THE COURT

(Sheriff R J MacLeod, Mr A Macdonald)

STEWART v THE CROFTERS COMMISSION

(Application RN SLC/40/11 – Order of 10 April, 2013)

CROFTING – APPEAL FROM CROFTERS COMMISSION AGAINST DECISION TO CONSENT TO ASSIGNATION OF CROFT TENANCY – NATURAL JUSTICE – FAILURE OF COMMISSION TO CORRECTLY APPLY SEC 58A OF CROFTERS (SCOTLAND) ACT 1993 – FAILURE TO TREAT OBJECTIONS CORRECTLY AND TO GIVE OBJECTOR AN OPPORTUNITY OF COMMENTING UPON PROPOSED ASSIGNEE’S COMMENTS ON OBJECTIONS – CIRCUMSTANCES IN WHICH COURT UPHELD APPEAL UNDER SEC 52A(3)(c) OF THE ACT

The appellant appealed against a decision of the Crofters Commission dated 20 January 2011 consenting to the assignation of the tenancy of a croft at 4 Fearnamore, Applecross. Because of the date of the decision appealed against the applicable law was the Crofters (Scotland) Act 1993 as amended by the Crofting Reform etc. Act 2007. Following public intimation of the application for consent the appellant, who was himself a crofter in Fearnamore, instructed a firm of solicitors to write to the Commission intimating objections. The Commission, misled by the fact that the appellant’s agents had marked their letter “Private and Confidential”, failed to treat the appellant’s objections as competent, valid objections in terms of sec 58A of the Crofters (Scotland) Act 1993. Having failed to do so they consequently failed to intervene in the application under sec 58A(6)(a) as they were obliged to do in terms of that provision unless they considered the appellant’s objections to be “frivolous, vexatious or unreasonable”. They did, however, decide to intervene at their own discretion in terms of paragraph (b) of sec 58A(6) in respect of some of the same issues as were raised in the appellant’s objections. Notwithstanding that they had not treated said letter as containing competent and valid objections, the Commission sent a copy of it to the proposed assignee and members of Commission staff subsequently discussed it with the proposed assignee in two telephone conversations. Notes of said conversations were taken by Commission staff but not made available to the appellant and the appellant was not given an opportunity to comment on the proposed assignee’s reaction. Instead the Commission proceeded to grant consent to the application. Appeal was taken on a number of the grounds contained in sec 52A(3), including paragraph (c), that the Commission had acted contrary to natural justice.

HELD (1) that the appellant was a competent objector and that his agents’ letter, notwithstanding the use of the phrase “Private and Confidential”, was unmistakeably a letter intimating objections to the application, some, at least, of which were valid objections and not frivolous, vexatious or unreasonable; (2) that the Commission had therefore erred in failing to intervene under para (a) of subsec (6) of sec 58A; (3) that said failure had the potential to result in injustice notwithstanding that the Commission had decided to intervene in the application of their own volition in terms of para (b) of said subsection on grounds similar to the appellant’s most substantive objections, that being so because considerations of proper procedure and natural justice applied where the Commission were dealing with an objector which, obviously, did not apply where the Commission were intervening of their own volition and in the absence of valid objections; (4) that one such consideration was the requirement to give each party an opportunity of commenting upon submissions made by the other party, which requirement the Commission had breached by their failure to disclose to the appellant the proposed assignee’s comments on his objections and to give him an opportunity of responding; (5) that although a decision not to intervene as aforesaid was not amenable to appeal to the Land Court due to the provisions of sec 52A(7) of the Act such failure could be taken into account by the Court when considering an appeal based on the requirements of natural justice; and (6) that, taken together, the Commission’s failure to intervene under sec 58A(6)(a) and their failure to give the appellant an opportunity of responding to the proposed assignee’s comments on his objections amounted to a breach of natural justice and appeal upheld on that ground. The other grounds of appeal were not sustained and the following report is confined to the part of the Court’s judgement dealing with the natural justice ground.

