DIVISIONAL COURT

(Sheriff MacLeod, D J Houston)

MILLIKEN v McNULTY

(Application RN SLC/44/06 – Order of 5 June 2007)

AGRICULTURAL HOLDINGS – NOTICE TO QUIT – CIRCUMSTANCES IN WHICH COURT REFUSED MOTION FOR DISCHARGE OF DEBATE – PROCEDURE ADOPTED ON WITHDRAWAL OF AGENT – COMPETENCY OF CHALLENGING VALIDITY OF NOTICE UNDER SECTION 22(2)(d) OF AGRICULTURAL HOLDINGS (SCOTLAND) ACT 1991 AFTER SERVICE OF NOTICE TO QUIT RELYING ON SAID SECTION

The applicant was landlord and the respondent tenant of an agricultural holding. The applicant served notice under section 22(2)(d) of the Agricultural Holdings (Scot1and) Act 1991 (“the Act”) demanding payment of rent due. No challenge to the validity of said notice having been made by the respondent and the rent demanded not having been timeously paid the applicant served notice to quit founding upon section 22(2)(d) of the Act. No notice was served by the respondent under section 23(2) of the Act requiring any question arising under section 22(2) to be determined by arbitration (which would have been the default forum for determination of such questions as the law then stood) and on expiry of the notice to quit the applicant applied to the Court seeking declarator that the lease between the parties was at end and an order for the respondent’s removal. The respondent lodged Answers claiming that the notice to quit was invalid because it proceeded upon a demand purportedly served under section 22(2)(d) which was in ambiguous terms and, therefore, itself not valid. Three successive diets of debate on the relevancy of parties’ pleadings came to be fixed. The first was discharged on joint motion because it was thought that the case had settled. Settlement not having been implemented, however, a second diet was fixed. That was discharged on the respondent’s motion but of consent, she having recently changed solicitors, in order to give her new agents time to prepare for the debate. Prior to the third diet of debate, however, these new agents withdrew from acting for the respondent. At the calling of the third diet of debate the respondent was not present but was represented by an agent appearing on behalf of a third firm of solicitors who had been consulted by the respondent for the first time the day before. Said solicitor moved the Court to discharge the diet of debate so that the new agents could familiarise themselves with the case. The Court having refused that motion said agent withdrew from acting, submitting that the Court should then fix a peremptory diet as was required in the Sheriff Court on the withdrawal of a solicitor from acting. The Court refused this motion also and, on the view that this was not a situation in which the provisions as to decree by default of Rule 51(b) of the Scottish Land Court Rules could be invoked, proceeded to hear Senior Counsel for the applicant on the competency and relevancy of the defence stated. Senior Counsel submitted, under reference to Magdalen College, Oxford v Heritage (infra), that, the validity of the notice to quit not having been challenged by the respondent by notice under section 23(2) of the Act it was not competent to challenge it in subsequent proceedings for removal.

The Court held that no notice having been served under section 23(2) of the Act, esto there was any ambiguity in the original demand for payment of arrears of rent (which, on a proper reading of that notice, there was not) it was now too late for the respondent to rely upon it and the applicant was entitled to the orders sought.

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

Authorities and texts referred to

Legislation

Agricultural Holdings (Scotland) Act 1991, secs. 22(2)(d), 23(2)
Agricultural Holdings (Scotland) Act 2003, sec. 84(1)
The Agricultural Holdings (Scotland) Act 2003, (Commencement No. 3, Transitional and Savings Provisions) Order 2003 (SSI 2003 No. 548)

Cases

Cayzer v Hamilton (No 1) 1996 SLT (Land Ct) 18
Magdalen College, Oxford v Heritage [1974] 1 W.L.R. 441
Mannai Investment Co. Ltd. v Eagle Star Life Assurance Co. Ltd. [1997] A.C. 749
Samson v Fielding 2003 SLT (Sh. Ct.) 48

Texts

Connell Connell on the Agricultural Holdings (Scotland) Act 7th. ed.; edited by Donald G. Rennie W.S. and Sir Crispin Agnew of Lochnaw Bt, Q.C.
Gill, The Rt Hon Lord The Law of Agricultural Holdings in Scotland3rd ed.

