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Cite as: [2002] EWCA Civ 1791

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Neutral Citation Number: [2002] EWCA Civ 1791
Case No: B2/2002/0630

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CARMARTHEN COUNTY COURT
His Hon. Judge Moseley

Royal Courts of Justice
Strand, London, WC2A 2LL
6th December 2002

B e f o r e :

LORD JUSTICE WARD
and
SIR ANTHONY EVANS

____________________

Between:
JOHN ALUN DAVIES
Appellant
- and -

LEWIS WYN DAVIES
Respondent

____________________

Robert Craven (instructed by Peter Lynn & Partners) for the Appellant
Vivian Chapman (instructed by John Collins & Partners) for the Respondent
Hearing dates : 11th July 2002

____________________

HTML VERSION OF JUDGMENT : APPROVED BY THE COURT FOR HANDING DOWN (SUBJECT TO EDITORIAL CORRECTIONS)
____________________

Crown Copyright ©

    Sir Anthony Evans :

  1. This appeal is from a judgment given by His Hon. Judge Hywel Moseley Q.C. in one of two actions which he heard together in the Carmarthen County Court. In this action, his order dated 22nd January 2002 was in favour of the claimant, Lewis Wyn Davies ("Wyn"), and the defendant John Alun Davies ("Alun") now appeals, with permission from the judge.
  2. Wyn's primary claim, and the only one which was pleaded, was that he held certain fields which he farmed at Ferryside, Carmarthenshire, on an agricultural tenancy which was agreed orally by Alun, the freehold owner of the land, in 1988. That claim failed, but the judge held in Wyn's favour that he held the fields under a statutory tenancy pursuant to the provisions of section 2 of the Agricultural Holdings Act 1986. The appeal has been concerned with the statutory but not with the contractual claim.
  3. Sensibly and realistically, Mr Robert Craven, counsel for Alun, did not take any point on the failure to include this claim in the pleadings. He acknowledged that both parties realised that a statutory tenancy was being claimed, though only in the alternative. The absence of a pleaded claim, however, means that some care has to be taken in formulating precisely what the issues are.
  4. Wyn and Alun are brothers. The claimant in the other action heard by the judge was a third brother, Philip, who made a similar claim in respect of some other fields which he has farmed and which Alun also owns. He too relied upon the oral agreement made with Alun in 1988, but the judge found that Alun had only agreed to give his brothers the right to graze cattle on a seasonal basis on the fields in question, and that in neither case was the right exclusive, meaning that Alun was not excluded from using the fields himself. He used them in fact for certain purposes of his own, including private aviation and occasionally for a plant hire and other business activities which he and his licensees carried out at his neighbouring farm. The right to graze cattle on a seasonal basis does not give rise to a statutory agricultural tenancy under section 2 of the 1986 Act. It is specifically excluded by section 2(3)(a). Philip's claim therefore failed and was dismissed. There is no appeal, by him or by Wyn, against the judge's findings of fact or with regard to the alleged oral agreement to grant a tenancy, upon which they both relied.
  5. Background

  6. The judge set out his findings in considerable detail and with great clarity, and for our present purposes a short summary will suffice. Since 1988, Alun has been the freehold owner of Pen-y-Hoel Farm. His land includes the fields in question, which in Wyn's case were formerly three fields with separate OS numbers. The hedges between them were removed, and there is now one large field of 12.21 acres which has been allocated a new OS number, OS 4439.
  7. Before 1988, the farm was owned by his late mother, who lived until January 1992, and before that by his parents jointly, until his father's death in 1973. They bought it in 1971 so that Alun could farm there on his own account. They already owned two substantial holdings, Maesmawr and Treforris Fawr, both at Ferryside, which they farmed as a family partnership and continued to do so, without Alun after he left. In 1988, their mother gave the freehold of one of the three farms to each of her three sons, so that Alun became the owner of Pen-y-Hoel and Wyn the owner of Maesmawr, which he already farmed. Wyn continued, as he had done before, to graze cattle during the summer months on field OS 4439, which was now owned by Alun and which he continued to use himself for the purposes referred to above. The dividing hedges were removed in 1990 so that, as the judge found, Alun could land fixed wing aircraft here, although he did this only once. Most of the flying was done by helicopters.
  8. Both Wyn and Philip paid annual sums by way of rent to Alun, both before and after 1988 when he became owner of the land. There was much confusing evidence about the amounts and times of these payments and as to the terms of any agreements under which they were paid. The findings do not include any with regard to rent for the grazing rights exercised after 1992, when Alun sold some adjacent land to Wyn and the amount of rent may have been reduced. The only reference in paragraph 17 of the judgment is to payments made in 1993 "in April or thereafter", and these were in respect of the previous year. However, we were shown an extract from Alun's witness statement which states that he received a payment of 1,000 from Wyn on 22nd April 1994 for the grazing and mowing rights exercised during 1993, and the argument before us proceeded on the basis that Wyn made an annual payment in arrears in respect of his right to occupy the field, whatever the precise amount of the payment and the nature of the right were.
  9. Grazing rights the judge's findings.

