THE COURT

(Lord McGhie, Mr D J Houston)

WILLIAM ALEXANDER FRASER v THE TRUSTEES OF THE CAWDOR SCOTTISH DISCRETIONARY TRUST

(Application RN SLC 75/09 – Order of 22 March 2010)

AGRICULTURAL HOLDINGS – ASSIGNATION OF TENANCY – LANDLORD DECLINING TO CONSENT TO ASSIGNATION – ACTINGS BY LANDLORD TENDING TO INDICATE ACCEPTANCE OF NEW TENANT – WHETHER SUFFICIENT TO DEMONSTRATE AGREEMENT – PERSONAL BAR – RELIANCE ON REPRESENTATIONS MADE BY THE ESTATE FACTORS – WHETHER RELIANCE PROVED – AUTHORITY OF FACTOR – PARTNERSHIP OPERATING FARM BUSINESS – TWO FORMER HOLDINGS TREATED AS ONE FROM OUTSET OF LEASE – SINGLE RENT – AGRICULTURAL HOLDINGS (SCOTLAND) ACT 1991 – AGRICULTURAL HOLDINGS (SCOTLAND) ACT 2003

The application was raised after the death of the applicant’s father and was based on averments that the applicant had been tenant of a holding since 1993 when his father retired. The landlords disputed this. The applicant did not dispute that the landlords had refused to consent to an assignation at the time when the father retired but it was argued that the words and actings of their factors thereafter showed that they had subsequently accepted him. They submitted that, in any event, the landlords were barred from disputing this. In course of the stage of adjustment of the pleadings, the father’s executor dative purported to transfer the father’s interest in the tenancy to the applicant. The landlords accepted that the transfer by the executor dative was a valid transfer. They contended that as they had accepted the applicant as tenant, the application was unnecessary. But they were unable to give any assurance to the applicant that they would at no time seek to rely on a distinction between his having become tenant before or after his father’s death. The landlords also contended that although there had only been one rent since the outset of the lease and both parties had treated the holding as a single unit for all purposes, there were in law two separate tenancies deriving from two separate holdings as they existed before the lease. It was said that it was essential to litigate to establish this point although it was stressed on their behalf that there was no practical reason for so doing.

HELD that in the whole circumstances the tenant had not established that there had ever been consent to assignation. The applicant had never acted in reliance on any representation that consent had been given and the landlords were not personally barred from disputing this. Further it was clear on the evidence that since the outset of the lease and at all times thereafter, the parties had treated both the original units as being the subjects of lease. Although the dispute on this was said to be a point of principle, the Court was unable to identify the principle involved. There was no basis for a finding that there had been two separate leases. The Court made certain OBSERVATIONS about the issues of personal bar and authority of agents.

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

[1] In this application Mr William A. Fraser seeks a declarator that he is “the tenant … of all and whole the farm and lands of Balculchaich Farm and Mid Urchany Farm, … Cawdor, Nairn” (Hereinafter referred to as “the subjects”). By the time of the hearing it was apparent that the landlords had accepted that he was tenant. The real dispute between the parties related to when his tenancy started. The application had been raised after the death of Mr David Fraser, the applicant’s father. It was based on averments that the applicant had been tenant since 1993 when his father retired. The landlords disputed this. In course of adjustment of the pleadings, Mrs Alma Fraser, as widow and executor dative purported to transfer David Fraser’s interest in the tenancy to the applicant. This was said to have been done without prejudice to the applicant’s position that the tenancy had already been transferred. The landlords accepted that the transfer by the executor dative was a valid transfer.

[2] In their pleadings, the landlords contended that the application was unnecessary. They said that, as they had accepted the applicant as tenant, it was unclear what the Court had to decide. In response, the applicant pointed to a perceived risk that the landlords might raise, at some future date, a question as to the treatment of money spent by him on improving the farmhouse and erecting a shed if he was not accepted as having been the tenant when such work was done. He also raised the fear that the respondents could seek repossession under the “succession provisions”, namely, section 25(3) and Schedule 2 of the Agricultural Holdings (Scotland) Act 1991.

[3] At the outset of the hearing we attempted to clarify the landlords’ position. We understood Mr Kermack to say that the landlords accepted that expenditure made by the tenant’s family, or by a family partnership when David Fraser was properly to be regarded as tenant, was accepted as expenditure incurred by the tenant. There was, accordingly, no reason for the applicant’s fears in that respect. However, Mr Kermack said that he had no instructions to give any assurance as to the landlords’ position in relation to the risk of a claim for repossession under the succession provisions. It appeared to us that had such assurance been forthcoming, there would indeed have been no need for waste of time and expense on litigation. However, if the landlords wished to reserve their right to rely on the succession provisions, they were clearly entitled to do so. This right depended on the proposition that the applicant’s status depended entirely on his nomination as successor on intestacy. In short, despite the limited terms of the formal crave, we were satisfied that the Court was being asked to determine the question of whether the applicant had been accepted by the landlords as tenant during his father’s lifetime or, in any event, whether the landlords were personally barred from disputing this point, and that there was at least a theoretical justification for time and expense being spent on the issue.

[4] The landlords also contended that there were two separate tenancies - Balculchaich and Mid Urchany. It was said on their behalf that it was essential to litigate to establish this point although it was stressed that there was no practical reason for so doing.

[5] At the hearing the tenant was represented by Robert Sutherland, Advocate, instructed by Murchison Law, Solicitors. He led evidence from Mrs Alma Fraser, the widow of David Fraser; from the applicant, himself; from Mr Alexander Hugh Garrett, a former factor of the landlords; and from Mrs Elizabeth Fraser, wife of the applicant. Mr Lewis Kermack, Solicitor, appeared on behalf of the landlords. He led no witnesses. Parties were agreed that the written material could be taken at face value as being what it bore to be.

Authorities

Ben Cleuch Estates Ltd v Scottish Enterprise 2008 S.C. 252
Blackmore v Butler [1954] 2 Q.B. 171
Elphinstone v The Monkland Iron and Coal Company (1886) L.R. 11 A.C. 332
Gray v University of Edinburgh 1962 SC 157
Gatty v Maclaine 1921 S.C. (H.L.) 1
Knapdale (Nominees) Ltd v Donald 2001 SLT 617
Morrison-Low v Paterson 1985 S.C. (H.L.) 49

Statutory material

Agricultural Holdings (Scotland) Act 1991
Agricultural Holdings (Scotland) Act 2003

Textbooks

Lord Gill, The Law of Agricultural Holdings in Scotland, 3rd edition
G Campbell H Paton and Joseph E S Cameron The Law of Landlord and Tenant in Scotland
Stair Memorial Encyclopedia, Volume 16

The factual background

[6] The following facts were admitted or established to our satisfaction on the balance of probabilities. We comment on some minor aspects of the findings as part of the narrative but we reserve our substantive discussion of the issues in the case for the section headed “Discussion”, below, and make some further findings at that point. We refer for convenience to the applicant as “W Fraser” and to his late father as “D Fraser” but it should be noted that when referring to the terms of correspondence we quote the name used.

[7] The landlords of the subjects are the trustees of the Cawdor Scottish Discretionary Trust. The Trust was set up in 1964 and the hearing proceeded implicitly on the basis that the trustees had been landlords of the subjects since that time. For most purposes the landlords appear to have been referred to as “Cawdor Estates” or “Cawdor Estate”. For example, in formal letters dealing with the amalgamation of Balculchaich and Mid Urchany in 1972, the landlords were said to be “Cawdor Estate”. We note for completeness that we understood from the evidence of Mr Garrett that different parts of the estate at Cawdor were held by different trusts and we are not satisfied that the term “Cawdor Estates” was always used simply to mean the present landlords. We do not think that anything turns on this.

