In the recent case of Mills v Estate of Partridge and another [2020], the High Court considered whether a plant nursery’s diversification of its business to include a tearoom exceeded the scope of the right of way allowing access to the site, and also breached a restrictive covenant registered against the land requiring the land to be used for agricultural purposes only.

The case concerned the rights and obligations over three parcels of land in Kinver, Staffordshire. The Defendants owned land which was originally used as nursery for growing bedding plans from seed, and a nearby field, which was used for growing vegetables. The field was subject to a covenant restricting its use to agricultural land, and access to both the nursery and field was via a track that was owned by the Claimant and over which the Defendant had a right of way “to pass and repass at all times and for all purposes in connection with the use of the land conveyed as agricultural land only…”.

Over the 40 years that the Defendant had owned the nursery and field, the business had grown and diversified to include polytunnels, outbuildings, stables, a shop and a tearoom. The shop sold plants, ornaments and other products and the tearoom comprised a purpose built kitchen and was used to host events (as the Defendant had secured an events licence over the premises). The nearby field was used for parking by staff and visitors to the nursery and tearoom.

The Claimant sought a declaration that the Defendant’s use of the track to excessive and amounted to a trespass, on the basis the Defendant’s use of the nursery and field was not as “agricultural land only”. The Defendant denied all allegations and maintained that its use of the field and nursery fell within this scope of the agricultural limitation.

The Court held the following:

  • The Defendant did not have the benefit of a right of way over the track and access to the field for the purpose of parking or to access the nursery to visit the tearoom, or for any other non-agricultural purpose. This use exceeded the scope of the right of way, and the Claimant was entitled to an injunction to prevent use of the track in this way.
  • The use of the field for parking for the sale of non-agricultural stock, such as firewood, was in breach of the restrictive covenant to use the land for agricultural purposes only.

The decision turned on the meaning of use of the land as “agricultural land only”. In reaching their decision, the Court made the following points:

  • As a starting point, “agriculture" was defined in various statutes, including in Section 336 of the Town and Country Planning Act 1990 as “…horticulture, fruit growing, seed growing, dairy farming, the breeding and keeping of livestock (including any creature kept for the production of food, wool, skins or fur, or for the purpose of its use in the farming of land), the use of land as grazing land, meadow land, osier land, market gardens and nursery grounds, and the use of land for woodlands where that use is ancillary to the farming of land for other agricultural purposes, and “agricultural” shall be construed accordingly."
  • As agriculture developed, the meaning of covenants and easements relating to agricultural use may also develop. However, the development of agriculture should not be confused with diversification into non-agricultural activity.
  • Unrelated activities that were peripheral or incidental and carried on in a small or minimal way alongside agricultural activities would not undermine agriculture only restrictions. It was a question of fact in each case.
  • The use of the word "only" was considered to be a vital. It was concluded that this did not operate as a bar to genuinely incidental or ancillary activities, but did exclude activities that had a different character or purpose from the primary activity of agriculture.

On the facts, the tearoom was not ancillary to the nursery. This was because the income from the tearoom made up more than 50% of the nursery's total turnover, and the tearoom was run as a separate business through a separate company. The tearoom was therefore a diversification into a non-agricultural activity on quite a significant scale.

For activities carried out on the nursery itself, the distinction between agricultural and non-agricultural was less clear. The sale of compost and peat would be agricultural, but the sale of garden ornaments would not be. To be ancillary to the agricultural use, the sale of other bought-in products and materials would have to be limited.

On the facts, the combined value of the turnover from the tearoom and non-agricultural activities at the nursery was so significant that it was not realistic to regard the business as agricultural.

This decision highlights the need to consider any restrictions (in the form of easements or covenants) attached to land or contained within a tenancy agreement or lease carefully prior to expanding or diversifying a business. Whilst the decision demonstrates that the Court will recognise some changes in definitions over time, the original purpose and nature at the time of grant are relevant and will be taken into account in identifying whether a party has exceeded the scope of its right. Landowners should therefore seek advice on any restrictions prior to committing to diversification plans in order to avoid any future challenges.

"I observe that it is important not to confuse developments in agriculture or agricultural practices with diversification into non-agricultural activity."

https://www.bailii.org/ew/cases/EWHC/Ch/2020/2171.html