The relevant parts of the Note appended to the Court’s order are as follows:

[1] This is an appeal under section 52A(1) of the Crofters (Scotland) Act 1993 (“the 1993 Act”). The appeal is against a decision of the Crofters Commission (as it was at the material time) under sec 8(1) of the Act to grant an application by Mr Donald Johnston for consent to assign the tenancy of the croft at 4 Fearnamore, Applecross, to his brother, William Johnston. The appellant is Dr Mark Stewart who is the tenant of a croft described in the appeal as Ro120, Fearnmore. (The township name appears variously as “Fearnamore” and “Fearnmore” in the appeal papers. We will use the former as it is the version used by the Commission in its documentation.) Both the Commission and William Johnston have lodged answers to the appeal and submissions in support of these answers. Parties have agreed that we can dispose of the appeal on the basis of their written submissions.

Relevant statutory provisions

[2] In his written submissions the appellant invites us to dispose of the appeal on the basis of the 1993 Act as amended first by the Crofting Reform etc. Act 2007 (“the 2007 Act”) and then by the Crofting Reform (Scotland) Act 2010 (“the 2010 Act). However, as the decision appealed against was made on 20 January 2011 and the relevant provisions of the 2010 Act did not come into force until 1 October 2011 (Part 1 of the Schedule to The Crofting Reform (Scotland) Act 2010 (Commencement No. 2, Transitory, Transitional and Saving Provisions) Order 2011, SSI 2011 No. 334 (C. 29)) we are satisfied that the appeal falls to be disposed of under the provision of the 1993 Act as amended by the 2007 Act. So far as relevant for the purposes of this appeal these are as follows:

“8(1) A crofter shall not assign his croft unless he obtains the consent of the Commission.

52A(1) An appeal shall lie to the Land Court, on one or more of the grounds mentioned in subsection (3) below, against –

(a) any decision, determination or direction of; or

(b) the imposition of a condition by, the Commission on an application made to them under this Act.

(3) The grounds are that the Commission, in reaching their decision or as the case may be in determining as they did, in making their direction or in imposing the condition in question –

(a) erred on a point of law;

(b) made a finding as to a fact material to the decision, determination, direction or imposition but did not have sufficient evidence on which to base that finding;

(c) acted contrary to natural justice;

(d) took into account certain irrelevant or immaterial considerations;

(e) failed to take into account certain relevant or material considerations;

(f) exercised their discretion in an unreasonable manner.

(4) In an appeal under subsection (1) above the Court may –

(a) confirm its decision, determination, direction or imposition;

(b) direct the Commission to come to a different decision, make a different determination or direction or impose a different (or no) condition; or

(c) remit the case to the Commission without so directing them.

(7) In subsections (1) to (6) above ‘decision’ does not include a decision under Section 58A of this Act as to whether or not to intervene and ‘determination’ does not include any determination by the Commission that an objection under subsection (4) of that section is frivolous, vexatious or unreasonable.

58A(1) Any requirement, under or by virtue of this Act, to obtain the approval or consent of the Commission, shall … be complied with as follows.

(3) The person making the application shall –

(a) forthwith give public notification of it;

(4) Within 28 days after public notification of an application made in compliance with subsection (2) above –

(b) any member of the crofting community in the locality of that land

may submit to the Commission an objection as regards the application, being an objection of the description given in subsection (16) below.

(6) When those 28 days have elapsed the Commission –

(a) must, in a case where they have received such objections by virtue of subsection (4) above and do not consider them to be frivolous, vexatious or unreasonable, intervene as respects the application;

(b) may, in any other case, decide to do so if it appears to them that any of –

(i) the general conditions; or

(ii) any conditions (if any) special to applications of the category in question, applies as respects the application.

(7) If, as regards an objection duly submitted under subsection (4) above, the Commission decide not to have regard to it or that it does not provide them with grounds for intervention as respects the application they shall notify –

(a) the applicant, the landlord (or owner) and, as the case may be, the grazings committee of the terms of the objection and of the reason for that decision; and

(b) the objector of that reason.

(9) The general conditions are –

(a) that, were the proposal to be implemented, there is reason to suppose that any or all of the following would be affected adversely –

(i) the interests of the estate which comprises the land;

(ii) the interests of the crofting community mentioned in subsection (4)(b) above;

(iii) the interests of the public at large;

(iv) the sustainable development of the crofting community so mentioned; and

(b) that such information as is contained in the application and its accompanying documents is insufficient for them to come to a decision as respects the proposal.

(11) Subject to any other provision of this Act as to procedure, the Commission may determine by such procedure and arrangements (including arrangements as to delegation and the powers and duties of persons delegated) as they consider appropriate whether or not to grant the approval or consent applied for; and references in this section to their intervening are to their proceeding to such a determination.

