THE COURT

(Lord Minginish, Mr J A Smith)

EUNSON v CROFTING COMMISSION

(Application SLC/10-14/15 – Order of 1 March 2016)

CROFTING - DECROFTING - APPLICATIONS FOR WHOLE-CROFT DECROFTING DIRECTIONS FOR FIVE OWNER-OCCUPIED CROFTS - WHETHER AVAILABILITY OF LAND AS SECURITY FOR LOAN FINANCE IN RELATION TO A WINDFARM DEVELOPMENT ON OTHER LAND COULD BE A REASONABLE PURPOSE FOR DECROFTING IN TERMS OF SEC 25(1) OF THE CROFTERS (SCOTLAND) ACT 1993 - WHETHER ADEQUATE REASONS GIVEN FOR REFUSAL - WHETHER CROFTING COMMISSION OTHERWISE ERRED IN LAW - MEANING OF “CROFTING COMMUNITY” AND WHETHER DETRIMENT TO CROFTING COMMUNITY IN THE DISTRICT OF THE CROFTS

The appellants were owner-occupiers of five crofts on mainland Shetland. They applied to the Crofting Commission for whole-croft decrofting directions for all five crofts. The reason given for seeking decrofting was “To be in a position to provide the land as security for a bank loan”. The bank loan was required in connection with progressing a wind farm development on other land in the vicinity. The Commission refused the applications, holding (i) that the decrofting of land for the purposes of development on other land was not a reasonable purpose within the meaning of sec 25(1) of the Crofters (Scotland) Act 1993 (“the 1993 Act” or “the Act”) and (ii) that they should not exercise their discretion to grant decrofting under sec 24(3) of the Act due to (a) the numerous uncertainties which lay in the way of the project going ahead, such that the applicants had failed to demonstrate any reasonable likelihood of the project being taken forward to completion, and (b) the detriment the loss of land from the local pool of crofting land would cause the crofting community in the district in which the crofts were situated. The appellants appealed on a number of grounds, including that the respondents had erred in law by not giving adequate reasons for their decision on reasonable purpose, that they had made a finding in fact that a crofting community existed in the district in which the crofts were situated without having sufficient evidence on which to base that fact, that they had taken certain irrelevant or immaterial considerations into account and left certain relevant or material considerations out of account and that they had exercised their discretion in an unreasonable manner.

Held, appeal refused and decision of respondents confirmed. Although the respondents had failed to give adequate reasons for the significance they attached to the fact that the proposed development was to take place on land other than the land being decrofted, and had thus not given adequate reasons in relation to “reasonable purpose” within the meaning of sec 25(1) of the Act, and had not had sufficient evidence for holding that a crofting community, within the meaning of sec 66(1) of the Act, existed in the district in which the crofts were situated, the uncertainty as to whether the project would ever materialise (which, contrary to the appellants’ submission, was a relevant consideration) was so great and the information presented in support of its prospects, including the prospects of being able to raise adequate finance on the security of the land to be decrofted, so scant that the respondents’ exercise of their discretion under sec 24(3) of the Act could not be said to be unreasonable; indeed it was difficult to see how they could have arrived at any other conclusion. Observations as to the unsatisfactory state of the law in relation to the meaning of “crofting community” in sec 66(1) and elsewhere in the Act and the possible need either to abolish the discretion given to the respondents under sec 24(3) (as that section and its forerunners had been interpreted by the Land Court) or extend to the exercise of that discretion and to sec 25(2) the provisions of sec 25(1A) and (1B) of the Act, introduced by the Crofting Reform (Scotland) Act 2010.

The note appended to the Court’s order, applying to all five decisions, is as follows:

[1] This is an appeal against the refusal by the respondents of a whole-croft decrofting direction in respect of the croft of Griesta on the mainland of Shetland of which the appellants are owner occupiers.

[2] In addition to Griesta, which extends to 53.26 ha, the appellants between them are owner occupiers of four other crofts, all on the mainland of Shetland, being Nesbister (21.03 ha), Breck (14.906 ha), 6 Veensgarth (3.625 ha) and Nesbister South Apportionment (10.749 ha).

[3] On 21 November 2013 they submitted to the respondents whole-croft decrofting applications in respect of all five crofts. In each case the purpose for which decrofting was sought was stated to be “To be in a position to provide the land as security for a bank loan”. The reason for which the bank loan was required was the development of a renewable energy project, not on any of the five crofts but on the Hill of Gibblestone, which, like Griesta and the Nesbister South Apportionment, is in the parish of Tingwall, whereas the three other crofts are in the neighbouring parish of Whiteness.

[4] Having completed their normal procedures the respondents, by letters dated 29 January 2015, refused all five applications in similar terms. Appeals against these decisions have now been taken and it has been agreed that the Griesta case be regarded as the leading case. What is decided in relation to it will apply to the other appeals, there being no basis for differentiation. Except where expressly stated, what follows applies to all five appeals.

[5] We heard debate on the appeal at Edinburgh on 11 January 2016 when the appellants were represented by Mr Robert Sutherland and the respondents by Mr Donald Cameron, both advocates.

Legislation

[6] The relevant legislation is as follows, all references being to the Crofters (Scotland) Act 1993 (“The 1993 Act”) as amended by the Crofting Reform (Scotland) Acts 2007 and 2010 (respectively “the 2007 Act” and “the 2010 Act”) and the Crofting (Amendment) (Scotland) Act 2013 (“the 2013 Act”).

20 Resumption of croft or part of croft by landlord

(1) The Land Court may, on the application of the landlord and on being satisfied that he desires to resume the croft, or part thereof, for some reasonable purpose having relation to the good of the croft or of the estate or to the public interest or the interests of the crofting community in the locality of the croft, authorise the resumption thereof by the landlord upon such terms and conditions as it may think fit, and may require the crofter to surrender his croft, in whole or in part, to the landlord accordingly, upon the landlord making adequate compensation to the crofter either by letting to him other land of equivalent value in the neighbourhood or by compensation in money or by way of an adjustment of rent or in such other manner as the Land Court may determine.

(1AA) In determining whether it is satisfied as mentioned in subsection (1) above (and, in particular, whether the reasonable purpose mentioned there relates to the public interest) the Land Court –

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

and must authorise , or refuse to authorise, the resumption of the croft by the landlord accordingly.

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

(a) the sustainability of –

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

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

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

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

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

(3) For the purposes of subsection (1) above “reasonable purpose” shall include-

(a) the using, letting or disposing of the land proposed to be resumed for –

(i) the building of dwellings,

(ii) small allotments,

(iii) harbours, piers, boat shelters or other like buildings,

(iv) churches or other places of religious worship,

(v) schools,

(vi) halls or community centres,

(vii) planting,

(viii) roads practicable for vehicular traffic from the croft or township to the public road or to the seashore,

(viiia) the generation of energy; or

(ix) any other purpose likely to provide employment for crofters and others in the locality.

24 Decrofting in case of resumption or vacancy of croft

(3) Where a croft is vacant, the Commission may, on the application of the landlord, direct that the croft shall cease to be a croft or refuse to grant the applications; and if the Commission direct under this subsection or under subsection (2) above that a croft shall cease to be a croft then, subject to subsection (4) below, this Act shall cease to apply to the croft, without prejudice, however, to the subsequent exercise of any powers conferred by this Act or any other enactment for the enlargement of existing crofts.

24A Applications to decroft by owner-occupier crofters

(1) An owner–occupier crofter may apply to the Commission for a decrofting direction.

(2) In this section and in sections 24B to 24D “decrofting direction” is a direction that the owner-occupier’s croft is to cease to be a croft.

24B Commission’s powers in relation to applications under section 24(A)

(1) The Commission may, on an application under section 24(A)(1), give a decrofting direction or refuse to grant the application.

24C Application of section 25 in relation to decrofting directions

(1) Section 25 applies in relation to an application under section 24A(1) by an owner-occupier crofter for a decrofting direction, and to such a direction, as it applies in relation to an application under section 24(3) by a landlord of a vacant croft, and to a direction under section 24(3), subject to the modifications mentioned in subsections (2) to (4).

