Alexander Bishop Loudon V. James Hamilton And Others Against An Order Of The Scottish Land Court
| Jurisdiction | Scotland |
| Judge | Lord Justice Clerk,Lord Kingarth,Lord Hardie |
| Judgment Date | 27 October 2009 |
| Neutral Citation | [2010] CSIH 36 |
| Date | 30 April 2010 |
| Published date | 30 April 2010 |
| Court | Court of Session |
| Docket Number | X61/08 |
| SECOND DIVISION, INNER HOUSE, COURT OF SESSION | |
| Lord Justice Clerk Lord Kingarth Lord Hardie | [2010] CSIH 36 X61/08 OPINION OF THE LORD JUSTICE CLERK in the appeal by ALEXANDER BISHOP LOUDON Appellant; against JAMES HAMILTON and OTHERS Respondents: Against an Order of the Scottish Land Court dated 10 April 2008 _______ |
For first respondent: Party
For second respondent: Upton; Hughes Walker
27 October 2009
Introduction
[1] This is an appeal from an Order of the Scottish Land Court. The issue is whether in March 2000 the first respondent granted to the appellant an agricultural lease of certain land at East Gartfarran Farm, Gartmore, Stirlingshire (the farm).
The application
[2] On 8 May 2006 the appellant applied to the Land Court (1) for declarator that he was tenant of the farm under a 1991 Act tenancy, as defined in section 1 of the Agricultural Holdings (Scotland) Act 2003 (the 2003 Act); (2) for interdict against the first and second respondents from taking occupation of the farm, from obstructing and interfering with the appellant's peaceful occupation of it, or any part or parts of it, from causing damage to the appellant's goods, gear and fixed equipment and from moving and interfering with the appellant's goods and stock; (3) for a finding that the first respondent was liable to the appellant for losses amounting to £54,000 sustained by the appellant as a result of the first respondent's failure to comply with his obligation to provide adequate fixed equipment on the holding; (4) for an order requiring the first respondent to provide a suitable steading, slurry tank and silage pit to enable the appellant to maintain efficient production on the farm, and (5) for expenses.
[3] The application was founded on averments that in March 2000 the first respondent let the farm to the appellant at an annual rent of £22,000; that the appellant took entry on 1 April 2000; that the farm was let as a stock farm; that the appellant had been in continuous occupation of it since then; that a large steading, silage pit and slurry tank formed part of the fixed equipment on the farm; that the effect of the lease was to create a tenancy of an agricultural holding; and that, because the tenancy was in existence on the coming into force of Part 1 of the 2003 Act, the tenancy was a 1991 Act tenancy. The applicant averred that the first and second respondents were harassing him and his stock in various ways.
[4] On the same date, the appellant's solicitors applied to the Land Court by letter for interim interdict in terms of the appellant's second crave. In the letter, they asked that the court should consider the granting of the interim interdict as soon as possible "due to the ongoing nature of harassment that our client is currently enduring." On 9 May 2006 the court granted interim interdict as craved. It did so without a hearing and before intimation of the application to the respondents. The interim interdict remained in force until April 2008.
[5] It is agreed that in March 2000 the first respondent owned the farm and that between then and the making of this application he sold it off in six transactions which I shall describe. The appellant convened each of the purchasers as respondents and in his pleadings referred to them and the first respondent collectively, and illogically, as "the landlord respondents." The application was opposed by the first, second, fourth and seventh respondents.
[6] In due course answers to the application were lodged by the first respondent to the effect that he had given the appellant only a series of grazing lets over parts of the land, it being understood by both of them that the lets would not create a protected tenancy.
[7] On 6 April 2006, shortly before the application was lodged, the first respondent sent to the appellant a schedule showing the rents that remained unpaid by the appellant for these lets for the periods 1 April 2000 - 28 March 2001 to 1 April 2005 - 28 March 2006. In the course of adjustment it was averred on behalf of the appellant that this schedule was "obviously an attempt at a sham" and later that it was "obviously an attempt at inferring that the agreement [between the appellant and the first respondent] was something other than a 1991 Act tenancy notwithstanding the unequivocal agreement reached between [them] in 2000." When the case came to proof, the appellant's reply to the first respondent's defence was an outright denial that in March 2000 the parties had agreed to enter into a grazing let.
