Decision of the Scottish Land Court

Elizabeth A M D Lewis (Applicant) v Shonagh J Hunter (Respondent)

Case reference SLC 83/15
before
Iain F Maclean, Deputy Chairman, John A Smith and Tom Campbell
29 March 2017

[1] The Applicant and the Respondent respectively are the landlord and the tenant of the Farm of Castleside in the Parish of Ashkirk and County of Selkirk (“the Farm”). The relationship between the parties is regulated by (i) Lease between Mrs Ann Peace Arabella Scott and Robert Little Hardie dated 27 February and 16 March 1967 (“the Lease”) [Production 2] and (ii) Agreement between the two persons last named dated 20 March 1967 (“the Post-Lease Agreement”) [Production 3]. In this application, the Applicant craves orders of declarator of irritancy in respect of the Lease and for removing of the Respondent from the Farm pursuant to a Notice of Irritancy and Notice to Remove dated 19 June 2015 (“the Notice of Irritancy”) [Production 13] issued by Leyshon WS, Solicitors, Peebles, as agents for the Applicant. We heard evidence over three days on 13-15 July and a further two days of evidence on 28 and 29 November, followed by two days of submissions on 30 November and 1 December, all 2016. We walked over the Farm on Wednesday 14 December 2016, not to carry out a formal inspection (we were, after all, attending at the Farm some 18 months after the issue of the Notice of Irritancy, and so our ex post facto observations as to its state on that date would be of little moment to the matters for our decision) but rather to enable us to interpret the evidence we heard and assess it in its proper context. The Applicant was represented at the hearing by Robert Sutherland, Advocate, appearing on the instructions of the said Leyshon WS, Solicitors, and the Respondent by Hamish Lean, Solicitor, of Messrs Stronachs LLP, Aberdeen. Whilst the case was at avizandum, the Court was informed that Stronachs had withdrawn from acting for the Respondent.

[2] Clause 18 (Bankruptcy.) of the Lease provides that:

“If the tenant shall, at any time, become incapax, notour bankrupt or if his estate shall be sequestrated or if he shall voluntarily divest himself of his property for behoof of his creditors or shall allow one half-year’s rent to become unpaid for one month after the same shall have become due, or shall contravene or fail to implement or observe any of the conditions of the tenancy, then and in any of these events, the Lease shall ipso facto become null and void and it shall be in the power of the Landlord without prejudice to any other rights or remedies open to them but in addition thereto forthwith to resume possession of the Farm.”

The parties were in agreement that an irritancy clause in such terms was, in principle, valid and enforceable, agricultural leases having been excluded from the scope of the restrictions on the operation of irritancy clauses contained in sections 4-6 of the Law Reform (Miscellaneous Provisions)(Scotland) Act 1985, and that conventional irritancies of this nature, if incurred, were not capable of being purged. They were in agreement also that there was no requirement on the part of the Applicant, in invoking Clause 18 of the Lease, to establish that any contravention or failure to implement or observe any of the conditions of the tenancy on the part of the Respondent constituted a material breach of the parties’ contract (i.e. a breach of contract which otherwise would justify rescission), and that it would be no defence for the Respondent to argue that a fair and reasonable landlord would not, in all the circumstances of the case, seek to rely on such a provision in the Lease. In order successfully to resist enforcement of the irritancy, the Respondent instead would require to aver and prove oppression on the part of the Applicant, defined as a clear abuse of rights or impropriety of conduct by her (HMV Fields Properties Ltd v Skirt ‘n’ Slack Centre of London Ltd 1982 SLT 477), and the Respondent here made no attempt to found such a plea. In the event of the Applicant proving that the Respondent had contravened or failed to implement and observe the conditions of the tenancy as set out in the Notice of Irritancy, we as a Court would have no discretion to refuse the orders sought by her. It follows from all of the above that a conventional irritancy provision in the terms of Clause 18 of the Lease is a powerful weapon in the hands of a landlord, but the corollary thereof is that it requires to be wielded with some skill. Here, as we shall proceed to relate, the manner in which the Applicant went about evidencing the fact of the Respondent’s alleged contraventions or failures to implement and observe the conditions of the tenancy left much to be desired, and compromised her prospects of obtaining the orders for declarator and removing she sought.

The Notice of Irritancy

[3] It was declared in the Notice of Irritancy that the Lease:

HAS BECOME NULL AND VOID as a result of the following breaches by you of your obligations thereunder, namely:-

(i) breach by you of Clauses 5 and 7 of the said lease in that you (a) have conducted and continue to conduct a hireling business at the said Holding, (b) have failed and continue failing to keep the said Holding well and sufficiently stocked with stock which is the Tenant’s own bona fide property, and (c) have left fallen stock (comprising both sheep and cattle) unattended or otherwise burned or buried on the said Holding;

(ii) breach by you of Clause 10 of the said lease in that you have not maintained the whole Fixed Equipment on the said Holding in terms of (a) said Clause 10 of the said lease as modified by Agreement between the said Mrs Ann Peace Arabella Scott and the said Robert Little Hardie dated said Agreement Twentieth March in the year Nineteen Hundred and sixty-seven, (b) Record of Condition for the said Holding made on behalf of the Landlord by MBF/Smiths Gore on 13th July 2006 and (c) Castleside Maintenance Schedule produced by the Landlord’s authorised agent, Peregrine John Lewis, of Cotfield, Lilliesleaf, near Melrose, Roxburghshire TD6 9JW and supplied to your then agent David Seed, of Cothill, Duns, Berwickshire TD10 6YW and updated by the Landlord’s said authorised agent on 11th July 2013 and sent by him directly to you on 27 July 2013 (hereinafter referred to as “the Maintenance Schedule”) and in particular you are presently in breach of said Clause 10 with reference to those parts of the Maintenance Schedule which are more particularly specified in the Annexure to this Notice.

(iii) breach by you of Clause 4(f) of the said lease in that you do not permit access by the Landlord and/or her land agent and/or any other persons authorised by the Landlord to the farmhouse on the said Holding as and when this is reasonably required with or without notice to the Landlord; and

(iv) breach by you of Clause 9 of the said lease in that you have not annually cut all thistles and other noxious weeds on the said holding before flowering in terms of those parts of the Maintenance Schedule which are more particularly specified in the Annexure to this Notice.”

The clauses of the Lease in respect of which breach is alleged

[4] The clauses of the Lease in respect of which breach by the Respondent was alleged in the Notice of Irritancy thus were Clauses 4(f), 5, 7, 9 and 10. The terms of each of those clauses will be narrated ahead of our discussion of the evidence adduced to substantiate each of those alleged breaches. It is not in dispute that in this application, in conformity with the normal rules on onus, it was for the Applicant to prove that the Respondent was in breach and not on the Respondent to prove that she was not. Counsel for the Applicant emphasised that the breaches alleged in paragraphs (i)-(iv) of the Notice of Irritancy were each “stand-alone” rather than cumulative grounds for irritancy.

