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Strictly by the book?

17 June 19

Agriculture briefing: Land Court decisions have clarified the requirements for an application for determination of rent, and the rules regarding appeals against reductions in CAP payments

by Adèle Nicol

Since my last column, the Land Court has produced eight decisions; three of particular interest to agricultural matters are summarised below. Also, the Tenant Farming Commissioner has issued a code of practice on agricultural leases, and two new guides, on tree planting and on the conduct of agents. It has been a busy quarter.

Rent review application

The applicant in Lewis v Hunter (SLC/150/17) sought a determination of the rent of a Selkirkshire farm under s 13(1) of the Agricultural Holdings (Scotland) Act 1991, from Martinmas 2017. 

The initial application submitted to the court on 27 November 2017 (one day before the rent review date) did not refer to or include a copy of the written notice requiring a rent review. The respondent moved for dismissal as the application had not been received in the proper form in time. There were two questions: first, did s 13(1) require the application to be lodged before the review date; and secondly, if it did, had this application been served in time, given the absence of reference to the written notice?

Following Gill, Agricultural Tenancies (4th ed), paras 27-48 and Graham v Gardner 1966 SLT (Land Ct) 12, the court proceeded on the basis that the application did need to be so lodged (noting its own doubts, expressed in Cawdor Farming Number 1 Partnership v The Cawdor Maintenance Trust (SLT/151/16, 21 May 2018), para 8). 

On the second question, the court did not consider that the initial application provided sufficient detail for the tenant to be able properly to answer it. The statement of facts referred to three rental comparables, but provided no information about them and did not explain how the rent sought was calculated. An amended version received in April 2018 made good some, but not all, of the deficiencies; it did not enclose a copy of the notice referred to in s 13(1) but referred to a notice of rent review having been issued to the tenant on 24 November 2017, a date far too late for a review that year. On this being brought to the agents’ attention, they emailed attaching the notice served, which was dated 24 November 2016. A revised statement of facts was lodged with this “typo” corrected, and intimation effected.

It was argued for the respondent that the application had not complied with the court’s rule 7, but the court highlighted that the rules existed to facilitate processing of applications and could not “add to the requirements of primary legislation” (paras 12 and 13). Thus, it was the terms of s 13(1) which really mattered, which the court concluded did not “require the application to refer to the service of a notice in writing ab initio” (para 15). The application for determination of rent could proceed.

Payment reduction appeals

Helen Thom v Scottish Ministers (SLC/65/17) and Ashley Thom v Scottish Ministers (SLC/90/17), were factually connected: both were appeals against impositions of 75% reductions in CAP payments, applied for “intentional non-compliance” with cattle movement regulations – cattle were recorded as having moved off the respective holdings, but there was no corresponding on-movement by a slaughterhouse or other registered holding. The appellants were husband and wife.

Mrs Thom sought a telephone review of the decision in her case, but did not answer the call which was made at the agreed time. An answering machine message was left, but the caller did not successfully terminate and an unprofessional exchange with a colleague was also recorded.

The Land Court considered the appeal “a full appeal, and not merely a review of the review” (para 14), but the appellant wished to limit the scope of the hearing to “her legal argument that the review decision ‘was time barred and that the appeal should be granted on the basis that [the respondents] failed to complete the initial appeal in the timescales laid down’”.

Her principal argument was that the respondents had failed to comply with the requirement to provide her with an “opportunity to be heard at a review meeting held within 60 days of receipt of the application”: Rural Payments (Appeals) (Scotland) Regulations 2015, reg 6(2). The respondents argued that she had been given the “opportunity” within that time (the ill-fated phone call and attempts to reschedule), and that had discharged their obligation. The court rejected this: that review was not “worthy of the name”. Equally rejected was the appellant’s contention that “the review could, and should, have continued in the appellant’s absence”. In future, “review of a relevant decision should not be conducted by a SGRPID official working out of the same area office as the official(s) who made that decision” (para 27). Ultimately, however, the court confirmed the respondents’ decision; the appellant was unsuccessful in her assertion that non-compliance with the timescales meant that the original decision must fall, notwithstanding its merits.

Mr Thom sought substitution of a 5% penalty for “negligent non-compliance” in place of 75%. He claimed his cattle had been exchanged for an excavator (strikingly similar to another which he owned) with a Mr Callaghan, who could not be traced. The evidence was in doubt; his appeal was refused. Calculation of the penalty was not contested, but the court raised a query about possible double counting, and reserved its opinion (para 68).

Adèle Nicol, partner, Anderson Strathern LLP

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