THE COURT

(Lord McGhie, Sheriff R J MacLeod, Mr J A Smith)

EDWARDS v THE GOVERNOR of ROBB’S TRUST

(Application RN SLC 100/11 – Order of 19 January 2012)

AGRICULTURAL HOLDINGS – RENT REVIEW – ARBITRATION – COMPETENCY – APPEAL AFTER PROCEDURE BY STATED CASE – WHETHER PERSONAL BAR AROSE DUE TO FAILURE TO MAKE REPRESENTATIONS IN RESPONSE TO DRAFT AWARD – WHETHER ACTINGS IN RELIANCE ON SILENCE – AGRICULTURAL HOLDINGS (SCOTLAND) ACT 1991 SEC 13-SEC 60 – SEC 61– SEC 61A – SCHEDULE 7 – AGRICULTURAL HOLDINGS (SCOTLAND) ACT 2003 – THE AGRICULTURAL HOLDINGS (SCOTLAND) ACT 2003 (COMMENCEMENT NO. 3, TRANSITIONAL AND SAVINGS PROVISIONS) ORDER 2003.

A farm tenant made a formal demand for arbitration to review the rent as and from the term of Whitsunday 2001. An arbiter was appointed by Scottish Ministers on 24 May 2001. The parties made various attempts to reach a settlement. These proved unsuccessful. The arbiter issued a draft award in May 2010. The tenant raised a question of law relating to the competency of the arbitration in light of procedural changes effected by the Agricultural Holdings (Scotland) Act 2003 and the landlord raised the question of whether the arbiter was bound to restrict his award to the range contended for by the parties. The Court dealt with these questions under stated case procedure in terms of the Agricultural Holdings (Scotland) Act 1991 schedule 7 and determined that the existing arbitration could competently continue and that the arbiter was bound by the figure advanced by the landlord. The tenant subsequently appealed under the provisions of sec 60 of the Act raising a number of questions which included issues of fact. It was contended that an appeal was incompetent in light of procedural changes effected by the Agricultural Holdings (Scotland) Act 2003 and that, in any event, the tenant was personally barred from raising such questions by his failure to raise certain questions of fact when the arbiter issued his draft award.

HELD that the landlord’s plea to competency was essentially covered by the terms of the previous decision when a similar plea by the tenant had been repelled. The plea of personal bar failed because the landlords had relied on what they would have done had the tenant raised various issues on receipt of the draft award rather than attempting to demonstrate that they had acted in reliance on his silence. The statutory right of appeal could not lightly be taken to be lost because an opportunity to raise similar issues had been given at an earlier stage. In any event, properly analysed, many of the tenant’s grounds of appeal turned essentially on allegations of defective reasoning rather than errors as to primary fact and the landlord had accepted that the tenant would not have been expected to challenge such matters at the stage of a draft award.

The note appended to the Court’s order is as follows:

[1] David Edwards, the tenant of Pitcow Farm, Whiterashes, Aberdeenshire made a formal demand for arbitration to review the rent of the holding as and from the term of Whitsunday 2001. Kenneth Stuart Bowlt, FRICS, was appointed arbiter by Scottish Ministers on 24 May 2001. A hearing and inspection took place on 13 February 2002 and the parties then made various attempts to reach a settlement. These proved unsuccessful and a further hearing was eventually held on 12 November 2009. The arbiter issued a draft award in May 2010.

[2] Both parties raised questions arising from that award and we heard submissions on a stated case. Our Note of 10 January 2011 in the application SLC/159/10 sets out the full background but for convenience we repeat some of the details.

[3] The arbiter made an assessment of rent, applying the provisions of section 13 of the 1991 Act, at a figure of £11,377. However, he took the view that he was bound to make his award within the range contended for by the parties. The tenant had contended that the rent should be £6,500 and the landlord that it should be £8,700 - which was, in fact, the passing rent prior to 2001. The arbiter proposed to restrict his award to £8,700. He issued a draft award to that effect.

[4] Following the issue of the draft award, the tenant intimated a challenge to the jurisdiction of the arbiter to make any award. The landlords raised the question of whether the arbiter was obliged to restrict his award to the figure contended for by the landlords. The arbiter accordingly submitted two questions for determination by the Court. As will be seen the tenant’s question had a bearing on the arguments advanced in the present case and it is appropriate to set out that question in full: “Is the Arbiter still entitled on the basis of the Arbiter’s appointment dated 24 May 2001 to issue any award determining the rent in respect of the holding in terms of section 61 and Schedule 7 of the Agricultural Holdings (Scotland) Act 1991 (as amended) standing the repeal of those sections and the amendment of section 13 of that said Act without any saving provision of the unamended section 13 provisions applying to existing arbitrations analogous to that for existing section 60 arbitrations?”

[5] We determined that the existing arbitration could competently continue. In that process we also determined that the arbiter was bound by the figure advanced by the landlord. It is unnecessary to make further reference to the second question.

Hearing

[6] We heard parties in debate on 6 December 2011 when the landlords were represented by Mr Robert Sutherland, advocate, instructed by Mr James T Merson, solicitor, Aberdeen, and the tenant by Sir Crispin Agnew QC, instructed by Mr Andrew A Murchison, solicitor, Inverness.

