Decision of the Scottish Land Court

The Cawdor Farming No. 1 Partnership (Applicant) v The Cawdor Maintenance Trust (Respondents)

Case reference SLC 151/16
before
Iain F Maclean, Deputy Chairman, and John A Smith
21 May 2018

Note

[1] The Applicant and the Respondents are respectively the Tenant and the Landlords of those parts of the Cawdor Estate, Nairnshire known as the Delnies Unit and the Moyness Unit (hereinafter “the holding”). On 24 November 2015, Messrs Bowlts, Chartered Surveyors, on behalf of the Landlords, gave notice to the Tenant in terms of section 13 of the Agricultural Holdings (Scotland) Act 1991, as amended, “that your Landlords will have determined by the Scottish Land Court the rent to be paid for the [above] holding from and after the term of Martinmas 2016 being the next ensuing term at which they could terminate the tenancy by Notice to Quit, given at this date.” On 28 November 2016, the Land Court received an application at the instance of the Tenant for an order “determining the question what rent should be payable in respect of the holding … as from the next day after 28th November 2016.” The Tenant contends in the application to the Land Court that, upon review, the passing rent for the holding should be reduced.

[2] In response, the Landlords’ agents, invoking rule 17 (Orders concerning preliminary or procedural points) of the Rules of the Scottish Land Court 2014 (“the 2014 Rules”), asked the Court to determine, on the basis of parties’ written submissions, the competency of the Tenant’s application, the Landlords’ argument being that a party who did not serve notice under section 13(1) of the 1991 Act is not entitled subsequently to apply to have the Land Court determine the question what rent should be payable in respect of the holding. There are in dependence before the Land Court two other applications (RN SLC/149/16 and RN SLC/150/16), involving the same parties and focusing the same preliminary issue, presently sisted to await our decision in this application. Although the Tenant’s agents indicated that they too would be content for the competency point to be dealt with by way of written submissions, having considered the contents of the written submissions and lists of authorities subsequently lodged by parties’ agents, we concluded that there was here a substantive issue of law of some difficulty to be decided, upon which we would both wish and require to be addressed by parties’ procurators. On 27 November 2017, we heard in debate Robert Sutherland, Advocate, instructed by Messrs Gillespie Macandrew LLP, Solicitors, Edinburgh, for the Landlords, and Sir Crispin Agnew of Lochnaw Bt., QC, instructed by Messrs Turcan Connell, Solicitors, Edinburgh, for the Tenant. The submissions we heard traversed a further argument, developed on behalf of the Landlords in a supplementary written submission that was duly responded to in kind by the Tenant’s agents, that the Tenant’s application to the Land Court was incompetent because it asked the Land Court to determine the rent to be paid from a date that was inconsistent with section 13 of the 1991 Act, the terms of the Lease, and the terms of the notice given by the Landlords’ agents on 24 November 2015, which notice in any event was spent as at the date (28 November 2016) the application to the Land Court was made. After setting out the legislative history and applicable terms of the relevant statutory provision, we shall consider these twin prongs of the Landlords’ challenge to the competency of the Tenant’s application to the Land Court for an order determining the question what rent should be payable in respect of the holding as from the next day after 28th November 2016 in turn.

Section 13 of the 1991 Act

[3] As originally enacted, subsections (1) and (2) of section 13 (Variation of rent) of the 1991 Act provided that:

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

(2) On a reference under subsection (1) above, the arbiter shall determine, in accordance with subsections (3) to (7) below the rent properly payable in respect of the holding as from the “next day” mentioned in subsection (1) above.”

Under the 1991 Act, then, the new rent was to be determined by reference to arbitration, but since section 13 of the 1991 Act was amended by section 94 of and paragraph 15 of the Schedule to the Agricultural Holdings (Scotland) Act 2003 (“the 2003 Act”), that jurisdiction has been exercised by the Land Court.

[4] The changes to section 13(1) of the 1991 Act contained in paragraph 15(a) of the Schedule to the 2003 Act were:S

“(i) for the words from “by” in the first place where it appears to “of” in the third place where it appears there is substituted “have determined by the Land Court”; and

(ii) the words from “, and” to the end are repealed”.

Thus, section 13(1) of the 1991 Act, as amended by the 2003 Act, provided that:

“(1) Subject to subsection (8) below, the landlord or the tenant of an agricultural holding may, whether the tenancy was created before or after the commencement of this Act, by notice in writing served on the other party, demand a reference to arbitration of 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, and the matter shall be referred accordingly.”

Paragraph 15(b) of the Schedule to the 2003 Act amended section 13(2) of the 1991 Act to the extent that “for the words from the beginning to “arbiter” there is substituted “In relation to such a question, the Land Court”.

[5] In seeking to substitute the Land Court for the arbiter, the 2003 Act amendments, inadvertently, threatened to render the statutory machinery for variation of rent unworkable. As was explained by the Full Court in Morrison-Low v Paterson’s Executors 2005 SLCR 5 at page 8,

“Because the first reference to “notice” which appeared in the original version had been deleted, the word “notice” when it first appeared in the second version had no ascertainable meaning. Thus, a rent could be fixed but it was impossible to say from what date it was to run. The whole provisions of the section thus had no practical meaning.”

It was suggested that it was likely that this difficulty had arisen:

“because the draftsman has failed to observe that the word “notice” where it first appeared in section 13 in the 1991 Act, served two practical purposes. It gave notice of a desire to change the rent as well as notice that this matter would be determined by arbitration. An unfortunate feature of much of the language relating to determination of rent is that it is couched in terms of the Court simply fixing a figure. It does not reflect the implicit position that this will be the outcome of contested litigation. The legislation contains no explicit acknowledgement of the primary expectation that parties will attempt to resolve the amount of rent by negotiation. Litigation in court, like arbitration, is unnecessary if there is agreement. It may be observed that the notice under the 1991 Act did not, of itself, trigger an arbitration. In practical terms, its primary purpose was to give notice of an intention to do something about the rent. In removing all reference to notice as if it was simply part of the machinery for arbitration, the draftsman has accidentally made the clause unworkable. Meaning can be restored by acknowledging the obvious need for notice of intention to have a change of rent [at pages 9-10].”

[6] Proceeding on the basis, as agreed by parties, that the Scottish Parliament had not intended to make any change in the law or procedure in respect of the machinery for review of rent other than to alter the jurisdiction from arbitration to the Land Court, the Full Court held that, as a matter of statutory construction, it was entitled to read section 13(1) of the 1991 Act “in a way which allows it to follow as closely as possible the intention of that section prior to amendment.” This entailed reinserting a provision similar to that which had been omitted:

“There is, of course, no question of “demanding” a reference to the Court. The function of the preliminary notice is simply to give intimation of an intention to apply to have the question of rent determined by the Court. In short, we consider that we can best reflect the original provision – except in relation to jurisdiction – if we treat the Act as if the provision inserted by paragraph 15 had been: “following notice in writing served on the other party, have determined by the Land Court [at page 13].”