25 Provisions supplementary to section 24(3)

(1) The Commission shall give a direction under section 24(3) of this Act that a croft shall cease to be a croft if –

(a) subject to subsection (2) below, they are satisfied that the applicant has applied for the direction in order that the croft may be used for or in connection with some reasonable purpose (within the meaning of section 20 of this Act) having relation to the good of the croft or of the estate or to the public interest or to the interests of the crofting community in the locality of the croft and that the extent of the land to which the application relates is not excessive in relation to that purpose;

(1A) In determining whether they are satisfied as mentioned in subsection (1)(a) above (and, in particular, whether the reasonable purpose mentioned there relates to the public interest), the Commission –

(a) may take into account the effect that purpose (whether alone or in conjunction with other considerations) would have on the matters mentioned in subsection (1B) below; and must give the direction , or refuse to grant the application for it, accordingly.

(1B) The matters mentioned in subsection (1A)(a) above are –

(a) the sustainability of –

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

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

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

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

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

(2) Without prejudice to subsection (1)(b) or (c) above, the Commission, in determining whether or not to give such a direction, shall have regard to the general interest of the crofting community in the district in which the croft is situated and in particular to the demand, if any, for a tenancy of the croft from persons who might reasonably be expected to obtain that tenancy if the croft were offered for letting on the open market on the date when they are considering the application.

61 Interpretation

(1) In this Act, unless the context otherwise requires –

‘crofting community’ means all the persons who (either or both) –

(a) occupy crofts within a township which consists of two or more crofts registered with the Crofting Commission;

(b) hold shares in a common grazing associated with that township.”

Cases

City of Edinburgh Council v The Secretary of State for Scotland 1998 SC (HL) 33
Ferguson v Crofters Commission 1999 SLCR 77
Knight v Crofters Commission 1999 SLCR 102
Loch Hill Windfarm (Scotland) Ltd v The Scottish Ministers [2015] CSIH 37
MacColl v Crofters Commission 1986 SLT (Land Ct) 4
Mackay v Crofters Commission 1997 SLT (Land Ct) 4
Moray Council v The Scottish Ministers 2006 SC 691
Moray Estates Development Co Ltd v Crofters Commission 1988 SLT (Land Ct) 14
Palmer v Crofters Commission 2007 SLCR 286
R v Criminal Injuries Compensation Board ex parte Moore [1999] 2 All ER 90
Ritchie v Aberdeen City Council 2011 SC 570
South Buckinghamshire District Council v Porter [2004] 1 WLR 1953
Wordie Property Co Ltd v Secretary of State for Scotland 1984 SLT 345
Wotherspoon v Crofters Commission [2008] SLCR 286

Submissions

(i) for the appellants

[7] In advance of his oral submissions, Mr Sutherland had lodged a written note of argument. We refer to it as appropriate, in our decision below. Otherwise, what follows is a summary of his oral submissions.

Adequacy of reasons for deciding that there was no reasonable purpose

[8] What leapt out of the decision letter was that it was a decision made in principle and without reference to the circumstances of the particular case. Mr Sutherland referred to the following passage:

“We have not found that a reasonable purpose has been established by the applicant in terms of sec 25(1)(a) of the 1993 Act. The stated purpose of providing land as security for a project to take place on other land is considered not to fall within a ‘reasonable purpose’. … The use of croft land for the purposes of granting securities and raising finance unrelated to any purpose or project for that particular croft is not a recognised reasonable purpose.”

It was clear that the Commission had not considered things beyond the fact that this was not a reasonable purpose listed in sec 20(3) of the Act or something which had been held to be a reasonable purpose in an earlier case. There had been previous cases involving the decrofting of land for security: the difference here was that the development was not to be on the land being decrofted. There was no evidence of the Commission having addressed the question whether it should be recognised as a reasonable purpose in the circumstances of this particular case.

[9] The decision letter also conflated the purpose of the application, which was to provide security in order to raise funds to allow the project to proceed, and the underlying project itself. Reference was made to the sentence:-

“The proposed project is not certain to proceed (even if this application is granted), does not benefit from planning permission and is not going to be located on the croft.”

All of these considerations were irrelevant. The fact that there was no planning permission in existence was something on which the application was predicated. The point was that the funding the appellants were seeking to raise was required to take the project to that stage and beyond. Mr Sutherland had taken express instructions on whether refusal of decrofting would kill the project and the answer was that it would.

[10] The Commission had also failed to put into the balancing exercise which they were required to carry out the benefits of the project. Instead they had said:-

“On the basis of the evidence provided with this application and the associated case paper, the proposed purpose is contingent on a large number of unknown factors (such as feasibility studies, anemometer testing and environmental impact assessments, planning consent, finance arrangements, grid connection agreements and dates), including the consent of other crofters or part owners of a croft, whose consent is not, on the basis of the evidence supplied by RPID, likely to be forthcoming.”

The latter reference was to small parcels of land situated within the 400 acre area of ground on which the project was to take place. These were parcels which had been sold off over the years but this project was not dependent on the use of these parcels or on the consent of their owners. This was, therefore, plainly an irrelevant consideration. In the event that, contrary to this understanding, their consent was required, there was no information before the Commission to the effect that it would be refused. The Commission had failed to take account of the factors which indicated that the project would go ahead. Considerable resources, in terms of time and money, had already been devoted to it. Mr Eunson had spent two years working on it. It was not vague nor at a preliminary stage. The Commission’s reference to the Natural Capital note which had been lodged with the applications did not do justice to the work that had already been done nor to the prospects of the project going ahead.

[11] The decision letter (first paragraph of second page) also displayed confusion as to the significance of planning permission in relation to decrofting. The reference to the usual practice of decrofting only the footprint area of a proposed development indicated that they had fundamentally misunderstood what was happening here.

[12] The foregoing were all the reasons given by the Commission for saying that this was not a reasonable purpose and these reasons were riddled with errors, inaccuracies and irrelevant considerations. The fact was that the applicants had put forward a prima facia reasonable purpose and the Commission had not come up with any good reason for refusal. In that situation there was a strong presumption in favour of decrofting: Ferguson v Crofters Commission; Wotherspoon v Crofters Commission.

[13] The Commission had had significant information before it to make a decision. They ought to have determined that a reasonable purpose had been established. The court should now do so and direct the Commission to grant these applications.

Sec 25(2)

[14] Although it might be thought that, having decided that there was no reasonable purpose, it was unnecessary to do so, the Commission had gone on to deal separately with sec 25(2). They had assumed the existence of a crofting community in the locality or district of the crofts. These five crofts were in fact in diverse localities; as shown on the map, production 25. One would expect the separate decision letters to discuss the nature of these individual localities. They were not even all within the same parish. Mr Sutherland referred to the definition of “crofting community” contained in sec 61. The first question which they should have asked was “What is the township?” and then “What does that community consist of?” With the exception of the application for 6 Veensgarth, none of the decision letters identified townships of which the crofts were part. Even with regard to Veensgarth, the Commission had to be clear that the croft was part of that community. So far as Griesta was concerned, it was not accepted, as stated in the Commission’s case papers, that the croft had a share in the Hill of Setter Common Grazings. The decision letter asserted that there was “actual or potential shared use of common resources in the working of the croft” but there was no evidence of sharing of resources between any of the crofts and any other croft. The Commission had had insufficient evidence to conclude the existence of relevant crofting communities.

[15] Mr Sutherland referred to the paragraph beginning “As there is a crofting community, we have assumed that the removal of such a croft from crofting tenure would adversely affect the interests of the crofting community …” That passage seemed to be setting out a general policy against the removing of crofts from a potential pool of croft land, however hypothetical that pool was. What was missing was any balancing consideration; the fact that the land was being taken out of crofting tenure was clearly a relevant consideration but the weight to be attached to it depended on the circumstances. To have a general policy of not allowing land to be taken out of a pool of croft land was an error of law: the legislative scheme itself envisaged that land could and would be taken out in certain circumstances. No proper and adequate reasons had been given for the Commission’s decision because they had not defined the relevant crofting communities nor identified the effect which granting these applications would have on them.

[16] The approach of applying a blanket policy was also reflected in the paragraph beginning:

“We must also have regard in terms of sec 1(2A)(a) and (b) of the 1993 Act to the desirability of supporting population retention and the impact of changes to the overall area of land held in crofting tenure on the sustainability of crofting.”

There was no consideration of what the extent of land was which was held on crofting tenure nor of the contribution it made to population retention. There was no suggestion that this land, despite being taken out of crofting was going to cease to make the same contribution to the local economy as it was making at the moment. The Commission had been well aware that it was Mr Eunson’s intention to continue his present crofting activities across all five crofts. So the land would not, in fact, be lost to crofting in a practical sense. The Commission ought to have identified what the threat to the crofting interest or community was. In fact no threat had been identified and it was not enough to say that decrofting, in and of itself, was a threat.

