Pattinson v Matheson - Inner House clarification on 1991 Act and crofting tenancy succession time limits

Picture credit cioch direct

When transferring a 1991 Act or crofting tenancy to a deceased tenant’s successor upon intestacy, the received wisdom is that the process must be completed within a year (two years for crofts) of the death. Otherwise, the tenancy is at risk of being terminated notwithstanding the security of tenure normally enjoyed.

That said, there has been a degree of uncertainty about exactly what the consequence of missing the deadline is. The Inner House case of Pattinson v Matheson 2022 CSIH 43 (concerning a croft but equally applicable to 1991 Act tenancies) now provides welcome clarity on this: the consequence is not that the tenancy simply terminates on the expiry of the one (two) year deadline and cannot be revived thereafter. Rather a right arises to the landlord at the expiry of the one (two) year period to terminate the tenancy but that may be defeated if the successor completes the transfer, albeit late, before the landlord takes action.

Different types of tenancy
This article only concerns 1991 Act and crofting tenancies. It does not concern the newer types of agricultural tenancy (Limited Duration Tenancies, Short Limited Duration Tenancies and Modern Limited Duration Tenancies). That's because s.16(4C)(b) of the Succession (Scotland) Act 1964 explicitly says that they simply terminate if not transferred within a year of the death.

Intestate transfers
This article also only concerns intestate transfers of tenancies, not transfers pursuant to a valid bequest of the tenancy in the deceased tenant’s will.

Intestate transfers of crofting tenancies only arise when the deceased tenant didn’t make a bequest of the tenancy (either because he didn’t have a will or he did but it didn’t contain a bequest of the tenancy). Intestate transfers of 1991 Act tenancies are much more common. That’s because, unlike crofts, there is no statutory right of bequest of most 1991 Act tenancies. [1]   

Succession (Scotland) Act 1964
The starting point of this discussion is the Succession (Scotland) Act 1964. That’s the one which vests a deceased’s heritable estate (which includes any interest in a tenancy) in his executor rather than his heir-at-law as under the pre-1964 law (section 14) and then allows the executor to transfer a tenancy to someone, typically (though not necessarily) one of the deceased’s heirs ab intestato, [2] notwithstanding any express or implied prohibition on assignation in the lease (s.16). 

1991 Act and crofting specialities
Section 12 of the 1991 Act adds a further requirement for 1991 Act tenancies, namely, that the transferee from the executor must give notice to the landlord of his acquisition of the tenancy within 21 days of the transfer to him. And section 11(1) of the Crofters (Scotland) Act requires the executor (not the acquirer as with 1991 Act tenancies) to give notice of the transfer containing particulars of the transferee to the landlord and the Crofting Commission “as soon as may be” after the transfer.

Three step process
The upshot of this legislation is that the transfer of a tenancy involves three steps to be achieved within one year (two years for crofts) of the death of the deceased tenant:

1 Confirmation – the deceased tenant’s executor obtains confirmation as executor. The deceased’s interest in the tenancy must be included in the inventory.

2 Deed of transfer – the executor transfers the tenancy to the successor. A docket transfer under s.15(2)of the Succession Act is the gold standard way to do this but something less formal will suffice.[3] Whatever form of document is employed, I refer to this step as “the deed of transfer” to distinguish it from the entire three step process of the transfer from the deceased to the successor.

3 Notice – the transfer is notified to the landlord. In the case of crofts, this notice must be simultaneously copied to the Crofting Commission (CC). The CC provides a form of notice for notifying transfers to landlords. You can see it here. Use of the CC form is not mandatory.[4]

Pattinson v Matheson - the facts
The tenant of two crofts at Shieldaig on Loch Torridon in Wester Ross (pictured above) died intestate (no will) on 14 September 2012. As he was entitled to do under the Crofting Act, his son, Mr Matheson, wanted to transfer the tenancies to himself as his father’s sole heir. Although he obviously hadn’t taken legal advice, he did rather belatedly become aware there were formalities he needed to complete within two years of his father’s death. Accordingly, he obtained a CC notice of transfer form and completed it to the extent of identifying the crofts and himself as the successor to his father and signing the declaration at the end. But he had to leave the details of the confirmation and deed of transfer (steps 1 & 2) blank because he hadn’t done these things. On 8 September 2014 – six days short of two years from his father’s death – Mr Matheson sent this to the landlord of the crofts, Mr Pattinson, with a covering letter. That letter is not quoted in either of the decisions in the ensuing court case and all we know of it is the following precis in the Inner House judgement (para [7]): “The letter explained that he was requesting the transfer of the crofts to him following upon the death of his father.” He also sent a copy of the form to the CC.[5]