Authorities referred to

Aberdeen Endowments Tr v Will 1985 SLT (Land Ct) 23
Beardmore & Co v Barry 1928 SC 366
Colstoun Trust v AC Stoddart & Sons SLC/226/04; [2010] CSIH 20
Director of Public Works v Ho Po Sang 1961 AC 901
Dunbar and Anderson 1985 SLCR 1
Earl of Seafield v Stewart 1985 SLT (Land Ct) 35
Edwardsv Governors of Robb’s Trust SLC/159/10 decision of 10 January 2011
Hamilton Gell v White[1922] KB 422
Mount Stuart Trust v McCulloch 2010 SC 404
Presslie v Cochrane McGregor Group Ltd 1996 SC 289

Text books

Reid and Blackie Personal Bar

Statutory material

Agricultural Holdings (Scotland) Act 1991 (“the 1991 Act”)
Agricultural Holdings (Scotland) Act 2003 (“the 2003 Act”)
The Agricultural Holdings (Scotland) Act 2003 (Commencement No. 3, Transitional and Savings Provisions) Order 2003 (“the Commencement Order”)
Interpretation Act 1978
The Scotland Act 1998 (Transitory and Transitional Provisions) (Publication and Interpretation etc of the Acts of the Scottish Parliament) Order 1999 (1999 No. 1379) (“the Scotland Act Order”)

[7] The relevant provisions of the 1991 Act prior to amendment were in the following terms:

Section 13: (1) Subject to subsection (8) below, the landlord or the tenant of an agricultural holding may, whether the tenancy was created before or after the commencement of this Act, by notice in writing served on the other party, demand a reference to arbitration of the question what rent should be payable in respect of the holding as from the next day after the date of the notice on which the tenancy could have been terminated by notice to quit (or notice of intention to quit) given on that date, and the matter shall be referred accordingly.

Section 60: (1) Subject to subsection (2) below and except where this Act makes express provision to the contrary, any question or difference between the landlord and the tenant of an agricultural holding arising out of the tenancy or in connection with the holding (not being a question or difference as to liability for rent) shall, whether such question or difference arises during the currency or on the termination of the tenancy, be determined by arbitration.

(2) Any question or difference between the landlord and the tenant of an agricultural holding which by or under this Act or under the lease is required to be determined by arbitration may, if the landlord and the tenant so agree, in lieu of being determined by arbitration be determined by the land Court, and the Land Court shall, on the joint application of the landlord and the tenant, determine such question or difference accordingly.

Section 61: (1) Any matter which by or under this Act, or by regulations made thereunder, or under the lease of an agricultural holding is required to be determined by arbitration shall, whether the matter arose before or after the passing of this Act, be determined, notwithstanding any agreement under the lease or otherwise providing for a different method of arbitration, by a single arbiter in accordance with the provisions of Schedule 7 to this Act, and the Arbitration (Scotland) Act 1894 shall not apply to any such arbitration.

(2) An appeal by application to the Land Court by any party to an arbitration under section 13(1) of this Act (variation of rent) against the award of an arbiter appointed by the Secretary of State or the Land Court on any question of law or fact (including the amount of the award) shall be competent.

(3) An appeal under subsection (2) above must be brought within two months of the date of issue of the award.

[8] At the previous hearing parties had addressed certain matters under reference to sec 16(1) of the Interpretation Act 1978 while simply noting that a similar provision had been made under the Scotland Act. However, in the present case, counsel properly referred to the provisions of para 13 of Schedule 1 to the Scotland Act Order, the relevant provisions of which are:

(1) … [W]here an Act of the Scottish Parliament repeals an enactment, the repeal does not, unless a contrary intention appears,-

(a) …

(b) affect the previous operation of the enactment repealed or anything duly done or suffered under the enactment;

(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under that enactment;

(d) …

(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment

and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture, or punishment may be imposed, as if the repealing Act of the Scottish Parliament had not been passed.

[9] As amended by the 2003 Act, the relevant provisions of sec 61 and 61A read as follows:

61 Agreement to refer matters to arbitration

(1) Subject to subsection (2) below, where this Act makes provision for any matter to be determined by the Land Court, the matter may, if the landlord and tenant so agree at or after the time when the matter arises, instead of being so determined, be determined by arbitration.

(2) [this provides various exceptions which are not relevant to the present case]

61A Arbitration: procedure etc.

(1) This section applies to any arbitration to which a matter is referred by the landlord and tenant under section 61(1) of this Act.

(6) Any party to the arbitration may appeal to the Land Court against the arbiter’s award on a question of law within 28 days of the award; …

[10] Following issue of the final award on 22 April 2011, the tenant applied to the Court on 20 June 2011 by way of appeal under the original provisions of sec 61(2) of the 1991 Act. The appeal raised some eleven points of challenge which, broadly speaking, turned on contentions that the arbiter had either failed to take account of particular matters, had misunderstood the evidence relating to some matters or had failed to give adequate reasons in respect of specified matters. As became clear at debate, several of the grounds, expressed otherwise, are properly to be regarded as turning on that last point. It is unnecessary for present purposes to set out the whole grounds of appeal.

[11] The landlords’ answers raised issues of personal bar. In the order of 23 August 2011, appointing a hearing to deal with the appeal, the Court invited parties to consider whether the issue of personal bar should be taken as a preliminary question. However, it appears that the parties initially took the view that it would be preferable to try to deal with all the issues at one hearing. Full written submissions were then lodged dealing with the substantive points and with personal bar. However, on 2 December 2011, the landlords intimated an intention to challenge the competency of the appeal. In the course of the hearing it became clear that it would not be possible to deal with all arguments in the time set down. It was agreed that counsel would limit their submissions to the issues of competency and personal bar and that we would issue a decision on these matters before further procedure. Sir Crispin made a preliminary submission that the landlords’ challenge to competency had come too late. It had first been intimated on the afternoon of 2 December.

