Decision of the Scottish Land Court

Glen Spean Estate (Applicants) v Mrs Jennifer MacLachlan & Others (Respondents)

Case reference SLC 28/14
before
Lord McGhie, Mr David J Houston and Mr Angus Macdonald
24 August 2015

[1] This is an appeal by a crofter respondent against the decision of a Divisional Court in an application by the owners of a site on a common grazings for consent to resumption. The crofter respondent also makes an application for a rehearing based on matters relating to her own application for an apportionment of the site.

[2] The court had already had some recent involvement with the relevant common grazings in connection with a dispute as to whether the site was, in fact, part of the common grazings and also with a previous resumption application relating to a different part of the grazings. This involvement may have been what led to a proposal that the court make a determination as to whether the applicant had satisfied the “reasonable purpose” test on the basis of written submissions rather than by an oral hearing. Both parties agreed to the procedure proposed. The decision of the Divisional Court on 27 March 2015 was based on the written submissions and productions. It dealt with the question of reasonable purpose and authorised resumption subject to certain conditions. Financial questions have still to be considered.

[3] At the hearing before us the crofter respondent, Mrs Jennifer MacLachlan, appeared on her own behalf, supported by her husband. Mr Stephen Ashley Smith BSc MRICS appeared on behalf of the applicants. In the proceedings below the applicants were referred to throughout as “landlords” and it is convenient simply to adopt that term, but noting that they are more accurately to be seen as owners of land subject to common grazing rights.

Statutory material

[4] The landlords’ application proceeded under section 20 of the Crofters (Scotland) Act 1993, as amended (“the 1993 Act”). It is convenient to set out here the relevant parts of that section:

Sec 20 Resumption of croft or part of croft by landlord

(1) The Land Court may, on the application of the landlord and on being satisfied that he desires to resume the croft, or part thereof, for some reasonable purpose having relation to the good of the croft or of the estate or to the public interest or the interests of the crofting community in the locality of the croft, authorise the resumption thereof by the landlord upon such terms and conditions as it may think fit, and may require the crofter to surrender his croft, in whole or in part, to the landlord accordingly, upon the landlord making adequate compensation to the crofter either by letting to him other land of equivalent value in the neighbourhood or by compensation in money or by way of an adjustment of rent or in such other manner as the Land Court may determine.

(1AA) In determining whether it is satisfied as mentioned in subsection (1) above (and, in particular, whether the reasonable purpose mentioned there relates to the public interest) the Land Court—

(a) may take into account the effect that purpose (whether alone or in conjunction with other considerations) would have on the matters mentioned in subsection (1AC) below; and

(b) where the purpose is, or is connected with, the development of the croft in respect of which planning permission subsists, may take into account the effect such development would have on the croft, the estate and the crofting community in the locality of the croft, and must authorise, or refuse to authorise, the resumption of the croft by the landlord accordingly.

(1AC) The matters mentioned in subsection (1AA)(a) above are—

(a) the sustainability of—

(i) crofting in the locality of the croft or such other area in which crofting is carried on as appears to the Land Court to be relevant;

(ii) the crofting community in that locality or the communities in such an area;

(iii) the landscape of that locality or such an area;

(iv) the environment of that locality or such an area;

(2) the social and cultural benefits associated with crofting.

(1AD) In subsection (1AA) above—

“development” has the meaning given by section 26 of the Town and Country Planning (Scotland) Act 1997 (c.8);

“planning permission” is to be construed in accordance with Part 3 of that Act;

“effect” includes both a positive and negative effect.

(3) For the purposes of subsection (1) above "reasonable purpose" shall include—

(a) the using, letting or disposing of the land proposed to be resumed for—

(i) the building of dwellings;

(vii) planting;

[5] The appeal proceeded under the provisions of the Scottish Land Court Act 1993 and Rules of Court 64 to 73 and the application for rehearing under Rules 74 to 81. It is unnecessary to set these out.