The Maintenance Schedule(s) and the Annexure to the Notice of Irritancy

[5] Paragraph (ii) of the Notice of Irritancy alleges that the Respondent is in breach of Clause 10 of the Lease in that she has not maintained the whole fixed equipment on the Farm in terms of (a) Clause 10 of the Lease as modified by the Post-Lease Agreement, (b) Record of Condition made on behalf of the Applicant by MBF/Smiths Gore on 13 July 2006 [Production 4], and (c) Maintenance Schedule stated to have been produced by the Applicant’s authorised agent, Peregrine John Lewis (“Mr Lewis”), and supplied to the Respondent’s then agent David Seed on 12 October 2010 [Production 61] and “updated” by Mr Lewis on 11 July 2013 and sent by him directly to the Respondent on 27 July 2013 [Production 33], and in particular that she is “presently in breach … of Clause 10 with reference to those parts of the Maintenance Schedule which are more particularly specified in” the Annexure to the Notice of Irritancy. The breach of Clause 9 of the Lease which is alleged in paragraph (iv) of the Notice of Irritancy, although not concerned with fixed equipment, is also stated to be more particularly specified in the Annexure to the Notice of Irritancy. Unpicking paragraph (ii) of the Notice of Irritancy, whilst the references to the Lease and the Post-Lease Agreement may be self-explanatory, the references to the Record of Condition, the Maintenance Schedule and the Annexure to the Notice of Irritancy are not, and in order for the reader of this Note to understand the manner in which the Applicant assembled the evidence to establish breach by the Respondent of her obligations under the Lease, it will be necessary for us to explain how its constituent parts relate to one another.

[6] Clause 17 (Record.) of the Lease narrated the agreement of parties that “a record of the condition of the fixed equipment shall be made forthwith in compliance with the provisions of Section Five of the Agricultural Holdings (Scotland) Act 1949.” In time-honoured tradition, no such record was made at the time the Lease was entered into, with the consequence that the only evidence we had before us as to the state of the fixed equipment on the Farm as at that date came from the contents of (i) a letter from the then landlord’s factor, Mr Hepburne-Scott, to the then tenant (the Respondent’s father) dated 7 March 1968 [Production 49]; (ii) an account of the expenditure on fencing carried out “during the past year” which was enclosed with that letter [Production 50]; and (iii) an extract from the then tenant’s cashbook from the same era [Production 51]. We shall have more to say about the contents of these productions when we come to deal with the issue of the state of the fencing on the Farm as at the date of the Note of Irritancy, but for present purposes, it is sufficient to note that the Record of Condition to which reference is made in paragraph (ii)(b) of the Notice of Irritancy is not a record of the condition of the fixed equipment on the Farm in terms of section 5 of the Agricultural Holdings (Scotland) Act 1991 (“the 1991 Act”) (the statutory successor to section 5 of the 1949 Act) and accordingly is not deemed to form part of the Lease. Whilst attempt was made by the Applicant at the time the Record of Condition was being compiled in or about July 2006 to obtain the agreement of the tenant (then still Mr Hardie, although the Respondent was by that stage taking an increasingly prominent role in the running of the Farm), this was never forthcoming, although some of the Respondent’s comments on what presumably was an earlier draft are noted by Smiths Gore in a Supplementary Note which forms part of Production 4. In consequence, the 2006 Record of Condition has no formal status, albeit that it does provide a snapshot of the condition of some of the fixed equipment on the Farm as at that date.

[7] The 2006 Record of Condition provides the evidential foundation of the Applicant’s case that the Respondent was, just short of nine years later, in breach of her obligations in terms of Clause 10 of the Lease, as modified by the post-Lease Agreement, to maintain the whole fixed equipment on the Farm. It consists principally of photographs, grouped under the headings Castleside Farmhouse, Castleside Farm Bothy and Holiday Cottage, Castleside Farm Buildings, Castleside Agricultural Land and Castleside Bracken. Each photograph in each of those categories is allocated a reference code (e.g. FH: 1 is the first photograph in the sequence of photographs showing the condition of Castleside Farmhouse as at the date of the 2006 Record of Condition). After the photographic sections, there is a spread sheet headed “Castleside Farm Inspection Report - Summary of Repairs/Replacement” which lists the various items of fixed equipment considered by Smiths Gore to require repair or replacement as at that date, each item in the list cross-referenced to the relevant photograph(s). It falls to be noted that this spread sheet features a number of items for action which are concerned with matters other than the state of the fixed equipment on the Farm (e.g. in relation to eradication of bracken on particular fields).

[8] The 2006 Record of Condition has been used over time by the Applicant as a baseline for the actions it is contended the Respondent is obliged to undertake in order to achieve compliance with her obligations under the Lease. The Maintenance Schedules produced by the Applicant as Productions 61 and 33 are updated (respectively as at 9 October 2010 and as at 11 July 2013) versions of the spread sheet headed “Castleside Farm Inspection Report - Summary of Repairs/Replacement” originally contained in the 2006 Record of Condition. These are entirely unilateral documents, in which Mr Lewis has recorded such changes in the state of the fixed equipment and the fields on the Farm as he considers have occurred from time to time since the 2006 Record of Condition was compiled. Much has indeed changed in the period between 2006 and 2015: by way of example, the Castleside Farm Bothy and Holiday Cottage and many of the original farm buildings were, between those dates, resumed and a new, part-enclosed, general purpose agricultural building has been provided by the Applicant on the other side of the river from Castleside Farmhouse. The Annexure to the Notice of Irritancy lists, over three pages, the items in the most recently updated Maintenance Schedule (being Production 33, showing the position as at 11 July 2013) which, we initially were given to suppose, remained outstanding as at the date of the Notice of Irritancy, identified by reference to location and photograph reference codes taken from the 2006 Record of Condition, although it later emerged, and was conceded by the Applicant, that some of the items listed in the Annexure had, in fact, been addressed by the Respondent in the period between 11 July 2013 and 19 June 2015. The Annexure includes a number of more recent complaints on the part of the Applicant, all bearing the reference “Nil” to signify that they do not feature in the 2006 Record of Condition. The level of specification in the Annexure to the Notice of Irritancy as to the location and extent of the failures of maintenance being complained of was in some instances so imprecise as to make it difficult for the parties’ respective experts to work out what it was they were supposed to be commenting upon, an observation which both offered up quite unsolicited during the course of their testimonies. Some entries in the Annexure on their face called into question the merits of the case for irritancy which the Notice of Irritancy advanced (e.g. “AL:85-86 The fence between Fields 302 and 303 is stock proof however it is in need of repair. It may have deteriorated beyond repair”).

[9] Taking to be the correct starting point here that the Applicant, in order to succeed in establishing breach by the Respondent of her obligations in respect of maintenance of fixed equipment on the Farm in terms of Clause 10 of the Lease, required to prove the state of that fixed equipment as at the date of the Notice of Irritancy, being 19 June 2015, her chosen method of so doing was both confused and confusing. The 2006 Record of Condition and the various subsequent Maintenance Schedules provided snapshots of the state of the fixed equipment and of parts of the fields at particular points in time, but those points in time are all some way removed from the date of issue of the Notice of Irritancy. We were surprised to learn from Mr Lewis that he did not further inspect the Farm for the purpose of instructing the issue of the Notice of Irritancy between 11 July 2013 and 19 June 2015, which no doubt explains why, as the evidence unfolded, some of the maintenance tasks identified as outstanding in the Annexure turned out to be no longer an issue. The Applicant’s expert witness, Hugh A Jones BSc, FRICS, FAAV, a Consultant to Edwin Thompson Chartered Surveyors, Galashiels, Selkirkshire (“Mr Jones”), according to his Report dated 20 and 23 June 2016 [Production 69], did not first inspect the Farm for the purpose of these proceedings until 24 May 2016, nearly eleven months after the Notice of Irritancy had been issued. We shall return to the implications of these observations in due course.