Motion for discharge of diet

[1] When this diet of debate called before us on 23 May Mr Lewis Kermack, solicitor, appeared on behalf of the respondent but only as, in effect, a local agent for Messrs Blackadders, Forfar, and only for the limited purpose of moving for a discharge of the diet. The respondent herself was not present.

[2] Mr Kermack explained that he had received his instructions in the form of a telephone call from Mr Lean of Blackadders late the previous afternoon, Mr Lean himself having been contacted by the respondent for the first time around noon that day.

[3] The respondent had initially instructed Messrs R & R Urquhart, solicitors, in relation to this matter before changing agency to Messrs Harper MacLeod. The latter had sent the former a mandate for the transfer of the respondent’s papers on 14 March 2007. Messrs R & R Urquhart had, however, insisted on retaining the files until their Law Accountants had finished with them. It had only been on 8 May that they had received the files back from the Law Accountants and Mr Kermack surmised, but could not be sure, that they would then have forwarded them to Messrs Harper MacLeod.

[4] Whether in receipt of the files or not, however, Messrs Harper MacLeod had then withdrawn from acting for the respondent. Mr Kermack understood their reasons to include that the respondent had not communicated with them adequately. This had led to the respondent contacting Mr Lean as aforesaid, “in something of a panic”. It was always regrettable when debates had to be discharged but clearly there had not been time to prepare for today’s diet. In the event that the motion was refused his instructions were to withdraw.

[5] The motion was opposed by Sir Crispin Agnew of Lochnaw Q.C., on behalf of the applicant. He recounted the history of matters. The notice to quit on which the application was founded had, subject to the decision of the Court, taken effect as at the term of Whitsunday 2005. The present application having been lodged, a hearing in the way of a debate had been fixed for 24 October 2006. That hearing had been preceded by negotiations which, it was thought, had resulted in settlement. Messrs R & R Urquhart had written to the Court on 22 October to advise accordingly and say that the debate would not be proceeding. The case had thereafter been sisted until 5 January 2007.

[6] While the case was sisted a draft agreement had been adjusted and an engrossment sent to Messrs R & R Urquhart for signature by the respondent. Thereafter the applicant’s agents had received a series of letters from them apologising for the delay and explaining that the respondent had not been in touch with them. On 28 November they had written saying that they would have to withdraw from acting unless they heard from the respondent within a given timescale. On 11 January 2007 they had intimated their withdrawal from acting.

[7] On 19 February 2007 the Court had fixed a fresh diet of debate for 22 March. That diet had been discharged of consent because by then the respondent had instructed Messrs Harper MacLeod, solicitors, but the applicant’s consent to the discharge had been conditional upon a further diet of debate being fixed for a date within six weeks or so of 22 March. That is when today’s diet had been fixed.

[8] On 14 May, however, Messrs Harper MacLeod had intimated their withdrawal from acting. In their letter to the applicant’s agent they explained that the respondent had not paid a bill they had sent her.

[9] The respondent herself had then written to the Court on 16 May. In that letter she had been economical as to the reasons for agents having withdrawn. The Court had, however, replied informing her that today’s hearing was likely to proceed.

[10] Against that history today’s diet should not be discharged. The Scottish Tenant Farmers’ Association operated a system whereby members were entitled to have their first telephone call and consultation paid for but did not fund litigation. It appeared to be on that basis that Mr Lean had been contacted. But if the respondent had not been able to pay her previous solicitors there was no guarantee that she would be able to pay new ones.

[11] A second reason for refusing the motion was that the respondent did not have a prima facie case. The applicant’s factual case on record was more or less admitted. The only defence contained in the Answers was in Answer 7. In summary it was that the demand notice which had been served was ineffective because it used the language of the second part of section 22(2)(d) of the Agricultural Holdings (Scotland) Act 1991 (“the 1991 Act”), which speaks of remedying a breach which is capable of being remedied, rather than the first part, which is the demand for payment within two months of any rent due in respect of the holding. Because the notice under section 22(2)(d) was ineffective, so it was argued, the notice to quit which followed it and was based on it was similarly ineffective.