[8] For some years before 1972, D Fraser had been tenant of a holding at Mid Urchany. This marched on its west with Balculchaich. It included part of a holding formerly known as Old Blackmill. In about 1972 the tenant of the holding at Balculchaich wished to give up his tenancy. Advantage was taken of a government scheme providing payment for retiring tenants where there was an amalgamation of units. After discussions with the then Lord Cawdor, D Fraser agreed to give up the part of his holding which had formerly been Old Blackmill and agreed that the farmhouse and some other parts of the Mid Urchany holding would be taken back by the landlords. In exchange, he would take over the land at Balculchaich and would move, with his family, to live in the farmhouse there. It was agreed between D Fraser and Lord Cawdor that the amalgamated subjects would be held on a single lease. It was agreed that a new lease for the combined holding would be prepared and that the rent for the combined holding would be £750. D Fraser took possession of the whole amalgamated subjects and paid an initial rent of £750.

[9] Over the years several applications for rent review were made formally by the landlords. All treated the subjects as one unit. All rent demands treated the subjects as one unit. From 1972 onwards both the landlords and the tenants regarded the subjects as held under a single lease. No written lease was ever executed. From that time until the pleadings in the present application there was nothing to suggest that the landlords had ever departed from their initial intention that the combined holding would be held under a single lease.

[10] W Fraser has worked full-time on the subjects since the time he left school. At the time of his marriage in 1983 it was agreed that he and his wife would live in the farmhouse at Balculchaich and that his parents would go to live in a cottage which they had built at Mid Urchany. This was situated on what had been the south east corner of the farm. They bought the plot from the landlords at that time.

[11] The farm was run by D Fraser, Mrs Alma Fraser and W Fraser in partnership under the name D Fraser & Son. The detail of the partnership and the extent of Mrs Alma Fraser’s involvement were not clearly established in evidence. However, we accept that D Fraser and his wife retired from all involvement in the management of the farm in 1993. A draft Minute of Agreement among Mr and Mrs D Fraser and Mr and Mrs W Fraser bore to narrate that all four had farmed the holding in partnership and that Mr and Mrs D Fraser were to retire. But, the draft agreement also provided that Mrs E Fraser would be assumed as a partner from 1 April 1993. It appeared that, for tax purposes, the partnership had been treated as continuing. However, for the purposes of the present case it is sufficient to say that we are satisfied that there was a new regime in place from about 1 April 1993. The farm business was then run by the applicant and his wife in partnership. D Fraser and his wife played no part in that partnership. There was no evidence that the landlords or any of their employees were aware of the detailed make-up of the partnership or partnerships although they must have been aware of the change of name.

[12] It was not clear how much practical work D Fraser did on the farm after April 1993. Mrs A Fraser said that he had continued to work full-time until 1996. Both the applicant and his wife described matters in more casual terms. Plainly D Fraser continued to be about the farm for a year or two. He helped with stock handling. He occasionally drove the tractor. We are satisfied that the precise detail of his working activities over this period is irrelevant to the matter before us. We are satisfied that he and his wife had no part in the business side of things after his retiral. It was not suggested that the landlords had had any personal contact with him therefter. It was not disputed that after 1993 correspondence addressed to D Fraser at Balculchaich Farm was received and dealt with by the applicant, or his wife, without them seeing any need for reference to his father.

[13] At the time of the retiral of D Fraser, the family recognised that some formal steps would be required if the tenancy was to be transferred from D Fraser to W Fraser. They knew that this could not be done without the consent of the landlords. D Fraser had discussed his plans with Lord Cawdor in about 1992. Lord Cawdor voiced no objection and, indeed, may have indicated that the landlords would agree to a transfer of tenancy to W Fraser. But, we are satisfied that the outcome of the discussion was that D Fraser knew that a formal agreement would be required and that anything said on that matter by Lord Cawdor was subject to agreement of the landlords. The discussion had included proposals for the construction of a new farmhouse. Lord Cawdor had eventually advised the family that the landlords would not agree to this proposal. However, they had agreed that work could be done to improve and upgrade the existing farmhouse.

[14] Mr and Mrs D Fraser instructed Mr Hardie of Messrs R & R Urquhart, Solicitors, to advise on various aspects of their retirement plans. At some point Mr Hardie became involved in giving advice to W Fraser. The detail of this was not entirely clear from the evidence but, it is clear that there was eventually an exchange of correspondence between Mr Hardie and the landlords’ solicitors requesting consent to a transfer. Put shortly, the landlords’ response was that they would agree to a transfer of the tenancy from D Fraser to W Fraser if the latter would enter a modern style lease and a post-lease agreement. Mr Hardie advised the applicant that this would be much more onerous than the existing arrangement. In particular, he advised that the proposed post-lease agreement would provide for the tenant to accept the whole fixed equipment as being in a thorough state of repair and oblige the tenant to maintain it, that the landlord would not be obliged to provide any buildings or other fixed equipment, and that any improvements under parts 1 or 2 of the Fifth Schedule to the 1991 Act would be subject to compensation of £1 only.

[15] The applicant met Mr Hardie to discuss matters. He professed to have little recollection of the nature of this discussion. But, we are satisfied that reference must have been made to the options open to him and that, following the discussion, the applicant would have had a reasonable understanding of his options. In a letter to Mr and Mrs D Fraser of 14 January 1993, Mr Hardie had expressed his opinion that there would be little negotiating scope and “it would simply be a matter of accepting the estate view in consideration of the transfer of the tenancy”. It can reasonably be assumed that he gave similar advice to the applicant or that the applicant was in any event aware of that advice. If, as Mr Hardie expected, the landlords would not agree to drop the onerous requirement proposed, the applicant could simply continue to run the farm with his father as nominal tenant. As it had been agreed his father would retire from the business he would be free to manage it without interference. He may well have been advised of the risk of potential difficulties when his father died, but on the evidence available to us there was nothing to suggest that Mr Hardie would have been likely to advise that the risk would outweigh the plain disadvantage of accepting the landlords’ conditions for transfer. In short, we are satisfied that in 1993 the applicant was prepared to continue to run the farm with his father as nominal tenant if the landlords did not agree to drop their requirement of a new agreement with its onerous terms.

[16] Mr Hardie wrote to the applicant on 18 February 1993 to say that he had written to the landlords’ solicitors seeking to have a transfer by informal exchange of letters rather than accept the more onerous terms proposed. The last relevant letter produced to us was one of 30 April 1993 advising the applicant that the estate’s solicitors were awaiting instructions from Lord Cawdor.

[17] The estate’s solicitors had written to “Cawdor Estates” on 26 April advising of Mr Hardie’s view that the modern agreements would substantially alter the position of the tenant. They advised of the request that change be effected by simple letter accepting a change to the applicant. Lord Cawdor wrote to the estate’s solicitors on 4 May to say that the estate would agree the transfer if the applicant was content with the modern form of post lease agreement. The plain effect of this was that the landlords were insisting on the new onerous conditions relating to equipment.

[18] That Lord Cawdor died in the summer of 1993. Nothing was ever said by or on behalf of the landlords then or at any subsequent stage to the effect that they were prepared to accept the applicant as a new tenant on an informal lease and without the conditions they had proposed.

[19] The applicant agreed in cross-examination that it was plain that, at the time, the landlords had proposed conditions for transfer of the tenancy which he was not willing to accept. He had never given any indication to the estate that he would accept their terms. They had never offered to drop the requirement of a new lease and post-lease agreement.