The landlord didn’t respond but the CC did because the transfer to Mr Matheson triggered registration of the crofts in the Crofting Register for the first time. This would involve him being named as the tenant but the CC was concerned from the absence of details of the confirmation or deed of transfer on the form that the transfer of the tenancies to him may not have been completed correctly. Protracted correspondence ensued until, possibly at the prompting of the CC, Mr Matheson eventually consulted a solicitor. This resulted in the following actions:-

30 November 2018 – Mr Matheson obtained confirmation (step 1)

4 June 2019 – His solicitor completed a new CC notice of transfer form and intimated this to the landlord and the CC (step 3)

13 June 2019 – Mr Matheson signed a docket transfer to transfer the tenancies to himself (step 2)

8 October 2019 – He was registered as tenant in the Crofting Register.

Meanwhile, having remained silent until now, the landlord, Mr Pattinson, now objected that the two attempts to transfer the tenancies to Mr Matheson were invalid, the 2014 attempt having been within the two years but inept for lack of steps 1 and 2 (confirmation and deed of transfer) and the 2018/19 one having been out of time. He accordingly served notice under s.16(3) of the Succession Act to terminate the tenancies at Martinmas (28 November) 2020 due to their not having been timeously validly transferred to anyone following Mr Matheson’s father’s death.

The Land Court: “automatic termination” and “protected period” interpretations of s.16(3)
The case came into court through Mr Pattinson applying to the Land Court to challenge the registration of Mr Matheson as tenant of the crofts.[6]

 

The court confirmed (report here), unsurprisingly perhaps, that the 2014 attempt to transfer the tenancies had indeed failed for want of steps 1 (confirmation) and 2 (deed of transfer).

 

As regards the 2018/19 attempt (which included steps 1 and 2 but was more than two years after Mr Matheson’s father’s death), the Land Court decided that the correct interpretation of s.16(3) was not that the tenancy simply ended at the expiry of the two years if it hadn’t by then been validly transferred by the completion of all three steps and couldn’t thereafter be revived – I call this the “automatic termination” interpretation of s.16(3). Instead, the correct interpretation was that the two years was merely a protected period within which the executors might effect a transfer. If all three steps had not been completed within the two years, the landlord might at any time thereafter give notice to terminate but until he did that, the tenancy remained in existence and available for transfer. And if the executor didn’t complete all three steps until more than two years after the death but before the landlord gave notice, then the successor would be safe: I call this the “protected period” interpretation of s.16(3).   

 

Unfortunately for Mr Matheson, however, the Land Court also decided that he had not correctly completed all three steps before Mr Pattinson had given notice to terminate because he’d done them in the wrong order – the 2019 deed of transfer (step 2) was dated nine days after the notice to the landlord and the CC (step 3). And it was implicit in the wording of s.11(1) of the Crofting Act, 

 

“Where […] the tenancy is transferred in pursuance of section 16(2) of [the Succession] Act, the executor of the deceased crofter shall as soon as may be give notice of the transfer …”

that the required notice was of a deed of transfer that had already taken place, not one that was going to happen.[7]

 

The Inner House
Mr Matheson appealed to the Inner House by special case.[8]

In reversing the Land Court and rescuing his crofts for him, the Inner House held (judgement here) that the 2014 attempt to transfer the tenancies had been valid. That was because it took the view (para. [24]) that Mr Matheson’s letter to Mr Pattinson of 8 September 2014 (within two years of his father’s death) together with the CC intestate transfer form enclosed with it themselves amounted together to the necessary deed of transfer (step 2). As for the objection that Mr Matheson had not at that time yet obtained confirmation (step 1), and didn’t do so until more than two years after his father’s death, it didn’t matter that step 1 (confirmation) was done after steps 2 and 3 (deed of transfer and notice) because a confirmation is deemed to be effective retrospectively to the date of the deceased’s death. Furthermore, the Inner House agreed with the Land Court that the protective period was the correct interpretation of s.16(3). Thus, all three steps had been completed, albeit in an unconventional order and more than two years after the last tenant’s death, before the landlord had given notice to terminate so Mr Matheson was safe.

