Jewell v McGowan & Anor

A covenant requiring a holding to be used for agricultural purposes only prohibits any material use for a separate non-agricultural purpose. The word only cannot be read as meaning mainly, nor does the statutory test for an agricultural holding enlarge the uses permitted by the covenant.

An activity may depend wholly on a working farm and may financially benefit it, yet remain a distinct commercial enterprise with non-agricultural purposes. Educational, recreational and profit-making access for visitors to an open farm was such an activity. Peripheral or minimal non-agricultural use may be disregarded as de minimis, but extensive visitor activities cannot.

The respondent was the agricultural tenant of land at St Augustines Farm under a 1982 tenancy agreement. Clause 22 required use of the holding for agricultural purposes only. The appellants were trustees and landlords under the agreement.

The respondent proposed to resume open-farm activities. Visitors would park on the demised land, follow trails, roam to view crops and animals, and take tractor-trailer tours. The main visitor facilities were to be on the respondent’s adjoining land. The farm itself would remain a working dairy farm.

The Gloucester County Court declared that the activities would not breach clause 22. The landlords appealed. The central issue was whether the proposed visitor activities were permitted use for agricultural purposes only.

1. Appeal allowed unanimously. Mance LJ, with whom Park J agreed, held that the Recorder had construed clause 22 incorrectly. The declaration that all proposed activities were permitted was discharged.
2. The natural and significant effect of the word only was to exclude material non-agricultural uses. It did not merely require that agriculture remain the principal use. The statutory criteria governing whether a tenancy remains an agricultural holding under the Agricultural Holdings Act 1948 or the Agricultural Holdings Act 1986 did not define the scope of the contractual covenant. Those criteria tolerate exceptions which do not substantially alter the tenancy’s character; clause 22 did not.
3. The covenant was not, however, to be read unreasonably. Express provisions of the agreement could qualify it, and genuinely peripheral or minimal activities could be disregarded as de minimis. Ordinary incidental enjoyment of farm land would not ordinarily amount to a separate non-agricultural use.
4. The proposed visitor parking, trails, roaming and tractor rides used the demised land for a commercial enterprise distinct in character and purpose from farming. The enterprise involved public education, recreation, promotion and profit. Its dependence on a continuing dairy farm, its possible benefit to farm income, and the fact that agricultural use would continue simultaneously did not make it agricultural use. The scale proposed was plainly more than minimal.
5. The substituted declaration stated that the activities in paragraphs 18.2 to 18.5 of the Particulars of Claim would, except insofar as they might be de minimis, breach clause 22. The respondent was ordered to pay the second and third defendants’ costs of the action and appeal.

• Court of Appeal (Civil Division): Allowed the appeal in [2002] EWCA Civ 145, discharged the principal declaration below, and substituted a declaration that the visitor activities in paragraphs 18.2 to 18.5 would breach clause 22 unless de minimis.
• Gloucester County Court (Mr Recorder de Navarro QC): On 15 and 16 March 2001, declared that the proposed open-farm activities would not breach the tenancy agreement.