[7] Article 5 of the Public Services Reform (Agricultural Holdings)(Scotland) Order 2011 (SSI 2011 No. 232) (“the 2011 Order”), which came into force on 22 March 2011, subsequently amended section 13, “to reinstate the wording that was deleted by paragraph 15 of the Schedule to the 2003 Act, to clarify that intimation of intention to make such a referral to the Land Court must be made by written notice”: see the Explanatory Note to the 2011 Order. Section 13(1) of the 1991 Act, both as at the date of the Landlords’ notice and when the Tenant applied to the Land Court, was in the terms:

“(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.”

It is worthy of note that in adopting the form of wording suggested by the Land Court in Morrison-Low v Paterson’s Executors, Article 5 did innovate on the terms of section 13(1) of the 1991 Act as they had stood prior to the deletion effected by paragraph 15(a)(i) of the schedule to the 2003 Act: the word “following” appeared in place of the word “by”.

[8] Section 13 of the 1991 Act is prospectively amended by section 101 of the Land Reform (Scotland) Act 2016 (“the 2016 Act”), which, when it comes into force, will make radical changes to the law and practice of rent review in relation to 1991 Act tenancies. Section 101(2) of the 2016 Act substitutes for the existing section 13 of the 1991 Act a new Schedule 1A to the 1991 Act which makes provision for review of the rent payable in respect of an agricultural holding. For present purposes, it is sufficient to note that under these prospective changes, it is expressly provided for in paragraph 1(1) of Schedule 1A that the landlord of an agricultural holding, and in paragraph 1(2) of Schedule 1A that the tenant of such a holding, may initiate a review of the rent that is to be payable in respect of the holding by serving a rent review notice (paragraph 1(3)) on the other. Paragraph 4(2) of Schedule 1A stipulates that the person who served the rent review notice may withdraw it but only with the consent of the recipient of the notice. Paragraph 5 of Schedule 1A provides that a rent review notice ceases to have effect on the earliest of the following—(a) the date it is withdrawn, (b) the date the landlord and the tenant reach agreement as to the rent that is to be payable in respect of the holding, (c) where no referral is made to the Land Court under paragraph 6(2), the day after the rent agreement date, (d) where a referral is made to the Land Court under paragraph 6(2), the date on which the Land Court determines under paragraph 7(2) the question of what the rent payable in respect of the holding is to be. Paragraph 6(2) of Schedule 1A, which applies where (a) a rent review notice is served under paragraph 1, and (b) no agreement has been reached between the landlord and the tenant as to the rent that is to be payable in respect of the holding, expressly states that the landlord or the tenant of the holding may (whether the sender of the notice or not) refer the question of what the rent payable in respect of the holding should be to the Land Court. Paragraph 6(3) of Schedule 1A however provides that such referral may not be made after the “rent agreement date”, which by paragraph 2(1)(e) of Schedule 1A is the date by which the landlord and the tenant must reach agreement as to what the rent payable should be, and which must be stated in the rent review notice. Paragraph 2(3) of Schedule 1A provides that for the purposes of sub-paragraph (1)(e), the rent agreement date stated in the rent review notice must not fall—(a) earlier than 12 months from the date on which the notice is served, or (b) later than 2 years from that date.

[9] It follows from the above that had Schedule 1A of the 1991 Act been in force and its contents applicable to the circumstances of the present case, the Landlords’ initial competency argument would have been rendered untenable, given that paragraph 6(2) explicitly addresses that very point, insofar as it provides that the landlord or the tenant of the holding may (whether the sender of the notice or not) refer the question of what the rent payable in respect of the holding should be to the Land Court. The question then is whether the same result obtains under the currently applicable legislation. In the interests of completeness, we would note that section 101 of the 2016 Act was brought into force on 23 December 2016 by Regulation 2 of and the Schedule to The Land Reform (Scotland) Act 2016 (Commencement No. 3, Transitory and Saving Provisions) Regulations 2016 (SSI 2016 No. 365), but that only for the purpose of enabling the Scottish Ministers to make regulations under paragraphs 2(4), 9(1) and 10(6) of Schedule 1A to the 1991 Act.

The Landlords’ initial competency argument

[10] The Landlords’ initial competency argument, directed towards securing dismissal of the Tenant’s application, may be quite shortly stated. It is contended that section 13(1) of the 1991 Act is quite clear in its terms. Service of a notice in terms thereof is merely a preliminary step, the first stage of a two-stage process, the function of which is to notify the other party that the party serving the notice may proceed to the second stage of making an application to the Land Court to have the rent determined with effect from a future date specified in the notice, but service of such a notice does not oblige the party who has served notice to do so. On a proper construction of section 13(1) of the 1991 Act, only a party who has served notice in terms of section 13(1) of the 1991 Act is entitled to have determined by the Land Court the question what rent should be payable in respect of the holding, and that by making an application to the Land Court in appropriate form. The notice under section 13(1) of the 1991 Act was not a “trigger” that set in motion the statutory procedure for rent review because it did not contain any words commanding or obliging the party who served it to have the Land Court determine the rent. Whereas section 13(1) of the 1991 Act as originally enacted had concluded with the words “and the matter shall be referred [i.e. to arbitration] accordingly”, those words had been removed when section 13(1) of the 1991 Act was first amended, by paragraph 15(a) of the Schedule to the 2003 Act, and had not been re-instated when the Scottish Parliament revisited this statutory provision. A notice under section 13(1) of the 1991 Act in effect was no more than a statement of present intent, from which the party who served it might subsequently choose to depart; given the timescales involved, with the notice having to be served not less than one year nor more than two years before the review date, it was quite understandable that the legislation might allow for such an outcome. Much could happen over such a time period, not least that the parties succeed in agreeing a new rent, thereby rendering it unnecessary for a party who had served notice under section 13(1) of the 1991 Act to make an application to the Land Court.

[11] The prospective changes to the law and practice of rent review contained in paragraphs 4(2) and 6(2) of the new Schedule 1A to the 1991 Act, to the effect respectively that the person who served the rent review notice may withdraw it only with the consent of the recipient, and that either the landlord or the tenant may refer the question of what the rent payable in respect of the holding should be to the Land Court, whether the sender of the notice or not, would not have been necessary if the currently applicable law had been to the same effect.

