Decision of the Scottish Land Court

J & S Wight Limited (Applicant) v Joan McGowan and Others (Respondents)

Case reference SLC 16/16
before
Iain F Maclean, Deputy Chairman, and Tom Campbell
27 January 2017

Introduction

[1] In this application, J & S Wight Limited (“the Company”) asks the Land Court to find and declare that the Company has:

1. a tenancy governed by the Agricultural Holdings (Scotland) Act 1991 (“the 1991 Act”) of the holding known as Duntilland Farm, Salsburgh, Shotts extending to the land shown outlined in red on the plan which forms Production No. 2 as lodged with the Land Court, including Fields Numbers 1 to 8, part 9, 10 and 11, but excluding therefrom the farmhouse and steading within Field Number 9 which commenced in about October 2002, together with a right of access more particularly described in the first crave; or

2. alternatively, a limited duration tenancy (“LDT”) governed by the Agricultural Holdings (Scotland) Act 2003 (“the 2003 Act”) of Duntilland Farm, as described in the first crave, which commenced in about January 2009; or

2A. which failing declarator in terms of either the first or the second crave, that the Company “has a tenancy of Duntilland Farm and to determine the terms of that tenancy”.

The Company seeks orders also in terms of a number of ancillary craves, about which we shall have more to say in due course.

[2] The circumstances which give rise to the Company’s application are those which have provoked so much litigation before this Court in recent years, of a party having been permitted to keep livestock on agricultural land belonging to another with nothing ever being committed to writing to record the agreed basis of his occupation, leading to conflict when the landowner calls into question his entitlement to remain. At the outset of the hearing, which extended over six days, taking in three days (20 - 23 June) of evidence and three of submissions (28 & 29 July, continued to 6 September, all 2016) in Edinburgh, Sir Crispin Agnew of Lochnaw Bt, QC, who appeared for the Company on the instructions of Messrs Stodarts, Solicitors, Hamilton, explained to us that there were two key dates that it would be helpful for us to keep in mind in order to understand the legal analysis which informed the framing of the Company’s alternative craves, because if the Court were to be persuaded, on the evidence, that some form of secure agricultural tenancy had been established in favour of the Company over Duntilland Farm, the type of tenancy and its legal consequences would depend upon which statutory provisions applied on the date we held it to have come into being.

[3] The key dates which Sir Crispin invited us to keep in mind were 27 November 2003, being the date upon which the relevant provisions of the 2003 Act came into force, by virtue of Article 2 of the Agricultural Holdings (Scotland) Act 2003 (Commencement No. 3, Transitional and Savings Provisions) Order 2003 (SSI 2003/548); and 22 March 2011, the date on which the amendments to the 2003 Act introduced by the Public Services Reform (Agricultural Holdings) (Scotland) Order 2011 (SSI 2011/232) (“the 2011 Order”) came into force. If an unwritten lease in favour of the Company of agricultural land was entered into before 27 November 2003, the tenancy under that lease would be a “1991 Act tenancy” in the nomenclature of section 1 of the 2003 Act; if entered into after that date, it would be subject instead to the provisions of the 2003 Act. If a lease of agricultural land from year to year (being for a term of not more than five years) was entered into in January 2004, it would be a short limited duration tenancy (“SLDT”), which after 5 years in January 2009 by operation of law (section 5(2) of the 2003 Act) defaulted into a LDT of 15 years commencing on the expiry of the 5 year term of the SLDT, and would not be terminable at the hand of the Respondents until January 2024. If, as the Respondents argued, as a result of a material variation of its terms occurring during the summer of that year a new SLDT came into being in 2009, then in consequence of the modifications to the 2003 Act introduced by the 2011 Order, it would, by operation of the amended section 5(2) of the 2003 Act, in 2014 “mutate”, as Sir Crispin put it, instead into a 10 year LDT, commencing at the start of the 5 year term of the SLDT, which the Respondents could bring to an end in 2019.

[4] The Respondents, who were represented at the hearing by Hamish Lean, Solicitor, of Messrs Stronachs, Solicitors, Aberdeen, denied that, on the facts averred, a secure agricultural lease had been established in the Company’s favour, their position being that the Company had “enjoyed a series of seasonal grazing lets over Duntilland which commenced in January of 2004, any prior occupation by them being by permission only”. Their fall-back position was that esto such a lease had been established in the Company’s favour, which was denied, then it would have been, just as the Company argued, an SLDT commencing in January 2004 and having effect for 5 years, which by operation of law in January 2009 defaulted into a LDT of a further 15 years enduring to January 2024. However, the Respondents contended, a variation of the terms of that lease occurred in the summer of 2009 sufficiently material as to be constitutive of a new lease commencing in that year. That new lease would become a SLDT having effect for 5 years from its date of commencement which in 2014 defaulted into a 10 year LDT from 2009, and which would be terminable (by way of the “dual notice” procedure) at the instance of the Respondents in the summer of 2019.

The witnesses

[5] At the hearing, the Company led evidence from James Wight, Senior (aged 72) (“Mr Wight (Snr)”), and his son James (otherwise “Jim”) Wight, Junior (aged 39) (“Jim Wight”). The Wight family farm on a substantial scale, including at East Fortissat and Fortissat Mains Farms and at Mountcow Farm, Salsburgh, Shotts, which shares a boundary with Duntilland Farm. Their various farming operations are conducted through three separate businesses, in the form of two limited companies, being J & S Wight Limited and J M Wight Limited, and the partnership John M Wight & Son. The reasons for this business structure were not explored in evidence, and during his testimony Jim Wight exhibited some uncertainty as to which of these entities farmed or owned the livestock upon the different farms. Jim Wight, his mother Mrs Sheila Wight and his sister Mrs Anne Kay are Directors of the Company, but although Mr Wight (Snr) is merely a shareholder thereof, it became increasingly clear to us as the evidence unfolded that he was the dominant figure in all of the three businesses. The Respondents, all of whom gave evidence, are Mrs Joan McGowan (aged 67), her son Lee William McGowan (“Lee McGowan”) (aged 48) and Mrs Donna Louise Touray (“Donna Touray”) (aged 42). Mrs Joan McGowan is the widow of William McGowan, a coal merchant and farmer, who died on 6 August 2006, and Lee McGowan and Donna Touray are the surviving children of that marriage. The Respondents became the heritable proprietors of Duntilland Farm after William McGowan’s death. Production 3 is a copy of the disposition in their favour as recorded in the Division of the General Register of Sasines applicable to the County of Lanark on 27 January 2009, which discloses that in part implement of a Deed of Variation dated 1 July 2008 Mrs Joan McGowan as her late husband’s Executrix Dative and as such uninfeft proprietor thereof disponed Duntilland Farm to herself to the extent of a one half share pro indiviso and to Lee McGowan and Donna Touray to the extent of a one quarter share pro indiviso each. The only other witness from whom we heard evidence was Mr John McKean Stirling (aged 68), a solicitor who had acted for the late William McGowan. The dealings which resulted in livestock belonging to a third party first being released onto Duntilland Farm took place in the Autumn of 2002 and were between William McGowan and Mr Wight (Snr). They were the parties to all subsequent communings in connection with the use of the land at Duntilland Farm until William McGowan’s death on 6 August 2006. One of the difficulties of this case is that with the death of William McGowan, what he might have had to tell us about the arrangement (to use a neutral word), or series of arrangements, he came to with Mr Wight (Snr), died with him. In the absence of a written lease or license, and in consequence of the fact of William McGowan’s death over a decade ago, the only direct evidence we heard as to what may have been agreed between the two men came from Mr Wight (Snr)’s oral testimony. That does not, of course, mean that we require to accept without question his account of that agreement. Issues of credibility and reliability loomed large at the hearing, in connection particularly with the evidence of both of the Company’s witnesses, about which we shall have more to say in due course.

Duntilland Farm

[6] Duntilland Farm is a farm formerly extending to some 300 hectares or thereby situated on the north side of the M8 motorway, the nearby village of Salsburgh on the south side of the motorway being the closest centre of population. Part of Duntilland Farm’s southernmost boundary runs along the M8. Duntilland Farm is bisected by a single-track road, known as Duntilland Road, which continues past the entry into the farmhouse and the steading pertaining thereto and on to Mountcow Farm and the Black Hill television transmitter, which looms over the surrounding landscape. The plan lodged by the Company as Production No. 2 (“the Plan”), based on an Integrated Administration and control System (“IACS”) plan from 1998, shows what was, back then, the larger part of Duntilland Farm, consisting of Fields 12 and 13 and having a combined area of 158.39 hectares, as lying to the east of Duntilland Road, with the farmhouse and steading and Fields 1-11 to the west thereof. A quarry, now operated by Aggregate Industries UK, lies to the east of Fields 12 and 13. Operations at Duntilland Quarry were enabled to expand westwards in consequence of William McGowan having in or about 1997/98 negotiated the sale of Field 12 to the quarry operators, but he was permitted to continue using such part of Field 12 as they had as yet no need. The Respondents to this day retain the use of what remains of Field 12, being a long narrow strip of land running parallel to Duntilland Road, the fenced eastern boundary of which post-dates, and in consequence is not depicted on, the Plan. The total area of Duntilland Farm (inclusive of the 5.32 hectares of Field 13) as now owned by the Respondents extends to some 148.14 hectares.

[7] It is convenient at this point to say something more about the Plan, and by so doing introduce one of the contested issues which we require to address in this case. The Company lodged the Plan, and refer to it in its first crave to define the subjects of which it claims to be the tenant, but did not, in the Application as first lodged, allude further to it or explain its origins. The Plan, as lodged, purports to show the subjects of lease outlined in red, and as so marked up, they include no land to the east of Duntilland Road (i.e. Fields 12 and 13 are excluded), with part of Field 9 to the west of the farmhouse and steading also shown as lying outwith the red line. As the pleadings developed, in response to averments by the Respondents, the Company introduced in paragraph 8 of the Statement of Facts averments that:

“in 2002 Mr Wight had approached William McGowan for a copy of his IACS plan and he arranged for a photocopy of the Plan to be delivered to East Fortissat by Donna McGowan. A copy of the plan so delivered is Production 2 …”

The casual reader would, we think, be forgiven for have taken the import of those averments to be that the Plan as so marked up was contemporaneous with the commencement of the initial arrangement between Mr Wight (Snr) and William McGowan, but it emerged when Mr Wight (Snr) was in the witness box that this was not the case. The red outline excluding Fields 12 and 13 and part of Field 9 was only appended after the Company had consulted solicitors subsequent to its continued occupation of Duntilland Farm having been called into question by the Respondents in 2015. The Company previously had averred that when it took occupation of the holding in about October 2002, Duntilland Farm “at that time included” Field 13, which begged the question what had happened to alter that position. The Respondents’ answer to that question is that when, after the death of William McGowan, Lee McGowan in 2009 purchased cattle and installed them on Field 13 without protest from the Applicants, that constituted a variation in the terms of any lease that might previously have been constituted in the Company’s favour so material as to be constitutive of a new lease. In relation to that part of Field 9 extending, according to the Company’s averments, to some two hectares, which also lies outwith the red outline on the Plan, the Company’s position, as set out in its pleadings, was that when Lee McGowan, in 2012, asked if he could make a small paddock in Field 9 for his bull when out of service, the Company agreed, so that:

“In these circumstances J & S Wight no longer claims that field number 13, nor the two hectare paddock (part of field No. 9) are still [both our emphases] part of the holding.”

[8] As we had read those averments, they embodied an acceptance that Field 13 and the whole of Field 9 initially had been part of the subjects originally let to the Company, but in evidence, Mr Wight (Snr) did not adhere to that position, at least in relation to Field 13. In his examination-in- chief, he testified that occupation had been taken in October 2002 of the land within the red line depicted on the Plan, but his position seemed to be that Field 13, outwith the red line, had some sort of intermediate status: it was “there if we wanted it”, or “was a field available to us”, or “it was available to us if we wanted it”, but it was not itself part of the subjects of lease. Under cross–examination about the status of Field 13, and how it fell to be distinguished from the other parts of Duntilland Farm over which the Company claimed to have a tenancy, Mr Wight (Snr), in a manner with which we became all too familiar as his evidence proceeded, never answered a direct question with a direct answer.

[9] There were, according to Mr Wight (Snr), various things wrong with Field 13 – it was a small field, on the other side of Duntilland Road from and as such not part of the “main block” of Duntilland Farm, and it had been used by the Company only from time to time as a holding area for parcels of sheep separate from the main flock; it had no water supply, was difficult to maintain in good agricultural and environmental condition (“GAEC”) and there had been instances of sheep thefts and worrying – so that it was “no loss” when Lee McGowan took it back in hand. We did not find any of this convincing. Mr Wight (Snr) was forced to acknowledge that he had not discussed the position with regard to Field 13 separately with William McGowan and that the Company had claimed agricultural subsidy payments against it just as it had on the other parts of Duntilland Farm that it claimed were comprised within the subjects of lease. From our site inspection of Duntilland Farm, which was carried out on 27 July 2016 after we had heard the witnesses’ evidence but before the parties commenced their closing submissions, we concluded that the 5.32 hectares of Field 13 was better quality land, and in better condition, than most of the rest of Duntilland Farm. We discovered an old cast iron bath/water trough next to a standpipe marker at the north edge of the field and we have no reason to doubt that a permanent water supply to Field 13 could have been restored with relative ease if this had been considered necessary. We further note that the photograph lodged by the Company as Production 14, being an image captured in May 2009, shows a flock of sheep grazing on Field 13 in what appears to be dry weather. No details of the circumstances of thefts from, or instances of sheep worrying within, Field 13 were proffered and it remains unclear to us why sheep should be any more vulnerable to such eventualities on one side of Duntilland Road than the other. Mr Lean reminded Mr Wight (Snr) that it was the Respondents’ contention that if Field 13 had been part of the original subjects of lease, its occupation by Lee McGowan in 2009 without prior reference by him to the Company or objection thereto by the Company was, as a matter of law, an event constituting a material variation such as would bring any existing lease in favour of the Company to an end, and he put to Mr Wight (Snr) that his position with regard to Field 13 was “designed to evade that argument”. Mr Wight (Snr) claimed not to be aware of the legal arguments: we did not believe him, and we are of opinion that Mr Lean’s diagnosis of what lay behind his answers to questions about the status of Field 13 was here the correct one. The overwhelming impression conveyed by the evidence of both Mr Wight (Snr) and his son was one of artifice: we have no doubt whatsoever that their answers to questions about Field 13 were crafted with an eye to eliding what they understood the potentially adverse legal consequences of their acquiescence in its removal from the subjects of lease might be. It follows that we are of the view that Field 13 stood in no different position from the other parts of Duntilland Farm which the Company occupied from in or about October 2002 onwards.

[10] We shall return to the legal implications of that finding in fact at a later stage of this Note. In the meantime, we shall attempt to summarise the other evidence we heard, and to explain which parts we accepted, and which parts we did not, adopting a broadly chronological approach.