  10. It was not disputed that Wyn, like Philip, paid rent to Alun for the right to graze cattle during the summer months in the fields which from 1988 were owned by Alun. The issues were whether their rights included the winter as well as the summer months, and whether they were entitled to exclusive occupation as against Alun.
  11. In Philip's case, the judge found that the fields he claimed were used by a neighbouring farmer, Emlyn Morgan, to graze sheep during the winter, in return for payments which he made to Alun. Philip, therefore, could only establish that "on a balance of probabilities [his] agreement [with Alun] was for summer grazing only". Moreover, there was "in any case overwhelming evidence that Alun and his licensees shared occupation of the land at all material times" (paras. 24(1) and (2)). Philip's claim therefore failed, because these findings fell within the exception under section 2(3)(a) to the operation of section 2(1) of the Act.
  12. In Wyn's case, the position until 1994 was much the same. However, in the autumn of that year Wyn planted a crop of winter barley. He said that he did this as of right and without obtaining Alun's permission, but the judge found that he both sought and was granted permission by him (para. 23). The crop was planted in autumn 1994 and harvested in the summer of 1995. It was when Wyn planted a further crop in autumn 1995 that the present unfortunate dispute arose.
  13. Winter barley.

  14. The following findings are material:-
  15. "Winter barley is planted in the autumn. It grows over the winter and spring and is harvested the following summer. Before planting the land needs to be ploughed, limed, harrowed and fertilised. The crop is then sprayed twice before harvesting the following summer." (Para. 22)"
    "[Alun] alleges that Wyn originally asked for permission to plant maize, that he refused permission because of the risk that it could interfere with the underground drainage which Alun had installed in 1983, that the land needed re-seeding, and that he made a deal with Wyn that in return for his permission to plant winter barley Wyn would re-seed to grass the following autumn."

    The judge preferred his evidence (para. 23)

    "There was however in my view a fundamental change in the position of Alun and Wyn in the summer of 1994. After granting permission to plant winter barley, Alun cannot claim that the agreement was for summer grazing only, so there can be no question of the agreement's falling within the exception in section 2(3)(c) after the summer of 1994. Moreover, the work carried out to the land, particularly the ploughing, in practice meant that exclusive occupation of the land was being granted to them." (Para. 26).
  16. The judge concluded:-
  17. "Though it is not expressly pleaded, there must have been a variation of the agreement in the summer of 1994 whereby the land was let for agricultural purposes with exclusive possession being granted to Wyn". (Para. 27)."

    He held that the agreement was one to which section 2 applied and that consequently, as section 2(1) provides, it

    "took effect, with the necessary modifications, as if it were an agreement for the letting of land for a tenancy from year to year " (Agricultural Holdings Act 1986, section 2(1)).

    The issues.

  18. The issues raised on the appeal, which were well argued both by Mr Craven for the appellant and by Mr Chapman for the respondent, were (1) the permission given by Alun in 1994 for the growing of winter barley was not supported by consideration; it was "gratuitously given after the 1994 grazing agreement had commenced and did not constitute a contractual variation of that agreement" (Ground of appeal para. 4); and (2) the alleged agreement could not be turned into a yearly tenancy under section 2(1), because the necessary modifications required to do so would so radically change the agreement as to be impermissible as a matter of law (Ground of appeal para. 6).
  19. The judgment.