(16) The description is that the objection is made in writing or in another form which, by reason of its having some permanency , is capable of being used for subsequent reference ….”

References hereinafter to “the Act” are to the 1993 Act as amended by the 2007 Act.

The procedure followed

[3] Before coming to the grounds of appeal it is appropriate to set out the procedure followed by the Commission in dealing with Donald Johnston’s application as aspects of it are relevant to one of the grounds of appeal.

[4] Mr Johnston’s application for consent to assign the tenancy of 4 Fearnamore to his brother is dated 10 September 2010 and was, we assume, lodged with the Commission shortly afterwards. It was then publicly intimated, as required by sec 58A(3) of the Act. On 2 November 2010 Messrs Harper Macleod LLP wrote to the Commission intimating objections on behalf of five clients, including the present appellant. By our earlier decisions in this appeal, dated 31 October and 1 December 2011, we held that of these five objectors only Dr Stewart was a competent objector in terms of sec 58A(4) of the Act. The objections set out in Harper Macleod’s letter are set out at para [14]below.

[5] Harper Macleod’s letter, a copy of which is production 2, was marked “Strictly Private and Confidential” but it made clear that it was intimating objections to the proposed assignation of a croft tenancy by Donald Johnston to William Johnston. Thus it was headed up “Objections”, the people on whose behalf it was written were listed under the heading “Objectors” and the complaints made were set out under the heading “Objections”.

[6] In cases such as this Commission staff prepare a “Case Paper” which serves as a procedural guide to the case officers dealing with the application and, once completed, as a record of how the application has been dealt with. Production 9 is a copy of the Case Paper prepared in relation to this application.

[7] It begins by naming the croft, the present tenant and the proposed assignee. There is then a checklist of questions which reflect the provisions of subsec (4) and (6) of sec 58A. Thus the first three ask whether written objections or comments have been received from the landlord or owner of the common grazing, from any member of the crofting community or from any other person or organisation. These broadly correspond to the list of competent objectors contained in subsec (4) of sec 58A and are clearly designed to identify whether the intervention requirement contained in subsec (6)(a) has been triggered. Question 4 has to do with sustainable development and question 5 with whether further information is required in order to reach a decision on the case. These are clearly designed to address the question whether the general conditions contained in parts (a)(iv) and (b) of subsec (9) apply and, consequently, whether the Commission should intervene in terms of subsec (6)(b).

[8] This section of the form appears to have been completed on 10 November 2010. Despite the fact that the Commission must have been in receipt of Harper Macleod’s letter of 2 November by then, the Case Paper records that no objection or comments have been received from anyone. At para 5A of the Commission’s answers to the appeal it is said that the marking “Strictly Private and Confidential” on Harper Macleod’s letter “was not helpful” and, if we understand what is said correctly, that this marking led to the letter not being treated as a letter of objection. So far as the remaining questions in this part of the Case Paper are concerned it is recorded that the proposed assignee resides more than 16 km from the croft and that he has no reasonable proposals for taking up residence or utilising the croft in his absence. On the basis of these answers the Case Officer decided that two intervention criteria were triggered, viz that the proposed assignee lived more than 16 km from the croft and that there were reasons to suggest that the proposed assignation or the proposed assignee’s proposals for using the croft would have an adverse effect on the sustainable development of the crofting community.

[9] In the Commission’s answers to this appeal (at para 4) the first of these intervention criteria is attributed to sec 8(2)(a) of the Act. However, sec 8(2) related (it has now been repealed) only to assignations to a person other than a member of the crofter’s family and in this case the assignation was between siblings and siblings come within the definition of family in sec 61(2) of the Act. We think this is a misunderstanding on the part of the solicitor who prepared the Commission’s answers and that this intervention criterion was instead contained in the Commission’s own Guidance Notes on Assignation dated 8 February 2011 referred to at para 27 of the appeal.

[10] So far as the second ground of intervention is concerned, the suggestion that the proposed assignation would have an adverse effect on the sustainable development of the crofting community was based on the fact that it was not known what the proposed assignee’s intentions were for managing the croft whilst he remained an absentee; Case Paper “Intervention Criteria Invoked” section para (c).

[11] The result was, therefore, that the Commission decided to intervene in the application of its own volition in terms of sec 58A(6)(b) and not as a result of the objections received from Harper Macleod.

