FULL COURT

(Lord McGhie, Sheriff MacLeod, A Macdonald)

WOTHERSPOON v CROFTERS COMMISION

(Application RN SLC/224/07 - Order of 13 May 2008)

CROFT – APPLICATION TO COMMISSION FOR DECROFTING DIRECTION – APPEAL BY STATED CASE – PROPER PROCEDURE IN STATED CASE – QUESTIONS OF LAW – REFERENCE TO DOCUMENTS BREVITATIS CAUSA – CONTENTS OF REPORTS – ADEQUACY OF REASONS – DEFINITION OF CROFTING COMMUNITY – ONLY TWO CROFTS – DEFINITON OF TOWNSHIP –SMALL ISLAND – PRESUMPTIONS – REASONABLE PURPOSE – IMPACT ON CROFT – IMPACT ON COMMUNITY – DISADVANTAGE TO COMMUNITY – IMPLICATIONS FOR HOUSING POLICY – VALUATION EVIDENCE – EXPENSES FOR SUCCESS – CROFTERS (SCOTLAND) ACT 1993 (AS AMENEDED) SECTION 20(1) AND (3), SECTION 24, SECTION 25, SECTION 52A, SECTION 61 – CROFTING REFORM ETC. (SCOTLAND) ACT 2007

The appellants applied to the Crofters Commission for an order that part of their croft on Gigha, extending to 5.827 hectares, should cease to be croft land. They proposed that an area of 0.143 hectares would be sold for use as a dwellinghouse and the proceeds used by them for renovation of the existing croft house. The application was refused on the following grounds: “As there are only two crofts on Gigha, decrofting for the purpose of housing must be to the disadvantage of the crofting community. Housing on Gigha would best serve the interests of the crofting community by building on non-croft land”. The applicants appealed by way of stated case under section 52A(3). The findings in fact made no reference to the applicants’ proposals nor to any impact on the croft itself. It was found that the croft did not share in a common grazing. It was one of two crofts on Gigha situated about three miles apart. There was no known demand for croft tenancies on the island. The area requested was a reasonable extent for the purpose of building a dwelling house to the specifications for which planning consent has been obtained with garden ground.

HELD that (1) the reasons given were an inadequate basis for refusal; they not provide any material which would allow the appellants to see what view was taken of their submissions in support of the application and did not show whether any presumption in favour of decrofting had been considered; (2) it was not clear upon what basis the Commission found that two crofts constituted a community as they could not be taken to be part of a township simply because of their location on a comparatively small island; (3) the only evidence that decrofting would have an impact on other housing related to issues of valuation and it would not have been a proper exercise of its discretion for the Commission to proceed solely with a view to preventing a valuer from obtaining sound evidence of value; (4) the proper disposal of the appeal required the exercise of a procedural discretion balancing the interests of the appellants against the wider public interest, including the interests of the Commission in the exercise of their statutory functions; (5) weighing these issues the Court concluded that it was appropriate to direct the Commission to grant the application.

OBSERVATIONS were made as to procedure in relation to stated cases generally.

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

[1] The appellants applied to the Crofters Commission in terms of sections 24 and 25 of the Crofters (Scotland) Act 1993 for an order that part of their croft at Ardailly Mill, Gigha should cease to be croft land. They proposed that the site would be sold for the purpose of use as a dwellinghouse and the proceeds used by them for renovation of the existing croft house. The application was refused on the following grounds: “As there are only two crofts on Gigha, decrofting for the purpose of housing must be to the disadvantage of the crofting community. Housing on Gigha would best serve the interests of the crofting community by building on non-croft land”.

[2] We agreed to deal with this case on written submissions as the arguments for the appellants had been very fully set out as part of their grounds of appeal. We afforded both parties an opportunity to lodge further submissions. Neither party sought to lodge additional material. This was understandable in relation to the appellants, having regard to the detail of their grounds, but we had some concern when it was intimated that no submissions were to be made on behalf of the Commission. This was the first case under the new procedure and the lengthy grounds of appeal might have been thought to merit a response. We considered whether to insist on a hearing. However, we were anxious to avoid unnecessary expense for the appellants and we resolved to attempt to deal with this case on the available material. On settling to consider the matter in further detail, it became apparent that the case raised a variety of issues which it would be inappropriate to resolve in absence of a contradictor but as we found it possible to reach a decision without requiring to deal with all the issues, we have done so. We have also thought it appropriate to touch on several matters with a view to giving guidance or flagging up points which may require more detailed consideration in any subsequent case.

Authorities

Ferguson v Crofters Commission 1999 SLCR 77
Fox v Crofters Commission 1991 SLCR 38
Gammie v Crofters Commission 1998 SLCR 49
Inkster v Crofters Commission – SLC/168/04
Knight v Crofters Commission 1999 SLCR 102
Libberton Proprietors Ltd v MacKay 1973 SLT (Land Ct) 13
MacKintosh v Crofters Commission 1991 SLCR 48
MacCallum v Duke of Hamilton’s Trustees 1924 SLCR App.513 at 514.

Statutory material

Crofters (Scotland) Act 1993
Crofting Reform etc (Scotland) Act 2007

[3] The full text of the relevant statutory provisions can readily be found in published material or on various websites including http://www.opsi.gov.uk/legislation/ and we see no purpose in repeating sections at length. Subsequent references are to the provisions of the 1993 Act as amended by the 2007 Act.