[20] We are satisfied that the applicant was well aware in 1993 that although he had taken over the whole running of the farm from his father, his father remained as tenant at that time. He must have been aware that unless the landlords decided to drop their requirement of a new lease with onerous conditions, that arrangement would continue until his father died.

[21] The estate sent out a questionnaire in 1994 asking for intimation of the state of equipment on the farm. Mrs E Fraser completed the answers. She said she obtained the information from her husband and checked it with him. She completed the form to show “D Fraser” as the tenant. As discussed further below, we are satisfied that this reflected her belief at that time. She was aware that there had been no change of tenant at that stage.

[22] In the period prior to 1993 rent was paid by partnership cheques drawn in the name of “D Fraser & Son”. After D Fraser’s retiral the partnership cheques were in the name of “W A & E A Fraser”. From 1972 on, all rent demands were addressed to D Fraser until his death after which they were addressed to his representatives. All formal documentation from the landlords was in the name of D Fraser as tenant.

[23] Notices requiring rent review were sent out in 1996 and 1998. They were addressed to D Fraser. The applicant had no grounds for thinking that was, in any sense, done in error. There had been nothing to suggest that the landlords had changed their minds about the need for a new agreement. The applicant, accordingly, had no reason, at least before 1999, to ask the estate to correct its records. There was no suggestion that he, at any time, attempted to do so. He never wrote to point out to the landlords that their continuing reference to his father in relation to the tenancy was incorrect or misleading. There was no evidence that he ever raised that issue with factors or other employees of the landlords although he had regular meetings with such people.

[24] It may be observed, in passing, that Mr Kermack suggested that the applicant was represented for the purposes of the rent review in 1999 by an agent with a reputation for meticulous attention to detail. Review procedure for various farms on the estate went as far as appointment of an arbiter by Scottish Ministers. All the formal records relating to that reference showed D Fraser as tenant. Mr Kermack suggested that the absence of any challenge to the validity of a notice showed that W Fraser had indeed accepted D Fraser as tenant at that time. We heard some rather confused discussion as to the precise role of the agent. We are satisfied that his primary involvement related to rebuilding works. We are not satisfied that his involvement in this arbitration, whatever its extent, adds anything of weight in the present context. We are satisfied that the applicant made no attempt to suggest to anyone that the reference to D Fraser as tenant in these formal proceedings was an error. It can also be said that the circumstance of work being paid for by the firm under direction and control of the applicant did not appear to have led the experienced agent to conclude that the reference to D Fraser as tenant was inaccurate.

[25] In addition to correspondence about rent, most other correspondence from the estate was addressed to D Fraser. All formal letters from the estate dealing with matters which could be said to be in any way related to the lease were addressed to D Fraser. A number of letters were produced addressed to W Fraser. Mr Kermack attempted to show that letters addressed to W Fraser contrasted with those addressed to D Fraser in that the former were restricted to letters dealing with practical running of the farm. Mr Garrett acknowledged that this was how it might seem but he spontaneously stressed that there was no question of this being deliberate as far as he was concerned. As factor, he had given no thought to such a distinction in the correspondence.

[26] A feature of several letters, nominally addressed to D Fraser, was that, where the content described meetings or conversations, the authors plainly had W Fraser in mind as the person they were writing to. Mr Garrett said that when he wrote such a letter as factor he was intending to communicate with “Willie” even if his letter was addressed to D Fraser. A letter of 8 August 1995 from Gordon Robertson, as factor, was the first available to us which showed signs of this feature, common in subsequent correspondence from factors. References within the letter to “our meeting” or to “you” were clearly references to W Fraser while the letter itself was addressed to “Mr D Fraser”. That letter illustrated the reality at the time: the tenant was known to be D Fraser but, for all practical purposes, the factor regarded W Fraser as if he was the tenant’s second self or alter ego. We are satisfied that the various factors would all be aware of the two different Frasers involved.

[27] It is a common arrangement in agricultural holdings for a person to remain as tenant while other members of his family, or a partnership of family members, carry on the day to day management of the holding. Partnership is a convenient way of carrying on the business. It may have tax advantages. Prior to the 2003 Act a tenant had no right to assign. Landlords would often refuse to agree to assignation because they wished to preserve the possibility of obtaining possession under “the succession provisions” of the 1991 Act and its predecessors, on death of the existing tenant. The use of a family partnership allowed an elderly tenant to give up practical involvement in the business while retaining the tenancy for use by the family. There is no doubt that this arrangement can give rise to some confusion. The landlords might well accept a member of the family or a partner as having authority to act on behalf of the tenant. They would expect to deal with those involved in the practical running of the farm as if they were tenant. It might require a close examination of the circumstances to understand the true position.

[28] All farm and routine domestic expenditure was paid from the partnership account. The annual accounts showed matters properly by distinguishing partnership expenditure and domestic expenditure, showing the latter as partners’ private drawings. Mrs E Fraser worked as a district nurse. She had a bank account but this was kept for her own personal purposes. W Fraser kept a private bank account which he rarely used.

[29] In about 1996, the Hydro Electric Board were seeking to upgrade the electricity supply to the farmhouse. The work was to involve the removal of an overhead power supply and its replacement with an underground supply. The landlords were to pay for this. When the applicant proposed to install a new central heating system in the house the expected increase in use of electricity was a factor in discussion about the cost of the replacement work. The landlords were aware of the work being carried out by the applicant. It was convenient for the work to be done by him as it saved the respondents expense. The applicant installed a new central heating system in the farmhouse in or about 1996. He subsequently installed a new kitchen in or about 1998. The bathroom was upgraded to some extent in about 2000. The landlords were aware of all this work before it was carried out. It was all paid for by the partnership.

[30] In 1999 the main steading/cattle court building was destroyed by storm. Other buildings were also damaged at that time. There was a claim on the landlords’ insurers. There were many discussions about the proposed replacement building. The applicant proposed to build a large building with grant assistance and a contribution from the landlords. A good deal of work was involved in the summer of 1999 to obtain proper plans and permissions.

[31] A meeting was arranged in about May 1999 for the applicant to discuss the various proposals on the farm with Gordon Robertson, Lord Cawdor, and Sandy Corbett, the landlords’ Clerk of Works. Mr Robertson was the factor. He arrived first. While they were waiting for the other participants to arrive there was some general discussion. Mr Robertson was asked some question about the applicant’s status as tenant. We accept that Mr Robertson indicated to the applicant and his wife that he regarded the applicant as the tenant but we discuss the detail of this further below.

[32] On that occasion there was agreement on various matters. A new rent for the combined holding of £5,000 was agreed. It was agreed that the sum of £15,000 paid to Cawdor Estates by their insurers would be paid over to the applicant to be put towards the erection of a new building at a cost of £30,000. The landlords plainly understood that the applicant would be contributing the balance of £15,000. In addition, the landlords agreed to re-wire the farmhouse and to repair a skylight on the stairs in the farmhouse. The evidence was not entirely clear as to different stages in discussions. Lord Cawdor and the clerk of works were concerned with building proposals and may not have been involved in discussion of rent and repairs.

[33] A letter dated 3 June 1999 setting out the terms of the proposed rent and offer of payment was sent by Mr Robertson to “Mr D Fraser”. The letter included an acceptance statement to be signed by “Mr D Fraser”. The typed offer and acceptance were modified by additions written by Gordon Robertson and by the applicant’s wife, on behalf of the applicant. The statement as modified was signed by the applicant on or about 4 June 1999. The applicant did not delete the reference to “D Fraser”. He simply signed alongside the typed name. The modifications were counter-initialled by Gordon Robertson.

