Decision of the Scottish Land Court

Grains (Applicant) v Exrs of J M Gifford and Others (Respondents)

Case reference SLC 82/15
before
Iain F Maclean, Deputy Chairman, and John A Smith
12 May 2016

[1] Mr Grains has applied to the Court under section 12 (1) of the Crofters (Scotland) Act 1993 (the 1993 Act”) for an order authorising him to acquire croft land tenanted by him at Hoove and Heogan Apportionments, Whiteness, Shetland. In our Order dated 10 December 2015, we refused in hoc statu a motion to dispense with intimation and appointed his solicitors to address us on the competency of his application on a date to be fixed. The same firm of solicitors is instructed in another application presently pending before the Court, the long asleep but recently revived application 1994 S2/842 at the instance of John Arthur Nicholson, in respect of the acquisition of his croft at North Aywick, East Yell, Yell, Shetland, in connection with which the same concerns about competency arise, and so we informally conjoined those two processes and on 9 February 2016 heard submissions from Mr Brian Inkster of Inksters Solicitors, Glasgow, in the course of which he sought to persuade us that the applications were competent and should be permitted to proceed in their present form.

[2] The problem which arises in these two applications is that the crofters wish to exercise the right conferred upon them by statute to apply to the Land Court for an order authorising them to acquire the croft land tenanted by them and requiring the landlords to convey it to them or their nominees, but the persons in whose names title to that croft land is recorded in the General Register of Sasines are long deceased and the identities and whereabouts of the persons beneficially entitled to succeed thereto are unknown to them.

[3] The Hoove and Heogan Apportionments formed part of the testamentary estate of the late Mrs Lizzie Gifford, who died in New Zealand on 27 May 1951. Title thereto was conveyed by her Testamentary Trustee to her three children, John Milner Gifford, Mrs Grace Elizabeth Read and Mrs Susan Jensen by Disposition in their favour dated 7 February and recorded in the Division of the General Register of Sasines applicable to the Counties of Orkney and Zetland on 3 March, both 1956. All three of the late Mrs Lizzie Gifford’s children resided in New Zealand and are understood now to be dead. Mr Grains has produced a letter from the widower of Mrs Susan Jensen, written to another solicitor in Shetland in 1989, recounting something of the family history to that date, upon the basis of the contents of which he avers that:

“in 1989 there were three separate executry estates involved and at least six people with a claim in respect of the title to the land in Shetland. Nothing has been done to date to transfer title to those parties and it is thought unlikely that the beneficiaries in question will go to the expense of so doing given the value of the land that they are entitled to in Shetland which will be nominal compared to the costs of resolving the issue of what is, in any event, tenanted land.”

[4] In relation to the croft at North Aywick, Mr Nicholson had until 1974 tendered rent to another firm of solicitors in Lerwick in their capacity as agents for “the Estate of Miss A.M. Mathewson (dec’d)”, the late Miss Mathewson being, we take it, the last recorded title holder, but thereafter his tendered rent was declined on the basis that the firm no longer had instructions to act and had no knowledge who, if anyone, had a claim to the heritable property and the rent derived therefrom. Mr Nicholson thus has had no knowledge of the identity or whereabouts of his landlord for over forty years. He now has pressing reason to acquire the croft land tenanted by him because his daughter and son-in-law wish to build a house upon the croft at North Aywick and in order to secure mortgage finance for that project will require first to obtain a title to the house site.

[5] With the accelerating fragmentation of ownership of croft land, it seems likely that other crofters who wish to purchase the croft land tenanted by them will encounter the problem of the unknown and untraceable landlord in future. Mr Inkster argues that section 16 (2) of the 1993 Act supplies a convenient solution to that problem. It provides that:

“Where the Land Court is satisfied, on the application of the crofter or cottar or his nominee that the landlord has failed to execute a conveyance of land in favour of such person in compliance with an order under section 13 (1) or section 15 (1) of this Act within such time as the Land Court considers reasonable, it shall make an order authorising its principal clerk to execute the conveyance and such other deeds as adjusted at his sight as may be necessary to give effect to the order; and a conveyance executed by the principal clerk under this subsection shall have like force and effect in all respects as if it had been executed by the landlord.”