Statement of Facts

[4] The facts found established to the satisfaction of the Commission were set out as follows:

1. The appellants are the owner occupiers of the croft known as Ardailly Mill, Gigha, which extends to 5.827 hectares.

2. The croft is vacant for the purposes of sections 23 to 25 of the 1993 Act, as amended by the 2007 Act.

3. There have been no previous decrofting or resumption applications in respect of the croft.

4. The appellants applied to decroft an area of 0.143 hectares of the croft for the purpose of building a dwelling house. They submitted the following additional documents:

a. Site plan at the scale of 1:2500 showing the entirety of the croft shaded orange and the approximate location of the area to be decrofted shown shaded red.

b. Plan at a scale of 1:500 showing the area in respect of which the decrofting direction is sought.

c. Copy of full Planning Permission for erection of a dwelling house.

A copy of the said application and a copy of each of the said additional documents are annexed. These show the full extent of the croft, the area in respect of which the decrofting direction is sought and the existence of planning permission for the erection of a dwelling house on that area.

5. The application was made on the appellants’ joint behalf. It was made pursuance to section 24(3) of the 1993 Act.

6. The statutory requirements for the advertisement of the application, as specified in subsection (6) of section 25 of the 1993 Act, were duly complied with by the Commission posting an appropriate notice in the Oban Times newspaper.

7. The Isle of Gigha Heritage Trust, the proprietors of most of the island of Gigha, wrote to the Commission on 18 May 2007 making certain representations. Said letter dated 18 May 2008 is referred to and held as repeated herein for the sake of brevity and a copy is annexed hereto. The Isle of Gigha Heritage Trust did not object to the application and this was made explicit in its letter to the Commission dated 8 June 2007 which said letter is referred to and held as repeated herein for the sake of brevity and annexed.

8. Jacqui MacLeod, the Commission’s Development Manager for Argyll, prepared a report in which she offered information/comment on the application. A copy of the said report is referred to and held as repeated herein for the sake of brevity and annexed. This report was not disclosed to the appellants or to their agents until after the making of the decision complained of.

9. MacPhee & Partners, as agents of the appellants, responded to the letter dated 18 May 2007 from the Isle of Gigha Heritage Trust. The said letter of 30 May 2007 is referred to and held as repeated herein for the sake of brevity and annexed hereto. The appellants’ agents refuted the representations made by the Isle of Gigha Heritage Trust.

10. On 5 June 2007 the Commission obtained a report on the application. A copy of the report is referred to and held as repeated herein for the sake of brevity and annexed hereto.

11. The Commission received no letters or any other intimation of objection from any interested party.

12. The croft does not share in a common grazing. It is one of two crofts on Gigha situated about three miles apart. There are no absentees. There is no known demand for croft tenancies on the island. There have been no township improvements or forestry schemes undertaken. The area requested, 0.143 hectare, is a reasonable extent for the purposes of building a dwelling house to the specifications for which planning consent has been obtained with garden ground.

13. The Area Assessor made no comment on the proposed decrofting.

14. Mr Robin Currie and Mr Angus McHattie, the only Area Commissioners to whom this application was referred, did not object to the application before it was referred to the Convener, Mr Drew Ratter, for consideration.

Decision-making process and grounds of decision

[5] The stated case set out full detail of the decision making process. After various procedures by way of investigation and written representations the Convener on 25 September 2007 endorsed the following Note on the report of procedure:

“The application has been refused on the following Grounds:

As there are only two crofts on Gigha, decrofting for the purpose of housing must be to the disadvantage of the crofting community. Housing on Gigha would best serve the interests of the crofting community by building on non-croft land”.

We have taken this endorsement as the substantive decision but have also had regard to the terms of notice the given on 22 August 2007to the appellants’ agents intimating that it was proposed to refuse the application on the following ground:

“The crofting community in the district consists of 2 crofts. Decrofting must therefore tend to the disadvantage of the crofting community. Housing should therefore be placed in the district on non-croft land, as planned by the Gigha Community Trust”.

“In arriving at this decision the Commission have accepted the views of the Trust that the interests of the crofting community are best served by the Trust’s plans for development of housing on non-croft land”.

Comment on stated case procedure

[6] As this is the first appeal we have had to consider under the new “Stated Case” procedure, it is appropriate to say something about the procedure which has been followed. It can be said, at the outset, that we consider that the presentation of material by the appellants has been of a high standard. Unfortunately, we recognise that we cannot expect this in every case. The following comments are intended to give some guidance as to our present view of the essential procedural issues. This may change in light of experience and in light of any submissions we may hear in subsequent cases. In every case, it will be important to have in mind the underlying areas of responsibility.

[7] Although the legislation is at pains to distinguish the procedure to be followed in appeals under section 25(8) from the normal appeal procedure of section 52A, we have not, as yet, detected any significant difference between the two procedures. For practical purposes, our comments apply to both. Under section 25(8) the applicant may “appeal by way of Stated Case” and under section 52A the appeal is to be “made by way of Special Case, at the instance of the applicant”. We think it plain from these provisions that the applicant must initiate the appeal. However, we are satisfied that the concept of a “stated case” is well established and must be taken to have been in the mind of the legislators. The essential feature of such procedure is that it requires the lower court to set out its findings in fact. Accordingly, a question arises as to what the appellant must do at the stage of initiating the procedure.

