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Rise and rise of the Land Court

20 June 05

The Land Court begins to make its mark in exercising its newly extended jurisdiction

by Alasdair Fox

The least commented-on part of the Agricultural Holdings (Scotland) Act 2003 is Part 7, which transfers primary jurisdiction for the resolution of tenancy disputes from arbitration to the Scottish Land Court. (Parties may still, if they prefer, refer differences to arbitration when the dispute arises, but not by prior contract; the rules relative to the arbiter’s appointment, procedure to be followed and form of award have been relaxed by the repeal of schedule 7 to the Agricultural Holdings (Scotland) Act 1991.)

Appeals from arbitration to the court are on law only – thus arbitration on rent will be final on fact and the previous ability to have two bites at the cherry has ceased. Equally the court provides a one-stop forum for rent review.

The lack of comment on the transition may, I suggest, be because this part of the Act was the result of detailed consideration by the Scottish Law Commission, resulting in its Report no 178, Jurisdictions under the Agricultural Holdings (Scotland) Acts (2000). Part 7 was subsequently drafted by the Commission itself.

A broadened remit

In installing the Land Court as first port of call, the Act has broadened the matters which may be considered by the court from those referred to arbitration under the 1991 Act (including the section 60 general reference of “any question or difference”). These now extend to whether a tenancy exists or has been terminated, any issue or fact or law relating to a tenancy or to agriculture which the landlord or tenant reasonably requires to have resolved (including tenant’s right to buy, other than questions of fact in determining the price), and any difference between a tenant and assignee arising out of assignation. Questions relating to succession, however, remain in the jurisdiction of the ordinary courts.

Furthermore, the Act extends the remedies available to the court beyond those previously available to an arbiter, to include any or all of interdict (including interim interdict), orders ad factum praestandum, specific implement, specific restitution, reduction or rectification, removal or ejection (but not interim orders), damages and declarator.

The court is final on fact, but questions of law may be appealed to the Court of Session (except where the court is, itself, exercising appellate jurisdiction, as from the decision of an arbiter), which may quash, confirm or vary the court’s determination and, where quashing, remit to the court for further procedure and direct it on a question of law.

Jurisdiction is broadly similar in relation to 1991 Act tenancies and SLDTs, LDTs and 2003 Act grazing tenancies, including the question of whether one or other of the new tenancies exists or has been terminated. Applications may be joint or several.

An interesting aspect of its extended role is the power of the sheriff courts and Court of Session (section 86) to remit cases to the court (of their own accord or on the motion of any party) at any stage if they consider it appropriate to do so. I understand that this power has already been used on more than one occasion.

Resolving ambiguity

The importance of the Land Court will inevitably grow as its case law clarifies the many unclear provisions of the 2003 Act: for example, what constitutes the “reasonable state of repair” in which a tenant is bound to leave fixed equipment before opting out of a post-lease agreement (1991 Act, section 5(4)(b)); what constitutes entering into negotiations with a view to the transfer of the land, triggering right to buy; to what extent the tenant may sublet for non-agricultural purposes (2003 Act, section 39(3)); the various grounds on which the landlord may object to a notice of diversification; and, perhaps most importantly, parties’ respective obligations in relation to SLDT and LDT for the provision, improvement, replacement, renewal, maintenance and repair of fixed equipment (section 16).

And, of course, we wait with bated breath for the court to make an order under section 72 in respect of a limited partnership dissolved by notice by the limited partner issued between 16 September 2002 and 30 June 2003.

The important new role of the court was, recently, brought into sharp focus by its decision, on 1 April 2005 (Morrison-Low v Paterson’s Executors, RN SLC/232/04), by which it cleared up the confusion surrounding the review of agricultural rents caused by the defective amendment of section 13 of the 1991 Act by paragraph 15(a) of the schedule to the 2003 Act. The court determined that the subsection falls to be read as if the missing words had not been omitted, in order to fulfil the clear intention of Parliament to repeat the previous provision, given that the amended section was meaningless as it stood. The decision is essential reading for lawyers interested in a dissertation on the powers of the courts in the construction of statute.

Alasdair Fox, Anderson Strathern