[12] On 26 November 2010 the Commission replied to Harper Macleod. Despite the fact that a decision had by then been taken to intervene on two grounds that letter referred only to one: that the proposed assignee lived more than 16 km from the croft. The letter said that Harper Macleod’s letter had been sent to the applicant for comment. It did not contest the competency of the objections in terms of sec 58A nor say that they were being regarded as being frivolous, vexatious or unreasonable in terms of subsec (6)(a). Nor did it contain intimation, in terms of subsec (7) that the Commission had decided not to have regard to the objections nor that the objections did not provide them with grounds for intervention. But, equally, it did not say that the Commission had decided to intervene on the basis of the objections, something they were bound to do where the objections were competent (as Dr Stewart’s was) and not considered to be frivolous, vexatious or unreasonable; sec 58A(6)(a).

[13] The next section of the Case Paper, completed by a different Case Officer on 7 December 2010, records that no valid objections had been received but that the letter received from Harper Macleod had been served on the applicant and that this had resulted in two telephone calls with the proposed assignee. These conversations were noted on the Commission’s file. The Case Officer also records that Mr Johnston did not wish to respond to Harper Macleod’s letter in writing.

[14] As a result of these telephone conversations and of her own view of matters the author of this section of the Case Paper came to the following conclusions in respect of the stated grounds of objection which had been contained in Harper Macleod’s letter. For clarity we set out each ground in turn with the Case Officer’s response in italics immediately beneath.

“1. The proposed assignee, William Johnston, has made clear his intentions are to seek financial benefit through the croft by developing various ruins into holiday homes.

In contrast to the information provided by the proposed tenant in the application.

2. William Johnston’s family – in particular his brother Donald Johnston (the current tenant) – have in previous years decrofted two dwellings which they have sold for significant gain. It is our clients’ understanding that these activities represent the extent of the Johnston family’s engagement with the management of the croft.

Not relevant, relates to previous use of croft by other family members. Any development on the croft would require planning consent and concerned parties can object at that stage.

3. William Johnston has indicated his intention to site a caravan within the croft whilst he undertakes the development, although has confirmed no intention to reside within his tenancy as required.

Mr Johnston has confirmed in the application that he intends to take up residence in approximately 18 months to 2 years. He intends to build a house on the croft, but in the meantime plans to site a caravan on the croft as a temporary home.

4. The current tenant, Donald Johnston, is an absentee crofter.

Not relevant – unless we refuse the application and then we should consider whether any absentee action is necessary.

5. As my clients understand it, the croft does not have sufficient rights of access to allow for the passage of vehicles to the croft, as would be required for either the development of the holiday homes or the subsequent letting of these. In order to open up such access, William Johnston requires the consent of Mr Stewart and Mrs Outhwaite [Mr Stewart being Dr Stewart, the current appellant, and Mrs Outhwaite being one of the other original objectors]. On the basis that they have made clear to him that they will not grant consent to allow such access, William Johnston has threatened to disconnect and disrupt the private drainage supply and private water supply of both Mrs Outhwaite and Mr Hills [also one of the original objectors] (in both cases in breach of the heritable and irredeemable property rights which they have in this regard) and separately has been both threatening and abusive to Mrs Outhwaite.

Not relevant – the landlord or SLC can grant access, even if there is not one and has not been historically. Also Mr Johnston denies any threatening behaviour (see file note).

6. William Johnston has threatened to prevent access over the croft along the historic route from the village to the harbour, which I understand is currently used, which action would be in breach of the public’s ‘right to roam’ in terms of the Land Reform (Scotland) Act 2003.

Refuted by Mr Johnston who advised the right of access is through a neighbouring garden (that of one of the objectors).”

[15] Having spoken on the telephone to William Johnston, as narrated above, Commission staff did not revert to Harper Macleod for their clients’ reaction. Instead the Case Officer prepared a “Consent After Review Slip” in the following terms:

“1. The application provides us with all necessary information to take a decision.

2. Written notice has been given to the landlord(s) of the croft and any owner(s) of associated common grazings.

No valid objections have been received.

Intervention criteria were invoked. However, after further investigation the concerns have been satisfactorily addressed (proposed tenant plans to take up residence on the croft in 18 months to 2 years).
[Emphasis original]

3. We are satisfied that the application does not adversely affect the interests of the estate, the crofting community, the public at large or have an adverse effect on the sustainable development of the crofting community.”