Having thus disposed of the appeal in Mr Matheson’s favour by deciding that the 2014 attempt to transfer the tenancies to him was effective after all, the validity of the 2018/19 attempt in which steps 2. and 3. (deed of transfer and notice) had been done in the wrong order didn’t arise. But the Inner House expressed its opinion on that obiter anyway: the wrong order didn’t matter. So if the 2014 attempt had failed, the 2018/19 one would also have succeeded due to all three steps having been completed, albeit in an even more unconventional order, before the landlord gave notice to terminate the tenancies.

Analysis
Two elements of the Inner House’s decision in Pattinson – the 2014 transfer being valid despite the absence of a step 2 deed of transfer and the 2018/19 one being valid despite the step 3 notice preceding the step 2 deed of transfer – appear surprising. The decision on the 2014 transfer turns on its own facts so perhaps doesn’t bear much analysis. The decision on the 2018/19 transfer involves a real stretch of the wording of s.11(1) of the Crofting Act (the Land Court’s reasoning – at para. [18] of its judgement – on this element of the case is fuller and far more convincing) but it’s obiter and confined to crofting because the analogous section of the 1991 Act, s.12(1), explicitly says that notice is to be given within 21 days after the date of acquisition by transfer under s.16 of the Succession Act.

All in all, it’s hard to avoid the conclusion the Inner House was bending over backwards to rescue Mr Matheson from the predicament he’d landed himself in. So how robust is its decision on the most significant element of the case – that the protected period is the correct interpretation of s.16(3) – which applies equally to 1991 Act as to crofting tenancies (and, indeed, to non-agricultural commercial leases) considering the court’s discussion of this point was pretty brief? It consists of just two short paragraphs ([19] & [20]) distinguishing with little discussion the cases in the “well established line of authority” (as counsel for the landlord called it) in support of the automatic termination interpretation which is the received wisdom. The remainder of this article will attempt a more in depth consideration of these cases but first we’ll look briefly at another element of the decision which underpinned it.

Confirmation retrospective
Although Mr Matheson didn’t have confirmation as his father’s executor (step 1) when he attempted to transfer the tenancies to himself in 2014, the IH (at paras. [18] and [24]) confirmed Garvie’s Trustees v Garvie’s Tutors (1975 SLT 94 - an Outer House decision concerning a 1991 Act tenancy) in holding that confirmation is retrospective to the date of death and thus validates an earlier transaction such as a transfer of a tenancy carried out by an executor while as yet unconfirmed. It’s good to have explicit Inner House confirmation of this in relation to heritage in the post Succession Act regime and in a case of executors dative. That’s because, firstly, the precedent Garvie’s Trustees followed was a case (Mackay v Mackay - 1914 SC 2000) concerning retrospective validation of an assignation of moveables (copyrights) before the Act. And secondly, in both Mackay and Garvie’s Trustees, there was a trust disposition and settlement in favour of the executors (albeit they hadn’t confirmed).[9]

Automatic termination or protected period?
To begin with, the Inner House’s preference for the protected period interpretation is entirely consistent with the relevant wording of s.16(3)

of the Succession Act:-

(3) […] if in the case of any [tenancy]— […] (b) [it] is not so disposed of [i.e. transferred under s.16(2) by the executor to an eligible transferee] within a period of one year [two years for crofts] or such longer period as may be fixed by agreement between the landlord and the executor or, failing agreement, by the relevant court on the application of the executor […] from the date of death of the deceased, either the landlord or the executor may, on giving notice in accordance with [subsection (4)] to the other, terminate the lease […].

