Davies v Davies

A contractual licence for agricultural use falls within section 2 of the Agricultural Holdings Act 1986 only if it can be modified into a yearly tenancy without becoming an essentially or radically different agreement. A promise to re-seed land may provide sufficient consideration for varying an existing grazing agreement, but a one-off winter-crop arrangement could not be converted into a continuing yearly tenancy by postponing that obligation until termination. The appeal was therefore allowed.

Lewis Wyn Davies claimed that fields owned by his brother, John Alun Davies, were held under a statutory agricultural tenancy. The county court rejected the alleged oral contractual tenancy but held that, following a 1994 variation permitting winter barley, the arrangement took effect as a tenancy from year to year under section 2 of the Agricultural Holdings Act 1986. The appeal concerned whether the re-seeding promise supplied consideration and whether the agreement could be converted into a yearly tenancy with the necessary modifications.

The appeal was allowed and the preliminary issue on liability was decided in favour of John Alun Davies.

1. Consideration. Wyn’s undertaking to re-seed the land after harvesting was valuable to Alun and constituted sufficient consideration for permission to grow winter barley. The 1994 arrangement was therefore a contractual variation of the existing annual grazing agreement.
2. Necessary modifications. Section 2(1) requires the original agreement to remain recognisably the same after modification. It does not permit substitution of a radically different agreement. The inquiry is one of substance and degree, directed to the agreement’s essential nature.
3. Application. The arrangement was a one-off agreement involving winter barley and an essential obligation to re-seed after harvesting. That obligation could not be performed annually if the arrangement became a yearly tenancy. Postponing it until termination would alter the agreement’s essential nature. Section 2 therefore did not apply.
4. Alternative analysis. Lord Justice Ward held that the arrangement was partly for non-exclusive summer grazing and partly for exclusive arable use. A licence within section 2 requires exclusive occupation for agricultural purposes. The claimed conversion would in any event create a radically different agreement.

• Carmarthen County Court: His Honour Judge Moseley held that the 1994 variation created an agreement within section 2 of the Agricultural Holdings Act 1986, taking effect as a tenancy from year to year.
• Court of Appeal (Civil Division): The appeal was allowed, and the preliminary issue on liability was decided in favour of John Alun Davies.