[12] The Tenant’s characterization of the Landlords’ position as one of seeking to withdraw the preliminary notice they had served was misconceived. At no time had the Landlords sought to withdraw that notice: they had merely opted not to proceed with an application to the Land Court to have it determine the question what rent should be payable in respect of the holding as from the “next day” mentioned in section 13(1) of the 1991 Act, as they were quite entitled to do. The decision of the County Court on the corresponding English legislation in Buckinghamshire County Council v Gordon (1986) 279 EG 853, and the endorsement it had received in the leading English textbooks on agricultural law, should not be regarded as determinative of the issue presently before us. That case was distinguishable on its facts as well as proceeding upon differently worded legislation, and the ensuing decision of His Honour Judge Barr was not binding upon the Scottish Land Court and should not be followed. It was significant, in this regard, that the Rt. Hon. Lord Gill, in Agricultural Tenancies (4th Ed.; 2017), at paragraph 27-46, after noting, under reference to that English County Court decision, that “a notice for arbitration on rent cannot be withdrawn without the consent of the other party”, merely comments that “The point has never been put to the test in Scotland.”

The Tenant’s rejoinder to the Landlords’ initial competency argument

[13] The Tenant’s argument is that, analogous with the position with regard to notices to quit, notices of intention to quit, notices of dissolution of partnership and dismissal and resignation notices, a notice under section 13(1) of the 1991 Act cannot be withdrawn unilaterally by the party who served it, and that either party to a lease may rely, and act, upon it by making an application to the Land Court for a rent review. If, contrary to that primary submission, it be competent for the party who served the notice under section 13(1) of the 1991 Act unilaterally to withdraw it, then up until the point at which the notice is withdrawn, it remains open to the other party to so rely, and act, upon it. Here, the Landlords’ notice under section 13(1) of the 1991 Act had not been withdrawn before the Tenant’s application to the Land Court was made. In section 13(1) of the 1991 Act as it presently applies, the right was conferred on “the landlord or the tenant”, “following notice in writing served on the other party”, to have the rent determined by the Land Court. The reference to notice “served on the other party” linked back to either the landlord or the tenant in the sense that one of them will have served the notice “on the other party”, but it is still open to either of them to have the question of what rent should be payable determined by the Land Court. Had it been the intention of the legislature that only the party who served the notice could apply to the Land Court, then this could easily have been made clear. It cannot have been the intention of the legislature that both parties should always have to serve notice under section 13(1) of the 1991 Act. The service of such notice was generally a prelude to negotiations: It would be illogical if, where negotiations were going badly for the party who served the notice, that party could stymie the rent review process simply by declining to make an application to the Land Court.

[14] The reasoning of the County Court in England in Buckinghamshire County Council v Gordon was persuasive and should be followed in Scotland, to the extent of holding that once notice has been served, under section 13(1) of the 1991 Act, it triggers a rent review process that can only be brought to an end by parties agreeing, or the Land Court determining, the new rent. If, as was held in that case, such a notice cannot be withdrawn, that would tend to confirm that either party may rely on the notice and either seek the appointment of an arbiter in England or make an application to the Land Court in Scotland. There was no real distinction to be drawn between the different statutory provisions under consideration, and the contents of the entirely new scheme for rent review provided for in Schedule 1A to the 1991 Act were of no assistance in construing section 13(1) of the 1991 Act. It was ironic that it was only in the dying days of section 13(1) of the 1991 Act, following what Sir Crispin described as Lord Gill’s “enigmatic” comment, appearing for the first time in the 4th edition of his book, that the point had never been put to the test in Scotland, that the reliability of the decision in Buckinghamshire County Council v Gordon as a guide to the position under Scots law had been called into question, against the grain of what Sir Crispin claimed was a “settled practice” of acceptance in Scotland since 1986 of the applicability of the principle that once a notice under section 13(1) of the 1991 Act had been served, the party who had initiated the rent review procedure could not stop it without the other party’s consent. In construing section 13(1) of the 1991 Act, he suggested, we should take that history of what he claimed was settled practice into account. In the foregoing circumstances, the Landlords’ rule 17 application should be dismissed and the Tenant’s application permitted to proceed, with the Tenant being afforded the opportunity to adjust the application to give notice of the facts upon which the Tenant relied to make out the case for the reduction in rent being sought.

Discussion

[15] As we read section 13(1) of the 1991 Act, it seems to us to be tolerably clear from both its grammar and its wording that what it contemplates is that whereas it is open to either party to the lease to serve notice under section 13(1) of the 1991 Act on the other party, it is only a party who has served notice who may, following service of the notice on the other party, make an application to the Land Court. We agree with the view expressed by the Full Court in Morrison-Low v Paterson’s Executors, op. cit., that “[t]he function of the preliminary notice is simply to give intimation of an intention to apply to have the question of rent determined by the Court”, and we see nothing in the terms of section 13(1) of the 1991 Act to support the argument that a party who serves notice under section 13(1) of the 1991 Act is precluded from withdrawing it, if so minded. Sir Crispin referred us to a number of cases in which it had been held that other forms of notice could not be withdrawn unilaterally by the party who had served them, but we do not consider these cases to be in point, because here, the issue is not whether the Landlords withdrew their notice but whether the Tenant was entitled to rely on it in applying to the Land Court.

[16] Further, and in any event, we do not consider that a notice under section 13(1) of the 1991 Act is in any sense analogous to the forms of notice which featured in the cases to which we were referred, being notices of intention to quit (Gilmour v Cook 1975 SLT (Land Ct) 10); notices to quit (Gilmour v Osborne’s Trustees 1951 SLCR 30; Freeman v Evans [1922] 1 QB 36); notices of dissolution of partnership (Jones v Lloyd (1874) LR 18 Eq 265; and see also the discussion in Miller on Partnership (2nd Ed. by Gordon H. Brough; 1994) at page 455); and notices of resignation or dismissal (Willoughby v CT Capital plc [2012] ICR 1038). The factor common to all of these notices, which distinguishes them from a notice under section 13(1) of the 1991 Act, is that they operate to terminate the contractual relationship between the parties. A notice under section 13(1) of the 1991 Act is served in the context of an ongoing contractual relationship and, by itself, in our view, does little more than preserve for the party who served it the option of having recourse to the Land Court to determine the question what rent should be payable in respect of the holding as from the next day mentioned in section 13(1) of the 1991 Act, should such recourse prove necessary because the parties have been unable to agree the same. Notices under section 13(1) of the 1991 Act are frequently referred to by rural professionals as ”protective” for this reason: whilst the vast majority of rent reviews ultimately are resolved amicably by negotiation between the parties, without proceedings before the Land Court, the statutory requirement for any party who wishes to preserve that option, to have first served notice under section 13(1) of the 1991 Act, under the same timetable as a notice to quit or a notice of intention to quit, being not less than one year nor more than two years before the date on which the tenancy could have been terminated by such notice, means that many such notices are served that are never followed up by an application to the Land Court.