[34] As noted above, rent review in 1999 went to the stage of appointment of an arbiter. On 10 June 1999 Mr Robertson wrote to the arbiter to confirm the farms where agreement on rent had been reached. His list included Balculchaich and showed the tenant as “Mr D Fraser”.

[35] Mr Garrett took over as factor on 15 July 1999. He wrote to “Mr D Fraser” on 30 August 1999 to give formal confirmation of the estate’s grant of permission for the erection of a new building. This included various conditions including agreement that the building would be treated as a tenant’s improvement and would be written down on a straight line basis to £1 over fifteen years. The letter opened with the words “Thank you for seeing me”. This was a reference to a meeting with the applicant. The letter requested the recipient to sign and return a copy to confirm agreement. The applicant did this signing “W A Fraser” and dating it “4. 11. 99”.

[36] The applicant later met Lord Cawdor to agree the location of the new building. Eventually, in or about October 1999, it became clear that grant assistance would not be available for the building initially proposed. The applicant resolved to settle for a smaller building.

[37] On 4 November 1999 Mr Garrett wrote to the applicant confirming that the applicant could proceed with the construction of the new general purpose building. This letter was possibly triggered by receipt of the signed copy of the letter of 30 August. On both occasions Mr Garrett wrote intending to communicate with the applicant and treating him as the tenant. Although the letter was addressed to “D Fraser” this would have been added by the typist. The letter opened with the words: “Thank you for coming to see me”. This, again, was a reference to the applicant. The letter explained the financial contributions to be made to the work and that “you” will be responsible for payment to the contractor including VAT. This “you” was directed at the applicant but it was understood by Mr Garrett that payment would be made by the partnership.

[38] On 12 November 1999 Cawdor Estates paid £5,000 of the insurance monies by way of cheque made out to the applicant. On 15 December 1999 they paid the balance of £10,000 by way of a cheque again made out to him. It had been agreed that all expenditure on the new work would be undertaken in name of the W A and E A Fraser partnership because of the VAT implications. Many of the invoices for goods or services supplied in connection with the new building were addressed to W Fraser. All payments were made by the partnership.

[39] Mr Garrett was factor between 15 July 1999 and 10 January 2001. Throughout that time he regarded the applicant as the tenant of the holding. But he said that the proper identity of the tenant would always be clear from the estate files. When he dictated letters to the applicant he left the question of the formal heading of the letters to be completed by the typists. They would simply use the name on the file.

[40] Mr Garrett was followed as factor by John Higson. He wrote to the applicant on 20 February 2001 referring to an outstanding account for “your” rent. This arose because payment had been withheld pending completion of rewiring works and renewal of a skylight by the landlords. As we have said, routine invoices for rent were always addressed to D Fraser. Mr Higson wrote to “D Fraser” on 13 May 2002 with a formal demand for reference to arbitration of the question of rent from May 2003.

[41] By about November 2003 Mr Angus MacNicol had become “Property and Development Manager” for the landlords. By letter of 8 December 2003 Mr MacNicol wrote to the applicant about a payment of rent which had been paid, as usual, by way of a cheque drawn on the account of W A & E A Fraser. The letter referred to this cheque and said “as you are tenant yourself, please could you sign below, where indicated, and return this letter to the Estate Office to confirm our understanding that the cheque received is presented by this account as your agent”. The typed acknowledgement prepared for the applicant to sign was in the following terms: “I, Mr W Fraser, as tenant of the holding of Balculchaich, confirm the cheque recently passed to Cawdor Estate Office from the above account is present by this account on my behalf as my agent”. Confirmation was not signed until 5 April 2004. There was no real explanation for the delay. Nothing appears to turn on it.

[42] D Fraser died on 29 July 2008. He had been seriously affected by Alzheimer’s disease for several years and latterly was completely incapable of taking any part in business affairs. On his death, the applicant consulted solicitors. He said that he did so just in case there was “an element of doubt about the tenancy”. Asked why there might be a doubt, he said : “Well, the rent notices, and that, had always been sent to D Fraser and he was there no longer so what do we do? So we went to the solicitor to find out the best thing to do”. The solicitors wrote to Mr MacNicol by letter of 21 August 2008. The letter asserted that the respondents had already accepted the applicant to be tenant of the holding. They asked for confirmation of this. No response was received to the letter. A further letter was written on 21 October 2008 seeking a response. The respondents did not reply. However, they issued a rent invoice dated 18 November 2008 to the “executors of Mr D Fraser”. This was paid promptly but we heard no evidence as to manner of payment and nothing was said to turn on the point.

[43] On or about 30 April 2009 the applicant raised the present application. The landlords resisted it. The evidence as to further discussion between the applicant and his mother and solicitors acting for the applicant and solicitor acting for the mother was confused. It is apparent that there was some sort of discussion. Mrs Alma Fraser as executor dative eventually took confirmation to the tenancy in terms of a confirmation dated 17 July 2009. The estimated value was put at £35,000. She then purported, insofar as she had right to do so, to transfer the interest in the tenancy to the applicant by transfer of 27 July 2009 in terms of section 16 of the Succession (Scotland) Act 1964. The formal transfer included a narrative that the landlords had opposed the application to find that the applicant was already the tenant. On or about 7 August 2009, W Fraser served on the landlords notices of his acquisition of the interest in the tenancy. The notices stated expressly that they were without prejudice to the continuation of this present application. The landlords made no attempt to challenge the notices and accepted the applicant as tenant.

Submissions

[44] Mr Sutherland presented submissions under three heads: the question of whether Balculchaich and Mid Urchany had been held since 1972 as a single tenancy; the assignation of the tenancy from D Fraser to W Fraser; and, finally, the submission that the landlords were, in any event, personally barred from disputing that W Fraser was the tenant before his father’s death.

[45] Counsel dealt with evidence relating to D Fraser’s occupation of the subjects as a single holding. He submitted that there could be no lease without agreement on rent: Gray v University of Edinburgh. There had never been any question of separate rent in the present case. He accepted that units might be “amalgamated” for some purposes without necessarily giving rise to one lease. But, he submitted that the evidence showed plainly that there had only ever been one lease in the present case. The provisions of section 25 and Schedule 2 of the 1991 Act, accordingly, had no relevance.

[46] He said it was clear that D Fraser had occupied the subjects as a single holding. He referred to Morrison-Low v Paterson. An inference of lease arose from the landlord allowing possession and accepting rent.

[47] In relation to the assignation, he cited Gill, 3.16 and Paton & Cameron at pages 155 and 156. This material, he submitted, adequately set out the proper legal approach. On the facts, an inference that there had been an assignation could tolerably be inferred from the conduct of the landlords. Although the original agreement was to be conditional on the tenant’s accepting new terms – which never happened – subsequent events demonstrated that the landlords did consent to having W Fraser in place of his father. Mr Sutherland analysed the terms of the correspondence and we shall look at this in the discussion below. It is sufficient to say that the main factors founded on by him as showing consent to the change were said to be the estate’s acceptance of rent from the new partnership; acceptance of improvements carried out by W Fraser; and evidence of the understanding of the various estate factors. Asked by the Court about the extent of authority of a factor in relation to creation or assignation of leases, Mr Sutherland said that this was not a point which had been raised. A factor might have authority. But, in any event, this was not essential to his argument.

[48] He contended that the whole evidence was persuasive that the applicant was being treated as tenant. He agreed that it was sufficient, from his point, to show that the applicant became tenant at some stage before the death of his father. It was not essential to be able to identify any particular actings or any precise time. Indeed, he suggested that the applicant’s references to his tenancy as starting in 1993 would be consistent with the concept of consent to change dating back to the time when the change took place. If the landlords at any point could be taken to have agreed to transfer to the applicant because his father retired in 1993, the change could be taken to date from that time.