[12] Although accepting that the demand for payment of rent under section 22(2)(d) used the language of the second part of that paragraph rather than the first, Sir Crispin did not accept that the demand was, in consequence, invalid. But even if it was, that was not a competent defence to an action of removal. One’s remedy in connection with an allegedly defective demand of this kind was, rather, the service of a notice under section 23(2) of the 1991 Act requiring any question arising out of section 22(2) to go to arbitration (as it would have been at the time of service of the notice to quit in this case). The respondent had not done that. That failure meant that she could not now challenge the reason given in the notice to quit by way of defence to an action of removing (Gill 17.39; MagdalenCollegeOxford v Heritage).

[13] Sir Crispin then went on to specify a number of conditions which we should, in his submission, impose were we minded to grant the respondent’s motion. These comprised conditions as to expenses, certification of the cause as suitable for the employment of Senior Counsel, and caution. However, given our decision to refuse the respondent’s motion we need not say any more about these.

[14] So far as the current factual position was concerned, we were told that the respondent continues to occupy the holding in the sense that she uses it as stables and grazing for about 12 horses, some belonging to herself and some to others. She does not, however, live on the holding and the holding is not her only source of income.

[15] In response Mr Kermack said that much of the factual background recited by Sir Crispin was not known to him or to those instructing him. He was not, therefore, in a position to comment on it. As to Sir Crispin’s submissions of law, it was Mr Kermack’s recollection that, notwithstanding what was said by Gill at paragraph 17.39, the learned author said elsewhere that where a tenant believed a notice to quit to be invalid he had the option to raise the question under section 23(2) or to defend the subsequent action for removal. So far as the conditions desiderated by Sir Crispin were we to grant the respondent’s motion were concerned, the respondent could hardly resist an award against her of the expenses occasioned by the discharge but otherwise - on matters such as caution - he was without instructions and consideration of these matters should be continued to a later date to allow him to obtain the same.

[16] After adjourning to consider our decision we refused the respondent’s motion. In coming to that decision we approached things in this way. Our decision involved an exercise of discretion. That in turn involved an exercise in the balancing of the interests of justice as between the parties. Approaching things in that way we were clear that the interests of justice, which at the stage of discharging the diet of debate fixed for 22 March would have favoured the respondent, now required us to find in favour of the applicant. That was because of the history of the matter. This application was lodged on 24 March 2006. Answers for the respondent were lodged on 2 May and amended on 6 October 2006. Since then three diets of debate have been fixed. The first was discharged, in effect on joint motion, because it was believed settlement had been reached. That settlement was never implemented because, as we understand it, of lack of instructions from the respondent to her then agents. That caused these agents to withdraw. The second diet of debate, that of 22 March, was discharged on the motion of the respondent, because her new agents had not had time to familiarise themselves with the case and prepare for that diet. These agents withdrew from acting on 14 May 2007. Again the reasons, as we understand them, included failure adequately to instruct these agents. That receives some corroboration from the respondent’s letter of 16 May to the Court in which she blames her mis-spelling of the agents’ email address for that apparent failure. We do not find that a credible explanation. Undelivered emails are generally returned to their senders. She should therefore have known of the problem. Even if she did not, however, she must have wondered about the lack of response and in such a situation one would have expected her to be in frequent telephone contact with her agents. That letter also makes mention of the respondent having to deal with a bereavement. While she, of course, deserves every sympathy in that regard, not even she herself suggests that this was in any way an adequate explanation for the circumstances causing Messrs Harper MacLeod to withdraw.

[17] The net result is that progress in this case has been delayed for some seven months (since October last) due to the respondent’s continuing failure to adequately instruct her successive agents.

[18] The motion to discharge could have been granted even against that background had there been compelling factors relative to the interests of justice in the respondent’s failure. For example the Court is generally loath to refuse such motions where what is at stake involves a party’s home or livelihood. But such is not, we understand, the situation here, where the respondent does not live on the holding and it is being used only as stables and grazing for a (relatively small) number of horses.