Background facts

[6] As the appeal deals with legal issues, it is unnecessary to say much about the practical aspects of the application except to set the discussion in context. The landlords seek authority to resume an area of the grazings, extending to 1.94 hectares, for the purpose of selling it as a site for a dwelling and for forestry planting or woodland management. The site lies to the east of Roy Bridge. It is near a main road and is bounded on one side by a railway line. It has not been used for grazing purposes in recent years. Mrs MacLachlan’s croft has shares in the grazings. The croft has no house. She wishes to obtain an apportionment of the site to allow her to build a house and facilities for livestock. She obtained grant of planning permission covering a house and farm buildings. The landlords obtained a renewal of that permission and rely on this as covering the building of a dwelling-house. We heard assertions as to the difficulties Mrs MacLachlan has had in finding suitable alternative accommodation and material bearing on the potential impact of her proposals for the benefit of the common grazings. She made reference to the implications of her proposals – and indeed her actings to date – on the viability of the local crofting community as a whole. The thrust of her appeal related to the way in which the Divisional Court had dealt with such matters.

[7] The application for rehearing arises from the fact that, although the Divisional Court was aware that Mrs MacLachlan had applied to the Crofting Commission for an apportionment, it was not aware when it made its decision that the Commission had decided that it was minded to grant the apportionment. As we consider that all the substantive issues can be dealt with as part of the appeal it is unnecessary to set out any more about the detail of this.

Submissions

[8] The appellant’s legal submissions can be seen from the discussion below. Mr Smith, for the applicants, did not attempt analysis of the legal issues but carefully advanced and supported the proposition that the Divisional Court had reached a proper view on the whole issue. He stressed that there was planning permission for the development for which the resumption was sought. It was a reasonable proposal. They had complied with the court’s requirements and conditions. There was no justification for the appeal. There was no need for rehearing because, after their initial indication of willingness to grant the apportionment, the Crofting Commission had subsequently agreed that the apportionment would not go ahead until the present application was fully concluded. Neither party relied on any pertinent authority although Mrs MacLachlan made reference to Agnew Crofting Law at p 99 and to a case mentioned in the footnote there.

Discussion

[9] The decision of the Divisional Court of 27 March 2015 was reached on the basis of written pleadings and full written submissions by both parties. Although the approach taken in this case was not inconsistent with a proper approach to written submissions, we think it important to stress that reliance on written material requires careful consideration where there are disputed issues of fact. Accordingly, it seems to us appropriate to make some preliminary comment about this. It is a procedure which can save expense and we would not wish to discourage its use in suitable cases where parties are agreed. But it will seldom be appropriate if there is any real dispute of fact unless it is clear that the disputed issues are not relevant to the legal issue which the court has to decide.

[10] A court may be able to start on the basis of written submissions by considering whether the disputed facts are relevant to the legal issue. But, if it takes the view that the disputed matters are relevant, it will not normally be appropriate to proceed further without an oral hearing to allow evidence to be heard and tested. One important potential exception to this arises from the speciality of Land Court practice that it can use site inspection as a means of clarifying fact. Where a dispute is about some physical features or characteristics, the court may be able to resolve it by inspection – with or without attendance of parties. There may also be circumstances where the disputed issue is one which can be resolved without issues of credibility and reliability having to be decided. Some cases may turn entirely on a view of documentary evidence. But in most cases disputed facts require a hearing.

[11] The relevance of particular issues may not become apparent until the court reaches quite an advanced stage of analysis and consideration. A court which has agreed to attempt to deal with the matter on the basis of written submissions may find that, on full consideration, a disputed fact acquires an importance in the mind of the court which it did not initially have. It is a characteristic of legal disputes that realisation of this may very well come at a late stage. But, where it does appear that a disputed fact is relevant to the ultimate decision, an opportunity has to be given to parties to have it dealt with at a full hearing. Normally this would mean abandoning the attempt to determine the case on paper – although there might be situations where allowance of a limited proof would be appropriate.