Submissions for the landlord

The question of competency

[12] It was clear that the effect of the amendments made to sec 61 of the 1991 Act by the 2003 Act was to change the nature of the appeal available from an arbitration such as the present. The right to appeal on any question of law or fact become a right to appeal on a question of law only. The time limit for bringing an appeal was changed from two months to 28 days. If the new provisions applied, the appeal would be out of time. Mr Sutherland contended that appeal was a step quite distinct from the original arbitration. Although the Court had been correct to determine that the arbitration process itself could continue under the provisions equivalent to those of para 13 of Schedule 1 to the Scotland Act Order, such provisions did not cover the quite distinct step of appeal. The appeal could not be regarded as a right within the meaning of (c). The only relevant rights or liabilities were those which were “accrued or incurred”. By 27 November 2003, the date upon which the relevant parts of the 2003 Act had come into force, no right to appeal had been accrued. Mr Sutherland referred in detail to the speeches in the Director of Public Works case. Stated Case procedure could properly be regarded as part of the arbitration process, necessary to allow the arbiter to produce his award, but an appeal was a new and distinct process. Once the arbiter issued his award he was functus and the arbitration was at an end. The right to appeal, accordingly, could not be said to have accrued before the 2003 Act came into effect. A right to appeal could not be said to have accrued when the appeal stage had not been reached by the time the law changed.

[13] Mr Sutherland took us through the detail of the legislation. He submitted that sec 61A (1) was wide enough to cover an arbitration under sec 13. Accordingly, it could be seen that Parliament had simply revised the appeal procedure. There was no reason why the new provisions should not apply to existing arbitrations. Both the reduction in time limit and the restriction of grounds of appeal to appeal on questions of law, were policy intentions for appeals which took place after the amending Act had come into force. There was nothing in the new provisions which would prevent them applying to old processes.

[14] In relation to the lateness of this plea, he contended that it was almost trite that a competency point could be taken by the court at any time. So, an objection based on lateness required the tenant to demonstrate prejudice. There was no prejudice in the present case as it was plain from the tenant’s written note of argument, in terms of the footnote to the first page, that thought had been given to the basis upon which the appeal was being taken. Sir Crispin had conceded that he had had time to address the point. Any difficulty caused could be dealt with by expenses.

Personal bar

[15] Counsel explained that although the written answers took a general plea of personal bar, his submission was limited to personal bar as affecting grounds 5, 6, 7 and 8. These were all grounds which, as stated, were far from clear but appeared to allege that the arbiter had erred because of some misunderstanding on his part, for which, it was said, he was at fault. He suggested that they appeared to reveal a misunderstanding of the arbiter’s decision. However, his substantive submission was based on the tenant’s response to the issue of a draft award by the arbiter. He submitted that this had given the tenant an opportunity to raise any factual issues where it was to be said that the arbiter had gone wrong. Had he done so, the arbiter could have clarified his findings. He might have been able simply to clarify matters without changing the substance of the decision or he might have been forced to recognise a material error and to change his effective decision. In the present case there was a third possibility. The arbiter might have accepted several, if not all, the points now criticised and reduced his own assessed rental figure accordingly but unless the reduction would have brought his figure to below his ultimate award, the tenant’s grounds of appeal would not have any effect on the ultimate decision.

[16] Mr Sutherland accepted that some of his comments on the individual grounds of appeal seemed to show that the question was not one of personal bar arising from events after the issue of the draft award, but of pleading practice. If the tenant had not properly raised a particular matter in the course of the arbitration, it might be said that he could not now found on it. That would be an example of procedural bar rather than personal bar. However, he accepted that an agricultural arbiter was expected to apply his own skill in assessment of obvious matters. For example, if access to a field was restricted, he would be expected to take account of that even if it was not drawn to his attention. But there could be difficulties over what should have been obvious and what should have been drawn to his attention by the party founding on it. The difficulty in the present case was that it was not clear whether the tenant was contending that he had raised certain matters. If so, Mr Sutherland accepted that there might have to be a proof to determine whether this was indeed the case.

[17] The issue of personal bar would arise if it was to be contended that the tenant had raised a factual issue in the evidence but the arbiter had ignored it. If the tenant had questioned this on receipt of the draft award, the arbiter would have been able to deal with it. By his silence, the tenant had to be taken to have accepted that the factual material was adequately and completely dealt with. Where the tenant had seen the draft, knew what it said and had failed to draw his criticism to attention, he was barred from now doing so.

[18] We shall return briefly to the detail of the various grounds in our discussion below. Broadly speaking, counsel accepted that there might be relevant differences in relation to personal bar between a failure to draw attention to an omission of a fact; a failure to dispute an assertion of agreement if such agreement was challenged, and a failure to criticise the adequacy of the arbiter’s reasons. He accepted that a party could not be expected to comment on an arbiter’s reasons or lack of them. If a ground of appeal was properly based on an allegation of such a failure, no question of personal bar could arise. But it was contended that the tenant would certainly have been expected to challenge any assertion of an agreement if he did not accept that he had agreed. Mr Sutherland suggested that he would also have been reasonably expected to point to an omission. It was plain that Mr Edwards understood the nature of the process and should have known what to do. It was in his interest to get the correct decision as soon as possible.

[19] To a question as to the way in which the landlords might be said to have acted to their prejudice, counsel initially responded that it was assumed that, when no points were raised, the decision was accepted. The landlords lost the opportunity of going back themselves to clarify matters. We understood counsel subsequently to accept that he was not suggesting that the landlords had been deprived of that opportunity by silence or that they would themselves have made representations to clarify or add to the arbiter’s findings or reasons if they had not been misled by the silence. Essentially the prejudice was the prejudice which arose from the fact that if Mr Edwards had actually raised some points, the landlords would have been able to respond. The points raised would then have been dealt with and either an appeal would have been obviated or the grounds of appeal considerably restricted. He stressed that a representation could be made by silence in a situation where comment was to be expected. The tenant’s silence was to be taken as a representation by the tenant that he would not raise a challenge at appeal. It conveyed the understanding that the arbiter’s description of factual matters was a fair and accurate representation of the tenant’s evidence. The landlords had lost the chance to make their representations at a time when the arbiter could deal with them. However, it was accepted that if there was a dispute now over what evidence was before the arbiter, the arbiter himself would be a potential witness and his notes would be important adminicles of evidence.

