THE COURT

(Lord McGhie, Mr A Macdonald)

JOHN CAMERON v SUSAN ELEANOR ALEXANDER AND OTHERS

(Application SLC 43/08 – Order of 6 November 2012)

AGRICULTURAL HOLDINGS – EXTENT OF SUBJECTS INCLUDED IN LEASE – POSSIBLE VARIATION OF LEASE BY AGREEMENT – INFERENCES FROM USE – INFERENCES FROM NON-USE – RESERVATION BY LANDLORD – RESERVATION OF IDENTIFIED SUBJECTS – RESERVATION OF RIGHTS TO USE – SHARED USE – EXCLUSIVE POSSESSION – CARDINAL FEATURES OF A LEASE – ARRANGEMENT AS A WHOLE – DEROGATION FROM THE GRANT – RELEVANCE OF DE MINIMIS

The tenant of a farm sought a declarator that in terms of his lease he was entitled to occupy and possess the whole of the steading at Clunemore, Drumnadrochit under exception of parts specified in the lease. Put shortly, the respondents contended that the so called lease should be regarded as no more than a licence because the landlord had reserved right to use certain part; and, in any event that the steading buildings were not included in the lease. There was no positive attempt by the landlord to suggest that the lease had been varied by agreement at any time.

HELD that it was clear that the whole steading, apart from clearly identified parts expressly excluded, was part of the leased subjects and that the landlords limited right to share use of byre and stables did not prevent the agreement from being treated as a full agricultural lease.

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

[1] The applicant, John Cameron, seeks a declarator that in terms of his lease he is entitled to occupy and possess the whole of the steading at Clunemore, Drumnadrochit under exception of parts specified in the lease. Put shortly, the respondents contend that the so called lease should be regarded as no more than a licence. They also contend that the steading buildings were not included in the lease. We heard evidence and submissions on 19, 20 and 21 September 2012 when Mr Cameron was represented by Mr Robert Sutherland, advocate and the landlords by Mr Lewis Kermack, solicitor.

Authorities

In addition to authorities listed in our note of 7 October 2009, reference was made to the following:

a. Assessor for Angus v George Ogilvie (Montrose Limited) 1968 SLT 348
b. Assessor for Midlothian v Buccleuch Estates Limited 1962 SLT 245
c. Chaplain v Assessor for Perth
d. Conwayv City of Glasgow Council 1999 Hous. L. R. 20
e. Kildrummy (Jersey) Limited v Inland Revenue Commissioners 1992 SLT 787
f. McDiarmid v Secretary of State for Scotland 1971 SLT (Land Ct) 4
g. NCB v Drysdale 1989 SLT 825
h. Parry v Angelsey Assessment Committee [1949] 1 KB 246

[2] This is an unusual case in that much time and effort has been spent on the litigation although the landlords and tenant had clearly been on terms of close friendship and we were told that this continued. The litigation was said to have been necessary to resolve some issues but precisely what the underlying dispute was about did not become apparent to us. There is a question as to whether one of the fields used by the applicant falls under the lease. The landlords had wished this to be resolved in the present action but the applicant successfully argued that this question should be left over for another day: see Note of 6 September 2012. The dispute before us related to the extent of the applicant’s rights in the steading buildings and the courtyard enclosed by them. The respondents have built a house incorporating the western half of the steading and have enclosed a substantial part of the courtyard area in association with this house. This work was apparently done under express reservation of the applicant’s rights or, in any event, on some terms which meant that nothing turned on the fact of the building work having gone ahead. It appeared that the landlords had relied on advice, from a solicitor in Inverness, that the steading or at least the west end of it was clearly not included in the lease. Although Mr Kermack clung tenaciously to that argument in his submissions before us, it can hardly be said to be clear. There were various pieces of evidence which might have been indicative of some informal agreement to change the lease in relation to the steading but the respondents did not plead such a case. The evidence was directed, in the main, at the issue of use of the steading. The respondents thought that the applicant had made little or no use of it. However, Mr Kermack expressly said that he did not challenge the credibility of Mr Cameron who had given evidence of continuing, if intermittent, use of various parts of the steading buildings and courtyard. It is clear that there have been extensive discussions about possible settlement. On the face of it there would seem no shortage of potential practical solutions. However, we were told that the parties required a decision from the court and our task is to reach a decision based on the evidence and submissions. We can do no more than express a hope that the outcome of this litigation will, indeed, allow the parties to reach an acceptable compromise of the various practical issues which will follow from it.

The debate

[3] We heard debate on 28 September 2009 on the respondents’ plea to relevancy but the parties’ positions had changed since that time and the terms of our Note of 7 October 2009 are no longer of direct relevance on the merits. The applicant had departed from the view that a decision in relation to the field would be helpful. In relation to the so-called sharing provisions of the lease, Mr Kermack’s position now was that the farm had to be looked at as a whole and his contention was that the sharing could not be disregarded as de minimis, even in relation to the whole farm. His position was that the effect of sharing of the buildings was that there could be no valid lease. It may be noted that, at the hearing on evidence, we understood his position to be that no part of the steading buildings was included in the lease although he may have intended implicitly to accept that the stable and byre were part of the agreement. As noted below the position on the pleadings was a little different.

Background history

[4] A formal lease was executed in 1957. Although the initial discussion about the lease had been with the present applicant’s grandfather, also John Cameron, the tenant under the lease was his father, “John Cameron, senior” who was tenant at all relevant times. He died in 2010. We set out some the relevant detail of the terms of the lease below. Put shortly it bore to be a lease of the farm with express reservations of an identified field and reservations relating to parts of the steading buildings.

[5] Our findings as to the history of use of the subjects thereafter are based essentially on the evidence of the applicant himself, supported by the evidence of Mr Chisholm in relation to use of the courtyard of the steading in the early years. Mr Cameron’s evidence of the earlier history was based on an understanding derived informally over the years from conversation with his father and general family conversations. Mr Cameron was accepted by Mr Kermack as essentially truthful and this was consistent with our own assessment. Many of his apparently spontaneous responses to questions indicated that he was, indeed, giving evidence of what he had always understood to be the case rather than simply relying on any recent account given by his late father – which might have been influenced by the very fact of litigation. It may be added that although a signed statement by the father had been produced, Mr Sutherland said expressly that he did not found on it in any way. There was no direct contradiction of the applicant’s evidence, although the witnesses led for the respondents gave evidence of their impression over the years that little or no use was made of the steading by the applicant or his father and gave evidence of the positive use of parts of it by their father and his brother. Susan Alexander was born in 1955 and Janet in 1963 and they cannot have had much direct knowledge of the early days of the lease when Mr Cameron, senior, was farming Clunemore as a separate unit. Their awareness of what was happening at Clunemore was mainly based on their experiences on holiday as children. They had no positive need to take account of what was happening at Clunemore and their memories of there being no activity at the steading cast no real doubt on the reliability of Mr Cameron’s evidence of his understanding of family history and his direct evidence of positive activity in connection with the farming business. We also heard evidence from Mr Tom Baker. He had lived in Clunemore House for a year or more in about 1978. He said he was not aware of use of the steading during that time but his evidence did not positively exclude the possibility of intermittent use, particularly of the courtyard. We also heard evidence from Mr Hamilton of events since he took up residence in Clunemore House in March 2008. However, by that time the present dispute was underway and we are satisfied that evidence bearing, one way or another, on use since about 2005 would not be a reliable basis for decision as to the state of rights of either party as they stood when the landlords started their conversion of part of the steading.