The chronology of events

[11] The Respondents’ unchallenged testimony was that William McGowan purchased Duntilland Farm in or about 1981, and he and his family moved into the farmhouse in December of that year. William McGowan worked six days a week in his business as a coal merchant, but he came from a farming family and, having acquired Duntilland Farm, he commenced livestock farming, and built up a flock which at its largest consisted of as many 750 breeding ewes and a total head count of some 1000 sheep. Between 1996 and 2000, he also bought and reared calves to create a small herd of black and white cattle. He cut hay and made silage. Growing up on Duntilland Farm, Lee McGowan assisted his father in the evenings and at weekends, and he continued to do so at weekends after he first left home. Always a heavy drinker, William McGowan’s consumption of alcohol became a serious problem following the death, in tragic circumstances, of his younger son Ewan in March 2000, from which blow he never recovered. He suffered panic attacks and experienced other health problems. His drinking was the cause of his wife Mrs Joan McGowan leaving him, and moving into Airdrie, although the couple remained in contact and never actually divorced, and the farming operations on Duntilland Farm, which had been winding down even before the death of Ewan McGowan, came to an end, with all of the remaining livestock thereon being sent to auction. Lee McGowan recalled helping his father worm the last 70 lambs before they were sent to market. He did not, as we recorded his evidence, specify whether those last lambs went for sale in the Autumn of 2000 or of 2001, but given that in answer to questions posed by Sir Crispin in cross-examination he indicated that the land at Duntilland Farm had not been vacant for more than a year before the arrival of the Company’s sheep thereon, and he was not challenged on that point, we hold that lambs were born to sheep belonging to William McGowan on Duntilland Farm in the Spring of 2001, with the last of his livestock being sold in late Summer or early Autumn of that year.

[12] Mr Wight (Snr)’s account of his dealings with William McGowan sounded well-rehearsed, with a number of stilted stock phrases recurring, some of which were repeated almost word for word by his son when he came to give evidence. We were told that, having noticed that Duntilland Farm had not been farmed for some time, he had approached William McGowan, someone he had not previously known, to “give me occupation of Duntilland Farm.” He emphasised that “we were looking for additional land”, to expand the business and “aggressively move it forward” and to establish a separate closed flock on Duntilland Farm, and the impression he was obviously keen to convey was that the acquisition of the land at Duntilland Farm represented the fulfilment of a long held plan. Mr Wight (Snr) placed great stress on the poor state of the fencing he encountered before taking up occupation of Duntilland Farm. There was a “huge volume” of fencing to be done; so much, he claimed, that he would not have taken on the land if all that was being offered by William McGowan was a short-term grazing let, but his answers to questions about what duration, if any, had been agreed, were indirect and evasive, and, to our way of thinking, as we shall go to explain, much in his account of these events did not add up or ring true. Mr Wight (Snr) testified that the works carried out by the Company to get the fencing at Duntilland Farm back into repair extended over some two years and included repairs to some of the internal fences. No vouching was produced for the costs supposed to have been incurred by the Company in putting the fencing at Duntilland Farm in order.

[13] When asked by Sir Crispin what he had agreed with William McGowan, Mr Wight (Snr) explained that he had been told that he could put stock on Duntilland Farm, but that William McGowan did not want any responsibility for the fencing repairs. Asked if there had been any discussion about rent, he replied that he had been told that if he repaired the fencing, William McGowan would “take that into consideration” when he “eventually asked for rent.” When asked by Sir Crispin (and we particularly noted the curious manner in which the question was posed), “how long did you expect to have occupancy”, Mr Wight (Snr)’s response was the equally odd “No time limit was placed on it”. When it was put to him by Sir Crispin, anticipating the Respondents’ cross-examination, that what William McGowan had offered him was only a (seasonal) grazing let, Mr Wight (Snr) answered that there had been “no mention of that.” In response to the leading question whether he had told William McGowan he wanted to establish a closed breeding flock on Duntilland Farm, Mr Wight (Snr)’s answer was once again cast in negative form: he did not positively affirm that he had indeed so told William McGowan, merely that William McGowan “had no objection to that at all.” Asked by Sir Crispin “how long did William McGowan expect you to be there?” (and we note, once again, the odd manner in which the question was framed), he replied that there was never any discussion of this, a position to which he adhered under cross-examination.

[14] On Mr Wight (Snr)’s account, then, the issue of duration was never broached by either party. We find this frankly incredible. It is incredible, looking at the matter from the point of view of Mr Wight (Snr), in that if the extent of the fencing required to make the place stock proof and fully operational were truly as extensive as he maintained, he himself surely would have wanted clarity, if not indeed a formal assurance from William McGowan in the form of a written lease, on duration before expending a significant amount of time and money on putting it in order. The state of the fencing spoken to by the Wights is consistent neither with the fact that a sizeable flock had been maintained on Duntilland Farm up until just over a year previously nor with the fact that the Wights were able to move sheep onto Duntilland Farm directly from the land at Dumfries from which they had required to remove in some haste, in circumstances we shortly shall relate. On the site inspection we carried out on 27 July 2016, during which, over a period of some three hours, we walked around almost the entire perimeter as well as across the middle of Duntilland Farm, we saw little evidence of extensive modern, by which we mean in this context, post-2002, replacement fencing on the holding other than a stretch along the south west march, and much of the internal fencing was in such an advanced state of dilapidation as to consist of little more than the stumps of broken stobs and old wire submerged in the grass.

[15] We do not doubt that, as indeed is a matter of admission by the Respondents in their Answer 3, some repairs to the march fences to render them fully stockproof were required before the Company took entry, and that further minor repairs may have had to be carried out from time to time thereafter to maintain them in a stockproof condition, but we do question the Wights’ account of the scale of the task they faced in rendering Duntilland Farm stockproof when first taking entry thereto. In relation to the repairs to the march fencing, we heard nothing about any contribution by adjoining proprietors towards the costs of repairs, which again causes us to question how extensive any programme of repairs could have been. Lee McGowan testified that the state of the march fencing on Duntilland Farm in or about October 2002 was not much different then from how it appears today. We found Lee McGowan to be a generally far more credible and reliable witness than either of the Wights, and we accept his evidence to that effect.

[16] Upon inspection, there was likewise little sign of the ditch maintenance and drainage works which the Wights claimed had been carried out on Duntilland Farm during their period of occupation. The heavily rush-infested and partially waterlogged fields and broken down internal fences we observed during our inspection exhibit no sign of the Company having expended a significant amount of time or money on maintaining the land on Duntilland Farm in GAEC and on the upkeep of the march and internal fencing in the period since the Autumn of 2002. We have concluded that the Wights, in evidence, exaggerated the quantity of replacement fencing and repairs to existing march fencing which was needed to render Duntilland Farm stockproof before they (or the Company) first took up occupancy, and how long it took, and more generally overstated the extent of their efforts to maintain the land and fixed equipment at Duntilland Farm in the period from the Autumn of 2002 to date. In our opinion, Duntilland Farm has been severely neglected during the period of their (or rather the Company’s) stewardship. The Company neither cut hay nor made silage on Duntilland Farm, as William McGowan had when he was actively farming. There was a conflict in the evidence as to whether Jim Wight had approached Mrs Joan McGowan or Lee McGowan for permission to lamp for and snare foxes on Duntilland Farm, but little or nothing seems to us to turn on with which of them Jim Wight spoke about vermin control.

[17] We would record at this point that on 26 July 2016, the day before our scheduled site inspection, the Respondents’ agents contacted the Court by email to report that the Wights were carrying out works to the march fencing that very day. Upon inspection, we saw the evidence of these very recent works, which were concentrated along a section of fence along the edge of Duntilland Road just down from the farmhouse and steading. Judging by the extent of the repairs which had been carried out shortly in advance of our arrival, that fence must have been in very poor condition – barely stockproof – before they were executed. We are sceptical that this work was carried out as part of a programme of routine maintenance, of which there was otherwise scant evidence, judging by what we saw elsewhere in the course of our inspection, and we cannot but think in the circumstances that it was done principally for our benefit.

[18] It emerged during the course of Mr Wight (Snr)’s evidence that the breeding ewes which arrived on Duntilland Farm in or about October 2002 had been brought back from land of which “we” [sic] had a seasonal grazing let in Dumfries-shire, supplemented, according to him, by ewes lambs recruited from other flocks. When Mr Lean suggested to him that the sheep from Dumfries-shire had come to Duntilland Farm out of necessity, rather than by design as part of a long-held intention to establish a new closed breeding flock, Mr Wight (Snr) demurred, claiming that “we could have found a place for them [i.e. the sheep from Dumfries-shire] somewhere”, an answer which characteristically once again side-stepped the point of the question being put to him, but we think something considerably closer to the truth emerged towards the end of Jim Wight’s evidence, when he admitted under questioning from the Court that if the land at Duntilland Farm had not become available when it did, the sheep from Dumfries-shire would have had to be sent to market. We accordingly reject Mr Wight’s evidence to the effect that he would not have taken on the land at Duntilland Farm if all that was then on offer was a short term grazing let. The Company, in Article 2 of the Statement of Facts in the Application, offered to prove that “Both parties understood that this would be long term arrangement.” We do not consider that they succeeded in so doing. We think it unlikely that the grassland at Duntilland Farm would have been allowed to fall into the state of neglect we observed on inspection had the Wights genuinely believed that the Company held it on a secure tenancy and had a long term interest in maintaining its productive capacity.

[19] The evidence, at second hand, from his widow, of how she understood the late William McGowan regarded his arrangement with “a farmer frae Shotts” (as Mrs Joan McGowan recalled her husband had referred to Mr Wight (Snr) when she was first told of it) was that it was just a grazing, or a seasonal grazing, let, to keep the grass down and the place tidy. Mrs Joan McGowan, who after her separation from William McGowan went out to work, until her retirement, as an auxiliary at Monklands Hospital, made clear that she had no knowledge or understanding of the complexities of agricultural law. She patently did not understand the different legal consequences which attach to leases of agricultural land for the purpose of being used only for grazing or mowing during some specified period of the year of 364 days or less, and leases of agricultural land constituted for a period of more than 364 days (i.e. for a whole year or annual), a lack of understanding of which great play was made by Sir Crispin in the course of her cross-examination, but we attach little significance to her answers in this respect. The critical distinction which Mrs Joan McGowan did draw was between seasonal grazing lets, by which she meant leases which did not confer security of tenure, and those forms of lease which did. Her understanding, gleaned from her late husband, was that in relation to Duntilland Farm, the parties “just made their arrangement from year to year”, with renewal at year’s end not guaranteed but dependent upon whether “the Wights still wanted it or Willie wanted to get them off”. The sheep were on Duntilland Farm to “keep the grass down and the place tidy.” Lee McGowan had formed the same impression from his conversations with his father.

[20] Mrs Joan McGowan spoke to two conversations she had in passing with Mr Wight (Snr), whilst her husband was still alive, at which she specifically raised with him the issue of the basis of his occupation of the land at Duntilland Farm (at this point in time, she had never heard mention of the Company and Mr Wight (Snr) did not then volunteer to her the information that any such occupation was by the Company rather than by himself as an individual). She had been prompted to do so by something which had been said to her in the course of a conversation in the village. A local had asked her whether Willie still had sheep, to which she had answered in the negative, explaining that the sheep in the fields at Duntilland Farm belonged not to her husband, but to a farmer from Shotts. The questioner, on hearing this news, then asked her whether she had heard that “you can be on land so long that you can claim the land”, to which Mrs Joan McGowan answered in the negative. Mrs Joan McGowan took this warning sufficiently seriously as to raise it with Mr Wight (Snr) next time she saw him round and about Duntilland Farm, in response to which he told her “not to worry, that doesn’t apply to us, we’re only grazing.” Mrs Joan McGowan recounted this answer to the person who had first alerted her to this concern, who elaborated on it to the extent of explaining that there was a thing that the occupier had to get off the land for about a week every year if the risk of such a claim were to be avoided. Mrs Joan McGowan testified that when she put this to Mr Wight (Snr) on a second occasion, he again told her there was no need for this: “that doesn’t apply to us, we’re only grazing”. Mrs Joan McGowan accepted his assurances that she had nothing to worry about. At no stage in either of these conversations did Mr Wight (Snr) assert that he (or the Company) had any form of secure tenancy of Duntilland Farm. Sir Crispin put it to Mrs Joan McGowan in cross-examination that her account of these two conversations with Mr Wight (Snr) was not true, but he did not press that suggestion, and for our part, we have no hesitation in accepting Mrs Joan McGowan’s testimony about having twice raised the issue with him, and her account of his responses thereto, as credible and reliable. The open and natural manner in which Mrs Joan McGowan and indeed also her two children gave evidence contrasted starkly with that of Mr Wight (Snr) and his son.

[21] Significantly, William McGowan’s solicitor, Mr Stirling, who had acted for him in or about 1999/2000 in a successful application for recall after he had been sequestrated at the instance of HMRC, and over the course of the next three or four years to 2003/2004 in negotiations with Scottish Coal in connection with the proposed grant of a mineral lease over the whole of the rest of Duntilland Farm, which ultimately foundered over Scottish Coal’s unwillingness to find caution or provide a remedial bond for the costs of reinstatement of the ground after mining operations had ceased, had formed from his dealings with William McGowan the same understanding as Mrs Joan McGowan as to the short-term nature of his arrangement with Mr Wight (Snr). Mr Stirling, upon hearing, in the course of advising William McGowan in connection with the proposed mineral lease, that a third party had livestock on Duntilland Farm, and having spoken to a professional colleague in his firm with some knowledge of agricultural law (Mr Stirling freely admitted he had no expertise in that area of work), broached with William McGowan his concerns about the complications which could arise for the proprietor of agricultural land where grazings were let with nothing in writing to record the basis of the arrangement. William McGowan’s response was “robust and gruff”, and was to the effect that he could look after his own business very well, and did not require any input from Mr Stirling in connection therewith. As such, it was, as Mr Stirling remembered William McGowan, very much in character. The impression Mr Stirling had formed from what limited information he had been able to glean from William McGowan as to the nature of the arrangement of mutual convenience which the latter had reached with the third party with regard to the grazing at Duntilland Farm was that it was casual and terminable at will. That William McGowan should, throughout the period from when he was approached by Mr Wight (Snr) in the Autumn of 2002 though to 2003/2004, have been engaged in negotiations with Scottish Coal about the grant of a mineral lease over the whole of the rest of Duntilland Farm renders even more inherently implausible the Company’s averred assertion that, from the outset, “Both parties understood that this would be a long term arrangement.”

