THE COURT

(Sheriff MacLeod, Mr J A Smith)

SINCLAIR v SINCLAIR

(Application RN SLC/136/09 – Order of 23 July 2010)

AGRICULTURAL HOLDINGS – WHETHER LEASE OF AN AGRICULTURAL HOLDING HAD COME INTO EXISTENCE IN CIRCUMSTANCES WHERE SUBJECTS HAD BEEN LET ON BASIS THAT THEY WERE A CROFT WHEREAS IN FACT THE LAND HAD BEEN DE-CROFTED – WHETHER LAND COURT CAN FIX A RENT AT OUTSET OF CROFTING TENANCY

On 29 November 1998, by Joint Minute in application RN SLC/16/01, the parties agreed that Kenneth Sinclair had become the tenant of crofts at Lochussie belonging to his father, John Sinclair, with effect from 30 November 1998. Subsequently this Court fixed fair rents for the various crofts in terms of sec 6(3) of the Crofters (Scotland) Act 1993. One of the crofts purportedly included an area of 7.5 acres which had in fact been decrofted in 1975. The fact of the decrofting was not known to the parties or to the Court when the Joint Minute was entered into and the rent fixed. Kenneth Sinclair occupied and worked the crofts including said 7.5 acre area. By application RN SLC/23/07 he applied to the Court for authority to acquire the croft of which the 7.5 acre area had been part. His application included that area. The application was opposed by John Sinclair but the Court granted it under exception of the 7.5 acre area, its decrofted status having by then come to light. The Court subsequently adjusted the rent of the relevant croft so as to exclude said area in the computation of the purchase price to be paid by Kenneth Sinclair in terms of sec 14(2) of the 1993 Act. Kenneth Sinclair then raised the present application seeking declarator that he held the interest of a tenant of an agricultural holding in terms of the Agricultural Holdings (Scotland) Act 1991 over, inter alia, the 7.5 acre area.

HELD that (1) the evidence did not disclose any agreement as to the rent payable for the area in question, nor the fixing of the rent by any competent means, nor the payment of any rent; (2) the deduction of rent made by the Court for the purposes of calculating the acquisition price for the croft land did not equiparate to a proper fixing of rent for an agricultural holding; (3) agreement on one of the four cardinal elements of a lease was therefore missing; and (4) the existence of a tenancy of an agricultural holding under the 1991 Act had not, therefore, been proved and application dismissed. Opinion reserved as to whether sec 6(3) of the Crofters (Scotland) Act 1993 entitles the Land Court to fix a rent for a croft at the outset of a tenancy as opposed to in the course thereof. Gray v Edinburgh University 1962 S.C. 157 followed; Bridger v Roger 1966 SLCR Apps 59 considered.

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

Introduction

[1] This is an application for declarator that the applicant has a tenant’s interest in a secure agricultural tenancy in terms of the Agricultural Holdings (Scotland) Act 1991 (“the 1991 Act”) in respect of two sets of subjects at Lochussie, Conon Bridge, Dingwall.

[2] The applicant is Kenneth Sinclair of 9 Lochussie and the respondent is his father, John Sinclair, of 13 Lochussie. This application is the latest in a series of applications dealing with various aspects of land at Lochussie in which the parties have an interest and in particular it may be seen as following on from our decision of 29 October 2008 in RN SLC/23/07.

[3] That was a case in which Kenneth Sinclair sought the authority of the court to acquire areas of croft land, comprising three crofts known as 10-12, 13 & 14 and 15 & part of 16 Lochussie, tenanted by him from his father. In that case we excluded from the land Kenneth Sinclair was authorised to acquire (i) an area of 7.5 acres which had at some time been part of croft 14 Lochussie but which had been decrofted by order of the Secretary of State for Scotland dated 8 January 1975 and (ii) an area of land with buildings thereon at 13 Lochussie. The basis for exclusion in both cases was that the subjects were not croft land tenanted by the applicant in terms of sec 12(1) of the Crofters (Scotland) Act 1993. In the present application the applicant contends that the two sets of subjects are agricultural holdings of which he is the tenant all in terms of the 1991 Act.

[4] We heard evidence and submissions thereon at Dingwall on 15 to 17 June, when the applicant was represented by Mr Robert Sutherland and the respondent by Mr Iain Maclean, advocates.

Preliminary issue

[5] Mr Maclean raised, as a preliminary matter, a point about a possible conflict between the crofting and agricultural holdings statutory regimes in relation to the second set of subjects with which we were concerned, which was referred to variously in the course of the proof as “the steading area”, “the steading” or “the steadings”.

[6] His point was that, whereas the present application sought to show that the subjects were agricultural holdings on the basis of what Mr Maclean described as “Morrison-Low v Paterson type tenancies”, it was not clear, to Mr Maclean at least, that the status of the steading area under the Crofters (Scotland) Act 1993 (“the 1993 Act”) had been decided by the court in application RN SLC/23/07. The present application proceeded on the basis that in the previous application the court had positively decided that the steading area was not subject to crofting tenure whereas it seemed to Mr Maclean that the court had been “studiedly non-commital” on that matter. If the steadings were still subject to crofting tenure then they had a status quite independent of the will of the parties and a Morrison-Low v Patersontype of tenancy of an agricultural holding could not arise.

[7] Although the result of that would be that the present application could not succeed quoad the steadings, the respondent’s own position was, as it had been in application RN SLC/23/07, that the steading area was not croft land. It may, however, be preferable for Mr Sutherland to deal with the matter in evidence so that findings could be made on the issue rather than have it dealt with by way of Joint Minute. But dealing with the crofting or non-crofting subjects of land in the context of an agricultural holdings application may present its own problems because it did not allow the involvement of the Crofters Commission or anyone else who might have an interest in that question.

[8] In Mr Sutherland’s submission the points raised were misconceived. The case before the court was that the steading area was an agricultural holding. It had to be an agricultural holding or croft land. The applicant, having previously misunderstood the position, now accepted that the steadings were not subject to crofting tenure. There was nothing to suggest that they were. The applicant’s position was that they were an agricultural holding.

[9] Mr Maclean made clear that he was not asking us to rule on the effect of our earlier decision as to the crofting status of the subjects there and then and we did not do so. Instead we allowed the proof to proceed. Although Mr Maclean returned to the point in his closing submissions, the evidence proceeded as if the point had not been made, with no exploration of the crofting status of the steading area. However, it is right that we should deal with the point now, so as to explain the basis upon which we deal with the steadings in what follows.

[10] In the earlier application there was some evidence from Mr John Sinclair as to the history of the steading area. It is set out at paragraphs [8] and[15] to [18] of our Note where Mr Sinclair is recorded as saying that the relevant area, although once part of the croft, had not been included in the subjects let to him when he had become tenant of 13 Lochussie in 1952 or 53. Nor had his father, who had been tenant before him, had use of the buildings. Instead they had at some point been let to someone else. John Sinclair had subsequently been gifted the use of the buildings in or around 1960 and had acquired title to the ground on which they stood in 1979. At paragraphs [199] to [201] of our Note we, in effect, accepted John Sinclair’s account. We went on to hold that the steading area was not part of the croft land let to Kenneth Sinclair. That is as far as our decision goes, and Mr Maclean was right to describe it as “non-committal” as to whether the area in question was or was not subject to crofting tenure. Given the limits of the evidence we do not think the non-committal nature of our decision is surprising. The applicant had failed to prove that this was croft land which was let to him. That is as far as we required to go for the purposes of that application.

[11] In the present application, as we have already said, no evidence on the matter was led and we are, therefore, no more able to make a positive finding than we were on the last occasion. Nor were we asked to. Since the passing of the Crofters (Scotland) Act 1955 it has not been possible for land to come out of crofting save by the recognised statutory procedures of resumption or decrofting (Agnew Crofting Law page 5). Prior to that, however, the position was not so clear cut and John Sinclair’s tenancy dated from that period. Without making a finding on the matter, therefore, we proceed, as the proof before us did, on the assumption that the steading area is not subject to crofting tenure.

Evidence

[12] For the applicant, evidence was given by Mr David MacVicar, Mrs Marina Dennis and Mr Roderick Mackenzie in addition to the applicant himself. The respondent led no evidence.

David Shanks MacVicar

[13] Mr MacVicar (50) gave evidence that he was currently employed as a Senior Agricultural Officer by the Rural Payments and Inspectorate Directorate of the Scottish Government at Portree, Skye. Before moving to Portree he had been a Higher Agricultural Officer at Inverness.

[14] Whilst at Inverness he had visited the Sinclairs at the request of the Crofters Commission under an agreement between the Commission and the Department of Agriculture and Fisheries for Scotland, as it was then, in terms of which Department employees acted as agents in the field for the Commission in connection with certain of the Commission’s regulatory functions. His visit had had to do with an application by John Sinclair to the Commission for permission to let crofts to Kenneth Sinclair. He had accompanied Shirley Adamson and had countersigned her report. The purpose of the visit had been to inspect the crofts and report back to the Commission.

[15] They had met both John and Kenneth Sinclair. The land owned by John Sinclair was going to be let to Kenneth in its entirety. Nothing was to be excluded. Nothing had been pointed out to him as being excluded from the let. His attention had not been drawn to any land as being non-croft land. The area to be let was more extensive than the area shown on production 1. There was additional land to the north and south of the land outlined in red on production 1 which was also going to be let. The boundaries of the land to be let had been pointed out to them by John Sinclair. They had all walked down to the far end of the units at croft 15 and 16. As to buildings, they had been in John Sinclair’s house and, the witness thought, in the old steading building across the road from the house. The reason for visiting the steading had been for John Sinclair to show them a small carriage he had made. John Sinclair was “fantastic with his hands”. The carriage had been in the old traditional steading, which was the building closest to the road.

[16] There had been discussion about the modern steading having been added to the existing buildings at some point. Mr MacVicar was unclear as to whether there had been discussion of any of the buildings being kept back for John Sinclair’s use, saying that that would depend on whether any of the land had been decrofted. He could not be certain as to whether there had been any discussion as to any land not being part of the croft or of any land being decrofted. The purpose of the let had been to regularise the situation. Kenneth Sinclair was already doing a lot of the work. He had been offered redundancy by his employer and his becoming a full-time crofter would allow his father to retire.

[17] So far as the area hatched green (i.e. the 7. 5 acre area) on production 1 was concerned, there had been no suggestion that this was not croft land nor any suggestion that it was not going to be let to Kenneth.

[18] Asked as to the extent to which John Sinclair was to have been retiring, Mr MacVicar thought the situation would not be very different from the situation of many farming families, where despite retirement the farmer carried on visiting the farm every day into old age. But John Sinclair’s retirement would have made Kenneth the sole claimant in respect of aid payments and he would be the crofter for all paperwork purposes.

[19] Mr MacVicar had formed the impression that none of Kenneth Sinclair’s brothers had been involved in working the crofts to any extent. However it was invariably the case in his experience, that a retiring crofter in a situation such as this would make provision for other members of the family by way of decrofting house sites for them. At all events, he had been fairly satisfied that John Sinclair wanted to let the land to Kenneth Sinclair.

[20] Mr Maclean took objection to a question as to whether the witness had noticed a stand of timber in the area of the 7.5 acre subjects but since the witness’s answer turned out to be that he could not, we need not concern ourselves as to the merits of the objection.

[21] The witness and Miss Adamson had produced a single report covering all of the crofts but the report carried three Crofters Commission reference numbers which would indicate that the Commission were dealing with the matter as three separate applications. Production 29 was a copy of their report. The plan attached to it showed the subjects with which it was concerned as well as other crofts which were already being run by Kenneth Sinclair at that time. There had been no suggestion that areas of trees referred to in the “General Remarks” section were to be kept back for himself by John Sinclair. The witness’s handwritten comments at the end of the report further endorsed approval of what had been seen at the time as a straightforward application.

[22] In cross-examination Mr MacVicar explained that he had accompanied Shirley Adamson because she had been relatively new to the job then. He confirmed that the report they had prepared had been an internal document for the Crofters Commission’s own use and that the applicant would not normally see a copy. In all his years in the job only two or three applicants had asked to see copies of such reports but reporting officers would generally confide their intended recommendations to the applicant during the course of their inspections. John Sinclair had not asked to see this report.

[23] Mr MacVicar had not been aware that the 7.5 acre area had been decrofted in 1975. Had he been aware of that the area would have been excluded from the report. Nor had he been aware that there was material in the Crofters Commission’s files which was strongly indicative of the steadings area not being subject to crofting tenure. When walking round the crofts they had been proceeding on the basis that all the land shown as crofts 10 to 16 was part of these crofts. He could not say that at any stage John Sinclair had positively affirmed that either the 7.5 acre area or the steading area was croft land but neither had there been any reference to either having been decrofted. It simply hadn’t been discussed.

[24] With reference to paragraph 11 of the report, Mr MacVicar explained that what was being said there was that the re-let would have no effect on the local community because, although the re-let would make Kenneth Sinclair the sole claimant for any payments in respect of the crofts, both he and his father would continue to be involved in the day to day management of the crofts. [We would explain at this point that the Crofters Commission documentation refers to the situation as “re-letting”, which is probably a perfectly accurate description of the generality of cases in which a croft is being let again after being vacant, but in this context it is slightly misleading in that John Sinclair had himself been a tenant, then owner-occupier, and had never let the crofts to anyone previously. All concerned at the proof tended to adopt the Commission’s term and it appears frequently in what follows. But it means letting, rather than re-letting.]

[25] The report made reference to parties’ intention that Kenneth Sinclair would buy his father’s cow and sheep quotas. The witness thought that this would have happened because it would allow Kenneth to claim in respect of these quotas.He was aware that John Sinclair had maintained cattle at Lochussie for a number of years after this. He may have been what was known as a “landless claimant”.He might have transferred his quota to Kenneth but he could still have gone on keeping cattle under his own farm code number. Aid payments would be made to the claimant but what happened after that was entirely up to the claimant.