[6] The close relationship between members of the Alexander family and the Camerons, as owners of the adjacent Balmacaan Home Farm, is an important aspect of the background. We have no doubt that the tenant would not have wanted to object to the landlord using part of the buildings unless he had a pressing need for them himself. We are satisfied that both landlord and tenant made use of parts of the steading. The friendship had extended to the previous tenant of Clunemore, Mr Alex Morrison. The applicant’s grandfather was also on good terms with the landlord at that time. The first missive offer in 1957 was addressed to him. When the applicant’s father took over the farm from Mr Morrison, the latter was allowed to remain in the farm house and the missives make it clear that the various reservations in the formal lease were for the potential benefit of Mr Morrison rather than for the landlords themselves – although nothing was said to turn on this. As it happened, Mr Morrison died soon after the lease was executed and it is probable that Mr Cameron simply took over use of the reserved field because it was no longer required for Mr Morrison. Some of Mr Morrison’s furniture continued to be stored in part of the steading after his death.

[7] The applicant was born in 1970. He spoke to various aspects of the history of the holding. His direct involvement with Clunemore did not start until about 1986 when he left school but he had worked on the two farms all his life since then, latterly in partnership with his father. His father had been very much the boss until quite shortly before his death. The family had owned Balmacaan Home Farm since 1946. The two farms were now worked together. Clunemore is some 600 acres of hill and 50 to 60 acres inbye. Balmacaan has 200 acres. Balmacaan steading is over half a mile from Clunemore. Although the farms are apparently contiguous they are in fact separated by a river. They are linked by a public road.

[8] John Cameron, senior, took over the tenancy of Clunemore at a time when he was not expecting to inherit Balmacaan as he was the second son. He expected to farm Clunemore for himself largely as a stand-alone unit although he might, no doubt, have expected to make use of facilities at Balmacaan if necessary. He lived there at that time. He kept cattle in the steading buildings at Clunemore. We heard no detail of how the building was used for cattle. It appears from the plan referred to below that it had a byre and two cattle folds. The applicant understood that there had been no electricity and no water. He said the cattle had to be watered outside. On entry the equipment was in a poor state of repair. The applicant’s father had had to repair fences with binder twine. He had subsequently installed various fences. The buildings had always been in a poor state of repair. The applicant understood that they were “on the cusp of not being useable”. However, Mr Cameron, senior, had stored feed and various pieces of equipment at the steading. One use of the buildings related to sheep handling in the courtyard. Evidence on this particular aspect was supported by evidence of Mr Chisholm who was shepherd on a neighbouring farm. He had been in the habit of helping Mr Cameron, senior. He had no doubt about the usage of the steading, particularly for the handling of sheep in the courtyard area. He thought Mr Cameron stored livestock feed in the old stable.

[9] It was apparent that eventually Mr Cameron, senior, had come to run the two farms together. Latterly most of the cattle handling was at Balmacaan. However, the applicant remembered occasions when cattle were held at the steading. Some calving took place there. On one occasion stock had been infected by the disease known as “red water”. He said that his father had explained that this was why calving was taking place at Clunemore.

[10] In about 1986 Lionel Alexander came back to live at Clunemore House. Prior to that the landlords’ family had lived in Kent but used Clunemore for all their holidays. They had no other farming interests in the locality. Clunemore House was about fifty yards south of the steading, the courtyard of which opened to the north. Mr Alexander had wanted the place to be improved. A good deal of work was carried out around the steading at that time. The buildings were all made safe. Much of the work was done by a local slater. The roof was taken off the byre. One wall was removed and the area was simply used thereafter as part of the yard. Other parts were re-roofed. The applicant understood that much of the work had been done by the slater in exchange for slates but it was clearly Mr Alexander who arranged for the work to be done. At some stage the roof had been taken off the areas marked “fold no.1”, “tractor shed” and “garage” as shown on the plan attached to the record. The west wall of these buildings remained. In 1986 when Mr Alexander did work on the steading he also carried out work improving the fencing. He put a roadside fence up. He effectively made various new enclosures. There was a mutual benefit in all the work he did.

[11] The yard had initially been used as a manure pit. The work carried out by Lionel Alexander included levelling of the yard. The applicant understood that his father had always made use of the courtyard for sheep handling. This continued even after he had use of better facilities at Balmacaan. After Mr Alexander’s work in about 1986, less use was made of the buildings by his father. It may be said that this would be consistent with the fact that the buildings had been greatly reduced in extent. However equipment was still kept there from time to time. For example, he referred to a spreader, a baler, and the clipping race being kept in the area shown on the record plan as “fold two”. The spreader was sometimes kept in the “cart shed”. The applicant’s own use of the steading was mainly to keep feed blocks. This happened most years. They would be there over the winter and for months at a time. They would keep about a tonne there. They would use quad bikes to take them out. He had a clear memory of this going back to 1990. They had kept balers and some farm machinery in the buildings. He could say positively that in more recent years fencing items such as strainers and wire netting had been kept within the steading buildings. He said that was specifically the case just before the start of the dispute. He had handled sheep in the courtyard. He initially said he kept a moveable sheep race and gates in the yard at Clunemore although he later said that the sheep handling equipment, gates, race and hurdles would usually be left where they were last used. They were portable and could be moved on a trailer. It could not be said that they were ever kept at Clunemore in the sense of being stored there. He accepted that such equipment could be used anywhere but thought there needed to be some building to be used with it. At Balmacaan they could use the sheds. When working with sheep they would put gates across the right hand opening of the courtyard. Stock would be funnelled in using a race at the other end. This was done for various handling activities. Sheep work was seasonal. Spring would be busiest with lambing. He thought that the courtyard would have been used for sheep about four times a year from at least 1986. Actual usage might not take more than half a day. The use would vary from year to year. It could be used in connection with tupping and for separating off lambs. The sheep were familiar with the steading. It was a natural place for them to go. The steading courtyard was open to the adjacent field. All stock handling for Clunemore ewes would be carried out at Clunemore except for clipping and dipping. Balmacaan had the dipper.

[12] Although we had initially understood Mr Cameron to say that they “currently” used the steading some four times a year he also said that they were no longer able to use the yard at Clunemore because the animals would simply go over the wall into the garden courtyard. The protracted nature of this litigation gives rise to the possibility of confusion. We had made it clear at debate that the focus of attention would be on activities prior to building works because they had been carried out under reservation of the applicant’s position. We have not been able to make any finding – even on balance of probabilities - as to the extent of the applicant’s activities at Clunemore since the building work was started 2008 as the evidence was not clear and it was not thought necessary to clarify it. For completeness it may be added that in 2011 he had used the loft area above the barn to store hay. It had not been used for a long time before that. He explained that he had used it because of lack of space at Balmacaan. Although it was still there, he had expected to have had the hay removed earlier in 2012. We place no weight on this use.

[13] Mr Cameron did not dispute that use of the buildings was also made by the landlord. A boat had been kept at the steading. He thought that the boat had been kept for some time in the garage at Clunemore House. His recollection was that it had been moved from the garage to the steading when Mr Hamilton bought the house. This was one area of sharp dispute. Both the Alexander sisters made it clear that, in their memory, the boat had never been kept near the house. They thought it was always kept at the steading. Mr Cameron accepted that photographs showed the boat in the cart shed part of the steading, perhaps in 1992. He accepted that there might have been long periods when it was there. It is clear that the boat was used by the Alexander family and was not a permanent fixture in the steading. However, having regard to the close relationship between the parties we do not think that anything turns on this. We had a very clear picture of a situation where the tenant would not have made any attempt to assert his rights against the landlord unless there was some serious interference with his farming operations which could not otherwise be resolved. The tenant did not give serious thought to the extent of his rights under the lease until the building work started.