Witnesses

[10] At the hearing, Counsel for the Applicant, who was first instructed when the hearing was pending and had not advised in connection with the issue of the Notice of Irritancy, led evidence from Mr Lewis and Mr Jones. The Applicant herself neither gave evidence nor attended the hearing. The Respondent gave evidence, with the only other witness called by Mr Lean being her expert, Thomas R. Oates MRICS of Youngs RPS, Chartered Surveyors, Alnwick, Northumberland, who spoke to his Report [Production 47]. We think it fair to say that as the evidence came out, there was not much of substance in dispute between the parties so far as the primary facts of the case were concerned: where dispute lay was as to the legal significance of those facts. We are quite satisfied that the witnesses were all trying to tell the truth as they saw it. The Respondent was far from being an expansive witness, and she exhibited an oddly detached mien throughout the proceedings, but nothing she did say provided us with any reason to conclude that her testimony should not be accepted as generally credible and reliable. On the afternoon of Tuesday 20 November, whilst Mr Oates was being cross-examined, confusion reigned for a time as to what part of the Farm was depicted in a photograph [AL33] contained in Mr Jones’s Report. Counsel for the Applicant, prompted by Mr Lewis, had identified it as showing a gate between Fields 289 and 591, but Mr Oates disagreed, believing it showed the gate between Fields 590 and 591. The next morning, Counsel for the Applicant advised us that Mr Lewis had realised overnight that he had misidentified the part of the Farm shown in the photograph, and that the Respondent’s position thereon was correct, and with a view to avoiding further confusion, now wished to tender his apologies and correct the record. The issue thereby resolved itself. We do not take Mr Lewis’s initial mistake, over what was a comparatively minor point of fact, as a reason to doubt his reliability as a witness more generally: our difficulties with his testimony concerned not so much his basic recollection of the facts (although he was, on occasion, liable to make emphatic assertions about the actions of others based on the flimsiest of factual foundations), as his lack of real understanding of the respective rights and obligations of the parties to an agricultural lease and his sometimes unreasonable expectations as to what the landlord is entitled to demand of the tenant in obtempering his or her contractual obligations thereunder.

[11] Whilst on the theme of our assessment of the witnesses, we would add that what became increasingly clear to us as the case proceeded was just how badly the landlord-tenant relationship has broken down here. The evidence suggested that the original parties to the Lease maintained a good working relationship, but that matters began to deteriorate after the Respondent succeeded her late father as the tenant and the Applicant dispensed with the services of professional land agents and her husband, a former army officer with no relevant qualifications or prior experience of such work, assumed their responsibilities. It seemed to us that Mr Lewis and the Respondent viewed each other across the courtroom through a haze of mutual incomprehension, with neither of them either willing or indeed able even to try to see things from the other’s point of view. We have no hesitation in concluding that both sides bear some degree of responsibility for this unhappy situation having come about. The Respondent conveyed the impression of feeling constantly harried by Mr Lewis, but whilst his impatient and overbearing manner, which was manifested even towards the members of the Court during the course of the hearing, does him no favours, and some of his expectations of the Respondent as a tenant were, in our opinion, unreasonable, we do readily understand why her persistent refusal to engage with his more justified concerns about various aspects of her farming practices over a prolonged period should have become a source of extreme frustration to him.

The breaches founded upon by the Applicant

[12] In paragraph (i) of the Notice of Irritancy, the Applicant alleged breaches by the Respondent of Clauses 5 and 7 of the Lease in that:

“you (a) have conducted and continue to conduct a hireling business at the said Holding, (b) you have failed and continue failing to keep the said Holding well and sufficiently stocked with stock which is the Tenant’s own bona fide property, and (c) have left fallen stock (comprising both sheep and cattle) unattended or otherwise burned or buried on the said Holding”.

Clause 5 (Stocking.) of the Lease provides that “The tenant shall keep the farm well and sufficiently stocked with stock his own bona fide property.” Clause 7 (Management and Cultivation.) of the Lease provides that:

“The tenant shall be bound to reside constantly on the farm and to cultivate, manure, labour and crop the lands so far as the farm or any part thereof is arable and not in permanent pasture in all respects according to the most approved rules of good husbandry practiced in the district and in accordance with the Sixth Schedule to the Agriculture (Scotland) Act 1948 and in the year of his waygoing should the landlord so desire, the farm shall be left and handed over on a seven course shift, that is to say, one seventh shall be in greencrop, one seventh in oats, one seventh in barley or oats sown out with grass seeds and not less than three sevenths in temporary grass (or as near to these proportions as the size of the field will allow.) No part of the farm and lands shall at any time be used as a market garden or for fruit cultivation. The farm shall be let as an arable and stock rearing farm and shall not be held to be let as a Dairy Farm and the landlord shall not be under any obligation to carry out any alteration whatever required by the Sanitary Authorities in connection with the sale of milk and other dairy produce.”

Conduct of a hireling business at the Farm

[13] Counsel for the Applicant spent a considerable amount of court time exploring with Mr Lewis and then with the Respondent the number of horses kept by the Respondent on the Farm and the nature and extent of her various equestrian activities, information about some of which had been culled by Mr Lewis from the Respondent’s social media postings, and the remainder from his sporadic observations of comings and goings from Castleside Farm and from hearsay, the source of which was identified as one Lesley Douglas, the proprietor of an equestrian business in the Scottish Borders. Ms Douglas’s name appeared on the Applicant’s list of witnesses but she was not called to give evidence. Attention was focused on a Riding Establishment Licence - Renewal (10 horses) granted to the Respondent on 19 May 2015 [Production 76] and attempt was made to make something of the circumstances in which the Respondent had sustained injury (a dislocated knee and ligament damage) whilst assisting a racehorse trainer friend saddle a runner at Perth races in July 2014. The evidence of the Respondent was that she was a keen rider, who formerly had hunted regularly with the Buccleuch, and that whilst she did occasionally supply mounts for Hunt servants at meets and horses for lads from the local racing yards to ride during the Common Ridings season at events closer to home, this was not a service she advertised. The impression we formed was that this was something she did for minimal profit and with a view to defraying the costs of her own equine activities.

[14] Many farmers, including tenant farmers, in the Scottish Borders keep a few horses about the farm, be it for hunting, point-to-pointing or other forms of equine sport, and before proof was led it had been unclear to us upon what basis it was to be argued on behalf of the Applicant that for the Respondent to participate in the activities described in the preceding paragraph constituted a breach of her obligations under either of Clauses 5 or 7 of the Lease. Nevertheless, it still came as a surprise to us when we were informed, in the course of closing submissions, that the Applicant was not contending that the Respondent’s equestrian activities were themselves a “stand-alone” ground for irritating the Lease, and that the evidence led in connection therewith had been merely “by way of background” to the other breaches which were being founded upon. The argument, as we understood it, was that the Respondent’s “farming” breaches were attributable to her devoting too much of her time to her equestrian activities, the conduct of which from the Farm, it was now acknowledged, was not itself a breach of Clause 7 of the Lease. This explanation left us somewhat nonplussed, in that in order to establish breach by the Respondent of the latter’s obligations under the Lease, the Applicant has no need whatsoever to adduce evidence to explain, as a preliminary, why such breach may have come about. At any rate, standing the Applicant’s concession that paragraph (i)(a) of the Notice of Irritancy is not being advanced as a stand-alone ground of irritancy, we need say no more about it here.