[8] In the present case we understand that the appellants presented a full draft case to the Commission. The Commission adopted the bulk of that draft as their Stated Case. We understand that they allowed interested parties to comment before submitting the case to us. We think that will always be an essential stage. How it is done will depend on circumstances including the number and interests of parties involved.

[9] Three distinct elements will be required in any Stated Case under this legislation: (i) a clear description of the decision complained against; (ii) a statement of the grounds of appeal having regard to the provisions of section 52A(3); and (iii), detail of the facts relied on by the Commission in reaching their decision. The first of these will initially be for the appellant although there might be circumstances when the Commission would wish to add material to ensure that the Court had a clear and full understanding of the precise nature of the dispute. It is for the appellant to set out the grounds of appeal. An appellant may well find it convenient to provide a draft statement of facts but ultimately it is for the Commission to ensure that the facts upon which the decision is based are fully set out. It is clear that the Commission did take responsibility for the findings in this case.

[10] A Stated Case may well contain other elements. It will often be convenient for it to start with an introduction which might be used to set out the background of law or any procedural specialities, against which the decision was taken. However, we think that, in practice, it would often be sufficient to set out the detail of the relevant statutory provisions as part of the narrative of findings in fact.

[11] The case may also include questions of law. Traditionally, appeal by way of Stated Case has taken the form of the lower court, or decision making body, posing questions of law for the appellate court, based on the facts the lower court has found to be established. It may be implicit in use of the term “Stated Case” that Parliament intended this procedure to be adopted. However, the explicit requirement is that the appellant should set out grounds of appeal and we recognise that it will not always be easy for an appellant to re-state such grounds in the form of questions. We are not yet persuaded that “questions of law” are needed for every Stated Case under section 25(8) or 53A. Such questions may, however, provide the most convenient way to deal with disputed questions of fact. We discuss this below.

[12] We consider that appellants are entitled to decide the form of any questions of law they wish to put to the superior court. In practice, the Commission might be able to agree with an appellant what precise form of question should go forward. In some cases the Commission might be able to help by revising the precise wording. But appellants should have the right to put a question in any way they wish. If other parties, including the Commission, do not like the form of any question they may, if so advised, pose their own additional questions.

[13] Another element which may often be necessary in a particular case is material to deal with any dispute about the findings in fact. An appellant might challenge a proposed finding or might wish a further finding to be made. The Stated Case will require to deal with such issues. This Note is not intended as an exhaustive commentary on all issues of style. However, it may be said that where the dispute is over a question of whether a particular finding can be made based on evidence which is, itself, undisputed, this can usually be dealt with as a question of law. It might take the form of a question on the following lines: “On the basis of findings in fact 1 and 2, were we entitled to make finding in fact 3? OR, On the basis of findings in fact 1 and 2 were we obliged to make a finding that X?” Where the underlying issue is a question of credibility it will be for the Commission to take a decision and give an explanation, leaving it for the appellant to propose any question of law which might be thought to have a bearing on such explanation.

[14] The present Stated Case is a good example of a full style. It sets out the detail of relevant statutory background; contains a Statement of Facts; gives a short summary of the decision making process and sets out the full text of the decision. It sets out the grounds of appeal with full supporting argument on behalf of the appellants, and then poses Questions from the Commission. It may be noted that the case sets out, as a separate chapter, an analysis of the series of authorities dealing with construction of section 25. That has proved extremely helpful to us although, as will be seen, we have not required to rely on it. However, in other cases, such material might either be included as part of the grounds of appeal or be left over for the stage of “submissions” to this Court.

[15] The Stated Case also contains a Schedule of Documents. We have no doubt that it may be appropriate to provide certain material in this way. For example, the first item in the present case was the “Decrofting Application with site plan and a copy of the relevant planning permission.” This material was referred to in the findings in fact. Such material will often be essential as part of the description of the decision complained about. In some cases, if the physical lay-out is important, plans and, where appropriate, photographs, might be used to allow the Court to get a proper impression of a particular issue. However, such material should be referred to explicitly in the findings in fact.

[16] It is important to realise that where a finding in fact simply narrates that a particular document was sent, reference to that document for its terms does no more than confirm what the letter actually said. It does not operate as a finding that all or any facts set out in the document are accepted as proved. The Court is not directly concerned with the evidence upon which the Commission made its findings. Letters, reports, summaries and memoranda prepared by witnesses will usually be irrelevant at the appeal stage. Findings in fact should be made explicitly either by setting out separate findings or by a finding that the facts set out in a particular document were accepted as established. In the latter case, care will need to be taken where a document is a mixture of facts and opinion.

[17] For completeness, reference may be made to the decision in Dickie v Scottish Ministers 2003 SLCR 1 at pages 10-11; and at 2004 SLCR at pages 36 to 46, for some further discussion of what is involved in making findings in fact. In the present case, most of the facts have been set out with commendable clarity. However, the intention behind several of the references to documents remains unclear and, as discussed below, we do not think the Commission have gone far enough in their findings to justify the decision taken.