[6] The Respondents in Application RN SLC/82/15 are identified as “The Executors of the late John Milner Gifford, Mrs Grace Elizabeth Read and Mrs Susan Jensen (addresses unknown)”, but the accompanying draft disposition, which we are asked, having dispensed with intimation, to authorise the Principal Clerk to sign, runs in the name of the Principal Clerk herself “in pursuance of” an order of the Land Court made in exercise of the power conferred on us by section 16 (2) of the 1993 Act. The manner in which Application RN SLC/82/15 and the draft disposition which accompanies it are framed brings into sharp focus the issue of the proper scope of section 16 (2) of the 1993 Act.

Discussion

[7] In both the Court of Session and the Sheriff Court, there are circumstances in which, where a party refuses or delays to sign a document which he was under obligation to sign, or his signature cannot otherwise be obtained, a clerk of court may be authorised to do so in his stead. In the Court of Session, this is done in exercise of the nobile officium, the equitable jurisdiction vested in the Court of Session to make provision for unexpected or exceptional happenings: see, e.g., Wallace’s Curator Bonis v. Wallace 1924 SC 212; Pennell’s Trustee 1928 SC 605; Lennox and Others, Petitioners 1950 SC 546; Boag, Petitioner 1967 SC 322; Mackay v. Campbell 1966 SC 237; 1967 SC (HL) 53. In Professor Stephen Thomson’s recent work “The Nobile Officium: The Extraordinary Equitable Jurisdiction of the Supreme Courts of Scotland” (2015), these cases are discussed at paragraph 8.6 under the heading “Substituted authority to subscribe”. The principle which the author extracts from those cases is that the Court will intervene in order:

“not to permit legal processes to be obstructed by what are typically recalcitrant persons who have not only a right, but an obligation, to sign a particular document or instrument, … the power may also be exercised where it is not certain that the rightful subscriber is refusing to sign the document or instrument, but where it is nevertheless proving impossible to obtain subscription. In each case the Court has authorised a clerk or deputy clerk of court to sign in place of the rightful subscriber. As such, the Court ensures that a practical solution is found where it would be inequitable to allow an obstruction or defeat of the realisation of legal rights.”

[8] In the Sheriff Court, section 87 (Power of sheriff to order sheriff clerk to execute deed relating to heritage) Sof the Courts Reform (Scotland) Act 2014 (“the 2014 Act”), which came into force on 1 April 2015, provides that:

“(1) This section applies where—

(a) an action relating to heritable property is before a sheriff, or

(b) it appears to a sheriff that an order under this section is necessary to implement a decree of a sheriff relating to heritable property.

(2) The sheriff may make an order such as is mentioned in subsection (4)—

(a) on an application by the grantee of any deed relating to the heritable property, and

(b) if satisfied as to the matters mentioned in subsection (3).

(3) The matters are that the grantor of any deed relating to the heritable property—

(a) cannot be found,

(b) refuses to execute the deed,

(c) is unable, or otherwise fails, to execute the deed.

(4) The order is one—

(a) dispensing with the execution of the deed by the grantor, and

(b) directing the sheriff clerk to execute the deed.

(5) A deed executed by the sheriff clerk in accordance with a direction in an order under this section has the same force and effect as if it had been executed by the grantor.

(6) In this section—

“grantor”, in relation to a deed relating to the heritable property, means a person who is under an obligation to execute the deed,

“grantee” means the person to whom that obligation is owed.”

As such, section 87 of the 2014 Act re-states the substance of the now repealed section 5 A (Power of sheriff to order sheriff clerk to execute deeds relating to heritage) of the Sheriff Courts (Scotland) Act 1907.

[9] The conventional wisdom, in both the Court of Session and the Sheriff Court, would seem to be that when the clerk of session or the sheriff clerk so executes a document, he or she does so essentially in the place or on behalf of the “rightful subscriber” or grantor. Section 16 (2) of the 1993 Act confers on the Land Court the power to make an order authorising its principal clerk to execute the conveyance and such other deeds as may be necessary to give effect to the order where it is satisfied that the landlord has failed (our emphasis) to execute a conveyance of land in compliance with an order under sections 13 (1) or 15 (1) of the 1993 Act within a reasonable time; and the conveyance, as so executed, “shall have like force and effect in all respects as if it had been executed by the landlord.” On the face of it, then, it too simply provides a means to enable the Court, by way of what might be characterised as a statutory form of agency, to enforce compliance with its order authorising purchase where the landlord, the “rightful subscriber” or grantor, duly identified as such in the application, has failed to do so. Applying this “agency” analysis to section 16 (2) of the 1993 Act, the fact that the identified grantor was deceased would seem to represent a fundamental objection to the competency of execution of a disposition by the principal clerk, because agency terminates on the death of either party: Life Association of Scotland v. Douglas (1886) 13 R. 910. In Mrs Jessie Ann Fraser v. Lord Burton (RN 55), the Court, in its Order of 10 December 1980, emphasised the narrow scope of this power:

“The Court’s jurisdiction under Section 5 (2) of the 1976 Act [i.e. the Crofting Reform (Scotland) Act 1976, being the statutory predecessor of section 16 (2) of the 1993 Act] is strictly limited. It is confined to authorising the Principal Clerk on being satisfied that the landlord has failed to execute a conveyance in compliance with their order, to execute the conveyance and such other deeds as may be necessary to give effect thereto.”

