THE COURT

(Sheriff MacLeod, A Macdonald)

WAUGH v THRUMSTER ESTATE LIMITED

(Application RN SLC/156/05 – Order of 28 July, 2009)

CROFTING – WHETHER ASSIGNEE FROM CROFTER WHO HAS OBTAINED AUTHORISATION TO ACQUIRE CROFT LAND ENTITLED TO THE BENEFIT OF SUCH ORDER – CROFTERS (SCOTLAND) ACT 1993 SECS 12(1), 13(1)(a) AND 17(1)

Sec 12(1) of the Crofters (Scotland) Act 1993 (“the 1993 Act”) entitles a crofter to apply to the Land Court for an order authorising him to acquire the croft land tenanted by him. Sec 13(1)(a) provides that the Court may make an order “authorising the crofter to acquire such croft land as may be specified in the order, subject to such terms and conditions as, failing agreement with the landlord, may be so specified, and requiring the landlord to convey the land to the crofter or his nominee in accordance with such terms and conditions”. Sec 17(1) provides that such an order shall have effect “for a period of 2 years from the date of intimation of the order or for such other period as may at any time be agreed to in writing by the crofter … and the landlord or as may be determined by the Land Court on the application of either party”.

A crofter (W) obtained an order from the Court under sec 13(1)(a) of the 1993 Act but did not enforce it. Instead, within the two year period specified in sec 17(1), she assigned the tenancy of the croft to R who, in reliance on the Court’s order obtained by W, called upon the landlords to convey the croft land to him. The landlords having refused to do so, he enrolled motions seeking (1) to be sisted in the Land Court application in place of W and (2) an extension of the two year period specified in sec 17(1) to enable the conveyancing of the land in his favour to be completed. The landlords opposed both motions arguing that an order under sec 13(1)(a) of the 1993 Act was not an object of commerce which could be transferred to an assignee but was, rather, personal to the crofter in whose favour it was made and that R was not, therefore, entitled to the orders sought.

As a convenient means of allowing it to deal with the principal question in the case the Court granted R’s motion seeking to be sisted in the application in place of W but quoad ultra held that an order under sec 13(1) of the 1993 Act was personal to the crofter in whose favour it was made and that an assignee was therefore not entitled to the benefit thereof. It therefore refused R’s motion seeking an extension of the two year period specified in sec 17(1). Opinion expressed that an application for such an extension could competently be made after said period had expired.

The Note appended to the Court’s Order was as follows:-

Note

[1] By our order of 18 August 2006 we ordained the landlord respondents, Thrumster Estate Limited, to convey to the crofter applicant, Miss Jessie Waugh, title to the croft of Brickigoe at a price of £2,500. Notwithstanding its terms (which do not accurately reflect those of the section) that order was granted under sec 13(1)(a) of the Crofters (Scotland) Act 1993 (“the 1993 Act” or “the Act”) and accordingly, in terms of sec 17(1) of the Act, remained effective for a period of two years from the date of its intimation. Miss Waugh subsequently elected not to insist upon such a conveyance but instead assigned the tenancy of the croft to a Mr George Rodenhurst with effect from 15 May 2008.

[2] There are now two motions before the Court. In the order in which they were lodged with the Court, the first bears to be on behalf of Miss Waugh and seeks an extension of the time for which our said order should have effect. It was lodged on 12 August 2006. The second bears to be on behalf of both Miss Waugh and Mr Rodenhurst and seeks to have Mr Rodenhurst sisted as the crofter applicant in place of Miss Waugh. It was lodged on 15 August 2006.

[3] The respondents having intimated opposition to both motions, we heard debate at Edinburgh on 15 June 2009 when Miss Waugh and Mr Rodenhurst were represented by Mr Iain Maclean, advocate, and the respondents by Mr Craig Sandison, advocate.

Legislation, authorities and textbooks

Legislation

Crofters (Scotland) Act 1993, secs 12-17

It is convenient to set out here the terms of the sections principally engaged:-

12 General Provision

(1) A crofter may, failing agreement with the landlord as to the acquisition by the crofter of croft land tenanted by him, apply to the Land Court for an order authorising him to make such acquisition.

13 Authorisation by Land Court of acquisition of croft land

(1) The Land Court on an application made to it under section 12(1) of this Act, may make an order –

(a) authorising the crofter to acquire such croft land as may be specified in the order, subject to such terms and conditions as, failing agreement with the landlord, may be so specified, and requiring the landlord to convey the land to the crofter or his nominee in accordance with such terms and conditions; or

(b) refusing the application.

(2) The Land Court shall not make an order in accordance with subsection (1)(a) above where it is satisfied by the landlord as to either or both of the following matters –

(a) that, in all the circumstances pertaining to the landlord and having regard to the extent of the land owned by him to which this Act applies, the making of such an order would cause a substantial degree of hardship to the landlord;

(b) that the making of such an order would be substantially detrimental to the interests of sound management of the estate of the landlord of which the croft land to which the application relates forms part.

17 Provisions supplementary to sections 13 and 15

(1) An order of the Land Court under section 13(1) or 15(1) of this Act shall have effect for a period of 2 years from the date of intimation of the order or for such other period as may at any time be agreed to in writing by the crofter or, as the case may be, the cottar and the landlord or as may be determined by the Land Court on the application of either party.