[26] John Sinclair had been in his sixties at the time of Mr MacVicar’s visit and had been fit and active, with plenty interests to keep him busy. The witness thought it possible that John Sinclair would have used some of the steading buildings in connection with his cart-making. Certainly the scale of items he was producing was such that the kitchen or back bedroom was not the place for them.

[27] Production 32 was a letter from the Commission to John Sinclair. The witness explained that for a let to be effective there had to be agreement on, and payment of, rent. Given that the Commission were still asking for that information at that point in time (10 May 2000) the witness assumed that no such agreement was then in place. Rent had not been discussed during his visit to the Sinclairs, other than to explain to them that there had to be a rent, however small.

[28] With reference to the trees on the 7.5 acre area, the witness explained that he could visualise nothing other than areas of native woodland in the corners of that area but he accepted that a commercial stand of trees could act as a shelter belt too, depending on its location.

[29] In re-examination, Mr MacVicar said that his inspection had been on 11 November 2008 and his report dated 16 November. No indication had been given to them of the intended timescale for putting the let into place. The parties would probably have wanted to await hearing from the Commission as to its consent to the application before deciding that.

[30] As to areas to be excluded from the let, the witness would have fully expected John Sinclair to point out any such areas and these would then have been excluded on the plan attached to the report.

[31] Mr MacVicar had given the Sinclairs an indication that his and Miss Adamson’s report would be favourable. There were no objections to the application and no suggestion that the Commission would not support it. He was in no doubt that John Sinclair fully understood that application was being made to the Commission for their consent to a re-let of the crofts and that he, the witness, would be recommending to the Commission that they grant the application.

Marina Theresa Dennis

[32] Mrs Dennis (67) gave evidence that she was a crofter and hill farmer with 25 years experience of working her own croft. She was, in addition, a Crofters Commission Assessor for Badenoch and Strathspey, Vice-Chair of the Scottish Crofting Foundation, a member of the Scottish Government’s Rural Payments and Inspections Directorateappeals panel, a director of the Royal Scottish Agricultural Benevolent Institution and a director of the MacAulay Land Use Research Institute.From 1996 to 2005 she had served as a Crofters Commission commissioner for the areas of East Sutherland/ East Ross-shire and East Inverness-shire.

[33] In September 1998 John Sinclair had written to the Crofters Commission applying, as an owner-occupier, to re-let his croft to his son Kenneth. His letter had said something to the effect that he wished to retire “before I kick it”.

[34] The Commission had asked the Department to prepare a technical report for them. John Sinclair had asked her if she would visit the croft and the family. He had done so because he wanted to demonstrate that this was a genuine family re-let and not some sort of exercise in avoiding the rules requiring means-testing of owner-occupiers applying for crofting grants.

[35] She had visited Lochussie in the autumn of 1998. Mr Sinclair’s application to the Commission had been made on 28 September, consent had been granted on 28 November, so her visit had probably been in October. She had met John Sinclair and his wife and their son, Kenneth. She, John and Kenneth had had a walk round the croft after an initial discussion at John Sinclair’s house. In the course of that discussion John Sinclair had clearly indicated that he wanted to retire and hand over the crofts in their entirety, with no exclusions of either land or buildings.

[36] Mrs Dennis had made “very sure” that she had asked John Sinclair about the position of other family members. He had replied “Kenneth does all the work on the croft and helps me. The others have no interest.” John Sinclair had been clear in his own mind that Kenneth should have the crofts. Mrs Dennis had been concerned about a position in which there was a family of four but one was to have all the crofts. However John Sinclair had been very clear about wanting Kenneth to have the crofts and about the other brothers not being interested in the crofts.

[37] Mrs Dennis had also wanted to be sure that this was the right thing to be doing from Kenneth’s point of view because Kenneth then had a secure job at the distillery and it was going to be a big step for him to give that up. She had asked them if they were both sure that this was the right thing to be doing and they had assured her that they were and that they wished the application to go ahead.

[38] Kenneth had been a very committed young crofter. He had intended to take over the stock. John Sinclair had said “I will just potter about in my workshop”, the workshop he was referring to being one beside his house. She had not gone to see the workshop; Mr Sinclair had just gestured as to its whereabouts. Mr Sinclair had mentioned that he would be cutting grass and fixing lawnmowers. He had never mentioned making carts.

[39] In addition to these more particular subjects they would have talked about crofting in general and the Sinclairs would have asked her about her own croft although she could not remember specifics of that conversation. At the time, this had been a straightforward family re-let with “no problems, no questions”.

[40] Mrs Dennis could not remember how many of the crofts they had looked at. They had walked around and gone down to the Loch. Referred to production 33, it did not assist in her recollection of where, precisely, they had gone. She remembered seeing the steading buildings below the road but, from memory, she thought they had not gone into them. The main purpose of the walk-round had been for the Sinclairs to show her the crofts. They had been very proud of what they had achieved. This was a very natural thing for crofters to do. John Sinclair was an exceptional crofter.

[41] There had been no talk at all of anything being excluded from the application. John Sinclair had never mentioned that any of the land had been decrofted. Her understanding of John Sinclair’s wishes was that he wanted to relet the crofts to Kenneth in their entirety and without exclusions.

[42] Productions 29 and 33 were copies of the report which had been produced by the Department. She had fully endorsed it. The reference numbers on the report were to “C” files. She was assuming the crofts were held in three blocks; 10-12, 13 & 14, and 15/part-16. Her own comments, as Commissioner, appeared at the end of the report. The reference in these comments to “the family” was a reference to John Sinclair and Kenneth Sinclair.

[43] After the Commission had granted the application, the next step was for the tenancy to be effected. The Commission needed to know the rent. In January 1999 the Commission had written to John Sinclair asking whether the tenancy had been effected. There had been no response. Over time other letters had been sent but the let had never been effected by John Sinclair. Mrs Dennis was not in a position to say that no rent had in fact been agreed; merely that the Commission had never been informed that it had. John Sinclair had been written to several times without response.

[44] However, in September 2000 John Sinclair had written to the Commission saying that he had changed his mind. That letter had been preceded by a telephone conversation between a member of staff at the Commission and Mr Sinclair, to which reference is made in production 30, a letter from the Commission to Mr Sinclair asking him to confirm in writing that he no longer wished to relet the crofts to Kenneth Sinclair. Production 31, dated 14 September 2000, was John Sinclair’s response. Following upon that letter steps had been taken to resolve the situation and try to get the two sides to discuss what was going on. Donald Smith, the Commission’s solicitor, would have been involved. Mrs Dennis could not remember if there had been discussion within the Commission about the possibility of the Commission using its powers under sec 23(5) of the 1993 Act to let the crofts to Kenneth Sinclair. Referred to the penultimate paragraph of production 27, a letter from Mr Smith to Messrs MacLeod & MacCallum, solicitors for Kenneth Sinclair, the witness thought that the Commission had not considered using its powers under said section. However, she had not been involved in any way with Mr Smith’s letter and by that time the case was on his desk, not hers.

[45] In cross-examination Mr Maclean asked a series of questions the thrust of which was to challenge the witness’s impartiality and objectivity in relation to this case. In response Mrs Dennis insisted that she had always acted impartially and with the highest integrity as a Commissioner.

[46] Under reference to production 35 she accepted that although she had been emphatic that there were to be no exceptions from the land sought to be relet, it had in fact always been the case that John Sinclair’s house was to be excepted. She agreed that the Commission had locus in relation only to croft land and had no locus over what was not croft land. The application was in respect of croft land Mr Sinclair was proposing to relet to Kenneth.

[47] Asked whether she would describe her visit to the Sinclairs as formal or informal, Mrs Dennis explained that she had been invited as a commissioner and that her visit had therefore been formal. She had not been there as a crofter or Scottish Crofting Foundation member but as a commissioner.

[48] Asked whether she was aware that the areas with which this case is concerned were not in crofting tenure at all, Mrs Dennis said that she was aware of that now. No mention of that had been made in the Department’s report to the Commission and that report was all the Commission had had to go on.

[49] She had taken notes of her meeting with the Sinclairs but she no longer had these. However, she had a very clear memory of what had happened at that meeting. Asked about John Sinclair gesturing towards his workshop, she said that she had understood the workshop to be beside the house but she had not seen it. Nor had she seen model carts. She had not known that Mr Sinclair made model carts. She had no knowledge at all of that. She therefore had no knowledge as to whether Mr Sinclair made full-size carts in a shed adjacent to the house in space “you couldn’t swing a cat in”, as Mr Maclean put it. Nor could she comment on what was in the steadings.

[50] John Sinclair’s change of mind had come as a disappointment to Kenneth Sinclair. Kenneth was a very keen young crofter and had taken voluntary redundancy in order to set up his home and family on the crofts and for it not to happen was a disappointment and a surprise to him. When the witness had visited in 1998 it had been an ideal situation of a farmer retiring and handing over to a son who would continue to work the crofts.

[51] Kenneth Sinclair had made his disappointment and surprise known to Mrs Dennis personally in a telephone call to her. He had asked her what she could do about it. She may have suggested to him that he should speak to Donald Smith; that perhaps Mr Smith could offer some help in the sense of helping Kenneth Sinclair understand the situation and discussing whether there was any way in which Kenneth could “regain” the situation.

[52] Mrs Dennis accepted that the Crofters Commission’s consent to the relet did not constitute the relet. The relet had not been effected. Once the Commission had given its consent there was no obligation on the applicant to go ahead with the relet; an applicant was entitled to change his mind. If that happened it was, she agreed, no business of the Commission to interfere.

[53] She had had further contact with Kenneth Sinclair since the telephone call expressing his disappointment. She was unsure when that had been or what it had been about but presumably it had been about the crofts. She had ceased being a commissioner in 2005. Within the past year she had been asked by Mr Findlay of Messrs MacLeod & MacCallum, if she would give evidence, so she had become involved in the case again in that way. Mr Sinclair himself had telephoned first and had said that there was going to be a court case and that his solicitor, Mr Findlay, would be getting in touch. She had spoken to Mr Sinclair directly on the telephone “perhaps once or twice” in that period. These telephone conversations had been pretty short. Kenneth had been interested in what she remembered from her visit to Lochussie. Beyond that he had not been interested in anything in particular.

[54] She did not know the reason for John and Kenneth Sinclair having fallen out. Kenneth Sinclair had not told her. It was a family dispute and she did not know what it was about. As a commissioner she would not have wanted to get involved in family disputes.

[55] She did not know what areas of land were in dispute. She knew nothing about what land was part of the crofts and what was not. These were matters completely outwith the bounds of her evidence. Likewise she had no knowledge of historical documents in the Commission’s files; it was the Commission’s staff’s responsibility to check applications against the relevant files. Her recollection of this application was that it had been a very straightforward application for consent to a re-let of the crofts.

[56] In re-examination Mrs Dennis said that she had not come across any other situation in which re-lets had not been proceeded with once consent had been granted. But she did have experience of parties contacting commissioners to raise issues about applications. The ones she remembered had involved telephone calls before a decision on the application had been taken. She had always dealt with those approaches appropriately, with the highest integrity and without showing favour or bias. Thus there was no bar to a commissioner giving information to applicants or referring them to someone who might be able to explain the position to them. One could be helpful without being partial.

[57] The witness confirmed having known that the house was outwith the land in respect of which the Commission’s consent was being sought. It would have been “almost an assumption” on the Commission’s part that an application was to be made to decroft the site of the croft house and garden ground. However, she would have expected John Sinclair to have mentioned any other land which was not going to be let to Kenneth. She would also have expected him to do that during the Agricultural Officers’ visit. But John Sinclair had never mentioned any exceptions. He had not said that the 7.5 acre area had been decrofted. The witness’s understanding had been that it was the entire crofts which were to be let and she would not therefore have expected any exclusions. John Sinclair was an exceptional crofter, who was proud of his crofts, and she would have expected him to show her anything he was holding back for his own use but there had been no suggestion that anything was being held back.

Roderick Thomas MacKenzie

[58] Mr Mackenzie (45) gave evidence that he had been Company Secretary to the Black Isle Farmers’ Society since November 2005.Prior to that he had been a Livestock Auctioneer since leaving school. He was also a self-employed livestock consultant.

[59] In 1998 he had been working for Dingwall Auction Mart Limited. He remembered having been contacted by John Sinclair and Kenneth Sinclair about going up to Lochussie to do a valuation for them, the reason being that Kenneth was taking over the crofts from his father and a valuation was a routine thing to do in that situation. The approach had been made at Dingwall Mart where both of them were good customers. There had been no written instruction, just an approach at the Mart. John Sinclair had said something like “Ken is going to be taking over the running of the croft. Come up some time and value my part of the stock.” Their stock had always run together.

[60] Although the subsequent valuation was dated 12 December 1998 the initial approach would have been made during the back-end selling season of August to November. They were always very busy at the Mart in September/October and there had been no urgency about this valuation: it was not a valuation for probate or sale. The approach had been along the lines of “Come up and see us when you’re not so busy”.

[61] Both John and Kenneth had crofts. The proposal for a transfer required to be ratified by the Crofters Commission. The valuation had taken place on 12 December, the date of the report thereof. His recollection was that by that time the initial application to the Crofters Commission had been made but he was not sure if it had been granted. The intention as between the parties was basically for father to hand over to son for the value of the stock and implements. So far as the Crofters Commission was concerned, this being a transfer from father to son, it would be a matter of rubber-stamping.

[62] Production 56 was a copy of his report. The reference on the first page to “per enclosed submission” was a reference to a standard document which he got parties to a valuation to sign just instructing him to do the job. He was surprised it was not attached to the copy of his report. It would have been dated the same day as his report.