[16] The case was then passed to another member of Commission staff for review. Having noted that only one of the objectors was a competent objector, but without commenting on the validity or significance of the objections, he decided that the case should be forwarded to a commissioner to make a decision “[d]ue to the history in this area”. A summary of evidence was prepared for the commissioner which recorded (i) that the proposed tenant was an absentee but had plans to build a house on the croft and reside there in the next 18 months to 2 years, in the meantime intending to site a caravan on the croft, (ii) that no objections or comments had been received from the landlord or from the Grazings Committee, (iii) that objections had been received from four people, one of whom was deemed a valid objector, but that the only point considered valid was that the proposed tenant was currently an absentee, a matter which had already been addressed.

[17] The commissioner who reviewed the evidence decided that the case should be considered by a quorum of commissioners. On 20 January 2011 a quorum of commissioners granted the application on the following grounds:-

“There have been no concerns raised by the landlord as to Mr Johnston’s suitability to tenant this croft.

Mr Johnston would initially be an absentee tenant but has indicated that he will take up residence on the croft within two years.”

[18] Their decision also records, as comments on the impact of the decision, that occupation of the croft was to be reviewed by the Commission in 12 months, that the land was to be used by the applicant for leisure activities and polytunnel grown organic vegetables and that “shared management” was not affected.

[19] The Commission’s decision was intimated to Harper Macleod on 25 January 2011 along with a copy of the Case Paper to which we have been referring. It is against that decision that this appeal is taken.

The grounds of appeal

Ground 2: That in reaching their decision the Commission acted contrary to natural justice; sec 52A(3)(c)

[30] This is a much more substantial ground of appeal for the appellant. Under it the following points are taken:

(a) That having received a competent objection and not having considered it to be frivolous, vexatious or unreasonable, the Commission ought to have intervened under para (a) of sec 58A(6) as well as under para (b).

(b) That had the Commission intervened under para (a) they would have been obliged (i) to give due consideration to the objections submitted by the appellant, (ii) to conduct an appropriate enquiry (para 5 of appeal document), which would have involved an “investigation of the relevant factors” and been “based on evidence and following a fair hearing” (para 22 of the submissions in support of the appeal) and (iii) to make available to the appellant the notes of the telephone conversations with Mr Johnston (para 16 of appeal document) and give him an opportunity to respond to Mr Johnston’s statements (para 43 and 46). By contrast, it is said that what happened was that the Commission case officers took a summary view of matters which was later “rubber-stamped” by the commissioners (said submissions para 14). No challenge was made to what Mr Johnston told the Commission staff, he was asked to provide neither further specification nor corroboration and no further enquiry was made to test the reasonableness, viability or veracity of his proposals (said submissions para 15 and 18).

(c) That the Commission’s failure to recognise the validity of the appellant’s objection and to intervene in terms of para (a) of sec 58A(6) led to the Commission failing to consider fully the issues raised by the appellant’s objections and therefore unreasonably restricted the scope of their consideration of the application (para 10 of submissions). A particular complaint is that while Mr Johnston was allowed to respond to the objections the appellant was not allowed an opportunity to respond in return.

[31] The existence of this ground of appeal demonstrates, if demonstration were needed, that the requirements of natural justice apply to the Commission. That requirement in fact reaches back even to the days of the original Crofters Commission; see Dalgleish v Livingston (1895) 2 SLT 564, albeit in that case the Commission were exercising a judicial rather than administrative function.

[32] It will be seen that the Commission’s alleged failings are all said to stem from their failure to treat the appellant’s objections correctly from the outset. We therefore examine that proposition.

[33] Having received objections to the application the first thing the Commission were required to do was decide whether the objections were in competent form and from competent objectors in terms of the requirements of subsecs (2), (3), (4) and (16) of sec 58A and, if so, whether they were, nevertheless, “frivolous, vexatious or unreasonable” in terms of subsec (6)(a). It is not disputed that Dr Stewart’s objection was competent in terms of the subsections we have referred to. Therefore the Commission could only have declined to intervene under subsec 6(a) if they considered the objections to be frivolous, vexatious or unreasonable. The Commission decided not to intervene under subsec 6(a) but (i) there is no evidence of the frivolous, vexatious or unreasonable test having been applied and (ii) we are now assured (para 4 of Further Submission (2) on behalf of Commission) that “at no time has the Commission considered [the appellant’s objections] ‘frivolous, vexatious or unreasonable’”. It is therefore the case that in their failure to intervene under para (a) of subsec (6) the Commission erred.