[17] Where neither party to a lease timeously serves notice under section 13(1) of the 1991 Act on the other party in advance of the next possible review date, it is reasonable to assume that both parties were sufficiently content with the passing rent to forego the option of invoking the statutory procedure for effecting a variation of rent provided by section 13 of the 1991 Act. Where one party to a lease has served notice under section 13(1) of the 1991 Act, but the other has not, the obvious inference to be drawn from those two facts is that the party who has served notice is minded to seek a variation of the rent as at the next review date, but that the party who has not served notice under section 13(1) of the 1991 Act is content with the passing rent and perceives no need for a review. We do not profess to understand the Tenant’s argument that it “cannot have been the intention of Parliament that both parties should always have to serve notice under section 13(1) of the 1991 Act”: clearly, a party to a lease who is content with the passing rent and sees no need for a review will have no reason to serve notice under section 13(1) of the 1991 Act, but if a party wishes to retain, at his or her own hand, the option of obtaining a determination from the Land Court of the question what rent should be payable in respect of the holding as from the next review date, the only means of so doing is for that party to serve notice under section 13(1) of the 1991 Act. One party to the lease will not necessarily know, before the last date for service of a notice under section 13(1) of the 1991 Act in advance of the next review date, whether the other party will serve such a notice, and where one party has served notice, the other party has no control over whether that party does indeed, in due course, apply to the Land Court or opts instead simply to let the notice lapse. Given that a party to a lease who has served notice under section 13(1) of the 1991 Act is under no obligation to follow it up with an application to the Land Court, the other party to the lease is not entitled to assume that this will happen, and in such circumstances, we see nothing objectionable in a construction of section 13(1) of the 1991 Act which holds that only a party who has served notice under section 13(1) of the 1991 Act is in right subsequently to apply to the Land Court, and that a party who opted not to do so is not entitled to “piggy-back” on the other party’s notice. Although it was suggested on behalf of the Tenant that we should take into account that the parties had been in discussion about the rent to be paid for the holding, and indeed that when the Landlords served the notice dated 24 November 2015, the parties were in the midst of negotiations about the rent in respect of a previous review period (that from 28 November 2013 onwards), we are not persuaded that such a consideration has any relevance to the legal point we have to decide.

[18] There is, in our view, a further consideration that militates against the construction of section 13(1) of the 1991 Act for which the Tenant argues. Section 13(4)(b) of the 1991 Act directs the Land Court, for the purposes of determining the rent payable for the holding under section 13(3) of the 1991 Act, to have regard to “the current economic conditions in the relevant sector of agriculture.” Such conditions may change in the period between the service of notice under section 13(1) of the 1991 Act and the instigation of rent review proceedings before the Land Court. It seems to us inequitable that a party who has chosen not to serve notice under section 13(1) of the 1991 Act should be able, at a later date, in the knowledge of such changes in economic conditions as may have occurred in the intervening period, to take advantage of a notice served by the other party to the lease, against whose interests the economic conditions may be perceived to have moved. On our preferred construction of section 13(1) of the 1991 Act, that potential inequity is avoided, with both parties being treated the same.

[19] In the interests of completeness, we would indicate that we are inclined to agree with Sir Crispin that, in the task of construing section 13(1) of the 1991 Act, the contents of the new Schedule 1A to the 1991 Act provide us with little by way of assistance. We would accept that it does not necessarily follow from the fact that the legislature has decided expressly to enact, for the future, both that the person who served the rent review notice may withdraw it only with the consent of the recipient, and that either the landlord or the tenant may refer the question of what the rent payable in respect of the holding should be to the Land Court, whether the sender of the notice or not, that such express provision would not have been required if the currently applicable law had been to the same effect. In any event, neither party volunteered any explanation of the thinking which informed the decision of the Scottish Parliament to include such provisions in the new Schedule 1A to the 1991 Act.

Buckinghamshire County Council v Gordon

[20] For all of the reasons given above, therefore, we would, absent persuasive authority to contrary effect bearing thereon, prefer the arguments of the Landlords on their initial competency point. The Tenant did, however, found strongly on the English County Court case of Buckinghamshire County Council v Gordon, whilst acknowledging that the decision was not binding upon us, and so in deference to the submissions we heard, we shall examine it in greater depth to see whether it causes us to alter our own initial views.

[21] The question of law for the County Court in Buckinghamshire County Council v Gordon, in a special case stated by an arbitrator, was whether a notice given under section 8(1) of the Agricultural Holdings Act 1948 (“the 1948 Act”) on 20 September 1984, demanding a reference to arbitration of the amount of the rent payable for the holding from 29 September 1985, could validly be withdrawn unilaterally by the landlord without the consent of the tenant, which the landlord had purported to do by letter dated 29 July 1985. The tenant had subsequently applied timeously for the appointment of an arbitrator. Section 8 of the 1948 Act provided that:

“(1) Subject to the provisions of this subsection, the landlord or the tenant of an agricultural holding may by notice in writing served on his tenant or landlord demand that the rent to be payable in respect of the holding as from the next termination date shall be referred to arbitration under this Act.

(2) On a reference under section (1) of this section the arbitrator shall determine what rent should be properly payable in respect of the holding at the date of the reference and accordingly shall, with effect from the next termination date following the date of the demand for arbitration, increase or reduce the rent previously payable or direct that it shall continue unchanged.”

His Honour Judge Barr, giving judgment, observed that:

“There is nothing in the Act expressly providing that a notice once given can be unilaterally withdrawn. Once a notice under section 8 has been given the parties may agree the rent when it would become unnecessary to have an arbitrator appointed. The only way in which a notice under section 8 expires is by the failure of either party to apply for the appointment of an arbitrator. Mr Earl for the landlord has argued that there is no provision in the Act preventing the landlord from withdrawing his notice. He has also argued that there is an analogy with the procedure in an ordinary action in the county court whereby a party may discontinue his proceedings. I do not consider that this is relevant. In my view the position is more analogous with the Landlord and Tenant Act 1954 and the Rent Acts than with civil proceedings. What all the Acts have in common is the protection of the tenant by security of tenure and control of rent. Restrictions are placed upon the rent that may be obtained and provision is made that disputes as to the amount of rent are to be determined by an appropriate body. In the case of agricultural holdings the determination is by an arbitrator. Mr Priday [for the tenant] is right in his submissions. Once the notice is given, that is a trigger which sets in motion the statutory procedure and the arbitrator will decide the rent unless the procedure is ended either by an agreement between the parties as to the rent or by a failure in due time to agree an arbitrator or to apply to the minister, and now the President of the Royal Institution of Chartered Surveyors, for the appointment of an arbitrator. Therefore I answer the arbitrator’s question in the special case by saying that the section 8 notice cannot be withdrawn unilaterally without the consent of the other party.”

