Resumption from crofting: Glen Spean Estate v MacLachlan

Glen Spean: Gorge Park below the plantation centre left

In Glen Spean Estate v MacLachlan the Scottish Land Court has issued another of its periodic pleas to the Scottish Government to legislate to clarify the law, this time on the subject of resumption from crofting.

Resumption is the process whereby the landlord of a tenanted croft can take back vacant possession in order to put the land so resumed to an alternative use. Resumption is seldom of entire crofts, more usually relatively small parts of them comprising a development site. It's also possible to resume land from crofters' common grazings, indeed this is more common than resumption from in-bye. Resumption is subject to the landlord paying the affected crofting tenant(s) half of the open market value of the land resumed with vacant possession. (In the case of common grazings, this is shared among the crofters who share the grazing.)[1]

Resumption must be authorised by the Land Court who, in terms of Section 20(1) of the Crofters (Scotland) Act 1993, must be satisfied that the landlord desires to resume the land for "some reasonable purpose having relation to the good of the croft or of the estate or to the public interest or the interests of the crofting community in the locality of the croft"

Glen Spean Estate v MacLachlan involved the common grazing of Galmore, just east of Roy Bridge in Glen Spean. Specifically, the landlord, Glen Spean Estate (a partnership between a Mr Smith and a Mr Bruce), had obtained planning permission to build a house on a detached portion of the grazings known as The Gorge Park extending to 1.94ha (4.8 acres) between the A86 and the railway to Fort William (go for a virtual drive-by here - left hand side of the road). The estate had sold it to a Mr & Mrs Dignan for £45,000 and now sought resumption in order to be able to convey it to the Dignans with vacant possession. In the meantime, however, one of the crofters sharing the Galmore Grazings, Mrs MacLachlan, had obtained an apportionment of the Gorge Park, that is an order by the Crofting Commission carving it out of the common grazings and adding it to her individual croft, No 5 Achluarach (1.95ha). As she too had plans to build a house and crofting infrastructure on the Gorge Park (there being none on the rest of her existing croft), she objected to its resumption by the landlord.

Resumption has been around ever since crofting began in 1886. But despite its longevity, the Land Court noted two separate strands of judicial authority on the subject. According to one, following the Inner House case of Whyte v Stewart (1914 SC 675), if the landlord can establish a reasonable purpose having relation to the good of the estate (or the public interest), he is entitled to his resumption even if that would be disastrous for the affected croft (or local crofting community).[2] But according to another, more recent strand of authority reflecting the Land Court's actual practice in recent decades, a balancing exercise has to be carried out between the respective effects of the resumption on the estate, croft, public interest and local crofting community: thus, a resumption undeniably for the good of the estate (or the public interest) might still be refused if it were judged to be outweighed by the adverse effect on the croft (or the crofting community). The latter approach was exemplified by the case of Portman Trustees v Macrae (1971 SLT (Land Ct) 6) in which the landlords sought resumption to sell as house plots of an area at Dornie in Wester Ross which the crofting tenant had obtained planning permission to develop as a site for holiday chalets and static caravans: refusing the resumption, the Land Court expressed matters neatly thus: "Standing the [tenant's] plans for the development of this part of her croft we are not satisfied that the landlord's purpose - though reasonable in itself - is reasonable in the circumstances."

In the Glen Spean case, the Land Court speculated that s.20(1AA)(b) of the 1993 Act (added by s.42 of the Crofting Reform (Scotland) Act 2010):-

(1AA) In determining whether it [i.e. the Land Court] is satisfied as mentioned in subsection (1) above [i.e. that the landlord desires to resume the land for some reasonable purpose having relation to the good of the croft or of the estate or to the public interest or the interests of the local crofting community]  (and, in particular, whether the reasonable purpose mentioned there relates to the public interest) the Land Court—
...

(b) where the purpose is, or is connected with, the development of the croft in respect of which planning permission subsists, may take into account the effect such development would have on the croft, the estate and the crofting community in the locality of the croft, ... .

... might be giving statutory effect to the second of the two judicial strands on resumption (the balancing exercise) but they didn't put it any more strongly than that it was "arguable".[3]

Anyway, it is the potentially irreconcilable conflict between these two strands - the first carrying the authority of the Inner House but the second more representative of contemporary practice and arguably since bolstered by s.20(1AA)(b) - which the Land Court in the Glen Spean Estate case recommended to the attention of the Scottish Government for resolution by legislation.[4] It's not one of the issues identified by the "Crofting Law Sump"[5] so the crofting legislation to do list just got longer.