[20] At the conclusion of Mr Sutherland’s submissions there was some discussion of the circumstances in which the draft award came to be issued in the present case. Mr Sutherland had suggested that the draft had been issued “in accordance with good practice” to give parties an opportunity to comment on it. However, Sir Crispin suggested that it would have been issued simply to allow parties to present any questions by way of stated case. Mr Sutherland then said that he understood that there had been a discussion between the parties and the arbiter as to the procedure to be followed, which had included agreement that a draft award would be issued. There was some further discussion of this in the course of Sir Crispin’s submissions. The whole discussion was inconclusive as to why a draft award had been issued in this particular case. Although the landlord suggested that the fact that the tenant had taken advantage of that procedure to ask for a stated case but had not raised the points now taken in this appeal reinforced the personal bar argument, we did not understand either party to seek to rely positively on any particular account of the circumstances in which a draft award was issued.

Submissions for tenant

Competency

[21] Sir Crispin started by pointing out that although the landlords had expressed matters in terms of a general challenge to competency, it appeared that their substantive plea was addressed to the time limit. In other words, that the appeal had not been taken within the limited period of 28 days now provided by the amended legislation. But this was a plea which could readily be waived and should, indeed, be taken to have been waived in the present case. Plainly it was within the discretion of the court to reject the plea as coming too late. He referred to the decision in Colstoun Trust v AC Stoddart & Son. The intention to take this plea had only been intimated to him in course of the afternoon of Friday 2 December 2011. Although he had been able to take time to deal with the point, it was wrong that it should be allowed at such a late date.

[22] His substantive response was to rely on our previous decision in SLC/159/10. He submitted that the whole process of the arbitration had started before the repealing Act. It was, accordingly, saved by the provisions of paragraph 13(e). He adopted the reasoning of the Court in the previous case on this point. There was no warrant for the suggestion that the appeal should be viewed as a separate process. The right which the tenant, and indeed landlord, had was to have the rent fixed in accordance with the statutory provisions. It was too narrow to describe it as a right to have a rent fixed by arbitration. The relevant provisions included the right to appeal. It was not logical to try to separate out the different stages of the legal process. His position was, he said, supported by dicta in Hamilton Gell v White.

[23] The tenant also submitted that the Court had erred in its previous decision in accepting the submissions previously made on the tenant’s behalf. Sir Crispin presented a powerful submission to the effect that the situation was, indeed, covered by the provisions of the Commencement Order. Although this argument was not critical to his position he advanced it in order to preserve his position in any subsequent appeal. Somewhat paradoxically, his argument was on broadly the same lines as that advanced for the landlord in the Stated Case. We need not repeat it at length. Put shortly, he contended that secs 13, 60 and 61 and sch 7 of the 1991 Act all had to be read together. They dealt with any “question or difference” between parties. There were many provisions in the 1991 Act similar to sec 13 expressly providing for “questions or differences” to go to arbitration. They should all be seen as falling to be treated as a question or difference between the landlord and the tenant which in terms of section 60 fell to be determined by arbitration. Where, as in sec 13, specific provision was made for a particular question or difference to be referred to arbitration that was because certain constraints were to apply to these arbitrations. But they were all arbitrations for the purposes of sec 60 as well. He stressed that the expression “question or difference” was also used in sec 60 (2) and this had always been accepted as apt to cover questions or differences in respect of rent: Dunbar and Anderson; Earl of Seafield’s Trs v Stewart.

[24] Finally he stressed that Mr Sutherland’s submission had been based on the proposition that the former provision for appeal had simply been changed. Mr Sutherland had accepted that the contention would not be open if the whole right of appeal had been abolished. However, in Sir Crispin’s submission, the new provisions in secs 61 and 61A simply could not be read as covering a statutory arbitration under the former provisions of sec 13. Plainly what they related to was the situation where parties had freely chosen arbitration in lieu of court procedures. That was quite different from compulsory arbitration. He pointed out that section 61A allowed parties to agree the procedure in any arbitration covered by that section; whereas an arbitration under the old section 13 had required to be carried out in strict compliance with the procedural provisions of Schedule 7. It was also to be noted that the new provision changed the scope of the appeal as well as the time. If the landlord was correct the appeal would be restricted to questions of law. That change was a pointer to the intention not to apply it to existing arbitrations.

Personal Bar

[25] Sir Crispin noted that the plea was now restricted to four of the grounds of appeal and that it was expressed as a plea of personal bar and not waiver. He addressed the necessary requirements under reference to the well known dictum in Gatty v Maclaine. Potential prejudice was not enough. The landlords had to show that they had acted to their prejudice. They had not given any indication of how they had done so in reliance on any implied representation by the tenant. Doing nothing was not an “acting”. In any event it was not clear what the supposed representation was supposed to be. The matter had to be seen in the context of the statutory provisions which provided a right of appeal on any question of law or fact. The tenant’s silence was not equivalent to a representation that he would not exercise his right of appeal. Standing that right, there was no obligation on either tenant or legal agent to suggest possible revisals to the draft award. However, if the court did think that there was any potential basis for the plea, he suggested that the proper procedure would be to order parties to set out their contentions fully by way of Minute and Answer procedure. It would be necessary to know the whole facts.

[26] Sir Crispin submitted that although the debate was to be limited to the issue of bar, it was necessary to see that plea in the context of the detail of each ground. Ground 5 related to facts which the arbiter had acknowledged. The problem was that he had not mentioned them in his reasons. As it had been accepted that parties would not be expected to comment on the arbiter’s reasoning in a draft award, there was no basis for personal bar in respect of this ground.

[27] Ground 6 was similar. The tenant had agreed as to the “comparables” to be looked at, but not to the use to be made of them. This, accordingly, was another aspect of challenge to the arbiter’s reasoning. The arbiter had transmuted agreement as to which farms were open to be considered into an agreement of substance.

[28] The tenant’s position on fencing, ground 7, was that he thought it was the norm that a tenant would provide all the internal fencing. He, accordingly, had not thought it necessary to point out to the arbiter that he had carried out all such fencing work. But the landlords must have known the true position. They could easily now say whether they agreed that the tenant provided the fencing. If he had, the arbiter’s decision contained an important error of fact.