  20. The judge dealt with these issues as follows:-
  21. "Mr Craven himself raised an argument that there was no consideration for the variation; however, that argument is not supported by the evidence, Alun's case being that he gave permission for the planting of winter barley in consideration for a promise by Wyn that he would re-seed to grass. Mr Craven also argued that section 2 could not operate because the conversion to a tenancy from year to year "with the necessary modifications" could not occur; see Harrison-Broadley v Smith [1964] 1 W.L.R. 456 at 467, citing Lord Evershed M.R. in Goldsack v Shore [1950] 1 K.B. 708 where Lord Evershed said:-
    "If the subsection applies to it, it must be capable of being so modified (and that must mean modified consistently with its own terms) as to become enlarged into a tenancy from year to year."
    I cannot see why this agreement could not become so enlarged. If one starts with the varied agreement, it is an agreement whereby Wyn is granted a licence to plant winter barley on the land in consideration for a promise to re-seed to grass after harvesting, that being a licence on a one-off basis. I cannot see why such an agreement cannot be so modified in accordance with its terms so as to become a tenancy from year to year". (Para. 27).

    The contractual ground no consideration?

  22. In my judgment, this ground of appeal must be rejected. I can state my reasons quite shortly.
  23. Mr Craven submitted that, on the judge's findings, Alun gave permission to Wyn to plant the crop of winter barley gratuitously and not in exchange for any payment or promise by Wyn which is sufficiently substantial to be capable of constituting consideration as a matter of law. He relied upon the statement of principle in Williston's Law of Contracts (1920) (Vol. 1, section 112) where consideration is distinguished from a condition which merely qualifies the promise made by the offeror. He gave as an example a case where one person might lend his motor car to another on condition that he refilled it with petrol after using it. Wyn's agreement to re-seed the land with grass was, he submitted, incidental to the use for which he was seeking permission, and the judge was wrong to hold that it was consideration for Alun's promise.
  24. Mr Chapman relied upon the same section from Williston but he submitted that it supported the judge's conclusion in the present case. He referred to three authorities, none of them recent and one of them known to all law students (Thomas v Thomas (1842) 2 Q.B. 851, In Re Soames (1897) 13 T.L.R. 439 and Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256). It has to be said that none of these cases either modifies the principle or applies it to facts even remotely resembling those of the present case.
  25. It became apparent during argument on this part of the appeal that the judgment does not say precisely when Alun gave his permission for the winter crop to be grown, though it may be inferred that there was more than one conversation before the permission was given sometime during the summer of 1994, which was after the grazing season began. (We were told by counsel that there was evidence to that effect.) Nor is it clear whether the agreement for a cereal crop over the winter of 1994/95 was expressly regarded as taking the place of a grazing agreement for the late summer and autumn of 1994, and for the summer of 1995, though on the judge's findings it must have been inferred that that was the assumption which both parties made.
  26. Despite these uncertainties, in my judgment the judge was correct to hold that the agreement with regard to a crop of winter barley which Alun made with Wyn sometime in the summer of 1994 was a variation of their existing annual agreement for summer grazing, and that Wyn's undertaking to re-seed the area to grass was sufficient consideration to support the agreement as a contract in law. Alun believed that the field needed re-seeding and this was a reason why he gave the permission when he was asked. This was valuable to him, and it was more than a mere condition which he attached to the permission that he gave.
  27. I would also have been inclined to hold that the winter barley agreement constituted a variation of the existing summer grazing contract, independently of Wyn's undertaking to re-seed the area after the crop was harvested. I would infer that the changed terms included Wyn's undertaking to pay rent, for 1995 as well as 1994. But there are no specific findings regarding the rental obligations, and in the circumstances I need say no more about this possibility.
  28. The statutory issue.