[49] On the issue of personal bar, counsel referred to Stair 16.12; to the well known passage from Gatty v Maclaine; and to the helpful summary provided by Lord MacFadyen in Ben Cleuch Estates Ltd v Scottish Enterprise at para. 87. He founded principally on the evidence of the conversation with Mr Robertson. In reliance on it, the shed was built and rent agreed. Mr MacNicol’s letter gave reassurance that the applicant could keep on paying rent despite the rent demands being addressed to D Fraser. It was suggested that the applicant’s action in raising the Court proceedings was, itself, in the category of actings in reliance on the representation and could be prayed in aid as a foundation of the claim of personal bar.

[50] Mr Sutherland submitted that it was not necessary to apply a strict test when considering actings in reliance. If a person was reasonably entitled to accept a representation, then anything he did thereafter which showed that he “took comfort” in the representation would be sufficient. For example, each time the applicant paid rent he could take comfort in knowing that he was accepted as the tenant despite the fact that the rent notices continued to be addressed to his father.

[51] Mr Kermack helpfully produced a written submission. He contended that it was misleading to look separately at the question of implied consent to assignation and the question of personal bar. Essentially, the question was whether there was implied consent and the niceties of personal bar did not, in his submission, arise.

[52] He pointed out that it had not been disputed that David Fraser’s lease was not assignable without consent of the landlord: Gill 3.16. He presented a careful analysis of the evidence bearing on the initial attempt to get such agreement. Plainly there had been no consent in 1993. There was no evidence of any change in that position. He referred to the decision in Lord Elphinstone v The Monkland Iron and Coal Company. He submitted that it showed the error in the applicant’s approach. It was necessary to look at the whole circumstances; not just at specific instances. He accepted that there were two letters which appeared to show recognition of W Fraser as tenant but they had to be taken in the context of a tract of material showing D Fraser as tenant.

[53] Mr Kermack referred to Knapdale (Nominees) Ltd v Donald as an example of a similar type of situation. Where there was no formal agreement the facts had to be plainly indicative of parties’ final and deliberate resolution on the subject before an agreement could be implied.

[54] He went on to provide a full analysis of the various factors which the applicant had appeared to rely on. We have had regard to this material in our own analysis of the evidence in this case. We think it necessary to refer only to his position in relation to the evidence of a meeting with the factor Gordon Robertson.

[55] Mr Kermack had not challenged the applicant’s evidence on this matter in his cross-examination. In submission he observed that Mr and Mrs Fraser had given exactly the same evidence on the matter and this, he said, suggested that it was somewhat rehearsed. Although he did cross-examine Mrs Fraser he said that he had not considered it necessary to cross-examine the applicant on this point as he took the view that, because of his previous answers in cross-examination, he could be seen as a witness with no credibility. It is not necessary for us to express our own view of credibility at this point. But it must be said that the landlords’ position was not entirely clear to us. He did not suggest to Mrs Fraser that her evidence was a fabrication. But, he did point out to her that shortly after the meeting Mr Robertson had written to confirm the discussion. The letter was again addressed to D Fraser. There was no mention of any confirmation of W Fraser as tenant. The applicant at no stage took any formal steps to correct this. It was suggested that it would have been very surprising if Mr Robertson had been pressed to commit himself to accepting W Fraser as tenant one day and had simply reverted to reference to D Fraser the next.

[56] He dealt with the landlords’ failure to respond to the letters from the applicant’s solicitors following D Fraser’s death. It was submitted that there was “scope for an alternative view” in that various members of the family had a potential claim to succession to the tenancy and that it was reasonable for the landlords, where the claims of assignation appeared so weak and unfounded, to hang back in order to give the whole family a chance to sort itself out and come to a definitive view. It was said that the alternative of accepting the applicant on the basis that it was an easy course of action to take, was only inviting the possibility of trouble and being dragged into a potential family dispute. He referred to previous cases illustrating the difficulties which could arise in relation to disputed succession. It may be noted, at this point, that there was no evidence of the estate’s reasons for failure to respond to the letter and we did not consider that reference to problems faced by other landlords in other circumstances had any useful bearing on the issues before us.

[57] Mr Kermack contended that the decision in Morrison-Low v Paterson could be distinguished. The case turned on the absence of any pre-existing right in the occupiers. In the present case there was no doubt that all possession by the partnership could be attributed to the pre-existing right of D Fraser. He submitted that it was clear that a landlord was entitled to take payment of rent when tendered without having to consider too closely the source of payment.

[58] In relation to the question of whether there were one or two holdings Mr Kermack stressed that it was not a matter of any great importance. He pointed out that Schedule 2 of the 1991 Act allowed for consideration of holdings held together with leased subjects. There was, accordingly, no advantage to the landlord in that connection.

[59] He pointed out that in terms of the grant conditions relating to the amalgamation all that was required was that the land was to remain for five years “in single occupation and single ownership”. He stressed that there was no explicit requirement that the two holdings be consolidated into a single holding. The scheme, he said, could have been complied with by retaining two separate tenancies. He contended that it was not conclusive that there had been a single rent payable: Gill para. 2.02; Blackmore v Butler. He suggested that the initial letter from the landlords was an offer of consolidation into a single tenancy. He suggested that there had been no response to this. He accepted that it was a consequence of his submission that the series of rent review notices served by the landlords on the basis that this was a single holding had been erroneous and defective. However, he suggested that it was clear law that as the notices had been acted on by the tenant, the tenant was bound by them. He accepted that he was unable to point to any factor since 1972 indicating that either landlords or tenant had ever considered the holdings to be separate.

Response for applicant

[60] In response Mr Sutherland dealt briefly with the question of the single tenancy. The respondents had averred that there were two separate contracts but there was no evidence of this. It had never been suggested that there were two rents.

[61] In relation to the question of deemed consent he suggested that once consent had been deemed it had to be backdated to the beginning of the tenancy “in that role”. There was a necessary legal fiction to cover the gap. Essentially the proper approach would be the same as if there had been an express consent backdated.

[62] It was important to keep in mind that D Fraser had given a clear indication of his intention to give up the tenancy. It was clear from the terms of the change in partnership and the attempt at assignation that he was trying to sort out affairs with effect from 1 April 1993. The Court should look at the circumstances in that way. If the landlords were taken to have been deemed to consent then effectively that consent should be taken to run from April 1993. The estate must have been well aware that D Fraser was no longer living on the farm.

[63] He suggested that there might be a difference in the evidence necessary to demonstrate creation of a new right and that required for the passing on or assignation of an existing right. The latter could be done by a simple exchange of letters.

[64] Both parties asked us to reserve questions of expenses and the question of sanction of counsel.

Discussion

The single unit

[65] It is clear that the landlords and the tenant both regarded Balculchaich and Mid Urchany as a single holding from 1973 until the start of the present action. However, the landlords now dispute this. The basis of their position was never made clear to us. Mr Kermack did stress that it was an issue of no practical importance. We were unable to understand why it was thought necessary to take time to litigate over it nor to understand precisely what the landlords wished to found on as showing that there were two separate leases.

[66] In the pleadings the landlords took the point that “amalgamation” of two holdings did not necessarily mean that they were held under one lease. We see no reason to doubt this proposition, as far as it goes and it is unnecessary to deal with the effect of the particular scheme in place in 1972. For present purposes, we can also accept the landlords’ contention that where one rent is paid in respect of two identifiable parcels of land there may be circumstances where they can properly be treated as held under two separate leases. There is some authority to that effect - although it is not immediately easy to reconcile this with the concept of rent as a cardinal feature of a lease: Gray v University of Edinburgh. But, the argument that a particular feature does not necessarily have a specified consequence does not mean that it cannot properly be relied on as pointing towards that consequence. It may not be appropriate to jump to a conclusion but that does not, of itself, mean that the conclusion is wrong.