[12] For avoidance of doubt it may be added that, where there has been a proof, the court will have to make a decision on the evidence before it – using its practical knowledge and experience if appropriate. If a person who requires to establish a particular fact which is relevant to the matter at issue, fails to lead sufficient evidence at the appropriate time, then the court will be entitled to proceed on the basis that the fact is not established.

[13] In the present case, the written submissions showed that the parties were in dispute as to some matters – including the availability of other sites for the respondent and the efforts she had made to acquire another site. We think that the court was in error in saying that it was not in a position to make any finding about the suitability of the site for her purposes or availability of other sites. As we have explained, if it had thought these matters to be relevant it could and should have given parties an opportunity to deal with them at a hearing. However, it does appear that the court took the view that the disputed issues were not relevant to the real question. It recognised that there was a dispute about the potential of the site for use by Mrs MacLachlan and that that involved the question of whether she would get the apportionment she had requested. But the court decided that this was an issue “extraneous to this application”. In other words it considered that it did not matter how the disputed material was resolved because it considered such material irrelevant to the issues it had to determine.

[14] The critical question for us is, accordingly, one of relevance and this turns on analysis of the court’s reasoning. The basis of the court’s approach to this issue was its stated view that, in determining an application for resumption, the court had to consider the impact on the existing state of things, “the crofting community as it presently exists”, and not on the possible effect on one individual crofter: [19]. Mrs MacLachlan challenged that proposition saying that the Act required the court to look to the positive and negative effects of a resumption in making its decision and that a predicted effect should not be ignored. If the court’s proposition was wrong, the need to make a decision on the options available to the Mrs MacLachlan would have to be addressed.

[15] It may be that the Divisional Court did not intend to assert that future prospects were never relevant to consideration of reasonable purpose in the context of section 20 but intended simply to limit itself to the present case where the respondent’s proposals were based essentially on a plan to introduce cattle to common grazings where such use as there had been in recent years was only for sheep. Mr Smith submitted strongly that the decision made sense in the context of the facts and circumstances of the present case. However, we accept that, as expressed, the court appeared to be applying too restricted an approach.

[16] We recognise that the Divisional Court’s reasoning draws a contrast between the crofting community as it presently exists and the individual crofter’s plans and that there are two elements in this contrast. The community is contrasted with the individual croft and the present state of things is contrasted with plans for the future. It is not clear what weight the Court gave to each element. It may have intended to say that any plans were not a proper focus of attention or simply that in considering the interests of the community for the purposes of section 20(1), the impact on an individual croft was always to be ignored. However, it is to be noted that the court had previously said that it did not doubt that if Mrs MacLachlan obtained an apportionment she would use it and “contribute substantially to the life of the crofting community in the locality.” The whole language of para [19] does tend to show that the intention was, indeed, to make a decision on relevancy and to proceed on the basis that consideration should focus on matters as they stood and not take account of prospective benefits.

[17] We are satisfied that the amending provisions of the Crofting Reform (Scotland) Act 2010, sec 42, with their reference to sustainability of crofting in subsection 1AC, require the court to look to the future. Indeed, we do not agree with the appellant’s concession that this was not required under the original provisions of the 1993 Act. We deal below with wider questions as to the proper approach to the assessment of reasonableness. But, on any view, we think that inevitably such assessment requires consideration of the probable impact of the resumption compared with what would have been the probable state of things if it was not allowed. This could not properly be done if consideration was limited to the existing state of affairs. It is plain that the court must look to the future in order to determine the effects of use of the land for a proposed purpose. We see no reason to suppose that the intention of the legislature was that, on the other side of the assessment, there should be an assumption that alternative uses are frozen in time. We consider that, in assessing the reasonableness of a purpose, the court will always have to take a view, on the balance of probabilities, as to what would be likely to happen if the land was to be used for the purposes of the resumption compared with what would have been likely to happen if it was not so used. In making that assessment it may be proper to proceed on an initial assumption that the existing state of affairs will continue, but, where there is evidence to the contrary, that evidence will have to be evaluated.