[17] As part of the required balancing exercise, and part of their assessment of the effect of decrofting on the relevant interests, the Commission ought to have had regard to the applicants’ view that the decrofting, in allowing the renewable energy project to go ahead, would strengthen Mr Eunson’s farming business and allow his children to join it. It would also strengthen the local economy. That economy was not necessarily the same thing as the “crofting community” referred to in the legislation but it was where the relevant “public interest” referred to in sec 20(1) lay. That interest would be best served by decrofting being granted.

[18] The Commission had also relied upon paragraph 67 of their Policy Plan (September 2014). It was in a section headed “Controlling speculation and preventing the loss of crofts”. In Mr Sutherland’s submission that section and the following section, on decrofting, supported his argument that one had to consider the facts of the particular case and assess how, exactly, decrofting was going to have a detrimental impact. The detriment had to be identified with some clarity. A sweeping statement was not sufficient. Paragraph 22 of that plan was also relevant, particularly the third, fourth and sixth bullet points listed there, in terms of which crofting was to contribute to realisation of economic potential, development of employment, the creation of strong, resilient, supportive and sustainable communities and reduction of Scotland’s carbon footprint. The present applications satisfied all of those aspirations. Mr Eunson was taking responsibility to himself by funding the project himself rather than relying on outside investment which would take money out of the community.

[19] The appeals should be sustained. We should not remit the matter to the Commission. A reasonable purpose had been established. It was not being suggested that the areas of land to be decrofted were excessive. Decrofting was in the public interest. The principle of decrofting land in order to provide security for development was not disputed; Palmer v The Crofters Commission. All of the requirements of the legislation having thus been satisfied, the Court should direct the Commission to grant the applications under sec 52A(4)(b) of the Act.

(ii) for the respondents

[20] Mr Cameron’s motion was that the decisions appealed against should be upheld and the appeals dismissed. Again he had provided a written note of argument and what follows is a summary of his oral submissions. These fell into five chapters: (1) reasonable purpose; (2) reasons generally; (3) the weighing and balancing of the different factors; (4) the general interests of the crofting community; and (5) demand in relation to the test contained in sec 25(2).

Reasonable purpose

[21] The decision letters were adequately reasoned, applied the correct legal tests and provided a proper basis for the decision to refuse the applications. The Commission had said in terms:

“We have not found that a reasonable purpose has been established by the applicant in terms of sec 25(1)(a) of the 1993 Act. The stated purpose of providing land as security for a project to take place on other land is considered not to fall within a ‘reasonable purpose’”.

That was the basic reason for refusal and it was a good reason. It was not necessary to give other reasons but in fact the Commission had given three: (i) that the development was not certain to proceed, (ii) that no planning permission had been granted for it and (iii) that it was not located on the croft. These three factors, set out in the decision letters, referred back to the basic reason for refusal and elaborated on it.

[22] That the security to be granted was unrelated to any purpose or project for these particular crofts was an unimpeachable and entirely valid reason for concluding that there was no reasonable purpose. Although generation of energy was listed as a reasonable purpose in connection with resumptions under subsec 20(3) the reference there was to the use for that purpose of the land proposed to be resumed. So there was a distinction between development on the land to be decroftedand development elsewhere.

[23] It had already been established that it was not acceptable to decroft land simply to free it from the effects of crofting legislation: MacColl v Crofters Commission, at page 6 para F. The Court had also, previously, indicated its reluctance to grant decrofting for the purpose of freeing the land as security for a loan particularly where there was lack of detail as to the development for which the loan was required: MacKay v Crofters Commission at page 6 paras A, G and H.Thequestion of decrofting for that purpose had also arisen in Palmer but the question whether decrofting purely for the purpose of raising finance could ever be a reasonable purpose for decrofting had never actually been argued and decided in any case to date. In Mr Cameron’s submission the decrofting of land so as to raise finance for a development elsewhere was not a reasonable purpose for decrofting.

[24] Asked about the lack of reasoning in the Commission’s decision letters as to why that should be, he accepted that there was no such reasoning but posed the question “what more was required?” The reason given was such a basic reason and such a good one, that nothing else was needed. Decrofting was restricted, by the case law, to developments on the land itself. Where would one draw the line if one allowed decrofting for development elsewhere? The obvious, logical, place to draw the line was where the project was unrelated to the land being decrofted.

[25] Answering the criticisms of conflation of the raising of finance and the energy project itself, as a reason for decrofting, it was worth looking at the information with which the Commission had been presented. The applications themselves plainly linked the loan to the wind project. Not only that but they attached a summary of progress to date, in the form of the Natural Capital report. The covering letters which accompanied the applications also clearly linked the use of the land for security purposes with the development of the renewable energy project. So the applications themselves conflated both. They were, in any event, inseparable. It was therefore appropriate for the Commission to look at all the contingencies which might arise between the decrofting of the land and the project actually proceeding. It was recognised in the case law that the onus was on the applicant to show why decrofting should be granted, not on the Commission to show why it should be refused; MacColl at page 6 and Palmer at page 30. In that regard, only limited information had been provided in terms of the applications. There were, therefore, clearly evidential issues to be explored and for that reason, as well as others, the Court should not grant decrofting at its own hand.

[26] In that context, the obtaining of planning consent was one of the many unknowns and was plainly relevant. All the Commission had had to go on was the Natural Capital report covering the period to 21 November 2013 and a letter from the applicants dated 9 April 2014. All the latter told the Commission was that the applicants were now looking to prepare an application for full planning permission. There was nothing to indicate that the planning permission was likely.

Reasons generally

[27] Mr Cameron submitted that it would be unreasonable for a decision-making body such as the Crofting Commission to be expected to provide decisions which were overly legalistic or resembled court judgements: Wordie Property Company Limited v The Secretary of State for Scotland at page 348 and Lord Justice-Clerk Gill in Moray Council v The Scottish Ministers at paragraph [28] – [31] .

[28] The first ground of appeal contended that the Commission had:-

“Failed to state adequately the reasons for many of its factual conclusions, relying on suppositions and assumptions which extend beyond those justified by the Commission’s experience and expertise.”

The appellants did not specify, however, which factual conclusions set out in the decision letters were challengeable on that basis.

[29] The respondents rejected the contention that the decision letters failed to identify all of the material considerations taken into account in determining the issues or left the informed reader in substantial doubt as to the Commission’s findings in fact and conclusions on these issues. Indeed the decision letters contained comprehensive reasoning and a detailed rationale for the decision taken.

Weight

[30] In decision-making of this kind, matters of weight (the weight to be attributed to individual factors) were for the decision-maker alone: Lord Malcolm in Loch Hill Windfarm (Scotland) Limited v The Scottish Ministers at paragraph [17] citing Lord Clyde in City of Edinburgh Council v The Secretary of State for Scotland at pages 44-45. In so far as grounds of appeal F, G, H, I and K took issue with the relative weight the respondents had attached to competing considerations, they faced a very high threshold and failed to reach it. It was quite apparent that the respondents had identified and given appropriate weight to the various competing material considerations. The appellants’ real complaint was that the respondents had failed to attach sufficient weight to the considerations in favour of decrofting, not that the respondents had overlooked them.

General interests of the crofting community in the locality or district

[31] What the Commission required to have regard to was “the general interest of the crofting community in the district in which the croft is situated”; sec 25(2).

[32] There was a question as to the relationship between the subsecs (1) and (2) of sec 25. It had caused some difficulty in the past. The case law said that if reasonable purpose was found in terms of subsec (1) a presumption in favour of decrofting arose (Ferguson and Wotherspoon) but you still had to look at subsec (2). The question was whether, if it were decided under subsec (1) that there was no reasonable purpose, it was necessary to go on to consider subsec (2) at all. In Knight v Crofters Commission the Court had concluded that no reasonable purpose had been shown in terms of subsec (1) but had gone on to consider subsec (2). In Mr Cameron’s submission, therefore, the Commission had to consider both subsections and applicants for decrofting had to satisfy the Commission in respect of both. In any event the Commission in this case had addressed subsec (2) and it was not being suggested that they had erred in so doing. However, if the Commission were exercising a discretion under subsec (2), that would make a challenge more difficult and it was appropriate for the Court to take a broad, common-sense and purposive approach to the definition of the terms used.