[22] Mr Stirling, an experienced solicitor who impressed us as a shrewd, careful, credible and reliable witness, portrayed William McGowan as a somewhat rough and ready individual, but one with considerable experience of life in spheres other than farming, who would be well able in difficult circumstances to look after his own interests. This assessment of the character of William McGowan is entirely consistent with all of the other evidence we heard about the man, who through his hard work in building up a coal merchant’s business had been able to purchase and run a 300 hectare farm, and who was involved in negotiations with mining concerns about the sale or lease of land to them, subject to one striking exception. Jim Wight, who gave evidence on the second day of the hearing, his father’s evidence having been concluded at the end of the previous day, volunteered the assessment that the late William McGowan was “not sophisticated”, “not well educated”, and “would not have understood a term like ‘seasonal grazing lets’”. That he should have so volunteered such an assessment of William McGowan’s character and intellectual capacities surprised us considerably, not merely because, on his own account, the young Jim Wight’s personal dealings with him had been very limited in extent and as such afforded him little material upon which to form such a judgment. In giving evidence, Jim Wight habitually answered the questions put to him in a terse and controlled manner, with a minimum of elaboration, which was highly reminiscent of that of his father, and with ready resort to the formulae that he either did not know, or could not remember, where questions came up for which he did not have a prepared answer to hand. Mr Wight (Snr) opted to sit towards the rear of public gallery in his son’s direct line of sight throughout Jim Wight’s evidence and as we observed him we were left with the distinct impression that Jim Wight was more concerned about how his answers were going down with his watching father than with the members of the Court. His views on William McGowan’s levels of sophistication, education and understanding were tacked awkwardly on to the end of an answer he gave during his examination-in-chief when it was being put to him that the Respondents’ position was that his father had agreed only to a seasonal grazing let. They were introduced with the words “The thing that sticks in my mind …”, and we were struck at the time by how different was his demeanour in “chipping in” these comments from that which we observed in the course of most of the rest of his evidence. We are drawn to the conclusion that this was something he had been instructed to try to insert into the evidence at some point. We reject as being without substance his suggestion that William McGowan would not have understood terms like “seasonal grazing lets”, and we take from the evidence of Mr Stirling, backed up by what we heard about William McGowan’s life experience and other business dealings, that he was someone well up to looking after his own interests in dealings with the Wights.

[23] We consider it to be highly significant that on the IACS Field Data Sheets submitted by the Company with its Single Application Form (“SAF”) to claim agricultural subsidy payments under the Single Farm Payment Scheme (“SFPS”) in the years 2006, 2007, 2009, 2010, 2011, 2012, 2013, 2014 and the new Basic Payment Scheme (“BPS”) in the year 2015, retained office copies of which were lodged by the Company as Productions 52-59 and 26A respectively, the land at Duntilland Farm was entered by the Company as SEASONAL LAND rather than as PERMANENT LAND. Mr Wight (Snr) initially claimed that in so doing, the Wights were following advice tendered in an article published in the farming press, he thought perhaps in the Scottish Farmer, but possibly in a briefing note sent out by a firm of professional advisers, to the effect that where there was no written lease, the land should be entered on the Field Data Sheets as SEASONAL LAND. He had not been able to trace the article or briefing note. Under cross-examination, he appeared to broaden his position somewhat, claiming that this was the view taken by the farming community at the time, and that he had probably discussed it with someone at the mart, although he could not name that person. He could not remember whether he had spoken to anyone at “the Department” about it, and it was not suggested that there was anything contained within the Notes for Guidance or any of the other scheme literature issued by SEERAD/SGRPID to farmers along with their SAF to encourage or sanction that approach. We did not find his explanation as to why the land at Duntilland Farm was so entered on the Field Data Sheets as SEASONAL LAND credible.

[24] Jim Wight, when questioned about why the land at Duntilland Farm was entered as SEASONAL LAND on the Field Data Sheets submitted by the Company with its SAFs, claimed to have become aware of this fact only once the present case commenced. Although he now took a greater role in completing the forms, his parents still dealt with the majority of the paperwork, with his brother and him doing the physical work on the farms. We did not believe him. Jim Wight is no ordinary farm labourer, but holds both a general degree in agriculture and a postgraduate (MSc) degree in animal production. He is also a director of the Company, and has been since at least 2002. Given the importance of agricultural subsidy payments to the viability of farming in Scotland during the period over which the land at Duntilland Farm was so entered on the Field Data Sheets submitted by the Company with its SAFs, we consider it highly unlikely that Jim Wight throughout that period remained ignorant of the fact that the land at Duntilland Farm had been entered as SEASONAL LAND, and we infer that his profession of ignorance was a strategy employed by him to close down awkward lines of questioning. Whilst we recognise that the unfamiliar experience of giving evidence in Court is one which many witnesses find difficult, he exuded a palpable sense of unease whilst delivering his evidence which we considered went beyond what we would have expected of an intelligent, well-educated and otherwise self-confident witness, and caused us to conclude that he was attempting to stick to a pre-rehearsed script rather than answering the questions put to him in a spontaneous and truthful manner.

[25] In 2005, the first year of the reformed agricultural subsidy scheme which introduced the Single Farm Payment, the Field Data Sheets completed by claimants did not distinguish between SEASONAL LAND and PERMANENT LAND, as the copy Field Data Sheets submitted by the Applicants with their 2005 SAF and lodged by them as Production 51 confirm. In the run of SAF Field Data Sheets lodged by the Company, one, that for 2008, was missing, for reasons which were not satisfactorily explained. When Mr Lean attempted to wrest from Mr Wight (Snr) the concession that the likelihood was that it too would have shown the land at Duntilland Farm entered as SEASONAL LAND, the latter’s persistent efforts to avoid making it further diminished his credibility as a witness in our eyes. We accordingly hold that when occupation of Duntilland Farm was taken by one or other of the Wight entities (an issue to which we shall return) in or about October 2002, Mr Wight (Snr) had no reason to believe that it “would be a long term arrangement”; on the contrary, we hold that he well knew and accepted that it was precarious and with no guarantee of renewal.

[26] We note, in passing, that in the years 2005, 2006, 2007 and 2009 (and, we would infer, also in 2008) the Company declared Field 13, but not Fields 1 and 4, in the Field Data Sheets relative to its SAF claims for those years, with Field 13 being excluded, and Fields 1 and 4 included, from 2010 onwards. No explanation was proffered as to why Fields 1 and 4 were not included in the Company’s subsidy claims before 2010, or what had occurred between the submission of the Company’s 2009 and 2010 SAFs to cause that to change. The loss of the use of Field 13 in the course of the previous year may have provided a reason for the Company to have included one or other of Fields 1 and 4 in its SAF claim from 2010 onwards in substitution therefor, but not why they were not included before, and we did wonder whether this further apparent anomaly in the Company’s position might have implications for the issues of the extent of the original subjects of lease, for which we only have the Wights’ word, and the materiality of any subsequent changes thereto, but Mr Lean neither broached the point in his cross-examination of the Company’s witnesses nor founded upon it in his closing submissions. That said, however, given that the Company itself has founded upon the contents of these Field Data Sheets to support its claim to have occupied Duntilland Farm on a secure tenancy (see, e.g., its averment in paragraph 4 of the Statement of Facts in the application that “The holding has been claimed on J & S Wight’s IACSs form for single farm payment since 2005, albeit it was entered as seasonal lets …”), it seems to us that its failure to provide an explanation for this anomaly, as with the other anomalies we have identified elsewhere in this Note, is something we are entitled to take into account in assessing the credibility and the reliability of the witnesses who gave evidence on its behalf.

Rent

[27] The Company accepts that no rent was agreed before its sheep were released onto Duntilland Farm. The position set out in the Company’s pleadings was that “no rent was discussed at the time, but both parties recognised that rent would be paid and the level of rent would be fixed having regard to the obligation to fence or repair fencing of the boundary as required”. That averment begged a number of questions. How did the parties manifest their mutual recognition that rent would be paid and that the level of rent would be fixed having regard to the obligation to fence or repair fencing of the boundary as required? What was the source and what was the measure of the asserted “obligation to fence or repair fencing”, and “as required” by whom? The evidence we heard did little to clarify these issues. When asked by Sir Crispin in examination-in-chief whether there had been any discussion, at their initial meeting, about rent, Mr Wight (Snr) explained that William McGowan’s position was that the Wights could put stock on Duntilland Farm, but he didn’t want any responsibility for repairing the fencing. Repair the fencing, and he’d “take that into consideration when he eventually asked for rent”. Under cross-examination, Mr Wight (Snr) stated that the rent would be “discounted” to reflect the amount of fencing which had to be done, but when pressed on this point by Mr Lean (“discounted from what?”) he had to concede that no figure for a base level of rent had been agreed. Had William McGowan, when the time eventually did come to discuss rent, said it should be £10,000 per annum, Mr Wight (Snr)’s response would have been to say that such an amount was excessive. He suggested that if William McGowan was unhappy with that response, “he could have taken us to arbitration”, although he did not explain how William McGowan could be compelled to go to arbitration to fix an initial rent where none had been agreed.

[28] On Mr Wight (Snr)’s account, there matters rested until Mr Wight (Snr) received a telephone call from William McGowan at the end of 2003 or in early 2004 in which he "suggested I [sic] pay some rent.” A figure of £1500 was agreed, “backdated to 2002.” This amount took into account “the fact that we’d done a substantial amount of fencing.” Thereafter, William McGowan received rent every year in an amount which became £3000 per annum, paid backhand to 2005, and thereafter forehand. Mr Wight (Snr) explained the change from rent being paid backhand to forehand on the basis that the flock maintained on Duntilland Farm was by then bigger, and because he had become a bit concerned that he “didn’t have a written lease. I suggested we pay rent forehand and he was quite happy with that.”

[29] The documentary evidence produced by the Company as to the numbers of sheep maintained by it on Duntilland Farm takes us back only as far as 1 January 2006, in the form of the Sheep and Goats Annual Inventory 2006 which was submitted by the Company to the GB Central Database maintained by DEFRA [Production 41] stating the number of sheep or goats kept by it, and the locations at which they were kept, so we were unable to verify from a contemporaneous documentary source whether there had indeed been such an increase in the numbers of sheep kept by the Company on Duntilland Farm between 2002/3 and 2005. Mr Wight (Snr) was unable to explain how payment of rent by the Company forehand rendered its position any more secure than payment of backhand, and nor did he explain why, if, as the Company had averred, “Both parties understood that this would be a long term arrangement”, he did not simply ask William McGowan to allay his concerns about not having a written lease by asking him to commit their agreement to that effect to writing.

[30] The Sheep and Goats Annual Inventory 2006 was the first in a run of 10 such Inventories produced by the Company [Productions 41- 50] covering the years 2006 – 2016 (inclusive), but omitting the Annual Inventory for 2008 recording the numbers of sheep and goats kept by the Company on its various holdings as at 1 January 2008. It will be recalled that the Field Data Sheets for 2008 were also missing from the run produced by the Company (the Company’s Third Inventory of Productions incorrectly shows the Field Data Sheets for 2008 as having been produced, with the Field Data Sheets for 2007 being missing). The Sheep and Goats Annual Inventories for the years 2006, 2007 and 2011 – 2016 were sent out to the Company pre-printed with its name and address and main holding number (83/530/0217). By contrast, those for the years 2009 and 2010 (recording the numbers and locations of the sheep of which the recipient was the registered keeper on 1 January 2009 and 1 January 2010 respectively) went out in pre-printed form addressed to the partnership of Messrs J & M Wight and bearing a different main holding number (83/548/0102). The Annual Inventories, completion of which is stated on the face of the form to be a legal requirement, ask recipients, as it is put in the 2010 form, to “tell us how many animals you have on each separate holding, under your keepership.” In the Annual Inventories signed off by Sheila Wight on behalf of the firm of Messrs J & S Wight in the years 2009 and 2010, the firm of Messrs J & S Wight is declared to be the registered keeper of the sheep then located on holding number 83/548/0086, which is the holding number for Duntilland Farm. If the information provided in those forms be true, it would seem to run counter to the position that it was the Company which was in occupation of Duntilland Farm upon those dates, but this point was not pursued by the Respondents in evidence or submissions.

[31] Mr Wight (Snr) was referred to Production 4, which is a document headed “Rent Schedule of Payments” (“the Rent Schedule”). We were told that the contents of the Rent Schedule had been agreed by the parties, albeit that no joint minute to that effect had been entered into by them formally to record such agreement. The Rent Schedule consists of a series of entries, set out in three columns, in the first of which there is a date, in the second a name and in the third an amount. The first three such entries are:

“2 Feb 2004 William McGowan £1500

4 Jan 2005 William McGowan £1500

31 Mar 2005 William McGowan £1500 …”,

signifying, we were told, that rent in the amount of £1500 was paid to William McGowan on each of those three dates. What the Rent Schedule does not record is by whom, or on whose behalf, the payments were made or to which periods of occupation they related, for which we have only the word of Mr Wight (Snr).

[32] The Company’s position, as set out in paragraph 3 of the Statement of Facts in its pleadings, had been that:

“Mr Wight and Mr William McGowan met again in about January 2004, when it was agreed that having regard to the fencing work undertaken that [the Company] would pay £1500 backhand rent paid twice per annum. In early 2005 it was agreed that the rent would be paid twice a year forehand.”

These averments do not, at first sight, sit easily with the contents of the Rent Schedule, in that the latter records that after the initial payment of £1500 made on 2 February 2004, nearly a year elapsed before another instalment of rent was paid. When asked in cross-examination what period of occupation that second payment, made on 4 January 2005, covered, Mr Wight (Snr) answered that it was the twelve months from January 2004, “discounted” to take account of the amount of fencing which the Company had required to do. When it was put to him by Mr Lean that there had been no mention of any such ongoing discount in respect of fencing in the Company’s pleadings (and, we might add, nor did this claim feature in the answers he gave during his examination-in-chief), Mr Wight (Snr)’s response was that “It may not be down there, but there was a lot of fencing being done.” As we interpret Mr Wight (Snr)’s evidence, although this was not brought out particularly clearly by the questions put to him by parties’ representatives in evidence, the first instalment of rent paid forehand was the third payment of £1500 made on 31 March 2005, but according to the Rent Schedule, the next half yearly instalment of rent was not paid until 17 January 2006. It was followed by a payment of £1500 made to William McGowan on 3 June 2006, the last one to be received by him before his death some two months later. After the death of William McGowan, payments of rent were tendered to his widow more or less regularly twice yearly, usually towards the ends of the months of March and November. The payment made on 27 March 2013 and all subsequent instalments, were in the amount of £1600, this modest increase being the result not of prior discussion, let alone negotiation, between the parties but instead of a unilateral decision on the part, it would seem, of the Company. In the words of Mr Wight (Snr), “We just thought it was fair. We’d been paying the same rent for a long time.” He also volunteered that it was his understanding that Mrs McGowan “didn’t have much income”. When Mr Lean put to him that the Company was, in effect, setting its own rent, he agreed.