[18] Mrs MacLachlan referred to the contrast between the position of the croft and the community as a separate point under reference to the way this was dealt with by the court, at paragraph [17]. This was in the following terms: “Although section 20(1) refers to resumption from “the croft” it is clear that the section is intended to apply to common grazings as well as to individual crofts. In the context of a resumption from common grazings, the reference in sec 20(1) to “the good of the croft” therefore falls to be read as “the good of the common grazings” rather than as a reference to the good of any of the individual crofts which share in those grazings. The collective interests of individual crofts may however come into consideration when the Court comes to have regard to the interests of the crofting community and the other matters set out in section 20(1AC).”

[19] The appellant challenged this as appearing to say that the court had no need to pay attention to an individual croft. She pointed out that, where the individual croft had a grazing share, that share was deemed to be part of the croft: section 3(4). The resumption of a site subject to grazing rights was properly to be viewed as a resumption of part of a croft. Accordingly the interests of individual crofts could not be ignored. We think the point made by Mrs MacLachlan is sound although the same result might be reached by the broad approach to reasonableness discussed below. If, for example, the proposal had been to resume land which provided access to a single croft, we think it plain that the court would require to consider the interests of that croft even if the resumption of such land would have no harmful effect on the grazings as a whole. We tend to think that the intention of the Divisional Court was to say no more than that, although the section did not make express reference to common grazings, it was properly to be read as requiring the court to consider the interests of the grazings as a whole. However, its emphasis on collective interests and the interests of the community does suggest that it may have considered that the interests of a single croft could not be taken into account. If so, that would have been an unduly restricted approach.

[20] Mrs MacLachlan also attacked the decision of the Divisional Court on the ground that it gave no consideration to issues of public interest and sustainability. These matters are expressly included by the terms of the 2010 amendment, but it seems to us that this challenge also raises the wider question of the proper approach to “reasonable purpose” in section 20.

[21] As the section stood in its original form it might have been argued that if a landlord established that a purpose was reasonable having regard to any single one of the three enumerated categories of “the good of the croft, the good of the estate, or the public interest”, that was the end of it. At first blush the provisions of subsection (3) might have been construed as supporting such approach by requiring consent for any of the enumerated purposes without regard to their impact. However, the court has always read that subsection as giving examples of potentially reasonable purposes rather than as a provision deeming those purposes to be reasonable in all circumstances. It has always considered it necessary to apply its mind to the reasonableness of any specific purpose having regard to the wider circumstances of the case.

[22] Dicta on this subject are not entirely consistent. The view has been expressed that the section required a general test of reasonableness in addition to the finding of a reasonable purpose. But there is no apparent statutory warrant for this and as a matter of construction the sounder approach was the broad one of considering whether the purpose was reasonable having regard to all relevant circumstances. However, “reasonableness” cannot be assessed in the abstract. Where a court requires to make an assessment of what is reasonable, Parliament must rely on the court applying standards and assumptions appropriate to the situation. Direct guidance may be obtained from the whole statutory context. Over the years the Land Court has implicitly taken the view that, in applying section 20, reference could properly be made to all or any of the enumerated interests in considering whether a purpose is reasonable. In other words a purpose which was at first sight reasonable in relation to the good of the estate might not qualify as a “reasonable purpose” in the context of section 20 if it was likely to have an unduly adverse impact on some other interest: Lands Improvement Holdings Landmatch S.a.r.l v Cole 2014 SLCR 85 (SLC 39/14) at para [48].