[33] There was also a potential difficulty caused by the fact that subsec (1) referred to “the crofting community in the locality of the croft” whereas subsec (2) referred to “the crofting community in the district in which the croft is situated” [emphases added] . The subsec (1) terminology had been inserted by sec 23(b) of the 2007 Act whereas the wording used in subsec (2) had been introduced into the Crofters (Scotland) Act 1955 by sec 13(3) of the Crofting Reform (Scotland) Act 1976. However, in Mr Cameron’s submission it was innately implausible to suggest that the use of the word “locality” in subsec (1) had been intended by the Scottish Parliament to direct the attention of the Commission to a different geographical area from that to which they were to have regard in terms of subsec (2). Moreover the reference to the “general” interest of the crofting community in the district suggested a broad, long-term, view was appropriate. It was important to note that all that was required was for the Commission to “have regard” to that general interest: it was not necessary to show actual detriment.

[34] There was no statutory definition of “locality”, “district” or “township”, only the definition of “crofting community” in sec 61(1). The Court had declined to supply its own definition of “township” in Wotherspoon. To use definitively the concept of what was thought of as a township in other areas could produce difficulties in areas such as Shetland and the north of Caithness, where crofting was conducted on a more scattered and diffuse pattern than in other areas. As to “district”, it had been described as a “general geographic area” in Moray Estates (at page 17) and in Palmer (at pages 21 and 26) the Court had held that, although the croft under consideration was a stand-alone croft, there was a crofting community in the district in which it was situated because it was bounded north and south by crofting townships and the whole of the north of Skye was a collection of crofting townships. A wide view was, therefore, permissible and indeed appropriate.

[35] Turning to the facts of this case, in respect of Griesta, the finding the respondents had made was that there was “a crofting community in the district as the croft shares in Hill of Setter Common Grazings and is situated approximately a kilometre from the crofting township of Veensgarth”. The respondents also relied, to some extent, on the references to parishes, parish boundaries, the areas assigned to the Area Assessors whose views had been canvassed by the respondents and the references to common grazings in some of the applications.

[36] It was plain from the case papers (production 3) that the Commission had specifically addressed the question of the existence of a crofting community. A question was posed as to whether one David Anderson was a member of the crofting community “in terms of the Crofting Act” and, therefore, entitled to object. In terms of the decision letter itself, the matter was dealt with head-on in the third full paragraph of the second page, where the Commission said “As there is a crofting community, we have assumed that the removal of such a croft from crofting tenure would adversely affect the interests of the crofting community by removing the croft land from the pool of available croft land that could be available for other members of the crofting community, including potential new entrants to crofting”. The next sentence had specifically taken account of the fact that Mr Eunson had no intention of removing the land from agricultural use and the rest of the paragraph went on to conclude that, notwithstanding its continued use for agriculture, there would be detriment to the crofting community because the land would no longer be available to an incoming crofting tenant.

[37] In addition, there was an artificiality about the appellants’ argument on this matter, given that their own grounds of appeal (Ground G) said “In considering the general interest of the local community the Commission failed to have sufficient regard to the benefits to the community which would flow from the development …”, implying that the appellants’ themselves did not seriously doubt that there was a crofting community in existence. In Mr Cameron’s submission the information before the Commission had entitled them to find that there was a crofting community within the definition of sec 61(1) in existence in relation to each of the applications. The decision letters, when read in context and against the background of supporting material, satisfied any requirement to identify the “township” and “district” in question. Were we to hold, however, that the decision letters were deficient by reason of failure to specify the relevant townships and districts which the respondents had in contemplation when assessing the general interest of the crofting community in the district in which the crofts were situated we should permit the respondents to clarify their position in respect of that matter.

Demand

[38] The requirement that the respondents were to have regard to the demand for a tenancy of the croft was a sub-set of the sec 25(2) test. Whilst demand had to be considered its existence or otherwise was just part of the wider test of the general interest of the crofting community; Knight at page 116. There was no need for detailed evidence of demand; Gammie v Crofters Commission at pages 59 and 61, Palmer at pages 32 to 33.

[39] The respondents had “fronted up” to the fact that they were looking at this in a hypothetical sense and what they said in the final paragraph on page 2 was on all fours with the approach in Palmer. Contrary to what had been said on behalf of the appellants, they had carried out the required balancing act; pages 2 and 3 of the decision letters, where the Commission were addressing sec 1(2A) and the overarching principles to which they were required to adhere, including population retention. Mr Sutherland had said that granting the applications would support population retention in as much as it would allow the appellants’ children to enter their parents’ business and retain profit in the community. However, there was no explicit reference to benefit to the local economy in the application letter: all that was said was that the purpose of the loan was to allow the applicant to keep the project in-hand. This did not come close to suggesting that population retention was a valid reason for the applications to be granted.

[40] In regard to the respondents’ reference to their Policy Plan, it was something to which they were required to have regard; sec 2D(1). They had given effect to what was said at paragraph 67 to the effect that:

“The Commission considers crofts to be a valuable resource that should be available both now and in the future, for existing crofters and new entrants to crofting to use productively”.

The other passages to which Mr Sutherland had referred, in support of the appeal, had not been foreshadowed in the grounds of appeal but, in any event, the fact that the Commission were required to have regard to their plans did not mean that they had to adhere to every aspect of them. In Mr Cameron’s submission the final substantive paragraph of the decision letters was entirely consonant with the information contained in the applications.

[41] As to disposal, the respondents’ primary position was that all the appeals should be dismissed. Were we to find that any part of any appeal was well founded, we should remit to the respondents to consider their decision anew in light of any guidance given by the Court. There being evidential matters remaining to be explored, it would not be appropriate for the Court itself to decide the applications. A decision on these applications was primarily a matter for the respondents and it was therefore more appropriate that it should be remitted to them. In any event the appellants had not demonstrated a reasonable purpose for decrofting and we could not, therefore, grant the applications.

Response by Mr Sutherland

[42] Mr Sutherland made some points in response.

[43] He first addressed the question of existence of a crofting community. He referred to the sec 61(1) definition. In terms of that definition a township had to comprise two or more crofts. Veensgarth was the only one of the applications which fell into that category: all the rest were single crofts. So there was no basis for saying there was a crofting community as defined in sec 61.

[44] Mr Cameron had said that there was no reference to benefit to the local community in the letter accompanying the applications but that letter did in fact refer to financial security for the business, enabling the applicants’ son and daughter to enter the business and referred to retaining profit within the local community.

[45] In relation to the Commission’s Plan his only purpose in referring to it had been to point out that it contained passages just as capable of supporting the applications as those on which the Commission had relied to refuse them.

[46] More generally, it was not sufficient for Mr Cameron to simply highlight passages in decision letters and link them to something in the legislation. Merely repeating the legislation was not equivalent to giving adequate reasons.

[47] With references to the “demand” test, there would always be demand for agricultural land and if that was to be used as a reason to refuse decrofting no one would ever be able to overcome that hurdle. It was a point to be considered but it could not be good enough in itself as a reason for decrofting. So used, it came down to being a policy not to release agricultural land from crofting.

[48] Finally, Mr Cameron’s submission had been that the Commission had refused decrofting because the land was to be used as security for development on other land which was not being decrofted. That had a bearing on the question of disposal of this appeal. The respondents had pinned their colours to the mast: they had found that not to be a reasonable purpose. The Court was now entitled to say that as a matter of law it was a reasonable purpose and the Court should therefore make that decision itself in light of the known circumstances. To go back to the Commission would be to give them another opportunity of refusing the applications. If the Court were to hold that there was a reasonable purpose that would give rise to a presumption in favour of decrofting in terms of sec 25(1) and the appellants had shown that the presumption was not rebuttable on the facts of the case. The list of reasonable purposes contained in sec 20(3) concluded with “any other purpose likely to provide employment for crofters and others in the locality”. That required a broad, purposive approach. There was no reason to confine the purpose to activity on the land being decrofted.

[49] Mr Cameron had also made something of the fact that planning consent had not been granted but the casework papers showed that the pre-planning procedures had been successful. That was another factor which should have been weighed in the balance.

Discussion of, and decisions on, the grounds of appeal

[50] The appeal as argued focused very much on subsecs (1) and (2) of sec 25 of the 1993 Act and in particular on the existence of “reasonable purpose” in terms of the former. Relatively little was said about sec 24(3) (or sec 24B(1) which deals specifically with the owner-occupier situation), although it is referred to in grounds of appeal (f), (i) and (k). These grounds of appeal were, of course, incorporated by Mr Sutherland in his oral submission but it is fair to say that the emphasis was on “reasonable purpose” under sec 25(1)(a). We mention this because it is important to understand what the Commission can do when considering an application for decrofting and what they in fact did in this case.