[22] The decision of Judge Barr is cited by the leading English textbook Scammell, Densham & Williams, Law of Agricultural Holdings (10th Ed. By P.R. Williams , 2015) at paragraph 29.22 as authority for the propositions that “a demand for arbitration is a trigger notice which once given cannot be ‘ungiven’. The recipient is as entitled as the giver of the notice to rely upon it and to pursue the arbitration.” The author goes on to submit that “the decision is right, particularly if the recipient of the notice has taken some step to his detriment in reliance upon it, or has forgone a right, for example to give notice himself.” Interestingly, in the 9th Ed. (2007) of that work, Scammell and Densham’s Law of Agricultural Holdings, in the equivalent paragraph (25.6), a copy of which had been provided for us on behalf of the Tenant, it had been submitted that the decision was “clearly right”, but the word “clearly” is omitted from the more recent edition. We were referred also by Sir Crispin to the other leading English work on this subject, Muir Watt & Moss, Agricultural Holdings (14th Ed., 1998) at paragraph 11.1, in which the question whether a demand for arbitration as to rent could be withdrawn by the party making it without the consent of the other was addressed in a footnote, in which it was observed that there was at present no superior court authority, but that the County Court judgment of Judge Barr was “persuasive.” Since we made avizandum, the 15th Ed. (2018) has been published. The case is cited at paragraph 13.2 as authority for the proposition, now incorporated into the body of the text, that “Once such a notice has been served it cannot be withdrawn without the consent of the other party.”

[23] Notwithstanding those endorsements, we have to say that we do not ourselves find the reasoning of Judge Barr so compelling as to cause us to depart from our own previously expressed views on the meaning and effect of the corresponding but differently worded Scottish legislation. The statement that there is nothing in the 1948 Act expressly providing that a notice, once given, can be unilaterally withdrawn does not advance the argument any more than it does to point out that is there is nothing in the 1948 Act expressly providing that a notice, once given, cannot be unilaterally withdrawn. Judge Barr’s observation that, once a notice under section 8 of the 1948 Act has been given, the parties may agree the rent, when it would become unnecessary to have an arbitrator appointed, is unexceptionable, but his assertion that the only way in which a section 8 notice would expire is “by the failure of either party [our emphasis] to apply for the appointment of an arbitrator” merely assumes that a party who has not himself served notice nevertheless may apply for the appointment of an arbitrator on the back of the other party’s notice. Conspicuously absent from the judgment is any reasoned explanation as to why it should be that a notice for arbitration on rent cannot be withdrawn without the consent of the other party, which is the proposition for which the case is cited as providing authority.

[24] We do not find the analogy drawn by the landlord with the procedure in an ordinary court action, in which a party may choose to discontinue his proceedings, particularly helpful in this context, but whilst Judge Barr considered the procedure for rent review under the agricultural holdings legislation to be more analogous with the Landlord and Tenant Act 1954 and the Rent Acts than with civil proceedings, we struggle to see how his exposition of what these other Acts have in common with the 1948 Act bears on the particular point at issue before him, as to whether a party who has served notice demanding a reference to arbitration of the amount of the rent payable for the holding may unilaterally withdraw it. More generally, and for our own part, we would not consider it apt to characterize the purposes of section 13(1) of the 1991 Act as being “the protection of the tenant … and control of rent.” Section 13(3) of the 1991 Act provides that for the purposes of section 13, the rent properly payable in respect of a holding “shall normally be the rent at which, having regard to the terms of the tenancy (other than those relating to rent), the holding might reasonably be expected to be let in the open market by a willing landlord to a willing tenant”, subject to a number of matters which the Land Court is either directed to disregard or to have regard. In our view, the open market test applied by section 13(3) of the 1991 Act is, in its operation, intended to be even handed as between the interests of the tenant and the landlord, and section 13 of the 1991 Act is not to be regarded as a measure solely for the protection of the tenant.

[25] Moreover, Judge Barr’s description of the section 8 notice as “a trigger which sets in motion the statutory procedure”, so that the arbitrator will decide the rent unless the procedure is ended by an agreement between the parties as to the rent, or the parties fail timeously to either agree, or engage the process for securing, the appointment of an arbitrator, is not, in our view, readily compatible with the existing Scottish legislative framework. We agree with Counsel for the Tenant that it is significant in this regard that in terms of section 8(1) of the 1948 Act, the landlord or the tenant “may by notice in writing served on his tenant or landlord demand that the rent to be payable in respect of the holding as from the next termination date shall [both our emphases] be referred to arbitration under this Act”. It is notable that this peremptory aspect is quite absent from section 13(1) of the 1991 Act, and without it, it becomes implausible to conceive of a notice under section 13(1) of the 1991 Act as “a trigger which sets in motion the statutory procedure”. Service of a notice under 13(1) of the 1991 Act is a necessary preliminary to having the Land Court determine 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, but we do not consider that it is apt to say that it itself sets a statutory procedure in motion: in our view, it is no more or less than a notice to the other party to the lease that the party who served it reserves the right to have resort to the Land Court at a subsequent date should this become necessary because agreement as to a new rent has proved elusive. If no application to have the Land Court determine the question of rent be made, the notice under section 13(1) of the 1991 Act will simply lapse, without any need for it to be formally withdrawn, whether unilaterally or otherwise.