[29] In relation to access in ground 8, the tenant’s position was that he had, indeed, told the arbiter that he had improved the accesses and had pointed out that the access to the Hattoncrook field was restricted. But he contended that there had been no obligation on him to point this out at the stage of the draft award. The arbiter would have been expected to see this on inspection in any event.

[30] Sir Crispin took us to the decisions in Beardmore & Co v Barry and Presslie v Cochrane McGregor Group Ltd. It was clear that simply failing to do what might have been reasonable or sensible to do would not be treated as requiring the penalty of barring normal procedural rights. Presslie was a question of waiver but, on the facts, it seemed obvious that it presented a clearer indication of waiver than anything in the present case, but the plea had failed.

[31] Counsel then dealt with the implications of an appeal on fact. Like a sheriff, an arbiter was under statutory constraints as to the form of his decision. He had been obliged to set out his findings in fact and his reasons in terms of Schedule 7 of the 1991 Act. In a court, an appeal would normally be heard with a full record of evidence and sight of all productions. A sheriff’s findings could be challenged by reference to the notes of evidence. Where there was no record of the evidence, challenge of fact would require a proof as to what material was before the arbiter. He accepted that such a proof would not allow new evidence of fact. An appeal on fact was limited to consideration of all material properly before the arbiter. That would include evidence of what should have been seen on inspection. However, there might be circumstances where there was such a conglomeration of errors that it was impossible to tell how the arbiter had dealt with the case. In such a case, a full hearing de novowould be appropriate. There were various examples of the Land Court having to hear cases under section 13 in this way: Aberdeen Endowments Trust v Will; Earl of Seafield v Stewart. However, in the context of questions of personal bar it was important to note that the factual material was known to both parties. Nothing the tenant had said or done after the draft award could have misled the landlords as to what material was in fact before the arbiter. They could have made their own proposals for revision.

[32] After referring to Reid and Blackieat paragraphs 19-23, 19-24, 19-25 and 19-27 Sir Crispin concluded by saying that it was important that the arbiter could not be asked to improve his reasoning. There was no representation that the tenant would not appeal on fact and, in any event, nothing to suggest that the landlords had relied to their prejudice on any implicit representation to that effect.

Response for the landlord

[33] In response, Mr Sutherland submitted that the Hamilton Gellcase could be distinguished. In that case, the right to an investigation of the tenant’s claims included a right to have matters determined on appeal. There was no split in the process. But dicta in The Department of Public Workscase, at pp 919-920, supported his position. At the time when sec 61(2) was repealed, there was no accrued right of appeal as nothing had been done in relation to any appeal. At that stage, all the tenant had was a hope of appeal if the arbiter made a mistake. This was too specious a hope to be considered to be a right. The decision showed that there was no legal difficulty in separating off a right which was entirely conceptual and depended on a state of affairs which might never come about.

[34] He supported the decision of the court in SLC/159/10 in relation to the effect of the Commencement Order. There would have been no content in the reference to section 60 if the tenant’s submissions were correct.

[35] In relation to Sir Crispin’s analysis of the individual grounds of appeal, he submitted that ground 5 was simply wrong. The arbiter had said he would not take account of the tenant’s improvements. If there was any failure in the decision it related to reasons. But, as the ground was presently stated, the plea of personal bar was a good answer to it. Further, the arbiter’s treatment of comparables – referred to in Ground 6 – was clear. The agreement was simply that the farms in question had sufficient similarity to be used. This did not mean that they were identical. Plainly the arbiter had to assess the weight to be given to the differences. He had done that. Here again, Mr Sutherland appeared to say that if there was any valid criticism it should properly be understood as a failure in the arbiter’s reasons.

[36] Mr Sutherland said that it had been suggested that the tenant might have been reluctant to comment on the draft award because he had lost confidence in the arbiter. However, this was a subjective matter. The plea had to be assessed objectively. Allowing the arbiter to proceed to make a decision without challenge to the factual materials set out in the draft decision was like allowing a record to close without making any effort to adjust. The tenant’s knowledge that the arbiter and the landlords were proceeding on the basis of the facts as set out, brought the matter within the scope of inconsistent actings amounting to personal bar.

[37] He submitted that the passages cited from Reidand Blackiehad to be seen in the context of a complex litigation. The question under discussion was the assumed extent of a party’s knowledge of legal matters. A simple rental was different. The landlords and tenant were on an equal footing as to the issues of fact in this case. The tenant plainly understood the issues which had to be addressed.

Final comment for tenant

[38] In response, Sir Crispin commented further on the implications of the Department of Public Workscase and Presslie. The latter, he said, showed that motive could be part of an objective assessment. He concluded by asking to amend ground 5 to insert the words “in the reasons” after the words “no evidence”. This was to meet some criticism by Mr Sutherland and we allowed that change. He asked us to reserve all questions of expenses and certification for counsel. This was not opposed.

Discussion

Competency

[39] As we have seen the landlords sought to challenge the competency of the appeal on the basis that the tenants rights of appeal under sec 61(2) of the 1991 Act had been repealed with effect from 27 November 2003. If there was a right of appeal it was under sec 61A and that imposed a time limit which had been missed.

[40] We deal first with what was presented by Sir Crispin as a subsidiary argument, namely, that contrary to the tenant’s previous position, the parties’ whole rights under the repealed legislation were saved by the Commencement Order. We do not think it appropriate to add much to the views expressed in the previous decision. Sir Crispin looked closely at references to the expression “question or difference” in the 1991 Act. He pointed out that where this was used in the original sec 60 (2) it had been treated as wide enough to cover rent review. At the previous hearing arguments were focused on sec 60(1) and we see that the reference to the material in sec 60 (2) might have been a factor encouraging a wider view of the scope of the phrase “under sec 60”. However, we are not persuaded that this is a point of such weight as to justify us now reaching a different conclusion.