[33] In relation to the change which he claimed took place in early 2005 from rent being paid backhand to being paid forehand, Mr Wight (Snr), under cross-examination, could offer no explanation as to why the Company’s concern to render its occupation of Duntilland Farm more secure, which was said to have prompted that change, had not been an issue for it in 2004. He denied that this concern was a recognition that any previous occupancy had been on a seasonal basis only, and he denied also that all of the payments of rent from 2 February 2004 onwards had been made on a forehand basis. Whilst it is by no means easy to discern from the evidence we heard a coherent pattern to the payments which are recorded in the early entries in the Rent Schedule, we have no hesitation in rejecting the argument advanced by Sir Crispin in his written submissions that the first £1500 payment made on 2 February 2004 “would have been the back hand rent for October 2003 backwards to April 2003, so it was an agreement as to rent prior to 27 November 2003 and thus retrospectively confirmed the lease, even if it might be argued that at the outset there was no consensus …”, a thoroughly contrived suggestion for which the evidence actually given by Mr Wight (Snr), in our view, provided no warrant. The Respondents last accepted payment of an instalment of rent on 31 March 2015, since when subsequent payments tendered on behalf of the Company have been declined.

Events following the death of William McGowan

[34] After the death, intestate, of William McGowan on 6 August 2006, the McGowan family consulted Mr Stirling and in due course Mrs Joan McGowan obtained appointment as Executrix-dative. One of the issues which arose in the wake of William McGowan’s death was that of what was to be done with the land at Duntilland Farm going forward. At some date subsequent to William McGowan’s funeral, a meeting took place in the living room at Duntilland Farm attended by Mr Wight (Snr), Lee McGowan and Mrs Joan McGowan. Mr Wight (Snr), in evidence, initially claimed not to remember Lee McGowan being present, but we are entirely satisfied, on the basis of the accounts given by Mrs Joan McGowan and Lee McGowan of that meeting, that the latter was indeed in attendance. There was no dispute that the meeting had come about as the result of a phone call Mr Wight (Snr) had received from Mrs Joan McGowan after William McGowan’s death asking him over to discuss the arrangements with regard to the land at Duntilland Farm, and we consider it to be inherently unlikely that the recently bereaved Mrs Joan McGowan would have attended such a meeting on her own, without another family member there to support her. In any event, it was a matter of admission by the Company at the end of Article 3 in the Statement of Facts in the Application that after William McGowan’s death, Mr Wight (Snr) did have a discussion with Mrs [Joan] McGowan, and Lee McGowan,

“but he did not suggest or say to her that this was only a grazing lease; he may have explained that the land was only used for grazing because it was only managed as a sheep farm. He did not discuss subsidy and he did not say that [the Company] did not claim subsidy on the land; [the Company] were claiming subsidy on the holding.”

When the fact of this admission of a discussion with both Mrs Joan McGowan and Lee McGowan was put to him, Mr Wight (Snr) somewhat reluctantly acknowledged that if he had said that, it must be correct, but his “present recollection” was that Lee McGowan had not been present. Mr Wight (Snr)’s account, in examination-in-chief, as to what passed between him and Mrs Joan McGowan at that meeting was very limited in its scope. She told him that the solicitor dealing with the estate wished to know what the arrangement with her late husband in relation to the land at Duntilland Farm had been. He told her that “we’d occupied the land, we’d repaired the fencing, and paid rent.” When it was put to him that the Respondents were suggesting that he had told them it was only a seasonal grazing lease, his answer was not a simple denial that he had said any such thing, but instead that “It was never brought up.” Later, he reiterated that “I was never asked for any assurance that it was only a seasonal grazing let” and that “At no stage was seasonal grazing let mentioned”. Nor were agricultural subsidies discussed. Mr Wight (Snr), in this chapter of evidence, once again exhibited the characteristic of being much keener to tell us what he did not say or do than what he did say or do.

[35] Mr Wight (Snr)’s account of the discussion which took place at the meeting at Duntilland Farm some time after William McGowan’s funeral is not reconcilable with that given by Mrs Joan McGowan and Lee McGowan. Mrs Joan McGowan had moved back into the farmhouse at Duntilland Farm in or about 2001, with her husband taking up residence at 3 Kelvin Drive, Airdrie, and she was still residing in the farmhouse, and William McGowan was residing in the town, at the time of his death. Mrs Joan McGowan’s evidence was that after her son arrived (Lee McGowan was not then living at Duntilland Farm, and his evidence was that by the time he got to the farmhouse, Mr Wight (Snr) was already there), he took the lead at the meeting, whilst she busied herself in the kitchen making tea for her visitors. Lee McGowan explained that at the outset of the meeting, Mr Wight (Snr) had to correct him as to his surname, because Lee McGowan had mistakenly referred to him as “Mr Wright”, and went on to clarify that his name was spelled “Wight” rather than “White”. Lee McGowan testified that having explained to Mr Wight (Snr) that the family were engaged in sorting out William McGowan’s affairs, he asked him directly what the arrangement with his father about Duntilland Farm had been. Mr Wight (Snr) told him that it was just seasonal grazing, just the sheep using the grass, and that the McGowans had nothing to worry about. What Mr Wight (Snr) did not, even on his own version of events as recounted to the Court, positively assert at the meeting was that he (or the Company) occupied the land at Duntilland Farm under what the parties thereto had understood “would be a long term arrangement”, or that in consequence of his (or the Company’s) having been permitted to remain in occupation after the expiry of a short term arrangement, he (or the Company) now had the benefit of a secure tenancy under the provisions of either the 1991 Act or the 2003 Act. The impression formed by Mrs Joan McGowan, based on what Mr Wight (Snr) had said in response to the questions put to him at the meeting, was that if in future either her son or her grandson wanted to farm the land at Duntilland Farm, she could ask the Wights to go, not immediately, but giving them a certain amount of time in which to make the necessary arrangements, and at the expiry of that period, they would have no option but to do so, having no entitlement to insist on remaining. Whilst we cannot, on the evidence, reconstruct precisely what was said by Mr Wight (Snr) at the meeting to cause Mrs Joan McGowan to form that impression, it is striking that the subsequent actings of both parties to this dispute up until the breakdown of their relationship in or about 2015 are entirely consistent with Mr Wight (Snr) having then given the McGowans the reassurances they were seeking in relation to the occupation of the land at Duntilland Farm. We have no doubt whatsoever that if Lee McGowan had not left that meeting believing, on the basis of what Mr Wight (Snr) had told his mother and him, that the Wights’ occupation of the land at Duntilland Farm to date had been, and in future would be, on the basis of insecure seasonal grazing lets, he would immediately have set about investigating how to get the Wights out. So far as the Wights are concerned, nothing in their subsequent dealings with members of the McGowan family before 2015 suggests that the Company’s occupation of the land at Duntilland Farm was understood by them to be anything other than precarious, as we shall go on to relate.

[36] Lee McGowan testified also to having inquired of Mr Wight (Snr) at the meeting whether he was claiming subsidies in respect of the occupation of Duntilland Farm, but according to Mr Wight (Snr)’s evidence, subsidies were not discussed. In a line of cross-examination pursued presumably with the objective of casting doubt on the credibility of Lee McGowan’s version of what passed between them at the meeting, Sir Crispin queried why Lee McGowan should be interested in whether the Wights (once again, no mention was made by Mr Wight (Snr) of any occupation of Duntilland Farm being by the Company) were claiming subsidy in respect thereof, given that Lee McGowan was not himself at that time engaged in any form of agricultural production, and as such had no entitlement to claim subsidy himself. We must confess that we did not follow the logic of this line of questioning. The McGowans had inherited a near 150 hectare farm. It would seem to us to be only natural that the minds of persons in their position would turn to how that asset could most profitably be employed by them, and indeed, we heard evidence that in anticipation of acquiring cattle and putting them on Duntilland Farm, Lee McGowan as long ago as 2005 had registered with the British Cattle Movement Service [Production 75] and in 2006 with the State Veterinary Service [Production 76], although he did not at that stage proceed to do so. That Lee McGowan should have taken such preliminary steps in 2005 and 2006 is entirely consistent with the McGowans at that date believing that the Wights occupied Duntilland Farm on the basis of a series of insecure seasonal grazing lets, and provides a plausible context for Lee McGowan, who was then by his own admission ignorant of the detail of the current eligibility rules, to have inquired of Mr Wight (Snr) whether the Wights were claiming agricultural subsidies in respect of Duntilland Farm. Lee McGowan, under cross-examination, explained that the fact (at least according to Mr Wight (Snr)’s account) that the Wights were not claiming subsidy in respect of the land at Duntilland Farm served to put his mind at rest that, when it suited them to do so, the McGowans would be able to recover possession to enable them to pursue their own farming ambitions and claim subsidy.

[37] We accept the accounts of Mrs Joan McGowan and Lee McGowan of what passed between the participants at their meeting with Mr Wight (Snr) after the death of William McGowan and reject that of Mr Wight (Snr) where it is inconsistent therewith. We accept, in particular, that Mr Wight (Snr) confirmed to the McGowans that the Wights’ occupation of Duntilland Farm had been on the basis of seasonal grazing lets, and that he assured them that they had nothing to worry about so far as any claim to some form of secure tenancy being asserted against them in future was concerned. What we cannot, on the available evidence, determine is whether in giving the McGowans the comfort they were seeking about matters going forward, Mr Wight (Snr) was honestly stating what he understood to be the position, or was dissembling in order to propitiate the McGowans in the short term, privately believing that in the circumstances which had transpired, if push ever were to come to shove, and the McGowans actively were to pursue the recovery of vacant possession of the land at Duntilland Farm, the Company would have a claim, by operation of law, to some form of security of tenure, albeit that this had never been in the contemplation of the original contracting parties. We have no doubt that Mr Wight (Snr) was well aware of the distinction between seasonal grazing lets and secure agricultural tenancies, and that he understood the concerns which prompted the McGowans to ask the questions they did of him at the meeting. We accept also Lee McGowan’s evidence that he asked Mr Wight (Snr) whether agricultural subsidies were being claimed in respect of the land at Duntilland Farm, and that Mr Wight (Snr) dishonestly answered that question in the negative, and we believe that he did so with the intention of misleading the McGowans. His motive for so doing, we infer, is that he was concerned that were the McGowans to learn that the Company was receiving subsidy in respect of its occupation of the land at Duntilland Farm, they might be moved to seek to terminate the arrangement by which it did so and to take the land back in hand with a view to themselves accessing subsidy payments by farming it in future.

[38] Towards the end of his evidence, Jim Wight acknowledged that he had been worried at the time of the initial arrangement between William McGowan and his father that “we’d fence the farm and then be told to get off.” The fact that there was nothing in writing to vouch for the terms of the arrangement was, he acknowledged, a risk. He went on to claim that not long after William McGowan’s death, his father had asked Mrs Joan McGowan whether she wanted to enter into a written lease with them, to which she had responded that she didn’t want to sign anything. There had been no suggestion in Mr Wight (Snr)’s evidence that any such request had been made of any of the Respondents, and this element of Jim Wight’s evidence was not put to Mrs Joan McGowan.

The introduction of cattle onto Duntilland Farm in 2009

[39] Subsequent to the meeting between the McGowans and Mr Wight (Snr) in the living room at Duntilland Farm, rent in respect of the occupation thereof was tendered half yearly to, and accepted by, Mrs Joan McGowan, under exception of a payment made on 16 December 2009 which she had redirected to Lee McGowan by way of repayment of a short term loan she had taken from him to meet an unexpected bill for works she had instructed to the farmhouse. In the Summer of 2009, Lee McGowan acted on his long held ambition to acquire some cattle and bought seven pedigree black Galloway heifer calves from a breeder on the Isle of Mull. The invoice for that purchase is lodged as Production 77 and bears the date 1 August 2009. On being delivered to Duntilland Farm, the calves were released onto Field 13 by his sister Donna Touray, Lee McGowan being at work when they arrived. It is not in dispute that this was done without prior reference to the Wights, and without eliciting any subsequent objection from them. Lee McGowan expanded his herd at the beginning of February 2011, when he bought eight Luing heifers, three of which were in calf, at a sale in Castle Douglas, bringing the total number of cattle on Duntilland Farm to fifteen. The three in calf heifers calved on Duntilland Farm. The cattle initially were kept principally on Fields 12 and 13, but although this was not adverted to in the Respondents’ pleadings, it emerged in the course of Lee McGowan’s evidence that during the winter months, the cattle were kept in Field 3, with their feed being put out for them in the corner of Field 3 closest to the farmhouse and steading. Not only was no objection taken to this evidence when it was elicited, but no challenge was made, after it had been admitted, to its veracity, which in any event was confirmed by photographic evidence in the form of the Company’s own Production 70, showing Lee McGowan’s large metal ring feeder standing in the corner of Field 3 just as he described it.

[40] On our own inspection of Duntilland Farm, we saw the ring feeder and noted how the ground on which it rested stood proud of the surrounding ground, the level of which had been lowered by poaching caused by the milling of cattle around the feed ring over a protracted period. Lee McGowan very fairly acknowledged, quite unprompted, in his examination-in-chief, that when in Field 3, the cattle “pretty much stayed” in what he referred to as the top half of Field 3, but the facts remain that since Field 12 was sold off, Field 3, at 43.34 hectares, according to the legend on the Plan, has been on paper by far the biggest field left on Duntilland Farm, and that in consequence of the internal fencing having been permitted to fall into a state of almost complete dereliction, cattle in Field 3 would have been free to range over the major part of Duntilland Farm. On the basis of our own judicial knowledge, we have no doubt that in fine weather during the winter months the cattle in Field 3 would move away from the poached ground around the ring feeder and up onto the higher and drier ground to the north west of the farmhouse and steading. The position of the Company, in its pleadings, was that the McGowans “began to feed the cattle” on Field 12, but “from time to time the cattle broke out and grazed elsewhere on the holding until brought back into Field 13”, and the Wights’ oral testimony was to similar effect. Mr Wight (Snr) even suggested that if the cattle had broken out onto Duntilland Road, the police would “put them through the nearest gate.” We reject the implication of those averments, and that testimony, that the only occasions upon which Lee McGowan’s cattle were present on those parts of Duntilland Farm situated below Duntilland Road (i.e. the whole of Duntilland Farm under exception of Fields 12 and 13) were when they broke out of Field 12. A version of events which places those cattle on the land below Duntilland Road only sporadically and unintentionally as a result of their escape from fields on the other side of Duntilland Road is entirely inconsistent with the presence of a large metal ring feeder in the corner of Field 3 nearest the farmhouse and steading to facilitate the feeding of Lee McGowan’s cattle during the winter months.