Cases

Baird v Barton (1882) 9 R 970
Blyth Dry Docks & Shipbuilding Co. Ltd. V
The Commissioners for the Port of Calcutta1972 S.L.T. (N) 7
David Boswell Ltd. v William Cook Engineering Ltd. 1980 S.L.T. (Sh. Ct.) 61
Donaghy v Rollo 1964 S.C. 278
Fearn v Cowpar (1899) 7 S.L.T. 68
Fraser v Mackintosh 1995 S.L.T. (Land Ct.) 45
Gibson’s Trustees v Gibson (1869) 7 M 1061
Grant v Sykes 1983 SLCR 65
G.U.S. Property Management Ltd. v Littlewoods
Mail Order Stores Ltd 1982 S.C. (H.L.) 157
Lanarkshire Health Board v Banafaa 1987 S.L.T. 229
MacDonald v Barker 1970 S.L.T. (Land Ct.) 2
Mavor v Governors of Aberdeen Educational Trust (1902) 10 S.L.T. 156
Morrison v Hunter and Ross (1822) 2 S 68
Parker v Welsh (1894) 2 S.L.T. 122
Ross v Douglas 1977 S.L.T. (Land Ct.) 2
Stewart v Kidd (1852) 14 D 527
Taylor v Jarvis (1862) 22 D 1031
Tayplan Ltd. v D & A Contracts [2005] CSOH 17
Watt v Scottish North-eastern Railway Company (1866) 4 M 318

Textbooks

Agnew, Crofting Law
MacLaren, Court of Session Practice
Macphail, Sheriff Court Practice, 3rd ed
Rankine, A Treatise on the Law of Leases in Scotland, 3rd ed

Submissions for motioners

[4] Mr Maclean submitted that the logical order in which to deal with the motions would be to take the procedural motion first. He referred to certain cases in support of doing so but, since this aspect of matters was not problematic at the end of the day, we need not cite them here. At a later point in his submissions Mr Maclean made the more general point, which it is convenient for us to note here, that the Land Court was habitually been prepared to overlook technical difficulties and look instead to the spirit and intent of the legislation, the case of MacDonald v Barker being an example of that approach.

[5] Mr Maclean set out the motioners’ primary position. After the tenancy had been assigned to Mr Rodenhurst it was only he who would have been in right to apply for the order of 18 August 2006 to have effect for a period other than two years. It was not technically correct to talk in terms of sec 17(1) involving an extension of the two year period. If after two years the crofter and landlord agreed to complete the conveyancing, no one would have any locus to object. So, by a similar token, if after two years one of the parties wanted to activate sec 17(1) there was no impediment to him applying to the court. That application could be opposed and the longer after expiry of the initial two years the application was made the more difficult it would be for the applicant to succeed. That was simply by virtue of normal common law objections which arose when a party delayed to exercise a legal right. So the guillotine did not come down on the second anniversary of the section 13(1) order. That meant that there was no need for the application to be made within two years of the original order, in marked contrast to, for example, section 10(2) of the Act (which deals with the giving of notice of a bequest of a croft tenancy). As it happened, this application had been made within the two-year period but it need not have been.

[6] As to the effect of the assignation, an assignation of a croft tenancy effected a transfer of the crofter’s whole rights and liabilities to the assignee; Rankine page 193, Agnew at page 70, fn 1, Ross v Douglas. Accordingly, included in the bundle of rights and liabilities which was transferred to Mr Rodenhurst by the assignation was the right conferred by our said order. When the assignation took effect he was the only person who could exercise that right. It followed that it was he who was entitled to apply to the court under sec 17(1).

[7] It was trite law that a right conferred by a court decree was assignable; Stewart v Kidd, McLaren page 479. There was an analogy between Watt v Scottish and North-Eastern Railway and the present case; the right to pursue an order under sec 17(1) was in exactly the same position as the right of the assignee to pursue reduction of the arrestment in Watt. Here, Mr Rodenhurst, like Mr Watt, had a “direct and immediate and palpable interest” (per Lord President Inglis at page 321) to pursue the present application. When Mr Rodenhurst had become the tenant he had become entitled to apply under sec 17(1) as a matter of substantive right; anyone who was the croft tenant from time to time was in right to make such an application.

[8] On the respondents’ approach to the construction of the word “party” in sec 17(1) as contained in paragraph (1) of their written submissions opposing the motions, Mr Rodenhurst could agree in writing with the respondents that the court’s order should have effect for a period other than two years but, in the absence of such agreement, would not be able to apply to the court for an order to that effect. There was no warrant for a construction of the word “party” which potentially would result in a different category of person being in a position to agree a variation of the two year period than could, in the absence of agreement, apply to the court for a determination.

[9] Although the first motion, seeking the extension of time, was framed in the name of Miss Waugh, it was entirely clear from its terms that the tenancy of the croft had been assigned to Mr Rodenhurst, that he wanted to purchase the croft and that it was he who was seeking the extension of time in order to enable him to complete the purchase. The motion should be treated as being on behalf of Mr Rodenhurst. In any event an assignee could raise an action either in his own name or in the name of his cedent so there was no reason in principle why the first motion should not have been lodged in the name of the cedent notwithstanding that it was the assignee who would be entitled to benefit from the order sought; cf Blyth Dry Docks & Shipbuilding Company Limited v Commissioners for the Port of Calcutta.

[10] If the assignation did not have the effect of conferring upon Mr Rodenhurst the right to apply under sec 17(1) the conclusion had to be that the assignation had caused the order we had made under sec 13(1) to fall. Presumably the same would be true where a crofter died before the conveyancing formalities for his croft purchase had been completed; his personal representatives would not be able to complete acquisition of title to the croft.