[63] Asked if he had subsequently become aware as to whether the arrangement between the parties had been implemented, Mr MacKenzie replied that it had been fully implemented. Kenneth Sinclair had started to sell the stock produced through Dingwall Mart the following year.

[64] As to quotas, he had valued these at the market price at the time. The quotas should have been transferred before the Suckler Cow Premium application went in. The deadline for SCP applications was 15 December in each year. It was desirable to complete the transfer of quotas and the transfer of land for IACS purposes simultaneously in order to avoid a siphoning of quota to the National Reserve. Both John and Kenneth knew of that requirement at the time because they were already in possession of the relevant forms.

[65] Asked whether Kenneth Sinclair had become tenant of the crofts, the witness said that he had never seen a document to that effect but that they acted as landlord and tenant. He was aware, however, that the relationship between them had broken down. He had become aware of that around 2000 or 2001.

[66] In cross-examination Mr MacKenzie was asked about the transfer of quota. Production 55, dated 13 November 1998 and signed by both John and Kenneth Sinclair, showed a transfer of 32.7 units of quota. However the witness had been asked to value only 18 units, which was what he had been told Ken was buying. The whole valuation had been of the livestock, quota, machinery and equipment Kenneth was buying from his father. Eighteen cows were being bought by Kenneth. The witness was not surprised to be told by counsel that the stock belonging to John and Kenneth Sinclair were held under two herd numbers. He had been told to value 11 cows in one batch and seven in another.John had quota for up to 33 cows, each qualifying for premium. Counsel put to the witness that John Sinclair had in fact owned 32 cows at the time of valuation. The witness responded that he had had 18 cows pointed out to him.

[67] Asked whether John Sinclair had carried on with his own cattle after the valuation, the witness said that the arrangement described to him had been that Kenneth was going to buy his father’s remaining cows and was going to take over the running of the crofts. He accepted that production 16 was a sales note from Dingwall Auction Mart dated 29 September 1999 showing the sale of 19 cattle for John Sinclair. That suggested, he agreed, that John Sinclair had retained an interest in cattle after the December 1998 valuation. The witness agreed that John Sinclair had continued selling cattle in his own name into 2000 and 2001 although the full amount of his quota had been transferred to Kenneth before that. At the time of the valuation his information had been that 18 units of quota was what Kenneth was buying. He had valued 18 units of quota. He agreed that it would not have been in anyone’s interest to leave quota unused because unused quota was “clawed back into the pot”.

[68] Mr Maclean put it to the witness that the arrangement had been that all of the quota would be transferred over but that Kenneth was buying only 18 units of quota, 18 cattle, and that as from November 1998 John Sinclair would continue to own cattle in his own right and sell these through the mart. Mr MacKenzie confirmed that that appeared to be the position on paper. John and Kenneth may have had a private arrangement between them but he did not know anything about that. The witness could easily have valued the cows at so much per quota unit but he had in fact been told that a certain number of cows were being sold. While confirming that nothing he had heard gave him any reason to dispute a suggestion that John was to be retaining non-croft land and would be running cattle of his own on that, the intention had been that Kenneth Sinclair was going to take over the running of all of the croft.

[69] In re-examination Mr MacKenzie confirmed that he could not remember anything being said to him which suggested that John Sinclair was going to keep back land for himself.

Kenneth David Sinclair

[70] Mr Sinclair (46) confirmed that he lived at 9 Lochussie and that in addition to that croft he tenanted numbers 10 to part of 16.

[71] He had formerly worked at Muir of Ord Distillery. He had worked there for approximately 13 years, at which point he had been offered voluntary redundancy. Although working full-time at the distillery, he had also been an active crofter. Before becoming tenant of the crofts owned by his father he had worked various other holdings in addition to his own croft at 9 Lochussie. He had also done all of the work on his father’s crofts; ploughing, sowing, calving cows and so on. He and his father had always worked well together.

[72] Going back in time beyond that, he had always worked on the crofts. His three brothers, on the other hand, had no interest at all in the crofts. When the offer of redundancy came up he had mentioned it to his father who had thought it a good idea. His father would have been 65 years of age, or so, in 1998. They had talked about the idea “for long enough”. His father had previously talked of selling off his sheep and some land but they had then decided that he, Kenneth, would take over and run the crofts as a viable unit. Accordingly, he had accepted the offer of redundancy and had finished at the distillery in September or October of 1998.

[73] At around the same time they had applied to the Crofters Commission for consent to the re-let and had instructed Mr MacKenzie for the valuation. When all of that had been completed he had taken over and had got the croft “up and running”.

[74] As to his father’s role once all of that had happened, he was to going to give the witness a hand when a hand was needed. His father had enjoyed doing that. However, after they had had their disagreement all of that had come to an end and the witness had got on with running the crofts on his own.

[75] His father had been a very good crofter. He had a lot of knowledge and that is where he, the witness, had learned about crofting and agriculture. They had done a lot of reclaiming together. They had got the crofts into good heart. His father had been good with animals but he had got frightened of cows as he got older – as we all tended to do.

[76] His father had wanted him to take over the whole croft. (In the course of his evidence the witness variously referred to the land comprising the three crofts as “the croft” or “the crofts”.) Nothing had been said about 7.5 acres having been decrofted. He had always thought that area to be part of the croft. It had been reclaimed and drained, all grant-aided.

[77] The witness had had nothing to do with his father’s interest in making carts and agricultural models. Nor had he taken anything to do with his father’s house, workshop and sheds. The carts, including carts big enough for a horse to fit between the shafts, had always been made up at the house and not in the steadings. The steadings were worked in connection with the croft. All his father’s machinery – lathes and the like – was up at the house and his father had made a cart there not so long ago. Workbenches and smiddy fires had been taken out of the old buildings. The witness’s brother, Morris, had the smiddy fire at his own house. All that was left in the old buildings of his father’s equipment was a couple of old drills and a saw bench. The witness used these building for chemicals. That is why they were locked. In the period up to 1998 his father was more and more moving towards working up at the house and, as part of that process, he had moved more and more of his equipment up there.

[78] In their discussions prior to submitting the application for Commission consent to reletting there had been no discussion about his father continuing to occupy any areas of ground. His father had wanted him to have the whole of the land as a viable unit.

[79] They had filled in production 35, the application to the Crofters Commission, together. The handwriting in Part 1 was his father’s and the rest was his wife’s. His father had done most of the paperwork regarding the crofts at this time.

[80] After the application had been submitted to the Commission they had been visited by Mr MacVicar, Marina Dennis and Rod MacKenzie. Mr MacVicar had been working with the Department of Agriculture at the time and he had been accompanied by a female colleague. They had come to make sure everything was in order and had walked round the whole croft to see if good husbandry was being practised and to see the condition of the fences and livestock. It had been his father who had contacted all of these visitors. His father had told them that he wanted to retire and that he did not want to keep any animals. He liked cattle but not sheep. However, he was getting afraid of cattle. He had told those visitors that he wanted to retire and that he was going to “dodge around” with Kenneth, which he had done quite happily for a couple of years after that.

[81] When they had walked about with the Agricultural Officers, no indication had been given to them that some of the land was not part of the croft. Nor had any indication been given that the steadings were not part of the croft. He himself had always understood the steadings to be part of the croft. They had walked along the road and down to the steadings with the Agricultural Officers. They had wanted to see all the buildings and, generally, all that he was going to be taking over. In the course of that, his father had made clear that the witness was going to have everything; that everything was going to be turned over to him. That went for the 7.5 acre area as well. His father had made clear that he intended giving everything over to him.

[82] As they went round, most of the talking had been done by his father and himself. His father had made clear that he wanted him to run it as a viable unit. There were to be no changes; his father had been very pleased with the way he, Kenneth, had been running his own unit (i.e. number 9 Lochussie and the other land occupied by Kenneth prior to November 1998).

[83] They had told the Agricultural Officers that he, Kenneth, intended to build an agricultural shed down at the steadings. His father had been present when that had been said.

[84] Mr Sutherland referred to Mr MacVicar’s evidence that in farming retirement did not always mean giving up everything. The witness was clear that his father had wanted to retire. Moreover his mother had also wanted his father to retire. His father had told the Commission and the Department that he wanted to retire.

[85] Marina Dennis had visited as the Area Assessor. She had done so at his father’s request. He had met her with his father. His father had told her that he wanted to retire. Marina had asked his father if he wanted to keep land for his other sons and his father had been adamant that he did not and that he wanted Kenneth to take over the whole croft. His father had said that his other sons had no interest in the croft. One was away working in Caithness and another was in the south of England. All that he was going to keep was the house and surrounding buildings, which he, Kenneth, had never had anything to do with in any event. Marina had advised his father to decroft the site of his house. His father had told Marina that he was quite happy making his carts and model engines up at his house and shed. She had been shown the shed and his father had told her that what he would be keeping would be the house, garden, workshop, lean-to and the wee shed where the lathes were. The witness also made reference to a garage in which his father had been making a cart at the time but he was unsure as to whether Marina Dennis had been shown the garage.

[86] Marina Dennis had been shown down to the Loch, through the buildings and they had either driven or part-walked, part-driven along the road to see the extent of the crofts. She had asked about his proposals for the croft, whether he intended putting on more cattle and sheep. His father had been present at that time and his father had been happy for him to build up the stock, particularly the cattle.

[87] When the Crofters Commission had made its decision he thought he had been told about it by his father. He presumed his father had got an official letter.

[88] The rent he was paying after that had been ten Beef Suckler Cow Premiums per annum. In the first year that had amounted to £750, in the second year to over £800 and in the third year it had been £900. His father had cashed these cheques. This arrangement had been agreed at the valuation. Mr Mackenzie had been told about it. For three years he had paid rent calculated in that way and his father had cashed the cheques. There had been no problem but after that his father had not accepted any money. They had bantered, backward and forward, about the rent and then one day his father had said “The rent will be 10 BSPs” and he, Kenneth, had agreed. Asked why his father would have agreed to rent being calculated in this way, when he could never be sure as to what he was going to get, the witness answered that each payment would never be less than the previous year’s payment: BSP always went up. He thought the rent was to be paid at the November term, but at all events sometime in November.

[89] The rent had changed to a fixed figure when the Land Court had fixed a fair rent a few years down the line. He was unsure whether the Land Court had been told what the existing arrangement for the payment of rent had been but he thought they must have been.

[90] When the Agricultural Officers from the Department visited, nothing had been said about trees. His father had told both the officers and Marina Dennis that he wanted Kenneth to take over. The witness thought that both the Agricultural Officers and Marina Dennis had asked his father if he was keeping any land back and he had told them he was not.

[91] Mr Sinclair did not think there had been much of a time lapse between Mr Mackenzie being asked to carry out the valuation and him doing it, perhaps a week or so but no more.

[92] The SAC (Scottish Agricultural College) had dealt with the transfer of quotas. His father had used the SAC a lot. It had been a complete transfer of all quota held. Asked about the difference between the units of quota transferred and the units of quota valued, the witness said that his own animals would be included in the units of quota transferred because he and his father had always run their stock, both cows and sheep, together. In 1998 he had taken over his father’s herd number. What Mr Mackenzie had valued (18 SCP quota units and 115 SAP quota units) was the quota being bought from his father. He already held the remainder of the quota units.

[93] Production 53 had been filled in by Hugh Ironside of the SAC. It dealt with the transfer of his father’s land. The hectarage referred to would be the total area being transferred to him. It included the 7.5 acre area. The area stated would represent only fields, rather than fields and buildings. He and his father had informally allocated units of quota between them. They had run their stock, both cattle and sheep, together. His father had done all the paperwork. He had, however, signed the transfer of quota forms along with his father. These had been signed on 13 November. The transfer of quota had to take place within a window of time. There was a break-off point. He remembered that his father had asked Ali MacKenzie, his accountant, for the letter which was production 52. The Fae Allan at Pentland House, to whom that letter is addressed, must have asked his father for it.

[94] The date of takeover had been agreed at 30 November 1998. That was the date on which his father was going to retire and he was to take over. The Crofters Commission had granted consent on 27 November 1998. His father had not changed his mind before that point. Indeed he and his father had worked well together throughout 1998, 1999 and 2000. It was not the case that his father was going to keep his own cattle on croft 13 and the 7.5 acre area.

[95] He accepted that the arrangement for the rent had been an unusual one but his father often did unusual things. The letting arrangement was to run from 30 November 1998, the date specified in Mr Ali Mackenzie’s letter (production 52). The application to the Crofters Commission, the quota transfers prepared by the SAC, and the valuation had all been in implementation of this agreement and to ensure that everything was done properly and with a view to avoiding “all this hassle”.

[96] Mr Sinclair was then asked whether he had a record of payments made to his father under this arrangement. He replied that he had put his lump sum from his redundancy towards the price he was paying his father per the valuation. That had left a shortfall of £4,000 which had been paid at a later date. His father had been paid the full amount stated in the Inventory and Valuation. He was not sure whether these payments were shown in any books or records. He had not been given a receipt by his father. In these early days he had had little in the way of proper accounts although his wife had kept a set of books for their own stock. Later they had got an accountant and proper records had been kept.

[97] Production 51 was a copy of extracts from the books he had kept at the time. An entry on 18 January 1999 was a payment of £4,000 made to his father, which would have been the balance still owed over and above the lump sum. There may have been another payment over and above that. The entry on 5 May 1999 was a Beef Premium Scheme payment of £921.85 to his father. An entry on 19 June 1999 showed another payment, this time of £1,316.53, to his father. This was shown as “Cow Premium”. A further payment of £4,000 to his father on 4 October 1999 must have been a further payment “for the croft”. Mr Sinclair explained that he had just paid the sums due to his father when he could afford to do so. Obviously it had been £8,000 rather than £4,000 he had owed his father after payment of his redundancy money. There had been a further payment of “Cow Premium” to his father on 1 February 2000 and one of £913 on 25 March 2000. He could not understand how these payments tallied, or failed to tally, with dates upon which payment of premium had been received or dates upon which rent was due to his father.