[19] We were, therefore, persuaded that the interests of justice favoured allowing the applicant to make progress with the application. We, therefore, refused the motion. In coming to that conclusion we did not require to rely on Sir Crispin’s submission that the respondent’s pleadings disclosed no prima facie case. We would have been reluctant to form a view on that in the time available to us for consideration of the motion for discharge but in any event it was just not necessary for us to rely on that submission for the purposes of our decision.

Further procedure

[20] Having reconvened and intimated our decision, Mr Kermack, withdrew from representing the respondent.

[21] Sir Crispin then moved us, in the absence of opposition, to grant decree de plano. We enquired whether he was doing so in reliance on Rule 51(b) of our Rules. Having checked its terms, he confirmed that he was.

[22] Rule 51(b) is in the following terms:-

“When the Application is called in Court at the appointed time and place, …

(b) if no appearance is made by or on behalf of a Respondent, but appearance is made by or on behalf of an Applicant, (1) the Application may be continued (2) any defence, objection or claim pleaded by such Respondent may be repelled in respect of such failure to appear, with or without expenses or (3) the Applicant may proceed to lead evidence so far as consistent with the terms of the Order appointing a hearing, or as allowed by the Court, either on any matters of fact in dispute or only on matters in regard to which the burden of poof rests upon him and may thereafter move for an Order disposing of the subject-matter of the Application…”

[23] However, standing the Sheriff Court case of Samson v Fielding and the authorities therein mentioned and Mr Kermack’s appearance albeit for the limited foresaid purpose we had reservations about whether this was a situation in which “no appearance [had been] made by or on behalf of [the] Respondent”. Having re-read the report of Sheriff-Principal (as he then was) MacPhail’s judgement in that case, there is the obvious distinction that in the present case Mr Kermack had withdrawn whereas in that case the local agent appearing had not withdrawn albeit she was entirely without instructions which would have allowed her to play any meaningful part in the intended proof. It may be, therefore, that pursuant upon Mr Kermack’s withdrawal this was a situation in which no appearance was made by or on behalf of the Respondent and that we could have applied the default provisions of Rule 51(b) on that basis.

[24] However that may, on reflection, be that is not what we did. What we did was order the “debate” to proceed in so far as it could in the absence of the respondent. This was not, in the circumstances of this case, such an artificial procedure as it sounds because the respondent’s defence was contained in her pleadings and Sir Crispin would have to deal with it to the satisfaction of the Court if he was to succeed in obtaining decree. But artificial or not, it seemed to us that to proceed with the diet was the only way, short of granting decree under Rule of Court 51(b), of giving effect to our earlier decision to refuse to discharge the diet, the rationale of which was that the time had come when the applicant was entitled to be allowed to progress the application.

[25] It is appropriate at this stage to deal with a suggestion made by Mr Kermack, before he became functus, as to what the appropriate – indeed, as we understood him, necessary – course of action would be once he withdrew. That was the fixing of a peremptory diet as is done in the Sheriff Court. He acknowledged that our Rules contain no express provision as to peremptory diets and certainly contain no requirement for the fixing of such a diet on the withdrawal of agents. But the absence of such a provision could and should be supplied by, in effect, importing the practice of the Sheriff Court under our Rule 107.

[26] Rule 107 states that “In matters of procedure or evidence which are not provided for by statute or by these Rules the Court shall have regard to the general practice of the courts of law so far as applicable and appropriate to the conduct of its business”.

[27] Although our own Rules say nothing as to what is to be done on the withdrawal of an agent we do not regard the foregoing Rule as requiring us to import into the practice of this Court a rule of such inflexibility as Rule 24.2 of the Sheriff Court Ordinary Cause Rules.

[28] Nevertheless, we could, of course, have fixed a peremptory diet. We did not do so because we did not see what purpose it would serve. Short of withdrawing her Answers, all that the respondent could be expected to do at such a diet would be to seek more time to enable her to instruct new agents and by virtue of our decision to refuse to discharge the present diet we had already decided that she should not have that time. Indeed to have fixed such a diet would have been to defeat the rationale of our earlier decision.

[29] We therefore proceeded to hear Sir Crispin in support of his preliminary pleas-in-law.