[41] On 10 July 2011, Lee McGowan bought a Luing bull privately from a farmer in Perthshire. The sales invoice for the purchase was lodged as Production 79. Knowing that he would require somewhere, away from the cows, to keep the bull whilst it was not in service, he determined to form a pen for it in part of Field 9, which he referred to as the Tup Park. He happened to see Mr Wight (Snr), and, not having had much to do with the putting up of fencing previously, asked for his advice. There is no dispute that the Wights subsequently assisted Lee McGowan in the erection of the fencing of the bull pen, measuring the area to be fenced with a wheel and calculating the quantity of wire and number of stobs he would require and referring him to the supplier in Kirkcudbright from whom he went on to purchase the materials (the invoice for which is Production 81), unloading and laying out the materials after they arrived and then driving in the posts for him. The parties were in disagreement as to the extent of Lee McGowan’s contribution to the labour involved in putting up the fence around the approximately 2 hectares of the bull pen, as it was to become, but as we see it, nothing of any significance turns on resolution of that controversy. Lee McGowan himself acknowledged during his examination-in-chief that Mr Wight (Snr) and his two sons did 90% of the work, and that his contribution was principally that of stapling wire to the posts. The bull pen was fenced by the middle of March 2012. The two hectares of the bull pen (carved out of a field recorded in the legend to the Plan as extending to 6.34 hectares) were removed from the Company’s IACS, with the Company declaring Field 9, referred to therein under its Land Parcel Identifier NS/83305/63718, as extending to 4.25 hectares in the Field Data Sheet it submitted as part of its SFP claim in 2013 [Production 58]. Where a conflict did exist was as to whether Lee McGowan, when he first spoke to Mr Wight (Snr) about using part of Field 9 for the proposed bull pen, was asking his permission to do so or was simply telling him what he was going to do. On this disputed point, we prefer the emphatic evidence of Lee McGowan that he was telling, not asking, to the considerably less categorical evidence given on that point by Mr Wight (Snr). There was no suggestion that Lee McGowan had asked permission of Mr Wight (Snr) to release the heifers from the Isle of Mull onto Field 13 and having encountered no objection to his so doing from the Wights we see no reason why he should have approached the taking back in hand of part of Field 9 any differently. Further, and in any event, the actions of the Wights in aiding and abetting him in this endeavour is scarcely suggestive of them considering themselves to be in a position to either grant or refuse permission in the event that Lee McGowan had asked for it. Sir Crispin, in his closing submissions, attempted to persuade us that the Wights’ actions in this regard and more generally in accommodating the Respondents in their re-entry to parts of the land at Duntilland Farm were motivated by nothing more than good neighbourliness: we were not so persuaded and believe that they were motivated entirely by self-interest, going along with what the Respondents were doing either because they perceived their occupation of the land at Duntilland Farm to be precarious or because they considered that it ultimately would be advantageous to their position to defer as long as possible a confrontation with the McGowans about the basis of that occupation. Lee McGowan maintained a herd of cattle and followers upon Duntilland Farm until in or about the Summer of 2013. Lee McGowan was at the time engaged in renovating the farmhouse and the cattle and the bull were sold while he got on with that task, with the intention of resuming when circumstances allowed.

The horses on Duntilland Farm

[42] Donna Touray, who works as the manageress of a dental practice in West Calder, testified to having had a lifelong interest in horses. She acquired her first pony, named Dougal, at the age of 7 when the McGowan family first moved into Duntilland Farm in December 1981. Dougal died when Donna Touray was aged 11 in 1985, but in May 1989 she acquired a thoroughbred mare, and when a damaged hind leg rendered the mare unsuitable for riding, she bred four foals from her, one of which, named Max, she retained for equestrian pursuits. In or about 2002, there were on Duntilland Farm along with Max two other horses, Corry and Danny, the property of friends of hers. The horses spent their time in the fields near the farmhouse (Fields 3, 6 and 9) as well as across the road in Field 12. If horses are permitted to become too gross, they are prone to develop laminitis, and so when grass was plentiful, they would be moved off the lusher areas with a view to avoiding weight problems. They would also be turned out onto new pasture after worming. The arrival of the Wight sheep on Duntilland Farm had no impact on Donna Touray’s management regime. Between 2002 and March 2015, when the demands of having two young children and other factors caused her to cease to keep horses there, Duntilland Farm was host to a shifting cast of horses owned by Donna Touray and her friends, numbering anywhere between two and six but probably averaging out over that period at about three at any one time, which horses Donna Touray and her friends rode out around Duntilland Farm without hindrance. The horses wintered out and over some winters were left unshod and roughed off. The horses ran with the Wight sheep and during the winter months had free run over the whole area within the red line on the Plan. Donna Touray recalled her friend Angela complaining about having to walk for two miles across the farm to catch her horse owing to the lack of internal fencing below Duntilland Road. For a period during 2011, before the bull pen was created, an electric fence was rigged up around the bottom of Field 9 within which the horses could be confined. One of the two Wight brothers had complained to her friend Angela, whom he had mistaken for Donna Touray, about the horses being boisterous with the lambs, but our impression from her evidence was that what principally prompted Donna Touray to install the electric fence was to make it easier to catch the horses when they were going to be ridden out around the farm, and to keep the weight off them by restricting their grazing. The Wight sheep could get under the electric fence, but had a tendency to get tangled up in it, and the electric fence initiative was not persisted in after the bull pen was fenced off: we saw the remnants of the electric fence in the corner of Field 9 in the course of our site visit. The horses spent time in the bull pen one summer after Lee McGowan had disposed of his bull. We had no hesitation in accepting Donna Touray as a credible and reliable witness, and indeed Sir Crispin did not seriously challenge the substance of any of her evidence, but in closing his cross-examination, he did inquire of her whether she had discussed with her family and their lawyers what he referred to as the “implications of horses sharing ground with the sheep?” We took it from this question that Sir Crispin was anticipating that Mr Lean on behalf of the Respondents would be arguing that the presence of the horses on Duntilland Farm meant that the Company did not have exclusive possession of the subjects of lease, but Donna Touray patently had no clue what he was here alluding to.

The breakdown in parties’ relationship

[43] The breakdown in the parties’ relationship which in time led to instigation of these proceedings was triggered by a letter received by Lee McGowan from SGRPID in the Spring of 2015 relating to the introduction of the BPS which replaced the SFPS. He did not understand the contents of the letter and at the suggestion of his silage contractor he took it to the local Scottish Agricultural College (“SAC”) office in Lanark, where he spent over an hour with an adviser during which the components of the new scheme were explained to him. Duntilland Farm had been allocated to Payment Region One for the purposes of the BPS. The SAC adviser confirmed to Lee McGowan that because he was actively farming in 2013, and had eligible land at his disposal, he should qualify for certain payments under the BPS, and assisted him to submit his application. In the course of their conversation, Lee McGowan told the SAC adviser that there was a man grazing Duntilland Farm, but that he understood, because that is what the man had told him, that he was not claiming subsidy in respect thereof. Lee McGowan testified that the SAC adviser suggested to him that, as a courtesy, he should speak to the grazier, and he speculated that maybe the adviser “suspected something I didn’t.” After getting home, Lee McGowan telephoned the Wights. The telephone was answered by Jim Wight. Lee McGowan told him that he wanted to speak to Mr Wight (Snr) in the next couple of days and Jim Wight said he would pass on the message. Shortly afterwards, whilst Lee McGowan was washing down his lorry with a power washer in the farm yard, Mr Wight (Snr) and his son appeared, to Lee McGowan’s surprise, as he had not expected them to turn up so soon. Lee McGowan’s position was that he told the Wights what he had been doing in Lanark that day, and that on the basis of what he had learned he would be starting to claim agricultural subsidy in relation to Duntilland Farm. Mr Wight (Snr) asked him what parts of the farm he wanted to claim for, to which Lee McGowan responded that as landowner he was going to claim for all of it. Mr Wight (Snr) “shot right back” that he claimed the subsidy payments in respect of Duntilland Farm, and had been doing so since 2002/3. This was, according to Lee McGowan, the first time Mr Wight (Snr) had admitted this, and it ran directly counter to the previous assurances he had given the Respondents. Mr Wight (Snr) then sought to persuade Lee McGowan that he didn’t understand how the scheme worked; the payments went with the sheep. At this stage, the discussion got heated. Lee McGowan in response told Mr Wight (Snr) that he had just spent an hour in Lanark having how the new scheme worked explained to him, and in his own words, he stopped listening to Mr Wight (Snr) at that point, because, we infer, of his growing realisation that he and his family had been lied to and misled by the Wights in the past and that in consequence of their misplaced trust in what they had been told by the Wights, their ability to recover vacant possession of Duntilland Farm might be in jeopardy. The meeting broke off with Lee McGowan demanding of the Wights that they revert to him with a specific day for quitting the land. Mr Wight (Snr)’s account of what passed at this meeting does not differ materially from Lee McGowan’s account, except that Mr Wight (Snr) spoke of Lee McGowan asking them to remove their stock with immediate effect. Jim Wight’s evidence about the meeting did not ring true in a number of respects. His account had Lee McGowan telephoning him at lambing time and asking him up to Duntilland Farm for a chat. Jim Wight “thought it was unreasonable that he phoned me at all”, but what is clear is that the Wights’ curiosity was sufficiently piqued that they attended at Duntilland Farm almost immediately. Jim Wight’s account of what passed between the parties at the meeting followed closely that provided by his father, but after delivering that account, he went on to volunteer that he was rendered “speechless” and that he “couldn’t believe what I was hearing” from Lee McGowan; once again we did not believe him. The alacrity with which the Wights attended at Duntilland Farm when asked to do so by Lee McGowan, despite it being what was a particularly busy time of year for them, suggests to us that the Wights had a strong suspicion as to what it was that Lee McGowan wanted to talk to them about, and that trouble was brewing.

[44] From that point onwards, the McGowans and the Wights were at loggerheads. The next significant development occurred in or about July 2015, when, without prior reference to the Wights, Lee McGowan employed a contractor to erect a fence from the point X to the point Y (extending along the south western and western boundaries of Fields 9,10 and 11) as marked on the Plan. The X-Y fence bisected the land below Duntilland Road, cutting off access from Fields 1-8 to the sheep handling facilities situated adjacent to the farm steading and excluding the Company’s sheep from Fields 9, 10 and 11. Lee McGowan employed a contractor to spray the rushes situated within the X-Y fence, having been prompted to do so by a warning he had been given by the SAC adviser than unless such action were taken, the land might, in consequence of its neglected state, be downgraded to Payment Region Two, and that if this occurred, it might be difficult to recover Payment Region One status. Under the BPS, land in Payment Region One attracts a much higher level of subsidy payment than land in Payment Regions Two and Three. The Wights had by then consulted solicitors, and lawyers’ letters were received by the Respondents, but in the meantime, the Wights resorted to self-help, removing a section from the new fence to enable them to take the sheep on Duntilland Farm to the handling facilities for shearing. They subsequently cut a second gap in the new fence to facilitate the taking of access by the sheep to Fields 9, 10 and 11.

[45] Matters came to a head on 15 September 2015, provoked by the Wights arriving at the handling facilities at Duntilland Farm with a flock of sheep from Mountcow, the property not of the Company, but of the partnership of John M Wight & Son. The evidence of the members of the McGowan family was that this was an isolated occurrence, with Lee McGowan conveying the impression that in so doing, the Wights were adding insult to injury; the Wights, on the other hand, testified that they took sheep from Mountcow down to the handling facilities at Duntilland Farm several times a year. They seemed oblivious to, and dismissive of, the point that if – as they claimed – the secure tenancy they were asking the Court to declare was in favour of the Company, then the partnership of John M Wight & Son had no entitlement whatsoever to make use of fixed equipment on Duntilland Farm. The suspicion that the Wights were seeking here to provoke a confrontation with Lee McGowan is heightened by the fact that the Wights, or one or other of their business vehicles, owned modern mobile sheep handling facilities that readily could have been erected at Mountcow, obviating the need for the Mountcow flock to be taken off that farm and driven along a public road for some distance down to what were the makeshift and rudimentary facilities at Duntilland Farm. It might also be pointed out that this unnecessary sharing of handling facilities, with the breach of biosecurity which such sharing represents, further undermines the credibility of the Wights’ testimony about wanting to establish and maintain a closed flock on Duntilland Farm. An altercation ensued, to which the police were summoned. Lee McGowan subsequently demolished the sheep handling facilities, and the Applicants crave an order on the Respondents in terms of section 84 (1)(b) of the 2003 Act to reinstate them, which failing for payment to them of the sum of £10,000. Lee McGowan frankly admitted having for devilment padlocked the gate into Field 11 which is the subject of the Applicants’ crave 3 for orders on the Respondents to unlock that gate, and to interdict them from locking it again. The Company, in its pleadings, adverted to a further incident, alleged to have taken place on 14 April 2016, which had also attracted the attention of the police and in respect of which, we were given to understand, a criminal prosecution was pending. We made clear to parties’ legal representatives before the proof got under way that we did not wish to run any risk of prejudicing those criminal proceedings by hearing evidence about that incident, the facts and circumstances of which, in any case, seemed to us to have little bearing upon the principal issues we had to decide. Parties’ legal representatives sensibly opted not to seek to adduce evidence in connection therewith, and so we need say no more about it here.

[46] On 14 January 2016 an application (RN/SLC/2/16) was made to the Land Court at the instance of Lee McGowan and Donna Touray for orders that no agricultural tenancy exists in favour of the Company over Duntilland Farm and for removal of the Company therefrom. It is averred in Application RN/SLC/2/16 that the Company has not had exclusive possession of the land. The Company lodged Answers thereto in which it argues that Application RN/SLC/2/16 is incompetent, on the basis that it has not been raised in the names of all three pro indiviso proprietors of Duntilland Farm. On 14 March 2016 we, of consent of the parties, sisted Application RN/SLC/2/16 to await the outcome of this application.

The relevant statutory provisions

[47] The Company’s primary position, that it has a 1991 Act tenancy that commenced in about October 2002, rests, as we understand its pleadings and the evidence adduced from its witnesses, not on the proposition that it was granted a grazing lease of Duntilland Farm for a shorter period than from year to year that, because the Company was permitted by William McGowan to continue in occupation after its expiry, “hardened” into a lease from year to year attracting security of tenure (an “accidental conversion” case), but rather upon the proposition that both parties thereto understood, ab initio, that the arrangement they were entering into was to be for the long term. We have already explained why, on the evidence, we do not accept the Company’s position in this regard, and consider that the preponderance of evidence points to the parties having agreed to some form of short term arrangement involving no security of tenure, and so we require to consider the possible application of the statutory provisions relating to seasonal grazing lets, the starting point of which, for present purposes, is the now repealed section 2(1) of the 1991 Act.

[48] Section 2(1) of the 1991 Act provided that:

“Subject to subsection (2) below, where, under a lease entered into on or after 1st November 1948, land is let for use as agricultural land for a shorter period than from year to year, and the circumstances are such that if the lease were from year to year the land would be an agricultural holding, then, unless the letting was approved by the Secretary of State before the lease was entered into, the lease shall take effect, with the necessary modifications, as if it were a lease of the land from year to year.”

Section 2(2)(a) of the 1991 Act disapplied section 2(1) in the case of a lease entered into (whether or not the lease expressly so provides) in contemplation of the use of the land only for grazing or mowing during some specified period of the year.

[49] Section 2 of the 1991 Act was repealed by section 1(3) of the 2003 Act. In its place, with effect from 27 November 2003, came sections 3 and 4(2) of the 2003 Act. Section 3 (Leases for grazing or mowing) is in the following terms:

“(1) This section applies to a tenancy under a lease under which agricultural land is let for the purpose of its being used only for grazing or mowing during some specified period of the year (whether or not the lease expressly so provides).