[14] Mr Cameron gave some evidence about the 1993 rent review. He had no direct involvement. He understood that it had been agreed to use Gavin Butler so that his father and the landlord would avoid risk of any direct acrimonious discussion. He also said that he understood Mr Alexander to have been angry when he heard the rent assessment but he had later phoned to apologise for his reaction.

[15] In relation to the landlord’s conversion of part of the steading to a house, Mr Cameron explained that he was aware that an application for planning permission had been made. He thought this had been some years back when Lionel Alexander was alive although he accepted that he could not say so positively. They did not want to object to the landlords’ plans. They did not expect planning permission to be granted. However they were confident they would be able to sort out something if he did intend to build. They were surprised when it transpired that planning permission had been granted. At the time when builders started work Mr Cameron had been storing machinery in “Fold No. 2”. He had a baler and spreader there. The builders had pulled it out and then asked him to move it away.

[16] Mr Cameron said he had no memory of the storage of furniture at the steading. He accepted that it was possible that Mr Morrison had kept furniture there. That was well before his time. He knew Tom Baker had lived there, possibly in about 1978. He did not know whether or not he had stored furniture in the steading. This was before his active involvement in Clunemore. He accepted that there were photographs showing use of parts of the steading by the landlord’s family. He referred to the photograph showing a car which he thought was in Fold No. 2. This was Dickie’s pride and joy. He thought that it was usually kept at Elgin or at a house in Whins but knew that Dickie did use the steading to carry out work on the car. Mr Cameron was, himself, using the barn at that time. He had his baler in the barn. This was in the winter months. It was not there in the summer. He did not think that the car was ever there for any length of time. Mr Alexander was always working on machinery. He would work on bigger items at the steading but mostly worked on smaller items at the back of his house. Fold No. 2 had been watertight since at least 1986 when the landlord carried out the improvement works.

[17] Mr Chisholm gave evidence of the use of the courtyard for handling sheep. He was familiar with work at Clunemore in the years following 1959. He worked on a neighbouring farm. As neighbours farmers helped each other. Their sheep were frequently mixed up on the hill. The sheep would be taken into the courtyard at Clunemore to sort and clip. He knew that this went on from 1959 until at least the 1970s. The sheep would all be gathered in the steading to be sorted out. He remembered machinery and fodder being stored in the steading in the early days. He could not really comment on matters after the 1970s.

[18] Mr Butler gave some general evidence about the working of Clunemore along with Balmacaan but his main importance related to a rent review he had carried out in 1993. He gave no direct evidence about use of the steading but the terms of his rent review were strongly founded on by the respondents. We shall return to the detail of this below.

[19] We heard evidence for the respondents from Susan Eleanor Alexander and Janet Victoria Alexander. The Alexander family acquired Clunemore when Alex Morrison was tenant. At some stage he moved from the house to a cottage. The family regularly used Clunemore House thereafter. However they did not live there. They were based in Kent. They had no other farming interests in the locality. The respondents’ grandmother Mrs Victoria Alexander was owner when the lease was signed in 1957. She had died before the time of the Record of the Holding in 1959. Ownership passed to her sons Lionel and Victor (known as Dickie). There was some suggestion that Lionel effectively took over Dickie’s share – although Mr Cameron made it clear that separate rent had been paid to each. On Lionel’s death the estate came to be shared among Victoria’s grandchildren.

[20] Susan and Janet were Lionel’s daughters. Their evidence can be summarised shortly. They were regular visitors to Clunemore when children. They were almost invariably there at Christmas and Easter holiday periods and usually also for several weeks in the summer. They were very friendly with the Camerons and spent much of their holidays on the farm at Balmacaan. They regarded themselves as working on the farm. They had no memory of any activity by the Camerons involving the steading at Clunemore – and apparently little memory of sheep farming on Clunemore. They spoke to use of parts of the steading by their own family and friends. Dickie had a vintage car. It was occasionally kept in the steading in the part shown on the Record plan as “Fold No 2”. The family boat was kept in the part labelled “carts”. They did not think the boat had ever been in the garage at Clunemore House. The had had the boat since at least the early 1960s.

[21] We heard evidence from Mr Ted Baker, a friend of the Alexander family in Kent who had stayed in Clunemore House for over a year in about 1978. He had stored furniture in the loft above the barn for over a year. He did not think that the Camerons made any use of the steading in that time. Mr Andrew Hamilton, a land agent and partner in Savilles, had lived at Clunemore House since March 2008. His office was in Inverness but he frequently worked at home. He had seen no sign of any use being made of the steading by Mr Cameron.

Documentary evidence

[22] It is convenient, at this point, to set out briefly the relevant details of the documentary evidence bearing on the subject let. We do so in chronological order although clearly the important document is the lease.

[23] An offer letter of 24 January 1957 from the landlord’s solicitors was addressed to John Cameron of Balmacaan Home Farm. This was the applicant’s grandfather. It related to the farm known as Clunemore. The offer proposed an express exclusion which was on the same lines as came to be included in the lease, except that the reference to the reserved field was to the “third” field on the Divach side. This was expressly to be reserved for Mr Morrison’s use. The reservation in the byre was for use “by Mr Morrison of two or three cows”. The offer proposed to oblige the tenant to “maintain the buildings and fixed equipment in good tenantable order and repair, fair wear and tear only excepted” and to oblige the tenant to enter a separate agreement after the lease was entered by which he was, inter alia, “12 … (2) to accept the buildings and fixed equipment presently on the farm as sufficient for the purposes of [his] lease: (3) to put into tenantable condition and repair at [his] expense such buildings and fixed equipment as are not in such condition at [his] entry and thereafter so to maintain them, wear and tear excepted.”

[24] The terms of the offer were revised by letter of 19 February. This included provision for the tenancy to go to the younger John Cameron, the present applicant’s father. It narrated: “(4) With regard to paragraph 12(3) of the Offer it is understood that you will not be under obligation to put into tenantable condition and repair such buildings and fixed equipment as are not now in that condition and neither will you have any right to demand that Mrs Alexander should put them into tenantable condition and repair”. There was nothing in the revised offer to show that there had been any discussion as to which field should be reserved.

[25] The lease was executed on the 4 and 15 September 1957. It was a lease of “the said farm and lands of Clunemore as recently possessed by the said Alexander Morrison and as belonging to the landlord.” Purpose FOURTH provided: “There are reserved to the landlord … (e) power to resume at any time for any purpose other than agricultural or pastoral, including without prejudice to the foresaid generality, feuing, fencing, planting, the erection of houses or other buildings … (i) the farm dwellinghouse with garden and ground attached presently occupied by Alexander Morrison, (j) the field at the back of the farm house being the second field on the Divach side from the junction of the Divach Road, (k) byre accommodation at the Steading for two or three cows, (l) the shed at the Steading used as a garage, (m) the shed at the Steading housing the engine and electricity generator, (n) one stall in the stable.” Clause SEVENTH provided that: “The Tenant will maintain the buildings and fixed equipment in the condition in which these are at the commencement of the Lease, fair wear and tear and natural decay only accepted”. In terms of clause TENTH of the lease, the parties agreed that a record of the condition of the fixed equipment would be made.