[41] It may be said that we entirely accept that the intention of Parliament would have been to save rent arbitrations but having expressly limited the provision to arbitrations “under sec 60” we felt it necessary to give effect to that provision. A more pragmatic approach might have been to ignore it, recognising that technically there was no such thing as an “arbitration under sec 60” but the circumstances in which a court is free to disregard legislative provisions are very limited and it was not suggested that any applied. We remain satisfied that a rent arbitration could not accurately be described as an arbitration “under sec 60”.

[42] We turn to consider the provisions of para 13 of Schedule 1 to the Scotland Act Order. As set out in our previous decision, we were satisfied that the arbitration procedure fell within the scope of the identical provisions of sec 16 of the Interpretation Act 1978. The arbitration was a legal proceeding. It was necessary to determine the amount of rent to be paid at a specific date. Under the existing provisions the tenant had acquired a right to challenge the amount to be paid. The proceedings were similar to litigation to determine any illiquid claim. The obligation to pay rent was clear. The statutory machinery was provided to determine the amount to be paid. The parties had a right to have that determined.

[43] Mr Sutherland’s argument was expressly said to depend on the proposition that a right of appeal was a completely new stage in the process. The right to appeal did not arise until after the arbitration. Accordingly, whatever its nature, it was a new right. He also accepted that his argument turned on the proposition that the legislation had changed the nature of the right of appeal, not that it had abolished it altogether.

[44] He relied on dicta in the Director of Public Works case. We dealt in some detail with that case in our previous decision and we need not repeat that detail. It is sufficient to say that we have found nothing in it to support the proposition that a right of appeal requires to be treated as a completely new and distinct right. Parliament had provided, in the 1991 Act, a machinery for determination of the amount of rent to be paid. There is no essential reason to treat the parts of that process as entirely distinct entities. The right was to take advantage of the statutory machinery to determine the rent. That right included a right to appeal. This right was there from the start although the circumstances in which either party might wish to take advantage of it would not be known until after the first stage decision – the arbiter’s award.

[45] We did not find assistance in Mr Sutherland’s attempts to take support from consideration of what would happen if procedures for appeal in the Court of Session or Sheriff Court were changed. He could provide no hard example. Accordingly, this suggested analogy would depend entirely on the terms of the relevant provisions in each case. If some purely procedural changes were made, it might well be the intention that they should apply to current cases. But, if the rules did not make express provision for the transitional effects, a court would be faced with the same question as the present. If the change took the form of repeal of an existing provision by an Act of the Scottish Parliament it would be a question of construction taking into account the provisions of para 13 and paying particular regard to whether any “contrary intention” appeared.

[46] We found some difficulty over the logic of the landlords’ acceptance that it was necessary to show that the appeal procedure had been changed rather than abolished. If the right of appeal was a completely new stage and was not covered by the provisions of para 13, it is not clear how that conclusion is affected by either the nature of a replacement provision, or the complete absence of any such provision. However, we do not accept that the new provisions for appeal in terms of sec 61A(6) can be read as applying to arbitrations under sec 13 commenced prior to 27 November 2003. We accept Sir Crispin’s submissions on this point. If the old right of appeal did not continue, there would be no right of appeal in relation to an arbitration properly proceeding under the old provisions. If anything, this tends to support our conclusion that the old right continued and that the appeal is competent.

[47] It must be added that if we had had to deal with the matter of competency on the basis of the tenant’s contention that the plea came too late, we would have been disposed to give effect to that contention. We accept that a party is normally free to waive the benefit of a time limit and that the landlords could be taken to have departed from reliance on any such limit. However, we need not address this as a question of waiver. The question is one for the discretion of the court unless the circumstances demonstrate that there is a fundamental issue of competency which the court cannot ignore. It is hard to see any reason to assume a policy that a party was not able to agree tacitly to ignore a time limit. We discussed in our previous decision the question of whether any fundamental policy of law would be defeated by refusing to accept the plea to competency. We referred to the decision in Colstoun Trust v AC Stoddart & Sons as an example of the court rejecting such a plea when it came too late.

[48] Although the context is quite different from our previous decision, we are again satisfied that there is no ground of policy to require the challenge to competency to be entertained at this late stage. We think this straightforward in relation to the time question. But we would have had to have regard to the fact that there was a change from appeal on ground of law and fact to one restricted to law. It is plain that the policy of the legislation was that rent review as at Whitsunday 2001 should be dealt with by arbitration. In that context, a policy of allowing appeal on issues of fact would be understandable. A policy restricting appeal to questions of law might appear to have some justification where parties have deliberately elected to go to arbitration. We do not think that the change points to an essential policy that all statutory arbitration should now have a restricted right of appeal.

[49] We are satisfied that it would be open to us to reject the plea in this case as coming too late. However, our aim is to deal with substantive issues, wherever possible. As we have been able to deal with the plea on its merits we have not required to take that approach.

Personal Bar

[50] The argument was presented solely on the basis of personal bar. Accordingly, although Mr Sutherland did make passing reference to concepts such as waiver, acquiescence, election and abuse of process, we think such references misleading or distracting. We heard nothing to suggest that the familiar test of personal bar set out by Lord Chancellor Birkenhead in Gatty v Maclaine should be taken to have been changed or relaxed in the context of a failure to follow some procedure. In short, we are satisfied that the landlords required to show that the tenant, by action or inaction, had justified the landlords in believing that an identified state of facts existed and that the landlords had acted in reliance on that state of facts to their prejudice. If so, the tenant would not be permitted to advance any argument, by way of appeal, which relied on an assertion express or implied, of a contrary state of facts.