[23] The amendments made in 2003 and 2010 have added to the complexity of the section. It is unnecessary for present purposes to attempt a full analysis of the implications of the amendments and inappropriate to do so in absence of full submissions on the point. But the court is now directed explicitly as to matters it may take into account in determining whether a purpose is reasonable. That is consistent with the broad approach referred to above. It may be said that the Act does not appear to require an exhaustive examination in every case under each possible head. We think that the start point is still to consider reasonableness by reference to the specific interest relied on by the applicant. If there is no challenge to this by reference to other factors it may not be necessary to go much further. Whether the court should make reference to all, or any, of the other statutory matters will always be a matter of circumstances. Much is likely to depend on the nature of the opposition. The court does have an obligation to make its own assessment of reasonableness, but in its written decision the aim will be to tell the parties how it dealt with the main arguments advanced for and against the application.

[24] There is no doubt that, in considering the issue of reasonableness, the Divisional Court recognised the need to look beyond the specific interest of the estate. At paragraph [16] the court referred to the need to consider reasonableness in terms of the public interest and sustainability and narrated that Mrs MacLachlan had submitted that the resumption would have an adverse effect on the crofting community and possibly on landscape and environment. But the court did not explain what it made of these issues. At paragraph [18] it set out Mrs MacLachlan’s submission in relation to impact on the crofting community but went on to characterise it as involving the question of whether she or the landlords should have exclusive use and benefit from the subjects. It can be seen from her written submissions – and indeed from the court’s narrative of her submission – that her point was much wider than that.

[25] We do not think that the court dealt adequately with the wider issues. It can be seen that the narrow focus on existing use, compared with the use proposed by the landlords, may have meant that the court considered discussion of the wider issues to be unnecessary. In so far as it did express a view it said that it could not make a decision on the basis of speculation as to how Mrs MacLachlan’s situation would improve if she was to be granted the apportionment she sought. We recognise the risk of subjecting the language of any judgment to an over critical analysis, but we consider that, in a context like the present, references to “speculation” should be restricted to situations where the court is asked to take a view of the future without a proper basis in evidence. This is not to be confused with making an assessment of probable outcomes based on evidence. Where there is evidence which permits a finding to be made on the balance of probability as to a future outcome and that is relevant to the issue before the court, a finding must be made. For reasons discussed above, the sense of paragraph [19] seems to us to go beyond a refusal to speculate and to amount to a decision that it was unnecessary to make any findings as to the probable outcome of specific proposals. These matters were wrongly thought to be extraneous to the real issue.

[26] Parties have an interest in having cases brought to a final conclusion and an appeal court will not lightly set aside an experienced court’s decision. Further, courts are always reluctant to put parties to the expense of a second hearing. However, as discussed above, we are not persuaded that the Divisional Court applied a proper test of reasonableness in the context of the specific conflicting proposals in this case. Accordingly we consider that the decision of 27 March 2015 must be set aside. It may be some comfort that in this case the parties have not incurred the expense of any hearing to date. We are satisfied that the decision should be set aside and the matter be heard afresh.

[27] In the circumstances it is unnecessary to give separate consideration to the motion for rehearing. The practical effect of our decision is that the parties will be able to lead such evidence, if any, as they think necessary about the Crofting Commission proceedings. However, the Commission has made it clear that they will not take further steps in relation to the apportionment until the present application has been determined. It can hardly be thought that there would be any proper purpose in an apportionment if the resumption was eventually authorised. That would simply give the respondent a cash benefit at the expense of other shareholders. Equally, the landlords might be expected to agree that, if resumption was refused, apportionment would probably be granted, particularly if the only basis for that refusal was the strength of the appellant’s own proposals for the site. At any hearing parties must always be alert to agree as much as possible and avoid waste of time and expense in relation to evidence which is not really in dispute.

[28] It is expected that there will be a new Deputy Chairman available to preside over any further hearing. It is unnecessary and inappropriate for us, at this point, to express any view as to further procedure other than that we do not consider this to be a case for further delegation. The court will have to consider whether all or any part of the hearing should be in Edinburgh; whether the hearing should be limited to the merits in regard to reasonable purpose or include the leading of evidence on valuation; and whether any direction should be given in an attempt to guide parties as to the lines of evidence which require to be explored.

[29] We are satisfied in the present case that it is appropriate to reserve all questions of expenses to date until after the final decision.