Substantive submissions for Applicant

[30] He attacked the defence contained in Answer 7 as being incompetent and irrelevant. The argument as to competency we have already rehearsed in paragraph [12] above. That was the applicant’s primarycase. Esto, however, that it was now competent for the respondent to raise the question of the validity of the demand for payment of rent, the applicant’s position was that said demand was valid. That rendered the defence stated irrelevant.

[31] Under reference to Cayzer (No 1) v Hamilton and Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd Sir Crispin submitted that the demand notice had to be read objectively, in the light of the relevant surrounding circumstances and by reference to its effect on a reasonable person reading it who had knowledge of these circumstances.

[32] The surrounding circumstances of which a reasonable person reading the notice here was to be taken to be aware included the knowledge that the parties were in the relationship of landlord and tenant, knowledge of the terms of the lease, including these in effect incorporated into the lease by the 1991 Act, and the fact that the rent due at 1 June 2003 had not been paid.

[33] So far as the form of demand in the present case was concerned, there was no prescribed style (see the final paragraph of the Court’s Note in Cayzer and the various styles referred to there). It was accepted here that the notice had not followed recommended styles, such as that at page 269 of Connell, because it used the language of the second part of section 22(2)(d) rather than the first part. It was more in the style of a demand to remedy a breach of the lease rather than a demand for payment of rent.

[34] Nevertheless the demand made quite clear to the respondent what had to be done within two months. Failure to pay rent was a breach of Clause 4 of the lease, which broke the annual rent of £2,300 down into monthly payments of £191.67. The notice made clear that that amount of rent had been due as at 1 June 2003 and was to be paid within two months of service of the notice. The demand referred explicitly to section 22(2)(d) of the 1991 Act and any reasonable person reading the terms of that section would be under no doubt as to what needed to be done. The respondent therefore had all the information she required and knew what she needed to do to comply with the notice. The requirements of section 22(2)(d) had therefore been complied with and the notice was valid.

[35] The demand had been validly served and followed in due course by the service of a valid notice to quit. That notice to quit, being a valid notice under section 22(2)(d), was now incontestable.

[36] Sir Crispin having completed his submissions in relation to the validity of the notice, we invited him to comment upon the plea to the competency contained in the respondent’s pleadings. It (plea-in-law 3 for the Respondent) states “The order second applied for being incompetent, it should be refused”. It is supported by an averment in Answer 8 to the effect that the Court has no jurisdiction to make the order second applied for, which is an order for removal.

[37] Sir Crispin accepted that the making of such an order would have been outwith the jurisdiction of this Court prior to the coming into force of Agricultural Holdings (Scotland) Act 2003 (“the 2003 Act”) on 27 November 2003. However, the present application had not been lodged with the Court until 24 March 2006. The only relevant transitional provision related to arbitrations which were still ongoing at 27 November 2003. The Court therefore had jurisdiction to pronounce the order sought and the plea to the competency should be repelled.

[38] In closing, Sir Crispin invited us to sustain the pleas-in-law for the applicant, repel those of the respondent, find the respondent liable to the applicant in the expenses of the application and certify the cause as suitable for the employment of Senior Counsel. (In support of the latter motion he had earlier explained that this application was part of a long-running course of dealings between the parties in which he had been involved for many years and which had included litigation in the Court of Session. The employment of Senior Counsel at this stage of matters, in that context, was reasonable.)

Decision

(i) The relevant facts

[39] The relevant facts here are as follows.

[40] A demand under section 22(2)(d) of the 1991 Act was sent by the applicant’s agent to the respondent on 1 August 2003. Its terms are set out below but in substance it sought payment within two months of service of rent arrears of £191.67 said to have become due on 1 June 2003. Service of the demand is admitted.

[41] On 8 August 2003 a further demand was sent seeking payment of the like amount but in respect of rent falling due on 1 August 2003.

[42] On 6 October 2003 the respondent’s agents wrote to the applicant’s agents enclosing two cheques each in the sum of £191.67 and being tendered payments in respect of the amounts of rent due as at 1 June and 1 August. By then the two months period specified in the demand of 1 August had expired.

[43] On 10 October 2003 the applicant’s agents served a notice to quit under section 22(2)(d) founding on the failure of the respondent to comply with a demand in writing for payment of rent (i.e. the demand served on 1 August 2003). This notice to quit was in proper form and, on the face of it, valid. It sought removal as at Whitsunday 2005.