Failure to keep the Farm well and sufficiently stocked

[15] Paragraph (i)(b) of the Notice of Irritancy focuses the issue of the level of stocking of the Farm. Mr Lewis spoke to his perception that stock numbers on the Farm had been in decline over a number of years before the issue of the Notice of Irritancy, but he frankly acknowledged that he was not in a position to supply figures to substantiate that general impression. Mr Jones did carry out a count of the livestock present upon the Farm on the occasions of his visits to the Farm on 24 May and 6 June 2016, when he noted the presence of some 16 mixed yearling cattle, 22 beef cows with 9 calves, and between 60 and 70 adult sheep, being predominately Greyface ewes with lambs, but such evidence, being merely a snapshot of the numbers of livestock present on the Farm on two close dates nearly a year after the date of issue of the Notice of Irritancy, is of little or no relevance here. In his Report, Mr Jones opined that the Farm was “clearly an upland livestock farm” and that it was “best suited for sheep production”. According to his assessment, based on standard figures taken from the SAC Farm Management Handbook, a stocking rate of 525 breeding ewes together with 20 spring calving beef cows (equating to an overall stocking rate of 1.13 livestock units per hectare on an adjusted basis) was “one which should readily be achieved by an ‘average’ tenant”. A more intensive operation might achieve a higher stocking rate of 1.5-2 livestock units per hectare, albeit with correspondingly higher inputs in terms of fertiliser, etc. He noted that in draft Accounts of the Respondent to 28 May 2011, originally produced by the Respondent in proceedings for rent review before this Court (Application RN SLC/180/11) that settled in 2013, and lodged now by the Applicant in this process as Production 71A, the balance sheet recorded the Respondent as having a stock of 433 Greyface ewes with lambs, 24 cows with calves and 11 older cattle, equating to an overall stocking rate of approximately 0.9 livestock units per hectare on an adjusted basis. Clearly, he concluded, current stocking was very low and he considered that the Farm was “significantly understocked with potential implications with regard to long term damage through understocking.” Undergrazing could lead to grassland becoming rank and deteriorating in quality. Mr Jones did not, however, suggest that such damage had already occurred by the two dates upon which he attended at the Farm nearly a year after the issue of the Notice of Irritancy. Mr Jones had visited the Farm in or about 2011 on the instructions of the Applicant in connection with the rent review proceedings, and in January 2015 for the purpose of a valuation report, but when asked whether he had noticed any differences in the state of the Farm between those visits, he stated that he had not noted any differences or made a comparison when he attended there in 2015. He had not carried out a livestock count on the occasion of his 2015 visit. It was striking that, when asked by Counsel for the Applicant for his “overview” of the state of the grassland on the Farm, and whether it was being grazed to its full potential, Mr Jones replied that it was “difficult to say on the basis of one day’s inspection”, but that “on the basis of [his] calculations [our emphasis]”, he thought not.

[16] There was nothing in Mr Jones’s Report to indicate that in compiling it he had had before him, or had taken into account, the actual terms of the Lease, which must be the starting point of any analysis of the extent of the Respondent’s stocking obligations. Clause 5 of the Lease, the terms of which were put to Mr Jones in the course of his oral testimony, obliges the tenant to keep the Farm “well and sufficiently stocked”, but as Counsel for the Applicant recognised, the task is to give meaningful content to those somewhat unspecific words, as to which he had been unable to locate any prior authority. He accepted that the words “sufficiently stocked” must have what he referred to as a “numerical connotation”, but he argued that the expression “well and sufficiently stocked” had a qualitative as well as a quantitative aspect; whilst we would not take issue with that submission, it does not, by itself, greatly assist us to determine how a clause in such terms falls to be applied in the circumstances of a particular case. In a further effort to import some practical content into Clause 5 of the Lease, Counsel for the Applicant argued that, so far as its qualitative aspect (i.e. “well … stocked”) was concerned, we should have regard to the contents of the statutory Rules of Good Husbandry set out in the Sixth Schedule to the Agriculture Act 1948. As is explained by the Right Hon Lord Gill in his Agricultural Tenancies (4th Ed., 2016) at paragraph 14-06 (we have updated the reference, having been directed at the hearing to the corresponding paragraph in the 3rd Ed.; of 1997), the Rules of Good Husbandry, which are applied by section 85(1) of the 1991 Act for the purposes of the 1991 Act, are relevant to, but do not necessarily determine the extent of, the tenant’s common law obligation to practise good husbandry or any contractual obligation to that effect in the lease or collateral agreement, but on the other hand are decisive of certain specific questions that arise under the [Agricultural Holdings] Acts. Whilst not going so far as to suggest that the Rules of Good Husbandry should be held as incorporated into Clause 5 of the Lease, Counsel for the Applicant did submit that resort might be had to them as indicative of what the original parties thereto must have intended to be comprised within the words “well and sufficiently stocked” when they entered into the Lease in 1967 (albeit that the date of entry in terms of Clause 2 thereof was Martinmas (28 November 1966)). As we understood him, he was in effect arguing that the contents of the Rules of Good Husbandry formed part of the “factual matrix” against the background of which the original parties had entered into the Lease, and as such might be resorted to as an aid to construction of Clause 5 thereof.

[17] We consider that there are two, together insuperable, objections to that submission. In the first place, the parties to the Lease chose expressly to invoke the Rules of Good Husbandry in Clause 7 in the context of the tenant’s duty “to cultivate, manure, labour and crop the lands so far as any part thereof is arable and not in permanent pasture”, which suggests to us that if they had intended to invoke them also in Clause 5, in the context of the tenant’s duty “to keep the farm well and sufficiently stocked”, they would also have done this expressly. In the second place, the particular paragraphs of the Rules of Good Husbandry to which it was suggested we should have regard were, in the case of paragraph 2(c) (“where the system of farming requires the keeping of livestock, the proper stocking of the holding”) singularly un-illuminating, and in the case of paragraph 2(e), in our view, not relevant to the Respondent’s situation. Paragraph 2(e) is in the terms:

“as regards hill sheep farming in particular:

(i) the maintenance of a sheep stock of a suitable breed and type in regular ages (so far as is reasonably possible) and the keeping and management thereof in accordance with the recognised practices of hill sheep farming;

(ii) the use of lug, horn or other stock marks for the purpose of determining ownership of stock sheep;

(iii) the regular selection and retention of the best female stock for breeding;

(iv) the regular selection and use of tups possessing the qualities most suitable and desirable for the flock;

(v) the extent to which regular muirburn is made; …”

[18] However, the Farm under consideration was not let as a hill sheep farm. It was let as an “arable and stock rearing [our emphasis] farm” and as such it was not incumbent upon the Respondent, in terms of Clause 7 of the Lease, to breed a single lamb thereon. It would be quite compatible with fulfilment of the obligations placed on the tenant by the Lease for the tenant to buy in different batches of sheep or cattle over the course of the year and keep them for a few months as forward stores or for finishing, which is why, in order to establish breach by the tenant of the obligation in Clause 5 to keep the Farm “well and sufficiently stocked” (or for that matter a failure to meet the requirement of paragraph 2(c) of the Rules of Good Husbandry in relation to the “proper stocking of the holding”) it will not, ordinarily, be enough, as a matter of evidence, merely to establish the number of animals that happen to be present on the Farm on one particular date, being the date of issue of the notice of irritancy.