Back in Glen Spean, meanwhile, as it turned out, the Land Court was able to decide the case consistently with both strands of authority. This was because it decided that selling the Gorge Park to Mr & Mrs Dignan for them to build a house on was not a reasonable purpose having regard to any of the good of the croft, the estate, the public interest or the local crofting community: the landlord having failed at every hurdle, there were none left standing to be balanced. It was too much of a stretch to argue that the tenant's £22.5k share of the value of the land resumed represented a good deal for the croft when it would be losing half its area. The landlords did not lead any evidence that they intended to use their half of the proceeds of sale of the Gorge Park to fund any capital improvements and therefore the case on good of the estate failed (one thing that's incontrovertible in resumption law is that the good of the landlord's pocket is not the same as the good of his estate). And a case on the public interest and the local crofting community - that the Dignans being able to build a house on the Gorge Park would establish a new family in the area - foundered for the reason that they already owned a house they lived in nearby.[6]

The Land Court was equally sceptical about the tenant, Mrs Maclachlan's, plans for the Gorge Park. That didn't affect the outcome because the onus was on the landlord to make the case for resumption, not upon her to keep it in her tenancy. But the Court did remark that, if the estate had succeeded in putting forward a "colourable case" for the resumption, the outcome might have been different given the weaknesses in her case - which does, of course, suggest that, if they had been put to it, the Land Court would have followed the second strand of resumption authority, the balancing approach.[7] 

Finally, the Land Court touched on new s.20(1AA)(a) added to the 1993 Act by s.42 of the 2010 Act:-

(1AA) In determining whether it [i.e. the Land Court] is satisfied as mentioned in subsection (1) above [i.e. that the landlord desires to resume the land for some reasonable purpose having relation to the good of ... etc.] (and, in particular, whether the reasonable purpose mentioned there relates to the public interest) the Land Court—

(a) may take into account the effect that purpose (whether alone or in conjunction with other considerations) would have on the matters mentioned in subsection (1AC) below;
...

(1AC)The matters mentioned in subsection (1AA)(a) above are—

(a) the sustainability of—

(i) crofting in the locality of the croft or such other area in which crofting is carried on as appears to the Land Court to be relevant;

(ii) the crofting community in that locality or the communities in such an area;

(iii) the landscape of that locality or such an area;

(iv) the environment of that locality or such an area;

(b) the social and cultural benefits associated with crofting. 

The Court said it had thought it would require to embark on a "thoroughgoing analysis" of what these recent additions to s.20 actually meant in practice. But - disappointingly, because I think that would have been the first judicial analysis of them (also relevant to decrofting) - the Court eventually decided that resumption (or not) of the Gorge Park would have no effect on any of the matters referred to in subs.(1AC). One can't help wondering if that's not likely to be the case in all but a few exceptional resumptions (e.g. an entire township or grazing for a super quarry or similar)[8] 

Footnotes
[1] Strictly speaking it's half of the difference between the OMV with VP and the "crofting value", that is 15 x the crofting rental value of the land but the latter value is usually negligible.  
[2] In terms of the original Crofters Holdings (Scotland) Act 1886 (s.2), resumption had to be for a reasonable purpose having relation to just the croft or the estate. Reference to the public interest was added by the Crofters (Scotland) Act 1955 (s.12) and the local crofting community by the Crofting Reform (Scotland) Act 2007 ((s.22(1)(a)). Stewart v Whyte actually involved resumption from a statutory small tenancy (SST) rather than a croft under the discrete statutory code applicable to them (s.32 of the Small Landholders (Scotland) Act 1911). But the wording of the SST legislation on resumption (s.32(15) of the 1911 Act) and the policy background was identical to that for crofts.
[3] Para. [33] of the judgement.
[4] Para. [34]
[5] A project by the Crofting Law Group to identify current problems in crofting law for potential legislative remedy: see the final report here. 
[6] Paras. [60] to [64] of the judgement.
[7] Para. [64] 
[8] The Court also noted that s.20(1AA)(a) says that the LC "may" take into account the matters referred to in subs.(1AC) - i.e. it's permissive not mandatory. The Court in Glen Spean interpreted this to mean that it could - as in fact it did - find as a matter of fact that the resumption had no effect on the (1AC) matters but I would have thought it also means that the Court could find as a matter of fact that the resumption would have a massive effect on the (1AC) matters but nevertheless ignore that: unless s.20(1AA)(a) is an example of when "may" in a statute actually means "shall". I'm no expert on that point but, coincidentally, s.20(1) of the 1993 Act ("The Land Court may, on the application of the landlord and on being satisfied that he desires to resume the croft, or part thereof, for some reasonable purpose ... authorise the resumption thereof ... ") is such an example: Whyte v Stewart, cit. sup., per Lord Dundas at 682 and Lord Salvesen at 685. Interpreting "may" as "shall" in that context underpins the first of the two strands of authority on resumption (because otherwise the second strand could be justified as saying that the LC only exercises the discretion conferred on it by the word "may" when satisfied with the result of the balancing exercise).     

