Decision of the Scottish Land Court

George Rodenhurst (Applicant) v Thrumster Estate Limited (Respondents)

Case reference SLC 26/11
before
Lord Minginish, Chairman, and Mr John A Smith
26 October 2016

[1] Following our order of 17 August 2016, whereby we determined the fair rent for the croft of Brickigoe and settled the terms and conditions of the sale, submissions have now been received anent expenses.

[2] The applicant’s position is, in summary, that he, having been successful in the application, should be found entitled to his whole expenses. His agents argue that this is a case in which the landlords were not willing to sell the croft on any conditions and that he was, therefore, put to the expense of establishing not only his right to purchase but the terms and conditions upon which the purchase should proceed. He resists the attempts by the respondents to have the award of expenses against them modified.

[3] The respondents’ position is that they should be found entitled to (a) the whole expenses associated with the rent review and (b) 80% of the expenses associated with the determination of terms and conditions. It is argued that both the rent review and the determination of terms and conditions have been shown to be necessary and appropriate parts of the process and that the respondents have enjoyed greater success in relation to these matters than the applicant. In relation to the rent review, it is pointed out that the applicant opposed any increase in rent, whereas a significant increase was awarded by the Court. With regard to the fixing of terms and conditions for the conveyance, it is submitted that on a large majority of points the respondents have been successful. It is, however, also acknowledged that they were not successful in relation to all of them, hence the suggested modification of an award in their favour in respect of this element of the case to 80%. Although their letter does not expressly say so, we assume that they concede that quoad ultra the applicant should be found entitled to his expenses.

[4] Reverting to the applicant’s position in relation to the respondents’ motion, issue is taken with how the respondents conducted their case in relation to the rent review. It is pointed out that they engaged valuation agents who did not even inspect the croft, whereas the applicant engaged an agent who not only inspected the croft but whose submissions assisted the Court in its thinking and whose approach the Court had described as “clearly to be preferred” to that of the respondents’ expert. The Court had accepted Mr Brewster’s approach of using the SAC Handbook and the result had been that the rent fixed was significantly below that sought by the respondents. That amounted to significant success on the part of the applicant.

[5] So far as the terms and conditions fixed by the Court are concerned, the applicant argues that he has been successful on the large majority of those and cites that the Court found that only retrieval of hawks, game birds and their kill was allowed on the croft, not actual hawking, and that the bodies of water within the croft and the solum of the road fell to be included in the sale. His agents argue that “any reasonable landlord willing to sell the croft in principle would have been able to negotiate terms of sale along the lines ultimately awarded by the Court and possibly even, on a negotiated basis, more favourable terms”.

Decision

[6] We are satisfied that a distinction falls to be made between the merits of the case – whether the landlords had made out a statutory defence under sec 13(2)(a) of the Crofters (Scotland) Act 1993 – on the one hand and the rent review and terms and conditions of sale on the other. So far as the former is concerned, there is no dispute that, the applicant having been successful on the merits, he is entitled to his expenses.

[7] Having been successful in that, however, the consideration payable (and, therefore, the fair rent) and the terms and conditions of sale had to be fixed. In this respect it should be noted that the position with Brickigoe is more complex than that of many crofts. It is a large croft on a small estate over which sporting rights and hawking have been carried out. Because it is a large croft the rent is more than nominal and because there has been a history of animosity between the parties nothing could be left to be resolved by goodwill. In these circumstances we are satisfied that the matters of a fair rent and the terms and conditions of the conveyance properly required to be determined by the Court.

[8] That being so, we go on to consider the position taken by the parties in relation to these matters. In relation to the determination of a fair rent it might be said that parties were equally unrealistic in the positions they adopted; the applicant being unwilling to concede any increase and the respondents looking for what was, in relation to the passing rent, an astronomical increase. Although the Court ended up making an award closer to the applicant’s position than to the respondents’, it was, nevertheless, a very substantial increase in the passing rent. Moreover, given the position taken by the applicant, the respondents’ agents are quite correct to say that the rent review was necessary. In accordance with the principle that the expenses of litigation should normally fall on the person necessitating it, the applicant should, all else being equal, be found liable for the expenses of this aspect of the case. On the other hand, it seems clear to us that even if the applicant had been prepared to move on the level of a fair rent, the parties were never going to agree on what that rent should be and the matter would still have to be decided by the Court. Accordingly it seems to us that they are equally responsible for the necessity of litigation on the matter. The applicant complains that he was put to additional expense by way of having to rebut unmeritorious attacks on his expert witness. Whilst we have some sympathy with that, we do not think it merits an award of expenses against the respondents. Instead we are satisfied that parties should bear their own expenses in respect of this aspect of the case.

[9] We have come to the same decision in relation to the fixing of the terms and conditions of sale. In relation to this, whilst it was unfortunate that some of these matters could not be agreed, there was nothing unreasonable about parties’ respective positions and again it cannot be said that one party was more responsible than the other in necessitating that these matters be decided by the Court. In our view parties were, broadly, equally successful on the matters in contention. Thus, although the applicant was successful in having the solum of the road and the bodies of water on the croft included in the sale, the respondents secured a servitude right of access, a standard security under sec 13(4) of the Act, a direction that the title to be granted is to be subject to the sporting lease in favour of Mrs MacLeod and the right to recover birds and kill from the croft. Accordingly we are satisfied that, on this aspect of the case also, each party should bear its own costs.