[51] Despite doubts which have surfaced from time to time, it now seems settled law that, in addition to what has been called (see below) the “mandatory” requirement on them to grant decrofting where reasonable purpose has been established under sec 25(1)(a), the Commission have a discretion under sec 24(3) to grant decrofting for other cogent reasons. The following passage from Knight (pp 115-116) may be taken as both reflecting the doubts and expressing the by-then (1999) settled state of the law:

“… the empowering provisions of section 24(3) are not expressly tied to section 25 although that is the section which makes detailed provision as to when decrofting should be allowed and what matters have to be taken into account. Parliament may have intended these provisions to be exhaustive of the circumstances in which the power given by section 24(3) could be exercised but the legislation is not expressed in this way. In Gray v Crofters Commission [citation given] the Court accepted, apparently without argument, that section 16(9) of the [1955 Act as amended] – now sec 24(3) of the 1993 Act – gave a discretionary power which was quite independent of what is now section 25(1). The Court made clear that the discretionary power had to be exercised within the guidelines supplied by section 16A(2) – now section 25(2). That approach to section 24(3) has been followed without question since 1980 and we see no reason to conclude that it is wrong. In other words, it is clear that the Commission does have power to grant an order for decrofting even where no reason has been stated. That approach was followed in Gammie v Crofters Commission [citation supplied] .”

[52] The changes made to resumption and decrofting provisions by the 2010 Act, which are discussed at paras [71] to [76] below, may suggest that the Scottish Parliament does not share that view of sec 24(3) but it must be taken to have been aware of it. The problems which arise as to what the Commission are, or are not, entitled or obliged to have regard to when exercising their discretion under sec 24(3) may require either the terms of sec 24(3) or the new provisions introduced into sec 25 to be revisited so as either to remove the discretion contained in sec 24(3) (as interpreted by this court) or extend the new provisions of sec 25 to the exercise of that discretion.

[53] All of that is discussed more fully below. For present purposes, and applying the law as it presently stands, what the Commission required to do was consider whether reasonable purpose existed under sec 25(1)(a) and, if not, whether they should nevertheless exercise their discretion under sec 24(B) (being the equivalent of sec 24(3) for owner-occupier situations) in favour of the applicants, a process which would bring sec 25(2) into play. Their decision letter shows that this is precisely what they did. Thus, although, the first substantive paragraph begins “We have determined this application under the general discretionary power with regard to decrofting applications vested in the Crofting Commission in terms of section 24(B) and section 25(2) of the Crofters (Scotland) Act 1993 as amended … and as it applies to owner-occupier crofters” it goes on immediately to address sec 25(1)(a), saying, in the very next sentence, that they have not found reasonable purpose established. And, having given their reasons for that conclusion, they go on:

“Accordingly, in terms of section 25(2) of the 1993 Act as it applies to owner-occupier crofters, and in the absence of any reasonable purpose being established, the Crofting Commission have had regard in the determining of this application to :-

Accordingly, it is clear that the Commission exercised both of their jurisdictions and that their consideration of sec 25(2) was in relation to the general discretion contained in sec 24(B)(1) rather than to sec 25(1)(a).

[54] With that, we turn to the grounds of appeal. The grounds as stated in the appellants’ pleadings and as dealt with in Mr Sutherland’s written submissions and, in turn, his oral submissions differ somewhat in structure and it has not always been easy to see how the various arguments advanced fit into the statutory grounds of appeal contained in sec 52A(3). The following discussion is structured on these statutory grounds and reflects our understanding of which arguments refer to which grounds.

(a) Sec 52A(3)(a): that the respondents erred on a point of law

[55] Pursuant to the approach we have just described, some of the ways in which the respondents are said to have erred in law are dealt with under the other statutory grounds below. In this section we deal with the challenge based on failure to give adequate reasons.

[56] Sec 23(b) of the 2007 Act amended subsec (7) of sec 25 of the 1993 Act, presumably inadvertently, in such a way as to apparently remove the need for the Commission to give reasons for a decision refusing a decrofting direction, while the duty to give reasons for granting a direction was retained. Nevertheless it has not been contended before us that the Commission were not under a duty to give reasons and they in fact did so. The adequacy of these reasons therefore has to be tested. The test is the same as for the situation where there is a statutory requirement to give reasons: R v Criminal Injuries Compensation Board ex parte Moore at page 95 H-J

[57] That test is well settled. In Wordie Property Company Limited v The Secretary of State for Scotland it was expressed thus by Lord President Emslie (at page 348):

“In order to comply with the statutory duty imposed upon him the Secretary of State must give proper and adequate reasons for his decision which deal with the substantial questions in issue in an intelligible way. The decision must, in short, leave the informed reader and the court in no real and substantial doubt as to what the reasons for it were and what were the material considerations which were taken into account in reaching it.”

[58] In Ritchie v Aberdeen City Council, Lord Justice-Clerk Gill, as he then was, referred to that as “the now classic formulation” of the duty on a decision-maker to give reasons and went on to say (at page 574):

“In fulfilling his duty to give proper and adequate reasons, the decision-maker need not engage in an elaborate and detailed evaluation of each and every point that has arisen at the hearing. But his statement of reasons must identify what he decided to be the material considerations; must clearly and concisely set out his evaluation of them; and must set out the essence of the reasoning that has led him to his decision”.

[59] In England, the classic equivalent of Lord President Emslie’s dictum is what was said by Lord Brown of Eaton-under-Heywood in South Bucks District Council v Porter (No 2) at page 1964:

“The reasons for a decision must be intelligible and they must be adequate. They must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the ‘principal important controversial issues’, disclosing how any issue of law or fact was resolved. Reasons can be briefly stated, the degree of particularity required depending entirely on the nature of the issues falling for decision. The reasoning must not give rise to a substantial doubt as to whether the decision-maker erred in law, for example by misunderstanding some relevant policy or some other important matter or failing to reach a rational decision on relevant grounds. But such adverse inference will not readily be drawn. The reasons need refer only to the main issues in the dispute, not to every material consideration. They should enable disappointed developers to assess their prospects of obtaining some alternative development permission, or, as the case may be, their unsuccessful opponents to understand how the policy or approach underlying the grant of permission may impact upon future such applications. Decision letters must be read in a straightforward manner, recognising that they are addressed to parties well aware of the issues involved and the arguments advanced. A reasons challenge will only succeed if the party aggrieved can satisfy the court that he has genuinely been substantially prejudiced by the failure to provide an adequately reasoned decision.”

[60] Applying these principles to this case, what are the reasons given by the respondents for the refusal of these applications? There are three: (i) that the purpose for which decrofting was sought was not a “reasonable purpose” within the meaning of sec 25(1)(a), (ii) that they were not persuaded that the project would go ahead in any event, and (iii) the detrimental effect on the local crofting community if decrofting was granted. In relation to each of these conclusions the appellants were entitled to know, in the words of Lord President Emslie, “what were the material considerations which were taken into account in reaching it”, or, in the words of Lord Justice-Clerk Gill ”the essence of the reasoning which led [them] to [their] decision”, or, in the words of Lord Brown of Eaton-under Heywood, “why the matter was decided as it was”. We deal with them in turn.

(i) reasons for decision that this was not a reasonable purpose

[61] On this matter the Commission said this:

“We have not found that reasonable purpose has been established by the applicant in terms of section 25(1)(a) of the 1993 Act. The stated purpose of providing land as security for a project to take place on other land is considered not to fall within a ‘reasonable purpose’. … The use of croft land for the purposes of granting securities and raising finance unrelated to any purpose or project for that particular croft is not a recognised reasonable purpose”.

[62] That is a perfectly clear statement of the the decision. But what is the reasoning which led to it? It is possible to infer that the Commission attached great significance to the fact that the development was to be on other land, not the decrofted land. That was what made the difference between this case and decrofting for development on croft land which is, of course, frequently granted. But that is not enough, in our view, to satisfy the foregoing tests. What is missing is any record of the reasoning which led the Commission to the conclusion that the fact that the development was being carried out on other land rendered it not a reasonable purpose. Why did they reach the conclusion that decrofting of land for a development to take place on that land was, in principle, a reasonable purpose whereas decrofting of land in order to facilitate development on other land was not?