[67] When land is held in tenancy without any identifiable separate terms and conditions applying to separate portions and where one rent is paid, we are satisfied that it is proper to draw an inference of one lease. In the present case, the initial arrangements whereby the farmhouse on the existing tenancy was given up and the tenant moved into the house on the other subjects and where various other changes were made removing pieces from the initial tenancy and substituting new ground, all support an intention to create one unit. The background to this was a Government scheme for grant assistance in the amalgamation of holdings. While amalgamation need not necessarily point to an intention to combine holdings under one lease, it is reasonable to infer that as an intention in absence of evidence of a contrary intention.

[68] The intention to have a single lease seems to us clear from the terms of the estate’s letter of 21 February 1972. Although the opening paragraph did make reference to the tenancy of Balculchaich and to Mr D Fraser continuing as tenant of Mid Urchany as if these were separate matters, the second paragraph deals with the parties’ intention that there was to be one combined tenancy. It was intended to have one written lease covering all the subjects. That was never executed but there was no suggestion that the whole arrangement was conditional on execution of a written lease. The parties actings for the last thirty years, or so, have been consistent with that intention.

[69] All rent demands were sent as if there was one holding. Notices relating to rent review were also sent in terms of there being one holding. Mr Kermack accepted that, if the landlords’ present contentions were correct, all these notices had been inept. But he pointed out that the tenant had acted on them and that there was authority that it was too late to challenge them. That response did not deal with the essential point that it was clear from the way the landlords had dealt with rent review that they had always treated the unit as one holding.

[70] Mr Kermack indicated that the landlords were arguing a point of principle. The positive argument was possibly based on the terms of the first paragraph of the letter of 21 February 1972 but we did not identify the principle at stake. In any event, as noted above, we consider that the thrust of the letter is to the opposite effect. We are satisfied that it is appropriate to find that the lands have been held as one tenancy since 1972.

Consent to assignation

[71] All the evidence of communings with estate factors or property managers has to be understood against the background of events in 1993 when an unsuccessful attempt was made to obtain the landlords’ consent to a change in the tenancy on the retirement of D Fraser. The applicant had taken advice from solicitors at that time. He had been advised that the landlords’ conditions for consent were extremely onerous. We are satisfied that it is reasonable to assume that his options were explained by his solicitors. In other words, he must have been well aware that if the landlords could not be persuaded to drop the onerous conditions, he had a choice between accepting these conditions or accepting that, in practice, he would be able to run the business freely on his own behalf but would have to wait until his father’s death before he could have the tenancy transferred to his own name.

[72] Prior to the 2003 Act it was not possible for an elderly tenant to assign his tenancy to a younger member of his family without consent of the landlord. The applicant freely accepted that he knew that any assignation to him required the consent of the landlords. It may be added that we are, of course, well aware that it has, for many years, been common practice in Scotland for a family farming business to be carried out in the name of some person other than the nominal tenant. In particular for tax and other reasons, it has become common to find a farm occupied and run for all practical purposes by a family partnership while the tenancy remained in the name of one member of the family. We can make no finding as to the applicant’s awareness or otherwise of this practice although he was certainly aware that prior to 1993 the subjects had been farmed in that way.

[73] When considering the options, the applicant might well have been advised that there was a possible risk to be expected of dispute from other members of the family or from the landlords on his father’s death. That risk would have to be set against the immediate adverse consequences of accepting the proposed conditions. However, it is unnecessary for us to make any finding as to the extent of the applicant’s awareness of the long term implications of inability to obtain consent to an assignation. We are entirely satisfied that the onerous implications were well understood. After some obfuscation in the witness box, the applicant accepted that he had not been prepared to agree to them.

[74] Accordingly, he must have been very well aware in 1993 that he was following the established practice of the family running the farm while the tenancy remained in the name of his father.

[75] His evidence on these matters was unclear, if not deliberately evasive. During examination-in-chief that evidence had been to the effect that he was prepared to accept the conditions proposed by the estate. He had to accept, under cross-examination, that this was not the case. He later appeared to say that he would have been prepared to accept the onerous conditions. He ultimately took refuge in an assertion of poor memory coupled with an assertion that his solicitors had been at fault due to their poor communication. It does appear that there was a failure by the landlords to reply after the death of Lord Cawdor but there was no evidence of any attempt by the applicant to seek confirmation of the position at the time either through his solicitors or direct from the landlords. There was nothing to indicate to the applicant when he took over the running of the farm and no evidence of anything thereafter, prior to his conversation with Mr Robertson in 1999, to indicate to him that the landlords had departed from the requirement that he execute a new agreement as a condition of becoming a tenant. His assertions that he became tenant in 1993 were disproved.

[76] It is clear that the new partnership of W A and & E Fraser took over the farm business in 1993 and that they did so on the basis that they were not the tenants. The tenancy remained with D Fraser. The completed questionnaire of 1994 simply confirms the clear picture derived from the correspondence in 1993. The rent review in 1994 was in name of D Fraser.

[77] Mrs E Fraser’s evidence was that the entry in the questionnaire was simply a “terrible mistake”. She attempted to explain the mistake by saying that there must have been a covering letter showing “D Fraser” as tenant and that she would have filled in that part of the form using information from the covering letter. She supported her reference to covering material by saying that she was sure that the applicant had signed something attached to the form when it was returned. We accept that there would have been some covering documents. We cannot accept her evidence as credible in relation to the “mistake”. On the whole evidence it is clear that there was no mistake. The applicant, at least, was well aware that the essential consent to a change had not been given. Further, it may be noted that this would have been one of his wife’s earliest formal responses to the estate after the new partnership of W A and E Fraser took over the running of the farm. She was answering a questionnaire. The estate was seeking information. If she had thought that there had been a change of tenant she would have been alert to the information in any covering letter as being the real “mistake”. She would not have copied it blindly. If she had any doubt about the formal position she would have been expected to ask her husband. It is clear that he was involved in completion of the form and checking the entries. It was suggested by Mrs Fraser that this was done by simply listening to her reading out the entries to him. But, if he signed the return we think it unlikely that he did not know that D Fraser was shown on it as tenant. Whatever may have happened later, he would have thought that correct at the time.

[78] In summary, we have no doubt that the applicant was well aware of the need for the consent of the landlords before there could be a transfer of the tenancy to him. We equally have no doubt that he was well aware that such consent had never been given. If he had, indeed, been satisfied that the landlords had accepted him as tenant, his father’s death would have had no bearing on the matter. He would not have felt it necessary to consult solicitors. His evidence was expressed in terms of the paperwork showing his father as tenant and the problem which arose when his father was no longer there. This can fairly be taken as indicative of his awareness that his father still had a role in the tenancy. It is clear that he was well aware that the estate records showed his father as tenant.

[79] We heard some suggestion that the applicant or his wife did not think it necessary to ask the landlords to correct the records because of gossip to the effect that the estate had a habit of not keeping good records. The applicant said they had never mentioned the fact that letters were addressed to D Fraser because he knew that the estate was slow to correct paperwork. He said they would not do so until someone died. But, of course, this would have been entirely consistent with the position they thought themselves to be in. If the landlords had not consented to a transfer, there would be no question of change until death of an existing tenant. A reasonable inference to be drawn from this second-hand evidence might be that the landlords did not normally accept assignations. That is, in our view, preferable to the suggested inference that the landlords had a well established practice of keeping inaccurate records. But, on any view, we cannot accept as credible the suggestion that the applicant and his wife made no attempt to ask the landlords to correct their records simply because they thought that the estate would not correct an error even if it was pointed out to them. The obvious inference to draw from the applicant’s failure to seek to change the records was that he was aware that the landlords always regarded D Fraser as the tenant.

