Camels and common sense
by Alasdair FoxTwo further court decisions relating to agricultural tenancies have caught the attention recently
The Journal, December 2007, page 41
Commercial grazing
In McDonald v O’Donnell [2007] CSIH 74 (25 October 2007), the Second Division held that a lease of 33.633 acres for the use of a riding school business, under which, in connection with that business, the defender was allowed to graze horses and crop hay for winter feed, was a commercial lease and not one of an agricultural holding, as its purpose was non-agricultural.
In his judgment Lord Justice Clerk Gill commented on Rutherford v Maurer [1962] 1 QB 16, which, for many years, has been used to support the proposition that a lease for the grazing of horses in pursuance of a business – albeit that business was non-agricultural – was an agricultural lease because the definition of “agriculture” in the agricultural holdings legislation includes “the use of the land as grazing land”. Lord Gill states that, because agriculture includes grazing, it does not follow that all forms of grazing constitute agriculture. In a colourful passage, he opines that “If the decision in Rutherford v Maurer was sound, it would follow that if a commercial zoo were to be given a tenancy of ground for the grazing of camels, the lease would be a lease of an agricultural holding. That conclusion, I suggest, is not in accordance with common sense.” It is reassuring that common sense does, on occasions, prevail, though I am left to wonder how often camels have been used to illustrate a point of agricultural law!
Right to buy and notice to quit
In Trustees of The North Berwick Trust v James B Miller & Co (SLC/220/06, 2 October 2007) the Land Court issued a decision which covers a number of interesting points relating to the interplay of right to buy and notice to quit. In short, the court rejected the landlords’ argument that registration by the tenants of their interest under right to buy prevented sound management of the landlords’ estate, which consisted only of the holding, on the ground that they were prevented from taking forward proposals for its development which would trigger right to buy and, accordingly, from realising development value. On the other hand, the court has allowed probation on whether, as a consequence of registration, the possibility that development may be prevented amounts to greater hardship, the court having already opined that the grant by statute to tenants of the right to buy does not, per se, constitute greater hardship.
The court also rejected the landlords’ contention that right to buy contravened ECHR by discriminating against “poor” landlords, who can only obtain the planning permission required for a s 22(2)(b) incontestable notice to quit to succeed, by negotiating with a developer (and therefore triggering right to buy), in comparison with a “rich” landlord who could meet the costs of a planning application himself.
The court went on to hold that s 24(1)(e) (which requires it to consent to a notice to quit where the landlord wishes to use the land for a non-agricultural purpose not falling within s 22(2)(b)) is the converse of the latter section, so that where land is required for non-agricultural use for which planning permission is required, but has not yet been granted, s 24(1)(e) could be used as the basis for a notice to quit.More guidanceAs part of its judgment the Land Court issued its interpretation of certain provisions of Part 2 of the 2003 Act. The headlines are:
- Negotiation between the landlord and the registered tenant himself does not trigger the right to buy.
- The right is triggered and a s 26 notice should be issued at an early stage, which includes (along with advertising or exposing for sale) the point at which the landlord “enters into negotiations” with a third party, including “any discussion with a developer”.
- If the landlord fails to give a s 26 notice and transfers the land anyway, ss 28(2) and 29(4) confer on the tenant the right to buy from the transferee for three years from the transfer.
- Importantly, “hope value” is to be taken into account in the valuation of the land for right to buy purposes.
The court did not, however, attempt a solution to the difficulty faced by a tenant (as a result of s 29) over how he exercises his right to buy where the landlord fails or refuses to issue a s 26 notice, even though the right has been triggered. To quote the court, “it is not clear how the tenant is to exercise the right” in such circumstances. The fact that although, I understand, invited to do so, the court did not attempt to solve the lacuna suggests to me that there may be no solution as the legislation is currently framed.
Alasdair G Fox WS, Anderson Strathern
My thanks to Sir Crispin Agnew of Lochnaw QC for considering this article for me.
CORRECTION: NOTICE PERIODS
I must confess to an inaccuracy in my last article (Journal, September, 41), relating to Isle of Gigha Heritage Trust v Herd (SLC/176/06). I stated that the Land Court held that a s 72(6) notice (by which a general partner, on dissolution of a limited partnership by the landlord, claims the tenancy) falls to be issued within two months after termination of the tenancy. That should, of course, have read 28 days. Apologies!
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