[11] But that was not the true legal position. There was nothing in the scheme of the 1993 Act to indicate that a right acquired under sec 13(1)(a) was personal to the original applicant as opposed to attaching to any person who was tenant of the croft from time to time. It was highly significant in that regard that the identities of the applicant and acquirer were irrelevant for determination of a sec 13(1)(a) order. The grounds for refusing such an order had to do only with the circumstances pertaining to the landlord; sec 13(2). What the court had to do in deciding whether a sec 13(1)(a) order should be made had been set out in Fraser v Mackintosh at page 46L:-

“In our view the determination of the question as to whether a landlord would be caused a substantial degree of hardship by the making of an order for acquisition must involve a comparison of the position of the landlord in the absence of such an order with the position in which he would find himself following upon such an order.”

If there was a tenant who was seeking to acquire the landlord’s interest and bring to an end the relationship of landlord and tenant why should issues personal to the crofter and to that crofter’s relationship with his landlord be relevant to whether an order under sec 13(1)(a) should be made? Under that subsection the identity of the crofter “simply did not enter into it” so there was no reason to regard the right under sec 17(1) as personal to the person making the original application for an order under sec 13(1)(a).

[12] Where a landlord objected to an assignation he should object to the Crofters Commission and it was quite illegitimate to use opposition to a sec 17(1) application as a means of challenging a completed assignation. The sec 13(1)(a) order had not fallen as a result of the assignation and the right to apply under sec 17(1)(a) which had been possessed by Miss Waugh until completion of the assignation had passed to Mr Rodenhurst at that point.

[13] The effect of Mr Rodenhurst being sisted in this application in room and place of Miss Waugh was to cure any defect in his title to bring a sec 17(1) application. In their written submissions the respondents had relied upon Donaghy v Rollo to the effect that title to sue was a continuing requirement from the commencement of the action to final judgement. But the situation in that case was that, the original pursuer having lost title to pursue the action, the court had allowed someone else with a good title to come in in his place and continue with the litigation. At page 288 Lord Justice-Clerk Grant had said:-

“ …I think that in the exercise of the discretion which we have under Rule 117 … we should allow the addition of the new pursuer. He is desirous of litigating precisely the same questions as those raised by the original pursuer. It would be a waste of time, money and procedure if, instead of being allowed to come into this action at the late stage which it has now reached, he was sent away to start from scratch another action in similar terms and with similar objects. I am reluctant to turn litigation into a game of snakes and ladders.”

[14] The position was different when an action had been raised or an application made by someone who had no title to pursue the action as, for example, had been the case in Symington v Campbelland Bentley v Macfarlane. But in the latter case Lord President Clyde had said (at page 79);-

“There have, of course, been cases where a pursuer’s title to sue has been affirmed although that title was not complete or was subject to some qualification. Provided that basically the title is in the pursuer, his title to sue will be vindicated, and he may complete the steps required to clear his title of defects or qualifications during the action.”

In the present case there had been a period between Whitsunday 2008 and 12 August 2008 (the date on which the first motion had been enrolled) during which Miss Waugh was no longer in right to apply for an order under sec 17(1) and Mr Rodenhurst had not yet revealed his involvement to the court. That was precisely the sort of situation in which any potential defect in title could be cured. Lanarkshire Health Board v Banafaa, David Boswell Ltd. V William Cook Engineering Ltd., Tayplan Ltd v D & A Contracts were examples of that sort of thing happening. Reference was made to para [20] of Lord Kingarth’s opinion in the last mentioned case in which his Lordship refers to whether the pursuers had been “substantially in possession of the right to bring the action”. In the present case, because the assignation had preceded the first motion, title had, in Lord Justice-Clerk Grant’s terminology, “basically” been in Mr Rodenhurst when the first motion was enrolled and, in terms of Lord Kingarth’s formulation, he had been “substantially in possession of the right to bring the [application]”.

[15] Where any party to a cause had alienated or been divested of his interest in the subject matter of the action in favour of a transferee, the transferee was, as a rule, entitled to take his place; Watt v Scottish North-Eastern Railway Company, Parker v Welsh, Fearn v Cowpar, Mavor v Governors of Aberdeen Educational Trust, Macphail paragraph 12.14. It would take very clear wording in any statutory provision to displace that general rule. The underlying right here was now with Mr Rodenhurst and he was now entitled to seek an order under sec 17(1).

[16] So far as the stage at which a party could be sisted was concerned, that was competent at any stage until final decree, being the point at which the cause was finally concluded, leaving nothing to be done and the court functus; Baird v Barton, Taylor v Jarvis. And even after final decree, a decree obtained by one person could be enforced by another; Morrison v Hunter and Ross, Gibson’s Trustees v Gibson.

[17] So in a situation such as we had here, where Miss Waugh had obtained a sec 13(1)(a) order in her favour, it would require something quite compelling in the wording of the relevant legislation to persuade the court that the benefit of that order was not transmissible to someone who stepped into her shoes as assignee and thus became the crofter. There was nothing in the wording of the relevant sections of the 1993 Act which would entitle the court to come to such a conclusion.

[18] The motioners also had a fall-back position. If the rights conferred by our order of 18 August 2006 were merely personal rights possessed by Miss Waugh and did not transmit to Mr Rodenhurst in consequence of the assignation of the tenancy, it would follow that Miss Waugh herself could now apply under sec 17(1) and nominate Mr Rodenhurst as her nominee in the ensuing conveyancing. This argument was not as strong as the motioners’ principal argument, said Mr Maclean, because it did not fit in so well or easily with the statutory framework or the general law but if the respondents were correct about the right to apply under sec 17(1) not transmitting to Mr Rodenhurst at assignation it must have some merit because courts were generally not in favour of rights disappearing into “black holes”; G.U.S. Property Management Ltd. v Littlewoods Mail Order Stores Ltd per Lord Keith of Kinkel at page 177.

