THE COURT

(Lord McGhie, Mr A Macdonald, Mr J A Smith)

GOURLAY v DOBLE & WALLACE

(Application RN SLC 136/03 – Order of 3 March 2011)

CROFTING – REHEARING – ACQUISITION BY TENANT – CONDITIONS – DISCRETION OF COURT – CROFTERS(SCOTLAND) ACT 1993 – SEC 13(1) – Sch 2 PARA 8. RULE OF COURT 78

A croft landlord whose tenant had been found entitled to acquire the croft on certain conditions applied for a rehearing. There had been an argument based on the issue of principle that the appellant as owner was not entitled to use the access for a purpose which for which he could not have used it as crofter and in particular that as he could not have used the track as a means of access to a second house on the croft while he was a tenant he should not be entitled to do so as owner. The Court found the crofter entitled to use the access for two houses. The motion for rehearing was presented on the basis of an acceptance that the Court had a discretion to impose appropriate conditions but it was argued that the Court had looked at matters too narrowly in considering only conditions bearing on exercise of access. It should have looked at the overall impact of the proposed condition including the impact of a second house being built. HELD that no proper ground for rehearing had been established. There was an issue of law but it would have to be determined by way of special case.

The Court held that in the particular circumstances none of the grounds in rule 82 had been established and that the motion for rehearing should be refused. In the note appended to the order the Court made the following comments on the merits.

[11] We are satisfied that the attempt to be allowed to lead evidence of drop on value comes too late. In any event it is not within the scope of R82. That is sufficient to deal with the motion to allow rehearing. However, in presenting the motion, Mr Thomson required to deal with the broad question of the relevancy of the material which he would have intended to lead at any rehearing. We think it appropriate to deal with that issue.

[12] Accepting, for the purpose of the argument, that the Court was not bound to limit the tenant’s use of the access to the rights he had enjoyed as tenant, the submission was based on the distinction to be drawn between looking at the effects of access in the context of construction of an existing right of access, and the wider question of determining appropriate conditions to be applied to access for the purposes of sec 13. In our Note of 5 October we dealt expressly only with the practical effects of access. However, we do not accept that we did so in substitution for the wider approach appropriate under sec 13. Although Mr Thomson properly pointed out that we did not deal explicitly in our Note with the issue of impact on value, we were aware that reference to this had been made. We did not consider it necessary to deal with it explicitly because he had not attempted to rely on it in his pleading or submissions. Had we done so we might have expressed our decision in different terms. We have no reason to think we would have reached a different conclusion.

[13] We think that, in substance, the question of the relevance of impact on value is essentially covered by our view of the intention of Parliament that the crofter should be able to purchase his croft free of restrictions imposed by the landlord in his capacity as landlord. Had the crofter had access which did not involve crossing the landlord’s ground, the point would not have arisen. We are satisfied that it was appropriate at a hearing to consider the conditions to be imposed on access primarily by reference to the impact of physical use of the access.

[14] However, at the February hearing, the question of loss of value was addressed more fully. It was said that evidence would be led to show that the value of the retained land would fall if the appellant was able to build a second dwelling because the planning authority was likely to restrict the overall number of dwellings permitted in the area. It was one of great scenic beauty. Mr Henderson did respond to suggest that this was unlikely because the retained land currently held only a number of derelict buildings and the planning authority would be likely to see a gain from housing of some sort taking its place. It may be observed that in the wider public interest it would be preferable to leave the question of suitable development to the planners unconstrained by private contract but we accept that this is not a relevant consideration for us. However, it is necessary to approach the legal question on the basis that such a reduction in value could be established.

[15] There is no doubt that, when considering the appropriate conditions to attach to the right of access over the retained land, the focus of our attention was the impact on that land of the use of the access. We did not attempt to consider the extent of any impact on that retained land of the potential development on the croft land which might be facilitated or constrained by access conditions. Mr Thomson contended that this was a fatal flaw in our approach. He submitted that we should either have addressed the issue of impact on value or should have recognised the need to have a further hearing to consider whether there were any such issues. As we have explained, we do not accept that it was necessary for us to deal explicitly with the point. Had we been dealing with pleadings or submissions which purported to rely to any extent on assertions of reduction of value we would have approached matters in a different way.

[16] However, having considered Mr Thomson’s submissions we are satisfied that we would not have come to a different conclusion even if a significant loss in value had been demonstrated. Put shortly, we see this as being essentially an aspect of the principal submission. The landlord seeks to control the right of access to enforce the conditions of the lease preventing a second house without his consent. However, Mr Thomson submitted that if the Court has a general discretion, in the exercise of that discretion, the Court had to take account of the whole circumstances and not just the direct impact of the use of the access. The discretion had to be exercised in the context of a compulsory acquisition of the property as a whole. The Court could and should have had regard to the impact on value of the landlords retained land of having two houses on the croft.

[17] It may be observed that this type of consideration might have been used, in terms of sec 13(2) as a defence to the crofter’s application to buy the croft land. For reasons discussed in our note of 4 December 2009 we have proceeded on the basis that Parliament intended the crofter to be free from the control of the landlord but there may be situations where some specific conditions might be appropriate to protect amenity of adjacent subjects. However, we are not persuaded that it is appropriate to use restrictions on access for protection of an interest in amenity which is not directly related to the access. Any right which the landlord has in relation to use of the croft arises from his status as landlord of the croft not his status as owner of the land burdened with the right of access. It is clearly intended that his status as landlord is to cease. It cannot have been intended that he be given power to enforce the statutory conditions of the lease in a different way.

[18] We recognise that access is often regarded as a key to development and valuation of that key may require to be done on what is commonly referred to a “ransom” basis. The argument might have been reformulated in terms of the proposition that even if the use of the access for an extra dwelling would not add to the direct burden of that access, the landlords should not be obliged to provide a “key” which would reduce the value of their own land. However, as far as the crofter is concerned the right of access is not a “key”, it is part of the croft. He is, in our view entitled to acquire it free of the statutory conditions applicable to his tenancy.

[19] Crofters are no longer bound to cultivate their crofts or use them for purposes subsidiary or auxiliary to agricultural use. They are entitled to put the land to any “purposeful use”: sch. 2 cond 3. We accept that when considering appropriate conditions to apply in relation to access, the burdened proprietor need not necessarily be expected to provide access for every use to which a croft might lawfully be put. But we are satisfied that in attempting a proper balance of relevant interests it is appropriate to look at this issue as one which concerns only the physical use of the access. In short, we consider that the proper approach to this matter is essentially dependent on the proper approach to the main issue of principle. The drop in value to be relied on by Mr Thomson was one which was said to be due to the fact that the crofter was now free to develop his land free from conditions in favour of the landlord. That would be consistent with the intention of Parliament. We would not have expected to impose such a condition as a condition of the right to purchase. We do not consider it appropriate to impose one as an aspect of the right of access.

Decision

[20] For reasons referred to above we have had to refuse the motion as not falling within the scope of the provisions of R82. In any event, we have come to the conclusion that the substantive issue is one of law. We have set out our conclusion. We do not think the matter can be advanced by further proceedings before us at this stage. The motion to allow rehearing is refused.

[21] We continue the cause for further procedure in respect of the third respondents’ application for a Special Case and for consideration of questions of expenses.

For the applicant: Ferguson MacSween & Stewart, Solicitors, Portree

For the second respondent: Thomas Duncan, Solicitor, Linlithgow

For the third respondents: D Thomson, Advocate; Brodies, Solicitors, Edinburgh