Graham Mcdonald - In The Appeal From The Sheriffdom Of South Strathclyde, Dumfries And Galloway At Airdrie V. Manus O'donnell
| Jurisdiction | Scotland |
| Judge | Lord Justice Clerk,Lord Johnston,Lord Kingarth |
| Neutral Citation | [2007] CSIH 74 |
| Court | Court of Session |
| Published date | 25 October 2007 |
| Year | 2007 |
| Date | 25 October 2007 |
| Docket Number | XA165/06 |
| SECOND DIVISION, INNER HOUSE, COURT OF SESSION | |
| Lord Justice Clerk Lord Kingarth Lord Wheatley | [2007] CSIH 74 XA165/06 OPINION OF THE LORD JUSTICE CLERK In the APPEAL from the Sheriffdom of South Strathclyde, Dumfries and Galloway at Airdrie by GRAHAM McDONALD Defender and Appellant; against MANUS O'DONNELL Pursuer and Respondent: _______ |
For the appellant: Henderson; Thorley Stephenson (for McWhinney Richards, Airdrie)
For the respondent: Simpson; Brodies (for John G O'Donnell, Glasgow)
25 October 2007Introduction
[1] The pursuer owns Braeside Farm, Moodiesburn. In 1989 the then proprietors of Braeside gave the defender an oral lease of Woodcroft Field, extending to 33.633 acres, which forms part of the farm. The lease ran from year to year. The anniversary date was 7 February. The subjects were let to the defender to be used by him for the business of a riding school. In connection with that business the defender was allowed to graze his horses on the subjects and to crop hay for their winter feed.
[2] Mr Leon Newman bought Braeside later that year. Thereafter the defender moved a static caravan onto the subjects and went to live there. He also erected sheds and placed some shipping containers on the land for the purposes of the riding school.
[3] In 1992 the pursuer bought Braeside from Mr Newman. He allowed the lease to continue. In 1994 a dispute arose between the parties about the defender's alleged breaches of his obligations to maintain and repair the subjects. The pursuer's solicitors served a notice to quit on the defender. The defender's solicitors contested it by counter-notice in terms of section 22(1) of the Agricultural Holdings (Scotland) Act 1991 (the 1991 Act). The pursuer applied to the Scottish Land Court for its consent to the operation of the notice to quit, but did not pursue the application.
[4] On 13 July 2004 the pursuer's solicitors served on the defender a notice to quit. This notice was not in the form required by section 21 of the 1991 Act. It referred to the defender's alleged breaches of the lease and intimated that the pursuer was terminating the lease on the ground that the breaches had not been remedied. It concluded as follows:
"In addition, since the current lease is held by you on a tacit relocation basis, our client gives you notice that he intends to terminate the lease as at the 31st of March, 2005 at the latest."
[5] Counsel agree that the subjects consist of two fields. On the first field there are the caravan, the sheds and the containers. The riding tuition takes place on this field. It is set out with jumps. The second field was formerly used for the growing of the hay. In recent years the horses have grazed on it. At January 2006 the defender had ten horses grazing there. Although the riding school operated seven days a week, most of the teaching was done at weekends.
The action
[6] This is an action of declarator and removing. The declarators sought need not concern us. The crave for removing is founded on the notice to quit of 13 July 2004. The principal line of defence is that the subjects are an agricultural holding within the meaning of the 1991 Act and therefore that the notice to quit is invalid.
The legislation
[7] The relevant provisions of the 1991 Act are as follows.
"1(1) In this Act ... 'agricultural holding' means the aggregate of the agricultural land comprised in a lease, not being a lease under which the land is let to the tenant during his continuance in any office, appointment or employment held under the landlord.
(2) In this section ... 'agricultural land' means land used for agriculture for the purposes of a trade or business ... " ...
85(1) In this Act, unless the context otherwise requires -
... 'agriculture' includes horticulture, fruit growing; seed growing; dairy farming; livestock breeding and keeping; 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 ...