That dictum was founded upon by the Divisional Court in the Note which accompanied its Order dated 25 November 1983 in Grant v. Sykes, reported at 1983 SLCR 65.

[10] Mr Inkster argued that we should adopt a more purposive approach to the interpretation of section 16 (2) of the 1993 Act. Section 12 (1) of the 1993 Act confers on a crofter the right, failing agreement with the landlord as to the acquisition by the crofter of croft land tenanted by him, to apply to the Land Court for an order authorising him to make such acquisition. By section 13 (1) of the 1993 Act, the Land Court, on an application made to it under section 12 (1), may make an order authorising a crofter to acquire such croft land as may be specified in the order, subject to such terms and conditions as, failing agreement with the landlord, may be so specified, and requiring the landlord to convey the land to the crofter or his nominee in accordance with such terms and conditions. Section 12 (2) of the 1993 Act confers on a crofter an absolute right to a conveyance of the site of the dwelling-house on or pertaining to the croft tenanted by him, and, failing agreement with the landlord, the right to apply to the Land Court requiring the landlord to grant such a conveyance. Section 15 (1) of the 1993 Act provides that the Land Court, on an application made to it under section 12 (2), may make an order requiring the landlord to convey the site of the dwelling-house to the crofter or his nominee, with such boundaries and subject to such terms and conditions as, failing agreement, may be specified in the order.

[11] It could not be the intention of Parliament, where the landlord had died and the person(s) beneficially entitled to succeed to the croft land belonging to the landlord had omitted to complete title thereto, and could not now be traced by the crofter, to leave that crofter in limbo, unable to exercise the statutory rights to acquire the subjects tenanted by him which Parliament had conferred on him. Section 16 (2) of the 1993 Act should be interpreted in such a way as to avoid that outcome, and indeed, he submitted, the practice of the Land Court hitherto had been to do so. He was not in a position to cite particular instances in which the Land Court had exercised the power conferred by section 16 (2) to authorise the principal clerk to execute a conveyance of croft land where the last recorded or registered proprietor was known to be long deceased and the identities of the persons who would be entitled to make up a title thereto were not known to the crofter, but he was sure that this had occurred in the past, and that the Keeper of the Registers of Scotland had accepted the resulting disposition for recording or registration. He suggested that for the Land Court to authorise the principal clerk to execute a conveyance in pursuance of section 16 (2) in such circumstances was analogous to a sheriff granting confirmation authorising executors to intromit with the estate of a deceased. Confirmation operates as a judicial conveyance, and it was Mr Inkster’s submission, as we understood him, that a section 16 (2) order by the Land Court may operate similarly as a midcouple to enable the principal clerk to convey the croft land to the crofter or his nominee. The correct analysis of the situation was that the principal clerk, in granting such a disposition, was acting under the authority of an order of the Land Court, rather than in the place or on behalf of either the late landlord or the person(s) beneficially entitled to succeed to the croft land, and in such circumstances, there was no need here to involve the Queen’s and Lord Treasurer’s Remembrancer (“the QLTR”). It seems to us, then, that at the heart of Mr Inkster’s submission lies the proposition that a section 16 (2) order may operate as some form of statutory link in title between the last recorded or registered proprietor of the croft land and the principal clerk, because otherwise any disposition running in the name of the principal clerk as grantor would be a non domino.

[12] Where an owner of heritable property in Scotland dies, no personal representative assumes responsibility for the administration of the estate and no-one entitled to succeed thereto comes forward to vindicate his or her interest by completing title thereto, the heritage is not left as res nullius. Atcommon law all ownerless goods are the property of the Crown as ultimus haeres, in accordance with the maxim quod nullius est fit domini regis (that which belongs to no-one becomes the King’s). The prerogative rights exercisable by Her Majesty as respects ownerless or unclaimed property were preserved by section 58 of the Abolition of Feudal Tenure etc (Scotland) Act 2000.