[18] The appellants’ Grounds of Appeal are set out very fully, with citation of authority and supporting submission. Although we consider that the requirements of section 52A(3) could be met by setting out the Grounds quite succinctly, there are advantages in the approach which has been followed in the present case. It is clearly important to give sufficient notice of the Grounds to be advanced to allow the Commission to state fully all findings in fact relevant to the stated Grounds. Where the Grounds are fully supported by submission at the outset, it may be easier for the Commission to see what is relevant. It will also be easier for the Court to be able to agree to deal with a case on the basis of written material where the arguments are fully deployed – although we expect always to afford an opportunity for further submission.

Grounds of appeal and submissions for appellants

[19] For the purposes of this Note, the submissions in relation to each of the Grounds can be summarised shortly and our references are to the relevant heads of section 52A(3).

[20] In relation to (a) the appellants contend that the Commission erred in law by failing to apply a presumption in favour of decrofting when a reasonable purpose had been established: Knight; Ferguson. They are said to have erred by failing properly to apply the definition of a “crofting community” as developed by the Court in MacKintosh; Fox; and Gammie. It is also asserted that the Commission “further erred” in that they failed to apply the interpretation provided by section 61(1). The appellants do not expressly address the relationship of the established law and the new definition although this observation appears to suggest a contention that both apply. They contend that the Commission should have found that there was no crofting community on Gigha. They should not have considered the wider public interest as being equivalent to the interest of the crofting community: Fox. Had they found that there was no crofting community they would have been bound to grant the application: Gammie; Inkster. They should not have considered the views of the wider community as represented by the Isle of Gigha Heritage Trust: Fox.

[21] In relation to (b) it is contended that the Commission effectively made a finding that decrofting must be to the disadvantage of the crofting community. But there was no evidence to show that loss of 0.143 ha. must tend to the disadvantage of crofting. There was no evidence for any finding that development of housing on non-croft land would better serve the interests of the two crofts. In relation to (c) the applicants referred to the Commission’s reliance on a report by Jacqui MacLeod purporting to record the intentions of Mr Wotherspoon. It was asserted that this evidence should not have been put before the Commission without giving him a chance to respond to it.

[22] Under (d) it was contended that the decision had taken into consideration the Trust’s plans for development of housing on the island which were not relevant or material to the interests of the crofting community nor to reasonable purpose. In relation to (e) the appellants asserted that the Commission had failed to take account of the consideration that the site had full planning permission and that a reasonable public purpose should be assumed: Inkster. The Commission had not referred to the intention of the appellants to raise money to restore the old croft house. They had not weighed such factors. They had not had regard to the fact that sale of one plot on the open market would be of no real affect in relation to the policy of the Trust.

[23] Finally, they contended that the Commission had exercised their discretion in an unreasonable manner:(f). They had not given proper weight to all the relevant factors including the views of the SEERAD officer and the two Commissioners who had supported the application.

Submissions for Crofters Commission

[24] For the Commission no submissions were made. In other words, we have not heard any argument in support the decision or challenging the grounds advanced by the appellants. However, we accept that the decision must stand unless we are positively satisfied that one or more of the Grounds of Appeal is, or are, well founded

Discussion

[25] Our conclusion can be shortly stated. The decision is very brief. Although we have attempted to see what reasons or findings, are implicit in it, we cannot avoid concluding that the decision provides inadequate basis for refusal. It gives no indication of the law it is applying but appears to proceed on the basis of a presumption we consider inappropriate as a matter of law and not well founded in fact. The decision makes no mention of any facts specific to the application other than a reference to two crofts on Gigha. There is no mention of the nature of the land to be lost to crofting nor whether that loss would have any adverse impact on the remaining land. There is no attempt to identify any practical way in which decrofting of the site would have an impact on the crofting community. We consider it clear that the decision must be revoked. However, the Grounds of Appeal raise a variety of issues and it is appropriate to comment more fully on some matters.

[26] The refusal purports to proceed on the basis of a presumption, initially expressed on the basis that any decrofting would “tend to the disadvantage” of the crofting community and latterly on the basis that decrofting for housing “must be to the disadvantage” of such community. This conclusion appears to be related to a situation where there are only two crofts. There is no express attempt to explain why housing would have an effect on these two crofts which it would not have on a larger number. It is quite clear that the appellants’ proposal was not to decroft the entire croft. Only a small part was to be taken. There is no indication that the Commission gave any thought to the actual impact of the loss of the particular plot from the remaining croft. We do not know what view the Commission took of the statutory provisions or of the effect of previous decisions of the Court. Plainly the decision does not attempt to deal with the explicit statutory issues such as the question of “reasonable purpose”. It does not provide any material which would allow the appellants to see what view was taken of their submissions in support of the application. It does not allow us to see whether any presumption in favour of decrofting has been considered.

[27] Previous decisions of the Court in relation to presumptions were based on analysis of the provisions of the Act; in particular, sub-sections 25(1) and (2). Parliament has had an opportunity to amend these provisions and the 2007 Act has made various changes to the section. The change made to section 25(1) has simply added a reference to the interests of the crofting community. No relevant change has been made to subsection (2) itself but a definition of the term “crofting community” has now been provided in section 61 and the effect of this must be considered. There has been no attempt to clarify the relationship of subsections (1) and (2).