[98] His father had definitely not gone on trading livestock in his own right after November 1998. He could not understand how production 16 appeared to be a print of details of a sale by his father of 19 animals at Dingwall on 29 September 1999. The only thing he could think of was that the animals had belonged to the witness and that his father had sold them in his own name, giving the money to the witness. But it was a fact that his father had not carried on trading after 1998.

[99] Shown productions 14 and 15, which bear to be sets of accounts prepared, respectively, for “Firm of J Sinclair” and “Mr J and Mrs M M Sinclair” for the years to 31 October 1999 and 31 October 2000 and which refer to livestock output, the witness said repeatedly that it was impossible. His father had had no sheep at that time – there had been no sheep at all left on the premises by this time – yet these accounts referred to sales of sheep. And, as for cattle, he could not understand where these had come from either. Mr Sinclair pointed out that we had seen the documentation transferring everything – 100 per cent – to him in 1998, so it did not make any sense that his father appeared still to be trading in livestock up to two years later. He could not “make head nor tail of it”. It was “nigh on impossible”, indeed it was impossible. What had happened was that he had taken over everything in 1998, he and his father had then run together for three years without complaints on either side and the witness could not understand where all of this had come from. He pointed out that the accounts included reference to machinery whereas he had bought all his father’s machinery.

[100] Ali Mackenzie had been an ill man when he had prepared the 1999 accounts. He had done no more accounts after these.

[101] The year 2000 accounts included reference to receipt of “Grants and Subsidies” yet his father had definitely not been claiming, never mind receiving, grants or subsidies at that time. And the sheep and cattle referred to just did not exist. He had no idea, and therefore could not explain, why these accounts had been drawn up.

[102] He had first become aware that his father was no longer happy with the arrangement in at the backend of 2000. He had been about to put his cattle into the sheds when his father had told him he couldn’t. His father had then said that he “wanted the whole place back”. His father had said nothing of that kind before that. The witness had not been aware that his father had been in touch with the Crofters Commission in June 2000, nor that he had written to them in September 2000 saying that he was no longer going to re-let the crofts to Kenneth. His father had stopped accepting rent payments in 2000. After the Land Court had fixed the rents he had paid them “loyally” but his father had never cashed any of the cheques.

[103] Between November 1998 and October 2000 the 7.5 acre field had been under crop rotation.Brahan Estate had put a road through it for the extraction of timber at one point and turnips had been grown on one side of the road and grasson the other. His father had been aware that he, Kenneth, was using the field for that purpose at that time.

[104] While they continued to work together his father had had use of the steading building. At that time he, Kenneth, had not minded if his father went into the steading and did anything he wanted there. But his father had done most of his work up at his house, although some was done in the steading. The steading was let to the witness at that time but he had no reason to stop his father using the building. He himself used the steading at the same time. He had had two bull pens in there and a grain bin.The bruisingand everything else was done there as well. The rent being paid covered these buildings and his father had made very clear to him that he, Kenneth, was taking over everything. They would not have worked happily together for a period of three years if there had been a problem.

[105] When the Land Court came to fix the rents, no exception had been taken to the inclusion of the 7.5 acre field and the steading being considered part of the subjects to be covered by the rent. The 7.5 acre field had been included and the Land Court had expressly said that the reason the rent it had fixed was so high was because of the existence of the buildings. The ground itself was not good ground, it was poor ground, and all that was payable was a fair rent. It was the inclusion of the buildings which explained why the rent fixed was so high.

[106] Mr Maclean began cross-examination by confirming with the witness all he had said about his father’s retirement. Unambiguously his position was that his father had retired; that he had not retained any livestock; that he himself had bought 18 cattle and 18 cattle quota units from his father; that some of the 32.7 quota units referred to in the quota transfer documentation were in reality his and not his father’s and that after his father had sold 18 cattle and followers to him his father had been left with no cattle.

[107] However, the witness then gave evidence, which we had difficulty in following, about his father having in fact kept 12 calves in his own name because he had been advised by the SAC that he needed to keep livestock units in order to preserve some financial entitlement during the year in which the transfer had taken place. But after 1999 everything had “come over” to the witness.

[108] Under reference to production 16, the print-out from Dingwall Mart apparently showing the sale of 19 cattle by John Sinclair on 29 September 1999, the witness confirmed that he had expected that document to show 12 calves. There must, however, have been some calves belonging to him included in that total. He had obviously sold seven calves under his father’s name in September 1999. He could not tell which these were from the invoice because they all had the same herd number. Herd number UKRA0300 had been his father’s herd number but he had taken it over.

[109] Having been advised by Mr Maclean to think very carefully about his evidence, the witness then said that he had not sold cattle under his father’s name. He accepted that what production 16 constituted was a statement made out to John Sinclair reporting on a store sale in September 1999 and that the cheque for the sum brought out as payable would have gone to his father. He himself would have been at that sale; he never missed a sale. He would have been aware that 19 cattle had gone through the ring. He would have been looking for the proceeds of these. Asked why, with his own operation up and running by September 1999, he would have been selling cattle under his father’s name, the witness said that it was because 12 or 14 of these calves, he could not remember the exact number, would have belonged to his father under the carry-over to preserve his father’s financial entitlement already referred to. He could not explain why, as it appeared, the seven animals out of the 19 put through the ring which belonged to him had been sold under his father’s name. He was puzzled – “bamboozled” – by that.

[110] At this point Mr Maclean moved the Court to allow additional productions to be received. These related, he said, to a serious issue of credibility which had arisen and which had not been anticipated earlier. Mr Sutherland asked for, and was given, an adjournment so that he could examine the new material. Thereafter he opposed the lodging of the proposed productions. These comprised five items, three of which were further sales invoices from Dingwall Auctions and appeared to be merely further material of the kind already produced. The next item was a copy of Replies made by the applicant in case number SLC/23/07. This was also material of a kind already produced and there did not seem to be anything in the new material which arose from the evidence which had been given by Mr Sinclair in the present case. This was just an attempt to lodge new material late in the day and under the guise of issues of credibility and reliability. The final item in the inventory of new material was a schedule of BSP payment rates and it was very difficult to see what this had to do with the evidence given so far. The material now sought to be produced did not meet the appropriate test: there had to be good reason for the production of the new material at this particular point in time and a good explanation as to why it had not been produced earlier. Insufficient justification had been offered for the production of this material at this stage.

[111] In response Mr Maclean reiterated that he sought to use the material to test the witness’s credibility and it was customary, for record purposes, for such material to be lodged in process. The case the respondent had come to court to meet was that the applicant was tenant of the relevant subjects under a 1991 Act tenancy constituted by possession and payment of rent. The respondent’s position had always been that he continued to possess occupancy and cattle. Reference was made to the court’s Note of 29 October 2008 in application SLC/23/07, which is formally incorporated into the respondent’s pleadings in the present application. At paragraph [13] of that Note the court had recorded John Sinclair’s evidence that at the time of the events with which we are concerned Kenneth had bought sheep and 18 cows from him, leaving him with 10 cows. Last week the respondent had lodged sets of accounts documenting the respondent’s position during 1999 and 2000 and it had genuinely come as a surprise to Mr Maclean that the authenticity of these was now being challenged. Items 1 to 3 on the new inventory were relevant to the foregoing matters. So far as the rent was concerned, the rent said to have been paid was calculated by reference to a BSP related mechanism. This had come as complete news to the respondent. There was no hint of it in the applicant’s pleadings. It had not been mentioned in any of the previous applications to the court. The fourth item sought to be produced demonstrated that no mention had been made of this arrangement for rent by Kenneth Sinclair in his pleadings in application SLC/23/07. The fifth item sought to be produced was a document setting out the BSP rates of payment for the relevant years and must be relevant to the issue at hand. There should be no question but that all of the new material be allowed in and put to the witness for him to explain as best he could.

[112] We decided to allow the new material to be received, on the view that it was plainly relevant to issues of credibility bearing on substantive issues in the case. That material now forms production numbers 58-62 inclusive.

[113] Production 58, bearing to be a sales statement from Dingwall & U. A. Partnership Ltd dated 12 April 2000 showing the sale of a Charolais Cross bullockon behalf of John Sinclair, was put to the witness and he was given time to consider it. He could not explain it: “to be honest, I haven’t a clue”. He had had the passports for all the cattle by that time. The beast must therefore have been sold with his approval, because at that time he had “all the cattle in [his] name, 100%”.

[114] Production 59, bearing to be another sales statement from the same source dated 27 September 2000 showing the sale of four bullocks and two heifersfor John Sinclair, was similarly put to the witness. Again he could not think how this had come about. He could not understand how he had sold them in his father’s name.

[115] Asked how many beasts he would have been selling through the Dingwall Mart in 2000, he thought he would have been selling 32. He did not know why he had sold some in his father’s name. The only reason he could think of was that he must have owed his father money and was paying him back in that way. The payments for these sales (shown in productions 58 and 59) would not show in his records because the cheques would have gone straight to his father. It having been put to him that there would surely be some record of these transactions in his own books, the witness replied that there was no explanation for this and said “I don’t know where we’re going with this and I don’t want to tell any lies”.

[116] Production 60 was then put to the witness. It is similar to number 58 and 59 and seems to show the sale of two Aberdeen Angus Cross bullocks for John Sinclair on 10 January 2001. One of these bullocks was definitely from a bull he had bought from a Mr Grant at Clunie. The only explanation for the sale in his father’s name was that he had owed his father money, although his recollection was that he had paid his father off in 2000.

[117] Production 14 – the 1999 set of accounts for the Firm of J Sinclair – was put to the witness. He confirmed that his position was that this set of accounts was a complete fabrication. They were false, and deliberately so. They referred to sheep but his father had had no sheep. They referred to contracting but his father had never gone contracting. His father had had no machinery with which to go contracting; he, Kenneth, had the machinery. Each beast had to be accompanied by a passport. Where was the documentation to back up the entries in these accounts?

[118] Asked as to who was responsible for the fabrication of these accounts, he said it was his father. Ali Mackenzie had obviously colluded in the fabrication. Asked by the Court if he was saying that the late Mr Mackenzie had knowingly co-operated in the preparation of false accounts, he said that he was.

[119] Asked about production 15 – the year 2000 accounts for Mr J & Mrs M M Sinclair – these accounts had been prepared by another accountant called Duncan who had not lived long afterwards. Without narrating the detail of what was said, the thrust of the witness’s evidence seemed to be that nothing in this set of accounts could be relied upon.

[120] Asked as to how much he had paid his father, Mr Sinclair was clear that he had paid more than the £36,000 brought out in Mr Rod Mackenzie’s valuation but he could not remember why he had done so.

[121] With reference to the rent arrangement, he confirmed that the suggestion that the rent be the equivalent of 10 BSP payments had come from his father. He and his father had worked together a long time and they had to be fair to each other. Asked if he knew of any other crofters whose rent was calculated by such a mechanism, he replied that he was sure there were, somewhere. But it was definitely the way they had worked out the rent.

[122] There was then some procedure as a result of which the whole of the applicant’s Cash Book was lodged in process as production 63.

[123] The witness confirmed that the herd number RA0677 had belonged to him. It had been for his aunt’s croft and had been used long before 1998, possibly around 1993. He had been allocated that number and had held it for a short time before being told that it was not a good idea to run two herds under different numbers. So he had carried on under his father’s herd number, RA0300.

[124] Asked whether he had sold cattle at Dingwall on 29 September 1999 under the RA0677 number as well as the 19 cattle sold under his father’s name on the same day, the witness replied that he had sold them all under his own name but had obviously had the cheque for the 19 cattle made out to his father. That was the only explanation he could think of.

[125] Mr Maclean then put to the witness Mr John Sinclair’s position which was that what had been let to the witness had been the croft land and had not included the steadings and the 7.5 acre field. The witness could not believe that was being said. What had been let to him was the croft and everything went with the croft – “100%”. The croft buildings were on croft land. The house now forming part of the steading building had been the croft house. That had never changed. It had not fallen out of crofting before 1955 when such a thing was possible. He had used every single one of these buildings. He had first heard that his father was disputing that the areas with which we were concerned were croft land “last time round” or possibly even before that. The 7.5 acres and the steading were part of the croft. His father had bought the 7.5 acres from Brahan Estate and had told him that it was still part of the croft. If his father had known that the 7.5 acres had been decrofted, he had never told the witness.

[126] The witness still believed that these areas, now in dispute, were part of the croft but the Land Court had said otherwise. That is why they he and his representatives were now saying that it was an agricultural holding. It must be one or the other. The 7.5 acres and the buildings were necessary to the operation of the holding. It was the only way the business could be run, as the past winter, one of the worst ever, had proved.

[127] Mr Sinclair confirmed that his position in respect of the 7.5 acres and the steading was not that he had been offered an agricultural tenancy of these and that he had accepted it. He knew that the law was different as between agricultural holdings under the 1991 Act and crofting, but in respect of the disputed areas it had to be one or the other. Some of the differences between the two legal regimes were explored by Mr Maclean but we need not narrate the detail. The witness was clear that when he had taken over the whole subjects were croft land: “it was all croft”.

[128] Under reference to productions 12 and 47 to 50, Mr Maclean then put Mr Sinclair Senior’s position to the witness. The witness protested that what was contained in these had nothing to do with him: when his father had given the croft to him he had taken over everything. We were now here to determine whether or not the disputed parts were an agricultural holding.