[34] It should be noted at this stage that it is the position of Mr Johnston in his submissions opposing this appeal that the objections lodged were frivolous, vexatious and unreasonable and that the Commission were not, therefore, required to intervene (par 5 of the submissions lodged on his behalf). However, it was for the Commission to decide that and at no time have they held the objections to be of that nature. Indeed they could not have done so as regards at least one of these objections – the complaint that Mr Johnston had not confirmed an intention to reside on the croft – because it raised the same issue as that on which they themselves had decided to intervene under sec 58A(6)(b).

[35] Having passed (or at all events not having failed) the “frivolous, vexatious or unreasonable” test, the next thing the Commission ought to have done was consider the objections on their merits. As we have seen, subsec (11) of sec 58A(6) gives the Commission a wide discretion about how it does that. This need not involve any formal process. An experienced official of the Commission may very quickly be able to come to the conclusion that, although not frivolous, vexatious or unreasonable, an objection is irrelevant or otherwise without merit. That need not involve any formal process. But if that is their conclusion the Commission are required to advise the objector of it in terms of subsec (7) of sec 58A(6). That did not happen in this case. Neither the Commission’s letter to Harper Macleod of 26 November 2010 nor their decision letter of 25 January 2011 did so.

[36] It seems to us, therefore, that the procedure adopted by the Commission in dealing with the appellant’s objections fell between two stools. On the one hand, the objections were not dismissed as frivolous, vexatious or unreasonable nor was the appellant told that the Commission were not going to have regard to his objections in terms of subsec (7). On the other hand the procedure which was followed was not the procedure which would have been followed had the objections been regarded as valid. We see that from the following passage from the Commission’s answers to the appeal, responding to the appellant’s natural justice ground of appeal:

“the letter [from Harper Macleod LLP] of 2 November 2010 was not treated by the Commission as an ‘objection’ in terms of s. 58A(4), due in no small measure to the letter being marked ‘Strictly Private and Confidential’. If a valid objection had been received, the Commission would have sent it to the applicant and proposed assignee, and would have then copied any responses from those parties, to the objector. Because this letter was not treated as an ‘objection’, this procedure was not followed.”

[37] Despite the fact that the Commission’s Further Submission (2) document gives a different explanation as to why Mr Johnston’s responses were not reported back to the appellant, viz that the responses were not in writing, we regard the foregoing passage as revealing of the Commission’s attitude to the appellant’s objections. They were not regarded as valid, despite the fact that at least one of them patently was. And that seems to us to have affected how the objections, and the appellant, were dealt with throughout. Had the objections, or any of them, been treated as valid they, or it, would have been dealt with more carefully and formally, with appropriate reporting back to the appellant.

[38] In this connection it avails the Commission nothing to point out that whoever completed the summary of evidence in the Case Paper recognised that one objection from one objector was valid. By that time such investigation into the application as was going to take place had taken place.

[39] Nor would it avail the Commission to say that these failures caused no prejudice to the appellant because the Commission intervened at their own instance to investigate Mr Johnston’s intentions in relation to living on the croft and as to the use he was going to make of it. In other words the fact that they intervened under para (b) of subsec (6) on the same basis as they ought to have intervened under para (a) does not cure their failure to intervene under para (a). That is because when the Commission decide to intervene under sec 58A(6)(b) it is entirely within their own discretion how far to take their enquiries and how to conduct them but when there is a competent objector with a valid objection the situation is otherwise. Considerations of following correct statutory procedure and natural justice then come into play.

[40] What then does natural justice require in a situation such as this? We were referred to no authorities on the point but it would appear that, in the words of Tucker LJ in Russell v Duke of Norfolk [1949] 1 All ER 109 at 118:

“The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter that is being dealt with, and so forth.”

[41] So far as the rules under which the Commission were acting in this case are concerned, it is relevant to note the wide latitude given to the Commission in terms of subsec (11) of sec 58A. In particular one notes the absence of a provision requiring an oral hearing and we are satisfied that there is no requirement on the Commission to hold an oral hearing in all cases where competent objections are received, not only because of the absence of such a requirement in the statute but also because the holding of an oral hearing is not always a requirement of natural justice and a party being “heard” can take the form of being heard through the medium of written statements; per Hamilton LJ in R v Local Government Board, Ex p. Arlidge [1914] 1 KB 160 at 191.