[63] Mr Sutherland says that there was no process of reasoning and he may well be right. Certainly it cannot be detected in the decision letter. Mr Cameron, for his part, posed the question “What more should or could they have said?” In our view they should have addressed the question why the fact that the development was on other land made a difference. Was it a legal reason? Mr Cameron referred to the fact that sec 20(3)(a) refers to the “using, letting or disposing of the land proposed to be resumed” but did not go as far as to argue that the respondents could not have found this to be a reasonable purpose as a matter of law. We think he was right not to do so. The wording of sec 25(1)(a), where it refers to the direction being applied for “in order that the croft may be used for or in connection with some reasonable purpose” (emphasis added), may be thought to point the other way. Did the Commission take either or both of these provisions into account and if so what did they make of them? If they thought decrofting in relation to a development on other land to be unreasonable in principle did it make any difference that the other land in this case was in the same general locality, indeed within the same parish or a neighbouring parish? These were matters which the Commission might be expected to have addressed in forming a view as to reasonable purpose. If they did address them the appellants are entitled to know what they made of them. If they did not, the appellants are entitled to know what other factors were taken into account and by what reasoning these factors led to the Commission’s decision. The decision letter does not tell the appellants about any of these things and we are therefore satisfied that the respondents failed to give adequate reasons for their conclusion on this material issue.

(ii) reasons for not being satisfied that the project would go ahead

[64] We deal below with the submission that this was an irrelevant consideration which ought not to have been taken into account. At this stage we deal only with the Commission’s reasons for reaching this conclusion.

[65] In our opinion the Commission’s reasoning on this aspect of the case is unimpeachable. They said this:

“The proposed project is not certain to proceed (even if this application is granted), does not benefit from planning permission and is not going to be located on the croft. … On the basis of the evidence provided with this application and the associated case paper, the proposed purpose is contingent on a large number of unknown factors (such as feasibility studies, anemometer testing and environmental impact assessments, planning consent, finance arrangements, grid connection agreements and date), including the consent of other crofters or part owners of a croft, whose consent is not, on the basis of the evidence supplied by RPID, likely to be forthcoming. The applicant has in our view failed to demonstrate that the proposed purpose and project has any reasonable likelihood at this stage of being taken forward and completed. The note provided by Natural Capital and enclosed with the application, which we have considered, suggests that the proposed project is at a very early stage.”

Two things might be said about this passage. In the first place it might be thought that the Commission were setting the bar too high when they said that the proposed project was not certain to proceed. But this is moderated in the penultimate sentence where they say that the applicant has failed to demonstrate “any reasonable likelihood” of it being taken forward and completed. Secondly, although there is a confused and confusing reference to the need for consent of other crofters which may well be simply factually wrong, what they say is, for the most part, not in dispute. In particular there is no disputing that the project was contingent on the six matters listed in parenthesis. Accordingly the Commission have shown clear reasons for their decision on this point and the “reasons challenge” fails in relation to this matter.

(iii) reasons for concluding that there would be detriment to the general interest of the crofting community in the district in which the crofts are situated

[66] We deal separately, at (b) below, with the question whether the respondents had sufficient evidence for concluding that a crofting community (or communities) existed in the district in which the crofts are situated. Here we deal only with the reasons given for deciding that decrofting would be detrimental to the general interest of that community (or these communities).

[67] A lengthy section of the decision letters is devoted to this. This is how it is expressed in relation to Griesta:

“We have had regard to the impact of the potential loss of this croft to crofting and also to the nature and locality of the croft. We would consider there to be a crofting community in the district as the croft shares in Hill of Setter Common Grazings and is situated approximately a kilometre from the crofting township of Veensgarth. There is actual or potential shared use of common resources in the working of the croft. We have taken into account the current use and potential of the croft as improved pasture in-bye land for grazing and silage and have noted from the information supplied by RPID that the apportioned land appears to be improved. We have noted that the croft extends to 53.2 hectares and contributes to the overall stocking level of 505 ewes (and additional use for grazing of cattle and cutting of silage) for the business as a whole.

As there is a crofting community, we have assumed that the removal of such a croft from crofting tenure would adversely affect the interests of the crofting community by removing the croft land from the pool of available croft land that could be available for other members of the crofting community, including potential new entrants to crofting. We have considered the information from RPID that the owner-occupier crofter applicant has no intentions of removing the ground from agricultural use in the future. We have also considered the comments of the area assessor, Mrs Marjorie Williamson. It is often the case, however, that an application is made by a person who intends to continue to own, occupy and use the land. For the purposes of considering the application in terms of the relevant statutory provisions, we have assumed that a tenancy of the croft would be available to an incoming tenant and have had regard also to the croft’s future potential within the context of the crofting community. Such potential availability would be removed if the land were removed from the pool of croft land, albeit that the land would continue to be used for agricultural activities.

With regard to the demand for a tenancy of the croft, we are satisfied that if the croft had genuinely been made available for letting at the time this application for a decrofting direction was considered, there would be applicants desiring to lease the land in question for crofting and agricultural purposes. We are satisfied that … a tenancy of the croft would provide an opportunity for active crofting and that it is therefore in the interests of the local crofting community to retain the croft within the pool of available croft land. The absence of any actual expressions of interest is not surprising as the croft is not actually available for letting. The availability of crofting grants and subsidies available to crofters, including grants for croft houses, would in our view attract new tenants who would be able to contribute to the crofting community. The evidence of the extent of the croft, extending to 53.2 hectares and the current stocking level of 505 ewes for the business as a whole (and use for grazing cattle) would strengthen our conclusion that any crofting grants or subsidies in respect of this croft would be sufficient to generate demand for a tenancy of the croft. We have considered the letter from David Adamson, surveyors, in support of the application stating that the land has less marketability and/or value for a lender/financier as croft land, but have concluded for the reasons set out above, and in particular the benefits in maintaining a pool of available croft land, outweigh any such considerations relating to marketability and value.

We must also have regard in terms of section 1(2A) and (b) of the 1993 Act to the desirability of supporting population retention and the impact of changes to the overall area of land held in crofting tenure on the sustainability of crofting. We have concluded that the removal of this whole croft from crofting tenure would result in a material reduction in the overall area of land held within crofting tenure within the local crofting community and would have an adverse impact upon both the sustainability of crofting within this crofting community (in the sense of maintaining a pool of croft land within the crofting community) and population retention within this island community (in the sense of there being future opportunities to (sic) both existing and new entrants to the crofting community). Reference is made to the Crofting Commission’s policy plan paragraph 67, in which it is stated that the Commission considers crofts to be a valuable resource that should be available both now and in the future.”

[68] In our view that is a perfectly adequate statement of reasons in support of this part of the respondents’ decision. It tells the appellants that the decision was arrived at because the removal of a large area of good crofting land, capable of supporting a significant agricultural activity and attracting subsidies, from the pool of available croft land would reduce the opportunities for new entrants to crofting in the future and therefore had implications for population retention within the community. It also tells the appellants that the evidence of Mrs Williamson and Mr Adamson had been considered but had been found to be outweighed by the foregoing considerations. What weight to attach to the various matters in the balancing exercise was and remains a matter for the Commission as decision-maker: Lord Clyde in City of Edinburgh Council at page 44B-D, Loch Hill Wind farm (Scotland) Ltd per Lord Malcolm, delivering the opinion of the court, at para [17] .

[69] Mr Sutherland submitted that the mere loss of land to crofting could never, of itself, be a sufficient reason to refuse decrofting, else all decrofting applications might be refused. But here the Commission has gone well beyond that to spell out what the consequences of the loss of that land were likely to be in terms of lost future opportunities. They have had regard to the area of land involved, its quality, the fact that a suitable tenant would attract grants and have concluded, on that basis, that there would be demand for the tenancy were it available.

[70] Mr Sutherland also submitted that not all relevant matters had been included in the balance but we deal with that matter at (d) below. In our view the Commission’s reasoning in support of this part of this reason for refusing decrofting is both clear and adequate.

Accordingly two of the three challenges under this ground of appeal fail.

(b) Sec 52A(3)(b): that the respondents made a finding as to a fact material to their decision but did not have sufficient evidence on which to base that finding

[71] The finding in fact complained of was that a crofting community existed “in the locality of the croft” (sec 25(1)(a)) or “the district in which the croft is situated’” (sec 25(2)).