[129] After the lunch adjournment Mr Sinclair asked the court if he could clarify something from his earlier evidence. We allowed him to do so. He said that over the lunch adjournment he had been in touch with Dingwall Mart and that the beasts referred to on productions 58 and 59 did not exist on their computer. The last beasts sold through the mart under his father’s name had been the 19 animals sold in September 1999 and these had comprised 18 of the cows he had bought from his father and a calf with a bad leg that he had also sold. There was nothing in his father’s name after that.

[130] Production 25, the Joint Minute entered into in SLC/16/01, was put to the witness and he confirmed that that was the basis upon which he had occupied the croft, the 7.5 acres and the steading. There was, he said, no room for the possibility that in entering into that Joint Minute his father had thought that the areas now in question were not part of the croft while he, the witness, had thought them to be part of the croft. The witness flatly rejected the proposition that his father’s position had always been that the old steadings, the 7.5 acres and some of the stock were excluded.

[131] The witness likewise rejected a suggestion that whereas the cattle passports had been put in his name, there had been an agreement with his father that some cattle would still belong to his father and that his father would run them on the 7.5 acres and that his father would retain the steadings. That was “100% not true” and was only being said now because his father wanted them back. He accepted that that must mean that his father had been “lying through his teeth” when he gave the evidence recorded at paragraph 20 of the Note which is production 12. Referred to productions 9 and 10 – the Court’s decisions and notes in applications SLC/16/01 and SLC/28, 50 and 195/05 – and to production 15 in SLC/23/07, which bears to be a letter by John Sinclair dated 28 March 2003, – the witness responded that it may be the case that his father had been lying about this consistently for a long time but he had been lying nevertheless.

[132] The idea of arguing that the disputed subjects were held on an agricultural holdings tenancy had come from the witness himself. He had gone to his solicitors and broached it with them. That would have been with Mr Flyn and would have happened about a month after the last hearing. Shown production 11, being a copy of written submissions made by his agents in relation to the adjustment of the rent following upon the Court’s decision that the disputed subjects were not part of the land let to him, Mr Sinclair said that these had been drafted in an effort to walk away from the situation for the sake of peace. They had been trying to get peace.

[133] Mr Maclean then took the witness to the Cash Book and asked him to identify the payments made by way of rent to his father for the three rental periods, November 1998-99; 1999-2000 and 2000-2001. This was the beginning of quite a long chapter of evidence and, although it is crucially important, we do no need to narrate it in detail. As we understood it, after a degree of coming and going, the witness’s position came to be that the payment of £921.85 on 5 May 1999, the payment of £708.70 on 1 February 2000 and the payment of £913 on 25 March 2000 were the payments of rent for these periods. With reference to the timing of the payments - which, given that Mr Sinclair thought the rent had been payable backhand, show the first payment to have been made six months early, the second to have been made nine months early and the third to have been made over a year early - he explained that his wife (who looked after such matters at that time) paid his father when they had the money. He denied that he was “talking a lot of baloney”.

[134] The witness was then asked about the treatment of rent payments in the Cash Book. He confirmed that a payment to “J. Duncan” on 5 April 1999 was a payment of rent for his aunt’s croft. It is allocated to the “Property and Repair” column of the Cash Book. He accepted that the payment on 5 May 1999, being the first of the claimed rent payments to his father, was not treated in the same way (it is allocated to the “Sundries” column).. He rejected the notion that the three payments which he had identified as payments of rent had nothing to do with rent but were, rather, payments of BSP made by him to his father and attributable to the cows his father continued to own. Where, he asked, were the passports and paperwork to support that idea? His father had never kept 10 cows. If that had been the case how could he, the witness, have made any money on the croft? It would have been nigh on impossible. He would have had to be off his head to agree to that.

[135] Under reference to production 62, setting out the BSP rates of payment, the witness explained that he had waited until the BSP money had come in and had then divided it, paying his father the amount attributable to 10 animals but doing so as rent.

[136] Under reference to the handwritten note at the end of production 53, Mr Sinclair explained that his father had had to keep calves so as to retain his payment for his cows.He had kept calves through the winter of 1998-99 so as to remain eligible for BSP that year. But nothing had been sold through Dingwall Mart in his father’s name after September 1999. He denied that in 1998 his father had sold him 18 cows, 18 quota units, retaining 10 cows and two cows being sent to the burner. He had bought 18 cows and 18 quota units from his father. To suggest that he had misappropriated animals belonging to his father after they had fallen out was to talk rubbish.

[137] Questioning then turned to the transfer of quota. Production 54 showed the transfer of 138 units of Sheep Annual Premium Scheme quota to the witness. He had purchased 115 units of SAP from his father. Prior to that he had had his own sheep quota with its own identification number and his own cattle quota with its own identification number and his own farm code number. Production 55 showed the transfer of 32.7 units of Suckler Cow Premium Scheme quota to him from his father. He could not understand that. He had bought only 18 units. His father had not had 32 cows. He could not understand where the 32.7 figure came from. It must include 15 cows he had himself, which, along with the 18 he had bought from his father, made a total of 33. He could not explain why his own cows had been included in the transfer when he already had his own quota but that is what it was: his cows were included in the transfer figure.

[138] Turning to the payment of rent following the fixing of rents by this court, Mr Sinclair confirmed that cheques had been sent to his father punctually for the years 2005 to 2008 inclusive but that none had been cashed. Rent had been paid on the BSP formula for the years 1998 to 2001. He agreed that it seemed as if no rent had been tendered for the intervening years. He did not know how that had come about. Everything had been up in the air, waiting for the rent to be fixed by the Land Court.

[139] It was not the case that rent calculated on the basis of BSP payments had been heard about for the first time only in the course of his evidence. Asked why there was no mention of it in the Land Court’s judgement in the rent application, he did not know why that was. He had told Mr Flyn about it. He had likewise told Mr Findlay, Mr Flyn’s successor, and Mr Sutherland about it “a good long time ago”.

[140] Objection was taken by Mr Sutherland to a question as to why there was no reference to the BSP mechanism in the applicant’s pleadings. The applicant could not be held responsible for what was in his pleadings. We allowed Mr Maclean to continue. Having had the procedure by which pleadings come to be drafted explained to him, Mr Sinclair seemed to doubt whether he had ever told Mr Flyn about the rent mechanism. He could not recall having told him. But he had told Mr Findlay one time when Mr Findlay had come to discuss the case with him a long time ago; maybe last year or just after the last case.

[141] The witness denied the truth of what his father is recorded as having said at paragraphs [34], [54] and [68] of production 12 to the effect that no rent had been paid in the years after 1998 until recent years when cheques had been tendered but not cashed. There had only been two years in which his father had not been sent rent and that was when they had been waiting for the rent to be fixed by the Land Court. It was “rubbish” to suggest his father had never received payment of rent for the 7.5 acres and the steading.

[142] The witness again denied a suggestion that his father had continued to hold stock of which he was the beneficial owner on the 7.5 acres field. His father had retired completely in November 1998. So far as exclusive occupation of the steadings was concerned, he had not minded his father using the old house in the years after 1998; why should he? They had both been using all of these buildings. He needed these buildings for keeping three bulls later this year. But he was not hiding the fact that there were still items belonging to his father in these buildings.

[143] He and his father had fallen out in October 2001. He did not know why. It had not been any fault of his. It had happened when they had been shifting cattle to take them in. He agreed that there had been a long history of disputes and litigation, including Sheriff Court proceedings for interdict as well as various proceedings in this court, ever since. So far as his own position was concerned, he was merely defending his rights. He was being denied what he was entitled to in terms of his agreement with his father and anyone would stand on their rights in that situation.

[144] In re-examination Mr Sinclair agreed with Mr Sutherland that, having regard to his own and his father’s evidence in the rent application (production 9, pages 3 and 5), it seemed likely that there had been about 33 cows on the crofts in 1998. Although his father had not made any reference to Kenneth owning any of these, the witness agreed that since he had bought 18 cows belonging to his father as a result of their agreement of November 1998, the other 15 would have been his own.

[145] So far as sheep were concerned, Mr Sinclair agreed with Mr Sutherland that the figure stated in the SAP quota transfer form (138), the number of sheep referred to in the valuation (145) and the number spoken to by his father at the rent application hearing (130) were all fairly consistent.

[146] Before the agreement with his father, when animals had been taken to market they were sold in the name of the person owning them. After 1998 there had been calves sold in his father’s name for a time. Beyond that the only reason he could think of for animals having been sold in his father’s name, despite the fact that he, and not his father, owned them, was that he had still been owing his father money.

[147] Mr Sutherland asked what the arrangement had been for the date of payment of rent. Mr Sinclair said that they (by which we take him to mean his wife and himself) should have been paying rent in November but with him paying his father other sums of money they had obviously lost track of what they were doing. But November had been agreed with his father as the time when the rent was to be paid. He was to pay his father out of BSP money received. That money was usually received around the backend of the year. BSP payments were not always made “in a oner”; there were top-ups and other things. For his father to get the full sum to which he was entitled they would have to wait until all BSP payments had been received. His father had said that he could pay him whenever he could manage but he had tried to pay in November. But basically it had been when he could afford it.

[148] As to why entries in the Cash Book had been made in particular columns, the Cash Book was only a rough book. In 2000 they had got an accountant to do their books. Entries in the Cash Book would not be consistent, with expenditure for the same purpose always being allocated to the same column.

[149] As to his father having maintained consistently that the 7.5 acres and the steadings were not part of the croft, that had never been mentioned in the application for finding of a tenancy and fixing of rents in 2001. When the court had drawn up records of the crofts it would have been clear that he, Kenneth, was including the steading and the 7.5 acres but at no time had his father denied that those were included. Similarly, in his evidence to the rent-fixing hearing, his father had never suggested that these subjects were not included in the subjects to be rented. His father had not said that the 7.5 acres had been decrofted. The first mention of that had been when his father had put in his resumption applications (applications SLC/28/05, 50/05 and 195/05).

Submissions

(i) for the applicant

[150] Mr Sutherland’s primary submission was that the evidence disclosed an agreement to let the subjects in question in 1998, which agreement had subsequently been acted upon.

[151] The evidence leading to that conclusion comprised;-

(i) John Sinclair’s application to the Crofters Commission for their consent to the letting of the crofts to Kenneth Sinclair.

(ii) The evidence of the information given by parties to the Agricultural Officers who had prepared the Department’s report to the Crofters Commission in respect of that application.

(iii) The evidence of Marina Dennis.

(iv) The granting of consent by the Crofters Commission on 22 November 1998.

(v) The evidence of Rod Mackenzie.

(vi) The evidence of payment of sums of money by Kenneth Sinclair to John Sinclair. These were payments of two kinds; (i) payments of capital sums in January and October 1999 for which the only explanation was that they related to the agreement of 1998, no other explanation having been put to Kenneth Sinclair in cross-examination, and (ii) payments of rent.

(vii) The documentary evidence relating to the transfers of SCP and SAP quotas and IACS registrationtogether with the accountant’s letter supporting these transfers.

[152] The evidence of Kenneth Sinclair was credible and should be accepted by the court. By contrast, the evidence had disclosed that the position of John Sinclair was neither consistent nor reliable. Reference was made to the evidence of John Sinclair as recorded at paragraph [49] of the court’s Note in application SLC/23/07, where Mr Sinclair is recorded as having said that he had not obtained the consent of the Commission for a let of the crofts to Kenneth, that the Commission had told him that the tenancy would have to be advertised and that he had “simply been making an enquiry” in any event. The evidence in the present case clearly demonstrated that an application for consent for a let to Kenneth had been made, granted and the decision to grant notified. The reference in that paragraph to a “sub-let” was significant; it tended to show that John Sinclair had thought that this was a matter he could enter into and back out of at his own choosing if he was not happy.

[153] There was also an inconsistency about the way in which John Sinclair had approached these matters. Up until the resumption application of 2005 had been lodged he had never made any attempt to distinguish between the 7.5 acre area and the steadings, on the one hand, and the rest of the ground, on the other. One would have expected him to have said something about that at the rent-fixing hearing.

[154] Another issue related to the use and occupancy of the steading buildings. The evidence showed that all of these buildings were part of the subjects let and had been handed over in total and without reservation in favour of the landlord of any sort. What there had been was a personal arrangement between the parties whereby Kenneth Sinclair allowed his father to keep items of personal property within the buildings being let. In terms of rights, there was no formal sharing of occupancy and what had happened was that everything had been handed over to Kenneth but Kenneth, as a personal favour, had allowed his father to carry on making some use of the subjects. It was a personal, “family”, arrangement on top of the formal lease but it did not give Mr Sinclair Senior any rights.

[155] In Mr Sutherland’s submission, the evidence demonstrated an agreed lease of agricultural subjects anticipated to run for an indefinite period of time and with rent payable in accordance with a formula.

[156] Asked by the court whether it was critical to the case being made that the court accepted Mr Sinclair’s evidence as to payment of rent in accordance with this formula, Mr Sutherland confirmed that that was critical to his primary case.

[157] Asked by the court as to the possible complication alluded to by Mr Maclean at the outset, regarding the possible crofting status of the steading buildings, and as to Mr Sinclair’s evidence on that subject, Mr Sutherland said that Mr Sinclair had always had it very clearly fixed in his mind that all of the property was croft property. Because it had only been late in the day that John Sinclair had asserted that it was not, Kenneth Sinclair had found that a very difficult proposition to accept. Legally, there was absolutely no doubt as to the non-crofting status of the 7.5 acres and as far as the steadings were concerned it had been John Sinclair’s evidence previously that these were not part of the croft and there was nothing to show that his evidence on that had been wrong. So, although the argument had been run late in the day, John Sinclair did appear to be correct about that.