As already noted, the Land Court had also favoured the protected period interpretation (para. [17] of its

judgement). It observed that, if tenancies simply automatically terminated at the end of the one/two years, then the provision giving the landlord the option to terminate by notice (“may, on giving notice … terminate”) would be redundant. So too, the Land Court observed, would the provisions concerning crofting tenancies in s.11of the Crofting Act - which assume a tenancy remains available for transfer past two years (see s.11(5)(b)) - giving the Crofting Commission power to terminate it when the landlord has chosen not to do so in order to clear the decks for them to exercise their power to compel the re-let of an empty croft.

Standing the pretty clear words of s.16(3), then, it’s perhaps hard to see how the automatic termination interpretation could have gained traction. But it was given credence in the 3rd (1997) edition of the leading textbook on 1991 Act Tenancies, The Law of Agricultural Holdings in Scotland by Brian Gill, para. 34.03 of which says:-

"The confirmation ought always to precede the transfer, but it has been held that the executor may validly transfer prior to the confirmation. In that case [Garvie’s Trustees] both the transfer and the confirmation were within one year of the death. It is almost certain that such a transfer would be invalid if the subsequent confirmation was obtained outwith the one-year period." (Emphasis added)[10] 

So what of the “well established line of authority” Mr Pattinson’s counsel proponed in support of the automatic termination interpretation that the Inner House felt able to step round? Let’s look at these in date order:-

Rotherwick's Trustees v Hope (1975 SLT 187)
In this Outer House case, a 1991 Act tenant (as we would call him now) died and nobody had confirmed as his executor or attempted to transfer the tenancy to anyone or notify the landlords of that (i.e. none of the three steps had been undertaken) by the time, more than a year after the death, when the landlords took steps to terminate the tenancy. They were, however, confronted with an apparent lacuna in the Succession Act: if there is no executor, to whom do they give notice to terminate under s.16(3)? Therefore, they raised a common law action against the late tenant’s widow and his children for declarator that the lease had come to an end and for removal of his son who was in possession of the farm.

The late tenant’s family’s counsel (Brian Gill as a junior) argued – not with much conviction, one senses – that, although no transfer had been effected within a year of the death, s.16(3)(b) contains provision for the year to be extended by application to the sheriff [11] and that there was not, on the face of the section, any time limit within which such application had to be made. But Lord Robertson preferred the landlord’s counsel’s argument that:

“It was erroneous to maintain that the effect of s.16 was that a lease remained in suspended animation after the death of the tenant until an executor or executrix chose at leisure and at pleasure to be confirmed to the deceased’s interest [which] was the only argument maintained by the [late tenant’s family].”     

The judge also remarked that he was:

“… of opinion that, even if the executrix confirms, the provisions of s. 16 (3) (b) insist that any disposal of such an interest by an executrix must be made within one year of the death of the tenant […]. Failing such disposal, the landlord may give notice to terminate the lease in the manner set out in s.16(4).”

That’s not the most unambiguous articulation of the automatic termination interpretation and it is, of course, obiter. That being so, there’s little here that’s inconsistent with the protected period interpretation of s.16(3) that the tenancy remains available for transfer after the end of the one (two for crofts) year period until the landlord takes action to terminate the lease. And in that latter regard (although Lord Robertson didn’t frame it in these terms) a common law action of declarator and removal fills the lacuna in the section when there is no confirmed executor. It’s implicit, of course, that no such action could succeed within the one (two) year protected period. 

Gifford v Buchanan (1983 SLT 613)
In this case, also concerning a 1991 Act tenancy, the tenant died on 6 April 1981. Executors were confirmed in February 1982 but no deed of transfer or notice was effected within a year of the death. On 13 May 1982, the landlords gave the executors notice under s.16(3) to terminate the lease at Whitsunday 1983. On 31 May 1982 the executors applied to the sheriff under s.16(3) for an extension of the year to give them further time to effect a transfer to the deceased tenant’s son. The landlords opposed that application as incompetent on the basis that it was too late.

Apparently accepting the executors’ rather creative interpretation of s.16(3) that granting the application would result in the retrospective substitution of a new longer period ending after the landlords’ notice to terminate, and thus making that notice premature, as opposed to extending the existing period which had already run out, the sheriff repelled the landlords’ competency plea. They appealed to the Inner House which, unsurprisingly perhaps, reversed the sheriff’s decision and confirmed that the application to extend was indeed incompetent as being out of time.

