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Smallholdings are different

10 December 18

Agriculture briefing: the Land Court has declined to allow a resumption for beneficial development, on the ground that there is no public interest criterion in the legislation covering smallholdings

by Adèle Nicol

In the quarter year since my last column, three new decisions have been added to the Land Court’s website, and the Scottish Government has produced a draft order to modernise the list of agricultural tenants’ improvements. Also, the Inner House refused leave to appeal to the Supreme Court in McMaster v Scottish Ministers, which may have drawn the fallout from Salvesen v Riddell to a close.

The first Land Court decision was Viking Energy Wind Farm LLP v Crofters having rights in the Common Grazings of the Townships of Sandwick, Sweening & Laxo and Other Common Grazings (5 September 2018). The applicant sought consent from the Land Court for development of crofting land under s 19A of the Crofters (Scotland) Act 1993. The application was successful. There was little legal argument, but the court did clarify that alleged irregularities in other statutory procedures were irrelevant to the application, which fell to be decided “within the four corners of s 19A” alone (para 80).

No public interest purpose

On 1 October 2018 the Land Court decided Trustees of Gibsone of Pentland’s Trust v Telfer. This was an application under s 2 of the Crofters Holdings (Scotland) Act 1886 to resume two smallholdings, so that the land could be sold and ultimately used for the Pentland film studios project. The application was refused on two grounds.

The smallholdings had originally been held under the statutory provisions with no written lease. One of them now appeared to be held on a written lease, governed by the Agricultural Holdings (Scotland) Act 1991. Consequently, it was argued for the tenant that the application was incompetent so far as concerned that holding. The court held that, although in certain circumstances it would be possible to let a smallholding on some other tenure without statutory consent, this had not happened, largely thanks to the gap between entry in 1962 and executing the lease in 1964. While the tenant was unsuccessful in challenging the application on this ground (the holding was a smallholding regardless of what the lease purported to say it was), the tenant defeated the application as the proposed use failed to be “a reasonable purpose”, as was required for resumption under s 2 of the 1886 Act.

There was no reasonable purpose in relation to the good of the estate. The land the applicants sought to resume was part of a larger area which they wished to sell. A previous tenant of that other land had created some unauthorised bings, which were extant. The local authority had issued enforcement notices and the prospective purchaser had agreed to carry out the costly remedial works. It was argued that the resumption – without which the sale would not proceed – would thus be for the good of the estate. The court was unconvinced: “the purpose of the resumption is the creation of a film studio… not the amelioration of the estate by the remediation of Clippens Yards. That... is an incidental benefit” (para 70).

The non-exhaustive list of purposes for which resumption may be made, contained in s 2, was considered. The creation of a film studio was not analogous to anything on the list, which seems to envisage purposes that will be to the improvement of the land in the context of a crofting or smallholding community. A resumption which benefits only the landlord or some third party “is not for a reasonable purpose in relation to the good of the estate” (para 74). There is no “public interest” criterion in s 2 (as there is in modern crofting law under s 20 of the 1993 Act).

Breach of duties?

Malone v Pattinson (10 October 2018) was the third Land Court case. The applicant sought an order enabling him to acquire his croft. The respondent argued that making the order would be substantially detrimental to the interests of sound management of his estate. He considered the applicant to be in breach of the duties under s 5AA (residency), 5B (not to misuse or neglect), and 5C (cultivate and maintain) of the 1993 Act. Granting the order would undermine his policy of not selling to crofters who were in breach. On the evidence, the existence of that policy was not made out and the application was successful. The decision includes some (obiter) discussion of what constitutes breach of the statutory duties.

The Scottish Government has produced the Agricultural Holdings (Scotland) Act 1991 (Variation of schedule 5) Order 2019. In general, the draft broadly follows the recommendations of the Tenant Farming Commissioner, made in November 2017, although not to the letter. I will return to this when it has been made law. 
Adèle Nicol, partner, Anderson Strathern LLP

 

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