[51] It may be appropriate to say that we think that it would have been difficult to advance an argument in terms of waiver or procedural bar. The tenant was given a right to appeal the final decision of the arbiter on any question of law or fact: sec 61(2). The fact that he was given an earlier opportunity to raise a question of law under the provisions of para 22 of Schedule 7, cannot itself detract from that. It would require very clear circumstances to deprive a party of a statutory right of appeal. In short, we think that the landlords were well advised in recognising that any challenge would require to be based on the concept of personal bar in its primary connotation.

[52] Although the matter was discussed in various ways in course of the debate, we think the first two requirements of the claim of personal bar relied on in the circumstances of the present case can be identified in fairly simple terms. It can be seen that, essentially, the “state of facts” relied on must be that the tenant had given up his right to argue that the facts in issue had not been fully and fairly stated in the draft award; in other words that he would not appeal on any ground which questioned the arbiter’s approach to issues of fact. The landlords’ reliance on this must be based on the proposition that they were justified in assuming this state of facts to be the case because the tenant’s silence raised such a clear inference of acceptance of the adequacy of the facts as set out in the draft award. However, the next stage in the argument was less easily identified. There was no express averment, or assertion in the written submissions, showing that the landlords had acted in any way on the strength of that reliance. All that was said was that the tenant had seen the draft award and had ample opportunity to “advise the Respondent, the Arbiter and the Scottish Land Court that the arbiter had erred in law by misdirecting himself on a material matter of fact. The appellant had an opportunity to do this at any point prior to the Arbiter issuing his decision, but failed to do so”: para 6 of Answers. We think it clear that the landlords do not contend that they acted in any positive way. They did not attempt to show that any inaction by them was attributable to reliance on the alleged state of facts or that they suffered prejudice thereby. At the debate, the very different line taken was that the landlords were prejudiced by the failure to draw attention to shortcomings in the award because that deprived the arbiter and the landlords of a chance to deal with them.

[53] It may also be noted that we did not understand the argument for the landlords to be presented on the basis that a party was obliged to present all his proposed questions of law by way of stated case. Such a proposition would, in effect, have reduced the right of appeal to one of fact only. That cannot have been the intention of Parliament in enacting sec 61(2).

[54] There is no doubt that if the attention of the arbiter had been drawn to the alleged problems a range of responses would have been open to him. If a proposed revisal to fact had had a direct bearing on a question of law posed, he would have been bound to consider it. However, we understood Mr Sutherland’s submissions to cover the idea of revising the draft in the sense of drawing attention to all alleged errors or omissions of fact. Had the landlords supported any such revisal, it might well be that the arbiter would have tried to give effect to it. But equally he might simply have taken the view that he had done his best with the material available and that if a party wished to challenge it, that party could exercise the right of appeal. The landlords would also have had a range of possible responses. If they supported the tenant’s revisals, they might have persuaded the arbiter that some change was necessary. If they did not, they might have positively resisted change. But, they, too, might simply have taken the view that the arbiter had done his best with the material available and that if the tenant wished to challenge it, he could exercise his right of appeal.

[55] But, in any event, the question of how the landlords might have responded had the tenant acted in a different way and whether they might have improved their position had he in fact challenged some details of fact in the draft, appears to us to be irrelevant to the issues to be addressed in terms of the Lord Chancellor’s formulated test. It seems to us that on a proper understanding of the circumstances of the present case, the relevant state of facts which the landlords required to rely on was that the tenant would not appeal on any ground which questioned the arbiter’s approach to issues of fact. To succeed with the plea they would require to show that they were justified in reaching that conclusion in the circumstances and that they acted in some way in reliance on that state of facts. Put shortly, we are satisfied that the landlords have failed to show that they were justified in reaching such a conclusion and that they have been unable to point to any way in which they conducted their affairs in any significantly different way because of such reliance. That is quite a different thing from saying that if the tenant had chosen to act in another way, they would have been able to improve their position.

[56] We did not understand it to be contended that the tenant had any positive legal duty to act in a different way. There was, for example, no statutory procedure covering issue of a draft award. The landlords were unable to present any clear authority to support the view that the tenant – or his legal advisers – ought to have known that they were expected to scrutinise the draft carefully and draw attention to errors of fact. There was no attempt before us to rely on any clearly established practice of arbiters sending drafts out for revision by the parties. It may be possible to go further and say that we are not aware of any practice of arbiters expecting to review the substance of their decision after issue of a draft award. A legal adviser might reasonably have assumed that the intention of the arbiter in issuing a draft award was simply to allow parties to state a question of law for the Court. We are not persuaded that any legal adviser would have thought it necessary to subject the draft to close scrutiny to see whether the arbiter had dealt adequately with all issues of fact. It was not said that the landlords had carried out such an exercise. However, while there is a superficial attraction in Sir Crispin’s suggestion that it would have been as easy for the landlords as for the tenant to identify omissions of fact, we recognise that whatever might be the obligation on the losing party, it would be unrealistic to expect the same scrutiny from the successful one.

[57] In any event, the question is not whether a tenant or his adviser might have been expected to carry out revision but whether the circumstances justified the landlords in assuming that they would do so. If there was no proper basis for such assumption, the absence of any proposed revisals could not properly be treated as an assertion that the tenant was satisfied with the way the facts had been dealt with in the award. We heard some discussion of the relevance of the tenant’s assertion that he had lost confidence in the arbiter. Mr Sutherland suggested that this was irrelevant. But this was a case where the arbiter had not only rejected the tenant’s arguments but had come to a figure far above the submissions of either party. It does not require knowledge of the tenant’s actual reaction to appreciate that a tenant, fighting over a dispute between his figures and the landlords’, might have lost confidence in the sense that he might reasonably have thought it unlikely that the arbiter would change his findings in light of further representations when that arbiter had not accepted these representations when originally raised. While the term “lost confidence” may often have somewhat pejorative implications, it need not necessarily be viewed in that way. The objective facts can be seen to provide some basis for a reasonable belief in the tenant that there was no point in making further representations to the arbiter when he could challenge his award by way of appeal on law and fact. When no positive duty to submit revision is suggested and we are simply considering whether the failure to do so justified the landlords in assuming a positive acceptance of the way the arbiter had expressed himself, the tenant’s position as the losing party cannot be left out of account. In any event, on any view of the matter, the landlords could have had no basis for any assumption that the tenant was satisfied with the terms of the award as a whole. A crude test of their position might be to ask what they would have done differently if the tenant had simply said that he intended to appeal if unsuccessful in relation to the issue of competency. There is nothing to suggest any positive answer to that.