[19] For those reasons we should sist Mr Rodenhurst as a party in accordance with the second motion and thereafter substitute an appropriate period for the two years originally provided for in sec 17(1).

[20] So far as the merits of the motion for substitution of a new period were concerned, Mr Maclean’s attempts to find useful authorities had been unavailing. Grant v Sykes had been the only case on sec 17 he could find and it gave no guidance at all as to what was to be considered or ignored in a sec 17(1) application. Ultimately all we had to go on was the wording of the section itself. Sec 17(1) was, however, a “pretty unrevealing piece of legislation”. It did not say “on cause shown” and the onus must, therefore, lie on the party opposing the application to show why a different period should not be substituted. There was, therefore, almost a presumption that the order would be granted unless the other party could show why it should not be.

[21] Paragraph 7 of the written submissions which had been lodged in support of the motions gave the factual background. Miss Waugh had originally suggested a division of the croft. Brickigoe was a large croft and she had been keen to see more local crofters establishing themselves in the area. The respondents had delayed to reply to this suggestion and when they had eventually responded it was apparent that they wished to control who should become tenants of the new crofts. Miss Waugh had then decided upon a straightforward assignation of the tenancy of the croft as it stood. The proposed assignation to Mr Rodenhurst had been opposed by the respondents and a hearing before the Crofters Commission had been necessary. In due course the Commission had given its consent and the assignation had taken effect as from Whitsunday 2008. There had been no excessive delay on the part of either Miss Waugh or Mr Rodenhurst. A further period was now needed to complete the conveyancing.

[22] Given the current state of the relationship between Mr Rodenhurst and the respondents it was desirable to terminate the relationship of landlord and tenant sooner rather than later.

[23] Asked by the court as to his understanding of why the two year provision was in the legislation, Mr Maclean said that he had considered that without coming up with an answer. But in any event it was not a long-stop provision. He did not accept that the provision was there in order to enable the landlord to come along and renew the argument as to whether acquisition should be authorised all over again. Where circumstances had changed the appropriate remedy for the landlord was to seek a re-hearing.

[24] Finally, Mr Maclean referred to Rule 38(e) of our Rules, which allows us at any time before a Final Order is pronounced to substitute or add the names of any person as a party who by reason of any assignation has acquired right or interest in the matters to which the application relates. Rule 1(k) defined “Final Order” as one which, either by itself or taken along with a previous order or orders, disposes of the subject-matter of the application. So there was no scope for dispute that we were entitled to sist Mr Rodenhurst as a party to the action. Reference was also made to Macphail at paragraph 12.15.

Submissions for respondents

[25] Mr Sandison opposed the granting of the motions and adopted the terms of the written statement of opposition already lodged.

[26] Alluding to Mr Maclean’s reference to what was said by Lord Justice-Clerk Grant about “snakes and ladders” in Donaghy v Rollo, he disclaimed any intention of making the procedures of the court any sort of game. Furthermore, his concern was with substantive questions of crofting law rather the adjectival approach to the issues which he said had been taken by Mr Maclean. He was not concerned with technicalities and, as an example of that, had no objection to the court dealing with the motions before it in any common sense order.

[27] Before turning to his own substantive submissions Mr Sandison commented upon certain matters arising from what Mr Maclean had said. Mr Maclean had conceded that after Whitsunday 2008 Miss Waugh had neither title nor interest to pursue further the right she had obtained in the order of 18 August 2006. On that basis what the court had to consider first was whether Mr Rodenhurst should be sisted as a party to the application. Mr Sandison’s submission would be that he should not but that was not for any technical reason: Mr Sandison entirely accepted that if Mr Rodenhurst had acquired a right to pursue this matter he should be sisted. If he was to be sisted, however, that did not mean that any motion already made would become his motion; Mr Rodenhurst did not become Miss Waugh by virtue of having been sisted in her place. So even if he were to be sisted he would not inherit Miss Waugh’s motion, he would have to make his own. Mr Sandison had no objection to the hearing being treated as the hearing of such a motion but an issue as to whether such a motion, which would have to be regarded as having been made at the bar today, was timeous then arose.

[28] With that, Mr Sandison turned to his substantive submissions.

[29] The logical first questions must be (a) whether the benefit of the court’s order of 18 August 2006 was capable of transfer to Mr Rodenhurst and (b) if so, whether it had in fact been transferred.

[30] Addressing the first of these questions, the order of 18 August 2006 both ordained the respondents to do something and found and declared certain matters. It was, therefore, a hybrid between an order ad factum praestandum and a declaratory order. There was no authority cited by the applicant or known to the respondents to the effect that such an order was an item of incorporeal property capable of being owned, and thus transferred, by any individual. In Mr Sandison’s submission such an order could not be “the object of commerce”. The situation was different in a straightforward decree for payment which invariably enforced some underlying obligation owed by operation of law by one person to another and which could be enforced directly against the property of the person against whom it had been pronounced without further judicial intervention. Morrison v Ross and Hunter was an example of a transferable order of that kind.

[31] In the present case, the only consequence of failure on the part of the respondents to obtemper the order of 18 August 2006 would be to entitle the applicant to apply to the court under sec 16(2) of the Act for the court itself to complete the formalities necessary to give effect to its order. Such an application could only be made by the person in whose favour the original order had been made or by someone nominated by that person to take title and had to be made while the order was effective.

