Decision of the Scottish Land Court

Richard Fyffe (Applicant) v John Esslemont (Respondent)

Case reference SLC 67/15
before
Iain F Maclean, Deputy Chairman
9 December 2015

The Application

[1] The Landlord Applicant here applies for an Order finding and declaring that the Tenant Respondent “no longer holds the Farm of Muirton of Corsindae (“the Farm”) under a lease governed by the Agricultural Holdings (Scotland) Acts 1991 and 2003.” He pleads that in the circumstances condescended upon, the Farm having ceased to be an agricultural holding subject to those statutes, decree of declarator should be granted as craved. The circumstances condescended upon are that over a number of years, despite the Applicant’s objections, the Respondent has been using the Farm buildings and the yards around those buildings for non-agricultural purposes principally through the vehicle of Monarch Conservatories Scotland Ltd. (“Monarch”), a sizeable construction business, and that the on-going conduct of the non-agricultural business of Monarch is “the principal activity now carried on at the Farm.” The Applicant further avers in Article 9 of the Statement of Facts in his Application that so far as known to him, the Respondent “carries out no agricultural activity at the Farm”, and in Article 10 that the Respondent has “abandoned agricultural use of the Farm and instead devotes his time to the business of Monarch”, although in a later adjustment to Article 9 he appears to row back somewhat from the position that the Respondent carries out no agricultural activity on and has abandoned agricultural use of the Farm, instead offering to prove merely that the use of the Farm as the location and base of operations for Monarch is the “predominant use to which the Farm is put by the Respondent.”

Inversion of possession

[2] Unless otherwise permitted by the lease or by the relevant statutory diversification provisions, a tenant is at common law not permitted to invert possession of the land let by using it for a purpose other than agricultural. If the tenant inverts possession of the land let, the landlord is entitled to terminate the lease without proof of any prejudice caused to him by the change of use. This rule does not apply in the case of exercise of the statutory right of a tenant under a traditional tenancy or a limited duration tenancy to diversify use of the land let, provided such diversified use proceeds in accordance with the statutory provisions: Somerled M. Notley, Scottish Agricultural Law Handbook (2009) at page 45. It may be a matter of fact and degree in each case whether inversion has taken place: Cayzer v. Hamilton (No. 2) 1996 SLT (Land Ct.) 21. The Applicant in Article 10 does invoke the concept of inversion of possession, but we would observe in passing that his position, as presently formulated in his pleadings, is not that the Respondent having inverted possession, the Applicant is entitled to terminate (or has terminated) the Lease, but rather that in consequence of such inversion of possession, the Farm is no longer an agricultural holding. The Applicant has neither a crave for declarator that the lease has actually been terminated nor any operative craves to have the Respondent remedy any alleged breach of the terms and conditions of his tenancy or to secure the removal of the Respondent from the Farm, from all of which we take it that the Applicant’s position is that, were he to obtain decree in the terms craved, the lease in favour of John Esslemont would endure, but shorn of statutory protection. If, however, this be a misinterpretation of the Applicant’s pleadings, the Applicant’s agents should so advise the Court.

The Answers

[3] The Respondent, in his Answers, frankly admits that since 1996 he has been using the Farm buildings and yards around the buildings for non-agricultural purposes, being the receipt, storage and distribution of building materials and fitments for the construction of conservatories, home extensions and improvements, loft conversions and other building projects off the Farm, through the vehicle of Monarch, in the face of the Applicant’s past objections. He acknowledges that these non-agricultural activities have expanded over a number of years, and that the non-agricultural business “is now the predominant economic activity” on the Farm, and that he derives the bulk of his income from Monarch, but he maintains that he has continued, and continues, to carry out agricultural activity on the holding, as averred in his Answer 9, and that the Applicant has continued to demand, and to accept, rent from him. It is contended for the Respondent that esto he has inverted possession, “the agreed purpose of the Lease continues to be that the land is used for agriculture for the purposes of a trade or business and therefor it is a lease of agricultural land which constitutes an agricultural holding for the purposes of the Agricultural Holdings (Scotland) Act 1991”, and that in any event, the Applicant is personally barred by mora, taciturnity and acquiescence from insisting in the present Application.

The Specification of Documents

[4] It is against that background that the Applicant’s agents by letter dated 19 November 2015 moved for the recovery of documents itemised in an enclosed Specification of Documents in the following terms:

“1. All documents (as that term is defined in section 9 of the Civil Evidence (Scotland) Act 1988, but excepting any documents prepared in contemplation of the present litigation) held by or on behalf of the respondent and containing entries showing or tending to show:

(a) that, as specifically condescended upon by the respondent in Answer 2, the respondent “has spent money on the Farm to bring it up to a very good standard and in carrying out improvements” (together with the dates, amounts and objects of that expenditure);

(b) the nature, extent and duration of the agricultural activity carried out by the respondent on the Farm in the five years prior to 12 October 2015, including, without prejudice to the foregoing:

(i) that since 2002 the respondent has used a contractor to grow hay;

(ii) that between 2004 and 2010 the respondent grew barley on the Farm;

(iii) the dates upon which and extent to which the respondent limed the fields at the Farm;

(iv) that the respondent spent about £5,000 on field drainage (together with the dates of that work);

(v) that the respondent has carried out work to the bank of the burn to stop flooding (together with the dates and cost of that work);

(vi) that the respondent made a silage pit (together with the dates and cost of that work);

(vii) that the respondent put up a Dutch Barn (together with the dates and cost of that work);

(viii) that the respondent presently uses an old steading on the hill to store hay and collect sheep;

