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Always the Land Court?

17 March 08

Despite what appears to be a prevailing belief, the Land Court is not the only available forum for resolving agricultural tenancy disputes

by Alasdair Fox

I detect that a popular misconception has arisen since the Agricultural Holdings (Scotland) Act 2003 came into effect, that all disputes between landlord and tenant should be decided, at first instance, by the Scottish Land Court. Undeniably there are benefits to be gained from litigating before the Land Court, given the combination of practicality and legal expertise which the court provides under one roof. Disputes do, commonly, involve both facts and law, particularly as we struggle to find a meaning for many provisions of the 2003 Act (albeit a back-of-an-envelope calculation suggests that there have, since 2003, been more cases decided on matters arising from or related to the 1991 Act than those arising directly out of the 2003 Act).

What’s new in the court

For example, since my last briefing, the full court has held, on appeal (in Johnstone v Milligan, SLC/170/06) that a lease for a “minimum 10 years” was a 1991 Act tenancy for a 10 year period, with the long period of occupation which had taken place since the expiry of the 10 year period attributable to tacit relocation; and (in Scottish Youth Hostels Association v Paterson, SLC/16/07) that a single contract, constituted by missives, providing for 10 successive grazing leases from 1 February until 31 December in each of the 10 years, was just that, and not a 1991 Act lease.

That said, the court has very recently issued guidance as to what fixed equipment requires to be in a “reasonable state of repair” so as to allow a tenant to be released from a post-lease agreement, following determination of the rent by the Land Court (2003 Act, s 60): Telfer v Buccleuch Estates Ltd, SLC/30/07. I will comment in a future issue. Other cases arising out of the 2003 Act, for example bearing on right to buy and assignation, are also expected to be heard before too long.

But it is, in my view, worth reminding practitioners that there are alternative forms of dispute resolution in agricultural cases which may in some cases be much more suitable for deciding the matters at issue than Land Court proceedings.

Arbitration: more flexible

First, arbitration. In passing primary jurisdiction for agricultural dispute resolution to the Land Court, the 2003 Act nevertheless preserved the right of parties to take issues to arbitration, but only as and when those issues arise and not by means of a general reference in a lease. The somewhat archaic provisions and procedures for arbitration formerly contained in sched 7 to the 1991 Act have been swept away, and parties are now free to agree not only who is to be the arbiter but also the procedure to be followed (including matters to be taken into account by the arbiter or contained in his award). In the absence of any guidance by the parties on such matters, they are to be at the discretion of the arbiter. Thus arbitration can be in such a form and, accordingly, as complicated, long or short, as the parties themselves determine, and there is a right of appeal to the Land Court on a question of law. It seems to me that there is a whole range of issues not involving law, or where the law is well known (for example, valuations) where a simple form of arbitration would be a quick and relatively inexpensive method of avoiding taking up the Land Court’s time.

Mediation: potential

And then, secondly, there is mediation, still rarely used in agricultural disputes, although I believe there to be a significant movement within the profession to do so more. Practitioners who have used mediation – I have to confess that I am not one of them, but they do include senior counsel – have found it most satisfactory in, for example, professional negligence claims. From the very fact that mediation is a confidential procedure, it is not possible to give detailed examples. There must, however, be a number of instances where mediation will tease out the cause of a dispute, while litigation will deal only with the symptoms, and bring warring parties back together in a way which, in time, may be more beneficial than the inevitable breakdown in relationships which facing each other across a courtroom often causes. Parties may sometimes appear to have entrenched positions on a particular matter when the underlying issue is, in fact, something quite different, and amongst all three forms of dispute resolution, mediation, it seems to me, is that which may uncover it. An example of an area where this might work is in relation to the provision, replacement, renewal or repair of fixed equipment.

We should not, in my opinion, be blinkered by taking a traditional approach to dispute resolution, but have our eyes open to alternative methods which may achieve our clients’ aspirations more successfully – and possibly more cheaply and quicker.

Alasdair G Fox WS, Anderson Strathern LLP