Decision of the Scottish Land Court

Elizabeth Arabella Lewis (Applicant)
v
Shonagh Jane Hunter (Respondent)

Case reference SLC/150/17
before
Lord Minginish, Chairman, and John Smith
15 March 2019

Introduction

[1] This is an application to have the rent of Castleside Farm, Ashkirk, Selkirkshire determined under sec 13(1) of the Agricultural Holdings (Scotland) Act 1991 (“the 1991 Act”) as from Martinmas 2017.

[2] The application was received by the Court on 27 November 2017. However, having been perused by a member of the Court and the Principal Clerk it was considered to be deficient as to information in two respects which were drawn to the applicant’s agents’ attention by letter from the Principal Clerk dated 12 December 2017 in the following terms:

“Following its preliminary consideration of the [application] form, the Court has asked me to raise the following points with you:

1. It is noted that there is no reference in the Statement of Facts to the written notice required in terms of section 13(1) of the [1991 Act], as amended. Please lodge a copy of the notice in process. If no notice was served, it would appear that the application is not competent – see Gill, Agricultural Tenancies, 4th Ed., 2017 at paragraphs 27.43-45.

2. The Court does not consider that the application, as presently drafted, provides sufficient detail for the tenant to be able properly to answer it. The Statement of Facts refers to 3 comparables but provides no information about them and does not explain how the rent sought is calculated. A revised Statement of Facts setting out details of named comparables and explaining the calculation and adjustment made to reach the figure of rent sought will require to be lodged before the Court will issue any order for answers.”

[3] On 5 April 2018 the Court received from the applicant’s agents an amended Statement of Facts which made good some, but not all, of the deficiencies in the original application. In particular it did not enclose a copy of the notice referred to in sec 13(1) but the amended Statement of Facts referred to a notice of rent review having been issued to the tenant on 24 November 2017, which would, of course, be far too late for a rent review at Martinmas that year.

[4] On 9 April 2018 the Principal Clerk wrote to the applicant’s agents bringing this to their attention. This produced an emailed response on 12 April 2018, attaching the notice which had been served which was in fact dated 24 November 2016. The reference to 2017 in the amended Statement of Facts was explained as a “typo”. A revised Statement of Facts was lodged with the mistake corrected. On 13 April 2018 the Court ordered intimation of the revised and corrected application and this was effected on the same date.

[5] On 27 April 2018 the respondent’s agents wrote to the Court with a motion for the dismissal of the application because the Court had not received an application in proper form until 13 April 2018 and it was, therefore, late because it had not been lodged before the rent review date; Gill, ibid para 27-48, Graham v Gardner 1966 SLT (Land Ct) 12. Both parties have agreed to the disposal of this motion on the basis of written submissions and Mr Lean, for the respondent, amplified the grounds of his motion by letter dated 18 June 2018.

[6] The case was subsequently – by order dated 1 August 2018 – sisted on the unopposed motion of the applicant’s agents pending the outcome of irritancy proceedings between the parties. The irritancy case (SLC/121/18) has now been abandoned and the applicant’s agents have enrolled a motion to recall the sist.

Discussion and decision

[7] The motion for the respondent throws up two issues; (i) whether an application for a determination of rent under the 1991 Act as presently in force (that is to say before the new Schedule 1A introduced into the 1991 Act by sec 101 of the Land Reform (Scotland) Act 2016 becomes operative) requires to be lodged before the rent review date and (ii) if so, whether this application, given its original deficiencies, can be said to have been lodged timeously.

[8] In relation to the first of these issues, we proceed on the basis that the law is as stated in Gill supra although we note, and share, the doubts cast on the reasoning in Graham v Gardner by the Court, chaired by the Deputy Chairman, in Cawdor Farming Number 1 Partnership v The Cawdor Maintenance Trust (SLC/151/16, decision of 21 May 2018) at paras [34]-[39]. So we proceed directly to the question whether this application was received in time.

[9] In order to consider Mr Lean’s argument it is necessary to set out the content of Rules 3, 4 and 7 of the Rules of the Scottish Land Court 2014:

“Making an application: general

3. (1) An application must be in, or as nearly as may be in, the appropriate form and is made by lodging it with the Principal Clerk.

(2) The court may provide a form special to a kind of application; and if it does then, for the purposes of paragraph (1), that form is the appropriate form for that kind of application.

(3) An application must comply with the requirements of any statutory provision under which it is brought.

(4) An application does not fail to be a valid application for the purposes of any statutory provision solely because it does not comply with all, or any, of the requirements of these rules.

Content of application

4. An application must –

(a) identify the applicant clearly and any special capacity in which the applicant is acting;

(b) provide the name and details of any agent acting for the applicant;

(c) give a full postal address and postal code for communication with the applicant or agent, together with any appropriate email address and a telephone number for such communication;

(d) list the persons who to the applicant’s knowledge may have an interest to respond to the application and provide sufficient detail (including, where reasonably ascertainable, the persons’ full postal addresses and postal codes) –

(i) for the nature of the interests to be identified by the Principal Clerk; and

(ii) to enable those persons to be clearly identified and to receive due intimation in terms of these rules;

(e) adequately identify the land in issue (and in so far as practicable include an address for that land);

(f) state clearly what the court is being asked to do or decide;

(g) set out the facts and circumstances relied on in support of the application in short concise numbered paragraphs; and

(h) provide such information as may be requisite for the purposes of any relevant statutory provision.”