The decision of the Land Court
[8] The Land Court held a proof on the question whether the first respondent had granted the appellant the tenancy that he claimed. It found against the appellant. By its Order of 10 April 2008 it assoilzied all of the respondents from craves 1 to 4 of the application and recalled the interim interdict. That is the Order appealed against.
The legislative framework
The 1991 Act
[9] Section 1 of the 1991 Act provides inter alia as follows.
"1(1) In this Act (except sections 68 to 72) "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."
Section 85(1) provides inter alia that -
"'lease' means a letting of land for a term of years, or for lives, or for lives and years, or from year to year."
Section 3 provides as follows.
"3 Notwithstanding any agreement or any provision in the lease to the contrary, the tenancy of an agricultural holding shall not come to an end on the termination of the stipulated endurance of the lease, but shall be continued in force by tacit relocation for another year and thereafter from year to year, unless notice to quit has been given by the landlord or notice of intention to quit has been given by the tenant."
Section 2 was in force at the relevant date in this case. It provided inter alia as follows.
"2(1) Subject to subsection (2) below, where, under a lease entered into on or after 1st November 1948, land is let for use as agricultural land for a shorter period than from year to year, and the circumstances are such that if the lease were from year to year the land would be an agricultural holding, then, unless the letting was approved by the Secretary of State before the lease was entered into, the lease shall take effect, with the necessary modifications, as if it were a lease of the land from year to year.
(2) Subsection (1) above shall not apply to -
(a) a lease entered into (whether or not the lease expressly so provides) in contemplation of the use of the land only for grazing or mowing during some specified period of the year ... "
[10] Sections 1, 3 and 85(1) (sv "lease"), taken together, are the foundations of the agricultural tenant's security of tenure. Section 2(2)(a) was designed to exclude from the operation of security of tenure the traditional practice of letting land seasonally for grazing or mowing. This appeal is based on it.
[11] The 2003 Act created new forms of limited duration tenancies. In association with those reforms it repealed section 2 of the 1991 Act (2003 Act, s 1(3)) and put leases for grazing or mowing on a new footing (ibid, s 3). It referred to the tenancy of an agricultural holding by the new nomenclature "1991 Act tenancy" and restricted the creation of any new tenancy of that kind (ibid, s 1(1), (2)).
The issue in this case and its significance
[12] The appellant's case is that in March 2000 the parties entered into an express oral agreement by which the first respondent let the farm to the appellant on the terms to which I have referred and that the lease created a 1991 Act tenancy. That case is straightforward. As it is pled, section 2(2)(a) of the 1991 Act has no bearing on it.
[13] A 1991 Act tenancy confers on the tenant valuable rights that are enforceable against both the landlord and any acquirer of his interest, and are potentially available to successors of the tenant through an indefinite number of generations. The most fundamental is the tenant's security of tenure. The tenant also has rights to certain compensations at waygoing and, since the 2003 Act (Pt II), a qualified right to buy.
[14] Unless a landlord has valid grounds for serving an incontestable notice to quit or for obtaining the consent of the Land Court to the operation of a notice to quit, he must accept that the land may be burdened with the tenancy indefinitely. In such a case, if he should wish to sell the land, he can realise the vacant possession value of it only with the tenant's co-operation.
[15] If the present claim is well founded, the appellant can exclude the second to seventh respondents, the present owners, from the subjects of the alleged tenancy and can invoke section 5 of the 1991 Act to require them to equip the land as a stock farm. That provision underlies craves 3 and 4 of the application.
[16] I mention these matters to demonstrate what is at stake for the second to seventh respondents who innocently acquired title to parts of the farm before the appellant made any claim to a tenancy of it.
The Land Court's findings in fact
The agreement for a grazing let
[17] The Land Court has found that in the Spring of 2000 the first respondent decided to retire from farming. His intention was to keep the farm until his son, then aged 10, was old enough to decide whether he wished to take it over.
[18] In about March 2000 the first respondent and the appellant entered into an informal oral agreement by which the first respondent gave the appellant a let over certain parts of the farm at a rent of £22,000. Both understood and contemplated that this was a let for grazing or mowing purposes and was for a period of less than one year. Both parties understood that the let would not attract security of tenure....
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