  29. The material parts of section 2 of that Act read as follows:-
  30. "2(1) An agreement to which this section applies shall take effect with the necessary modifications, as if it were an agreement for the letting of land for a tenancy from year to year
    (2) Subject to subsection (3) below, this section applies to an agreement under which
    (a)
    (b) a person is granted a licence to occupy land for use as agricultural land, if the circumstances were such that if his interest were a tenancy from year to year he would in respect of their land be the tenant of an agricultural holding.
    (3) This section does not apply to the granting of a licence to occupy land
    (a) made (whether or not it expressly so provides) in contemplation of the use of the land only for grazing or moving (or both) during some specified period of the year, "
  31. We were told that the section was not re-enacted in the Agricultural Holdings Act, 1995. Mr Craven submitted that we could infer from this that the policy which motivated the 1986 Act and its predecessors is no longer approved by Parliament. But the section was not repealed with retrospective effect and it continues to apply to the land with which this appeal is concerned. Therefore, in my judgment, the 1986 Act should not be interpreted on the basis that the Parliamentary intention underlying it has somehow changed.
  32. The policy behind section 2 when it appeared in the Agricultural Holdings Act, 1946, was referred to by Cross J. in Verrall v Farnes [1966] 1 W.L.R. 1254 at 1269 as follows:-
  33. "After all, one of the objects of the Act of 1948, as I understand the matter, was to give security of tenure to those actually farming that land, so that they should not be tempted to take the last halfpenny of profit out of it during the period for which they had a contractual right to remain in occupation, without regard to its future welfare after the date when they were liable to be turned out."
  34. Other leading authorities on the interpretation of section 2(1) have been Goldsack v Shore [1950] 1 K.B. 708 (C.A. Lord Evershed M.R. presiding), Harrison-Broadly v Smith [1964] 1 W.L.R. 456 (Harman, Pearson and Davies L.JJ) and, most recently, Bahamas International Truck Co. Ltd. v Threadgold [1974] 1 W.L.R. 1514 (C.A. and H.L.). In the first of these cases, the court held that, to be an "agreement" within the meaning of section 2(1), a transaction must be a contract enforceable by law, so that a gratuitous licence to occupy land could not be within the section. The statement of principle by Lord Evershed M.R. was quoted by the judge in the present case (see paragraph 14 above).
  35. The effect of the words "with the necessary modifications" in section 2(1) was considered in Harrison-Broadley v Smith where Pearson L.J. (as he then was) said this:-
  36. "That which is to take effect [as a tenancy from year to year] is the original agreement with the necessary modifications. It is not permissible to substitute for the original agreement a radically different agreement and make that take effect instead of the original agreement". (p. 467).

    After quoting from Lord Evershed M.R.'s judgment in the earlier case, he continued:-

    "Of course it must be recognised that any modification of an agreement must be in a sense inconsistent with its own terms. But I understand that passage to mean that the agreement must remain, so to speak, recognisably the same agreement after the necessary modifications have been made. This section is not applicable to an agreement which is not capable of taking effect, with the necessary modifications, as an agreement for the letting of the land for a tenancy from year to year. The necessary modifications have to be distinguished from a transformation of the agreement into something radically different." (p. 467).
  37. These authorities were considered and approved by the Court of Appeal in Bahamian International v Threadgold, where the judgment was given by Megaw L.J. He observed "There is perhaps a logical difficulty in a modification of terms, involving different rights and obligations, being "consistent with" the terms which have thus been modified". The court did not have to consider in that case [Goldsack v Shore] what sort of modifications could be treated as being "consistent with its own terms". But the principle laid down appears to be that, if the agreement cannot be modified "consistently with its own terms", it is not an agreement which falls within section 2(1) of the Act of 1948" (p. 1521A). Megaw L.J. continued:-
  38. "Once it is accepted, as I understand it to be accepted for the defendant, that there may be such cases cases in which the opening provisions of the subsection are literally satisfied, yet the subsection does not apply then the question must, I think, be a question of degree. The question arises: what is the criterion?" (p. 1521F).

