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).