Coates Crescent: servitudes granted by implication

 

ASA International Ltd v Kashmiri Properties (Ireland) Ltd ([2016] CSIH 70) is a decision of the Inner House of the Court of Session (Scottish equivalent of the Court of Appeal) illustrating circumstances in which a servitude (Scottish equivalent of a wayleave) of access was held not to have been created by implied grant.

The parties were the owners of two neighbouring properties in Edinburgh's New Town, 6 and 7 Coates Crescent (above): originally town houses, they had long since been converted to offices.  At the back of No 7 was a car park opening on to William Street South East Lane while the rear frontage of No 6 to the lane was occupied by a garage. You can see the site in Google Streetview here with No 7's car park nearer the camera and No 6's garage beyond.

Nos. 6 & 7 were in the same ownership from 1989 until October 1996 when No 6 (and a car park belonging to it behind No 9 Coates Crescent, also accessed off the lane) was sold off, the vendor retaining No 7. (Note in this regard what appear to be mistakes at various points in the judgement (e.g. para. [6]) in which the dates of the break off disposition (deed of conveyance) of No 6 are given as being in 1994 when 1996 must be intended (e.g. last line of para. [7]).)

The case concerned pedestrian access from No 6 to the lane at the rear. The evidence showed that, both before and after the separation of ownership of No 6 from No 7, occupants of No 6 going out to William Street or to its carpark behind No 9 found it more convenient to go through a gate in the party wall between Nos 6 & 7 (behind the car in the Google Streetview linked to above) and walk out to the lane through No 7's car park rather than through No 6's garage. The same went for occupants of No 6 when parking in the garage: due to restricted space, they found it easier after having parked their cars in it to go out on to the lane, round the outside of the garage through No 7's car park and into No 6 through the gate.

For reasons not disclosed, the owners of No 7 sought to prevent the occupants of No 6 walking through their (No 7's) car park. The owners of No 6 applied to the sheriff (Scottish equivalent of the County Court judge) for a declarator (court order declaring legal rights) that they had a servitude (wayleave) right of access through the car park which its owners could not prevent. However, as the break off disposition of No 6 did not contain an express servitude, and the two properties had not yet been in separate ownership for long enough to admit a servitude constituted by prescriptive possession (use "without a by-your-leave" for 20 years), the owners of No 6 were left with no option but to contend that a servitude of access through No 7's car park had been granted by implication when ownership of the two properties was separated.

The sheriff rejected the claim, whereupon the owners of No 6 appealed to the Inner House. The court focussed on the classic statement of servitudes granted by implication by Lord Chancellor Campbell in the 1861 House of Lords case Ewart v Cochrane:

[W]hen two properties are possessed by the same owner, and there has been a severance made of one part from the other, anything which was used, and was necessary for the comfortable enjoyment of that part of the property which is granted, shall be considered to follow from the grant ... . When I say necessary, I do not mean so essentially necessary that the property could have no value without it; but necessary for its convenient and comfortable enjoyment, as it existed at the time of the grant.

The court noted that Lord Campbell's test for a servitude granted by implication involved two elements, both of which had to be present: (i) the access claimed had to have been in use before the properties were separated; and (ii) it had to be necessary for convenient and comfortable enjoyment of the putative dominant tenement (i.e. the property accessed). At Coates Crescent, element (i) was present so the case boiled down to whether No 6's continued access through No 7's car park was, in the words of Lord Campbell, "not ... so essentially necessary that the property could have no value without it; but necessary for its convenient and comfortable enjoyment ..." (The court pointed out that judicial dicta suggesting that any access which existed before severance was continued by implication - i.e. that only element (i) was necessary but not (ii) - were being read out of context.)

Having regard to the fact that the occupants of No 6 could get out to the lane by going through its own garage, less convenient though this appears to have been than bypassing it through No 7's car park, and that it wasn't too much of a hardship to get to No 6's car park behind No 9 or William Street by walking an extra 150 yards or so out the front door of No 6 and round by surrounding streets (Walker Street or Stafford Street), the Inner House had little difficulty in deciding that a servitude of access through No 7's car park was not implied.

Each case turns on its own facts and it can be hard to predict the result of application of broad principles to particular circumstances. But having said that, the decision is not surprising: if I'd been asked for my opinion, I'd have told No 6 I thought their claim a complete no-hoper. One wonders what imperative drove them into the expense of litigating to the Inner House.

 I'd summarise by saying that the fact that an access would be "handy" (or, to use a word beloved of estate agents, "useful") is not enough for a servitude by implied grant.

Get used to going this way ...