R A Mcmaster And Others Against The Scottish Ministers

JurisdictionScotland
CourtCourt of Session
JudgeLord Clark
Neutral Citation[2017] CSOH 46
Date21 March 2017
Docket NumberP321/15
Published date21 March 2017

Web Blue CoS

OUTER HOUSE, COURT OF SESSION

[2017] CSOH 46

P321/15

OPINION OF LORD CLARK

In the cause

(FIRST) (i) R A McMASTER, (ii) R & N McMASTER, a firm, (iii) N A McMASTER and (iv) F M McMASTER, all having a place of business at Springfield, West Bennan, Isle of Arran;

(SECOND) (i) J R HALLEY (SNR), (ii) JAMES ROBERTSON HALLEY, a firm and (iii) J R HALLEY (JNR), all having a place of business at South Cassochie Farm, Methven, Perthshire PH1 3RT;

(THIRD) (i) C S MITCHELL, (ii) MAINS OF LARG FARMERS, a firm, (iii) M A MITCHELL and (iv) F C MITCHELL, all having a place of business at Mains of Larg Farm, New Luce, Newton Stewart, Wigtownshire DG8 0AT;

(FOURTH) (i) D SHAW, (ii) FIRM OF HILLHEAD FARMING COMPANY, a firm, (iii) THE CROFTHEAD FARMING COMPANY, a firm, (iv) J G SHAW and (v) C R SHAW, all having a place of business at Crofthead Farm, Sorn, Mauchline, Ayrshire KA5 6HW; (FIFTH) (i) A A STODDART, (ii) A C STODDART & SONS (COLSTOUN 1995), a firm and (iii) E C STODDART, all having a place of business at Colstoun Mains Farm, Haddington, East Lothian EH41 4PB;

(SIXTH) (i) W N DOUGLAS, (ii) DAMHEAD FARMS, a firm, (iii) MESSRS W N DOUGLAS, a firm, (iv) I W DOUGLAS, (v) W N D DOUGLAS and (vi) O B DOUGLAS, all having a place of business at Catslackburn, Yarrow, Selkirk TD7 5NE; and

(SEVENTH) (i) J D PATERSON, (ii) J D PATERSON TRADING AS THE FIRM OF GLENREE FARMERS, a firm, (iii) I W PATERSON, (iv) T J PATERSON and (v) C PATERSON, all having a place of business at Glenree Farm, Ross Road, Sliddery, Isle of Arran KA27 8NY

Petitioners

against

THE SCOTTISH MINISTERS

Respondents

Petitioners: Sir Crispin Agnew of Lochnaw QC, Blair; Davidson Chalmers LLP

Respondents: Mure QC, Ross QC; Scottish Government Legal Directorate

21 March 2017

Introduction
[1] The petitioners aver that they are all persons who have suffered loss, injury and damage as a result of the passing of section 72(10) of the Agricultural Holdings (Scotland) Act 2003 (“the 2003 Act”) and the making of the Agricultural Holdings (Scotland) Act 2003 Remedial Order 2014 (“the Remedial Order”). The Remedial Order was enacted in order to rectify defects in the 2003 Act which had been identified by the Inner House of the Court of Session and the Supreme Court in Salveson v Riddell 2013 SC 69, 2013 SC (UKSC) 236.

[2] The essence of the petitioners’ case is that the enactment of the Remedial Order, without the Scottish Parliament making provision in it for the assessment and payment of compensation to the petitioners, and the subsequent refusal by the Scottish Ministers to meet the petitioners’ claims for compensation, violate the petitioners’ rights under Article 1 of the First Protocol to the European Convention for the Protection of Human Rights and Fundamental Freedoms (“A1P1”).

[3] The petitioners argue that the Remedial Order is therefore outside the legislative competence of the Scottish Parliament. Accordingly, the orders sought include declarator that the Remedial Order is incompatible with the petitioners’ A1P1 rights. The petitioners also seek compensation in this process for the alleged violation of their A1P1 rights.

Background
[4] The background to the 2003 Act has been fully explained by the Lord President, Lord Gill, in Salveson v Riddell 2013 SC 69 (paras [7] – [32]) and by Lord Hope of Craighead in Salveson v Riddell 2013 SC (UKSC) 236 (paras [8] – [21]). For present purposes, I need only explain a few key parts of that background.

[5] In terms of the statutory regime governing agricultural holdings in Scotland as set forth in the Agricultural Holdings (Scotland) Act 1948 and later legislation, tenants enjoyed indefinite security of tenure. The landlord could serve a notice to quit, but this would be effective only if the Land Court consented and there were limited circumstances in which such consent could be granted. The tenant also had the statutory right to bequeath the tenancy, in which case the tenant’s successor would become the tenant, with the same security of tenure.