[32] The terms of sec 12(1) would have been different if the intention had been to bring about a change in the status of the land itself as a result of an order under sec 13(1)(a) being granted. As it was, the section did not provide that a crofter could apply for an order authorising acquisition of the land by any person who was crofter from time to time. Instead the terms of sec 12(1) were personal to the particular crofter making the application: what the crofter could apply for was “an order authorising him to make such an acquisition” (emphasis added).

[33] The right which flowed from a successful application under sec 12(1) was personal to the tenant. It did not attach to the tenancy. It may be that it was a hybrid right – a mix of personal and real – because it was a right pertaining to a particular person while that person remained the tenant of the croft. Assignation of the tenancy did not carry with it any right which was personal to the assignee himself. A person who had obtained an order as a result of a sec 12(1) application could nominate someone else to receive the conveyance. Presumably that would be so that the person who obtained the order could remain as crofter and continue to enjoy the various benefits of that status. But that was not what was happening here. Here Miss Waugh was not trying to retain any kind of benefit from the order in her favour but was trying to pass on the whole of that benefit to a stranger to the court proceedings. If it was not possible to do that she had only herself to blame for having deliberately chosen not to exercise the right conferred on her by the Court.

[34] If, contrary to his main submission, the benefit of the court’s order could be bought and sold one had to consider whether that had actually been done in this case. All that had happened here was an assignation of the croft tenancy. That certainly gave Mr Rodenhurst the right to apply to the court under sec 12(1) for an order in his own favour. But there was no basis for saying that the court’s said order was part and parcel of the rights and obligations which made up the tenancy. Assignation of the tenancy did not carry with it any separate personal right which the tenant had in relation to the subjects of the tenancy. If Miss Waugh’s right in terms of the court’s order was capable of being assigned or bought and sold that would have to be done as a separate transaction from the statutory assignation of the croft tenancy and there was no suggestion that any such separate transaction had been carried out here.

[35] If the benefit of the court’s order could not be assigned or had not in fact been assigned that was an end of the matter. By her assignation of the tenancy Miss Waugh had lost all rights stemming from the court’s order. Talk of legal rights disappearing into a black hole was misplaced. A more accurate analysis was that an option to perfect a right had come to an end as the result of the voluntary act of the right-holder in deciding not to pursue it. There was nothing unusual or unjust about that. The result was that Mr Rodenhurst had no right to any benefit under the court’s order or to seek any order in the present process, the substantive aspects of which had come to an end at Whitsunday 2008.

[36] With reference to the analysis of how the terms “crofter” and “landlord” were used in the fasciculus of sections dealing with croft purchase, there was nothing to suggest that they were used other than carefully, precisely and with the intent to invoke precisely the meanings of those terms as defined elsewhere in the Act. Equally the words “person” and “party” were used carefully. There was no anomaly in the use of “party” and “crofter” in sec 17(1). “Party” meant a party to the application in which the original order had been made.

[37] Where someone other than the persons who were crofter and landlord at the time of the acquisition was being talked about they tended to be referred to as “person”. Sec 14, dealing with the landlord’s “clawback” in the event of sale of the croft land within five years, was an example. The closest that section came to referring to anyone who was not a participant to an application to the court as a “party” was in subsecs (3)(a) and (5) where provision was made for what was to happen in the absence of agreement as to the amount of the clawback and the reference was to “the parties concerned”. Tellingly, the proviso to sec 14(2), which deals with a landlord applying to the court for determination of a fair rent prior to an acquisition order being made, altered sec 6(4) of the Act (the provision relating to fixing of fair rents in other contexts) by removing the reference to “parties” in that subsection and substituting the words “landlord and crofter”. That change was wholly inconsistent with the suggestion that “parties” and “landlord and crofter” were effectively synonyms in the Act. Secs 15(2) and (4) also referred to “parties” solely in the context of people who were participants to an application before the court. Sec 16, dealing with matters relating to the conveyancing pursuant upon a sec 13(1)(a) order including potential interests of people other than the landlord and crofter, referred to these people as “persons” and not as “parties”.

[38] Sec 17 itself also used the words “crofter”, “landlord”, “party” and “person” and there was nothing to suggest that “crofter” should mean anything other than the definition of that term contained in sec 3(3), that “landlord” should mean anything other than the definition contained in sec 61, that “party” (as opposed to “party concerned”) should mean anything other than a participant to an application to the court or that “person” should mean anything other than someone with an interest in the subject-matter of the section who was distinct, or potentially distinct, from a “crofter”, a “landlord” or a “party”.

[39] There was no mystery as to why a “crofter” and “landlord” should be allowed to agree that an order of the court should continue in effect beyond the two year period; that was simply the adoption by mutual consent of a pre-existing set of terms about the acquisition of the land. But it was consistent with the principle that only a person who had been a party to the application which produced the order ought to be permitted to seek its continuance in effect without the consent of the other party. That is exactly what one would expect sec 17(1) to say and it was exactly what it did say.

[40] If Mr Rodenhurst was to be sisted as a party to the action in room and place of Miss Waugh that could only be for the purpose of working out the rights, if any, he had acquired in the subject-matter of the application: it did not mean that in a procedural, or any other sense, he fell to be treated as Miss Waugh. In particular a motion made by her did not become a motion made by him. Mr Rodenhurst would have to enrol his own motion, which raised the question whether an application under sec 17(1) required to be made before the two year period had expired.

[41] That could be answered by asking what the status of the order was two years and one day after the date of its intimation. The answer was that it no longer had effect. Any subsequent application under sec 17(1), if competent, therefore involved the reactivation of the order after a hiatus during which it had been unenforceable.