Referring to his decision in Rotherwick’s Trustees, Lord Robertson opined that a competent application to extend could only be made within the year from the death. In so doing, he appeared to confirm he had indeed been articulating the automatic termination interpretation in Rotherwick. Lord Grieve agreed with Lord Robertson without delivering his own judgement. But the Lord Justice Clerk (Wheatley) preferred to decide the case on the basis that the application was incompetent because (as is surely uncontroversial) it had been made after the landlords had exercised their right to terminate. And he declined to offer an opinion on whether it was necessary to make an application within the year – in other words leaving open the competence of applying to extend after the end of the year but before the landlord had given notice to terminate.

Morrison-Low v Paterson (1985 SC (HL) 49)
Thomas Paterson was the 1991 Act tenant of a farm in Fife called Moonzie under a lease dating back to 1929. He farmed in partnership with two of his sons. The partnership was called Thomas Paterson & Sons and the rent was paid out of the partnership bank account. Mr Paterson died on 4 December 1973. The executors nominated in his will obtained confirmation but for some reason this did not include the tenancy of the farm (so for present purposes, that’s the same as if there had been no confirmation at all). After his death, Mr Paterson’s sons continued to farm Moonzie in the same partnership (which had not been dissolved by their father’s death). The landlord issued rent demands to “the Executors of the late Thomas Paterson t/a Thomas Paterson & Sons” and the rent continued normally to be paid out of the partnership account as it had been before Mr Paterson’s death. But his executors had not attempted to obtain an eik  to confirmation or transfer the tenancy to anybody under s.16 by the time in 1979 when the landlord raised an action of declarator and removal.     

Accepting the authority of Rotherwick [12], the executors didn’t even attempt to argue that the tenancy might still be available for transfer under s.16 even though the landlord had already commenced action. Instead, their defence was that a new unwritten lease from year to year – but enjoying agricultural security of tenure, of course – in the executors’ favour had been created. This was due to the circumstances of the landlord having allowed the executors to remain in possession of the farm and demanded rent from them over a period of about five years.[13] This being so, not only would it have been hopeless, it wasn’t even in the executors’ interest to argue that the 1929 lease remained in existence beyond the anniversary of Mr Paterson’s death. That’s because, per Rotherwick, there is no doubt that, even if it had stayed alive past the anniversary, it had been “killed” by the landlord raising his action of declarator and removal. The facts of the possession of the farm between the anniversary and the raising of action were entirely consistent with the 1929 lease having remained alive so the executors needed it out of the way so that these same facts could be ascribed to a new lease with security of tenure. For that reason, it’s perhaps puzzling that counsel for the landlord didn’t argue for the original 1929 lease having continued past the anniversary of Mr Paterson’s death. Be that as it may, the executors’ new lease defence didn’t find favour with either house of the Court of Session for reasons beyond the scope of this article. But it did eventually succeed in the House of Lords. Lord Keith of Kinkel delivering the leading judgement there remarked (page 76):-

“Under section 16(3) any such transfer [by executors to a successor] is required to be made … within the period of one year after the death of the deceased. As authority for the proposition that in these circumstances the lease of 1929 had come to an end not later than the expiry of that period, so that there ceased to be any person in right of the tenant’s interest under it, counsel for the landlord cited Lord Rotherwick’s Trustees v. Hope … . The correctness of that decision was not questioned by counsel for the [Mr Paterson’s executors], and I see no reason to doubt it. It must, therefore, be accepted that the tenant’s interest under the lease of 1929 has indeed come to an end, and that neither the [executors] nor any other person are now in right of it.”

Assuranceforeningen Skuld v. The International Oil Pollution Compensation Funds (2000 SLT 1333 and here)

There’s no sign this case was cited in argument at either stage of Pattinson [14] but it was cited in McGrath v Nelson (discussed below) which was so it’s worth a look at here. It concerned the competence of extending a time limit in a different Act after it had expired. Lord Gill (author of the above quoted text book) sitting in the Outer House opined that this was always a question of interpretation of the statute (or, as the case may be, contract) in question. In this regard, an important factor was whether it provided that a right arising during the period concerned was extinguished upon its expiry. He cited s.16(3) of the Succession Act as interpreted by Gifford as an example of a statute where that was the case. He glossed Gifford thus:-

“The ratio of the court in refusing the application was that since the landlord had served notice of termination, it was on any view too late for the executor to seek an extension of the period. However, the majority [Lords Robertson and Grieve] were of the view that the emergence, on the anniversary of the death, of the landlord's right to terminate the lease extinguished the executor's right to transfer the tenant's interest. Therefore the court could not resuscitate the executor's right by granting any subsequent application for an extension.