    His conclusion was as follows:-

    "I think that the criteria is analogous to that which applies, in a different sphere, to the question of frustration of contracts. Would the substituted agreement, all the "necessary modifications" having been made be an essentially or radically different agreement from the agreement [in fact made]?" (p. 1522G).
  39. The House of Lords decided that case, also in the landlord's favour, on the ground that the agreement did not give the tenant exclusive possession, in any event. Nothing was said as to the correctness or otherwise of the views expressed by Megaw L.J. in the Court of Appeal. Nevertheless, his judgment remains, as Mr Craven pointed out, the most recent and authoritative statement of the law on the interpretation of the words "with the necessary modifications" in section 2(1).
  40. I do not, with respect, find the test of "radically different" or a "transformation of the agreement" easy to apply. When it applies, the section has the effect of "transforming" a contractual licence, granted for a period of less than a year, into a tenancy from year to year which has a protected status under the Act. Of itself, that is major transformation and its magnitude no doubt is the reason why disputes have arisen and many must have been settled in accordance with the courts' interpretation of the Act. What can be said, however, is that a straightforward lease, or licence, for a shorter period than one year, can be converted with an annual tenancy with the "necessary modifications" to the agreed rental and perhaps other, related, terms, but without any other radical change in the nature of the agreement. This approach is supported by the closing words of the subsection, "if the circumstances are such", etc.
  41. Submissions.

  42. Mr Chapman, for Wyn, submits that the judge was correct to hold that there is no reason why the necessary modifications should not be made, as permitted by section 2(1), in the present case. Although the undertaking to re-seed with grass after the cereal crop is harvested could not be performed every year, the "necessary modification" which can be made is that the obligation takes effect at the end of the statutory tenancy, whenever that may prove to be. The essential nature of the agreement, he submits, apart from the conversion to an annual basis, is unchanged.
  43. Mr Craven, for Wyn, placed his main emphasis on the obligation to re-seed to grass after the crop was harvested, which he coupled with Alun's right, any statutory tenancy apart, to use the land for flying, whether helicopter or fixed-wing, whenever the state of the land permitted flying operations. He accepted, however, the judge's finding that flying would not be practicable during the period between ploughing in the autumn and April when, presumably, the seedlings appear (para. 26). The licence granted by Alun, he submitted, permitted some use for flying: a statutory tenancy would permit none.
  44. Discussion.

  45. I do not find the "aircraft use" argument convincing. If the test is whether the statutory tenancy from year to year would be "radically different" from the licence to grow a winter crop which was granted, such use could only be for a short part of the year, and, if necessary, the tenancy could be made subject to a licence in Alun's favour without prejudicing its essential nature. This would not detract from Wyn's right to exclusive possession for the whole of the period from ploughing until harvesting of the winter crop.
  46. Further assistance can be gained, however, from a passage in Megaw L.J.'s judgment which I should quote in full:-
  47. "Suppose that in a contract for the sale of land for use as agricultural land there was a provision under which if the purchaser should be allowed to occupy the land before completion, he should be a licensee pending completion: suppose that for some reason difficulty in making title or default in payment the contract went off, after the purchaser had entered into occupation as a licensee. The preliminary part of section 2(1) would literally be satisfied. But it could not be suggested that the subsection would operate to make the purchaser a tenant from year to year. The "necessary modifications" of the agreement could not be made. The alternations in the agreement could not be "modifications" consistent with the terms of the agreement. They would be a transformation into a different agreement." (p. 1521D).
  48. In this example, the contrast is between a licence pending completion and a statutory tenancy from year to year. Mr Chapman suggested that the licence would be terminable at will, but this would not necessarily be the case. The licence could grant the right to exclusive occupation until the condition regarding completion was satisfied. I think that Mr Chapman was correct to identify that condition subsequent as the significant feature of the licence which would not permit the statute to operate in those circumstances. It is a licence to occupy for a period less than one year; but it is a once-for-all arrangement which cannot be transformed into an annual tenancy without altering the essential nature that is given to it by the condition subsequent.
  49. It is also noteworthy that Megaw L.J. referred to the decision of Cross J. in Verral v Farnes, where he held that a rent-fee licence could be converted into a rent-free tenancy (though subject to a rent to be assessed by a statutory arbitration tribunal), in terms almost of disapproval: " this might appear to provide something far short of justice", though it might be necessary to accept that there was, in such a case, no "radical difference" in the nature of the contract (page 1522E). Megaw L.J.'s remarks suggest to me that the Act should not operate so as to produce a change in the essential nature of the agreement, rental terms apart.
  50. Conclusion.