[19] Mr Jones’s approach to stocking density proceeded upon the stated basis that the Farm was an “upland livestock farm”, and he calculated what an average stocking rate for such a farm would be, but as has been noted, the Farm was, in terms of Clause 7 of the Lease, actually let “as an arable and stock rearing farm”, with nothing in the Lease to prescribe what proportion of the farmland is to be used for arable and how much for stock rearing. It follows that, in our view, the results of Mr Jones’s calculations are irrelevant to our task. Counsel for the Applicant, in his closing submissions, argued that Mr Jones’s suggested achievable stocking rate for an upland livestock farm of 525 breeding ewes together with 20 spring calving beef cows represented a threshold which, if not reached, would be enough to establish breach of Clause 5 of the Lease, but we were not favoured with any explanation of the process of reasoning upon which it could be concluded that maintaining a stocking rate of 525 breeding ewes and 20 spring calving beef cows would satisfy Condition 5 of the Lease, but maintaining a stocking rate of, say, 500 breeding ewes and 15 spring calving beef cows, would not. We also bear in mind in this context that Mr Jones affirmed, under cross-examination, that the stocking levels vouched for by the 2011 draft Accounts, whilst at the lower end of the scale, “would probably be” within an acceptable range.

[20] We think the evidence we heard from the Respondent herself went some way towards confirming Mr Lewis’s general impression that the numbers of livestock maintained on the Farm had reduced in recent years. The Respondent explained that her core flock of Greyface (including some Suffolk cross) ewes had declined in number and she had in 2014 disposed of her flock of 100 Scottish Blackface ewes, acquiring in their place in November 2014 400 “Easycare” ewe hoggs from a dealer in Lancashire. This experiment did not prove successful. There was a significant level of mortality amongst the new Easycare hoggs the following spring, the Respondent estimating that she lost some 50 - 60 head of stock over a few weeks through tick-borne fever. Thus, the only lambs born on the Farm in the Spring of 2015 were to ten or so of the Easycare hoggs that had got in lamb (presumably inadvertently), and to such of the Greyface ewes as then remained on the Farm (and which according to Mr Jones’s calculations numbered some only 60 – 70 by the following year). The surviving Easycare gimmers were put in lamb in the autumn of 2015, and sold before lambing in the Spring of 2016, the Respondent frankly stating, in a somewhat startling passage of evidence, that she wanted to move them on before they lambed because of problems she had experienced on the Farm in the past with ewes aborting. The evidence with regard to cattle numbers on the Farm indicated that a herd of cows numbering in the low twenties with their yearling and calf followers was maintained by the Respondent in the years preceding the issue of the Notice of Irritancy.

[21] The Respondent did not produce at the hearing her flock or movement records and the Applicant made no attempt in advance of the hearing to recover these records, the contents of which presumably could have established definitively the number of sheep on the Farm from time to time in the year(s) prior to the date of issue of the Notice of Irritancy. The Respondent’s oral testimony as to the numbers of sheep kept by her on the Farm was less specific than might have been wished, but it was internally consistent and we accept it as being broadly accurate. From that evidence, it is clear that there was, during 2015, a reduction in the number of animals on the Farm, consequent upon the Respondent’s ill-starred and short-lived experiment with Easycare sheep, which resulted in a much smaller lamb crop in 2015 than ordinarily would be present. We accept the evidence of Mr Jones that the Farm could have carried a larger stock of sheep and cattle than appears to have been present thereon on the date of issue of the Notice of Irritancy if the Farm had been let as a hill sheep farm, but that is not what is provided for in the Lease, and the words “well and sufficiently stocked” do not, in our view, bear the implication that any stocking level below the optimal stocking capacity of the Farm if let as a hill sheep farm means that Clause 5 of the Lease has been breached. A farm can be grazed at different levels of intensity and indeed, some agricultural support schemes now actively encourage lower stocking density.

[22] The obvious question begged by the words “well and sufficiently stocked”, but not convincingly answered in the submissions we heard, is “sufficiently for what purpose?” Mr Jones suggested two answers to that question, being (a) sufficiently to enable the tenant to pay his rent, and (b) sufficiently to ensure that the Farm is being well managed and looked after, and we incline to the view that this is about as close to a workable answer to that question as we are likely to get. In the context of grazing land, Mr Jones’s answer (b) might be expressed in contemporary agricultural parlance in terms of maintaining the grazing land in good agricultural and environmental condition. As we understood it, the import of Mr Jones’s evidence was that if the Respondent continued at her current levels of stocking, there was the potential to do harm to the grazing, but that such harm could not yet be said to have occurred, and that at a date some eleven months after the date of issue of the Notice of Irritancy which is, for the purposes of the present application, the punctum temporis (point in time) against which fulfilment by the Respondent of her contractual obligations under the Lease requires to be judged. Mr Jones, under cross-examination, explained that identifying the effects of undergrazing was not an exact science; the effects did not appear overnight, and how long they would take to become apparent depended on the nature of the ground. Hill ground would exhibit the symptoms of undergrazing sooner than lower lying ground, because the animals tended to congregate on the lower lying ground. It was a matter of taking stock and comparing the land on a year on year basis, which Mr Jones had been unable to do in 2016 because on his January 2015 visit to the Farm, he had not been directing his mind to that issue and thus had no base measure for comparative purposes. In the foregoing circumstances, we consider that the Applicant must be held to have failed to prove breach by the Respondent of her obligation in terms of Clause 5 of the Leases to keep the farm well and sufficiently stocked with stock her own bona fide property.

Disposal of fallen stock

[23] Paragraph (i)(c) of the Notice of Irritancy alleges breach by the Respondent of Clauses 5 and 7 of the Lease in that she has “left fallen stock (comprising both sheep and cattle) unattended or otherwise burned or buried” on the Farm. There is no express term of the Lease which bears directly on the extent of the tenant’s obligations in respect to the disposal of fallen stock on the Farm, and it is by no means obvious, and was not explained to us in the closing submissions for the Applicant, how the existence of any such obligation might be derived, whether by implication or otherwise, from the terms of Clauses 5 and 7. The Applicant produced and Mr Lewis spoke to a number of undated photographs [Productions 16-23] of fallen stock which he or his wife, the Applicant, had spotted around the Farm at various times, and of sites where, it was suggested, carcasses had been either burned or buried. Mr Lewis’s evidence was that these photographs had been taken at different times over a period extending from 2012 to the spring/summer of 2015. It was acknowledged by the Respondent that she had been spoken to by officials from Scottish Borders Council about her practices with regard to the disposal of fallen stock, but it was not suggested for the Applicant that a prosecution or any other formal enforcement action followed from those dealings.