In my view, these cases [i.e. Gifford and others concerning other statutes/contracts] are distinguishable. In each of them the statutory or contractual provision provided that on the expiry of the specified period a right or power was extinguished. It was logical for the court in those cases to require that any extension of that period should be made while the right or power remained live.”

Sproat v South West Services (Galloway) Ltd (2000 - unreported but available here)
Mr Wyllie was the tenant under two non-agricultural 99 year leases from the same landlord. He died in December 1978 when the terms of these leases still had about 60 or 70 years still to run (the report doesn't tell us exactly when they began). His widow was confirmed as his executor in June 1979 but she didn’t transfer them to herself as an individual (in part satisfaction of her claim to prior rights) until November 1981, more than a year after he had died. Although no statute mandates notification to the landlord of transfers on succession of non-agricultural leases as the 1991 Act and Crofters Act do for the tenancies they apply to (in other words, there is no step 3 for non-agricultural leases), Mrs Wyllie did anyway notify them to the landlord’s solicitors who acknowledged them without comment. For many years thereafter, the landlord, Mr Sproat, was content to let her, then a Wyllie family partnership and then latterly the defender, a Wyllie family company, remain in occupation of the leased subjects and he accepted rent from them. Then in the late 1990s relations must have broken down. The landlord served notices to quit on the company and raised an action heard by T G Coutts QC sitting as a Temporary Judge in the Outer House.

The facts are not dissimilar to Morrison-Low except that the new lease defence which eventually saved the Patersons there wouldn’t save the Wyllies here. That’s because any new lease would necessarily only be from year to year and, in a non-agricultural context, that would not have security of tenure – the landlord could terminate it at the end of any year. To protect their long term occupation of the sites, the Wyllies needed to convince the court that Mrs Wyllie was still the tenant under the original 99 year leases which still had decades to run because they had been validly transferred to her, albeit more than a year after her death of her husband, the last tenant, before the landlord had taken steps to terminate the leases consonant with the protected period interpretation of s.16(3). And the defender family company was in informal occupation as her manager and paying the rent on her behalf (like the firm of Thomas Paterson & Sons in Morrison-Low).

Arguing for the protected period interpretation of s.16(3), the Wyllies’ counsel suggested that Lord Robertson’s dicta to contrary effect in Rotherwick and Gifford were obiter and should not be followed. (He didn’t mention Lord Keith in Morrison-Low.) But Temporary Judge Coutts rejected that. Finding Lord Robertson’s views (the automatic termination interpretation, in other words) compelling, he held the defender company was the tenant under a new, unwritten lease from year to year. And, because that didn’t involve security of tenure in a non-agricultural context, the company could be evicted at the end of any such year. He accordingly repelled all its pleas and granted decree in favour of the landlord. 

McGrath v Nelson (2010 CSOH 149)
Mrs MacLean, the tenant of a croft and also a farmhouse held on a separate short assured tenancy (SAT) from the same landlord, died intestate in August 2006. While as yet unconfirmed, her executors decided at a meeting in January 2007 to transfer the tenancy of the croft to Miss McGrath (which they were entitled to do) and request that the landlord, Mr Nelson, grant her a new SAT of the farmhouse. In February 2007, the executors’ solicitors wrote him a letter the relevant part of which was:-

“The Executors of the late Mrs Margaret MacLean … hereby nominate Miss Josephine McGrath, … to succeed to the tenancy of (One) Achaleven Croft and (two) to be put forward for a new short-assured tenancy of Achaleven farmhouse. Josephine would intend to personally reside in the farmhouse and personally operate the croft as soon as these transfers have been completed.” [Emphasis added]       