[80] Points relied on by Mr Sutherland as justifying an inference of consent were the landlords’ awareness that D Fraser had retired and that a new partnership had taken over and was paying the rent and spending money on improvements. Both the applicant and his wife laid great stress on the payment of the rent. We do not accept these factors as pointing clearly towards consent. The landlords were aware of D Fraser’s intention to retire when they refused to agree except on new conditions. The fact that he did retire does not add anything new. The farm business had been run as a partnership long before 1993 at a time when D Fraser was tenant. That it was run by a differently named partnership does not justify any inference that the landlords had assented to a change in the tenancy. The fact that this went on for many years appears to us to add nothing to the situation as it stood in 1993. We think it clear that the landlords had not agreed a change at that stage.

[81] We are satisfied that a landlord normally need have no concern as to the source of money used to pay rent. Where a rent demand has been issued to a person, A, and payment is tendered in response, a landlord is entitled to assume that the payment is tendered on behalf of A unless the landlord has reason to suspect that A and the payer represent distinct interests. In the present case, the practice started when there was no real room for doubt as to D Fraser’s status as tenant. The continuation of the practice does not appear to us to justify any different inference. We recognise, of course, that Mr MacNicol was concerned about problems which might arise from confusion as to the identity of a tenant when rent was paid by a partnership cheque. But, such concern by him does not create any inference that identity of the payer is of critical importance. The payments were made by the partnership not by W Fraser.

[82] The practice of a split between a family partnership running the whole business while the tenancy remains in name of an individual is well known and we do not accept that agreement to treat expenditure by the firm as a tenant’s improvement has, itself, any bearing on the question of identity of the tenant. In any event, the fact that work was paid for by the partnership would not point unequivocally to a change of tenancy from father to son.

[83] Against the background of events in 1993, we find nothing in the evidence of events in the period to 1999 to give any support to an inference that the landlords had changed their minds and accepted W Fraser as tenant in place of D Fraser. It may be observed that it was not contended that the landlords would have had any reason or incentive to agree to a transfer. While D Fraser was tenant they had the possibility of bringing the tenancy to an end on his death or attempting to negotiate new conditions at that time. They had the security of D Fraser for implement of any tenant’s obligations. There was nothing in events after 1993 to give them any incentive to re-assess their attitude to the assignation.

[84] Indeed, the applicant agreed that his position was that he had been accepted as tenant in 1993. He had believed himself to be tenant from that time. He had always acted on that belief. He did not point to any occasion when the landlords might have been expected to reconsider the matter. As indicated above, we do not accept his evidence on this matter but, in any event, it is clear that any such belief was not well founded.

[85] The most weighty evidence tending to support the applicant’s status as tenant while his father was alive was that relating to the actions and attitudes of the factors and the letter from Mr MacNicol. When looking at this material, it is important to understand that it was not contended that the factors had, at any time, acted in such a way as to be taken to be consenting to the assignation. As Mr Sutherland put it, in relation to the conversation with Mr Robertson, “the parties did not think they were novating”. They were simply “confirming” a situation. He accepted that, on the way he sought to approach the case, the question of the extent of a factor’s authority did not arise. They were not involved in making a contract.

[86] In short, the actings of the factors and Mr MacNicol were relied on simply as adminicles of evidence tending to support the view that the landlords must, at some point, have agreed simply to accept W Fraser as tenant in place of his father. As we are entirely satisfied, on the whole evidence, that this was not the case it is unnecessary to deal with the evidence of these actings in any great detail. We look further at the evidence relating to the conversation with Mr Robertson in the context of discussion of the personal bar argument. The evidence relating to the other managers can, we think, readily be explained by the fact that the whole practical business of running the farm was being conducted by the applicant. In fact, he was acting on behalf of the partnership for the most part but, in any event, for all practical matters the distinction between the partnership and the nominal tenant was of no significance. It is hardly surprising that the factors were happy to treat W Fraser as if he was tenant. It is a step too far to draw from that an inference that he was, in fact, accepted by the landlords as tenant.

[87] Mr Garrett’s spontaneous comment was significant. He said that the the files were clearly labelled and the identity of the tenant would easily be seen. It seemed to us that, implicit in this remark, was the thought that it was unnecessary for him in his day to day supervision of the estate, to have to worry about informal usages or assumptions because the true position would always be perfectly plain if it was necessary to know it. He said that he did regard the applicant as tenant but we noted that, in relation to the new building, he referred to expenditure by “the Frasers”. He said he would not be concerned about a difference between the tenant and the partnership.

[88] The letter from Mr MacNicol of 8 December 2003 was, on the face of it, the strongest pointer to the landlords having accepted the applicant as tenant. It expressly addressed him as tenant. It said that he was the tenant. Taken on its own, it undoubtedly justifies an inference that the landlords had accepted him as the tenant. It was a letter from a senior employee who would be expected to know the landlords’ position on such an elementary matter as identity of the tenant. It can, undoubtedly, be regarded as giving strong support to the applicant’s case. But, equally, we have no doubt that Mr Kermack was correct to say that it cannot be viewed in isolation. It must be taken with the whole other evidence. There is an explanation for it. Mr MacNicol was plainly intending to eliminate the possibility of any confusion which might arise from acceptance of rent from a partnership instead of the tenant. On the face of the letter it is clear that it was this contrast rather than any question of challenge to the identity of the tenant which was the purpose behind the letter. We conclude that the obvious inference to be drawn from the letter is insufficient to stand against the picture painted by the bulk of the other material. We are satisfied that the landlords did not in fact consent. The estate files showed D Fraser as tenant and, from the viewpoint of the landlords, the letter was indeed a mistake. This is confirmed by the terms of Mr MacNicol’s letter of 15 December 2005 where his understanding of the distinction between D Fraser as tenant and W Fraser as the person spoken to about practical aspects of the business is quite clear.

Personal bar

[89] Mr Kermack contended that it was fallacious to suggest that two separate arguments were open in this case. He contended that if there was no justification for implied consent, there was equally no question of personal bar. It was accordingly unnecessary to consider the “niceties” of personal bar. He did not attempt much amplification of this submission. We think it rested implicitly on the proposition that the applicant had been well aware throughout his father’s life, that the landlords had not, in fact, agreed to drop their requirement of new conditions and did not, in fact, regard him as tenant and that, accordingly, there was no implied consent and no question of the applicant having relied on anything which might, taken on its own, have justified a contrary view. We consider this proposition well founded. We are satisfied that, whatever comfort he did take from them, the applicant did not in fact rely on statements by the factors or the property manager as showing that the landlords had consented to a change.

[90] However, it is necessary to deal with the arguments advanced by Mr Sutherland. He presented the matter in terms of personal bar and based the argument principally on the applicant’s apparent reliance on representations made by the estate factors. In particular he relied on the statement said to have been elicited by the applicant from Mr Robertson over the kitchen table to the effect that the applicant was the tenant.

[91] We have had some difficulty in knowing how best to deal with the evidence bearing on this point. The direct evidence was taken from both the applicant and his wife without any attempt to flesh it out in any way. Mr Fraser was at pains to explain the detailed context. It was a general informal chat over the kitchen table while they were having a cup of coffee, or tea and were waiting on Lord Cawdor for discussion of detailed plans for erection of a new shed. As narrated in evidence, he simply posed the question out of the blue to Mr Robertson: “Am I the tenant of the place?” Mr Robertson, without qualification or any request for explanation as to why there might be a doubt or why the question was being asked, “assured me that I was”. Such a bold exchange seems to us inherently improbable.