'livestock' includes 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 sheriff's decision and reasoning
[8] Sheriff JC Morris QC held a proof before answer at Airdrie sheriff court. By interlocutor dated 10 January 2006 he held inter alia that the lease was a lease of an agricultural holding and that the notice to quit specified the wrong date of ish, namely 31 March instead of 7 February. He assoilzied the defender.
[9] The sheriff found that the permission to the defender to graze his horses and to crop hay for winter feed was given "in connection with" the business of the riding school (finding in fact 6). He also found that "the purpose of the lease was for the running of a riding school with an entitlement to graze the horses on the subjects and to crop hay for the winter feed of the same" (finding in fact 17). In view of his findings that the defender's horses grazed on both fields, the sheriff concluded that the defender was using the subjects as "grazing land." That, in his view, came within the definition of agriculture in the 1991 Act (s 85(1), sv "agriculture," supra). Furthermore, the defender was using the land for the purposes of the "trade or business" (s 1(2), supra) of a riding school. On both of these points, the sheriff based his decision on Rutherford v Maurer ([1962] 1 QB 16), which was followed in Scotland in Crawford v Dun (1981 SLT (Sh Ct) 66). These are in essence the submissions for the appellant.
[10] In findings 21 and 22 the sheriff found that since most of the tuition was done at weekends, the horses spent most of their time grazing and that at that time the horses were grazing on the second field during the winter. He concluded his findings in fact with the following finding:
"23 That the subjects are used to a substantial extent for the grazing of horses, consequently the predominant use of the subjects is for an agricultural purpose."
[11] On the view taken by the sheriff, the other questions in the case were superseded, but he indicated inter alia that if the lease was not an agricultural lease, the notice of 13 July 2004 would have effectively terminated it "certainly after 7 February 2006 and arguably after 7 February 2005."
The sheriff principal's decision and reasoning
[12] By interlocutor dated 24 August 2006 Sheriff Principal BA Lockhart allowed an appeal by the pursuer and inter alia granted decree of removing.
[13] Relying on Howkins v Jardine ([1951] 1 KB 614, Jenkins LJ at p 628), the sheriff principal considered that the important question was to identify the substantial purpose of the lease. He considered that that test had been applied in Monson v Bound ([1954] 1 WLR 1321) and Deith v Brown ((1956) 167 EG 513). He distinguished Rutherford v Maurer because the purpose of the let in that case was for grazing horses and was therefore, in his view, agricultural. The point in that case was whether "the purposes of a trade or business" required to be agricultural purposes. Rutherford v Maurer was not inconsistent with the three cases to which he had referred. The sheriff principal also distinguished Crawford v Dun (supra). It related to a question of resumption and the interpretation of the forerunner of section 21(7) of the 1991 Act.
[14] Taking this approach, the sheriff principal held that the substantial purpose of lease was for the non-agricultural use of the subjects as a riding school.
[15] On the question of the notice to quit dated 13 July 2004 the sheriff principal took a similar approach to that of the sheriff. That notice made clear that the pursuer was not prepared to countenance a continuation of the lease. That was sufficient to prevent the operation of tacit relocation at the next anniversary, namely 7 February 2005. Although the notice gave the wrong date of ish, it gave the defender 6 months and 23 days notice that the lease would not be renewed at the next anniversary. There was no prescribed form of notice in a common law action of removing. The notice effectively terminated the lease. If he was wrong in that conclusion, he agreed with the sheriff's view that the lease was certainly terminated at 7 February 2006.
[16] These are in essence the submissions for the respondent.
The appeal and the cross appeal
[17] The defender has appealed against the interlocutor of the sheriff principal on the basis that the sheriff's interlocutor should be restored simpliciter. The respondent has cross appealed against the interlocutor of the sheriff principal on the basis that it leaves undisturbed the sheriff's purported finding of fact 23 (supra) which, so long as it remains unaltered, stands in the way of a finding that the subjects are not an agricultural holding.
Conclusions
(1) Are the subjects an agricultural holding?
[18] In my opinion, the approach of the sheriff principal is...
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