[158] Mr Sutherland then turned to his secondary case. It involved a Morrison-Low v Paterson1985 SC (HL) 49 type of case. When application SLC/16/01 had been settled, apart from the fixing of fair rents, on the basis of the Joint Minute which is production 25 that had been done on the basis that the subjects included the 7.5 acre area and the steading buildings. So, since the very start an agreement had been in place which covered these subjects. A rent for the whole subjects had in due course been fixed by the court. There had been a mistaken understanding that the 7.5 acre field and the steading buildings were subject to the crofting legislative regime but that did not matter.

[159] The commencement date of the agreement had been 30 November 1998 and the rent payable under it was, to begin with, ten BSP payments per annum and, later, the rent fixed by this court. When it had been realised, or decided, that the croft land let to Kenneth Sinclair did not include the 7.5 acre field or the steading buildings, the court had, in effect, adjusted the rents payable in respect of the relevant crofts in its computation of the purchase price payable for them in terms of sec 14(1) of the 1993 Act.

[160] Because the 1998 agreement had been entered into in ignorance of the true status of the 7.5 acre field and the steading buildings, the rent attributable to them was unknowable. But that did not mean that there was no lease in place. An analogy was the lease of a tenement building with houses on top of a shop and it turning out that because of different statutory regimes applying to the two types of property the rent originally agreed for the whole building required to be apportioned. That would not mean that there had not previously been a lease of the whole building and its constituent parts. It would simply mean that a mechanism would have to be found for identifying the rent payable in respect of the shop. In this case the court had already carried out that exercise in terms of its Note of 8 January 2009 in application SLC/23/07. If John Sinclair took the view that that rent was too low, because it had been calculated with reference to rents payable under crofting, and if he could not agree a revised rent with Kenneth Sinclair, his remedy was to seek a determination of the rent payable for the subjects as agricultural holdings under the relevant provisions of the 1991 Act.

[161] So far as actual payment of rent was concerned, Kenneth Sinclair had tendered the rent fixed by the court and the fact that John Sinclair had refused to accept it was of no consequence.

(ii) for the respondent

[162] In Mr Maclean’s submission the application fell to be dismissed. In SLC/23/07 the applicant had sought to persuade the Court that the steading and the 7.5 acres formed part of the croft land tenant by him as croft tenant. The warrant for his occupation of these subjects was the Joint Minute in application SLC/16/01, in terms of which it had been agreed that he was the tenant of the croft and that the tenancy had commenced in November 1998. The Court had decided that these two areas did not in fact form part of the croft land tenanted by the applicant. It had found as a matter of fact that the 7.5 acre field was not croft land but it had not made any finding that the old steading did not have croft status. The present application proceeded on the basis that if the disputed subjects were not croft land they must be held by the applicant on a 1991 Act tenancy.

[163] On a proper analysis both of the applicant’s cases sought to set up a Morrison-Low v Paterson type tenancy and both were doomed to failure. They were fundamentally misconceived.

[164] It was axiomatic that if land was subject to crofting tenure it was not open to parties to proceed to let it on a 1991 Act tenancy. So it was a necessary preliminary to the setting up of a Morrison-Low type tenancy to show that the subjects were not croft land. It was unclear what the applicant’s position was in relation to the steading buildings. On both his primary and secondary cases he was relying on the Joint Minute and the Joint Minute in terms applied to the crofts at Lochussie. The applicant’s case seemed to involve the extension of the Joint Minute to what was not croft land and any such attempt was misconceived.

[165] In terms of onus, it was for the applicant to prove on the balance of probabilities that he had been admitted to possession of these areas and that he had paid rent for that possession, distinctly and separately from the croft land and that consensus had been reached between him and the respondent as to the four cardinal elements of a lease. The respondent did not have to prove anything. The respondent was entirely entitled to put the applicant to his proof on all of these matters and the applicant had failed to prove, (a) consensus as to rent, (b) actual payment of rent, and (c) that the applicant had ever exercised exclusive possession of the old steading or the 7.5 acre field.

[166] It was difficult to understand either of the applicant’s positions. His pleadings were wholly unspecific as to what the case being made was to be and we had been in the dark about that until Mr Sutherland’s closing submissions.

[167] One thing which was clear was that the applicant’s primary case depended upon acceptance of the applicant’s evidence in relation to the rent which he said had been agreed. On that critical matter the applicant’s evidence had been wholly incredible and that was enough to dispose of that case.

[168] So far as the secondary case was concerned, when Mr Sutherland started his submissions he seemed to be saying that the starting point of the lease was 2001. If that was the starting point the secondary case was doomed to failure because, on the applicant’s own evidence, there had been a hiatus in the payment of rent and, in particular, no rent had been paid after 2001 until the rent had been fixed by the court in 2005.

[169] But in the development of the secondary case the starting point seemed to “lurch back” to November 1998. Despite that, an attempt had been made to found on the tendering of rent by the applicant. But that had not happened until the court had fixed the rent in 2005 and the period covered by the subsequent “payments” was 2005 to 2009. This “last minute, last gasp” attempt to found on these payments was also doomed to failure because on a Morrison-Low v Paterson analysis in 2005 the applicant and respondent were severely at odds as to what, if anything, was tenanted by the applicant and the circumstances could not therefore give rise to the irresistible inference that the parties had agreed to the relationship of landlord and tenant in relation to the subjects in question.

[170] At this point we allowed Mr Sutherland to intervene to clarify his position as to the rent payable. The rent identified in 1998 had been a global rent and at the time neither party had considered apportionment of that rent to be appropriate. That rent had been superseded by the rent fixed by the court in 2005. That rent in turn had subsequently been apportioned by the court with the result that a rent had now been identified for the agricultural holdings tenancies. There was no need to project that back to 1998. If there had been arrears of rent prior to 2005, these had prescribed. So the court was concerned only with looking at the current rent. In Glen v Roy (1882) 10 R 239 the court had decided that where there was occupancy but it was not clear exactly what level of rent was payable, there was an inference that the rent would be the appropriate market rent.

[171] In Mr Maclean’s submission in reply, there was a difficulty with the concept of relying, as a means of determining rent for land which was not in fact subject to crofting tenure, on rent which had been fixed by the court on the basis of sec 6(3) of the 1993 Act.

[172] Mr Maclean then took us through the requirements of establishing a Morrison-Low type tenancy. Reference was made to the speeches of Lord Fraser of Tullybelton at page 75 and Lord Keith of Kinkel at page 78. These showed that there had to be an inescapable inference that a tenancy had come into existence. That was a high test; Strachan v Robertson-Coupar 1989 S.L.T. 488, at pages 490-491.

[173] The immediate problem in the present case was which statutory regime would be applicable and which would found the terms of the lease. The applicant was attempting to set up an agricultural holdings lease by reference to an agreement which was in terms an agreement in respect of croft land.

[174] So far as what had happened in 1998 was concerned, there had been nothing to stop John Sinclair changing his mind about re-letting the croft to Kenneth. So far as what was intended to be let was concerned, the implication of some of the questioning of Mr MacVicar and Mrs Dennis was that it had been for John Sinclair to point out that the 7.5 acres and the steading were not croft land but Mr Sinclair had been under no such obligation. His position in the 2008 proof (in application SLC/23/07) had been that he was going to retain some land and some cattle and that had been borne out by the evidence in the present case.

[175] As to exclusive possession, under reference to what is said in Commercial Components (Int) Ltd v Young 1993 S.L.T. (Sh. Ct.) 15 at page 17 about the significance, in terms of exclusive possession, of ponies belonging to the pursuers grazing on the fields with which that case was concerned, the absence of exclusive possession was a feature of this case also.

[176] In Bell v Inkersall Investments Ltd 2006 SC 507 at paragraphs [23] and [24] the Lord Justice-Clerk had referred to a misunderstanding of the law as contained in Morrison-Low. In the present case, while there was no document constituting the lease, there was a document evidencing the constitution of the lease, namely the Joint Minute. The Joint Minute referred to the let of the crofts so it could not provide a warrant for the applicant’s possession of the steading area and the 7.5 acres as an agricultural holding under the 1991 Act.

[177] Against the background of these cases, what was being looked for were facts giving rise to an irresistible inference of the existence of a lease. The evidence had to be of agreement. That agreement had to cover the four cardinal elements of a lease; parties, subjects, rent and duration, Gray v University of Edinburgh1962 S.C. 157. Morrison-Low fell to be distinguished in a number of ways: in that case there had been no disagreement as to subjects, rent or possession and no history of disputes between the parties. That there was no need for express agreement for the constitution of a lease of an agricultural holding did not mean that there was no need for an agreement at all. Occupation alone was not enough.

[178] Under reference to Earl of Ancaster v Doig 1960 SC 203, at pages 209-210, Mr Maclean submitted that what the applicant was seeking to do in the present case was engraft onto an agreement for lease of croft land a tenancy of an agricultural holding. There had to be evidence of such an agreement. If the applicant could not prove that a rent had been agreed and paid he could not succeed in proving such agreement.

[179] Mr Maclean then turned to the evidence. As to the credibility and reliability of Mr MacVicar, Mrs Dennis and Mr Mackenzie, there was no issue. One might question the relevance of their evidence but that was all.

[180] The position of Kenneth Sinclair was different. His evidence about the entries in his Account Book showing payments to John Sinclair and the nature of these payments as being truly rental payments calculated by reference to ten BSPs was utterly implausible and fell apart under scrutiny. Similarly his attempts at explaining away the evidence which suggested that, while all the paperwork had come to be in Kenneth’s name, John Sinclair had retained a beneficial interest in 10 cows and followers for a significant period after 1998 and was getting payment for them from Dingwall Mart until 2001 were utterly unconvincing. His evidence that his father had sold cattle for him for some reason when he himself had sold cattle of his own through the same ring on the same day was also implausible.

[181] The applicant’s position as to whether his father had retained any animals had changed overnight. On the first day of his evidence he had said that his father had retained none. Next day he had said that his father had retained calves. Additionally he had been unable to explain productions 58, 59 and 60, ultimately claiming that they were fabrications. The applicant’s position had dissolved under pressure and he had become wholly unspecific, vague, desperate and blustering. When documents which were contrary to his position had been put to him his evidence had become permeated with expressions of puzzlement and unbelief. His carefully constructed case had fallen apart under scrutiny.

[182] In relation to consensus as to subjects let, looking at the evidence it could not be said that there had ever been any true consensus on that matter.

[183] In relation to the payment of rent, the applicant’s evidence as to the level of rent agreed and how and when it was to be paid was inextricably linked. If we were not satisfied with his evidence as to the three payments which he had identified as payments of rent because of the discrepancies between the dates on which these payments had been made and the dates on which rent was said to be due and the discrepancies between how these payments had been recorded in the Cash Book and how other payments of rent had been recorded and because of the fact that this mechanism for arriving at a rent had not once come to light in a decade of litigation, all of that would undermine his claim that he and his father had agreed that the rent should be calculated by reference to ten BSPs. If there was no consensus as to rent, no lease of the crofts, never mind the non croft land, had come into existence in November 1998. The rent payable for a croft was the rent “fixed at the date of the letting” in terms of sec 6(1) of the 1993 Act. The Land Court had no power to fix the rent for parties at the date of the letting; Bridger v Roger 1966 SLCR App 59. If there was no consensus as to rent at the outset, no lease of a croft could come into being.

[184] Furthermore, if there was consensus as to what the rent was to be but no rent was ever paid, there was no basis for a Morrison-Low type tenancy having been established from 1998. Where rent was neither tendered nor paid the Morrison-Low situation in which one was able to draw an inference of a lease could not arise. Here there had been a hiatus of payments from 2002 to 2004. So far as the situation beyond 2004 was concerned, the issue of whether payment by cheques which were not cashed was enough to set up a Morrison-Low type tenancy was one which we did not have to address for the simple reason that after that point in time it could not set up a 1991 Act tenancy because of sec 1(2) of the Agricultural Holdings (Scotland) Act 2003. That was why the applicant’s secondary position did not simply seek to establish the existence of a tenancy from 2004-2005 onwards. Beyond that it could only be a limited duration tenancy. The applicant had perilled his case on setting up a 1991 Act tenancy.

[185] Although it was not, therefore, necessary to go into the authorities as to whether the tendering of payment sufficed if the cheques were not cashed, Mr Maclean submitted, under reference to Leggat Brothers v Gray 1908 SC 67 and Glasgow Pavilion Ltd v Motherwell (1903) 6 F 116, that the underlying obligation was not discharged by tendering.

[186] Turning to possession, mere possession on its own meant nothing; Earl of Ancaster v Doig supra. Parties here had been at odds as to the existence of any tenancy since 2000. There was evidence that items belonging to the respondent were still in the old house. The applicant had sought and obtained interdict (of use by his father of the buildings) qua crofter. The interdict had therefore been obtained on an erroneous basis. Possession obtained in that way was not relevant possession for the purposes of a Morrison-Low tenancy. The interdict proceedings were redolent of disagreement rather than consensus.

[187] In any case possession had never been exclusive. The evidence that after 30 November 1998 the respondent continued to have a beneficial interest in stock grazing the 7.5 acres was compelling. The respondent’s position, per paragraphs [13] and [14] of our decision of 29 October 2008 in SLC/23/07 was consistent with 37.2 units of SCP quota being made over to Kenneth Sinclair yet only 18 cattle and 18 units having been sold to him. It was, therefore, no coincidence that the payments recorded were for ten cow premium payments.

[188] The considerations which in the 2008 case made it unlikely that the respondent would have let the steading were even more compelling in relation to the possibility that he had granted the let of an agricultural holding.

[189] The application therefore failed in fact and law and should be dismissed. Expenses should be reserved in accordance with out usual practice.