[92] Similarly, Mrs E Fraser seemed at pains to stress the very casual nature of the conversation. Her husband and Mr Robertson were just having a general chat. She said they were “getting along fine”. She said that her husband “asked if he was the tenant and Mr Robertson confirmed that he was”.

[93] We appreciate that Mr Sutherland may have been anxious to avoid any risk of tainting this evidence by anything which might be criticised as a leading question but we think some attempt at clarification was plainly required. For example, it would have been helpful to know whether the applicant was asserting that he actually remembered using the words he told us about. Did he actually use the expression “the place” in putting his question? Did he mean to say that Mr Robertson actually used the word “assure” in his reply? We ourselves recognised this alleged conversation as being potentially a critical piece of evidence and wished to leave it to the advocates to decide how much clarification was required. We were a little surprised that there was no attempt to test Mr Fraser’s evidence in cross-examination but were aware that the respondents’ position on the pleadings was simply that this conversation was “not known and not admitted”. Mr Robertson had long since left the landlords’ employment and it may be that he could not be traced but, the fact remains that neither the applicant nor his wife faced any challenge to their evidence and there was no evidence which directly contradicted it.

[94] In the circumstances, we recognise the risk of unfairness to the applicant if we do not simply take the evidence at its full face value. But, it must be said that we are satisfied that the bald narrative does not present an adequate picture. The applicant said that his concern was that rent demands being sent out by the estate were always addressed to his father. But, as discussed above, he must have been well aware from 1993 that this was an accurate representation of the landlords’ position. There was nothing to suggest that in 1999 he had any particular reason to think that the landlords had had a change of heart. No doubt any discussions with factors had been with him rather than his father but both parties were aware that the farm business had always been carried on by a partnership. As we have said, he at no time asserted to the estate that their references to “D Fraser” as tenant were wrong. He did not raise any particular concern with the factor. On his account, the so-called “assurance” given by the factor was a casual response to what was a leading question. The precise terms of the question would have been important. It may fairly be said that if the question was put in such bald terms as the witnesses recounted, it was a misleading question. We are satisfied that the applicant was aware that he had never been formally accepted as tenant. A more likely question would have been to ask whether the factor was treating him as tenant for the purposes of expenditure on improvements. That, or something on such lines, would have been a sensible question on a matter where the applicant might reasonably have wanted reassurance and one which the factor would have been competent to deal with without further enquiry. It is hard to accept that a factor would have responded to a bald question “Am I the tenant” without asking for more detail as to why the question was being asked.

[95] Mr Kermack pointed out that the meeting was followed by a letter from Mr Robertson dated 3 June 1999 addressed to “D Fraser” and said to be to finalise the estate’s offer relating to rent review. It dealt with arrangements for the new building. Mrs Fraser added some changes to the letter at the applicant’s request. Mr Garrett initialled these to show his acceptance. There was a little confusion as to when that was done but it appeared that it was in the presence of the applicant. There was no attempt to change the name of the tenant or to point out to Mr Robertson that despite his assurance he had still used the wrong name.

[96] In all the circumstances, we feel free to conclude that any question actually posed on that occasion must have been put in terms which would fairly be understood as asking whether the applicant would be treated as tenant in relation to his expenditure on the new shed. A question to that effect would have been sufficient for the applicant’s purposes. A question in quite simple terms could have been intended to have that effect even without express reference to the building. The context was very clear. We are satisfied that if he had seriously sought reassurance that the landlords were prepared to accept him unconditionally in place of his father, he would have been likely to have explained to Mr Robertson the reasons for asking the question and to have sought explicit reassurance about the letters addressed to D Fraser.

[97] It is right to note that Mr Fraser can be taken to have known that Lord Cawdor was not, himself, the landlord. On the evidence it was clear that the Lord Cawdor at the time of the requested assignation made it plain that the decision was one for the landlords. However, if the applicant had seriously been seeking reassurance based on a genuine belief that the landlords thought he was tenant Lord Cawdor would have been the more obvious person to ask.

[98] But, even if we take the applicant’s evidence of the conversation with Mr Robertson as entirely accurate in its terms, we are not satisfied that the conversation was sufficient to establish the plea of personal bar against the landlords. It was not disputed that the dictum of the Lord Chancellor, Lord Birkenhead, in Gatty v Maclaine provided a comprehensive guide to the essentials of the concept of personal bar. Applied to the present case, the dictum is to the effect that the applicant must show that the landlords, by their words or conduct, justified him in believing that they had decided not to require him to complete a post-lease agreement and had accepted him as assignee in place of his father without any formality at all, and that he acted on that belief to his prejudice. As we have said we are not satisfied that he did in fact come to believe that he had been accepted as tenant as a result of the conversation but, in any event, he has not established that anything he did in reliance on such belief was to his prejudice.

[99] We are satisfied that the applicant did not, in fact, act to his prejudice in reliance on having been accepted as tenant in place of his father. We have no doubt that he was prepared to run the farm, pay the rent and carry out improvements knowing that his father remained as nominal tenant. He did this at least until 1999. We heard nothing to persuade us that he would have had stopped paying rent at any stage if he had thought that his father continued to be the nominal tenant. To have done so would have led to loss of home and livelihood. We heard that he needed the new shed to carry on farming. He needed it to winter his stock. He did not attempt to suggest that he would have abandoned the project if he had not been sure that he was fully accepted by the landlords as having replaced his father as the proper tenant.

[100] We understood Mr Sutherland to contend that, even if it was likely that the applicant would have behaved as he did without any assurance from Mr Robertson that he was the tenant, he had the benefit of the “comfort” of that assurance. As he had then acted with that comfort in mind, the respondents would be personally barred from taking it away. However, we are not persuaded that such “comfort” is sufficient to meet the test of “acting to his prejudice”. If the actual conduct would not have differed he can hardly have been prejudiced by acting in a comfortable though misplaced belief. He would have had the benefit of comfort. Removal of that comfort for the future would not prejudice him compared with the position he would have been in without the conversation.

[101] It should be added that we do not accept that the raising of a Court action can, of itself, be said to be an action in reliance on the disputed belief. By the stage of litigation the applicant was aware that the belief has not been accepted. The application contained an averment that a rent invoice of 18 November 2008 had been sent to “the executors of Mr D Fraser” and that the inference was that the respondents refused to accept the applicant as tenant. We think that inference plainly correct. He was not acting in reliance on their acceptance when he raised the application.

[102] We think that, broadly speaking, these various observations apply to the other representations made by factors or by Mr MacNicol, the Property Manager. The applicant has not established that he relied to his prejudice on such representations, either individually or taken together.

[103] It may be observed that Mr Sutherland’s reliance on the conversation with Mr Robertson – and on subsequent letters – was implicitly founded on an assumption that the words of a factor could be taken to be the words of the landlords for the purposes of personal bar. We would have wished to hear further submission on that question had it appeared to be a live issue before us. But, Mr Sutherland said that it was unnecessary for the purposes of his submission to consider the extent of a factor’s authority and nothing was made of this point by the respondents.

Decision

[104] We find that Balculchaich and Mid Urchany have been held as a single tenancy since 1972. The applicant has failed to establish that he was accepted as tenant, or is to be treated as having been accepted as tenant, of these subjects while his father was alive. He is tenant of them in virtue of the nomination by his mother as executrix dative of the late David Fraser. We reserve all question of expenses.