  51. On this issue, as with the question of consideration, my decision turns on the existence of the re-seeding obligation. That is undoubtedly an essential term of the parties' agreement. It is impossible for the obligation to be performed each year if the agreement becomes a yearly tenancy. (If the use were to revert to summer and winter grazing, section 2 would no longer apply.) Postponing the re-seeding obligation until the tenancy comes to an end means that the annual obligations no longer include the promise by Wyn which was the consideration for Alun's permission to use the field for an agricultural purpose other than summer grazing. In my judgment, the agreement was a one-off arrangement which section 2 does not protect.
  52. For these reasons, I would allow the appeal and decide the preliminary issue on liability in the defendant's, Alun's, favour.
  53. Lord Justice Ward :

  54. I have read the judgment of Sir Anthony Evans in draft and gratefully adopt his careful account of the facts and law.
  55. I agree with him that Wyn's undertaking to re-seed the land to grass was sufficient consideration to support the variation of the agreement as a contract in law. I need say no more about that aspect of the appeal except to offer my thanks to Mr Chapman for curing a forty-year old defect in my legal education. He succeeded where my Director of Studies in the law of Contract failed. He forced me actually to read the Carbolic Smoke Ball case, not just what Cheshire & Fifoot said about it.
  56. As to the main point on the issue of the application of section 2(1) of the Agricultural Holdings Act 1986, I agree with the conclusion of Sir Anthony Evans that the existence of the re-seeding obligation was an essential term of the parties' one off agreement which cannot be postponed until the tenancy comes to an end without making it a radically different arrangement. I would allow the appeal accordingly.
  57. There is another way of looking at the facts which leads me to the same conclusion. It is important for this purpose to analyse exactly what the contract as varied was. On the judge's findings, the arrangement until 1994 was a licence for grazing for the summer see paragraph 14 of the judgment, read with paragraphs 24(1) and paragraph 26. Thus the judge found in paragraph 26:-
  58. "Wyn's claim is far stronger. If Alun had not granted permission in 1994 to plant winter barley the conclusion would have been the same as in the case of Philip: there was ample evidence that until that time possession was shared with Alun but also the same body of evidence as in Philip's case led me to the conclusion that the agreement was probably an agreement for summer grazing only until the summer of 1994."
  59. It is important to stress that Wyn did not have exclusive possession of the land under the terms of this arrangement.
  60. Then the judge found that there was:-
  61. " a fundamental change in the position of Alun and Wyn in the summer of 1994. Moreover, the work carried out to the land, particularly the ploughing, in practice meant that exclusive occupation of the land was being granted to Wyn.
    27. Though it is not expressly pleaded, there must have been a variation of the agreement in the summer of 1994 whereby the land was let for agricultural purposes with exclusive possession being granted to Wyn." (My emphasis added).
  62. It seems to me to be plain from those findings that 1994 began with the usual arrangement for summer grazing commencing in the spring i.e. about April. That was the original contract. It was varied in the summer i.e. the variation was agreed after the 1994 grazing rights were granted and whilst that licence was still running. The case proceeded on the basis of a variation, not a novation. By the variation Wyn was allowed to plant winter barley once he had ploughed and prepared the land in the autumn and he would have exclusive possession of the land until after the crop had been harvested and the land re-seeded to grass. The judge held later in paragraph 27, and I add the emphasis:-
  63. "If one starts with the varied agreement, it is an agreement whereby Wyn is granted a licence to plant winter barley on the land in consideration for a promise to re-seed to grass after harvesting, that being a licence on a one off basis."
  64. What is the effect of all of that? The parties start with an agreement for summer grazing, but without Wyn enjoying exclusive possession. Then they vary that agreement by extending it and changing its terms. Wyn is now granted further permission to prepare the land and sow his barley (probably at times when ordinarily as in other years his cattle would still have been on the land), grow his barley throughout the rest of the calendar year 1994 and, in 1995, instead of enjoying his grazing rights, he occupies the land, now exclusively, until the harvesting is complete and the grass sown. In my judgment the licence as varied is more or less for a period of 18 months from the spring/early summer 1994 when the cattle come on the land to graze through to the end of the summer/autumn 1995 once the land is restored to grass. For part of that period Wyn did not have exclusive possession, for part of it he did. The use of the land was part grazing, part arable.