[42] The basic requirements of natural justice in relation to a regulatory or administrative body such as the Commission were outlined over a hundred years ago by Loreburn LC in Board of Education v Rice & Ors [1911] SC 179 at 182:

“[t]hey must act in good faith and fairly listen to both sides, for that is a duty lying upon everyone who decides anything. But I do not think that they are bound to treat [the question to be decided by them] as though it were a trial. They have no power to administer an oath, and need not examine witnesses. They can obtain information in any way they think best, always giving a fair opportunity to those who are parties in the controversy for correcting or contradicting any relevant statement prejudicial to their view.”

[43] In R v Deputy Industrial Injuries Commissioner, Ex parte Moore [1965] 1 All ER 81 Diplock LJ (at page 95) enunciated as a rule of natural justice that the Deputy Commissioner had to “give fair consideration to the contentions of all person who are entitled under the Act [in that case the National Insurance (Industrial Injuries) Act 1946] and regulations to make representations to him”. His Lordship was dealing with a situation in which the relevant legislation entitled a person to ask for an oral hearing, in which case the Deputy Commissioner was bound to hold one. Where a hearing was held that rule and what was said by Loreburn LC in Rice would require the Deputy Commissioner:

“(a) to consider such ‘evidence’ relevant to the question to be decided as any person entitled to be represented wishes to put before him; (b) to inform every person represented of any ‘evidence’ which [he] proposes to take into consideration, whether such ‘evidence’ be proffered by another person represented at the hearing, or is discovered … as a result of his own investigations; (c) to allow each person represented to comment on any such ‘evidence’ and, where the ‘evidence’ is given orally by witnesses, to put questions to those witnesses; and (d) to allow each person represented to address argument to him on the whole of the case.”

[44] Although his Lordship related these requirements to a situation in which a hearing has been held, where a party is not entitled to insist on a hearing (as is the case under sec 58A) and no hearing is held, it seems logical to us that the same requirements apply in so far as they can apply outwith an oral hearing.

[45] If we are right about that, then the Commission in this case had a duty to give the appellant (through his agent) an opportunity of commenting on the explanation of his intentions given by Mr Johnston and the comments made by him on the objections in the two telephone conversations Commission staff had with him. Although we are told that these conversations yielded no new information over and above what was contained in the application for consent to the assignation, that will not suffice. It is also a principle of natural justice that justice must not only be done but must be seen to be done; Barrs v British Wool Marketing Board 1957 SC 72, a case which also demonstrates the relevance of English authority in this field. In the present case the file notes of the conversations with Mr Johnston were not shown to the appellant, nor were the contents of these conversations relayed to him in any form, and, consequently, no opportunity was given him to respond. Instead the Commission proceeded to its decision. By so doing the Commission in our view acted contrary to natural justice.

[46] It will usually be the result of a breach of natural justice that the decision complained of cannot stand. In Barrs v British Wool Marketing Board Lord Sorn (at page 88) said this:

“Perhaps there may be cases in which a tribunal like this, whose proceedings are informal, has followed a procedure contrary to the principles of justice and yet in which it would be possible to hold that this did not matter because no actual injustice had resulted … There might be transgressions of such a nature that a court would not hold them to be material … [but] in the ordinary case, the effect of a transgression is to render the proceedings null. It is important that the principles of justice should be observed and it is desirable that the rule that they must be observed should have behind it, and should be known to have behind it, the sanction of nullity.”

[47] We do not consider the present case to be one of those in which it can be said that no actual injustice has resulted. Had the appellant been given the opportunity of responding to the explanations given to the Commission by Mr Johnston he may have given greater specification of the reasons for which the Commission ought not to accept Mr Johnston’s assurances at face value. In that connection it is relevant to note that the writer of Harper Macleod’s letter of 2 November 2010 said “I do not yet have all the information I require to prepare a detailed note of objections”. Whilst the writer of the letter ought to have submitted a fuller note of objections as soon as he was able to do so, without waiting for an invitation to do so from the Commission, we think the knowledge that there may be more to be said in support of the objections should have made the Commission all the more careful to revert to Harper Macleod before making their decision. That there evidently was more to be said in support of the objections makes it more likely that the failure of the Commission to revert to Harper Macleod after speaking to Mr Johnston did result in injustice. By that we do not mean that the decision to consent to the assignation was itself an injustice. The injustice to which we refer is the procedural injustice of not giving the appellant a proper opportunity to state his case fully.