[26] It is not for us to express a view on whether the decision of Judge Barr in Buckinghamshire County Council v Gordon is correct as a matter of English law: for present purposes, it is enough for us to say that we do not find its reasoning persuasive when applied to the case now before us, and the issue we have to decide. So far as the various authorial comments on the merits of that decision are concerned, we would content ourselves merely by observing that the opinion expressed in Scammell, Densham & Williams that “the decision is right, particularly [our emphasis] if the recipient of the notice has taken some step to his detriment in reliance upon it, or has forgone a right, for example to give notice himself”, as so stated, seems to us to subvert itself. If, as Judge Barr held, a notice demanding arbitration as to rent cannot, as a matter of law, be withdrawn unilaterally without the consent of the other party, his decision to that effect can scarcely be rendered “more correct” by the fact that the recipient of such a notice may have taken, or omitted to take, some step to his detriment in reliance upon it. An argument that the party who served the notice is personally barred from subsequently withdrawing it because of what the recipient of the notice did, or did not do, in reliance upon it, is a quite different argument from that which insists, on an a priori basis, that as a matter of law, such a notice cannot be withdrawn unilaterally. For the reasons we set out in paragraph [17] above, we do not consider that it would be tenable for a party to a lease who opted not to serve notice under section 13(1) of the 1993 Act, in the event that the party who did serve notice subsequently omits to apply to the Land Court, to argue that he was entitled to rely instead on that other party’s notice. With regard to Sir Crispin’s appeal to what he referred to as the “settled practice” of acceptance in Scotland since 1986 of the applicability, north of the border, of the ratio decidendi (reason of the decision) in Buckinghamshire County Council v Gordon, we would make three observations: (i) in the 2nd (1990) and 3rd editions (1997) of The Law of Agricultural Holdings in Scotland, the learned author merely noted that it had been held in the County Court that a notice of arbitration on rent cannot be withdrawn without the consent of the other party, expressing no view one way or the other on the merits of that decision; (ii) no example was cited to us of any previous application to the Land Court for rent review at the instance of a party who had not first served notice under section 13(1) of the 1991 Act; and (iii) even if there were, before the present application was made, a “settled practice” of acceptance in Scotland that, on a proper construction of section 13(1) of the 1991 Act, either party could rely on the other’s notice to make an application to the Land Court., such settled practice nevertheless may turn out to have been wrong: cf, e.g., Royal Bank of Scotland plc v Wilson 2011 SC(UKSC) 66.

[27] At the hearing, Mr Sutherland drew our attention to Personal Representative of the Estate of the late Dr. Cotton v Gardiner (28 November 1979), a decision of Judge Whitehead in Spalding County Court, unreported but noted in [1980] CLY 24. The note in Current Law Yearbook indicates that Judge Whitehead held, inter alia, and seemingly consistent with the view we have formed in relation to the position under section 13(1) of the 1991 Act, that “a s. 8 [of the 1948 Act] notice has no effect to alter or determine a tenancy and unlike a notice to quit may be withdrawn or waived (by the landlord not proceeding under it)”. The Estates Gazette report of the decision of Judge Barr in Buckinghamshire County Council v Gordon makes no reference to this case, and nor does it feature in any of the Tables of Cases of the textbooks on Agricultural Law herein cited. The efforts of the Supreme Courts library to obtain a copy of this judgment for us have proved unavailing, and so we are not in a position to take anything more from it than appears here.

[28] It follows from the above that we consider the Landlords’ initial competency argument to be well founded, and so we determine the preliminary point raised in their rule 17 application in their favour. Our decision on the Landlords’ initial competency argument being sufficient to dispose of the Tenant’s application, our thoughts on the second competency argument advanced by the Landlords are rendered somewhat academic, but as we heard full submissions thereon, and in case matters should go further, it is appropriate that we record those submissions, and indicate the views we formed of their merits.

The Landlords’ second competency argument

[29] The starting point of the Landlords’ second competency argument is that section 13 of the 1991 Act links the proposed variation of rent to the terms of the lease. Clause 2 of the Lease provides that:

“The tenancy shall commence on 17 September 2001 … (hereinafter referred to as “the Entry Date”) and shall subsist from the Entry Date to the term of Martinmas 2002, and shall thereafter continue on a year to year basis, unless and until terminated by either party on giving one year’s notice to the other. The rent payable by the Tenant shall be FIFTY POUNDS (£50.00) Sterling per annum for each acre of the Subjects (…) … payable by the Tenant to the Landlords (…) on 28 November and 28 May in each year, the first such payment being made on 28 November 2001 for the period from the Entry Date until that date and thereafter on 28 May 2002 for the preceding half year and so on half yearly thereafter …”

Here, the Landlords’ notice was dated 24 November 2015. Martinmas [28 November] 2016 was the next date after the date of the notice on which the tenancy could have been terminated by notice to quit (or notice of intention to quit). Any new rent thus would become payable with effect from Martinmas 2016. Consistent with the terms of both section 13 of the 1991 Act and Clause 2 of the Lease, the Landlords’ notice dated 24 November 2015 had provided that “your Landlords will have determined by the Scottish Land Court the rent to be paid for the … holding from and after the term of Martinmas 2016 being the next ensuing term at which they could terminate the tenancy by Notice to Quit, given at this date.”

[30] By contrast, the Tenant’s application, which sought an order determining the question what rent should be payable in respect of the holding “as from the next day after 28th November 2016”, asked the Land Court to determine the rent from a date [i.e. 29 November 2016] inconsistent with the terms of the Lease, and different from that specified in the Landlords’ notice dated 24 November 2015. Furthermore, the Tenant’s application having been received by the Land Court only on 28 November 2016, the Landlords’ notice dated 24 November 2015 was spent and the Tenant’s application was out of time. The language of section 13(1) of the 1991 Act was prospective. It was submitted, under reference to the decision of the Land Court in Graham v Gardner 1966 SLT (Land Ct) 12 and a decision of the English Court of Appeal (Sclater v Horton [1954] 2 QB 1) on the corresponding English legislation to similar effect, that it was a requirement of section 13(1) of the 1991 Act that the application to the Land Court be made before the date from which any new rent would become payable. A year being 365 days, a lease for one year from 28 November 2015 would terminate on 27 November 2016 the following year, although there was authority for the proposition that a notice to quit served against the actual anniversary of the ish date [i.e. 28 November 2016] would also be valid: Morrison’s Executors v Rendall 1989 SLT (Land Ct) 89 (but see the cogent criticism of that aspect of the decision in D.C. Coull, “Termination Date in a Notice to Quit”, at 1989 SLT (News) 431). Put simply, it was Counsel for the Landlords’ submission that if the new rent for the holding became payable from 28 November 2016, in conformity with the terms of both section 13 of the 1991 Act and Clause 2 of the Lease, then the application to the Land Court had to be made before 28 November 2016, i.e. on or before 27 November 2016. The underlying rationale of this approach to the construction of section 13(1) of the 1991 Act, applied to the particular circumstances of this case, is that were the tenancy to have been terminated by a notional notice to quit served against the anniversary of the ish date, the notional new tenant coming into the holding would have been entitled to take entry, and would be liable for the new rent as determined by the Land Court, from and after 28 November 2016.