[26] On the same dates, the parties entered what was referred to as a post lease agreement. This purported to vary the provisions of the lease. In summary it provided that the landlord would not be bound to provide any fixed equipment beyond what already existed and would not be bound to put it into any better state of repair than it was. There were provisions allowing the tenant to put fences into stock proof condition and repair with the cost to be met in equal shares by the landlord and tenant and the cost of maintenance thereafter wholly at the expense of the tenant. The tenant was to have no claim against the landlord in respect of any work or materials supplied by him in connection with improvement, renewal or repair of fixed equipment.

[27] A record was made in 1959. Prior discussion of arrangements for the making of the record included a letter from the landlord’s solicitors in which there was reference to the need to have plans made for the recorder “showing … plans of the buildings included in the let to you”.

[28] In the record, the recorder narrated that he had been appointed “to make a record of the condition of the fixed equipment of the holding”. He recorded that he had “heard parties and inspected the subjects”. He recorded that the farmhouse had been let as an independent subject and was not recorded in the record. He then set out his findings as to the “Farm Buildings”. He said: “The buildings as a whole are in a dilapidated condition and not in a tenantable state of repair. The buildings are wired for electric light which appears to be in working order”. However, he then went on to describe, in some considerable detail, the condition of the individual parts of the steading itemised as follows: Garage; Tractor Shed; Fold No.1; Barn and Mill (With Loft over); Thrashing Mill (With Loft over); Fold No. 2; Turnip Shed; Byre; Calf Shed; Rood facing East; Engine House with Loft Over; Loose Box; Stable; Cart Shed; Store; Open Shed; Sheaf Loft, Bothy and Hay Loft; the Square. We touch again below on some of the detail of the entries made in relation to specific parts. For present purposes it is enough to say that the record gave careful detail of the condition of all the listed items, some being said to be in a fair good state of repair.

[29] After listing these items with detail of their condition, the record went on to say:

“NOTE. It is understood that in terms of the Tenants Lease the following items are reserved to the landlord:-

1. The field at the back of the farm house being the second field on the Divach side from the junction of the Divach Road.

2. Byre accommodation for two or three cows.

3. The shed at the steading used as a Garage.

4. The shed at the steading housing the Engine and Electricity Generator.

5. One stall in the stable.”

[30] The record went on to deal in detail with fencing. Some fifteen different fences were described, several being said to be derelict.

[31] Attached to the record were plans. The two lodged in process were the “ground floor plan” and the “loft floor plan of the steading”. These are labelled to show the various itemised parts of the steading other than the open courtyard. It may be added that a byre and the calf shed were both said to have a “Lean-To” roof. The record concluded with the following: “All the buildings, fences and fixed equipment are the landlord’s improvements with the exception that all stock proof fences specified have been repaired and made stock proof by the tenant and at his own expense

Submissions

Pleadings

[32] Although this Court seeks to avoid over-reliance on technicalities of pleading, it is appropriate to say something of the pleadings in this, somewhat confused, case. We had debate on the original pleadings and a lengthy hearing on the applicant’s first amendment; see Notes of 7 October 2009 and 24 February 2010. The pleadings still contain averments by the applicant about the reserved field although Mr Sutherland stressed that this had nothing to do with the present case. In the pleadings the applicant relies essentially on the terms of the lease and asserts that it covers all the steading buildings except those referred to as reserved to the landlord. The landlords do not accept this. They aver: “Other than those parts of the Steading on the holding which are reserved to the respondents or in respect of which the respondents have a right of occupation, the Steading let in terms of the lease extends only to two stalls in the Stable and a lean-to structure. The Stable is in a dilapidated and un-roofed condition and is not used by any person.” This might appear to concede no more than part of the Stable and some lean-to structure but they go on to say that: “In terms of the lease the Applicant does not enjoy exclusive possession of the byre forming part of the Steading and may have no rights of possession.” The respondents aver that it is not known whether Mr Morrison possessed the steading. Their position in relation to the applicant’s assertions as to the use made on the steading is that this is not known and not admitted. Their substantive contentions, as pled, are: “The steading does not comprise fixed equipment”; “the subjects let [by a probative lease] cannot be extended by acquiescence”; “in terms of the lease the applicant does not enjoy exclusive possession of the byre and may have no rights of possession”. The applicant “does not pay rent in respect of any subjects other than those described as let to the applicant in terms of the lease”.

[33] There are extensive averments by way of comment on the rent review in 1993 but these are mainly directed at the field and include an assertion that “an erroneous inclusion of description of a field in a rent review does not amount to an agreement whether express or implied between a landowner and a farmer”. There is no attempt to assert that the reference to buildings could, by contrast, point to any such agreement. It is fair to say that the pleas-in-law cast no light on the parties’ legal arguments in relation to any of the matters in issue.

Closing submissions

[34] In closing submissions for the applicant the case was again based on the lease. Mr Sutherland contended that on a plain construction the steading buildings were included except where expressly excluded. If there was any doubt about this, reference could be made to surrounding circumstances, in particular, evidence of the parties’ understanding of the matter as shown by their actings in relation to the making of the record. If further support was needed it could be found in the terms of the missives. He referred to Bank of Scotland v Dunedin Property Investment Co Ltd, at 665 D-E. The lease was clearly intended to include all the parts of the steading except the specified parts. The landlords’ rights to share use of byre and stable did not detract from this. These sharing provisions were not sufficient to change the character of the agreement as a lease. The subjects let had to be viewed as a whole. Mr Sutherland said he had little to add to the submissions at debate but drew to our attention the very short report of the decision in Websterv Lyell. That, he said, showed that a reservation by a landlord would not strike at the lease as a whole. It was a matter of degree. This was a lease of a hill farm. The buildings were part of the lease but were clearly of little value. In any event, the reserved use was de minimis compared with the subjects taken as a whole. Actual use was irrelevant. It was enough that the buildings were covered by the lease and there was no evidence of any agreement to change this. But, in any event, there was evidence that Mr Cameron had had cattle in the early days and there must have been some use of buildings when he was farming as a stand-alone farm. There was adequate evidence of use although it had varied over the years.

[35] Mr Kermack had helpfully prepared a skeleton written submission. His first substantive contention was that the agreement could not be said to be a lease. Exclusive possession was an essential feature of a lease. He referred to various authorities including Chaplin v Assessor for Perth; Kildrummy Farms (Jersey) Limited; Brador v British Telecommunications; Conway v City of Glasgow Council; Commercial Components International v Young and South Lanarkshire Council v Taylor. Cases of shared use were distinguishable from cases where the landlord reserved part of the physical subjects. In the latter case, it could be said that the reserved area simply did not fall within the lease. Sharing involved joint use of the subject and was a different concept. It was impossible, he said, to construe the references to the byre and stable as other than shared use. No specific parts of these units could be identified as being reserved. He accepted that the leased subjects had to be looked at as a whole. However, he contended that the sharing provisions in relation to the byre and stable could not be disregarded on any basis of de minimis. The buildings were plainly a significant part of a hill farm. In relation to the de minimis principle, he cited NCB v Drysedale; Parry v Anglesey Assessment Committee; Assessor for Midlothian v Buccleuch Estates; Assessor for Angus v George Ogilvie (Montrose) Limited.