[42] The words “at any time” in the subsection qualified the first exception, not the second. An agreement in respect of a period other than two years could be made at any time but an application to the court required to be made within the two year period. In the former case there was no need for a time limit because parties were in agreement. If parties were in agreement that the acquisition should proceed and the terms and conditions contained in the court’s order were still valid and appropriate for their purposes that was fine; no one could have an interest to object. But where there was no agreement one had to look for a cut-off or guillotine.

[43] That was for two reasons. Firstly, because circumstances changed in time with the effect that it might become desirable to revisit the whole question of acquisition. If there had been no great change in circumstance within the two year period the burden of persuading the court to grant a fresh sec 13(1)(a) order was not likely to be a great one. If, on the other hand, there had been a significant change why should that not be ventilated before the court in the context of a fresh sec 12(1) application? Secondly, the need for certainty in legal matters, especially in property rights (which were fundamental rights in terms of the First Protocol to the European Convention on Human Rights), made a cut-off point desirable. On Mr Maclean’s view the order would be enforceable for 20 years, until extinguished by prescription. That would be unusual and the court should be slow to reach such a conclusion. The better view was that an application for extension must be granted, or at least made, before the order ceased to have effect. If that view of the two year provision in sec 17(1) was correct it meant that Mr Rodenhurst’s application was too late and he now required to make his own sec 12(1) application.

[44] If, contrary to that submission, Mr Rodenhurst was entitled to seek an order under sec 17(1) on what principles ought it to be granted or refused? The court obviously had a discretion as to whether to grant or refuse such an order. As was normally the case, the onus here was on the person seeking the intervention of the court to show why the court should exercise that discretion in his favour. In exercising its discretion the court should first of all ask whether any good reason had been given as to why the order had not been enforced with the two year period. No such reason had been given here. For example, it was not being said that the respondents had misled Miss Waugh or Mr Rodenhurst into believing that a conveyance would be granted voluntarily notwithstanding the expiry of two years. The simple reason for which the order had not been enforced was that the person in right of it had decided not to seek its enforcement.

[45] Refusing the order sought would not result in Mr Rodenhurst losing the opportunity to acquire title to Brickigoe. He could still make his own sec 12(1) application. If the court took the view that there was a colourable case that such an application might not now be successful that was a reason for not allowing the period for acquisition under the present order to be extended: instead the merits should be ventilated afresh. Certain material about Mr Rodenhurst’s behaviour had been set out in the statement lodged in opposition to these motions at an earlier stage and the respondents did not accept that these matters were incapable of providing a proper basis for refusal of an order in terms of sec 13(2)(b). That was because sec 13(2) was predicated upon a particular application having been made to the court by a particular crofter; its provisions could only be applied in that context and not in the abstract.

[46] For all of the foregoing reasons the motions should be refused.

Response by Mr Maclean

[47] Mr Maclean made the following short points in response;-

(i) He did not dispute Mr Sandison’s characterisation of the order of 18 August 2006 but that characterisation made no difference to whether the benefit of the order was communicable to another party; it remained a right of action which carried with it an underlying substantive right.

(ii) The narrow construction of sec 12(1) favoured by Mr Sandison was difficult to reconcile with the nominee provisions of sec 16(1); the more familiar use of these provisions was not the one described by Mr Sandison but use in order to nominate a developer of the land with the applicant dropping out of the picture and the clawback thus being avoided.

(iii) As to the interplay between secs 14(2) and 6(4), sec 6 was a more general provision that sec 14(2), allowing either a landlord or tenant to make application to the court for the fixing of a fair rent. A landlord may apply to have fair rents fixed for his whole estate. The sections therefore served different functions.

(iv) As to where the onus lay in a sec 17(1) application, Mr Sandison had submittedthat it lay on the person seeking to disturb the status quo by intervention of the court. But that begged the question what was the status quo. In this case it was the respondents who were seeking to disturb the status quo by attempting to bring an end to the sec 13(1)(a) order’s life by refusal of an order under sec 17(1).

(v) As to the relevance of Mr Rodenhurst’s alleged conduct to whether we should grant an order under sec 17(1) or oblige Mr Rodenhurst to make his own application under sec 12(1), if the respondents were unhappy with Mr Rodenhurst’s conduct qua tenant they had remedies available to them under the Act. Mr Maclean was not aware of any case in which the conduct of the tenant had been held to be a relevant factor in deciding whether to grant a sec 12(1) application. That was hardly surprising given that the result of successfully invoking sec 13(2) of the Act was to leave the applicant as tenant.

[48] Finally, given that the three months period referred to in the sec 17(1) motion had long since expired what we should do if minded to grant the motion in principle was to put out the application By Order for submissions as to what the appropriate period should be.

Decision

[49] We have had no difficulty in deciding to grant the motion which seeks to have Mr Rodenhurst sisted as the crofter applicant in place of Miss Waugh. That has been on a pragmatic and non-technical approach. It is clear that Miss Waugh’s rights in and to the tenancy came to end upon assignation and that whatever rights now exist in relation to the tenancy of this croft are held by Mr Rodenhurst. It is as well, therefore, to sist him in place of Miss Waugh in this application so that the question of whether these rights include the right to make an application to the court under sec 17(1) and, if so, whether he has made that application timeously, can conveniently be answered in this process. Sisting Mr Rodenhurst as the applicant does not of itself confer upon him more rights than he already has. The rights he has are his rights as assignee of the tenancy.

[50] That having been done, the first question we have to decide is whether the assignation of a croft tenancy carries with it the benefit of an unimplemented sec 13(1)(a) order.