[28] It is not immediately obvious what change was intended by the addition to subsection (1). As matters stood, it was plain from subsection (2) that the Commission had to have regard to the interests of the crofting community. Subsection (1) appears to set out a list of different categories in relation to which a finding of “reasonable purpose” may be made. On the face of it, the addition has simply added a further ground for finding that such a purpose has been established. It is possible that the addition was made simply to keep the decrofting provisions in line with the amended provisions of section 20 which had previously contained no reference to the crofting community. In any future case we would welcome submission as to the effect of the inclusion of the explicit reference to the interests of the crofting community in section 25(1). What seems clear is that there has been no attempt to make any change bearing on the Court’s construction as to a presumption in favour of decrofting where a reasonable purpose has been established.

[29] Nor has there been any change which would have a bearing on construction of the term “reasonable purpose”. The fact that Section 20(1) and section 25(1) are both expressed in terms of a disjunctive list of separate categories does mean that this is not free from difficulty. On a straightforward reading, the Court in the former case, and the Commission in the latter, need only be satisfied that a purpose is reasonable in relation to one category, in order to fall within the section: Libberton Proprietors Ltd v MacKay. Where satisfied as to reasonable purpose the obligation on the Commission to give a direction is expressed in mandatory terms. But the relationship of this provision with the provisions of subsection (2) is not entirely straightforward and it has been subject of consideration in previous cases. It is plain that section 25(2) would be redundant if the Commission required to give a direction in every case where they had satisfied themselves as to the reasonableness of a particular purpose. Accordingly the Court has accepted that the word “shall” in subsection (1) cannot have been intended to have a mandatory effect: Ferguson, at page 94. The two subsections have to be read together and this can be done by treating them as intended to apply a strong presumption in favour of decrofting when a reasonable purpose was established.

[30] As far as “reasonable purpose” itself is concerned, it has been held in relation to resumptions that the Court need not accept a purpose as reasonable simply because it falls within the list of examples set out in section 20(3). Nor is it necessarily sufficient to establish that a purpose is reasonable viewed in relation to any single one of the categories listed in subsection (1). If the Court was satisfied in relation to one such category - say, to the public interest - that would suffice, if there was no evidence of any potential adverse effect. But, it is necessary to consider whether the purpose is reasonable in all the circumstances. The same approach seems appropriate in relation to section 25(1). The Commission could proceed on the assumption that use of land for a dwelling was a reasonable purpose having regard to the public interest, if no other factors arose. However, while such use might be reasonable having regard purely to the public interest, it would not necessarily be a reasonable purpose if, for example, it was to have a significant adverse impact on the rest of the croft: see for example MacCallum v Duke of Hamilton’s Trustees.

[31] We think it clear that Parliament has accepted that loss of land from the control of the Crofting legislation will not, in itself, be harmful to the interests of the crofting community. Section 25(2) is quite specific in the particular things to be considered and various uses are defined by section 20(3) as included in the term “reasonable purpose”. On the face of it, the Act appears to allow decrofting when a reasonable purpose falling into any one of the four categories is established, although, as discussed above, this must be taken to be qualified by having regard to any adverse effects. For present purposes, it is unnecessary for us to say more about the type of adverse effect which might have to be taken into account. We are not satisfied that the dicta in Fox justify a conclusion that there is any limitation as to the categories of potential adverse effects which may be taken into account. That issue may require further consideration. However, we are satisfied that where there is no evidence of any likely adverse effect, use of the land for housing can be accepted as a reasonable purpose in relation to the public interest and this gives rise to a presumption in favour of decrofting. In Ferguson we expressed that in terms of a “strong presumption” for the reasons there expressed. The amendments effected by the 2007 Act do not appear to change this.

[32] In any event, for present purposes it is enough to say that there is nothing to suggest that any presumption in favour of decrofting was weighed by the Commission in the final decision. As we have said, the first ground of decision, that decrofting “must” be to the disadvantage of the crofting community appears to be based on a contrary presumption or assumption. We, accordingly, consider the first part of the appellants’ Ground of Appeal in relation to error in law to be well founded.

[33] The grounds of refusal purport to relate to the interests of the “crofting community” and it is implicit that the Commission have made a finding that the two crofts on Gigha constitute such a community. They have not made any explicit finding in fact to that effect. They have not set out any primary facts which provide a basis for such a finding.

[34] Despite the absence of any attempt to contradict the appellants’ submissions, it must be assumed that the Commission took the view that dicta bearing on the meaning of the expression “crofting community” have been replaced by the new definition in section 61 as this is implicit in the first question of law posed by them. The appellants’ attempt to ride both horses by reference to the established law and to the new definition is not supported by argument. We consider it inappropriate to embark on further analysis of the potential problems of construction of section 61 for the purposes of this appeal. In an appropriate case we might hear more detailed submissions. However, we accept the appellants’ submission that the new definition leaves open the question of what is meant by a “township”. If all established tests of the term “community” are to be taken as swept away to be replaced by a simple numerical test, it would seem that this has simply changed the focus from a requirement to identify a “community” to that of a requirement to identify a “township”. For the purposes of the present case we proceed on the basis that this was the intention of Parliament.