[13] It seems to us that where, as here, the persons in whose names titles to the croft land are recorded are long dead and their heirs and successors cannot be traced, the croft land must be regarded as ownerless and unclaimed and as such falls to be treated as bona vacantia, so that the Crown, through the Lord Advocate and/or the QLTR, is to be regarded as landlord and should have been called as respondent in these two applications. According to the QLTR’s Policy Statement BV12, to which Mr Inkster made passing reference,

“We expect the interested party to provide evidence of appropriate searches as to the person’s whereabouts (or their successors or representatives) or any explanation with supporting authority as to why the person (or their successors or representatives) could no longer make up title to or deal with the property, before considering whether to deal with the property as BV [i.e. bona vacantia].

The QLTR Office would be happy to be approached to discuss what searches and investigations might be appropriate as circumstances arise.”

Thus, it would be a matter for the Crown, as represented in Scotland by the QLTR, to decide whether or not to grant the crofters conveyances of the croft land tenanted by them. In the event of the QLTR declining to do so, it would be open to the crofters to apply to the Court for orders authorising them to acquire the croft land tenanted by them, and requiring the QLTR to convey it to them or their nominees, and a failure on the part of the QLTR to execute a conveyance in compliance with such an order within a reasonable time would have the potential to bring section 16 (2) of the 1993 Act into play.

[14] This is what appears to have occurred in Dunn v. The Crown 1989 SLCR 48, to which Mr Inkster referred us in the course of his submissions. That case raised what might be termed the “dissolved company variant” on the problem raised by these two Shetland applications. In Dunn, the tenant of crofts Nos. 28 and 31 Lochbay, Waternish, on the Isle of Skye applied for an order authorising him to acquire the croft land tenanted by him. The application as originally framed identified Johannes Hellinga as the landlord respondent. It subsequently became apparent that title to the crofts was held in the name of a limited company, Johannes Hellinga Limited, and that the limited company had been dissolved voluntarily in terms of section 353 (5) of the Companies Act 1984 (what is now section 1003 of the Companies Act 2006 (“the 2006 Act”), in consequence of which it ceased to exist. By statutory provision, which now is contained in section 1012 (1) of the 2006 Act, when a company is dissolved, all property and rights whatsoever vested in or held on trust for the company immediately before its dissolution are deemed to be bona vacantia and accordingly belong to the Crown and vest and may be dealt with in the same manner as other bona vacantia accruing to the Crown. Section 1012 (1) of the 2006 Act is, however, stated by subsection (2) of section 1012 to have effect subject to the possible restoration of the company to the Register of Companies under Chapter 3 (sections 1024 – 1034) of the 2006 Act. At the hearing of the application, Derek Flyn, solicitor for the crofter applicant, moved the Divisional Court (Mr A.B. Campbell) to substitute the Crown as landlord respondent in the application. As the Note appended to the Divisional Court’s Order dated 6 June 1998 narrated,

“It would of course be necessary for the Application to be intimated to the Crown and the Crown given an opportunity to lodge Answers thereto. However as the Crown in an earlier Application – see Application Skye 383 – had in a similar situation indicated to the agents acting for the crofter Applicant in that Application that as the company could still be restored to the Register of Companies in terms of Section 353 (6) of the Companies Act it was not the practice of the [QLTR] to intervene on behalf of the Crown for a period of 20 years from the date of dissolution Mr Flyn moved the Court to allow him to amend his Application by the addition of a fourth crave to the effect that should the Crown as landlord respondent fail to execute the necessary conveyance of the croft to his client, he asked the Court to grant an Order in terms of Section 5 (2) of the [1976 Act] authorising their Principal Clerk to execute the necessary conveyance.”

[15] The Divisional Court granted Mr Flyn’s motions. When the Crown entered the process, it lodged a motion, the thinking behind which is not readily discernible to us at this distance of time, asking the Court to reinstate Johannes Hellinga Limited as landlord respondent, but that motion was opposed by Mr Flyn, on the basis that the company no longer existed, and the fact that property was last registered in its name did not enable the company to participate in the process. The Crown withdrew its motion, and by Order dated 8 September 1989, the Divisional Court authorised the crofter applicant to acquire his crofts, and ordained the landlord respondent (i.e. the Crown) to convey it to him or his nominee forthwith; it also authorised the Principal Clerk to execute the conveyance in terms of section 5 (2) of the 1976 Act. The Note appended to the Order dated 8 September 1989 records that the Crown’s agent “said that in the special circumstances of the case, the Crown would wish the Principal Clerk to execute the conveyance and accordingly he consented to Mr. Flyn’s motion.” The Note does not disclose what were the “special circumstances of the case” which meant that the Principal Clerk should sign the disposition. The outcome in Dunn then would seem to have been a disposition drawn in the name of The Crown per the QLTR, as proprietor of all Estate which belonged to the dissolved company of Johannes Hellinga Limited, which Estate fell to Her Majesty as bona vacantia, but executed by the Principal Clerk under the power conferred by section 5 (2) of the 1976 Act.