[58] We rather think that the problem for the landlords was one of surprise rather than prejudice. As the tenant had taken one point by way of stated case, they did not expect him to take other points at appeal. But we have little doubt that if they had thought about it, they would have come to realise that there was no sound reason why he should not. The issue of a draft award could readily be explained by reference to the doubt raised by the conflict between the arbiter’s conclusion as to a proper figure and the lower sum apparently sought by the landlords. It almost invited a question of law. The draft needed no revision to address that question. The tenant took advantage of the draft to challenge the competency of the whole proceedings. The nature of this challenge should not be overlooked when considering the landlords’ reasonable expectations. Where the tenant was challenging the competency of the whole proceedings before the arbiter was it reasonable to assume he was intending to forego any right to challenge matters of detail?

[59] For completeness in relation to the question of the landlords’ actings, it might be added that we are aware of some discussion in recent years of the precise scope to be given to the reference to “prejudice” in the context of personal bar. We did not hear any submissions on this matter and consider it appropriate to proceed on the basis of the parties’ apparent acceptance of the straightforward way in which matters were expressed in Gatty v Maclaine. However, it may be said we heard nothing to suggest that the landlords acted in any significant way in reliance on the relevant “state of facts” we have described above.

[60] Although some comment can be made about the individual grounds it must be borne in mind that the essential issue is whether the tenant’s initial silence justified the landlords in a relevant belief. It is not appropriate to subject the grounds of appeal now stated to detailed scrutiny. Nothing said about the individual grounds was relevant to the fundamental problem of how it could be suggested that the landlords had acted in reliance on some different state of facts. As we have said, the fact that they might have been able to address any of the specific grounds had they been raised, does not address the question of what they would have done differently if, instead of the silence, the tenant had simply let it be known that he was not happy with the way the arbiter had dealt with the whole matter.

[61] The state of facts which the landlords had purported to rely on was that the tenant accepted that the arbiter’s draft included full and adequate findings in fact. It was accepted that this did not mean that he accepted the arbiter’s reasons or reasoning. It is not necessary for us to express a view on the validity of this distinction from the point of view of a plea of personal bar and the landlords’ reliance on silence. Where a draft award has been issued a party has an opportunity to consider whether the arbiter’s reasoning can be challenged as raising a question of law. If the tenant would not have been expected to challenge the arbiter’s reasoning at the stage when such challenge might have been advanced, it is not easy to see why he would have been expected to challenge an error of fact at that stage when it presented no formal machinery for any such challenge.

[62] However, put shortly, we consider that neither ground 5 nor ground 6 can clearly be said to involve any departure from any previous position which might be said to have been tacitly adopted by the tenant. In particular they do not rely on any change from a position of assumed acceptance that the arbiter had set out the facts adequately. Both involve acceptance that the facts were referred to in the draft. The essential complaint is of a failure to give a properly reasoned explanation of what the arbiter made of the facts in question. The precise wording of the proposed ground seems irrelevant to the issue of identification of a relevant change of position but, in any event, the tenant’s proposed amendment made the matter clearer. These grounds involve challenges to adequacy of reasons or reasoning.

[63] Ground 7 raises an unusual issue. It is based on a contention that the arbiter erred in proceeding on the basis that the fencing had been provided by the landlord. This is, at first sight, a complaint about an issue of fact. However, it appeared from the submissions that the tenant did not suggest that any factual issue in relation to provision of fencing had been raised in the proceedings before the arbiter. It was said that the tenant had proceeded on the assumption that the arbiter would treat all internal fencing as having been provided by him. The tenant, accordingly, had felt no need to say anything about such fencing. Sir Crispin appeared to say that in his experience there was a reasonable basis for such belief, but it seems that this ground is intended to raise a question of law rather than fact. The tenant may be able to challenge the arbiter’s reasons for making an assumption that the fencing was part of the fixed equipment. It is not clear what he might be said to be barred from arguing.

[64] Ground 8 raised two distinct issues about field access. We understand that the tenant is to contend that he had given evidence that he had improved the accesses. Accordingly the award might be challenged on the basis of an error of fact if it is to be assumed that the unimproved accesses were inadequate. We simply note that there might be little weight in an assertion that the tenant had improved accesses unless it had been asserted, expressly or implicitly, that without such improvement, the pre-existing accesses were in some significant way inadequate for the purposes of the lease.

[65] The second issue is specific to the field at Hattoncrook. This does raise an assertion of a simple issue of error of fact. The arbiter said all the accesses were good. The tenant may seek to show either that he pointed out, or that the arbiter ought to have seen for himself, at inspection, that the access there did not permit use by a modern tractor. Had this point stood on its own and had the other necessary features of personal bar been present, the tenant might have been precluded from raising this.

Decision

[66] We are satisfied that the appeal is competent. We have considered Sir Crispin’s submission that to deal properly with an issue of personal bar in this case, it might be necessary to have a proof. However, we are satisfied, in light of the full discussion at debate, that the plea of personal bar has not been relevantly stated, and can be rejected at this stage. The next step will be a hearing of submissions on the substantive grounds. Issues of expense and the question of certification of counsel were deferred on the motion of the parties.

For the appellant (tenant): Sir Crispin Agnew of Lochnaw Bt QC; Murchison Law, Solicitors, Inverness

For the respondent (landlord):Robert Sutherland, Advocate; Stronachs, Solicitors, Aberdeen