[44] On 14 October 2003 the cheques tendered as payment of rent were returned to the respondent’s agents.

[45] No notice raising any question as to the validity of the demand notice was served by the respondent on the applicant in terms of section 23(2) of the 1991 and no further procedure ensued until the lodging of the present application with the Court on 24 March 2006.

[46] The Respondent now challenges the validity of said notice to quit on the basis that the demand for rent on which it proceeds was itself invalid.

(ii) Competency of defence pled

[47] So far as the argument on competency is concerned the question is, we think, whether a challenge as to the form which a demand for payment of rent under section 22(2)(d) is to take is a “question arising under section 22(2) of [the 1991] Act”. If so and the tenant wishes it to be determined by this Court notice under section 23(2) of the 1991 Act must be given to the landlord within one month of service of the notice to quit. There is no suggestion in section 23(2) or elsewhere in the Act either that the period can be extended or that this Court has jurisdiction to adjudicate on such a question at any other time or in any other context.

[48] One need only ask that question to know what the answer to it is. We think it self-evident that any dispute as to the form of such a notice is a question under section 22(2) because such notices exist only under section 22(2) and it is only by reference to that section that one can see what they ought to contain and what form they ought to take.

[49] In that regard the language of the Scottish provision is less equivocal than that of article 9 of the Agricultural (Notices to Remedy and Notices to Quit) Order 1964 with which the Court of Appeal was concerned in the Magdalen College case. Article 9 referred to the tenant wishing to “contest any of the reasons [stated in paragraphs (b), (d) and (e) of section 24(2) of the Agricultural Holdings Act 1948]”. One can see that that wording may leave room for a distinction between challenges to the form, and formal validity, of a demand notice under section 24(2)(d) of the English Act (which is in almost identical terms to the 1991 Act provision), on the one hand, and challenges to the factual basis on which the notice proceeds, on the other. Indeed one sees that such an argument was presented in that case (see the opinion of Megaw L.J. at page 446F). We doubt whether on the Scottish provision there would even have been room for such an argument but in any event it failed. The result is that if the conclusion arrived at in Magdalen College was correct, as in our respectful opinion it was, it is even more clearly so in Scotland, given the different wording of section 23(2) of the 1991 Act.

[50] With reference to Mr Kermack’s suggestion that there was authority in Gill for the proposition that a tenant has an option to wait until an action of removing is raised before challenging a the validity of a notice to quit, there is indeed comment to that effect in Gill at paragraph 16.47 but it relates to situations where it is the notice to quit itself which is said to be invalid. Where what is alleged is that a demand for rent or remedy of breach upon which the notice to quit proceeds is invalid we think, for the reasons already given, that the situation is different. The only opportunity to raise that question is under section 23(2) and failure to take it means that the question cannot be raised as a defence to subsequent proceedings for removal.

[51] We have accordingly sustained Sir Crispin’s argument as to competency.

(iii) Relevancy of defence pled

[52] The defence pled is contained in Answer 7 of the respondent’s Answers as amended and is in the following terms:-

“Explained and averred that the purported Notice to Quit is invalid. It narrates that it is given on the ground that at the date of the giving of the Notice to Quit the respondent had failed to comply with a demand in writing served on her by the Applicant requiring her within two months of the service thereof to pay rent due in respect of the holding. There was no such demand. Such a demand requires to contain an explicit and unambiguous requirement on the tenant to pay the rent due within two months. The demand dated 1st August 2003 specified in the purported Notice to Quit was in form and in substance a Notice to remedy a breach by the respondent of a term or condition of the tenancy capable of being remedied and which was not inconsistent with her responsibility to farm in accordance with the rules of good husbandry, viz her “failure as tenant to pay rent timeously…resulting in arrears of rent of £191.67 made up as undernoted:- Rent due as at 1st June 2003 - £191.67”.”