[72] It is convenient to repeat here the definition of “crofting community” contained in sec 61(1). It is as follows:-

“In this Act, unless the context otherwise requires –

crofting community” means all the persons who (either or both) –

(a) occupy crofts within a township which consists of two or more crofts registered with the Crofting Commission;

(b) hold shares in a common grazing associated with that township.”

[73] We find it a strange definition. It is more a definition of who is a member of a crofting community than a definition of a crofting community itself. As such it has value because members of the crofting community are a class of people entitled to appeal certain decisions of the Commission; see sec 25(8) in the decrofting context and sec 58A(4) more generally. It is therefore important to define what that class comprises. But as a definition of a crofting community it is more problematic. It is narrow: it does not extend beyond a single township. “Township” is not defined but it is a term frequently used in the crofting context and is normally understood as meaning a crofting village or other settlement having its own distinct identity. It would seem, therefore, that, on its terms, crofting community simply requires a single township of two or more crofts registered with the Commission, with or without an associated common grazing. The reference to common grazings is itself puzzling. The grazing has to be associated with “that township” and “that township” is one in which the member of the crofting community occupies a croft. But if that person already occupies a croft in that township he or she already qualifies as a member of the crofting community under part (a) of the definition. That does not make sense. To our mind the only way in which this part of the definition can be made to work is by treating it as referring to shares in a common grazings associated with a township of at least two crofts and that is the interpretation we apply in what follows. Greater problems arise where – as is almost always the case in the Act – “crofting community” is followed by words such as “in the locality of the croft” (secs 5A(1), 20(1), (1AA) and (1AC), 25(1)(a), (1A), (1B) and (8), 26G(2)); “in the area affected by the development” (sec 19A(2)(c), 3(b) and (11)); “in the district in which the croft is situated” (sec 25(2)); and “in the locality of that land” (sec 58A(4) and (7)). The question is whether these words extend the definition beyond the township in which the particular issue – whether it be development under sec 19A, resumption under sec 20, decrofting under sec 25 or any other matter – arises.

[74] Taking sec 25(2) as an example, since it is the one we have to deal with anyway, if the Scottish Parliament, in enacting the definition now contained in sec 61(1), intended to limit the crofting community to whose general interest the Commission was to have regard under sec 25(2) all it had to do was delete the words “in the district”. There is at least one example in the Act where the 2010 Act has restricted the meaning of “crofting community” in that way. It is in sec 26A which deals with the Commission’s duties to investigate suspected breaches of duty by a crofter. Subsection (3)(d) lists, among those who may submit information about such breaches to the Commission, triggering a duty on the Commission to investigate, “a member of the crofting community within which the croft to which the [matter complained of] relates is situated” (emphasis added). This makes clear that only a complaint from a member of the township in which the croft is situated or someone having a share in grazings associated with that township (in addition to the parties mentioned in paras (a) to (c)) triggers the duty on the Commission to investigate.

[75] That this has been done in one place suggests that the use of additional words such as “locality” and “district” (like Mr Cameron we can find no distinction between the two) in other places entitles the Commission to look at a wider area. But that runs into a different problem, the mirror image of the situation we have just described. It is that in at least two cases where Parliament has intended that the Commission look beyond the interests of a single crofting community it has said so (in terms of changes introduced by the 2010 Act). These cases are very close to home for present purposes. Section 20 deals with resumption. Subsection (1AC) read with subsec (1AA) says that in considering whether it is satisfied as to the existence of reasonable purpose for resumption this court may take into account the effect the proposed purpose would have on:

“(a) the sustainability of –

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

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

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

These provisions are exactly mirrored in the decrofting context at sec 25(1A) and 1(B) but only in relation to the Commission determining whether they are satisfied in terms of sec 25(1)(a). They make no reference to secs 24(3) or 25(2).

[76] As we have already said, the Scottish Parliament, when passing the 2010 Act, must be taken to have been aware of how this court has interpreted sec 24(3) but it is extremely odd that in exercising its discretion under that provision (which does not require reasonable purpose in relation to the matters listed in sec 25(1)(a) to be established) the Commission is not entitled to look at these wider considerations and reach its decision accordingly. The Commission are entitled to look at crofting interests more widely when assessing reasonable purpose under sec 25(1)(a) than they are in assessing the effect of decrofting under sec 25(2). That is a very surprising result, which, if not intended, should be cured by legislation at the first opportunity. We do not think that the general duties on the Commission contained in secs 1 and 2 allow it to take a wider view than is allowed by the specific provisions of secs 24(3) and 25(2).

[77] Another problem with the wording of sec 25(2) is that it is not made clear whether the land being decrofted must be part of the relevant community or whether it is sufficient that there be such a community in the district. It is hard to envisage how decrofting of land might affect the interests of a crofting community of which that land is not part unless one is entitled to look at the wider picture and construe “crofting community” as it was understood in cases such as Palmer (where it was held that the Court could have regard to the interests of the crofting community in the district of the croft, albeit the croft was not itself part of a crofting township) before the statutory definition was introduced.

[78] Despite all of these difficulties, the Commission are entitled to the clearest guidance the Court can give as to what the phrase “crofting community in the district in which the croft is situated” means in sec 25(2) and whether it is necessary that the croft which is the subject of the application must be part of it. It would be a bold, if tempting, step to say that the statutory definition does not apply in sec 25(2) because “the context otherwise requires” and that the pre-existing law therefore holds good but we feel unable to go that far on the basis of our foregoing analysis of the references to “crofting community” in the Act. The result, therefore, is that the statutory definition has to be applied. There has to be such a crofting community, so defined, in the district of the croft and the croft has to be part of it. We reach the second part of that conclusion because we find it hard to conceive of a situation in which decrofting an area of land affects the general interest of a crofting community (so defined) of which it is not part.

[79] Turning to the present case, it is clear that the Commission set out to apply the statutory definition: the question whether the croft is in a crofting community is asked on the first page of the Casework Paper, production 3B, and sec 61(1) is referred to. On the second page there is a section for the effect on the crofting community/public interest. In each case “The impact of the removal of this croft from the crofting community” is identified as something on which information is required. Section C of the Casework Paper is headed “Crofting Community Information” with a sub-heading “Township Information”. The information received in respect of the croft is then entered in tabular form. We produce the result for the five crofts in similar style:

Name of croft Part of township consisting of two or more crofts? Share in Common Grazings?
Griesta No Yes: Hill of Setter CG*
Nesbister No Yes: South Whiteness CG
Breck No Yes: South Whiteness CG
Nesbister South Apportionment No No (the apportionment resulted from shares previously held in the South Whiteness CG)
Veensgarth Yes Associated share in Tagdale CG*

*We acknowledge that these entries are disputed by the appellants, or do not correspond with the information contained in the decrofting applications, but they represent the basis on which the respondents proceeded in terms of the case papers for these crofts.

[80] It is clear from the foregoing that only Veensgarth meets the statutory definition. The others are not part of a township consisting of more than two crofts and, so far as shares in common grazings are concerned, it is not said which townships the grazings are associated with, their names being the names of the grazings themselves rather than the names of townships having shares therein.

[81] If the shares which the four crofts other than Veensgarth have in common grazings pertain to townships of two or more crofts then, on the foregoing interpretation, they will be part of a crofting community and the Commission would be obliged to have regard to the general interests of these communities. But as matters stand it does not appear to us that there was sufficient information before the Commission to entitle them to reach the conclusion that there was or were a crofting community or crofting communities in the district of these crofts of which the crofts were part. This ground of appeal is therefore sustained.

(c) Sec 52A(3)(d): that the respondents took into account certain irrelevant or immaterial considerations

[82] The allegedly irrelevant matters are (a) that the proposed project was not certain to proceed, (b) that it did not benefit from planning permission and (c) that it was not located on the land to be decrofted.

[83] The argument in relation to (a) and (b) is that the Commission wrongly conflated the purpose for which decrofting was sought, being the raising of funds, and the project for which the funds were needed. At para 4(b) of the grounds of appeal it is said that the purpose of decrofting was “Offering the land in security for loan finance”. It is plain that that in itself could never be a reasonable purpose for decrofting. Regard must be had to the reason for which finance is required. In this case, Mr Sutherland explained, it was required in order to take the project to the planning stage. The Commission’s reasoning, he submitted, missed the point. Without decrofting the project would certainly not materialise. Decrofting was therefore being requested in order to finance the planning stage of a project which may or may not ultimately materialise (although, in the appellants’ view, there was no reason to think that it would not) but which would certainly not materialise without it.