[35] We make no attempt to define a “township”. It is enough to say that, plainly, two crofts do not become a township simply because they happen to be mentioned in one application. It is equally plain that two crofts do not become a township simply because they are both on the one island. If we assume that the Commission gave active thought to this issue, there must have been some other basis for the implicit finding that the crofts in question were part of a township. This cannot be seen as a primary fact. It is the type of finding which may be described as a secondary or inferential fact. It requires some primary fact, or facts, upon which the inference may be based. No primary facts have been set out which might justify such an inferential finding. The finding that there are only two crofts and that they are three miles apart make it clear that, in themselves, the crofts do not constitute a township. There are no findings about other dwellings.

[36] It may be said that we would readily accept that traditional townships may be well spread and that a distance of three miles between houses would not preclude their being in a township. The Court can be taken to have an awareness of the more obvious facts of geography. We know that Gigha is an island about 9 kilometres long by about 2 kilometres miles wide although it is much narrower in places. We think it too simplistic to assume that all houses on such an island can be taken to be a township. There are farms on Gigha and traditional farms are not usually viewed as part of a township – although larger farms may in themselves be described as a township in a different context. Ardailly is comparatively remote from the main settlement of houses around the hotel. It is off the main road. There are other isolated houses on the island. Achamore House would not be regarded as part of a township. In short, the question is not a simple one and we are not persuaded that all dwellings on Gigha can be regarded as forming part of a township simply because of their location on a comparatively small island. We have no basis for any inference that other facts were relied on in this case.

[37] A further question may arise as to whether a croft with no dwellinghouse can be part of a crofting community within the meaning of section 61. The definition is expressed in terms of occupation. There is a finding that the appellants are owner-occupiers of the croft. We recognise that there is no actual finding that they do not live on it and that it has no habitable dwelling. As indicated in our preliminary discussion of procedure above, we must expect to proceed on the basis of findings and not on the content of documents incorporated in general terms. However, we note that the appellants’ address is said to be in Campbeltown, and it seems appropriate in the rather unusual circumstances of this first case to accept that they live off the croft and that there is no accommodation on it. There can be little doubt that, in some contexts, owners can be taken to “occupy” their land even if they have little or no physical contact with it. However, a wide approach may not be appropriate in the context of an application under section 24(3). When attempting to identify a “community” it might be thought to make sense to ignore an unused croft. In any event, although we note that the reference in section 25(2) is to the “general interest”, if the appellants are to be regarded as members of the crofting community for the purposes of section 61, it may follow that their own personal interests must form part of the assessment of that interest. These are all matters which will require further consideration.

[38] It is unnecessary for us to express any conclusion on these matters for the purposes of the present appeal because the stated grounds of refusal are wholly inadequate. As it seems clear that building of new housing as such cannot be assumed to have an adverse effect on an existing crofting community, the first ground must be based on the implicit proposition that any loss of land, for whatever purpose, is harmful to people involved in crofting where there are only a few such people. We do not consider that such a general proposition is well-founded. In Gammie we accepted that an assumption may be made that a crofting community would be adversely affected by removal of any croft from the pool of crofts. All else being equal, a community is likely to be weakened by any loss of members. But that is quite different from a situation where only part of a croft is involved. This would not, of itself, lead to any change in membership of the community.

[39] It must not be forgotten that the appellants had made representations to the effect that there was no habitable dwelling on the croft at present and that their intention was that a new house would be built. They made it clear that it was not intended to become the new croft house. Their stated aim was to provide funds to restore the old house. They contended that it was of special character and historical interest. They intended to return to live in it and to work the croft. On the face of it, this was a proposal in the interests of the crofting community. It would both restore a special croft house and allow the appellants to become additional residential members of that community.

[40] If any part of the reason for refusal was that the Commission did not accept that the appellants had any intention of using the original croft house, we think that should have been made explicit. As it is, we are not told whether the Commission thought that having no dwelling on the croft was more likely to further the interests of the occupiers of the other croft than having two dwellings on it or whether they simply did not accept that there was any intention to restore the original house. As the first of these would, we think, make little sense it might have been possible to infer that the real reason was the latter. However, the explicit grounds make nothing of this point and we do not think it appropriate to make such an inference without any stated basis.

[41] The terms of the decision indicate that at least two separate grounds were in mind. The second ground of the decision of 25 September made no reference to the views of the Isle of Gigha Community Trust. It was expressed simply on a basis equivalent to saying that the interests of the occupants of the crofts would be better served by building new houses somewhere else. Standing on its own this makes little sense, particularly in the present context with no one actually living on the Ardailly croft. It is unlikely that the preference of Commission is that crofters should live off their crofts. It must accordingly be assumed that this particular ground, though shortly stated, was intended to incorporate, by implication, a reference to the policies of the Community Trust as had been mentioned in the proposed decision of 22 August.

[42] The appellants challenge the relevance of reference to the plans of the Trust. They say that this shows that the decision relied on protection of the interests of the wider community rather than the interests of the crofting community. However, in the proposed decision issued on 22 August and in the decision noted on 25 September, the Commission purported to have regard only to the interests of the crofting community. It is necessary to attempt further to expand the decision by looking to see what inferences are, or may be, implicit in relation to that aspect of the matter.

[43] If they were proceeding in terms of section 61, the Commission must have taken the view that the appellants, themselves, were an essential part of the crofting community. Without them there would be no such community within the meaning of the new definition. It is hard to see a sense in which their interests would be better served by preventing them developing their own land in order to allow some third party build a house on other land. It is equally hard to see any practical basis for a finding that the present occupiers of the other croft would be better served by a policy that any new house to be built on the Island should not be at Ardailly Mill. There is no suggestion that a new house on this croft would have any impact of any sort on either the working of Ardailly itself or the other croft. The decision does not attempt to draw a distinction between the “general interests” of the community and these of other occupiers as crofters.