“Inadequate or defective applications

7. (1) If the Principal Clerk is not satisfied that an application gives full specification of all matters specified in rules 3 and 4 she may –

(a) accept the application;

(b) accept the application under reservation; or

(c) place it before the court.

(2) Where an application is placed before the court, the court may determine that it be accepted or accepted under reservation, or, after hearing the applicant, may determine that it be rejected.

(3) Where an application is accepted under reservation –

(a) it is to be intimated to the named respondents;

(b) they and the applicant are to be advised that it will be sisted until the applicant provides information sufficient to satisfy the Principal Clerk that the application can be accepted without reservation; and

(c) any respondent may move to have the sist recalled.

(4) Without prejudice to any statutory provision, an application accepted under reservation is to be taken as having been received on the date on which it was first lodged with the Principal Clerk.

(5) Where an application is rejected following procedure under paragraph (2), it is to be taken to have been accepted for the purposes of any appeal from the determination that it be rejected.”

[10] It will be seen that Rule 7 only comes into play where the Principal Clerk is not satisfied that the application gives full specification of all matters specified in rules 3 and 4. We have, therefore, considered to what extent the application received on 27 November 2017 did so. Having done so, the following emerges:

i. It was in the appropriate form;

ii. It identified the applicant clearly;

iii. It provided the name and details of the applicant’s agents, both her solicitor and her factor;

iv. It listed and gave sufficient detail of the only other person with an interest in the application, viz the respondent;

v. It adequately identified the land as “the Holding of Castleside Farm, Ashkirk, Selkirkshire TD7 4PF”;

vi. It stated clearly what the Court was being asked to do or decide, viz “determination of the rent for the Holding … from and after Martinmas 2017 pursuant to Section 13(1) of the Agricultural Holdings (Scotland) Act 1991”; and

vii. It set out, in 13 short, concise, numbered paragraphs, the facts and circumstances being relied upon in support of the application (whether those were adequate to support the application is a separate question).

The only thing which it did not do, therefore, was to provide, in terms of Rule 4(h), “such information as may be requisite for the purposes of any relevant statutory provision”, in that it failed to aver the service of the notice referred to in sec 13(1) of the 1991 Act.

[11] Mr Lean’s point is that, since the application was not intimated until 13 April 2018, it could not have been accepted, or accepted under reservation, in terms of Rule 7 and if it was not accepted it could not be said to have been lodged and it therefore fell foul of Graham v Gardner.

[12] That is, however, to confuse the lodging of the application with its acceptance by the Principal Clerk or the Court as being in a fit state to be intimated to the respondent. It is also to run the risk of substituting the Court’s requirements in terms of processing the application for the requirements of the primary legislation as to what constitutes a valid application.

[13] It will be helpful here to remind ourselves of the purpose of Rules 3, 4 and 7. Their purpose is to act as a filter to sift out patently incompetent applications and to bring to light shortcomings in the pleadings which might, with advantage, be corrected before the application is intimated. The current Rules are relatively recent (2014) and it is within the memory of some members of the present Court that Rule 4 was devised very much with rent review cases in mind. It was thought that by insisting, or attempting to insist, on, for example, details of comparable holdings and their rents being provided at the outset time and expense could be saved later. It was felt that there was no point in ordering answers to an application which was so devoid of relevant information that the respondent could not make a meaningful response. But they were not intended to add to the requirements of primary legislation (nor could they competently do so) as is expressly stated in Rule 3(4) which says that “[a]n application does not fail to be a valid application for the purposes of any statutory provision solely because it does not comply with all, or any, of the requirements of these rules”.

[14] So Mr Lean’s argument, so far as based on our Rules, fails and we must look instead at the requirements of sec 13(1) itself. It is in the following terms:

“13. (1) Subject to subsection (8) below, the landlord or the tenant of an agricultural holding may, whether the tenancy was created before or after the commencement of this Act, following notice in writing served on the other party, have determined by the Land Court the question what rent should be payable in respect of the holding as from the next day after the date of the notice on which the tenancy could have been terminated by notice to quit (or notice of intention to quit) given on that date.”

The question is whether the failure to refer to (and produce) the written notice is fatal to the application’s validity from that perspective?

[15] We see no reason to give sec 13(1) such a restrictive meaning. It is true that only a landlord or tenant who has served the notice in writing which is there referred to is empowered to ask the Court for a determination of rent but the subsection does not say that the application must aver the service of such a statement from the outset. If the fact is that a notice has been served, as turned out to be the case here, the landlord (or tenant) is empowered to make the application for determination to the court. If the fact is that no notice has been served, the Court would be entitled to reject the application but, if it did not, the case would fall at the next hurdle in any event, when its competency and relevancy was challenged. But the basic point is that sec 13(1) does not require the application to refer to the service of a notice in writing ab initio. That is a defect which can be cured later. So Mr Lean’s case, in so far as based on sec 13(1), also fails and his motion has been refused and answers have been ordered.