(2)The tenancy is not to be constituted for a period of more than 364 days; and where the term of the tenancy has expired, the land may not be let for the same purpose to the same tenant before one clear day from the date of expiry of the tenancy has elapsed.”

[50] As Robert Sutherland, Advocate, observed in his insightful article “Possession by the tenant following the expiry of a seasonal let: the continuing problem for landlords” in 2006 SLT (News) 249, the provisions of Section 3 of the 2003 Act:

“simply repeat and make clearer what was permitted under s 2(2)(a) of the 1991 Act. Both sections specify that they apply where the land is to be used for the purposes of grazing and mowing only. Both sections specify that this use is to be during some specified period of the year. Section 3(2) of the 2003 Act states that the tenancy is not to be constituted for a period of more than 364 days. This reflects the previous understanding under the 1991 Act that the lease could be for 364 days because that was a specified period which was less than a year, Reid v Dawson [1955] 1 QB 214.”

Section 3(2) also requires that the land is not to be let for the same purpose to the same tenant before one clear day from the date of expiry of the tenancy has elapsed. That is an innovation on the previous law. It would have been perfectly possible before to have a series of leases for six months at a time, each new lease commencing the day after the expiry of the old lease … Under the new provisions in s 3(2) of the 2003 Act it is now no longer possible to grant a series of new leases to the same tenant without leaving at least one clear day between the end of the old lease and the commencement of the new lease.”

[51] Of even greater concern to landlords, Mr Sutherland pointed out, was the impact of section 4(2) of the 2003 Act. Section 4(1) of the 2003 Act established the new form of tenancy known as the SLDT. It provided that where— (a) agricultural land is let under a lease for a term of not more than five years; (b) the land comprised in the lease is not let to the tenant during the tenant’s continuance in any office, appointment or employment held under the landlord; and (c) the lease does not constitute—(i) a 1991 Act tenancy; or (ii) a tenancy to which section 3 applies, the tenancy under the lease is, by virtue of this subsection, a SLDT. Section 4(2) of the 2003 Act, as originally enacted, provided that:

“(2) Without prejudice to subsection (1), where the tenant remains in occupation of the land after the expiry of the term of a tenancy to which section 3 applies with the consent of the landlord, the tenancy continues to have effect as if it were for a term of—

(a) 5 years; or

(b) such period of less than 5 years as the landlord and tenant may agree to, and the tenancy is, by virtue of this subsection, a short limited duration tenancy.”

[52] Mr Sutherland noted that “consent” for the purposes of section 4(2) of the 2003 Act was not defined, but he commented that:

“one thing that is clear is that s 4(2) does not require that there be any agreement reached between the landlord and the tenant that the tenant can remain in occupation for any particular length of time. Nor is there any grace period allowed before s 4(2) applies. If the landlord is aware that the tenant remains in occupation and does nothing about it, then that runs the serious risk that failure to actively object to this continued occupation will be deemed to be consent.”

[53] Section 4(3) of the 2003 Act sets out the consequence where the tenant remains in occupation of the land after the expiry of the term of a SLDT of less than 5 years (including such a term fixed by virtue of section 4(2) of the 2003 Act) with the consent of the landlord, which is that the tenancy continues to have effect as if it were for a term of—(a) 5 years; or (b) such period of less than 5 years as the landlord and tenant may agree to.

[54] Section 5(1) of the 2003 Act established the new form of tenancy known as the LDT. It provided that where—(a) agricultural land is let under a lease for a term of not less than fifteen years; (b) the land comprised in the lease is not let to the tenant during the tenant’s continuance in any office, appointment or employment held under the landlord; and (c)the lease does not constitute a 1991 Act tenancy, the tenancy under the lease is, by virtue of this subsection, a LDT. Section 5(2) of the 2003 Act, as originally enacted, provided that:

“(2) Where the tenant remains in occupation of the land after the expiry of the term of a short limited duration tenancy of 5 years (including such a term fixed by virtue of section 4(2) or (3)) with the consent of the landlord, the tenancy has effect as if it were for a term of 15 years commencing on the expiry of the term of the short limited duration tenancy; and the tenancy is, by virtue of this subsection, a limited duration tenancy.”

[55] The 2011 Order, which as has been noted came into force on 22 March 2011, introduced significant modifications to the above. Article 7 in Part 3 of the 2011 Order reduced the minimum term of a LDT from 15 years to 10 years. Article 8 in Part 3 of the 2011 Order substituted a new section 5 (2) of the 2003 Act in the following terms:

“Where—

(a) at any time before the expiry of the term of a short limited duration tenancy, the landlord and tenant agree in writing to convert the tenancy to a limited duration tenancy; or

(b) the tenant remains in occupation of the land after the expiry of the term of a short limited duration tenancy of 5 years (including such a term fixed by virtue of section 4(2) or (3)) with the consent of the landlord, the tenancy has effect as if it were for a term of 10 years commencing at the start of the term of the short limited duration tenancy, and the tenancy is, by virtue of this subsection, a limited duration tenancy.”

In the interests of completeness, it is convenient at this point to record that by section 6(2) of the 2003 Act, a SLDT may be terminated by the landlord and tenant by agreement. In contrast to the position with regard to an LDT (for which see sections 8(1) and 8(2) of the 2993 Act), the legislation neither prescribes the form of any such agreement nor stipulates that after the expiry of its term, a SLDT will continue unless terminated by the giving of some form of writtennotice.

The Company’s argument for the constitution of a 1991 Act tenancy

[56] Sir Crispin argued that the evidence had established the existence of agreement between William McGowan and Mr Wight (Snr) (on behalf the Company) upon two of the four cardinal elements of a lease, namely parties and subjects, and that resort to legal presumptions could plug the apparent gaps in the evidence so far as relating to the other two cardinal elements, being rent and duration, to enable the Court to hold that a 1991 Act tenancy had come into being before 27 November 2003, even if we rejected Mr Wight (Snr)’s account of his initial dealings with William McGowan to the extent that it presented the intended outcome of those dealings as being the constitution of a long term arrangement. Under reference to Gray v University of Edinburgh 1962 SC 157, it was argued that in the absence of express agreement as to duration, a term of one year might be implied. In relation to rent, whilst recognising that no actual sum by way of rent was agreed before early in 2004, Sir Crispin argued, citing by way of example the case of Lundy v The Smith of Lundy (1610) M 15166, that rent could be services in kind, and that by agreeing to occupation on condition that the tenant undertook substantial works that would be taken into account when rent was finally settled, that amounted to an agreement as to the rent for the first year. Alternatively, it was submitted that where a party gives occupation of subjects to another party, the presumption was (i) that the latter occupies as tenant and (ii) that he will pay the “annual value of the subjects”, and that this could be fixed by the Court on evidence: Young v Cockburn (1674) M 11624; Glen v Roy (1882) 10 R 239; Ogilvie v Boath (1868) 5 SLR 231. He referred us to the case of Shetland Islands Council v BP Petroleum Development Ltd 1990 SLT 82 as authority for the proposition that a lack of evidence of consensus as to both duration and rent was not a bar to the constitution of a lease where possession had been taken.

[57] We do not accept either branch of that submission. Whilst we do not doubt that parties are entitled, as Rankine puts it in The Law of Leases in Scotland (3rd Ed; 1916) at page 114, to agree to “a rent in the shape of service”, Mr Wight (Snr)’s own evidence was not to that effect. As he himself explained it, matters were left on the footing that if the fencing were repaired, William McGowan would “take that into consideration when he eventually asked for rent.” William McGowan might, on that basis, have decided unilaterally that no allowance at all should be made for the fencing and demanded a sum by way of rent far in excess of what the Company was willing to pay, and had he done so, the Company would have no contractual mechanism upon which it could rely to determine the level of the rent in the absence of consensus. There was in these circumstances no agreement between the parties either upon a rent from in or about October 2002 or upon a formula or procedure for fixing the rent absent such agreement.

[58] So far as the Company’s alternative submission on rent is concerned, it founders against two rocks. In the first place, it seems to us that the presumption upon which it relies has no place where, as on Mr Wight (Snr)’s own account, entry is taken upon the basis that the rent will be agreed between the parties at a later date, and a rent is subsequently agreed, the quantum of which takes into consideration the value of services provided by the occupier in the intervening period. In the second place, we heard no evidence about either the annual value (or market rent) of the subjects occupied by the Company or the value of the fencing work undertaken by the Company at Duntilland Farm before it took entry. It formed no part of the case upon which the Company came to Court that rent for the period from October 2002 until such date in early 2004 as a rent was agreed between the parties was a matter for us to fix by reference to some notional annual value of the subjects.

[59] Mr Lean, in his reply, started to advance the argument that there was here not only no evidence of agreement as to rent and duration, but no evidence that any agreement was between William McGowan and the Company. There was nothing in the evidence of Mr Wight (Snr) to indicate how he had conveyed to William McGowan that he was contracting on behalf of the Company and not in his own right and the Respondents’ evidence, which we accept, was that they knew nothing of the Company’s involvement with Duntilland Farm whilst William McGowan was alive and believed that any agreement he had made was with the “farmer frae Shotts” as an individual. It seemed to us that there was considerable force in that submission, but Sir Crispin intervened to object that, on the admissions contained in their pleadings, this was not an argument that it was open to the Respondents to make. Sir Crispin drew attention in particular to the Respondents’ admissions in Answer 2 that “[the Company] moved sheep onto Duntilland on or about October 2002” and in Answer 4 that “[the Company] have had sheep on Duntilland Farm since the autumn of 2002.” We do not, of course, know upon what factual basis those admissions were made, but even assuming that they were correctly made, it was far from obvious to us that they precluded Mr Lean from developing the argument upon which he embarked, and we were somewhat surprised when, in the face of Sir Crispin’s objection, he intimated that he would not be insisting upon it. Mr Lean did take issue with Sir Crispin’s wider argument that where possession had been taken, an absence of consensus as to both duration and rent would not necessarily prevent formation of a lease, but on the approach we have taken to the evidence on this case, that is not a conflict we require here to resolve.

The Company’s argument for the constitution of a LDT to 2024

[60] The Company’s fall-back position, in the event that, after hearing proof, we were not with it on its argument that a 1991 Act tenancy in its favour had come into being from October 2002, was that a lease for one year or a [section 3] grazing lease came into being in or about January 2004 which, because the Company had remained “in occupation of the land after the expiry of the term … with the consent of the landlord” (cf. sections 4 (2) and 4(3) of the 1993 Act) became a 5 year SLDT to January 2009 which then defaulted into a LDT from that date to January 2024. The first question then is whether, in the circumstances disclosed at proof, the Company can indeed be said to have remained in occupation of the land after the expiry of the initial term with the consent of the landlord. Lee McGowan spoke of members of the McGowan family commenting from time to time that the sheep had “gone on their holidays”, but while it was his impression that there were periods of the year when the sheep were absent from Duntilland Farm, he frankly admitted that he could not prove that, by which we take him to mean that he was not in a position to testify as to particular dates or periods. We accept, for present purposes, that whether any tenancy which may have been constituted in January 2004 was a grazing lease for a period of 364 days or less to which section 3 of the 2003 Act applied or a lease for a term of a year to which section 4 of the 2003 Act applied (i.e. a one year SLDT), the Company remained in occupation of Duntilland Farm after the expiry of its term. In the absence of positive evidence to contrary effect, we accept that it may be said to have done so with William McGowan’s consent. The effect thereof would be the same under sections 4(2) and 4(3) of the 2003 Act, namely that the tenancy would continue to have effect as if it were for a term of – (a) 5 years; or (b) such period of less than 5 years as the landlord and tenant may have agreed to.

[61] Both the Company and the Respondents, in their respective fall-back positions, proceed upon the basis that the effect of William McGowan’s consent, at the expiry of the initial term, to the Company remaining in occupation of the land at Duntilland Farm, was that the tenancy continued to have effect as if it were for a term of 5 years to January 2009. They similarly are at one that because the Company remained in occupation after the expiry of the 5 year term of that SLDT to January 2009 with the consent of the Respondents, by virtue of section 5 (2) of the 2003 Act, the tenancy from January 2009 had effect as a LDT for a further term of 15 years to January 2024. We note that under section 5(2) of the 2003 Act as first enacted, in contrast to the position under sections 4(2) and 4(3) of the 2003 Act, there is no provision for the period for which the tenancy continues to have effect to be modified by reference to the agreement of parties. The point of divergence in the respective legal analyses of the Company and the Respondents arises in the summer of 2009 when, on the Respondents’ account, the circumstances by which they took up occupation of Field 13 constituted a material variation of the terms of the LDT sufficient to create a new lease over the remainder of Duntilland Farm for an initial one year term from the effective date of that variation which would, by virtue of section 4(2) of the 2003 Act, continue to have effect as if it were for a term of 5 years to 2014 and would be a SLDT, and then by virtue of section 5(2)(b) of the 2003 Act as substituted by Article 8 in Part 3 of the 2011 Order, as if it were for a term of 10 years commencing on that date to 2019 and would be a LDT. For reasons we shall go on to explain, we do not agree that, as a matter of law, the loss by the Company of Field 13 in the circumstances disclosed at proof constituted a material variation of the terms of the LDT sufficient to create a new lease over the remainder of Duntilland Farm. As we interpreted the evidence we heard, the critical change here occurred some years earlier, in or about August 2006.

[62] Both parties, in their closing submissions, seemed to be proceeding upon the basis that where the tenant remains in occupation of the land after the expiry of the term of a tenancy to which section 3 of the 2003 Act applies or a SLDT of less than 5 years with the consent of the landlord, the tenancy will continue to have effect as if it were for a term of 5 years, regardless of the wishes of the parties. That seems to us to misunderstand the import of these provisions, and to attach insufficient weight to the presence of sections 4(2)(b) and 4(3)(b) of the 2003 Act. The legislation does not, in these circumstances, impose a minimum period of 5 years irrespective of the wishes of parties: what it does do is provide that where the landlord and the tenant do not agree, and the tenant insists upon it, then 5 years it will be. The tenant and the landlord may agree to the tenancy to which section 3 of the 2003 Act applies or the SLDT continuing to have effect as if it were for a term of any period of less than 5 years they choose, or indeed to it not continuing at all (remembering that a SLDT may be terminated by agreement), and we can see nothing in the 2003 Act which would preclude the landlord and the tenant in these circumstances from agreeing to enter into a new lease constituting a grazing or mowing tenancy for no more than 364 days to which section 3 of the 2003 Act applied, the deterrent provisions in sections 4(4) and 4(5) of the 2003 Act applying only where the landlord and tenant have entered into a lease constituting a further SLDT. It is for this reason that we consider the exchanges which took place at the meeting between the Respondents and Mr Wight (Snr) after the death of William McGowan in or about August 2006 to be of such significance here. We pressed Sir Crispin in the course of his closing submissions as to what the position would be if – as turned out to be the case – we accepted the accounts of Mrs Joan McGowan and Lee McGowan as to what transpired at that meeting and rejected that of Mr Wight (Snr). If, we asked, we were to hold that Mr Wight (Snr) had told the McGowans, in response to their questions, that this was seasonal grazing, and they accepted him at his word on that, was that evidence simply to be treated as irrelevant? His considered answer to that question was in the affirmative. We disagree. It seems to us that whilst it may have been open to Mr Wight (Snr), at that meeting, to have told the McGowans that the Company was entitled to insist, and was insisting, on remaining on Duntilland Farm to January 2009 (when the McGowans would have had the opportunity to recover possession), he did not do so. On the contrary, on our findings in fact, his position, in his discussions with the McGowans, was that hitherto the Company had occupied Duntilland Farm on the basis of seasonal grazing lets, and that following the death of William McGowan, it was agreeable to maintaining that basis of occupation under them as new landlords of the holding, with rent thereafter being tendered to his widow and accepted by her in a representative capacity pending the obtaining of confirmation and completion of the executry.