The executors were not confirmed until December 2007. In 2009, the landlord gave notice under s.16(3) to terminate the crofting tenancy on the basis that no transfer of it had validly been effected by the completion of all three steps within a year (as the period for crofting tenancies then was [16]) of the tenant’s death. The executors raised an action for declarator that there had indeed been a valid transfer, that the landlord’s notice of termination was consequently invalid, and for reduction of it. Lady Dorrian decided the case on the basis that the letter quoted above did not amount to a step 2 deed of transfer (para [44] - a view the Inner House in Pattinson considered (at para. [20]) "perhaps somewhat narrow"). Therefore, absent step 2, there had been no valid transfer before the landlord gave notice to terminate so she dismissed the executors’ action. But she went to add – obiter – in case she was wrong about that (para [45]), that the action would also have failed because the confirmation hadn’t been obtained within a year from the death. In other words, she was applying the automatic termination interpretation of s.16(3).

The Land Court in Pattinson
Finally, let’s revisit what the Land Court said in Pattinson. As already noted, it explicitly adopted the protected period interpretation of s.16(3) (paras. [17] & [18]). But it also agreed with Lady Dorrian in McGrath that a retrospective confirmation would need to be within two years (as it is now for crofts) of the death (para. [16]). To me, these two positions are irreconcilable. If you accept that a tenancy remains available for transfer after the end of the one/two year protected period but before the landlord takes action to terminate, and also that the confirmation may come after the deed of transfer and/or notification, why does the confirmation have to be within the one/two years?

Summary of the precedents
Lord Robertson’s remarks in Rotherwick, Lord Gill’s Assuranceforeningen and Lady Dorrian’s in McGrath in support of the automatic termination interpretation of s.16(3) are all obiter. Sproat is directly in point (Mrs Wyllie transferring the tenancy to herself more than a year after the death but before the landlord raised action didn’t save the lease) but it was, of course, open to the Inner House in Pattinson simply to overrule Temporary Judge Coutts as they have, in effect, done. As an Inner House decision, Gifford is entitled to more respect but Lord Gill’s gloss on it in Assuranceforeningen – that the ratio of the court in refusing the application to extend the year was that since the landlord had served notice of termination, it was on any view too late for the executor to seek an extension – is surely correct and consigns to obiter the views of the majority (Lord Robertson again and Lord Grieve who agreed with him without delivering his own opinion) that the application was blocked by the expiry of the year from the death rather than the landlord taking steps to terminate.

It’s harder, though, to understand how the Inner House in Pattinson felt it could so easily step round the House of Lords in Morrison-Low with the single sentence (para. [20]):-

“The issue of whether a lease could be transferred after the statutory period in section 16(3) was not contested in Morrison-Low … (see Lord Keith at 76 citing Rotherwick’s Trs v Hope).”

The issue may not have been contested but the ratio of Morrison-Low is that the landlord’s action of removal was blocked by the existence of the new lease with security of tenure. And Lord Keith sat that new lease firmly on the previous lease of 1929 having ended a year after its tenant’s death. He remarked (page 78):-

“So it is enough for the [late tenant’s executors] to prove that the farm at Moonzie was let to them for some period from 4th December 1974 [the day after the expiry of a year from the tenant’s death], when, as is common ground, the lease of 1929 necessarily came to an end … The [executors’] possession [of the farm after 4/12/74] was not capable of being ascribed in law to the 1929 lease. It must, therefore, be ascribed to something else, and that something else can only be [the new lease contended for by the executors].”

At the end of the day, I confess I just don’t know the exact protocols around when a lower court may ignore a superior court on the basis that the point at issue was matter of concession and not argued before the latter. I trust the judges of the Inner House to know more about that than I do!

Conclusion
No lawyer timeously consulted by the family of a deceased crofting or 1991 Act tenant is ever going to advise doing things other than by the conventional procedure of obtaining confirmation, doing a deed of transfer and then notifying the landlord (and CC in the case of a croft), in that order and all within a year (two for a croft) the death. Pattinson does, however, throw a lifeline to people who have not done things by that book and while the landlord has not yet exercised his right to terminate. The only ground for hesitation is the shadow cast over the decision by Morrison-Low. Although, if you were acting for a landlord faced with a tenant who had completed the three steps outwith the one (two) year period, would you advise him he could evict that tenant on the basis Pattinson is wrongly decided?