The Tenant’s rebuttal of the Landlords’ second competency argument

[31] It was argued for the Tenant that section 13 of the 1991 Act provided a machinery which enabled the landlord or the tenant of an agricultural holding to have determined by the Land Court the question of 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.” Here, the date on which the tenancy could have been terminated by notice to quit (or notice of intention to quit) was 28 November 2016, being the anniversary of the date of “the termination of the stipulated endurance of the lease” (cf section 21(3)(c) of the 1991 Act), which in terms of Clause 2 of the Lease was “the term of Martinmas 2002.” The six monthly instalments of rent provided for under Clause 2 of the Lease were paid backhand, so that the instalment of rent payable on 28 May 2017 would cover the period from midnight on 28 November 2016. The terms of the Landlords’ notice dated 24 November 2015 were apt because the use of the words “from and after” the term of Martinmas clearly meant from midnight on 28 November 2016. The Landlords’ notice dated 24 November 2015 had to be read and understood in the context of section 13 of the 1991 Act because it had been served in terms of that provision. Section 13(1) of the 1991 Act referred to “the next day after the date … on which the tenancy could have been terminated”, which was 29 November 2016, so “from and after” must mean from 29 November 2016, otherwise the Landlords’ notice would be invalid. The Tenant’s application having been received by the Land Court on 28 November 2016, seeking an order determining the rent payable in respect of the holding from 29 November 2016, it was lodged before the date from which the new rent would be payable and so the Landlords’ notice dated 24 November 2015 was not spent and the Tenant’s application was within time. Sir Crispin referred us to a number of passages in the Stair Memorial Encyclopaedia, Volume 22, on the subject of “Time”, and to some of the cases cited therein, the contents of which he contended supported his position, but in which, ultimately, we could detect little of direct relevance to the issues we had to decide.

Discussion

[32] We think that the Tenant here, in formulating its crave, in asking the Land Court to determine the question what rent should be payable in respect of the holding “as from the next day after 28th November 2016”, has proceeded upon a misapprehension as to the meaning and effect of the words “next day” mentioned in section 13(1) of the 1991 Act. By way of recap, Clause 2 of the Lease expressly provides for both a date of entry and a date of ish. The Entry Date, as defined, was 17 September 2001, and the Lease was stated to subsist from the Entry Date to the term of Martinmas 2002, and to continue thereafter on a year to year basis, unless and until terminated by either party on giving one year’s notice to the other. This was not, therefore, the case of a lease stipulated initially to run for a year from 28 November 2001, giving rise to the question whether notice to quit would correctly be served against an ish date of 27 November or of 28 November in some succeeding year. Here, Clause 2 of the Lease specified a termination date of the term of Martinmas 2002, which by virtue of the Term and Quarter Days (Scotland) Act 1990 means, in the absence of some other date being specified therein, 28 November 2002. The Tenant here seems to have believed that “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”, assuming, contrary to what we have already found, that it was open to the Tenant to rely on the Landlords’ notice dated 24 November 2015, would be 29 November 2016. We disagree.

[33] The key to understanding the admittedly somewhat awkwardly expressed last part of section 13(1) of the 1991 Act is that – as the Landlords’ notice dated 24 November 2015 correctly reflects – the “next day” mentioned in section 13(1) of the 1991 Act is the next day after the date of the section 13(1) notice on which the tenancy could have been terminated by a notional notice to quit (or notice of intention to quit) given on the date of the section 13(1) notice. When, in conformity with section 13(2) of the 1991 Act, the Land Court determines, in accordance with sections 13(3) to (7A) of the 1991 Act, the rent properly payable in respect of the holding “as from the “next day” mentioned in subsection (1) above”, it is determining the rent from the next day occurring after the date of the section 13(1) notice on which the tenancy could have been terminated, and not from the next day after the date on which the tenancy could have been terminated. This point is helpfully brought out in the suggested wording for a notice under section 13(1) of the 1991 Act to be found in The Hon Lord Gill and Alasdair G. Fox, W.S., Agricultural Holdings Styles (1997) at page 60, although that style now requires to be updated to accommodate the transfer of primary jurisdiction in questions of rent review from the arbiter to the Land Court effected by the 2003 Act:

“I hereby demand a reference to arbitration of the question what rent shall be payable in respect of the above holding as from [date], being the next day after the date of this notice on which the tenancy could have been terminated by notice to quit or notice of intention to quit given at this date.”

The Tenant’s application to the Land Court falls into error insofar as it craves an order determining what rent should be payable in respect of the holding “as from the next day after 28th November 2016” [i.e. 29 November 2016]. We thus agree with the submission for the Landlords that the manner in which the Tenant’s crave is framed is inconsistent with the terms of all of the statutory provision, Clause 2 of the Lease, and the Landlords’ notice dated 24 November 2015.

[34] We turn finally to consider the Landlords’ associated argument that the Tenant’s application is invalid also because it was not made before the date from which any new rent would become payable; i.e. that it is a requirement of section 13(1) of the 1991 Act that the application to the Land Court must be made before the review date.

[35] The Landlords’ argument that if the application to the Land Court is not received before the date from which any new rent would become payable, it is out of time, is derived principally from dicta in the decision of the Land Court in Graham v Gardner, op. cit. In that case, the landlord of an agricultural holding had, by notice served on the tenant under section 7(1) of the Agricultural Holdings (Scotland) Act 1949 (the statutory forerunner of section 13(1) of the 1991 Act)(“the 1949 Act”) dated 8 November 1962, demanded a reference to arbitration of the question what rent should be payable in respect of the holding from and after the term of Martinmas 1963. In their covering letter to the tenant, the landlord’s solicitors invited any offer the tenant might care to make as to a new rent, but the tenant made no offer and took no other action in response to the landlord’s notice and covering letter. The landlord in turn took no steps to initiate arbitration proceedings, which would have involved applying to the Secretary of State for the appointment of an arbiter. In the Spring of 1964, discussions took place between the parties relating to the terms upon which the tenant might agree to give up the tenancy, but nothing came of this. The landlord then sought to proceed to arbitration as to the rent to be paid from and after the term of Martinmas 1963, but the tenant disputed his right to do so. The parties having agreed to submit that issue to the Land Court, the Full Court, chaired by Lord Birsay, concluded that:

“In our view the notice of 8th November 1962, is spent and cannot now back date the new rent … to Martinmas 1963 …

… Section 7(1) is clearly forward looking so far as the new rent is concerned, and envisages a rent, commencing at the date when the notional notice to quit would terminate the present tenancy, and fixed before that term is reached. It may be that the determination of the new rent could competently be made within a reasonable period after the notional notice to quit would become effective, provided arbitration proceedings had been validly commenced before that time. We do not require to decide this point in the present case. We think this forward looking construction much more accords with the critical words of the section … than the view contended for by the landlord’s solicitor that the new rent could be fixed by arbitration proceedings taking place even years after Martinmas 1963. It gives a reasonable and generally accepted meaning to the words “should be payable” and “as from the next ensuing day.” It also matches the intention of the section, viz. to achieve a “variation of rent”, which be it observed, could be by increase or reduction of the sum presently payable. This construction also is supported by the statutory requirement that the rent to be fixed as payable for the year commencing at Martinmas 1963 must be an “open market” one. Furthermore, it must obviously be unambiguously related to the actual state of the holding at that date. Practical considerations of inspection to ascertain the state of the holding as near in time as may be to the date from which a new rent is to operate, and the ordinary accepted meaning of the words, combine to favour this construction of the section.