[36] Mr Kermack did not address, expressly, the relationship between his first and second substantive submissions, simply referring to each as hurdles or difficulties faced by the applicant. The second submission was that the applicant had not established that any part of the steading was included in the lease. The reference in the pleadings to the two stalls in the stable and the lean-to was not repeated in his submissions. His argument was based on the description of the subjects in the lease as the farm and lands of Clunemore “as recently possessed by the said Mr Alexander Morrison”. He said there was no evidence that Mr Morrison had possessed any part of the steading. He accepted that Mr Morrison must have had use of some parts but he might only have had use of the parts which the lease expressly excluded. That would be why the lease had express reservations. The missives produced were incomplete. There was no material to explain the change of field. It could be seen that the concluded lease did not simply reflect the negotiations disclosed in the missives produced. It was not appropriate to rely on part of incomplete missives. He further contended that in the record, the recorder was not expressing any concluded view as to the extent of the subjects leased. He was simply noting the condition of all the equipment he saw. His reference to having “heard parties” could be ignored as being no more than a standard formulaic introduction or, possibly as something based on having seen letters from the parties. It did not necessarily mean that he had heard submissions by the parties either as to the extent of the buildings involved or their condition.

[37] There was no positive attempt by the respondents to suggest that there had been any change in the extent of the subjects leased. As we have seen the pleadings went no further than to suggest that there might have been a change that was not known to them. However, Mr Kermack made much of the applicant’s averments about the field. If the applicant was arguing that the lease had been changed to include the field, he could no longer rely on the lease as the measure of his rights in the subjects, including the buildings. In relation to the field, the applicant would have to seek to rely on the evidence of what he occupied and what he paid rent on. Mr Kermack founded strongly on the evidence of Mr Butler’s rent review in 1993. It was clear that Mr Butler had not included any buildings in his assessment of rent. Mr Alexander might well have been content to accept rent on the basis that the buildings were no longer part of the lease. Mr Kermack then discussed the evidence to the effect that Mr Cameron had made little positive use of the buildings, at least since the time of the rent assessment. The respondents relied on the decision in Ancaster v Doig and particularly the passage from the opinion of the Lord Justice Clerk at page 7.

[38] Mr Kermack further contended that, in any event, the steading could not be regarded as fixed equipment. It was redundant. He referred to the negotiations at the time of the lease. The provisions of the missives and the post lease agreement were equivalent to agreement that the buildings were redundant. This, he contended, was supported by the finding by the recorder in 1959 that the buildings were then in a dilapidated condition and not in a tenantable state of repair. If it was agreed they were not tenantable they were not part of the tenancy.

Discussion

[39] We are satisfied that the steading, with the exception of the garage and generator shed, was included in the subjects let to the tenant in 1957. The careful exclusion of parts of the steading points clearly to the intention to include the remainder. There was nothing in the circumstances of this case to exclude that obvious inference. In particular, the reservation of rights in the byre and stable can reasonably be explained only if the byre and stable are included in the lease. If support for this plain construction was required it can be found in the other productions. We are satisfied that the fact that the missives may not disclose the full terms of parties’ communings would not, of itself, prevent them having weight as part of the factual matrix. We have some reservation about the use of such material as indicative of the “intentions” of parties. However, the need to make explicit provision about building repair obligations shows a recognition of the fact that there were buildings to be included in the lease. Leaving aside the express reservations, there was no basis for any finding that there was any distinction to be drawn in respect of parts of the building. Nothing was founded on to support the distinction in respect of the “two stalls in the stable and a lean-to structure” mentioned in the pleadings. There was no challenge to use of the material relating to the record of 1959 as evidence of the parties’ own understanding of the terms of the lease. As we have seen the landlord’s solicitors referred to the need for a plan “of the buildings which are included in the lease”. The plan signed by the recorder was of the whole steading. The recorder narrated that he had heard parties. He could hardly have failed to be told that the steading was substantially excluded if that was, indeed, the understanding of either of the parties. His record carefully details the condition of the entire steading and then notes specifically the excluded parts as shown in the lease. The evidence of the missives and of the making of the record and plans provide strong support, if such support was required, for the view that the lease included the whole steading except the specified reserved items.

[40] In any event, we see no reason to go behind the obvious inference to be drawn from the basic history. The steading was situated within the external boundaries of the farm. When the farm was tenanted by Mr Morrison as a separate unit, the steading would have been a useful if not essential asset. The landlords had no other agricultural property in the vicinity and accordingly no need to exclude the steading from the farm as let. The Square or courtyard area was described in the missives as being used as a “manure pit”. and there was no suggestion that this use could have been by anyone other than the farm tenant. There was no reason suggested as to why the steading might have been reserved from Mr Morrison’s lease. There was no evidence that there were any other farm buildings available to Mr Morrison. In absence of any contrary evidence, we are satisfied that this material allows an inference to be drawn that the steading buildings were part of “the farm of Clunemore as occupied by Mr Morrison”.

[41] Under the heading of “The difficulty of identifying the subjects let”, Mr Kermack made extensive reference to the evidence of Mr Butler and the terms of his letter of 7 July 1993 setting out his rent assessment. It is plain that the views of Mr Butler in 1993 would be of no weight in helping us construe the lease of 1953. Mr Kermack appeared to be relying on the terms of the letter as showing that there had been a change in the lease at some point. But, essentially his proposition was that if the applicant wished to rely on the evidence of Mr Butler as the basis of a claim that the lease had been changed to include the field then, “on the same basis”, the steading could be said to be excluded from the subjects by non-payment of rent and lack of any meaningful possession. The written submission put the matter in this way: “If the applicant contends that he is paying rent for field 902, he has no choice [but] to accept that he is not paying rent for any buildings on the holding”. (It was not disputed at the hearing that “902” was the reserved field.) It may be sufficient answer to say that, before us, no contentions were advanced on behalf of the applicant in respect of any field.

[42] It is appropriate to look at the detail of Mr Butler’s rental award but it can be said, at the outset, that we consider it irrelevant to the issues which presently fall to be determined. As we have discussed, the landlords did not, in their pleadings, attempt to make any positive case of change nor did they seek to lead evidence to establish that there had been a change. Indeed the pleadings make clear the landlords’ contention that Mr Butler’s inclusion of the field could not amount to an agreement between landlord and tenant and Mr Kermack made it plain that he did not accept that there had been any change to the lease to include the field. Although there were averments about the field in the pleadings, the applicant did not advance any case about it in the present action. We do not know what evidence he may be able to lead in a separate action. It is not possible to use Mr Butler’s letter as the basis of a case for which there is no record and which was said, in essence, to rest simply on a hypothetical quid pro quo. One might turn the argument around and say that if the respondent disputes any change to include the field, “on the same basis”, he cannot rely on a change to exclude the buildings. But, we do not think this advances matters.

[43] It may be added that we are not persuaded that the question of whether subjects have fallen out of a lease is a matter to be determined by reference to exactly the same type of evidence as might have shown that subjects had come to be included. A tenant is not obliged to make active use of every part of the tenanted subjects, so the inferences to be drawn from evidence of little, or no, use of leased subjects are quite different from those which might be drawn from active use of subjects outwith the scope of a written lease. It can also be said that the inferences which would fall to be drawn from payment of rent for land would be quite different from those to be drawn from a finding, on rent review, that a particular piece of equipment had no identifiable rental value. In other words, the circumstances which might justify a conclusion that parties had added subjects to a lease are not necessarily a direct obverse of circumstances which might justify an inference that subjects included in a formal lease fell to be treated as having been cut out of that lease.