[53] Section 22(2)(d) of the 1991 Act reads as follows:-

“Subsection (1) above shall not apply where –

(d) at the date of the giving of the notice to quit the tenant had failed to comply with a demand in writing served on him by the landlord requiring him within two months from the service thereof to pay any rent due in respect of the holding, or within a reasonable time to remedy any breach by the tenant, which was capable of being remedied, of any term or condition of his tenancy which was not inconsistent with the fulfilment of his responsibilities to farm in accordance with the rules of good husbandry;…”

It is, in effect, in two parts, the first dealing with a demand for payment of rent due and the second with a demand for remedying a remediable breach of the terms and conditions of the tenancy.

[54] The demand served on 1 August 2003 was in the following terms:-

“Notice by the Landlord to the Tenant to Remedy a Breach of Conditions of the Tenancy capable of being remedied [S22(2)(d) of the Agricultural Holdings (Scotland) Act, 1991]

Date: 1st August, 2003

To: Ms Ann McNulty, East Kingsteps, Lochloy Road, by Nairn TENANT

[the holding is then identified]

For and on behalf of Mr George Milliken, residing at Wester Lochloy Farm, Nairn, Landlord of the Holding in terms of the undernoted Lease, we hereby intimate to you as Tenant of the above Holding that you are required to remedy within two months of the service of this Demand the following breach of the conditions of your tenancy which is capable of being remedied and which is not inconsistent with your responsibility to farm in accordance with the Rules of Good Husbandry, viz:-

Your failure as Tenant to pay rent timeously all in terms of the Lease between …[the lease is then identified] … resulting in arrears of rent of £191.67 made up as undernoted:- Rent due as at 1st June, 2003 £191.67”

One sees therefore that the demand confuses the language of the two parts of section 22(2)(d).

[55] There is, however, no statutorily prescribed form which a demand under either part of section 22(2)(d) must take and we are satisfied, on the basis of Cayzer v Hamilton (No 1) and Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd, that the demand served here was valid. We say that because, despite its confusion of the two parts of section 22(2)(d), it makes clear to any reasonable reader what is being demanded and what has to be done in response to the demand. Thus it makes clear that a specified amount of rent is due, that it is to be paid within two months of service of the demand and that the demand itself proceeds under subsection 22(2)(d). A reading of that subsection would in turn appraise any reader of the significance of such a demand and of how failure to comply would result in the landlord being entitled to serve a notice to quit. We are satisfied, therefore, that the demand told the respondent all she needed to know. It therefore served its purpose and was, in our opinion, valid. Service of the demand is a matter of admission by the Respondent so no question arises as to that. Sir Crispin’s argument as to relevancy is, therefore, also sustained.

(iv) Competency of granting order for removal

[56] So far as the respondent’s plea that the granting of an order of removal is incompetent is concerned, that appears - although it is not specifically pled - from the averment in Answer 8 referred to above, to be based on an alleged lack of jurisdiction in this Court to make such an order. Prior to the introduction of the 2003 Act that was certainly so. It is not so now: section 84(1)(e) of the 2003 Act gives the Court power to make an order for removal or ejection where it has determined any matter by virtue of either the 1991 or 2003 Act. This is such a situation. Although service of both the rent demand and notice to quit took place prior to 27 November 2003, the transitional provisions contained in the Agricultural Holdings (Scotland) Act 2003 (Commencement No. 3, Transitional and Savings Provisions) Order 2003 do not have the effect of excluding the application of section 84 on that ground. No other ground of lack of jurisdiction or incompetency being apparent to us, we have repelled the Respondent’s second plea-in-law.

Expenses

[57] So far as expenses are concerned, although Sir Crispin suggested that we could deal with those on the basis of expenses following success, we think it fair to allow the respondent an opportunity to make submissions on these, perhaps particularly on the question of the suitability of the cause for the employment of Senior Counsel. Accordingly we have reserved expenses in the usual way.

Result

[58] Accordingly we have sustained the pleas-in-law for the applicant and repelled those of the respondent. The applicant is apparently happy that the respondent should have a reasonable time to organise her removal, including making appropriate

provision for the horses presently on the holding. A period of two months was suggested and we have so allowed.

For landlord applicant: Sir Crispin Agnew, QC, Messrs Murchison Law, Solicitors, Inverness

For tenant respondent: Mr L Kermack, Solicitor, Edinburgh