[51] We start by reminding ourselves of the nature of croft tenancy assignation.

[52] It is, like most things to do with crofting, a statutory procedure. The relevant statutory provision is sec 8 of the 1993 Act. Although subsec (1) of sec 8 refers only to the assignation by a crofter of “his croft”, subsec (5) makes clear that what is being assigned is, of course, the tenancy of the croft.

[53] Indisputably assignation of the tenancy of a croft will carry with it, as the authorities referred to by Mr Maclean make clear, all the rights and obligations pertaining to the tenancy. These include not only the rights and obligations contained in the statutory code presently comprised in the 1993 Act but also rights and obligations which happen to be current at a particular time, such as the rights and obligation to do with compensation for permanent improvements, which were before the court in Ross v Douglas. That is because they relate to the tenancy of the croft; as it is put in the passage from Rankine referred to by Mr Maclean “… assignation operates a substitution of the assignee for the cedent in the rights and obligations of the lease” (page 193, emphasis added).

[54] Does an order sec 13(1)(a) fall into that category? Such an order certainly arises out of the tenancy relationship in the sense that one must be a crofter in order to apply for it. The right to make such an application under sec 12(1) of the Act is certainly a term or condition of the tenancy which transfers to an assignee. However it seems to us at least arguable that an order obtained as a result of such an application - a sec 13(1)(a) order – does not become a term or condition of, or right under, the lease. It is not one of the bundle of rights which make up the tenancy but rather a separate and distinct additional right - granted by the court on the basis of a particular set of circumstances - to put an end to the tenancy altogether. On the basis of our understanding of what is involved in the assignation of a croft tenancy, therefore, we tend to agree with Mr Sandison that an order under sec 13(1)(a) is personal to the crofter who obtains it and endures until it is implemented or until he ceases to be the crofter of the croft to which it relates.

[55] Proper consideration of the question, however, requires an examination of the other relevant statutory provisions, the starting point for which is sec 12(1) of the Act. It entitles a crofter, failing agreement with the landlord as to acquisition by the crofter of the croft land, to apply to this court for an order authorising him to make that acquisition. There is no reference to third parties at this stage; the matter is entirely between the crofter and the landlord.

[56] If the court decides to grant such an application it makes an order under sec 13(1)(a). The terms of that subsection are, we think, important. An order under sec 13(1)(a) authorises acquisition by “the crofter” of such land as the court may specify upon such terms and conditions as the court may specify and requires the landlord to convey the land to“the crofter or his nominee”. That reference to a nominee is the only reference to a third party. So far as the sense in which the words “the crofter” are used in sec 13(1)(a) it seems clear to us that the reference is to the person who is crofter at the time the order is made. In the vast majority of cases that will be the person who has made the sec 12(1) application but it is possible to figure cases in which an assignation of the tenancy has taken place while the sec 12(1) application is pending or, perhaps more realistically, the crofter has died and the court, on the basis of the approach taken in cases such as Donaghy v Rollo, allows his successor to be sisted in room and place of the original applicant. What is significant for present purposes is that sec 13(1)(a) does not refer to “the crofter or any successor or assignee in the tenancy” or anything of that kind. If that had been Parliament’s intention Parliament could easily have said so. As it is, in terms of sec 13(1)(a) the court simply has no power to authorise anyone other than the person who is the crofter at the time of granting of the order to acquire the land or to require the landlord to convey the land to anyone other than that person or his nominee.

[57] If we understood him correctly, as well as arguing that assignation of the tenancy had the effect of carrying with it the benefit of a sec 13(1)(a) order, Mr Maclean argued that the benefit of the order passed to Mr Rodenhurst on the basis of the general rule that where any party to an existing cause has alienated, or been divested of, his interest in favour of a transferee the transferee is entitled to take his place. Mr Sandison, for his part, argued that the nature of a sec 13(1)(a) order made it incapable of assignation.

[58] We entirely accept that the right to pursue litigation is as a general rule something which can be assigned. We take no issue with any of the cases referred to by Mr Maclean as authority for, or examples of, that principle. Likewise we take no issue with his submission that it would require very clear language in an Act to prevent assignation of a right in this way. But all of that seems to us to be beside the point if the underlying right upon which the litigation is founded is itself incapable of being assigned. That is, in our view, the position in this case and we need not, therefore, express any view on Mr Sandison’s submission as to the non-transferable nature of this particular kind of order.

[59] Accordingly we are of the view (i) that an order under sec 13(1)(a) does not constitute a right relating to the tenancy which is automatically assigned as part of the tenancy and (ii) that such an order is, as a matter of statutory construction, in any event personal to the individual in whose favour it is made and therefore not assignable.

[60] Mr Maclean’s “fall back” position was that if the benefit of the order had not passed to Mr Rodenhurst it must remain with Miss Waugh because the law did not permit rights to disappear into black holes. If Miss Waugh was still in right to the sec 13(1)(a) order she was also in right to make a sec 17(1) application.

[61] This raises the question whether rights in a sec 13(1)(a) order can survive once the holder is no longer the crofter. In our view that cannot happen. The purpose of this chapter of legislation is to allow crofters to buy their crofts. Someone who assigns his tenancy is no longer the crofter of that croft and it would be at odds with the fundamental purpose and scheme of the legislation if he could nevertheless insist upon a conveyance of the land in his favour, thereby simply substituting one landlord for another. Accordingly we consider that Mr Sandison’s description of rights under a sec 13(1)(a) order as attaching to the person in whose favour the order is made while that person remains as tenant of the croft is correct. In that situation there is no question of these rights disappearing into a black hole when the tenancy is assigned; they simply come to an end because the holder has relinquished the status which alone entitles him to hold them. That does not seem to us to offend against either legal theory or justice. We accordingly reject Mr Maclean’s submission.