[84] In our opinion the Commission were not only entitled but bound to take account of the prospects of the project materialising and the distinction which the appellants seek to draw is quite artificial. How otherwise could they form a view as to whether the purpose was in the public interest (in terms of sec 20(1) and sec 25(1)(a))? On Mr Sutherland’s approach, what the Commission were being asked to do was decroft a large area of land in order to facilitate what was no more than a feasibility study. To do so without having regard to whether any good to any of the interests desiderated in the legislation would ever materialise is something which, in our opinion, the Commission could not have done as a matter of law.

[85] The artificiality of the submission which underpins this aspect of the appeal is reflected in both the terms of the covering letter which accompanied the applications and some of the other grounds of appeal. The covering letter explained the benefits of financing the project in-hand, retaining the profit locally. But, to state the obvious, that benefit depended on the project going ahead. So far as the other grounds of appeal are concerned, it is the appellants’ complaint, in the ground next dealt with, that not enough weight was attached to evidence that it was likely to go ahead. It seems to us, therefore, that the appellants acknowledge that the likelihood of the project proceeding was something on which the Commission would require to be satisfied.

[86] As to the fact that the project was to be developed on other land, that was relevant to the question of whether the purpose was reasonable, although, as we have said, the Commission ought to have given a fuller explanation of why they attached to that the significance which they did.

[87] Accordingly we reject this ground of appeal.

(d) Sec 52A(3)(e): that the respondents failed to take into account certain relevant or material considerations

[88] Four matters are complained of under this head: (i) that the Commission either ignored or gave insufficient weight to the evidence that the project would go ahead, (ii) that they failed to take account of the fact that the land would continue to be used for agricultural purposes notwithstanding decrofting, (iii) that in the balancing exercise they had not adequately taken account of the applicants’ own interests, as part of any crofting community found to exist, and (iv) that they failed to consider and give due weight to the general interest of the local community in terms of the jobs, investment and population retention which the project would bring.

[89] In Mr Sutherland’s written note of argument he puts the first point like this (at paragraph 11):

“The decision letter fails to have regard to information before the Commission that a pre-planning application process was considered to be successful, [and] that the applicants were now looking to prepare an application for full planning permission and the erection of a temporary mast.”

[90] The information being referred to there is principally a report from Natural Capital, “an environmental and sustainability company”, which had been working on the project with Mr Eunson since 2011. That evidence was not overlooked or ignored by the respondents; their decision letter says:

“The note provided by Natural Capital and enclosed with the application, which we have considered, suggests that the proposed project is at a very early stage”.

Having read the Natural Capital report we agree. It extends to a page and a half of A4, it contains a brief introduction, a statement of the proposals, a statement of project objectives and it describes the statutory context. It then goes on to say that an Environmental Impact Assessment (EIA) is required but does not predict its outcome. It says that a “Scoping Opinion” had been issued by Shetland Islands Council in February 2013 and that it would be used to guide the EIA and necessary survey work. It sets out what the EIA will consider, referring to ecological surveys, including bird vantage point surveys to be undertaken over two years. It concludes by saying that the EIA was likely to be progressed in the spring of 2014.

[91] Whilst it is true that this report does not alert the reader to any major obstacles likely to pose serious risk to the project, neither does it express any confidence in the eventual outcome. The respondents’ conclusion from it, that the proposed project was at a very early stage, was, it seems to us, justified. Mr Sutherland submitted that the references to this report in the decision letters did not do justice to the work that had gone into the project nor to the prospects of the project going ahead. That is a matter of the weight to be given to the report. The present ground of attack is that the respondents failed to take it into account. That is manifestly not the case. They took it into account and the weight to be attached to it was a matter for them.

[92] The second matter is the Commission’s failure to take account of the intended continuing agricultural use of the land to be decrofted. There is no merit in this criticism. It is plain that the Commission considered the intention to go on using the land for agriculture. The decision letters say (at page 2, fourth para):

“We have also considered the information from RPID that the owner-occupier crofter applicant has no intentions of removing the ground from agricultural use in the future. We have also considered the comments of the area assessor, Mrs Marjorie Williamson [who had mentioned this point] . It is often the case, however, that an application is made by a person who intends to continue to own, occupy and use the land. For the purposes of considering the application in terms of the relevant statutory provisions, we have assumed that a tenancy of the croft would be available to an incoming tenant and have had regard also to the croft’s future potential within the context of the crofting community. Such potential availability would be removed if the land were removed from the pool of croft land, albeit that the land would continue to be used for agricultural activities.”

That passage makes clear that they took account of this and explains what they made of it.

[93] We can take the third and fourth matters together. It is the case that there is nothing in the decision letter about the advantage of this project to the applicants, to the crofting community or to the public interest were it to go ahead. But it is clear that the Commission never got that far because they were not satisfied that the project would go ahead. They were therefore not satisfied that benefit would accrue to any of these interests. In that state of affairs the fact that nothing is made of the benefits of the project is unsurprising and does not vitiate the respondents’ decision.

(e) Sec 52A(3)(f): that the respondents exercised their discretion in an unreasonable manner

[94] Under this head it is said that the Commission failed to give sufficient weight to the interests of the applicants as against those of the crofting community (Ground of Appeal (i)).

[95] On the face of the decision letter there is certainly force in this criticism. It contains not a word about the interests of the applicants. However, it seems clear to us that this too is because the Commission never got to that stage. The reason for that was that they were not satisfied that there was “a reasonable likelihood at this stage of [the project] being taken forward and completed”. Accordingly its promised or potential benefits were not likely to materialise. The Commission, therefore, could attach no weight to them even if they had considered them more fully than appears from the decision letter. For that reason, this submission fails.

[96] More generally, we do not think it can be said that the Commission exercised their discretion in an unreasonable manner. Even in the absence of sufficient evidence for their finding that there was a crofting community in the district of the croft, they were obliged to satisfy themselves, as part of the exercise of their discretion under sec 24(3), that the purpose for which decrofting was sought would materialise. Even if, contrary to our conclusion above, the respondents were not entitled to have regard to the prospects of the project going ahead, they were surely entitled to have evidence that the loan for which the land was to be security would actually be forthcoming if decrofting was allowed. At para 12 of the appellants’ written Note of Argument it is said that “it is not apparent to the Appellants what other information (if any) would be required to persuade the Commission that a reasonable purpose exists in the context of an application to decroft land with a view to securing finance for a renewable energy development”. In our view one might have expected information along the following lines: (a) a budget of proposed cost, (b) proof of an application to a bank for a loan in a specified sum, and (c) confirmation from the bank that a loan in that sum would be available if, and only if, the entirety of the subjects to be decrofted was to be available by way of security. Nothing of that kind was before the respondents and, for our part, we find it difficult to see how they could have granted the applications even if they had confined themselves to the limited purpose to which the appellants say they should have confined themselves. It might be said that they could have asked for it, and so they could. We imagine the Commission will often do so, if only to prevent the additional work resulting from a fresh application having to be lodged. But they are not obliged to do so. Instead applicants for decrofting should take care to make sure that appropriate supporting evidence is lodged with the application. The appellants here showed some awareness of that. They lodged the letter from David Adamson & Partners. But it is in the most general of terms and does not come anywhere near what we consider appropriate as evidence to support an application of this kind. This ground of appeal therefore fails.

Disposal

[97] Despite the fact that we have sustained certain grounds of appeal, we do not find the respondents’ decision to be flawed to the extent that it should be set aside. On the contrary, because of the paucity of information as to whether the project was likely to go ahead, including the complete absence of confirmation that an appropriate level of funding would be available if only the crofts were available to be used as security, it was a decision which was not only open to them but one to which they were almost bound to come. Accordingly we have confirmed it in terms of sec 52A(4)(a).

[98] We have considered whether, instead of confirming their decision, we should remit the case to the Commission. This would give the applicants a chance of supplying the information set out above and the Commission the chance of further addressing the question of the existence of a crofting community in the district of the crofts. However, that would involve setting aside the present decision and we see no good reason for doing so. This does not, however, preclude the lodging of a fresh application by the applicants. Any such application should be clearly focused as to purpose and adequately supported by appropriate evidence. In considering it the Commission should bear in mind such faults as we have found in their approach in relation to the present applications and such guidance as we have been able to give in relation to the law.

Expenses

[99] Following our usual practice, we have allowed 28 days for written motions and submissions on the expenses of the appeal.