(iii) response for applicant

[190] Mr Maclean had fundamentally misunderstood the case he had to meet. So far as the primary submission for the applicant was concerned, the case was that there was an express contract of let agreed between the parties verbally witch was put into effect from 30 November 1998. To that, Morrison-Low v Patersonhad no application whatsoever.

[191] So far as the applicant’s secondary case and the Joint Minute were concerned, the Joint Minute was itself a contract and as such had to be interpreted and understood in the context of the circumstances in which it had been concluded and the intention of the parties at the time. Having regard to all the evidence, what was understood by parties was that it was to apply to the 7.5 acres and the steading building and that was acted upon by both parties going to court for a determination of the rent, although there had been a misunderstanding that crofting legislation applied to the whole area. What we had to look at was what area of ground was intended to be covered by the agreement of 1998 and the Joint Minute.

[192] There was nothing to prevent a landlord and tenant from entering into a contract to let ground when some of it was subject to crofting tenure. For example, if parties entered into a lease of 10 acres of land and it was subsequently found that five acres were subject to crofting, that would not invalidate the lease. Here the applicant was not saying that there were two separate agreements. There was a single agreement applying to the whole land. The fact that part of the land was subject to crofting tenure and part not did not matter. Mr Maclean had said that it was the system of law applicable which would determine the terms of the lease, but, generally speaking, parties were free to enter any agreement subject to any applicable statutory regime and, in particular, there was no authority that a single agreement could not encompass both land which was to be held as an agricultural holding and land which was subject to crofting. It was inaccurate to say that the statutory regime applicable would determine the terms of the lease; the statutory regime may modify the terms of the lease but that was all.

[193] The closest he had come to saying that Morrison-Low v Paterson applied was in relation to the applicant’s secondary case, which he had said was more analogous to Morrison-Low. The only point he was taking from that case was the point made by Lord Fraser of Tullybelton at page 75 to the effect that an agreement could be evidenced by actings. In the present case there was evidence of a verbal agreement and evidence of actings after 30 November 1998. The application for the consent of the Crofters Commission to the re-let was evidence of an intention to enter into a lease and the evidence of the payments of £4,000 was evidence of having done so.

[194] So far as payment of rent was concerned, it was possible for there to be a lease even if no rent at all was paid. The fact that, in a given situation, rent was not actually paid did not mean that there was no lease. So the hiatus in the rent payments was irrelevant. The contract had already come into being.

[195] So far as the tendering of rent from 2005 onwards was concerned, Mr Sutherland made reference to Gill at paragraph 17.13, where payment of a demand for rent under sec 22(2)(d) of the 1991 Act is being discussed, to the effect that tendering of payment within the two months period in that situation was regarded as sufficient compliance with the demand, notwithstanding the rule emanating from Glasgow Pavilion Ltd v Motherwell and Leggat Brothers v Gray.

[196] In Commercial Components (Int) Ltd v Young it had been part of the agreement entered into that the landlord would be allowed to keep a horse on the land and the tenant’s rights had, therefore, been qualified to that extent. Here the evidence was that the tenant was getting the buildings outright, in his own right, and that the arrangement with his father for his father’s use of the buildings was purely personal. Although there had been some references by Mr Maclean to John Sinclair having kept stock on the 7.5 acres there had been no evidence to that effect. The only evidence as to the use made of that area had come from Kenneth Sinclair and had been that it was under crop rotation and currently under silage.

[197] As to the applicant’s evidence being undermined by the fact that no mention of the original rent was made in the course of the application to the court for the fixing of a fair rent, it was implicit from the fact that such an application was being made that the applicant thought it reasonable that the rent be re-determined.

[198] Mr Sutherland’s final point was to do with the accounts produced on behalf of the respondent. These suggested that John Sinclair had told his accountants at the time that he was carrying on trading under his own name, notwithstanding that the IACS and quota transfers had taken place. That may be consistent with John Sinclair having changed his mind, or thinking he was entitled to do so, after 30 November 1998. But if the court accepted that an agreement of the kind described by the applicant had been entered into at that time it did not matter what John Sinclair had done after that date.

Decision

[199] The applicant seeks to establish the existence of 1991 Act tenancies. It seems to be common ground between the parties, although it was not spelt out to us, that if leases of the subjects, entered into at any time prior to the coming into force of sec 1 of the Agricultural Holdings (Scotland) Act 2003, are proved these will be leases to which the 1991 Act applies.

[200] In order to prove the existence of a lease the applicant requires to prove consensus as to the four cardinal elements of a lease; parties, subjects, duration and rent, Gray v University of Edinburgh (supra).

[201] Before turning to what we have found admitted or proved, we would make the following general observations as to the context within which this dispute has arisen. We do so because we have found attempting to understand that context helpful in the fact-finding exercise which we have had to carry out.

[202] What we are dealing with here is an originally amicable family arrangement which has gone sour for reasons not disclosed in the evidence.

[203] Because the arrangement was originally an amicable one, there was no need to dot the i’s and cross the t’s at the outset. Certainly care was taken to seek the consent of the Crofters Commission to the proposed let, to see to it that the transfer of quota for SCP and SAP purposes and of land for IACS purposes were properly attended to, and to have a valuation of the items changing hands prepared. But, as between the parties themselves, neither of them saw the need to formalise their agreement or spell it out in detail. There was no need to do so while all was well but the fact that it was not done means that there is plenty of room for doubt on certain critical issues now that things have turned out badly. We think that, in an attempt to deal with that problem, there has subsequently been an element of re-writing of history on both sides, in the way of reading into the agreement of November 1998 matters which, if they were in contemplation at all at that time, were certainly not the subject of explicit agreement.

Credibility and reliability

[204] Mr MacVicar, Mrs Dennis and Mr Mackenzie were all speaking to uncontroversial matters and we considered all of them to be credible and reliable.

[205] The person whose credibility and reliability matters is Kenneth Sinclair. We have therefore assessed his evidence very carefully.

[206] The impression we have of Mr Sinclair is of a man who considers himself to have been wronged by his father’s change of mind. Unsurprisingly, he feels very strongly about the position in which he finds himself. He is, it would appear, an excellent crofter and, like many good farmers and crofters, happier out working on the crofts than he is when having to deal with the fine detail of administration, book-keeping and the like. Making allowances for these things, we have accepted much of his evidence as credible and reliable. For instance, on the issue of whether his father ever intended him to have the 7.5 acre area, we have preferred his evidence to the position taken by his father. But we have been unable to accept his evidence in relation to the critical question of rent having been agreed with his father. That is for the reasons given at paragraph [210] below. That is what we are referring to as the re-writing of history in his case.

[207] John Sinclair did not give evidence but we think that in the position he has taken in the relation to the 7.5 acre area he too has been re-writing history. We explain that below.

[208] Against that background, we have found the following matters admitted or proved:-

(i) At some time prior to November 1998 John Sinclair and Kenneth Sinclair came to an agreement, the general import of which was that John Sinclair would transfer his crofting operations to Kenneth and would grant Kenneth tenancies of the crofts 10 - 12, 13 & 14 and 15 & part 16 Lochussie, of which John Sinclair was then owner occupier.

(ii) The following things were done in furtherance of that agreement;-

(a) Kenneth Sinclair accepted an offer of redundancy from his job at Muir of Ord Distillery.

(b) John Sinclair applied to the Crofters Commission for their consent to let the crofts to Kenneth and arranged for Mrs Marina Dennis to visit Lochussie so as to demonstrate to her, as the local area commissioner, the bona fide nature of the proposed transaction.

(c) Both parties cooperated with the subsequent visit by Agricultural Officers from the Department of Agriculture and Fisheries for Scotland, Mr David MacVicar and Miss Shirley Adamson, who reported favourably on the application to the Commission. Their recommendation was endorsed by Mrs Dennis as a result of her own visit.

(d) On 10 November 1998 John Sinclair’s then accountant, Mr Alistair Mackenzie, issued a letter to the Department intimating that Mr Sinclair was to retire from farming on 30 November 1998 and that " all holding interests and quotas [were to] be transferred to Kenneth Sinclair".

(e) On 13 November 1998 the parties executed applications for the transfer of IACS registration and the whole cattle and sheep quotas held by John Sinclair to Kenneth. These documents, productions 53, 54 and 55 respectively, were subsequently lodged with the relevant authorities. In terms thereof 99 hectares of land, 138 units of Sheep Annual Premium and 32.7 units of Suckler Cow Premium were to be transferred to Kenneth Sinclair. Said transfers took effect as from 30 November 1998.

(f) On or around 28 November 1998 said application was granted by the Crofters Commission.

(g) At or around the time that all this was going on, the parties also instructed Mr Rod Mackenzie of the Dingwall Mart to carry out a valuation of the stock, quotas, and implements which were to be purchased by Kenneth. That valuation was carried out on 12 December 1998 and production 56 is an Inventory and Valuation proceeding thereon. The stock valued comprised 18 Charolais Cross cows and one Charolais bull, 145 North Country Cheviot sheep and three rams; the quota valued comprised 18 units of Suckler Cow Premium quota and 115 units of Sheep Annual Premium quota and the implements valued comprised the whole agricultural implements on the subjects.

(h) Kenneth Sinclair took occupation of the crofts.

(iii) Although John Sinclair made over to Kenneth Sinclair his whole cattle quota he sold only 18 head of cattle to Kenneth. He retained, beyond 30 November 1998, a beneficial interest in at least 10 head of cattle although entitlement to any premium payment on these animals had passed to Kenneth.

(iv) Although most of the work on the crofts was done by Kenneth Sinclair after 30 November 1998, he was assisted by his father and both men worked well and amicably together until at least some time in the year 2000. As part of that amicable arrangement the ten head of cattle of which John Sinclair retained beneficial ownership ran with the rest of the stock.

(v) As to the extent of the subjects to be let to Kenneth in terms of the foregoing agreement, the 7.5 acre area was included but the steadings were not. After 30 November 1998 Kenneth Sinclair had occupation and use of the 7.5 acre area in the same way as he had occupation and use of the crofts.

(vi) On several occasions between November 1998 and June 2000 the Crofters Commission wrote to John Sinclair referring to their approval of his application and asking him to confirm whether he had effected the let to Kenneth. Production 32, dated 10 May 2000, is one of these letters. Attached to it is a notification slip with a question as to the annual rent payable. John Sinclair did not reply to these letters but in a telephone conversation with one of the Commission’s staff on 9 June 2000 he informed the Commission for the first time that he “wanted to preserve the status quo” (see production 27). The Commission having asked him to confirm the position in writing, Mr Sinclair wrote to them on 14 September 2000 (production 31) saying “I write to confirm that I am no longer going to relet the crofts 10-16 Lochussie as I have 4 sons and it can cause resentment in the family so I shall remain owner occupier until the day (I kick it).”

(vii)  (a) No rent was ever agreed between the parties in respect of Kenneth Sinclair’s occupation of the subjects.

(b) However, over a number of payments, which included his redundancy payment from his former employers and a number of payments of £4,000 referred to in said Cash Book, made between November 1998 and the end of 2000, Kenneth Sinclair paid John Sinclair at least the full amount of £ 31,235.00 brought out in Rod Mackenzie’s valuation of the stock, quotas and implements.

(viii) When it became apparent to Kenneth Sinclair that his father was not going to follow through with letting of the crofts to him, he took legal advice and, on 12 February 2001 raised application SLC/16/01 asking this court to determine whether he was the tenant of the crofts at Lochussie belonging to John Sinclair and, if so, to fix fair rents for these crofts.

(ix) The declaratory part of the crave in that application was settled by Joint Minute lodged with the court on 29 November 2001, in terms of which it was agreed that Kenneth Sinclair was “the tenant of the Crofts at Lochussie belonging to the Landlord Respondent and that the tenancy commenced on 30 November 1998”.

(x) The Divisional Court dealing with that application then proceeded to prepare records and fix rents for all three crofts. In terms of its order of 28 February 2005, it fixed a rent of £1,995 per annum for croft 13 and 14. In doing so, it regarded both the steadings and the 7.5 acre area as parts of that croft.

[209] Certain of these findings require explanation because of their significance in terms of the outcome of the case.

[210] The most critical of them is our finding that parties never agreed a rent. It is fatal to the applicant’s primary case. We have made that finding because we have been unable to accept Kenneth Sinclair's evidence as to the rent he says he agreed with his father and because there is no evidence of any other agreement. We have been unable to accept Kenneth Sinclair’s evidence on this because of (a) the unusual nature of the arrangement, (b) the fact that this is the first mention of any such arrangement in the long history of litigation between the parties, (c) the mismatch between the dates upon which payments of the rent were to be made, according to Kenneth Sinclair himself, and the dates upon which the payments which he claims were payment of rent appear in his Cash Book, (d) the fact that these payments are not treated in the same way in the Cash Book, in terms of the column to which they are allocated, as other payments of rent in respect of other subjects, (e) the availability of an alternative explanation for these payments as being payments of Suckler Cow Premium to John Sinclair in respect of the ten head of cattle retained by him, and (f) the generally vague and unconvincing character of Kenneth Sinclair's evidence on this matter.

[211] We acknowledge that it would be extremely surprising if, in discussing the sort of arrangement which the parties had in contemplation in November 1998, the question of rent had not arisen. When parties had gone to the trouble of organising everything else in a business-like way it would be surprising if the matter of rent was overlooked. This is an aspect of the case which may be explicable on the basis suggested at paragraphs [202] and [203] above; that this having been an amicable arrangement they had simply never got round to agreeing a rent before they fell out.