[6] In order that landlords could retain the right to repossess their land notwithstanding the statutory security of tenure, the practice developed of landlords granting new agricultural tenancies to limited partnerships. Commonly, the landlord or his nominee was the limited partner and the individual farmer was the general partner. The limited partnership had a fixed duration, as did the lease to the limited partnership. The limited partnership and the lease could, however, be continued yearly by tacit relocation. The landlord had the power to terminate the limited partnership at the end of its fixed duration or on any anniversary. A landlord who wished to obtain vacant possession could serve a notice dissolving the limited partnership. On the date of dissolution, the legal person which was the tenant ceased to exist, thus terminating the tenancy. This practice of granting tenancies to limited partnerships became widespread in the market for agricultural holdings in Scotland.

[7] At the turn of this century, it became the policy of the Scottish Executive that a new system should be introduced. It was proposed that the new system would disallow future leases to limited partnerships and offer security of tenure to the tenant, but that it would also give the landlord the right to recover vacant possession at the end of a fixed term. The duration of the fixed term would be agreed by the parties before the tenancy began. The landlord would then be entitled to intimate his intention to terminate the tenancy, at an appropriate point in advance, and to terminate it by giving notice to quit.

[8] In May 2000 the Scottish Executive published a White Paper, entitled ‘Agricultural Holdings—Proposals for Legislation’. This proposed that a new fixed term tenancy should be created and that it should no longer be possible to create new tenancies where the tenant was a limited partnership. The White Paper expressly stated that existing tenancies granted to limited partnerships would not be affected. The Agricultural Holdings (Scotland) Bill, as introduced on 16 September 2002, reflected this policy. It proposed that the Agricultural Holdings (Scotland) Act 1991 would not apply to future tenancies unless the lease was entered into in writing before the commencement of the tenancy and the lease expressly stipulated that the 1991 Act was to apply. It also contained provisions allowing the tenant under a 1991 Act tenancy a pre-emptive right to buy if the land which was the subject of the tenancy was marketed for sale.

[9] On 3 February 2003, a marshalled list of amendments to the Bill was published. Included in the list was a proposed amendment to the effect that general partners who had received notice of dissolution of their limited partnership on or after 4 February 2003 could apply to the Land Court for an order allowing them to continue as tenants in their own right, that is, under the 1991 Act. If such an order was granted, the tenant would also be able to take advantage of the right to buy provisions.

[10] It was in that context that, on 3 February 2003, notices were served on behalf of several landlords to terminate the limited partnerships which held the tenancies of their farms. Some of the limited partnerships had several years to run and in terms of the notices would terminate at the end of that period.

[11] Further amendments were proposed by the Scottish Executive on or about 10 March 2003. One of these further amendments was to the effect that if a notice terminating a limited partnership was served during the period between 16 September 2002 and prior to the relevant date (which became 1 July 2003), the general partner could become tenant in his own right by giving notice to the landlord. The landlord could apply to the Land Court for an order that the provision allowing the general partner to become tenant did not apply.

[12] As enacted, the 2003 Act contained provisions to the following effect. If a landlord of an agricultural tenancy in which a limited partnership was the tenant had given notice on or after 16 September 2002 terminating the limited partnership, the tenancy continued with the general partner as the tenant in his own right, if the general partner in turn gave notice to that effect (section 72(6)). The landlord could apply to the Land Court, in terms of section 72(7)-(9) of the 2003 Act, for an order under section 72(8) that the general partner did not become the tenant, but the circumstances in which such an order could be obtained were very restricted.

[13] Where a landlord served a notice on or after 1 July 2003 terminating the limited partnership, section 73 applied. In terms of section 73, the landlord could terminate the tenancy by giving notice of his intention to do so at least two years but not more than three years before the date of the expiry of the duration of the lease (as stipulated in the contract of lease) or the date of expiry of a period of relocation, and by then serving a notice to quit not less than one year and not more than two years before the date of expiry. The second notice of this ‘double-notice’ termination procedure required to be served not less than 90 days after the first. In terms of section 72(10), section 73 Act did not apply to landlords who had served a notice dissolving the limited partnership between 16 September 2002 and 30 June 2003 (“the relevant period”).

[14] The key feature of note is that the section 73 procedure for termination by the landlord was not available to landlords who had given notice of dissolution of the limited partnership which was the tenant in the relevant period but it could be used where the notice of dissolution of the limited partnership was served on or after 1 July 2003. The consequence of this, of critical importance in the present case, was that those tenants upon whom a notice to terminate the limited partnership was served during the relevant period were, by...

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1 cases
  • McMaster v Scottish Ministers
    • United Kingdom
    • Court of Session (Inner House)
    • 12 Junio 2018
    ...2017, the Lord Ordinary issued an interlocutor disposing of the matters debated before him and set out in his opinion of 21 March 2017 ([2017] CSOH 46). The petitioners reclaimed against that decision to the Inner House of the Court of Session. Section 72 of the Agricultural Holdings (Scotl......

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