[48] We now return to the matter of the Commission’s failure to follow statutory requirements in this case. Although this is not the way the matter is argued by the appellant’s agents, we consider that these failures too can be seen as a amounting to, or resulting in, a breach of natural justice. The matter may be looked at as one of reasonable expectation, although it is in truth a matter of entitlement and not just reasonable expectation. An objector is entitled to have the statutory requirements relating to his objections carried out correctly. That did not happen in this case. What was the result? In our view these failures affected everything the Commission subsequently did with the appellant’s objections. In particular they resulted in the objections not being taken as seriously as they otherwise would have been; see para [36]above.

[49] We are conscious that a decision by the Commission as to whether or not to intervene in an application is not appealable to this Court; sec 52A(7). It may be that a patently flawed decision not to intervene is amenable to reduction or judicial review in the Court of Session but it is not amenable to challenge through the statutory provisions which alone give this court jurisdiction. However, this case is different. In the first place it is arguable that there has not been any decision by the Commission as to whether or not to intervene under sec 58A(6)(a): that what has happened is that they failed to decide that point. Secondly, this is not an appeal against a decision not to intervene. It is an appeal based on the Commission acting contrary to natural justice. We have come to the view that as part of that we are entitled to look at how the Commission treated the appellant’s objections, including their failure to correctly apply the statutory provisions. Had they applied the statutory provisions properly they would have intervened under para (a) of sec 58A(6) as well as under para (b). Because of their failure to do so and their subsequent, but not unconnected, failure to give the appellant a proper opportunity of stating his case in response to Mr Johnston’s explanations we consider that in arriving at their decision the Commission acted contrary to natural justice and this ground of appeal is accordingly sustained.

The result

[65] Strangely sec 52A(4) of the Act does not contain an express power to quash a decision of the Commission. But such a power is surely implicit in the powers we are given at paras (b) and (c) to direct the Commission to come to a different decision or to remit the case to the Commission. In this case we have decided to remit the case to the Commission in order that they may deal with the appellant’s objections correctly, that is to say in accordance with the requirements of sec 58A. That necessarily involves the quashing of the Commission’s decision of 20 January 2011. The clock will then be returned to the point in time at which Harper Macleod’s letter was received by the Commission and the time limit for further objections had expired. It will be for the Commission to consider matters afresh as from that point in time, bearing in mind what is said in this judgement.

[66] For the further advice of parties we would say this:

(a) Subject to the requirement to allow each party proper opportunity to respond to what is being said by the other, it is, in terms of sec 58A(11) of the Act, entirely for the Commission to determine the procedure and arrangements by which they decide the application. The Commission will not, however, be entitled to hold that the objections based on doubts as to Mr Johnston’s residency intentions and as to the use he intends to make of the croft to be frivolous, vexatious or unreasonable. That is because they are plainly not, as the Commission itself has accepted in this appeal.

(b) The appellant will be entitled to give fuller details of his objections but will not be entitled to raise new matters since the time limit for objections expired without further objections beyond those contained in Harper Macleod’s letter of 2 November 2010 being lodged. He will be entitled to an opportunity to respond to any representations made by Mr Johnston. Mr Johnston likewise will be entitled to expand on what he may have told the Commission in said telephone conversations and will be entitled to an opportunity to respond to any elaboration of the original objections. This process cannot go on indefinitely, of course. It simply requires to be taken to the point at which each party has had the opportunity of stating his position and responding to the other party’s position. Once the positions of parties is clear to the Commission they should proceed to their decision.

(c) It is not necessary that an oral hearing is held. Whether to hold one is entirely for the Commission to decide and we express no view on that.

(d) It is for the Commission to decide what weight to attach to particular objections or issues, subject only to the requirement that it does not exercise its discretion in an unreasonable manner.

(e) The law to be applied to the Commission’s decision-making process continues to be the 1993 Act as amended by the 2007 Act, notwithstanding that the 2010 Act is now in force.

(f) With apologies for stating the obvious, the appellant must realise that the setting aside of the present decision does not oblige the Commission to come to a different decision when it reconsiders the application.

(g) Nothing said in this note is to be taken as expressing any view on the merits of the application for consent to assign the tenancy of the croft to Mr Johnston. We have no such view.