[44] Mr Butler is now 82. He has a B.Sc. in agriculture and had been an agronomist with SAI. In that role he had got to know a number of farmers including the applicant’s father. He was in the habit of giving advice on agricultural matters. Although there was some confusion as to precisely when he started work as an agricultural consultant it appears that he has been doing so since at least 1993. He still has a few clients, including the applicant. He said he does not work for nothing but mainly he works for his own pleasure. The rent review at Clunemore was the first he had carried out. His appointment was another example of the close friendly relationship between landlord and tenant at that time. He said he had been advising John Cameron, senior, and was familiar with his business. When it was agreed that a rent review was necessary, Mr Cameron proposed him as a suitable person to do this and Mr Alexander agreed. Although Mr Butler’s memory of the whole matter was vague and he talked of Mr Cameron as being his “client”, it is a fair, indeed obvious, inference from the terms of his letter to Mr Alexander, that Mr Alexander had had some contact with him and had agreed to pay half his fee. It seems, in short, that there was a joint reference to Mr Butler for his expert view of rent.

[45] He told us he now has no memory of how he had gone about his task. He said that he had never seen the lease and although he accepted that it was possible that he had, there was nothing in the evidence led to suggest that, in fact, he had done so. We think it highly unlikely that the letter would have been in the laconic terms it was if he had thought it necessary to consider the terms of the lease at the time. He was clear that he had never seen the record of 1959 nor the steading plan. There was no hint that he had any awareness of any statutory provisions bearing on the matter. He said he had just applied commonsense and his knowledge of the background from Mr Cameron to determine what the farm could stand, by way of rent. It is clear that he saw himself as acting as an expert rather than an arbiter although the matter was not addressed in these terms before us. The amount of rent he fixed is not relevant to the present issues. The importance of the rent review lies in the terms of his decision letter. It narrated that the unit comprised 580 acres, or thereby, and after describing the acreages of different types of land it included the following passage: “(d) There are no farm buildings available for the tenant.”

[46] Mr Kermack made some attempt to lead evidence as to the meaning of that phrase from the present owner of Clunemore House, Mr Andrew Hamilton. He had been led to give evidence as a witness to fact but he is an experienced and well regarded land agent, perfectly able, in a suitable case, to give expert evidence on agricultural matters. However, we did not allow his evidence as to the meaning of Mr Butler’s letter as we are satisfied that such evidence would not have added any relevant weight. We have no doubt that, at the time, Mr Butler was attempting to express his understanding in plain English. It was not suggested that the language used had a special technical meaning which required expert evidence.

[47] Mr Butler told us that what he had meant was to make an “observation about the quality of the buildings”. He said there were buildings but “maybe they were not up to much”. It is plain that his present understanding is that the tenant claims a right to use the buildings and although it was not disputed that he was doing his best to give honest evidence, we cannot avoid the conclusion that his memory was affected by that understanding. He elaborated the matter by saying that there were buildings there but they were not suitable. He said he was used to prosperous farms where buildings were good. He thought that if they were not good it was better to write them off when considering rent but he did not literally mean that there were no buildings. The buildings would not add value although the tenant could just use them as best he could. There were only thirteen cows on the holding at the time. He thought there would not be need of many buildings to support thirteen cows. He was well aware of the general nature of the Cameron’s operations and the fact that they owned the farm with full range of steading buildings at Balmacaan. This was no more than half a mile away. He said that he now realised he could have expressed himself more clearly.

[48] It is not easy to accept Mr Butler’s evidence as to what he meant by buildings not being “available for the tenant”. Plainly this is something different from there being “no farm buildings on the farm” but it seems equally clear that if he had simply been intending to comment on the quality or usefulness of the buildings he could have done so in more explicit terms. However, in the present context, it is important to keep in mind the fact that Mr Butler was not the alter ego, or agent, of the tenant. At best, Mr Butler’s language might be assumed to tell us what he, himself, understood at the time and it must be said that we cannot accept that the understanding he had was that the tenant had full use of various parts of the buildings and that he was simply expressing a conclusion that as their condition was so poor they should not be reflected in the rent. That would be a very strained construction. It would hardly be consistent with the evidence that Mr Lionel Alexander had made significant changes to the steading in 1986. Such buildings as remained had been put into a reasonable state of repair. It may be noted that he was not asked specifically about these changes but it may possibly be the case that neither of the parties’ advocates had known about them before John Cameron subsequently gave evidence. There was nothing about the 1986 changes in the pleadings. The two respondents who gave evidence did not mention them. Another aspect of the matter is that we are satisfied that the tenant had the use of the courtyard for handling stock. Mr Butler made no express reference to this and it cannot be assumed that he excluded the handling benefits of the courtyard in making his assessment.

[49] Although his letter can be read as intended to convey an understanding by him that no buildings were included in the lease, Mr Butler’s language does not point unambiguously to his having been told that the tenant had no “right” to use any of the buildings. The language used is practical. It seems clearly to reflect an understanding that the tenant was not able to use the buildings but it is not possible to say much more. In any event, nothing about Mr Butler’s letter detracts from our view that the lease gave the tenant full right to use of those parts of the steading which were not a matter of express reservation and we are not able to hold it sufficient to establish that there had been any agreement to change the lease.

[50] It is perhaps appropriate to say a little more about the work done by the landlord in 1986. No attempt was made to rely on the physical changes made at that time as pointing to any agreement to resume or to change the subjects let. In the circumstances it is not for us to speculate about such possibilities. However, the landlords did not attempt to challenge the bona fides of any of the Cameron family. The applicant volunteered the evidence of the landlord’s activities. The evidence was consistent with the landlord simply wanting to put the leased subjects into a better state. We were told that in addition to work on the building he carried out work on fencing which was plainly part of the leased equipment. It may be significant that part of the work appeared to have involved removal of the dilapidated byre and it may be inferred that the tenant accepted that he would be able to get by without it. The immediate effect of its removal was simply to enlarge the courtyard. Our clear impression was that neither Mr Cameron nor his father were the kind of people who might have taken advantage of the death of Mr Lionel Alexander to go back on any informal agreement they had reached with him.

The reservations

[51] It is well established that physical parts can be reserved. The effect of the reservation of the garage and generator shed is that these parts are simply not part of the leased subjects. However, the landlord’s reservation of unspecified accommodation at the steading for “two or three cows” and of “one stall in the stable” has given rise to more difficulty. At the debate in 2009 the argument was that these provisions took the byre and stable out of the lease. At the stage of his final submissions, Mr Kermack contended that these provisions prevented the whole agreement from having effect as a lease. Submissions on both sides were directed at that proposition.

The implications of shared use

[52] Mr Kermack contended that the reservations relating to byre and stable amount to sharing of use of these parts and that such sharing was potentially so important that it could not be excluded on any principle of de minimis. We understood him to accept that sharing for a different type of use such as for sport would not affect an agricultural lease, the argument was that any reservation in respect of a use of the same type as the tenant’s use prevented the agreement from being a lease. This is an argument of considerable importance not only in this case but more generally, particularly where, as here, the parties have plainly intended to enter an agricultural lease with all that that entails in terms of statutory protections.