[24] On the first morning of the hearing, Counsel for the Applicant moved us to issue citations upon two named employees of Scottish Borders Council Regulatory Services Division, who, we were given to understand, would be asked to speak to these matters, to compel their attendance at Court on Thursday 14 July 2016. Having ascertained that the Applicant’s agents had not yet even spoken to either of these persons, that neither one of them had any inkling that he might be required to travel to Edinburgh that week to give evidence in this case, and that their availability to attend on that date had not been ascertained, we refused the motion on the basis that it came too late (Rules 20(1) and (6) of the Rules of the Scottish Land Court 2014 contemplate that any such motion should be made at least two weeks before the date on which the hearing takes place) and that it would be quite unreasonable to compel their attendance with no prior warning and at such short notice. The Respondent testified, in answer to questions about the burial of fallen stock on the Farm, that she had indeed buried on the Farm a very old Shetland pony she had inherited from a neighbour. We would observe, in passing, that the Shetland pony being a pet animal, this was something she was perfectly within her rights to do. She denied that she burned carcasses on the Farm. The principal adminicle of evidence founded upon by the Applicant in support of that allegation was the undated photograph lodged by the Applicant as Production 19, said by Mr Lewis to have been taken circa 2013, over which the Court pored for some time during the hearing. The Respondent disputed that what was shown in the photograph was a burial pyre containing the charred remains of a number of dead sheep. She contended that the photograph showed two sheep carcasses, thrown on to the top of a charred pile of old straw, silage wrap, clarts and clags whilst awaiting collection by the knackers. She explained that her practice with regard to the disposal of fallen stock formerly had been to take advantage of her association with the Buccleuch Hunt, whose Kennels offered her a cheaper means of disposal, but because the Kennels no longer uplifted, and she had no trailer to deliver carcasses to the Kennels, she now used the local knackers’ yard, S.B. & Co, of Newtown St Boswells, taking any fallen stock off the hill and leaving the carcasses by the sheds near the river to await collection by S.B. & Co. the next time they were in the locality.

[25] It is a truism of agricultural life that where you have livestock, you will also have dead stock. The unusual levels of mortality which the Respondent experienced with her Easycare sheep in the Spring of 2015 conceivably may have precipitated a breakdown in her system for disposing of fallen stock at that time, but the evidence founded upon by the Applicant in support of any such proposition was limited both in quality and quantity. In particular, we do not consider that the evidence we heard would entitle us to hold that the Respondent was in the habit of either burying fallen livestock on the Farm or burning carcasses on open bonfires. The 2013 photograph lodged as Production 19 was insufficiently clear to enable us to form any firm conclusion as to what it showed, but even if it did show what Mr Lewis contended it did, and was indeed taken in 2013, it thus pre-dated the issue of the Notice of Irritancy by some two years. The Respondent meanwhile spoke to the system for the disposal of fallen stock which she now had in place, and she was not seriously challenged on her evidence to that effect. For present purposes, then, whilst this chapter of the evidence begged questions about aspects of some of the Respondent’s farming practices and her standards of husbandry (we also heard evidence that the Respondent lost a number of calves to an unknown cause in what the Applicant suggested to her was the year 2013), about which Counsel for the Applicant voiced some general criticism in his closing submissions, it is not, in our view, of relevance in the context of the present application. We are not here dealing with an application under section 26(1) of the 1991 Act for a certificate that the Respondent is not fulfilling her responsibilities to farm in accordance with the Rules of Good Husbandry, but an application for declarator of a conventional irritancy where the trigger for irritancy under Clause 18 of the Lease is contravention or failure to implement and observe particular conditions of the tenancy. In Paragraph (i)(c) of the Notice of Irritancy, the Applicant perils her position on demonstrating that the Respondent’s actions in leaving fallen stock unattended or otherwise burned or buried on the Farm constitute a breach by the Respondent of Clauses 5 and 7 of the Lease. In the absence of any explanation of the contractual mechanism by which these actions may be said to represent a contravention or failure to implement and observe any of the conditions of either of those two clauses, this ground for irritancy must be rejected.

Failure to maintain fixed equipment on the Farm

[26] Clause 10 of the Lease provides that:

“The Landlord undertakes as soon as reasonably practicable to carry out the work specified in Schedule Number Two. In consideration of this obligation and subject to implement thereof the tenant accepts the whole fixed equipment on the farm as in a thorough state of repair and sufficient and suitable for the farm in every respect for the whole duration of the Lease. The tenant binds and obliges himself to maintain the whole fixed equipment including without prejudice, roadside, plantation, boundary and division fences, dykes and hedges (and march dykes fences and hedges in respect of which the tenant will be entitled to the benefit of any obligations enforceable by the landlord against adjoining proprietors of tenants) on the Farm together with any others to be afterwards erected or constructing in the like good condition during the Lease and also to leave them in the like good condition at his removal therefrom, natural decay, fair wear and tear excepted, all to the satisfaction of the Landlord and without having any claim against the Landlord thereanent. In particular the tenant shall regularly or when called upon by the Landlord repair all farm roads, clean and clear the drain outlet and water courses throughout the farm and keep the same in good working order. The tenant shall be bound to paint with two coats of good oil paint all outside woodwork and ironwork once every four years.”

Schedule Number Two referred to in the Lease consisted of three paragraphs, being “1. Completion of all repairs necessary to put the farmhouse into good and tenantable repair including renewal of bathroom fittings”; “2. External painting of farmhouse and cottages”; and “3. Completion of all proposed repairs and improvements to the farm buildings as proposed in Schedule H.F.A. 4/1A of the Livestock Rearing Improvement Scheme in operation for the farm …”, of the details of which Scheme we heard no evidence and which we take it have no bearing on the present application.

[27] With no formal record of condition, and absent the evidence of surviving persons who could speak to the position at the commencement of the Lease, the principal evidence before us as to the state of the fixed equipment at in-go came from Productions 49, 50 and 51. Production 49 was a copy letter, dictated by Mr F.M Hepburne-Scott, of Hepburne-Scott & Ireland, Chartered Surveyors and Land Agents, Broughton, Biggar, Lanarkshire, and signed by a colleague in his absence, addressed to the Respondent’s late father, Mr R[obert Little] Hardie and bearing the date 7 March 1968. It commenced with an apology from Mr Hepburne-Scott that he had not been able to get over to have a talk with Mr Hardie ”about the fencing and other things at Castleside, however I am now enclosing the whole story on paper.”

[28] First of all, Mr Hepburne-Scott enclosed a map of the Farm, on which had been indicated in red with the appropriate numbers the internal fence and dyke repairs which were:

“shown on the attached schedule taken from the Hill Farming Scheme of which you have a copy. I have not indicated the various march fences on the plan which are in the scheme, but of course a large part of these have already been dealt with. I have scratched out in pencil the fences on Castleside Hill which are no longer there, and indicated approximately in pencil the new fence between the hill and the enclosed land of O.S. 571 and 572. This may not be quite accurate but in any case, none of that needs renewal at present. I hope that this sketch and list will be of some help to you in planning the fences which you would like renewed this year.”

Also enclosed with his letter was “an account of the expenditure on fencing carried out during the past year”, being the document lodged as Production 50. Mr Hepburne-Scott explained in his letter that this showed:

“the total cost applicable to Castleside of all the March fencing which has been carried out £452, and that of the internal fencing which is of course all applicable to the farm £337.9.2 total cost of both of the above £789.9.2. While we have not yet received payment of grant of this, it is anticipated to be half of the cost, leaving one quarter to be borne by the landlord and one quarter by you. Your one quarter share up to date therefore, under the terms of the lease, amount to £197.7.3.”

The extract from the late Mr Hardie’s cashbook which forms Production 51 contains an entry showing an outgoing payment of £197.7.3 to Hepburne-Scott & Ireland on 15 March, the year of which entry is not apparent ex facie the extract but which would seem likely to have been 1968, and a 1970 entry showing a payment made in respect of fencing in the sum of £149.5.7.

[29] The reference in Mr Hepburne-Scott’s letter dated 7 March 1968 to the late Mr Hardie’s one quarter share of the (50% grant aided) fencing costs “under the terms of the lease” properly refers to the contents of the Post-Lease Agreement. Clause ONE: of the Post-Lease Agreement provides that:

“Notwithstanding the terms of the said Lease the Landlord and Tenant agree that the net cost of the following items, after deduction of any Government grants or subsidies or contributions from neighbouring Proprietors which may be received, shall be borne equally between them.

