Hemens v Whitsbury Farm and Stud Ltd

JurisdictionEngland & Wales
JudgeLord Keith of Kinkel,Lord Brandon of Oakbrook,Lord Griffiths,Lord Oliver of Aylmerton,Lord Goff of Chieveley
Judgment Date10 December 1987
Judgment citation (vLex)[1987] UKHL J1210-2
Date10 December 1987
CourtHouse of Lords

[1987] UKHL J1210-2

House of Lords

Lord Keith of Kinkel

Lord Brandon of Oakbrook

Lord Griffiths

Lord Oliver of Aylmerton

Lord Goff of Chieveley

Whitsbury Farm and Stud Limited
Hemens (Valuation Officer)
Lord Keith of Kinkel

My Lords,


The question at issue in this appeal is whether or not premises occupied and used by the appellant ratepayers for the breeding and rearing of thoroughbred horses are entitled to the benefit of agricultural derating.


Four separate hereditaments, situated at Fordingbridge in Hampshire, are involved. Each of them is situated within or is attached to land which is conceded by the respondent valuation officer to be agricultural within the meaning of the relevant legislation, and each comprises buildings of the sort usually to be found on stud farms, in particular stable blocks, loose boxes, covering yards and sheds, foaling boxes, veterinary rooms, hay stores and feed stores.


The local valuation court held that the hereditaments were entitled to derating, but the Lands Tribunal and the Court of Appeal (Lawton, Lloyd and Balcombe LL.J) [1987] Q.B. 390 decided that they were not.


The principal enactment concerned with the derating of agricultural premises in England and Wales is section 26 of the General Rate Act 1967, which provides:

"(1) No agricultural land or agricultural buildings shall be liable to be rated or be included in any valuation list or in any rate. (2) The gross value for the purposes of section 19(2) of this Act of a house occupied in connection with agricultural land and used as the dwelling of a person who-( a) is primarily engaged in carrying on or directing agricultural operations on that land; or ( b) is employed in agricultural operations on that land in the service of the occupier thereof and is entitled, whether as tenant or otherwise, so to use the house only while so employed, shall, so long as the house is so occupied and used, be estimated by reference to the rent at which the house might reasonably be expected to let from year to year if it could not be occupied and used otherwise than as aforesaid. (3) In this section the expression 'agricultural land' — (a) means any land used as arable meadow or pasture ground only, land used for a plantation or a wood or for the growth of saleable underwood, land exceeding 0.10 hectare used for the purposes of poultry farming, cottage gardens exceeding 0.10 hectare market gardens, nursery grounds, orchards or allotments, including allotment gardens within the meaning of the Allotments Act 1922, but does not include land occupied together with a house as a park, gardens (other than as aforesaid), pleasure grounds, or land kept or preserved mainly or exclusively for purposes of sport or recreation, or land used as a race-course; and for the purposes of this paragraph the expression 'cottage garden' means a garden attached to a house occupied as a dwelling by a person of the labouring classes; and (b) includes land occupied with, and used solely in connection with the use of, such a building as is mentioned in subsection (4)(b) of this section. (4) In this section, the expression 'agricultural buildings' — ( a) means buildings (other than dwellings) occupied together with agricultural land or being or forming part of a market garden, and in either case used solely in connection with agricultural operations thereon; and ( b) includes a building which is used solely in connection with agricultural operations carried on on agricultural land and which is occupied either — (i) by the occupiers of all that land; or (ii) by individuals who are appointed by the said occupiers for the time being to manage the use of the building and of whom each is an occupier of some of the land or a member of the board of directors or other governing body of such an occupier who is a body corporate, where the number of occupiers of all the said land does not exceed 24 (two or more persons occupying jointly being counted as one, but as a separate person from any of them who are occupying any of the land severally)."


The scope of this enactment was extended by sections 1 to 4 of the Rating Act 1971. It is sufficient for present purposes to quote section 1(1)( a) and (3) and section 2(1) and (4):

"1(1) In section 26 of the General Rate Act 1967 (in this Part of this Act referred to as 'the principal section')- (a) the expression 'agricultural buildings' shall include any building which is an agricultural building by virtue of section 2, 3 or 4 of this Act; … (3) In this Part of this Act 'livestock' includes any mammal or bird kept for the production of food or wool or for the purpose of its use in the farming of land …

2(1) Subject to subsections (2) to (4) of this section, each of the following is an agricultural building by virtue of this section — ( a) any building used for the keeping or breeding of livestock; and ( b) any building (other than a dwelling) which is occupied together with one or more buildings falling within paragraph ( a) above and is used in connection with the operations carried on in that building or those buildings … (4) A building is not an agricultural building by virtue of this section unless it is surrounded by or contiguous to an area of agricultural land (as defined in the principal section) which amounts to not less than two hectares; …