In the section, proposed variation of rent, notice, and an ensuing term, are expressly linked. That term is also a new beginning as regards rent, which is a cardinal condition of any let. The statutory requirement that the notice to vary rent must be timed as for a notional notice to quit at the future term, gives ample opportunity for parties to have the new rent fixed for that term, either by agreement or by the procedures available under the Acts [at pages 12-13].”

[36] Whilst we agree with the point made by the Full Court in Graham v Gardner that practical considerations greatly favour the rental determination taking place as close as possible to the date from which the new rent (assuming the Land Court holds that the evidence establishes that the passing rent should be varied) is to be payable, it has to be acknowledged that this desirable outcome is not always achieved. By way of example, in the two most prominent rent review cases before the Land Court in recent years, the rent that was to be payable for Moonzie Farm, Cupar, as from the review date of 4 December 2008 was ultimately determined only by an Order of the Land Court dated 5 April 2012: Morrison-Low v Paterson’s Executors 2012 SLCR 153. That delay was, of course, due largely to the interposition of a successful appeal to the Inner House of the Court of Session against the Land Court’s original Order dated 2 June 2010 determining the rent to be payable from the review date (reported as Morrison-Low v Paterson’s Executors 2012 SC 373), and it had a knock on effect for the rent review pertaining to Roxburgh Mains Farm, Kelso, the application to the Land Court in relation to which having been sisted to await the outcome of the Moonzie appeal. In the event, the question of what rent should be payable in respect of that holding as from Whitsunday 2009 was finally determined by an Order of the Land Court dated 11 June 2014: Capital Investment Corporation of Montreal Limited v Elliot 2014 SLCR 19. Where there is a significant delay between the review date and the date of the hearing, the task of the Land Court is made considerably more difficult, not least because in having regard, for the purposes of determining the rent payable under section 13(3) of the 1991 Act, to the current economic conditions in the relevant sector of agriculture, as section 13(4)(b) of the 1991 Act directs the Land Court to do, the Members must attempt to forgo the benefits of hindsight, taking cognizance only of such information as would have been available to them at the review date.

[37] All that said, however, whilst the Land Court would, for these obvious practical reasons, wish to discourage delay in the making of such applications, we remain to be convinced, at least as presently advised, that it is possible to derive from the actual terms of section 13(1) of the 1991 Act a decisive “cut-off” date, such as is prospectively provided for in paragraph 6(3) of the new Schedule 1A to the 1991 Act (“The landlord or the tenant may not make such a referral [of the question of what the rent payable in respect of the holding should be to the Land Court] after the rent agreement date”), after which an application to the Land Court to determine the question what rent should be payable in respect of the holding as from the “next day” mentioned in section 13(1) of the 1991 Act must be held out of time.

[38] We do not find it altogether easy to extract the true ratio decidendi from the decision of the Full Court in Graham v Gardner, and the process of reasoning by which the Full Court arrived at the conclusion that the arbitration proceedings could only be validly commenced before the review date does seem to us to be vulnerable to criticism. The “forward looking construction” of section 7(1) of the 1949 Act which found favour with the Full Court is stated first to envisage that the new rent will be fixed before the review date is reached, but the logic of that approach is then backed away from, with the Full Court going on to acknowledge the possibility, albeit without deciding, that “the determination of the new rent could competently be made within a reasonable period after the notional notice to quit would become effective”, provided that arbitration proceedings “had been validly commenced before that time.” The invocation of the malleable concept of a “reasonable period” after the review date within which the new rent might yet be determined, provided only that the arbitration proceedings had been validly commenced before that date, might be thought to undermine the argument in favour of the arrival of the review date operating as a cut-off point for the commencement of arbitration proceedings. It begs the question what practical difference it would have made if the application to the Secretary of State for the appointment of an arbiter were to be made one day after, instead of one day before, the review date. It is not obvious to us that the inclusion of the words such as “should be payable”, and “as from the next ensuing date” in section 7(1) of the 1949 Act materially advance that “forward looking construction.” Where the Land Court determines a new rent for a holding, even, as in Capital Investment Corporation of Montreal Limited v Elliot, several years after the passing of the review date, that new rent will still be payable from the review date. If the arrival of the review date was intended to operate as an absolute “cut-off”, it would have been very easy for Parliament, if it had been so minded, to lay down such a rule in express terms, as the contents of paragraph 6(3) of the new Schedule 1A to the 1991 Act illustrate, but section 13(1) of the 1991 Act is conspicuously silent on such procedural niceties, and it is, at the very least, not self-evident to us that it is the “necessary and inevitable implication of the language which Parliament has used” (to borrow an expression used in Sclater v Horton, op. cit.) in section 13 of the 1991 Act that the application to the Land Court must be made before the review date. The legislation is not necessarily rendered unworkable in the absence of such a “cut-off” point.

[39] Assuming that the difficulties that have been encountered in defining the “productive capacity” of the holding, which is one of the factors to which the Land Court must have regard when determining the fair rent for a holding in terms of the 2016 Act amendments, are eventually resolved, and Schedule 1A of the 1991 Act subsequently is brought into force for all purposes, this issue will cease to matter. That said, however, we have, at the time of writing this judgment, no inkling as to when that might be, and we are conscious that in the meantime, there may be other applications in train in which this same issue arises. In light of the conclusions we have reached on the two principal arguments in this case upon which we heard fully developed arguments, either of which by itself would be sufficient to dispose of the Tenant’s application, nothing in practical terms turns on this essentially subsidiary point, which seems to us to be one potentially of some difficulty, and consequently we would prefer formally to reserve our opinion on it until such time as it arises in a case in which it is material to the ultimate decision.

Decision

[40] Consequent upon our determination of the initial preliminary point raised in the Landlords’ rule 17 application in their favour, we shall grant the Landlords’ motion for dismissal, as incompetent, of the Tenant’s application. We shall, in conformity with our usual practice, allow parties 21 days within which to lodge with the Court their written motions and submissions on expenses.