(ix) that the respondent has contract machinery to carry out work at the farm (together with the dates of such work and the cost of hire of the machinery); and

(x) that, since 2015, the respondent has kept his own sheep on the farm (together with the number of such animals being kept);

(c) the identities of all employees and sub-contractors of Monarch Conservatories Scotland Limited (“Monarch”) over the past five years;

(d) whether the skilled tradesmen employed by Monarch work from their own homes and rarely visit the Farm (as averred by the respondent in Answer 3);

(e) the date, nature and content of all agricultural subsidy applications (including IACS forms) and awards made by and to the respondent in respect of the farm in the period from 1998 to date;

(f) that, since 2012, the respondent has reduced the amount of traffic connected with Monarch which uses the road (as averred by the respondent in Answer 7), together with the manner in which he has reduced this traffic and the level to which the traffic has been reduced; and

(g) the extent of the use made of the Farm for the business of Monarch Conservatories Scotland Limited in the three years prior to 12 October 2015 in order that excerpts may be taken therefrom by a commissioner of all such entries.

2. Failing principals, drafts, copies or duplicates of the above or any of them (in paper, electronic or other form).”

The parties’ submissions on the Specification of Documents

[5] The Respondent’s agents have opposed the Applicant’s motion for recovery of documents in terms of such Specification on a number of grounds. The Respondent argues generally that for the Court to order production at this stage would be premature, the parties being still at the stage of adjusting their respective pleadings, and it in any case being the intention of the Respondent “in due course” to lodge productions in anticipation of proof in connection with the subject matter of a number of the Calls. The Respondent makes specific criticisms of the excessive temporal scope of Calls 1 (a) and 1 (e) and disputes the relevance to the issues in dispute of other Calls (e.g. Call 1 (c) which seeks to recover documents containing entries showing the identities of all employees and sub-contractors of Monarch over the past 5 years). It is contended that the fact that the Applicant also seeks a further period to adjust “indicates that the purpose of the specification is to trawl for material to bolster the Applicant’s case.” The Applicant, in response to the Respondent’s argument that the Specification is premature, argues that “the days of waiting the finalisation of parties’ pleadings before seeking a recovery of documents is outdated”, with the Courts increasingly favouring early production of relevant documents, and that he is entitled to seek recovery of documents by way of specification and not simply rely upon the Respondent’s agents’ assertion that relevant documents are to be, or have been, produced. The Applicant emphasises that his calls have been framed by reference to the Respondent’s own averments, and that he is entitled to recover the documents sought “to test the Respondent’s position, as averred by him.”

Discussion

[6] Procedure before the Land Court differs from that before the Court of Session and Sheriff Court in that the distinction between adjustment and amendment, with the point of transition between the two marked by the closing of a record, does not feature in Land Court procedure. In the ordinary Courts, at common law, a commission and diligence for the recovery of documents was not normally granted before the record was closed, with the test for recovery before the record had closed being that the documents sought were necessary for the purpose of enabling the party seeking recovery to make more pointed or specific that which was already averred or to enable him to make adequate and specific replies to his opponent’s averments: Moore v. Greater Glasgow Health Board 1978 SC 123 per Lord Cameron at page 131. A fishing diligence, being one for which there is no basis in the averments, or which involves too wide a search among all the papers of the haver (see Civil Service Building Society v. MacDougall 1988 SC 58 per the Lord Justice Clerk Ross at page 62) would not be allowed. In the Land Court, with no record to close, the distinction between recovery of documents for the purpose of rendering the pleadings entire and for the purpose of preparing for proof is less clear-cut and in practice would be more difficult to apply, and indeed the terms of the relevant Rule 21 (Order for delivery of material relevant to a hearing) of the Rules of the Scottish Land Court 2014 (SSI 2014 No. 229) acknowledge no such distinction.

[7] Although we reject what would seem to be the implication of the Respondent’s submission that the timing of the production of any relevant documents in his hands is a matter entirely for him, we equally are not persuaded that the Applicant’s submission in support of his favoured approach to the timing of production of documents should be given effect to in the particular circumstances of this case. We are here at a relatively early stage in these proceedings, with the Respondent having adjusted his Answers once and the Applicant’s agents, who have adjusted once, having indicated to the Court a wish to adjust the Application further and no hearing, whether by way of debate or of proof, is yet in view. The Applicant seeks to justify recovery of documents containing entries pertaining to the matters identified in his Calls not by reference to the contents of those of his own averments which he wishes to render more specific, but instead by reference to, and in order to test, as he puts it, the contents of the Respondent’s averments.

[8] In a number of his Calls, as we read them, the Applicant is in effect asking the Respondent to provide further specification of matters already the subject of general averment by the Respondent in his Answers, and in others to produce documents as evidence of (i.e. to prove) factual assertions already made by the Respondent. We note that the parties have already between them lodged in process over 130 documentary and photographic productions, and that a significant number of the nearly 120 productions lodged on behalf of the Respondent ex facie would fall under one or other of the Applicant’s Calls. We do not, in these circumstances, consider that it would be justified, appropriate or helpful to order recovery of documents in the terms sought by the Applicant at this stage, and so we have refused the Applicant’s motion, but that only in hoc statu; the Respondent should consider himself to have been put on notice by the Applicant as to those matters upon which the Applicant considers he requires to provide greater specification in his pleadings, and in relation to which, failing voluntary production by him of documents falling within the Applicant’s Calls, he may expect to have his position tested in advance of any future hearing by way of proof that may be fixed in these proceedings. In light of this disposal, we have allowed both parties a period of approximately six weeks to adjust. We reserve judgment meantime on all questions as to the relevance of the particular Calls in the Applicant’s Specification of Documents.