[16] In advancing his argument, Mr Inkster did not essay a systematic semantic analysis of the wording of section 16 of the 1993 Act. The formula contained in section 16 (2) of the 1993 Act appears also in section 16 (8) of the 1993 Act, which provides that:

“Where the Land Court is satisfied, on the application of the landlord, that the crofter or his nominee has failed to execute a standard security in favour of the landlord in compliance with a condition imposed by the Land Court under section 13 (4) of this Act within such time as the Land Court considers reasonable, it shall make an order authorising its principal clerk to execute the standard security; and a standard security executed by the principal clerk under this subsection shall have the like force and effect in all respects as if it had been executed by the crofter or his nominee.”

We put it to Mr Inkster that the use of that formula also in section 16 (8) of the 1993 Act surely militated against his argument for a wider interpretation of the scope of section 16 (2) of the 1993 Act, in that the failure being referred to therein can only be that of an identifiable, and identified, crofter or his nominee, in whose stead the principal clerk may be authorised to execute the standard security, but while Mr Inkster demurred to that suggestion, he did not, to our mind, provide any convincing rejoinder to it.

Conclusion

[17] We have come to the conclusion that Mr Inkster’s argument cannot be sustained. We do so with some regret, in that we recognise that a consequence of our decision is that the applicants here will, through no fault of their own, be put to further trouble and expense in order to exercise the statutory rights which have been conferred upon them to acquire the croft land tenanted by them, but we consider that as a matter of construction, it is impossible to accord to section 16 (2) of the 1993 Act the meaning he invites us to apply thereto. As we read it, section 16 (2) of the 1993 Act is only engaged where an identifiable, and identified, landlord within the statutory definition in section 61 (1) of the 1993 Act, being, in relation to a croft other than one registered in the Crofting Register, any person for the time being entitled to receive the rents and profits, or to take possession of, the croft, has failed to execute a conveyance of land in compliance with an order under section 13 (1) or 15 (1) of the 1993 Act within such time as the Land Court considers reasonable. Thus it is that a conveyance executed by the principal clerk under section 16 (2) of the 1993 Act “shall have like force and effect in all respects as if it had been executed by the landlord.” Where there is no identifiable, and identified, landlord, there could be no possibility of the conveyance having been executed by such landlord.

[18] The relevant failure in section 16 (2) of the 1993 Act, in our view, is the failure of the landlord to execute a conveyance in compliance with such an order, and not, as Mr Inkster contended at one point in his submissions, the failure of the deceased landlord’s unidentified personal representatives (if any) or of the persons beneficially entitled to succeed to the interest of the deceased landlord in the croft land to lodge answers in response to public notification, whether by way of newspaper advertisement or otherwise, of the crofter’s application to the Land Court for an order under section 13 (1) or 15 (1) of the 1993 Act. We do not consider that there is a true analogy here between the Land Court making an order authorising its principal clerk to execute a conveyance under section 16 (2) of the 1993 Act and the sheriff granting confirmation authorising executors to intromit with the estate of a deceased, because we do not consider that a section 16 (2) order operates as judicial conveyance in the manner of a grant of confirmation. It follows that we consider that the remedy of these applicants must lie, at least in the first instance, with the QLTR, if they cannot trace, and secure the co-operation of, the personal representatives, or the persons beneficially entitled to succeed to the interest of, the last recorded title holders of the croft land tenanted by them.

[19] Mr Inkster suggested, although he was not in a position to cite particular instances of this practice, that the Land Court had in the past been prepared to authorise its principal clerk to execute conveyances of land running in the names of the last recorded title holders where the applicants were unable to trace either their personal representatives or their heirs and successors. We have not carried out a comprehensive search of our archives to ascertain whether this may indeed have occurred on isolated occasions in the past, but even if it had, we do not consider that this would justify us now, when the problem has been identified and we have been addressed formally thereon, in following what we consider would be a course not warranted by statute and in conflict with existing conveyancing principle and practice.