(One) All renewals, when necessary through fair wear and tear of fences and dykes.

(Two) all renewals, when necessary through fair wear and tear of roofs of houses and buildings.

(Three) All new tile or pipe drainage schemes.

All such works shall be carried out on the instructions of the Landlord’s Factor or subject to his approval and any payments due by either party to the other shall be settled following completion of the works at the time of the next payment of rent.

In the event of failure by the Tenant to implement his obligations under these conditions the Landlord shall have power to carry out the necessary work and to recover the cost from the Tenant with the next payment of rent following completion.”

[30] It increasingly seemed to us as the case proceeded that although the parties’ respective expert witnesses expressed themselves somewhat differently, they were, on a proper analysis, essentially saying much the same thing about the state of the fencing on the Farm. Neither expert, it should be noted, claimed to have walked every fence line, or rattled every post, but on the basis of their respective visual inspections, they arrived at much the same place. Mr Oates, whose Report was based on an inspection of the Farm carried out just short of one year after the date of issue of the Notice of Irritancy, on 9 June 2016, repeatedly characterised the fencing as “stock-proof”, i.e. effective in preventing livestock from straying, and we did not understand Mr Jones to disagree with that overall assessment. Mr Jones’s position was that the traditional high tensile post and wire fences on the Farm were, to quote from his Report,

“generally old and … have been the subject of considerable patch repair maintenance which is clearly becoming more onerous with age. The result is that a high proportion of fences are nearing the end of their useful life and ideally a programme of regular replacement should be instigated.”

In his oral testimony, he stated that the fences were at the stage where it was not economic to repair them. He had no reason to question the adequacy of the patch repairs he had noted had been carried out to the fencing, but because of the age of the fencing, such repairs would endure for only a short period before further remedial work would be necessary.

[31] Those conclusions chime closely with the general impression we formed of the fencing when we visited the Farm towards the end of 2016. If, as seems likely to us, much of this fencing is the original post and wire fencing erected at or about the inception of the Lease as spoken to by the contents of Productions 49 and 50, it is a tribute to the quality of the materials used, the skill of the original fencers and the extent of the maintenance it has received over the past half-century that the fencing has survived so long. That said, however, as Mr Jones reported, and as we ourselves have observed, matters have now reached a point at which, as a result of natural decay and fair wear and tear, the fencing is, to all intents and purposes, beyond maintenance and repair and requires to be replaced or renewed in conformity with the sort of phased programme which Mr Jones had in contemplation. Such a situation has not arisen overnight, and we have no reason to suppose that the position was any different on 19 June 2015 when the Notice of Irritancy was issued.

[32] We heard evidence about the state of stretches of riverside fencing, parts of which were carried away along with the banking in the floods which hit the Scottish Borders in December 2015/January 2016. Both Mr Jones and Mr Lewis spoke to photographs taken of this damage, some of which were contained within the former’s Report and others held on a disc [Production 74], print-offs from which were lodged as Production 75, but as the damage caused by the floods post-dates the issue of the Notice of Irritancy, the state of the riverside fencing after the floods is not relevant to our deliberations. It seems reasonable to infer that before the floods did their damage, the riverside fencing would have been in a similar state to the remainder of the original fencing on the Farm as spoken to by the parties’ respective expert witnesses in the wake of their respective 2016 inspections. The Annexure to the Notice of Irritancy contains a number of entries relating to the state of various dykes on the Farm, it being suggested that these are no longer stock proof and require repair. Dykes do indeed form part of the fixed equipment on the Farm, but the evidence available to us as to the state of the dykes when the Lease was entered into is limited to a couple of references on the second page of Mr Hepburne-Scott’s letter to Mr Hardie dated 7 March 1968, the import of which references, as we read them, is that the dykes were not themselves fully intact and stock-proof even back then, nearly half a century ago, with discussion of the expedient of putting up scare wires as a means of deterring sheep from what must have been already vulnerable sections of the Essensyde March Dyke and of whether, in relation to the (internal) dyke across Broadlee Hill, this was “really going to be worth doing.” Mr Jones made no reference to dykes in the text of his Report.

[33] Standing the evidence of the Applicant’s own expert witness that a high proportion of fences on the Farm are nearing the end of their useful life and require to be replaced or renewed, the contents of the Annexure to the Notice of Irritancy, in so far as they relate to complaints about the state of the fencing on the Farm, in our view, are misconceived. As Mr Lewis, in acting as land agent for the Applicant, ought to know, responsibility for replacement or renewal of fixed equipment which has been rendered necessary by natural decay and fair wear and tear rests, both at common law and in terms of section 5(2)(b) of the 1991 Act, with the Landlord. By Clause ONE: (One) of the Post-Lease Agreement, the parties agreed that, notwithstanding the terms of the Lease, the net cost of all renewals, when necessary through fair wear and tear of fences and dykes, after deduction of any Government grants or subsidies or contributions from neighbouring Proprietors which may be received, were to be borne equally between them. It was stipulated that all such works were to be carried out on the instructions of the Landlord’s Factor or subject to his approval, and provision was made for the settlement by either party to the other of his share of the cost where the renewal was carried out by the other. The more perplexing aspect of Clause ONE: of the Post-Lease Agreement is the provision at the end that “In the event of failure by the Tenant to implement his obligations under these conditions the Landlord shall have power to carry out the necessary work and to recover the cost from the Tenant with the next payment of rent following completion.”

[34] The issue of construction which this raises is that the only obligations imposed on the Tenant “under these conditions”, taking “these conditions” to be what is contained within Clause ONE: of the Post-Lease Agreement, relate to payment. At any rate, what is clear is that all works of renewal falling within the terms of paragraphs (One), (Two) and (Three) of Clause ONE: of the Post-Lease Agreement require to be carried out either on the instructions of the Landlord’s Factor or subject to his approval, which means that, in terms of the Post-Lease Agreement, the Tenant cannot act unilaterally in relation to the renewal of fixed equipment, and at common law and under section 5(2)(b) of the 1991 Act is not responsible for effecting replacement or renewal rendered necessary by natural decay and fair wear and tear. It follows, in our opinion, that where replacement or renewal is rendered necessary by natural decay and fair wear and tear, that is first and foremost an issue for the Landlord rather than for the Tenant. That would, after all, be the position at common law and under statute in relation to replacement or renewal rendered necessary by natural decay or by fair wear and tear of all of those other items of fixed equipment on the Farm which do not fall within the terms of paragraphs (One), (Two) and (Three) of Clause ONE: of the Post-Lease Agreement: these provisions apply only to the renewal, when necessary through fair wear and tear of fences and dykes, roofs of houses and buildings and all new tile or pipe drainage schemes, and have no bearing on the replacement or renewal of any other fixed equipment on the Farm. We consider that much clearer words would have had to be used for Clause ONE: of the Post-Lease Agreement to be construed as effecting a departure from that position.