[212] That is speculation. But there is another piece of evidence which has a significant bearing on the question of rent. That is that there is no mention of a passing rent in the Divisional Court's Note fixing fair rents for the crofts. That is strongly suggestive of no rent having been agreed. The passing rent is normally one of the first things the court wants to know when asked to fix a rent. This silence is all the more surprising since at page 3 of the court’s Note Kenneth Sinclair gives evidence of the rent he was paying in respect of other crofts, at 4 to 8 Lochussie, and at page 5 John Sinclair gives evidence of the level of rent he had been paying for the crofts in the 1970s, before he bought them. It is this silence as to a passing rent in 2001, when application SLC/16/01 was raised, and in 2005, when it was finally decided, that persuades us that we should go as far as to make a positive finding that no rent was agreed rather than leave matters on the basis that no agreement has been proved.

[213] Although they are less critical to the outcome of the case, we should also explain the basis for our findings that John Sinclair retained the beneficial ownership of cattle after 30 November 1998 and that the subjects to be let included the 7.5 acre area but not the steadings.

[214] So far as the first is concerned, we have considered it appropriate to make that finding, notwithstanding that John Sinclair has not given evidence in this application, on the basis of the documentary productions 14,15, 16, 58, 59, 60. These productions were not formally spoken to in evidence but it is our practice in this court to have regard to productions, whether formally spoken to or not, which have been referred to in evidence and the authenticity of which has not been challenged. In the present case, Kenneth Sinclair in his evidence challenged the veracity of the contents of productions 14 and 15 (his father’s sets of accounts for 1999 and 2000) in the most robust terms. But since his position on these documents would require us to accept that his father had instructed the preparation of false accounts at a point in time when there was no apparent reason to do so – because things had been proceeding amicably for most of 1999 and 2000, and even towards the end of that period he seems to have regarded himself as entitled to change his mind about the let to Kenneth in any event – we do not accept his evidence on the status or content of these productions. Kenneth Sinclair also cast doubt on productions 58, 59 and 60 (the documentation from Dingwall Mart apparently showing the sale of animals in his father’s name after 29 September 1999), contending that his researches had established that no animals had passed through the Dingwall Mart in the name of John Sinclair after that date. However, we did not understand the authenticity of these documents ultimately to be challenged. Certainly no opportunity was sought, in the way of an adjournment, for evidence to be led to show that these documents were something other than that which they bear to be. In the absence of a satisfactory alternative explanation - and no such explanation was advanced by Kenneth Sinclair in his evidence - we consider that we are entitled to hold that John Sinclair did indeed go on having a beneficial interest in cattle at Lochussie beyond November 1998 and in particular during the years 1999 and 2000.

[215] So far as the second is concerned, we reach that conclusion on the basis of Kenneth Sinclair’s evidence on the matter, which we believe, and John Sinclair’s silence on the matter in application SLC/16/01. That application included the 7.5 acre area and John Sinclair took no issue with that at any time. Reviewing the history of the subsequent litigation between the parties, the exclusion of the 7.5 acres is mentioned for the first time in John Sinclair’s resumption application, SLC/195/05. When we decided SLC/23/07 we excluded the 7.5 area from the subjects we authorised Kenneth Sinclair to acquire under sec 13(1) of the 1993 Act simply because it was not croft land. At paragraph [196] of our Note of 29 October 2008 we said that this area appeared to be tenanted by Kenneth Sinclair but that because it was not croft land which he was entitled to apply to acquire under sec 12(1) we could not authorise its acquisition. Our finding in fact above, although not the conclusion in law at which we arrive below, accords with all of that.

[216] So far as the steadings are concerned, we held in application SLC/23/07 that these were not included in the subjects let to Kenneth Sinclair for the reasons set out at paragraphs [199] to [201]. We have heard nothing in the present case to cause us to depart from that view. We think the truth of the matter is that while things were amicable both parties were very happy to share the use of these buildings. Now that matters are no longer amicable and it becomes necessary to analyse the legal rights of the parties, we adhere to the view already expressed.

[217] With that explanation of our decision in relation to the crucial facts in the case, we now turn to the law.

The applicant’s primary case

[218] The finding that there was no agreement as to the rent payable for the subjects to be let is fatal to the applicant’s primary case, as Mr Sutherland accepted, and that case therefore fails.

The applicant’s secondary case

[219] Turning to the applicant’s secondary case, the starting point is the Joint Minute lodged in application SLC/16/01 on 29 November 2001.

[220] We have no doubt that when that Joint Minute was entered into it was intended to include the 7.5 acre area. That is simply because (i) the area covered by the application included the 7.5 acres, (ii) it was never argued by John Sinclair that the croft did not include the 7.5 acres, and (iii) the Joint Minute is not qualified in any way as to the geographical extent of the land to which it applies.

[221] The Joint Minute is, however, qualified in another sense - on its terms - since it refers to "the Crofts at Lochussie belonging to the Landlord Respondent". The significance of that is that, whatever the intentions of the parties, it cannot be taken as extending to land which was not in fact croft land. That is because what is and what is not croft land has to be determined by applying the statutory definitions of a croft and is not dependent upon the intentions of parties.

[222] The Joint Minute having been entered into without anything having been said about the different status of the 7.5 acre area, the court proceeded to fix a rent for croft 13 & 14, inclusive of that area. Just as, however, parties could not competently create a crofting tenancy over what was not croft land by Joint Minute, the court could not competently fix a rent under section 6(3) of the 1993 Act for land which was not croft land. To the extent to which it purported to do so in its order of 28 February 2005, the Divisional Court dealing with application SLC/16/01 therefore unwittingly acted ultra vires.

[223] The consequence of that, it seems to us, is that by February 2005 a rent for the 7.5 acres had neither been agreed nor fixed by a competent rent determination process.

[224] Mr Sutherland invited us to arrive at a rent by a process of deducting from the rent fixed by the Divisional Court for the whole croft the reduction in rent calculated by ourselves in respect of the 7.5 acre area in our decision of 8 January 2009 in application SLC/23/07. That seems to us however an artificial contrivance for arriving at a rent. It reflects neither the agreement of the parties nor the determination of rent by a proper rent determination process. What we were doing in our decision of 8 January 2009 was calculating the price to be paid by Kenneth Sinclair for the croft exclusive of the 7.5 acre area. That did involve us in making adjustments to the rent fixed by the Divisional Court so as to take account of the exclusion in fixing a purchase price for the croft proper. But it was not a process for the determination of the rent of the 7.5 acre area considered as an agricultural holding.

[225] As has been noted above, much was said in the course of submissions about the creation of a Morrison-Low v Patersontype of tenancy. We did not understand Mr Sutherland to be founding upon that case to any extent at the end of the day but we should say that we do not think either it or Strachan v Robertson-Coupar are helpful to the applicant. This is not a situation in which agreement falls to be inferred from the existence of the normal indices of a lease. Here we are satisfied that there was an agreement in terms of which John Sinclair was to let this ground to Kenneth Sinclair. But it was an incomplete agreement in that a rent for it was never agreed. There was then a determination of rent by this court under sec 6(3) of the 1993 Act in respect of the larger subjects of which this area was understood to form part. That could not in law have the effect of fixing a rent for land which was not croft land, this court having no jurisdiction to do that under sec 6(3). And finally, parties having fallen out and no rent ever having been paid, in the sense of having been tendered and accepted, the indices of a lease which might give rise to a Morrison-Low type tenancy are not present.

[226] Mr Sutherland also argued, under reference to the case of Glen v Roy (supra), that where there was occupancy but it was not clear exactly what level of rent was payable, there was an inference that the rent would be the appropriate market rate. Glen v Roy was a very different case. It concerned a claim by a creditor under a bond burdening a deceased person’s heritable property and the question was whether the occupant of the house in question, the son of the deceased, had occupied as tenant during his father’s lifetime. The presumption of the law, in that situation, was that he had (Lord Justice-Clerk Moncrieff at page 240) and it was, therefore, for the defender to prove that he was not the tenant; that he was, as was contended in that case, occupying rent free. That is a set of circumstances very far removed from two parties to an averred lease contesting the question whether a lease exists. There can be no question of presumption of a lease in such a case.

[227] The case which is more in point is Gray v University of Edinburgh (supra). Of the circumstances in that case Lord Justice-Clerk Thomson said (at page 163);-“Even if there may be circumstances in which parties can be said to have agreed on rent, if what they have done is to stipulate for a fair rent, or a reasonable rent, or a market rent, and to make it clear that they are agreed that the figure is to be fixed by the Court, or some other agreed machinery, that was not the situation here.” In the present case what the applicant argues, in terms of his secondary case and on the basis of the Joint Minute, is, essentially, an agreement that the rent would be fixed by the court. For the reasons already given we have decided that the court could not perform that function. It seems to us that what Lord Justice-Clerk Thomson is saying in the passage just quoted is that without such a mechanism an agreement to pay a “fair” or “reasonable” or “market” does not amount to consensus in idem as to the rent payable.

[228] Mr Maclean suggested that there may be a more fundamental problem about this court fixing a rent for the parties, even in respect of what was undoubtedly croft land. That was on the basis of sec 6 of the 1993 Act, Bridger v Roger 1966 SLCR Apps 59, and Agnew Crofting Law page 67, fn. 2.

[229] Sec 6(1) of the 1993 Act refers to the rent in the case of a croft let after the commencement of that Act being that “fixed at the date of the letting, unless and until that rent is altered in accordance with the provisions of this Act”. Subsec 6(3) says:-

“The Land Court may, on the application of the crofter or the landlord, determine what is a fair rent to be paid by the crofter to the landlord for the croft or for any part of the croft, and may pronounce an order accordingly; and the rent so fixed by the Land Court shall be the rent payable by the crofter as from the first terms of Whitsunday or Martinmas next succeeding the decision of the Land Court:

Provided that –

(a) where the rent payable for the croft or for any part of the croft has been fixed by the Land Court it shall not be altered, except by mutual agreement between the crofter and landlord, for a period of 7 years from the term at which it first became payable; and

(b) where a croft is let after the commencement of this Act, the rent for it or any part of it shall not be altered by the Land Court for a period of 7 years from the term at which it first became payable or for such longer period as may have been agreed upon between the crofter and the landlord.”

While the words of paragraph (b) of that proviso suggest that the Land Court is not to have a role in the fixing of a rent at the outset of a tenancy, the use of the word “fixed”, rather than “agreed”, in subsec 6(1) might suggest otherwise.

[230] Agnew, in the footnote referred to above, says “The Land Court has no power to fix the rent at the commencement of the let”. But the case cited as authority for that proposition does not go that far. In Bridger v Roger a landowner was proposing to let a number of vacant crofts to the applicant but the applicant was objecting to various terms and conditions of the proposed let. Accordingly there was no agreement between them that he was going to be the tenant. What the court held was that since he was not the crofter he had no status under the Crofters Acts and no title to apply to the Court to fix a fair rent. The Divisional Court which dealt with the case expressly said;-

“It is of course, competent for the proprietor of a croft and an offerer for the croft to agree that it shall be let at a fair rent to be fixed by the Court, but, if the landlord is unwilling, the prospective crofter has no legal right unilaterally to insist that the croft shall be let to him on that basis. Once he becomes the crofter by entering into a binding contract with the landlord, he can in due course apply to the Court under Section 5(3) of the 1955 Act – subject, however, to proviso (b) thereof – to fix a fair rent.”

Sec 5 of the Crofters (Scotland) Act 1955, upon which that case proceeded, was in substantially the same terms as sec 6 of the 1993 Act.

[231] The point was not pressed very far or argued very fully by Mr Maclean. If it is correct, it would have implications for what the Divisional Court did in the way of fixing rent in SLC/16/01. We do not require to express a concluded view on it in this case, but we are not to be taken as accepting it as correct.

[232] Without relying on that argument, therefore, for the reasons already given we have come to the view that there was no lease of the 7.5 acre area because there was no agreement as to rent nor as to a mechanism by which rent could competently be fixed.

[233] Mr Maclean also argued that there was no lease of this area for another reason. That was that Kenneth Sinclair had never been given exclusive possession of it. Although what we have already decided about rent is sufficient to dispose of the case so far as the 7.5 acre area is concerned, we should deal with that argument.

[234] Our view is this. Although John Sinclair’s retention of beneficial ownership of ten head of cattle after November 1998 clearly required that he should have use of the land for the purpose of keeping them, we have no doubt that the intention was that Kenneth was to be the tenant. Clearly, so far as the crofts are concerned, the Joint Minute was to that effect. We see no basis in the evidence for saying that the position was different in respect of the 7.5 acre area. Accordingly we would not have been inclined to hold that there was shared occupation of that area in a sense inconsistent with a lease in favour of Kenneth.

[235] So far as the steadings are concerned, we decided in SLC/23/07, for the reasons stated at paragraphs [199] and [200] of our Note, that there had never been an agreement to let the steadings to Kenneth Sinclair: that there had been no intention of including them from the start. Nothing we have heard in the present case alters that view. Although John Sinclair did not give evidence in the present case, Kenneth Sinclair acknowledged that as a matter of fact, although not entitlement on his father’s part, he and his father had shared the use of these buildings. That shared use was, of course, unproblematic while all was well and it is probably the case that no one gave very much thought to the strict legal position. Now that matters have gone so badly awry, it becomes necessary to determine the position. It seems to us that the agreement simply was for shared use of these buildings and we are unable to hold on the evidence that a lease of any sort was ever in contemplation, far less concluded, insofar as these buildings are concerned.

[236] If we are wrong as to that, however, the case in respect of the steadings fails for the same reasons to do with absence of consensus as to rent as apply to the 7.5 acres.

[237] Accordingly the application falls to be dismissed.

Expenses

[238] We have reserved expenses in accordance with our usual practice.

For the Applicant: Mr Robert Sutherland, Advocate
Messrs Macleod & MacCallum, Solicitors, Inverness

For the Respondent: Mr Iain Maclean, Advocate
Messrs Martin Mackay, Solicitors, Dingwall