[53] In addition to the authorities discussed at debate, the respondents relied on various cases taken from the field of rating law. Mr Kermack also founded strongly on the decision of Sheriff Gordon in Conwayv City of Glasgow Council. We shall go on to discuss this case in more detail but make the preliminary point that it is important in considering dicta bearing on this matter to have regard to the context and nature of the issues in each case. Where the court is trying to determine the proper nature of some innominate arrangement, the right to “exclusive possession” may be an important pointer to a lease. That is not to say that exclusive possession is a necessary feature of a lease. Similarly where a lease is silent as to any sharing of possession, exclusive possession will normally be implied. However the four common law cardinal features of a lease have been authoritatively described as being the parties, the subjects, the rent and the ish. We have found little persuasive authority to justify a further cardinal feature that there must be no sharing of the tenanted use. However, we recognise the important principle that a landlord cannot derogate from his grant and this may have a bearing on the proper approach to this issue.

[54] It is well established that in a lease there is considerable scope for reservation in favour of a landlord: Rankine on Leases, p 211; Hunter, Landlord and Tenant, p 212. The question is whether it is possible to reserve a right to make the same use of the subjects as the tenant. Put shortly, we are satisfied that, at least where that right is clearly defined and does not in any substantive sense derogate from the grant, there is no reason why such reservation should be treated as fatal to the concept of a lease.

[55] Where a reservation is used simply to describe parts excluded from the subjects let, it is not strictly a reservation but merely a convenient way to define the subjects. It is evident that the validity of a purported lease of defined subjects cannot be affected by the fact that some other subjects have not been included. A reservation of right implies some qualification or restriction of the rights that would otherwise go to the tenant. This will often involve sharing of use. A very obvious example is a right to make use of roads within the leased subjects. Sometimes, a reservation of a specific part may not only exclude that part from the subjects leased but also imply a right of shared use of part of the leased subjects. Reservation of a “garage” not only excludes an identified part from the subjects of lease but may well imply a reservation of a right of access over these subjects to the reserved building. Reservation of a specified stall in a stable would implicitly include sharing of access and also sharing of facilities for watering, waste removal and the like. In a lease of residential subjects it is clear that a particular locked room or cupboard can be excluded from the lease. This is often done to allow storage of landlord’s property. A question may arise in any case as whether the landlord is, expressly or implicitly, reserving a right of access to make active use of the storage facility during the currency of the lease. If there is an express reservation of this right, we do not see that this could cast doubt on the character of the lease itself unless the use claimed proved so intrusive as to derogate from the grant.

[56] Perhaps the most obvious example of the sharing of rights to use the subjects is the reservation of sporting rights in an agricultural lease. Such a reservation may often be more valuable to the landlord than the rent obtained from the agricultural tenant. The exercise of sporting rights may occasionally involve a considerable disruption of agricultural activity. A good deal of active cooperation may be required on both sides. However, there has never been any question of an agricultural lease losing its status because the landlord has reserved such rights. There can be no doubt that the law does not require exclusive possession of the heritable subjects as an essential feature of a lease. The South Lanarkshire Council case is binding authority for that proposition. However, it does not go as far as excluding a possible requirement of an exclusive right to make use of the subjects for a specific purpose. In the South Lanarkshire case, counsel did make reference to the fact that the owner’s reserved purpose was different from the purpose of the tenant’s occupation but the Court simply noted this comment in parenthesis and there is nothing to suggest that the distinction played any part in the court’s reasoning. The case affords no authority for any such proposition.

[57] It was a case which involved an apparent tenancy for grazing of horses at or near Lanark Racecourse. The “tenant” was obliged to vacate certain fields from time to time to allow the owners to use them in connection with the race course. The reserved use, in other words, prevented the tenant from making any use of the reserved areas when the owner was using them. The Inner House held that this would not, of itself, be inconsistent with a tenancy. “A limited reservation in favour of the landowner or limitation of the use to which the occupier can use the land would not necessarily be inconsistent with the existence between them of the relationship of landlord and tenant. Plainly, however, it would be a matter of degree, according to the circumstances of the individual case”. It may be observed that the Court plainly was dealing with interference which could hardly be described as de minimis. Examples can be found of similar circumstances where a farmer, under an agricultural tenancy, appears to be obliged to give up use of fields to allow parking for sporting or other activities. This may often involve a significant degree of disruption and adverse impact on the use he can make of the fields in question. We are satisfied in light of the South Lanarkshire case that as a matter of substantive law rather than any application of a de minimis principle, cases of conflicting rights to use should be assessed as a matter of degree.

[58] Mr Kermack founded strongly on the dictum in Conway that “The law has come increasingly to talk of exclusive possession as a necessary condition of a lease”: 6-31. This observation may be correct as far as it goes. The issue has been discussed in different contexts. But while there are undoubtedly several examples of authoritative references to exclusive possession as an important pointer to the existence of a lease it is clear that the law does not require exclusive possession of the subjects as a cardinal feature of a lease. It may be noted that the case was decided before the decision in South Lanarkshire Council v Taylor.

[59] We think it sufficient for present purposes to express our conclusion in relation to agricultural leases. It might be the case that any sharing in a residential context would be expected to have such an significant impact on the tenant’s enjoyment of the subjects that an absolute rule, or something close to it, would be appropriate. However, even in a domestic context it is not hard to figure examples of cases of shared use which would not, at first sight, appear to cast doubt on the existence of a tenancy. A landlord might let property while reserving a right to park a car on the premises. Depending on the space available this might cause considerable inconvenience to the tenant. We do not think that it would be possible to explain such examples by reference to any application of a de minimis principle. It may also be observed that although the court in Conway decided that exclusive possession was a necessary condition of a residential lease, it also accepted that the right to use shared facilities was not fatal to the existence of such a lease. This distinction might be explained by reference to the nature of the shared rights and the way rights are described in the agreement. It might possibly be argued that a shared right to park a car was use of a different character from true domestic use. But other examples can be found. In former times, leases of tenement flats in Scotland would often involve shared use of external toilet or wash house facilities. The lease would have to give rights to use such heritable subjects, to be shared with other specified occupiers including, perhaps, the landlord. We need not multiply examples but we tend to think that the problems which might be caused by such examples are more likely to be satisfactorily resolved by looking at the impact of the reserved rights on the arrangement as a whole rather than by an assumption that any reservation of a right to share heritable subjects for the same type of use is necessarily fatal to a lease, unless it can be ignored as de minimis. It makes sense to treat the question as one of degree rather than on a need to identify different types of use. Questions of degree may not be easy to determine in some cases but in practice most will be obvious. We think the present to be a clear example of a reservation which could not realistically be thought to cast any doubt on the status of the occupier as tenant under an agricultural lease.

[60] The fundamental proposition underlying the respondents’ position must be that it is an underlying principle that a landlord simply cannot lease subjects and reserve for himself any right to use the subjects for the same purpose as the tenant. We have found no authoritative analysis limiting in such a way the scope of a landlord’s power to reserve to himself a right. It is not clear that a principle based on a narrow classification of type of use would serve any useful purpose. For example, a principle based on careful analysis of the type of use reserved might mean that if the landlord reserved a right to share use of roads there would be a need for enquiry as to whether his predominant use was to get to his dwelling or to get to his fields. We would be slow to find that a reserved use which was plainly tolerable to a tenant in every practical sense use could nevertheless deprive the agreement of the character of a lease, merely because the use could be described in the same terms as the tenant’s use. To give a concrete example, there would seem little justification for a view that reservation of a right to graze horses in a field of sheep was a permitted reservation being a non-agricultural activity while sharing of the same grazing by a few cows would be fatal to the existence of an agricultural lease. It can readily be seen that there might well be circumstances in which such a distinction could be important. For example if cows were sharing with other cows this might have implications for disease or stock control. Sharing might have implications for the operation of other provisions of the agreement or for regulatory regimes. But these practical issues can be addressed without an absolute rule.