[63] We did raise with the parties’ procurators, in the course of their closing submissions, the issue of what is meant by “consent” in sections 4(2) and 4(3) of the 2003 Act and how consent, or the absence of consent, might be established, issues of particular significance if, as is argued by the Hon Lord Gill at paragraph 67-07 of his new edition of The Law of Agricultural Holdings in Scotland (4th Ed; 2017), published subsequent to the conclusion of the closing submissions, a SLDT expires automatically at the end of the contractual term and the landlord need not give notice to quit, on the basis (see paragraph 67-03) that the operation of tacit relocation at common law is incompatible with the mechanisms by which SLDTs can be extended or converted into LDTs. Sir Crispin, as we understood his oral submissions, takes a different view on that latter point, contending, under reference to institutional authority (Erskine, Institute (8th Ed; 1871) II vi 34; Bell, Principles (10th Ed; 1899) para 1265); Paton & Cameron, The Law of Landlord and Tenant in Scotland (1967) at page 221; sections 34 – 37A of the Sheriff Courts (Scotland) Act 1907, and the cases of Douglas v Cassillis & Culzean Estates 1944 SC 355; Lormor Ltd v Glasgow City Council 2015 SC 213; Gillies v Fairlie (1910) 36 Sh Ct R 6; Craighall Cast-Stone Co Ltd v Wood Bros 1931 SC 66, that the common law is not displaced and that some form of notice must be given to prevent the operation of tacit relocation. Lord Gill goes on to observe in paragraph 67-08 that:

“The automatic expiry of the tenancy at the end of the term makes it essential that the landlord should not allow the tenant to remain in occupation of the land beyond the expiry date. To grant any indulgence to the tenant in such a case is to run the serious risk that the short limited duration tenancy will become a 10-years limited duration tenancy …”

That general advice leaves open the question of how in practice the law would fall to be applied where the tenant remains in occupation of the land after the expiry of the term and the landlord indicates that he does not consent thereto, albeit by some means falling short of immediately instigating legal proceedings for recovery of possession in respect of the tenant’s failure to quit the holding on the due date.

[64] On the approach to the evidence which we have taken, no issue arises as to either the quality of the consent which must be established for the purposes of section 4(2) and 4(3) of the 2003 Act or upon whom the onus lies to prove consent or the lack of it. In the context of what happened in August 2006 after the death of William McGowan, those issues are displaced by the positive evidence we heard and accepted as to what the parties then agreed. At various points in the course of his submissions, Sir Crispin urged us to have regard to what parties actually did rather than on what they may have understood or believed and that is the approach we have taken: here, we are satisfied on the evidence that what Mr Wight (Snr), in his dealings with the McGowans in August 2006, did was to assent on behalf of the party for whom he claims to have been acting, in response to their requests for reassurance, that the Company’s occupation of Duntilland Farm was, and in future would be, “just grazing”, in the form of a seasonal grazing let, upon which basis the Respondents accepted the rent tendered on behalf of the Company going forward. The Company having remained in occupation of Duntilland Farm after the expiry of the initial term with the consent of the Respondents, sections 4(2)(a) or 4(2)(b) of the 2003 Act would operate so that, in the absence of subsequent agreement between them of a lesser period, the tenancy would continue to have effect as if it were for a term of 5 years, to August 2011, being a date after the date of coming into force of the 2011 Order. The Company having remained in occupation of Duntilland Farm after the expiry of the 5 year SLDT with the consent of the Respondents, section 5(2) of the 2003 Act would operate so that the tenancy would continue to have effect as if it were for a term of 10 years from August 2006 and would be a LDT to August 2016. On that analysis, notwithstanding that the Respondents have refused to accept rent from the Company since 31 March 2015, and proceedings have been instigated for the removal of the Company from Duntilland Farm (albeit in the names of two only of the three pro indiviso proprietors), because the resulting LDT to August 2016 was not terminated in accordance with section 8 (Continuation and termination of limited duration tenancies) of the 2003 Act, it would continue in effect on a “first short continuation” of three years to August 2019 in terms of section 8(6) of the 2003 Act, during which period it would be terminable by the Respondents at the expiry of the continuation (for which, see section 8(12) of the 2003 Act) by giving the requisite intimation and notice in conformity with section 8(7) of the 2003 Act.

The Respondents’ argument for the constitution of a LDT to 2019

[65] At common law, a material variation to the terms of a lease agreed between the parties may result in the creation of a new lease (under English law, the equivalent situation is characterised in terms of implied surrender and re-grant). Section 16 of the 1991 Act provides that the lease of an agricultural holding “shall not be brought to an end … by reason only that any new term has been added to the lease or that any terms of the lease (including the rent payable) have been varied or revised in pursuance of this Act”, but it was common ground between the parties that, as it was put by Lord Gill in The Law of Agricultural Holdings in Scotland in a passage to be found in the new edition at paragraph 7-17, (4th Ed; 2017), “the purpose of the section is to guard against the possibility that any variation of the terms of the lease made in pursuance of the [1991] Act might be held to be so material as to create a new letting at common law” and thus a contractual modification involving a new term which was not a variation or revision in pursuance of the 1991 Act might still result in a new lease by operation of common law.

[66] The Respondents’ argument was that the removal of Field 13 from the subjects of lease in 2009 was a change in terms sufficiently material to be constitutive of a new lease. Mr Lean contended, under reference to the case of Tufnell and Nether Whitehaugh Co. Ltd., Applicants 1997 SLT (Land Ct) that whether a change in the terms of a tenancy was sufficiently material to create a new tenancy was dependent on the particular facts and circumstances of the case. We did not understand him to be arguing that the removal of any land from the subjects of lease (as for instance consequent upon exercise by the landlord of a contractual entitlement to resume) necessarily would represent a change sufficiently material as to bring the existing lease to an end and establish a new tenancy in its place, but it remained unclear to us upon what factual basis Mr Lean was submitting that the loss, in whatever circumstances, of a field of 5.32 hectares from a farm with an overall area of a little short of 150 hectares represented a change sufficiently material as to be constitutive of a new lease. Of course, as we have narrated, the evidence we heard, and have accepted, established that there were other significant changes which took place on Duntilland Farm from 2009 onwards, such as the abstraction of the bull pen from Field 9 and the release of cattle belonging to Lee McGowan onto Field 3, but as Sir Crispin pointed out, Mr Lean periled his argument on this point entirely on the removal of Field 13 from the subjects of lease.

[67] Whilst we ourselves have found that the 5.32 hectares of Field 13 was better quality land, and in better condition, than most of the rest of Duntilland Farm, there was nothing in the evidence which would have enabled us to conclude that its removal was a material change in the terms of the tenancy. No reduction in rent was sought by the Company in consequence of this reduction in the size of the holding, and the number of sheep kept on Duntilland Farm on 1 January 2010 and 1 January 2011 was much the same as it had been on 1 January 2009, going by the contents of the Sheep and Goats Annual Inventories to which we previously have referred. Whilst the exclusion of the Company from Field 13 would appear to have provoked some change in relation to the formulation of its SAF claims from 2010 onwards, with the omission of Field 13, and the inclusion of Fields 1 and 4, we do not consider that the removal of Field 13 from the subjects of lease was a change sufficiently material as to entitle us to imply the coming into existence of what would be an entirely new lease between the parties as contrasted to a mere variation of the terms of the subsisting lease. The cumulative effect of the abstraction of the bull pen from Field 9 and the release of cattle belonging to Lee McGowan onto Field 3 might have been argued to put a somewhat different complexion on events, but we incline to the view that the real significance of each of these three actions by Lee McGowan, and of the Company’s passivity in response to them, is not as evidence of some change in the terms of the arrangement by which the Company occupied Duntilland Farm, but rather as confirmation of the essentially precarious nature of the basis upon which it had agreed to do so, both initially and again when the members of the late William McGowan’s family broached the issue with Mr Wight (Snr) in August 2006.

The exclusivity of possession issue

[68] The dog which ultimately did not bark in this application was the issue of exclusivity of possession. The Respondents, in their pleadings, had referred to Lee McGowan having put cattle on the holding without any prior discussion with the Company and having fenced off approximately two hectares within Field 9 without seeking the Company’s consent or permission, and to Donna Touray and friends of hers keeping horses thereon from 2001 onwards. Further evidence was elicited without objection in the course of the hearing to establish the extent to which, from October 2002 onwards, areas of Duntilland Farm were occupied by the Respondents’ horses or cattle either to the exclusion of the Company’s sheep (Field 13 and part of Field 9) or alongside them (Field 3 and the other fields situated below Duntilland Road which are accessible therefrom). There was also evidence that Lee McGowan had made use of the sheep handling facilities for his cattle. As indicated by the question put by Sir Crispin to Donna Touray at the end of cross-examination about her awareness of the implications of her evidence about the horses sharing the ground with the sheep, the Company was anticipating that the Respondents would be seeking to argue that there could here be no lease in favour of the Company over Duntilland Farm because it did not have exclusive possession thereof. In paragraph 19 of his closing written submissions for the Company, Sir Crispin commented upon some of the principal Scottish authorities (Brador Properties Ltd v British Telecommunications plc 1992 SLT 15; Magistrates of Perth v Assessor of Perth and Kinross 1937 SC 549; Commercial Components (Int) Ltd v Young 1993 SLT (Sh Ct) 15) bearing on the question of whether exclusivity of possession is an essential element of a lease under Scots law, and in his subsequent oral submission he elaborated on the issue of how the concept of exclusivity of possession should be approached in the context of rural subjects.

[69] Whilst it is well recognised that, in a rural context, sporting and mineral rights may be let separately from the agricultural land, it has been suggested that permitting a party to graze livestock on land which is also grazed by the landlord’s stock, or those of a third party, creates a right which does not amount to a lease, the distinction being that there is no exclusive right to those particular types of rights: cf. Professor Robert Rennie, Leases (2015) at paragraph 30-22. Sir Crispin contended that where the shared use was between a small number of horses belonging to the landlord on the one hand and the tenant’s flock of sheep on the other, this was a sharing between a non-agricultural and the prime agricultural use comparable to the situation of the landlord or sporting tenant’s game (which consumed crops) sharing with the agricultural tenant’s livestock, and that in any case, the instances of shared use of Duntilland Farm by Donna Touray’s horses and Lee McGowan’s cattle should be regarded as de minimis. We express no view upon the merits or demerits of these arguments, beyond to observe that – as the contents of Sir Crispin’s contra-submissions implicitly acknowledged – there was here at least an issue to try. We suspect that he was as surprised as we were when Mr Lean, for the Respondents, advised that he was not proposing to advance any argument based on the proposition that because the Company did not exercise exclusive possession over Duntilland Farm, it did not have a proper lease thereof, but merely some form of licence to occupy the land. For our part, we consider that the evidence we heard would have entitled us to make a finding in fact that the Company did not at any point between October 2002 and March 2015, when Donna Touray ceased to keep horses on Duntilland Farm, have exclusive possession of Duntilland Farm and we would have been prepared to entertain submissions as to the legal implications, if any, of such a finding.

The issues arising from the “catch-all” crave

[70] Before any evidence was led, we raised with parties as a preliminary issue our reservations as to whether it was either competent or appropriate for us to entertain a crave in the terms of crave 2A, which we in this Note have characterised as a “catch-all” crave. Sir Crispin, for the Company, explained that the reason for its inclusion was to permit us, were we to be persuaded on the basis of the evidence we heard, that a secure tenancy in favour of the Company had come into being, albeit not of the form or from the same starting date or with the same consequences as craved in craves 1 and 2, we could so declare. Mr Lean, for the Respondents, indicated that he was content to go along with this approach, perhaps because, although the Respondents had not themselves counterclaimed for any declarator, they had, within their pleadings, set out an esto case that if a lease from year to year had been established in the Company’s favour (which was denied), then it would be one having a different starting date and legal consequences from those described in craves 1 and 2, and the “catch-all” crave would have provided a means of giving effect to that outcome in the absence of any counterclaim for declarator. At the conclusion of the evidence, our concerns on this score not having been fully allayed by the submissions made on behalf of parties at the outset of the hearing, we reiterated our unease about the form of crave 2A, and the degree of latitude it purported to be affording us. In his closing written submissions, framed in the light of this further expression of concern, Sir Crispin argued that:

“As a practical court the court is requested to deal with such variables in granting this crave [i.e. crave 2A] or perhaps put the matter out by order after the court has issued its decision in relation to craves 1 & 2 and in light of any findings to allow argument as to whether or not decree should be granted in terms of crave 2A and in what terms. The parties are agreed that the court should take this approach.”

Mr Lean endorsed this proposal.

[71] Our concerns about entertaining “catch-all” craves in such terms in applications for declarator of lease can be shortly stated. Firstly, in matters as legally complex as this, where there are potentially many possible permutations, it seemed to us that we should not be taking it upon ourselves – volunteering – to formulate the terms of craves where the parties themselves are either unable or unwilling to do so. If, having asked the Land Court to grant declarator of lease in particular terms, an applicant takes the view that the evidence adduced does not support any of his existing craves, but may support the existence of a lease in some other form or from some other starting date, it seemed, and seems, to us that the proper course procedurally would be for the applicant to formulate the crave he wishes the Court to grant, and then move to amend his craves so that the declarator he is inviting us to pronounce reflects the evidence led. It would then be for the respondent to either consent to or oppose such motion to amend as so minded. Where, in response to an application for declarator of lease, a respondent wishes not merely to oppose the grant of decree in terms of the applicant’s craves, but also to advance, on an esto basis, the case for the grant of declarator in different terms, the appropriate course procedurally would be for him to table a counterclaim containing a crave to that effect.