[44] Although no explicit finding has been made relating to any facts relied on in the representations by the Isle of Gigha Heritage Trust we have considered it appropriate in this case to have regard to the terms of their letters. It is clear that their observations must be taken to relate solely to the question of valuation of building plots. They made it clear that did not object to the application itself. Building a house on croft land does not prevent other houses being built on other land. Use made of a new house on croft land would have no direct bearing on the use which might be made of other housing. If the appellants had proposed to build a new house and use it or sell it, there would be nothing of relevance in the Trusts observations. Addition of a new house would not diminish the existing stock of houses. It would not restrict, in any way, the opportunity of the Trust to offer their plots to chosen purchasers. The difficulty perceived by the Trust was that sale of a plot on the open market would force the District Valuer to increase his or her figures for assessment of plot values. It is implicit in this argument that it is understood that the District Valuer’s present assessment does not accurately reflect the market value. It is too low. This is seen to benefit the community because it allows chosen purchasers to buy land more cheaply and accordingly provides a wider range of suitable people from whom a purchaser may be chosen. If this particular decrofting was allowed it is thought that it would force the District Valuer to increase the valuation. Fewer suitable people would be able to afford to buy plots.

[45] We accept that this analysis may have some basis in reality. A District Valuer must proceed on the basis of available evidence. There is inevitably a tendency for such valuations to lag the market. However, we do not think that it is a proper basis for refusal of an application that to grant it would provide the District Valuer with sound evidence of value. If the Distict Valuer’s task is to identify open market value it is clear that direct evidence of an open market transaction would be likely to assist that task. If the valuation is to be reached on some other basis, the problem does not arise. In any event, we are satisfied that it would not have been a proper exercise of its discretion for the Commission to proceed solely with a view to preventing a valuer from having sound evidence of value.

[46] As the actual content of the response on behalf of the Trust was directed at the broad issue of valuation policy and not at any issues specific to the site, the croft, or the interests of the two crofts taken together, we accept that the views of the Trust were irrelevant to the issues to be determined by the Commissioner. It might be said to be an error of law to treat them as relevant: ground(a).

[47] In relation to Ground (c) we are not satisfied that it will always be necessary to advise applicants of the contents of all reports received by the Commission in relation to an application. They may properly seek reports from their staff to inform themselves of matters of fact. It is only where the matters of fact are perceived as being of significance to the decision that it may be necessary to allow an applicant to comment on them. There is nothing in the scanty terms of the decision to suggest that the Commission was influenced by the observations in this report. Indeed, a major criticism of the decision is that there is nothing to suggest that it took any account of the particular facts of the case.

[48] However, we accept that the report from Jacqui MacLeod ought to have been put to the applicants before a final decision was made. It contains material openly or implicitly critical of the applicants. As the explicit grounds of decision were so unsatisfactory, it is hard to avoid the impression that the Commission did indeed attach weight to this material. But, in absence of any stated findings, we cannot treat the content of the report as factually well founded. We can see that it contains a mixture of alleged fact and comment. For example, there is an implicit criticism that Mr Wotherspoon was said to have received a grant under the Croft Entrant Scheme but that he had never moved onto the croft nor worked it. However, there is nothing dealing with the question of how he might have been able to move onto the croft prior to completion of the housing proposals which are at the heart of the present application. There is a confused report of what Mr Wotherspoon said about his plans. It does not make it clear whether Mr Wotherspoon said simply that he hoped to be able to go on to sell another plot. Although it purports to record that he said he was “effectively asset stripping the croft” a fair reader might take that as a pejorative observation by the reporter rather than direct quotation. It must be borne in mind that he would not be able to sell for building purposes without planning permission and decrofting. Accordingly, any such expression of hope or intention would only be relevant to the present application if it cast doubt on his proposals in relation to it. An openly expressed intention to try to sell two sites is not, of itself, inconsistent with an intention to raise funds to renovate the old building and return to live on the croft. Agricultural use of the croft would be unlikely to provide a comfortable living. We do not think it unreasonable for a crofter to identify all potential sources of income.

[49] It is to be noted that nothing in any of the reports, let alone any of the findings, suggests that loss of one or two sites would have any significant impact on the viability of the remaining croft. We are told nothing of the nature of the land in question. The Commission does not express concern about the agricultural value of the proposed house sites

[50] More generally, it may be added that the reference to “asset stripping” and the concern that Mr Wotherspoon was to be “allowed to do away with” his croft, are emotive expressions which add nothing to the issues requiring decision. The proposal was to use 0.143 out of 5.827 hectares. Even if the proposal to renovate the old house and return to crofting is ignored, it cannot reasonably be said that use of such a relatively small area for housing was equivalent to “doing away with the croft”. Even if the appellants did succeeded in getting permission for two sites this would be less than 5% of the total area. It might very well be a more significant proportion of the workable land but there is nothing to suggest that that was viewed as a matter of concern by the Commission or Ms MacLeod.