[61] We were referred to Brador Properties. In that case suites of offices were available for occupancy. Users shared toilet and other facilities. If the agreement ran for any length of time, the owners could compel the users to move to different rooms. The question of identification of specific physical subjects was the main issue in the case. But, in submissions, both counsel referred to the degree to which exclusive possession was or was not given. Neither party contended that exclusive possession was an essential. The Lord Justice Clerk (Ross) referred to Rankine’s definition of a lease (p1) and pointed out that this made it clear that for there to be a lease “it may be enough that the alleged tenant receives the right to certain uses only of the land”. This comment is consistent with the type of distinction now under discussion but it falls far short of saying that if a particular type of use can be identified, the tenant must have exclusive right to that use. In its context, the distinction being drawn was between a right to exclusive physical possession of land and a right to use it for certain uses. The conclusion of the court was that “In all the circumstances, … there was sufficient (our emphasis) possession ceded … under the agreement to amount to a sublet”. However, the circumstances of that case were quite special and we do not think it casts much light on the present issue, one way or the other.

[62] We do not doubt that where a lease is silent and no reservation is implied by law the tenant is entitled to exclusive possession. We consider that weight must be given to the principle that a landlord cannot derogate from his grant, although the implications of this were not discussed before us. However we have found no warrant for saying that a landlord is not entitled expressly to reserve rights to a use similar to that of the tenant. We conclude that, at least in the context of an agricultural tenancy it is the degree of conflict which is important in determining whether a matter is a lease or a mere licence rather than the fact that it might be possible to describe the reserved rights as being of the same class or type as the rights given to the tenant.

[63] Applying the approach taken in the South Lanarkshire case we are quite satisfied that the rights reserved in the present case do not strike at the lease as a whole. This was a substantial hill farm. It could be used for sheep without covered steading accommodation. It was also used for cattle. We heard little evidence of the capacity of the byre and stables. However, there was no real dispute about the latter: there were three stalls as shown on the plan attached to the Record. Use of one, unspecified, stall was reserved. By 1953 use of tractors was quite common. In practical terms, the reservation of a stall would be of no great importance. In relation to the byre, the plan and record were referred to at debate as indicating capacity for ten cows because of the explicit reference to ten chains. In any event, we accept ten cows as reasonable enough for a byre of the size in question. We do not know what capacity, if any was provided by the two folds. If the reservation had been of an identified stall or identified part of the byre this would have fallen to be treated as something excluded from the lease. In other words, if the landlord had reserved these specific parts, this would not prevent there being a lease of the remainder. Mr Kermack said that Websterv Lyell was simply an extreme example of this. That case concerned the lease of a large dwelling. There had been no explicit reservation. When the landlord did not give possession of all of the rooms, the tenant sought unsuccessfully to resile. The court plainly considered that reservation of minor parts of the building did not strike at the lease as a whole. If the lease would have been perfectly workable had the stall for a horse and space for three cows simply been excluded, it is hard to see that the more limited right of sharing could be said to strike in any way at the arrangement as being a perfectly workable lease of the farm as a whole. The reservation did not derogate from the substantive grant.

[64] Although the matter was argued on the basis that the reservations necessarily implied a sharing of use, we are satisfied that the tenant could have complied with the terms of his tenancy if he had ensured that one stall in the stable and three places in the byre were reserved for the landlord’s use. In other words the reservation might have been treated as excluding such part as the tenant decided to allocate to meet the reservation.

[65] As are satisfied that the reservations in this case fall far short of impugning the character of the agreement as a lease, it is unnecessary to discuss the factors which might, in a narrow case require to be considered in assessing matters as a matter of degree. As the substantive law appears to us to require the matter to be assessed as one of degree, it is unnecessary to consider the issue in terms of any principle of de minimis. However, it may be said that this principle commonly finds its application in cases where there is some clear rule of law which does not expressly provide for exceptions. Justice may require to prevent a trifling breach from having a disproportionate effect. The power to ignore some matters if they can properly be described as de minimis may be a useful and, indeed, necessary, concept when dealing with statutory provisions. The cases cited to us were decisions in that context. In the present context, as we are satisfied that there is no absolute rule that any sharing of use prevents the existence of a lease, it is unnecessary to consider what type of sharing might be excused by application of de minimis principle. However, we understood that the attitude of the respondents at the original debate to be that, if the lease was to be viewed as a whole, the extent of sharing was insignificant. We shared that view. Although their view of that matter has apparently changed, we see no reason to change our own view.

Dilapidation

[66] We do not consider it relevant, for the purposes of the present case, to determine whether the buildings fell to be regarded as part of the fixed equipment. If they were part of the subjects let, the tenant was entitled to make use of them. In particular, we are satisfied that he was entitled to make use of the Square otherwise referred to as the courtyard. The landlord has enclosed a substantial part of the courtyard and removed it from the tenant’s use. We have no doubt that such a yard, wholly enclosed on three sides is potentially a useful asset when handling sheep. Even if the tenant is now able to carry out the bulk of sheep handling activity at the better facilities in Balmacaan we have no doubt that he has been able to derive a benefit from use of the courtyard. We are also satisfied that the buildings can provide covered storage areas. These are useful on any farm even if not essential to the day to day farming operations. It may be noted that, although the record described the “buildings as a whole” as in a dilapidated condition and not in a tenantable state of repair, various individual parts were different. For example, fold No.1 was described as being “in good state of repair and tenantable”; the barn was “in fair (sic) good state of repair” and the threshing mill “in fair good condition”. The stable was “in good tenantable state of repair”. We do not agree with the contention that because neither party was to have any positive obligation to maintain the subjects, this excluded them from the subjects of let. No authority for such proposition was cited.

Decision

[67] We have no doubt that the steading was part of the farm let to Mr Cameron, senior, under the lease, subject to the specified reservations. We are satisfied that the reserved rights were not of a nature and extent which prevented the agreement being properly regarded as a lease. Although the parties were, apparently, agreed that the buildings were not in a great state of repair, their condition did not prevent them being viewed as part of the subjects of lease. There was no case made of any positive change after execution of the lease.

[68] We are, accordingly, satisfied that declarator should be pronounced substantially in terms of the first two craves. We have noted that the first crave seeks to exclude all the landlords reservations as if they were specific areas and does not address the matter as a problem of sharing. However, the submissions before us were based on the proposition that the effect of the reservations in relation to byre and stable was to create a sharing arrangement. Mr Kermack stressed that no identified part of the byre was used to accommodate the landlords’ cows. No specific stall was reserved. We were not addressed explicitly on the terms of this crave. It does not accurately reflect the current state of affairs. There is now no byre. In the circumstances, we are satisfied that the order should only make an exception of the garage and generator shed. The landlords’ rights in respect of the byre or stable, in so far as otherwise enforceable, will not be prejudiced by an order in such terms.

[69] As the parties are apparently on amicable terms, it should be unnecessary to pronounce any order in terms of the third crave, although we shall provide an opportunity for further submissions in respect of any such order as may be required.

For applicant: Robert Sutherland, Advocate; Anderson Strathern, Solicitors, Edinburgh

For respondents: Lewis Kermack, Solicitor; Turcan Connell, Solicitors, Edinburgh