[72] The second, and more fundamental, concern which prompted us to raise the issue of the form of crave 2A with parties before evidence was led was, at that stage, purely theoretical so far as the instant case was concerned. Were we, having heard evidence and the parties’ closing submissions, to come back with a decision for which neither party had contended, it seemed to us that both parties would, potentially, have grounds for complaint, or indeed appeal, on the basis that they had not been afforded the opportunity to be heard on the case ultimately sustained by us, unless it could be argued that by conferring on us the seemingly free hand provided by a crave in the terms of crave 2A, they effectively debar themselves from objecting if they do not like the eventual outcome. Whilst in petitory proceedings, a petitioner may, in the prayer of the petition, after setting out the primary remedy he seeks, invite the court, on a “catch-all” basis, “to do further or otherwise as to Your Lordships shall seem appropriate in the circumstances”, in adversarial proceedings of this nature, it may be questioned whether there is the same scope for conferring such a free hand on a court. It was, we suspect, in order to address that latter concern that Sir Crispin suggested that if, on the evidence, we were minded to decide the case on a basis other than one of those expressly canvassed by the parties themselves, we should “put the matter out by order after the court has issued its decision in relation to craves 1 & 2 and in light of any findings to allow argument as to whether or not decree should be granted in terms of crave 2A and in what terms.”

[73] With eerie inevitability, what at the outset of these proceedings was merely a theoretical concern has become a live practical issue for us. For the reasons we have explained at some length in the body of this Note, we are unable to accept the analyses of the legal effect of the evidence we heard put forward on behalf of either the Company or the Respondents. We do not consider that, on the balance of probabilities, the Company has made out a case for the grant of declarator in terms of either of its first two craves and accordingly, they fall to be refused. We consider that the Respondents’ argument, that the removal of Field 13 from the subjects of lease in 2009 was, by itself, a change in terms sufficiently material to be constitutive of a new lease, must fail. We have explained why we attach significance to the dealings between the parties which took place in August 2006 and we have sketched out what, it initially appears to us, the consequences in law of our findings in fact in connection therewith may be. We have come to the conclusion that in these circumstances, we should accede to parties’ suggestion and invite parties to address us upon the issues arising out of those findings in fact and as to whether, in light thereof, we should grant an order in terms of crave 2A, and if so, what the terms of any such order should be. In so doing, we would emphasise that we are not thereby extending to parties an invitation to ask us to reconsider our findings in fact, but rather to address us on the legal implications of those findings in fact and as to how, if at all, they should be reflected in any resulting order.

[74] So far as future practice is concerned, whilst we do not go so far as to say that there should be no place in our practice for catch-all craves in the form of crave 2A, we do consider that in the ordinary course of events, a party who wishes, after the evidence has been heard, under reference to such a crave, to obtain an order in terms not foreshadowed in his specific crave, should tender up a minute of amendment to convert the catch-all crave into a specific crave. The other party having been heard thereon, the allowance or refusal of the Minute of Amendment would be a matter for the discretion of the Court.

The ancillary craves

[75] The Company did not insist on its crave 7 for (one) interdict of the Respondents from maintaining or continuing to maintain to the Scottish Government that they were entitled to any allocation of entitlements under the BPS and (two) an order on them to withdraw their current application therefor. The Company’s crave 3 sought an order ordaining the Respondents to unlock the gate into Field 11 which Lee McGowan admitted to having padlocked after parties’ relationship broke down, and to interdict them from locking it or from obstructing the taking of access to any part of Duntilland Farm in future. The Company’s crave 6 sought interdict of the Respondents or anyone on their behalf from “interfering with the tenant’s rights to occupy the holding of Duntilland Farm as an agricultural tenant and from attempting to occupy the said farm or any part thereof”. We understand that the padlock on the gate into Field 11 is no longer in place, and Sir Crispin’s formal motion in respect of crave 3 was for an order interdicting the Respondents from “obstructing the tenant taking access to any part of Duntilland Farm.”

[76] We are not minded to grant decree of permanent interdict in the terms sought by the Company. Quite apart from our concerns about the broad scope of and the lack of precision in the terms of the craves in question, we do not consider that there was anything in the evidence to suggest that once the Court had determined the parties’ respective rights and obligations, the Respondents would not respect and abide by our order(s). Whilst these proceedings have been ongoing, peace between the parties has been preserved by means of an undertaking provided by the Respondents embodied in an exchange of letters between parties’ respective agents and this arrangement appears to have worked tolerably well. Sir Crispin’s fall-back position in relation to the interdict craves was that if we were with the Company on either of craves 1 or 2, but against granting permanent interdict, we should grant decree in terms of the declaratory crave and then continue the application in respect of the interdict craves to see if matters settled down, so as to obviate the need for a new application to be raised later if they did not, but given that in the event of the Company returning to Court alleging some form of interference by the Respondents with its newly declared rights, it would have to introduce fresh averments about the facts and circumstances giving rise to such new alleged breach, we are not convinced that any useful purpose would be served by us so doing.

[77] The Company’s crave 4 was for an order in terms of section 84(1)(b) of the 2003 Act ordaining the Respondents to reinstate the sheep handling facilities demolished by Lee McGowan in 2015, and that within three months, or such other period as the Court might ordain. Failing reinstatement in terms of an order of the Court in terms of crave 4, “or alternatively to that crave”, the Company in crave 5 sought an order for payment by the Respondents to the Company of the sum of £10,000 with interest thereon. Section 84(1) of the 2003 Act empowers the Land Court, where it has by virtue of the 1991 Act or the 2003 Act determined any matter in relation to the rights of any party make such order or grant such remedy as it considers appropriate and in particular make or grant (b) an order ad factum praestandum or an order of specific implement. The Company’s entitlement to this remedy rests on the proposition that the sheep handling facilities were fixed equipment on the holding at the outset of the lease, which the landlord should not have removed.

[78] By section 5(2) of the 1991 Act, there shall be deemed to be incorporated in every lease of an agricultural holding to which section 5 applies “an undertaking by the landlord that, at the commencement of the tenancy or as soon as is reasonably practicable thereafter, he will . . . provide such buildings and other fixed equipment as will enable an occupier reasonably skilled in husbandry to maintain efficient production as respects both – (i) the kind of produce specified in the lease, or (failing such specification) in use to be produced on the holding, and (ii) the quality and quantity thereof, …” As first enacted, section 16(1) of the 2003 Act provided that when a lease constituting a SLDT or a LDT was entered into, any fixed equipment on the land comprised in the lease was to be specified in the lease, and section 16(3) of the 2003 Act as originally enacted incorporated in every lease constituting a SLDT or LDT an undertaking by the landlord regarding the provision of fixed equipment in essentially the same terms as in section 5(2) of the 1991 Act. Section 16 of the 2003 Act was substantially recast with effect from 22 March 2011 by the 2011 Order, so that now, by section 16(1)(a)(i) of the 2003 Act, the landlord’s undertaking, incorporated in every lease constituting a SLDT or LDT, is within 6 months of the commencement of the tenancy, or where that is not reasonably practicable by virtue of any obligation on the landlord under any other enactment, as soon as reasonably practicable thereafter, to provide such fixed equipment as will enable the tenant (rather than the hypothetical occupier referred to in section 5 of the 1991 Act) “to maintain efficient production as respects the use of the land as specified in the lease.” The amended section 16 of the 2003 Act contains no provision which corresponds with that in the original section 16(1) of the 2003 Act to the effect that when a lease constituting a SLDT or a LDT is entered into, any fixed equipment on the land comprised in the lease is to be specified in the lease. The legal basis of the Company’s claim to be entitled to insist on reinstatement of the sheep handling facilities thus is that its removal by the Respondents put them in breach either of section 5 of the 1991 Act (if the Company had a 1991 Act tenancy) or of section 16(1)(a)(i) of the 2003 Act (if the Company has a SLDT or LDT).

[79] On the view we have taken of the evidence, that at the inception of the arrangement entered into between William McGowan and Mr Wight (Snr), what the Company, through the latter, obtained was merely seasonal grazing, there would have been no obligation on William McGowan to provide sheep handling facilities on Duntilland Farm, and whilst the Wights may have been permitted to make use of the sheep handling facilities which were there, there was nothing in the evidence to suggest that they did so on the basis of contractual entitlement. On our findings in fact, what was let was “just grazing”, and the Company’s use of the sheep handling facilities at Duntilland Farm was a matter of tolerance rather than of right. We did not have the benefit of parties’ submissions upon the operation of section 16 of the 2003 Act in relation to a landlord’s fixed equipment obligations where what was, in its origins, merely an unwritten seasonal grazing let imposing on the landlord no obligation to provide any fixed equipment later mutates into a SLDT and then a LDT, but on the particular facts of this case, against a background of increasing usage by sheep farmers of mobile handling facilities of the sort we heard evidence the Wights themselves possessed, we were not satisfied that the provision of permanent sheep handling facilities on Duntilland Farm would fall within the scope of the landlord’s obligation to provide fixed equipment in terms of section 16 of the 2003 Act.

[80] In relation to disposal of the Company’s crave 5, Sir Crispin, in his closing submissions, indicated that he would be content to have it held over to see whether the Respondents complied with the Court’s order in terms of crave 4; i.e. he was departing from that part of crave 5 which sought the order for payment in the alternative to, rather than merely which failing, an order for reinstatement, about which we had harboured concerns. We do, however, require to comment on the quantum of the sum sought in crave 5. The Company offered to prove that in the event that the sheep handling facilities were not replaced, the Company “will have to provide a replacement sheep handling facility, which they reasonably estimate will cost them about £10,000.” Vouching for that figure purported to be provided by a schedule headed “TO REPLACE SHEEP PENS AT DUNTILLAND FARM, SALSBURGH, SHOTTS, With like for like” dated 30-11-15 which was produced as Production 23. This document, drawn up by the Wights themselves, consisted of two parts. The first part, set out under the above quoted heading, listed costs of labour and materials amounting in total to £2571. Under the heading “RESITE PENS”, the second part listed further costs totalling £5116.80 in respect of site preparation and a further £1455 for a further 300 yards of guide/paddock fencing, which, we were to learn when Mr Wight (Snr) gave evidence, represented the additional costs which would be incurred were the replacement sheep handling facility to be erected on a new site on Duntilland Farm where there was no existing hard standing. The running total of these three amounts, as shown at the foot of Production 23, was £9142.80. Under cross-examination, Mr Wight (Snr) could provide no satisfactory explanation as to why, if £2571 was the estimated cost of reinstatement of the sheep handling facilities upon the hard standing where they had previously been located, the Company should be suing for the greater sum of £10,000 said to represent the cost of re-siting the sheep handling facilities elsewhere on Duntilland Farm where a hard standing would have to be created. There was nothing in the evidence to indicate either why re-siting of the sheep handling facilities should be necessary or even that the Company had any specific alternative location in mind. Had we been of opinion that the Company was entitled to an order for reinstatement of the sheep handling facilities, we would have acceded to Sir Crispin’s suggestion, and afforded the Respondents a period of three months within which to do so, which failing ordered payment in the sum of £2571, the quantum of which Mr Lean, for the Respondents, did not dispute.

Other authorities

[81] We were, in the course of the three days of submissions, referred to a large number of authorities, but in a case which seems to us to be one which turns ultimately on the application of relatively new statutory provisions to its own very singular facts, we derived only limited assistance from much of the past case law and texts cited. For the record, in addition to those already mentioned in the foregoing Note, reference was made in the course of the hearing also to the following cases.

Morrison-Low v Paterson 1984 SC (HL) 49
Korner v Shennan 1950 SC 285
Scene Estate Ltd v Amos [1957] 2 QB 205
Angus Estates v Smith 2009 SLCR 1
Mackie v Gardner 1973 SLT (Land Ct) 1
Lord Advocate v Drysdale (1872) 10 M 499; (1874) 1 R (HL) 27
Belshes v Fraser (1839) 1 D 1071
Mann v Houston 1957 SLT 89
Bell v Inkersall Investments Ltd 2006 SC 507

Summary of principal findings in fact and law

[82] We have, accordingly, found in fact that the initial arrangement under which the Company came to occupy Duntilland Farm commenced in or about January 2004. No lease came into being before that date. We have rejected the evidence of Mr Wight (Snr) that at its inception, both parties “understood that this was to be a long-term arrangement.” We have held, on the balance of probabilities, that what was agreed was that the Company would occupy Duntilland Farm on the basis of a seasonal grazing let falling within the terms of section 3 of the 2003 Act, with the conferral of any form of security of tenure not having been within the contemplation of parties, but for most practical purposes, it does not matter whether the initial term agreed between William McGowan and Mr Wight (Snr) was a period of 364 days or less (i.e. being in law a lease under which agricultural land is let for the purpose of its being used only for grazing for a period of not more than 364 days to which section 3 of the 2003 Act applied) or a lease of one year (a SLDT in terms of section 4 of the 2003 Act) because where, as we have found as a matter of fact, the Company remained in occupation after its expiry with the consent of William McGowan, the legal consequences would, by virtue of sections 4(2) and 4(3) of the 2003 Act, be the same. We do not, on the evidence, discount the possibility that what was agreed between the parties was that the Company’s use of the land at Duntilland Farm for grazing was subject to such other use as members of the McGowan family might wish to make of it, such as for keeping Donna Touray’s horses: such a possibility would be entirely consistent with the subsequent actings of parties.

[83] We consider that the arrangement by which the Company occupied Duntilland Farm was reconstituted in August 2006 after the death of William McGowan, when Mr Wight (Snr) attended at the farmhouse at the behest of Mrs Joan McGowan and Lee McGowan to discuss that arrangement and affirmed, in response to their pointed inquiries, that the Company was occupying on the basis of seasonal grazing and would continue to do so under the late William McGowan’s successors as owners of Duntilland Farm. It was upon that stated basis that the Respondents thereafter accepted the instalments of rent tendered on behalf of the Company. The Company having been permitted to remain in occupation of Duntilland Farm after the expiry of the initial term of the new seasonal grazing let which commenced in August 2006, in the absence of subsequent agreement between them of a lesser period, the tenancy devolved by operation of law initially into a 5 year SLDT to August 2011, and thereafter into a 10 year LDT to August 2016. The ultimate legal consequence of these findings in fact, as we have worked them out on a preliminary basis, would seem to point to the Company being today the tenant under a LDT on its first short continuation in terms of section 8(6) of the 2003 Act, but as we have not, as yet, been addressed by parties on this point, this should be regarded as no more than a preliminary view, upon which we invite parties’ submissions. We have not been persuaded that the removal of Field 13 from the subjects of lease in 2009 was, looked at in isolation, a change sufficiently material as to be constitutive of a new lease as argued for by the Respondents.

Disposal

[84] We have, in part (FOUR) of our Order, appointed parties to be heard on a date to be fixed on the further consequences in law of our findings in fact and whether any order should granted in terms of crave 2A, and if so, what the terms of any such order should be. We respectfully would ask that parties’ agents liaise with Court personnel with a view to identifying a mutually convenient date for such a hearing. Of course, if parties are able to agree a way forward regarding the outstanding issues in relation to crave 2A, or consider that they might adequately be addressed by way of written submissions, no oral hearing would be necessary. If, however, parties do consider that a further oral hearing is either necessary or desirable, we would be happy to entertain their submissions on the issue of expenses at the same hearing.