  65. In my judgment section 2 of the Agricultural Holdings Act 1986 has to be applied to that licence. Since that licence is not in contemplation of the use of the land only for grazing or mowing (or both) during some specified period of the year, section 2(1) and (2) are engaged. Thus the question to ask is whether that agreement can take effect with the necessary modifications as if it were an agreement for the letting of land for a tenancy from year to year. Whilst land which is let for a term longer than from year to year cannot be brought within section 2 because it falls outside subsection (2)(a), it seems that a licence to occupy land for longer than a year may be within section 2 by the deeming provision in subsection 2. As I read subsection (2)(b) a licence is within its purview whether it is a licence from year to year, a licence for less than a year, or even a licence to occupy the land for a period exceeding the year. Let me recite section 2 again:-
  66. "(1) An agreement to which this section applies shall take effect, with the necessary modifications, as if it were an agreement for the letting of land for a tenancy from year to year unless the agreement was approved by the minister before it was entered into.
    (2) Subject to subsection (3) below, this section applies to an agreement under which
    (a) any land is let to a person for use as agricultural land for an interest less than a tenancy from year to year, or
    (b) a person is granted a licence to occupy land for use as agricultural land,
    if the circumstances are such that if his interests were a tenancy from year to year he would in respect of that land be the tenant of an agricultural holding.
    (3) This section does not apply to an agreement for the letting of land, or the granting of a licence to occupy land
    (a) made (whether or not it expressly so provides) in contemplation of the use of the land only for grazing or mowing (or both) during some specified period of the year "
  67. If that is the extended licence with which we have to be concerned, then there are two reasons why Wyn must fail. The first is that for the first part of the period he does not have exclusive possession. The case is covered by Bahamas International Trust Co. Ltd. v Threadgold [1974] 1 W.L.R. 1514, 1527G where Lord Diplock said:-
  68. "To come within section 2(1) of the Agricultural Holdings Act 1948 the licence granted under an agreement must be a "licence to occupy land for use as agricultural land. To satisfy this requirement the right of occupation for agricultural purposes must be an exclusive right under which the grantee is entitled to prevent the grantor and any other person authorised by the grantor from making any use of the land, at any rate for agricultural purposes, during the period of the grant. The application of section 2(1) of the Act to licences to occupy land for use as agricultural land was, in my view, correctly stated by Davies L.J. in Harrison-Broadley v Smith [1964] 1 W.L.R. 456, 470, where he said:-
    " there cannot be such a licence without a right of exclusive occupation during the currency of the licence in the licensee as against the licensor for that purpose.""
  69. The second reason is that this licence partly for summer grazing and partly for winter barley cannot be modified to take effect as if it were an agreement for the letting of land for a tenancy from year to year. Wyn's desire to use the land solely for arable purposes and to give up summer grazing is "to substitute for the original agreement a radically different agreement and make that take effect instead of the original agreement" to adopt the words of Pearson L.J. in Harrison-Broadley v Smith at p. 467. His test was:-
  70. "That the agreement must remain, so to speak, recognisably the same agreement after the necessary modifications have been made."
  71. In my judgment the effect of the modifications Wyn claims will change the agreement, varied in the way I find it to have been varied, to something radically different. What he now wants an agreement from year to year for arable purposes - is not recognisably the same as he had.
  72. I would also allow the appeal and decide the preliminary issue in Alun's favour.
  73. I appreciate that this analysis of the case is not the way in which the matter was presented to the judge, nor, indeed, is it an approach upon which Mr Chapman has had proper opportunity to comment. I have not thought it necessary to invite further argument in view of my agreement with Sir Anthony Evans' conclusion with which I concur. My analysis simply reinforces the result of the appeal. That has to be that the appeal be allowed and the preliminary issue decided in Alun's favour.


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