Thomas v Countryside Solutions Limited - Agricultural Land & Drainage Tribunal
On 16.10.2025 the Agricultural Land & Drainage Tribunal handed down its decision in Thomas v Countryside Solutions Limited, dismissing an application by the son of the late tenant for a succession tenancy under s.39 of the Agricultural Holdings Act 1986.
There were a number of particular factual features that raised two particular issues – one of fact, and one of expert analysis – that the Tribunal had to consider.
As is often the case, the holding had been farmed in conjunction with other land owned and rented by the deceased and other members of his family. The applicant therefore based his application on the assertion that the farm comprised a single agricultural unit “of which the holding formed part”.
Less usual was the fact that the applicant son had not farmed in partnership with his late father, nor had he been employed and taken a salary for his work on the family farm. Instead, at all times both father and son had maintained separate sole trader accounts, with their own VAT numbers, SBI numbers, and had made their own applications over the years for BPS subsidies.
In these circumstances the landlord questioned the applicant’s assertion that the holding and the additional land had been farmed under one integrated system, and not as two separate businesses. The point of law the landlord raised was the extent to which the holding must “form part” of the agricultural unit. Ultimately, however, the landlord was not in a position to advance a positive case to the contrary – the applicant being put to proof and having been cross examined on the nature of his arrangements with his father, the Tribunal held that the business was in practical terms one farming business, not carried on by two sole traders.
However, the second issue concerned livelihood condition, and the fact that during the relevant seven years (a) the applicant had also derived income from non-farming sources, and (b) his various income streams were not held in separate accounts but were pooled.
In order to ascertain the extent to which his “livelihood” derived from qualifying income it was necessary for the accountancy experts to analyse his expenditure and then attribute it to his sources of income.
The approach of the applicant’s expert was to assume – notionally - that in spending his money the applicant was first spending the qualifying income, and only if that was not enough to support all of his expenditure would he treat the balance as having been drawn from non-farming income. In other words, the applicant’s case was if he “could have” supported his expenditure from qualifying income the test was satisfied.
The Tribunal accepted the landlord’s criticism that this was a subjective approach which depended on hindsight and self-perception. If, for example, an applicant had a career as a banker who earned £100,000 a year but also earned £30,000 as a farmer, with all monies paid into a mixed account out of which an annual expenditure of £20,000 was paid, on this approach he would then qualify if he “saw himself” as a gentleman farmer but not if he saw himself as a banker with a hobby farm. This approach was therefore rejected.
The approach of the landlord’s expert, which was accepted, was to treat the expenditure out of the accounts rateably in proportion to the amounts paid in. This was in line with the House of Lords’ treatment of mixed funds in Foskett v McKeown [2001] 1 AC 102: “A mixed fund, like a physical mixture, is divisible between the parties who contributed to it rateably in proportion to the value of their respective contributions, and this must be ascertained at the time they are added to the mixture”.
In other words, the correct approach is to assess – objectively - the extent to which qualifying income did in fact support livelihood expenditure. This is an important and helpful point of reference for cases concerning pooled income, which are not uncommon.
On this correct analysis the application under s.36 failed because the applicant’s percentages for qualifying livelihood expenditure in the seven years preceding the date of the death were (working backwards): 44.6%, 41.2%, 45.3%, 57.1%, 44.7%, 41.5% and 47.2%. He passed the 50% threshold only once in the seven-year period.
The final part of the Tribunal’s determination was the applicant’s alternative case under s.41 of the Act – i.e. whether he nevertheless satisfied the livelihood condition “to a material extent”.
The Tribunal held that passing the threshold only one time out of seven constituted a “really large failure” as per the guidance given in Wilson v Earl Spencer’s Settlement Trustees [1985] 1 EGLR 3.
The application was therefore dismissed.
A copy of the judgment can be found below.
Joseph Ollech, instructed by Fred Harrison-James of Loxley Solicitors, represented the successful landlord.
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