[62] Although that is enough to dispose of the case we should also consider the submissions we heard on sec 17(1) of the Act.

[63] Two issues were discussed in relation to sec 17(1). One was whether someone other than the person in whose favour a sec 13(1)(a) is made can make an application under sec 17(1). That obviously overlaps to a considerable extent with the discussion we have just had. The other was whether an application under sec 17(1) requires to be made, or even decided, before the two year period has elapsed.

[64] The first of these issues is, of course, governed by the our decision that a sec 13(1)(a) order is personal to the individual in whose favour it was granted and, therefore, non-transferable. But Mr Sandison made a separate submission to the effect that the use of the word “party” where it appears as the last word in the subsection means in effect “party to the original application to the court”.

[65] That was supported by a full and detailed submission as to the sense in which various terms are used in this group of sections in the 1993 Act. However, in our view the meaning of the word “party” in sec 17(1) is quite clear from the wording of the subsection itself and without resort to other provisions of the Act. It is plainly a reference back to the words “the crofter or … the cottar and the landlord”. That is the natural reading of sec 17(1). We therefore reject Mr Sandison’s submission to the contrary.

[66] The second issue is more difficult. It is whether an application under the subsection requires to be made, or possibly even granted, before the expiry of the two year period during which the sec 13(1)(a) order is said to be effective.

[67] The obvious inference from a provision which says that an order is to be effective for a specified period is that once that period has expired the order is no longer effective.

[68] The difficulty with sec 17(1) is caused by the provisions it contains whereby that period may be altered. The period can be altered in one of two ways: written agreement of the parties and an application to the court. Nothing is said as to when such agreement or application has to be made. It is not even said that the period is to be such longer period as the parties may agree or the court decide although that is probably a clear enough inference.

[69] Counsel both accepted that there was nothing to stop parties agreeing an extension of the two year period after it had expired. Mr Maclean argued that if that was so it must follow that in the absence of agreement an application to the court can also be made after the two year period has expired.

[70] We do not agree with that submission. The possibility of a consensual acquisition of croft land by a tenant always exists. If it suits a crofter and landlord in a particular situation to adopt what Mr Sandison called a pre-existing set of terms and conditions for that acquisition even after the two year period has expired there is, of course, no bar in the legislation to them doing so. That is unsurprising because such a bar would be a very extreme step which would serve no useful purpose: there is no public or other legitimate interest in preventing consensual transactions of that kind. The law has no role to play in that situation. The position where there is no agreement is completely different. The law does then have a role to play and the parties themselves have an interest in the situation being resolved by law.

[71] Although we have rejected that particular submission we have come to the conclusion that Mr Maclean’s position on this question is nevertheless correct. Having considered the matter carefully – because there are factors, which we mention below, which point the other way – we have come to the conclusion that Parliament intended that applications under sec 17(1) should be competent after the two year period has expired.

[72] The most powerful argument in favour of that view is simply that the section contains no requirement that the application must be made within the two year period. The obvious inference from that is that an application can be made at any time. Again we apply the reasoning already applied to an earlier question: if Parliament intended otherwise it could easily have said so.

[73] But it is also possible to see reasons for which Parliament may have intended to leave the matter open. We have in mind the situation of a crofter or cottar who has been misled by his landlord as to voluntary implementation of the order after the two year period has expired. It would be hard if a crofter or cottar in that situation had to start all over again and it would be unjust if a landlord acting in bad faith could gain a second opportunity of resisting a sec 12(1) application (perhaps on the basis of a contrived change in circumstance) by that means.

[74] As against that there are the considerations mentioned by Mr Sandison. What is the status of the sec 13(1)(a) order when the two year period expires? For it to go into some sort of suspended animation seems unsatisfactory and to a large extent defeats the objects of legal certainty to which Mr Sandison referred. These are factors which favour the view that Parliament must have intended that there should be a time limit on applying to the court although it failed to provide one. It occurs to us, however, that these factors are likely to prove less formidable in reality than they sound. There is no reason to think that a crofter or cottar would delay in making a sec 17(1) application long after the expiry of the two year period: why should he? And if he did there is perhaps little likelihood of it being granted, given the considerations about delay in enforcing legal rights mentioned by Mr Maclean.

[75] In the result we do not find these considerations sufficiently compelling to require us to read the section as containing a time limit. We think the section should therefore be given effect according to its terms with the result that applications to the court after the expiry of the two year period are competent. However, that conclusion is not necessary to our decision in this case.

[76] Had we considered the sec 17(1) application to be competent we would very probably have granted it on the basis that Mr Rodenhurst had only a relatively short period of time (from 14 March 2008, the date on which the Crofters Commission gave consent to the assignation, until 18 August 2008, the second anniversary of the date of intimation of our order of the same date) within which to decide whether he was going to exercise his right to acquire title and that any delay on his part could not be said to be unreasonable. However, on the view we have taken on other aspects of the matter that question is not a live one.

[77] For the foregoing reasons we have refused the motion of 12 August.

Expenses

[78] Following our usual practice we have reserved expenses and invited written motions and relative submissions within 21 days.

For applicant: Mr I Maclean, Advocate, Messrs Macleod & MacCallum, Solicitors, Inverness

For respondent: Mr C Sandison, Advocate, Messrs Murchison Law, Solicitors Inverness