[51] People are entitled to try to make the best of the resources available to them. They may very well feel that this requires them to consider the impact on other people but that is usually seen as a personal matter. Where Parliament considers it appropriate they can be constrained either by general public controls, such as the need for planning permission, or by the enactment of specific controls, such as are contained in the Crofting legislation. We are aware of a view that the controls provided by the present legislation do not go far enough and that crofters should accept further restraints in the broad public interest or the interests of crofting as a whole. However, that is not a matter for us. The task of the Commission and the Court is to apply the law as it stands. Cases cannot be decided on the basis of what the law ought to be or on the basis of anticipation of changes Parliament might make in the future.

[52] Although we understand why a very careful approach has been taken to laying out the material for the appellants under all potentially applicable heads of section 52A(3) this has led to some duplication. Unless ground (a) is to be read in a narrow sense, it is likely that there will always be a potential overlap between it and the other grounds. Duplication may be inevitable. Our above comments cover much of the material raised under grounds (d), (e) and (f) and it is unnecessary to say much more about them.

[53] As we have discussed, there is nothing in the findings to show why the Trust’s Plans for development of housing on non-croft land could have any bearing on the interests of those who might be said to “occupy” the two crofts. Accordingly, in making reference to the Trust in the context of a decision based explicitly on the interests of the crofting community, the Commission can be said to have taken account of irrelevant or immaterial considerations, within the meaning of ground (d).

The failure to make any mention of the potential impact of the proposal on the croft itself, shows a failure to take into account relevant or material considerations. Parliament has given the Commission the task of determining whether any particular decrofting is reasonable. But, in the present case, the principal ground of refusal is expressed in terms of a simple presumption that decrofting is contrary to the interests of the crofting community. It does not appear that the Commission exercised any discretion. That, however, may fall to be regarded as an unreasonable exercise of discretion.

The questions of law

[54] It is not entirely clear what role is played by questions of law in a stated case under the provisions of section 52A. However, we can answer the questions from the Commission in the following way:

1. We are satisfied that there were no facts stated which justified a conclusion that there was a crofting community, within the meaning of section 61(1), in the district in which the croft is situated.

2. We consider that the stated purpose, to use the specified land for a house site, was a reasonable one within the meaning of sections 20(3)(a)(i) and 25(1)(a). Nothing in relation to the good of the croft or of the estate or to the public interest or to the interests of any local crofting community has been shown to detract from that.

3. On the very limited facts stated by them, the Commission was not entitled to refuse to make the direction.

Decision

[55] We are satisfied that the decision to refuse must be revoked. The question then arises as to whether we should simply remit to the Commission to reconsider or go further and direct that the application should now be granted. It is the Commission which has been given responsibility for control of decrofting. We have no express power to substitute our discretion on the merits for that of the Commission.

[56] We initially tended to the view that we should remit to the Commission for reconsideration. We might have done so with a suggestion that they make findings on various matters and reconsider in light of such findings. For example, they might have been asked to make findings as to whether the two crofts on Gigha lay within a township; what impact the loss of 0.143 ha would have on the rest of the croft; and whether they accepted that the appellants had a genuine intention to return to live on the croft if they were able to realise funds to allow them to do so. This issue might have required an oral hearing if they had doubts as to the genuineness of any representations made and could have involved further examination of the circumstances of the appellants including examination of their current earnings and their prospects of being able to derive an adequate income when living on Gigha. We might have invited the Commission to reach findings as to the practical impact on occupants of the other croft. We could have directed them to go on to make a decision in light of such findings.

[57] However, the proper disposal requires the exercise of our procedural discretion. We must balance the interests of the appellants against the wider public interest, including the interests of the Commission in the exercise of their statutory functions. For various reasons, we have come to the conclusion that it is appropriate now to direct the Commission to grant the application.

[58] It is plainly in the interests of the appellants that the matter be determined without further delay. In relation to the wider, public, interest, we consider it appropriate to have regard to the overall approach of the Commission. They have made no submissions in support of the decision. They have not attempted to meet the arguments advanced by the appellants. They have given no indication of the legal principles applied by them. We recognise that when a decision is vitiated by error-in-law it will often be appropriate, in the public interest, to give the Commission an opportunity to reach a decision on the merits applying a proper view of the law. Had we been able to see that their decision was based on a misunderstanding of the law, it might well have been appropriate to give them an opportunity to reappraise matters applying correct principles. However, it does not appear that the case was viewed as proceeding upon any clear issue of principle.

[59] We also note that the stated facts include a finding that the Area Commissioners to whom the application was referred did not object to the application before it was referred to the Convener for consideration. We should make it clear that we do not accept the appellants’ suggestion, hinted at under ground (f), that it was unreasonable for the final decision not to follow the report of the Scottish Government officer and the views of the two Commissioners. If Mr Ratter was authorised to make the final decision, he was entitled to come to a different decision if he found grounds to do so. However, we consider that the views of the two Commissioners may properly be taken into account in determining appropriate disposal.

[60] In the result we revoke the decision of the Commission and, in terms of section 25(8B)(b), we direct the Commission to make a direction that the land forming the subjects of the application shall cease to be part of a croft. The Stated Case included the appellants’ motion for an award of expenses. We consider it appropriate that expenses follow success and we find the Commission liable in the expenses.

For Applicants:- Mr J Benfield, Solicitor, Fort William

For Respondents:- Mr D Smith, Solicitor, Inverness