The basis of the valuation officer's concession that the land occupied along with the stud farm buildings is agricultural is that the land is used for grazing by horses. He accepts that the land is used as "pasture ground only," within the meaning of that expression in section 26(3)( a) of the Act of 1967, notwithstanding that the horses put to pasture there are thoroughbreds which have nothing to do with farming in the ordinarily understood sense of the word. I am of opinion that the concession is rightly made. There is nothing in section 26(3)( a) or elsewhere which expressly limits use as pasture ground so as to exclude the pasturing of animals which are not reared as food or for use in the farming of the land, and I do not think that such an exclusion can be implied.


It follows that the buildings with which the appeal is concerned are occupied together with agricultural land, which is one of the relevant requirements of section 26(4)( a) if a building is to qualify as an agricultural building. The other requirement is that the building should be used solely in connection with agricultural operations on the land. Is that requirement satisfied? The expression "agricultural operations" is nowhere defined. In its ordinary meaning it indicates operations concerned with the raising of crops or the rearing of animals so as to produce or contribute to the production of "the means of human subsistence," to quote the words of Lord Robertson in Hardie v. Assessor for West Lothian, 1940 S.C. 329, 334. In the present context, however, I think it must bear a meaning to some extent wider than that. Included in the meaning of agricultural land under subsection (3)( a) is land used for a plantation or a wood, and also certain cottage gardens and nursery grounds, where no doubt flowers and not any foodstuffs may be grown. No operations which are agricultural in the ordinary sense of the word would be carried out on such land, but one would not readily impute to Parliament an intention to exclude from the benefit of derating buildings used solely in connection with the carrying out of silvicultural or horticultural activities on these categories of "agricultural" land. Likewise the special treatment for rating purposes of certain dwelling houses, provided for by section 26(2), would, considering that a wood is to be treated as agricultural land, seem no less appropriate for a house occupied by a forestry worker than for one occupied by a farm worker.


The argument for the ratepayers proceeded on the lines that since the use of the land as pasture for thoroughbreds admittedly made it agricultural land, the activity of pasturing these horses was necessarily an agricultural operation; that operation was part of the activity of raising and keeping thoroughbreds; the same activity was what the buildings were used for; and hence the buildings were used, and solely used, in connection with an agricultural operation on the land.


It is necessary to give some consideration to the meaning of the words "in connection with." In Gilmore v. Baker-Carr [1962] 1 W.L.R. 1165(a case under section 2(2) of the Rating and Valuation (Apportionment) Act 1928, the terms of which did not differ materially from those of section 26(3) and (4) of the Act of 1967) Donovan L.J. said, at p. 1175:

"But the clear impression which I receive from the statutory language is that the buildings exempted were to be ancillary or complementary to the agricultural purpose of the land, and not vice versa."


This passage was approved by Viscount Dilhorne in W. & J. B. Eastwood Ltd. v. Herrod [1971] A.C. 160, 181, who said that to come within the statutory definition the buildings must be used as adjuncts to the agricultural operations on the land, and that it was wrong to consider whether the enterprise as whole, the land and the buildings taken together, was "a combined agricultural operation." In the same case Lord Reid said, at p. 168:

"Ordinary usage of the English language suggests that the buildings must be subsidiary or ancillary to the agricultural operations… I do not foresee serious difficulty if 'used in connection with' is held to mean consequential on or ancillary to the agricultural operations on the land which is occupied together with the buildings."


Lord Morris of Borth-y-Gest expressed the view, at p. 174, that...

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2 cases
  • Commissioners of Customs and Excise v East Midlands Aggregates Ltd
    • United Kingdom
    • Chancery Division
    • 23 April 2004
    ...W & J.B. Eastwood Ltd v. Herrod (Valuation Officer) [1971] A.C. 160 and Whitsbury Farm and Stud Ltd v. Hemens (Valuation Officer) [1988] A.C. 601. I will not refer further to either authority, since I was not persuaded that they provide any assistance in the interpretation of the relevant w......
  • Decision Nº RA 27 2008. Upper Tribunal (Lands Chamber), 10-02-2010
    • United Kingdom
    • Upper Tribunal (Lands Chamber)
    • 10 February 2010
    ...by HMRC Solicitor for the appellant. The following cases are referred to in this decision: Whitsbury Farm and Stud Ltd v Hemens (VO) [1988] 1 AC 601 Gilmore (VO) v Baker-Carr [1962] 1 WLR 1165 W & J B Eastwood Ltd v Herrod [1971] AC 160 Belmont Farm Ltd v Minister of Housing and Local Gover......

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