Footnotes
[1] There is a statutory right of bequest in the 1991 Act (s.11) but its effect was neutered by the case of Kennedy v Johnstone 1956 SC 39 which held that it doesn’t apply in the case of a lease containing an exclusion of assignees (a bequest being functionally a mortis causa assignation). As written leases almost invariably exclude assignees, the result is that the statutory right of bequest is effectively confined to the relatively rare cases where there is no written lease. Intestacy can also arise in the case of 1991 Act tenancies when there has been a valid bequest but it is declared null and void by the Land Court under sections 12A or 12B of the 1991 Act consequent upon an objection to the legatee by the landlord. But this is even rarer and thus not a scenario contemplated in the rest of this article.

[2] This article is not concerned with the class of people to whom 1991 Act or crofting tenancies may be transferred upon intestacy, only with the process of transfer to eligible transferees.

[3] Pattinson v Matheson, at para. [24] 

[4] The Land Court in Pattinson v Matheson and Lady Dorrian in McGrath v Nelson (see below) follow the 3rd (1997) edition of Gill on Agricultural Holdings at para. 34.01 in referring to it as a two step process. So too does the current, 4th edition of Gill (at para. 53.01). That is by treating obtaining confirmation and the deed of transfer as a single step. But with respect, I think it’s much more helpful to think of it as a three step process. 

[5] What Mr Matheson didn’t know was that it’s not the landlord’s role to effect the transfer in response to a request from the tenant: it was up to him to do the transfer and simply notify the landlord (and the CC) that he’d done so.

[6] Neither the Land Court nor the Inner House decisions explicitly state which provision Mr Pattinson’s challenge was brought under but presumably it was either s.14 of the Crofting Reform (Scotland) Act 2010 (challenge by an interested party to the first registration of a croft) or s.16 of that Act (rectification of a “mistake” in the register).

[7] There’s a curiosity here in that the Inner House’s judgement refers (para. [8]) to Mr Matheson having “executed a “Form of Docket” nominating himself as the person entitled to his father's estate” on 3 June 2019, i.e. before the notice. The Land Court judgement doesn’t mention this. Both courts proceeded on the basis that the 13 June 2019 docket transfer was the only deed of transfer in play so presumably the 3 June one was accepted by Mr Matheson as having been invalid in some way and thus irrelevant to the proceedings and that would explain why he felt it necessary to do another one on 13 June which was valid but too late.

[8] under section 1(7)of The Scottish Land Court Act 1993

[9] McGrath v Nelson ([2010] CSOH 149), an Outer House case discussed more fully below, also accepted – albeit obiter – retrospective validation by confirmation subsequently obtained of transactions relating to heritage (a crofting tenancy) by executors dative while as yet unconfirmed.

[10] Under reference to McGrath v Nelson (supra), the current, 4th, edition (2016) of Gill at para. 53-16 rewords this more emphatically as “Such a transfer would be invalid if the subsequent confirmation were to be obtained outwith the one year period.”   

[11] In the case of 1991 Act tenancies (but not crofts), such applications are now to the Land Court: Succession Act s.16(3) and (8A) as amended/inserted by the Agricultural Holdings (Scotland) Act 2003, s.94 and Schedule (consequential amendments), para. 2. 

[12] Gifford doesn’t appear to have been cited to any of the courts in Morrison-Low. 

[13] The 'new lease' defence run by the Patersons in Morrison-Low was not one available to Mr Matheson in Pattinson because any new let of a croft is null and void unless approved by the Crofting Commission: Crofters (Scotland) Act 1991, s.23(3) 

[14] The Land Court in Pattinson said that 43 authorities were produced to it but only listed the ten cases it found of particular relevance and assistance. Assuranceforeningen isn’t one of them.

[15] Mr Wyllie was also the tenant under two other 99 year leases from the same landlord which were dealt with in the same judgement but there were specialities about them in the context of succession so for simplicity’s sake, I’m just concentrating on the treatment of the first two. 

[16] The period within which an intestate transfer of a crofting tenancy must be completed was changed from one to two years by the Crofting Reform (Scotland) Act 2010 (Sch. 4, para. 2(2)(c) inserting new sub-section (3A) into s.16 of the Succession Act).