[35] The Respondent testified that she had obtained an estimate for renewal of part of the fencing on the Farm in 2006 [Production 52] which the Applicant had refused to approve: we did not understand Mr Lewis to dispute this claim, his position in response being that the Applicant had declined to do so because of difficulties she had encountered in recovering from the Respondent the latter’s share of the cost of other works of renewal. The Applicant had required to sue the Respondent in an action in the local sheriff court to enforce payment of disparate sums due by the Respondent to the Applicant, one of which sums was the Respondent’s share of the cost of renewal of a march fence, and another an outstanding liability in expenses for which the Respondent had been found liable in this Court arising out of the rent review proceedings between the parties in 2011-2013. That the Applicant may in the past have had to resort to legal proceedings to recover sums due by the Respondent is not, in our view, a relevant basis for her, through her Factor, to decline to instruct or approve the execution of works of renewal of fixed equipment necessary through fair wear and tear in terms of Clause ONE: of the Post-Lease Agreement.

[36] Many of the items which are listed in the Annexure to the Notice of Irritancy and stated in paragraph (ii) of the Notice of Irritancy to represent failures on the part of the Respondent to maintain fixed equipment on the Farm in breach of Clause 10 of the Lease are no such thing, because they concern the farmland of the Farm and not the fixed equipment on the Farm. Thus, the complaints in the Annexure about the state of middens, the spread of gorse, the presence of old agricultural machinery or implements in fields and the need for weed control in particular locations are of no relevance in the context of an alleged breach of Clause 10 of the Lease, which is the only breach alleged in paragraph (ii) of the Notice of Irritancy. Whilst made up/constructed roads on the Farm do form part of its fixed equipment, we heard no evidence whatsoever as to their state as at the date the Lease was entered into and we have no reason to suppose that those roads, which appeared to us to be typical farm roads best traversed by a sturdy 4 x 4 vehicle, are in any materially worse or different state today than they were back in the days of Mr Hepburne-Scott and Mr Hardie. Many of the “tracks” which are referred to in the Annexure are neither marked on the plan annexed and signed as relative to the Lease nor have any proper core or base; they are indeed merely tracks signifying the routes habitually taken across or around the edges of particular fields over the years by the Respondent’s farm traffic and they do not constitute part of the fixed equipment provided by the landlord at all. Mr Lewis, in his evidence, complained of the extent to which, as a result of the rutting of the original route of some of these tracks, their width had been extended by the passage of the Respondent’s vehicles further into the fields in question. When we attended at the Farm, particularly in the fields along the west side of the Woll Burn, we saw clear evidence of what Mr Lewis was complaining of, with tyre tracks fanning out across a wide section of the field where the Respondent’s quad or tractor, in the course of transporting feed to the cattle out-wintered on Broadlee Hill (the lower hill ground), had moved out wide to avoid the deepest ruts, thereby causing damage to Fields 561 and 562, as shown in photographs lodged in process such as photographs 0057 and 0058 in Production 75, but the Respondent’s failure to take remedial action in relation to this rutting, whatever else it may be, does not constitute a breach of Clause 10 of the Lease.

[37] A further aspect of the contents of the Annexure which illustrated Mr Lewis’s lack of understanding of the respective rights and obligations of the landlord and the tenant of an agricultural holding in relation to fixed equipment concerned the state of a wall of the farmhouse. Against the reference FH:4 there appeared the legend “Rear Extension – the wall on the back extension is in need of urgent structural repair.” The same legend appeared below photograph FH:4 in the 2006 Record of Condition. Photograph FH:4 showed an area of the rear elevation of the back extension to the Farmhouse where an area of harling had broken away, exposing the underlying brickwork and what appeared to be a crack in that brickwork. We had, before evidence was led, assumed from the repetition in identical terms in the Annexure of the legend which had appeared below photograph FH:4 in the 2006 Record of Condition, that the state of the back extension had remained unchanged between the date upon which the 2006 Record of Condition was compiled (and photograph FH:4 was taken) and the date of issue of the Notice of Irritancy, but that assumption was misplaced. It emerged from Mr Lewis’s testimony that in fact the Respondent had instructed repairs to the rear extension, and that these had been executed a number of years before the date of issue of the Notice of Irritancy, begging the question why the state of the back extension still featured as an issue in the Annexure. The explanation we received was that Mr Lewis was concerned that the situation disclosed in photograph FH:4 suggested the existence of a potentially serious underlying structural problem, with which the repair effected by the Respondent may not have been adequate to deal, but what was less clear to us was upon what basis it was being asserted that it was the Respondent’s responsibility to assuage his concerns in that regard. If the crack which can be seen in photograph FH:4 does indeed betoken a serious underlying structural problem, that would, in our view, constitute an extraordinary repair which would not fall within the Respondent’s maintenance obligations in terms of Clause 10 of the Lease.

[38] We do not doubt that, as at the date of issue of the Notice of Irritancy, just as was the case on the date upon which we visited the Farm, the Respondent had outstanding maintenance jobs to address, but quite distinctly and separately from the point that much of the fencing requires to be renewed, and its renewal does not fall within the scope of her maintenance obligations, we do not consider that an irritancy for breach of a broadly stated maintenance obligation in an agricultural lease can be incurred by the mere fact that on the day the irritancy notice was issued, there were a few holes in what may be thousands of metres of fencing to be mended, or that a gate would benefit from being rehung, or that there were some missing or loose slates on the farmhouse roof that needed to be attended to (although in giving that last as an example, we should add that, notwithstanding that item FH:5 in the Annexure was “Slates need replacing and holes in roof repaired”, no evidence was put before us to establish that such a situation prevailed on 19 June 2015). In assessing whether a tenant is in breach of a clause in the nature of Clause 10 of the Lease, a practical and realistic approach has to be adopted which entails addressing the issue of whether substantial compliance with the tenant’s obligations in relation to maintenance has been achieved, and that was the approach adopted by parties’ legal representatives in the way they presented the evidence to us. On that approach, we hold that the Applicant has not succeeded in proving breach by the Respondent of her maintenance obligations under Clause 10 of the Lease.

Access to the farmhouse

[39] Paragraph (iii) of the Notice of Irritancy alleges breach by the Respondent of Clause 4(f) of the Lease “in that you do not permit access by the Landlord and/or her land agent and/or any other persons authorised by the Landlord to the farmhouse on the said Holding as and when this is reasonably required with or without notice by the Landlord”. Clause 4 of the Lease sets out the Landlord’s reserved rights under the Lease and paragraph (f) is in the following terms:

“Power to the landlord or her servants or others authorised by her to enter the farm for all necessary purposes at all reasonable times and without notice.”

It is not in dispute that Castleside Farmhouse forms part of the fixed equipment of the Farm and that the landlord’s reserved power of entry extends to Castleside Farmhouse just as it does to any of the other areas of the Farm. The reserved power may be exercised without notice but it is qualified in two respects. In the first place, it is a power to enter “for all necessary purposes”; and in the second place it is a power to enter “at all reasonable times.” The tenant under the Lease would, then, as we read Clause 4(f) of the Lease, be entitled to deny entry to the landlord or her servants or others authorised by her where entry was not for a necessary purpose or at a reasonable time. Of course, the rub comes where the parties to the Lease disagree as to either the necessity of the purpose or the reasonableness of the time, and the potential for such disagreement is nowhere more obvious than in relation to the farmhouse, which as well as being part of the fixed equipment of the Farm, is also the tenant’s home, the tenant being bound by Clause 7 of the Lease to reside constantly on the Farm (but see now section 16A of the 1991 Act, as inserted by section 65 of the Agricultural Holdings (Scotland) Act 2003, which abolished the landlord’s power to irritate the lease for breach of a residence obligation, but replaces a contractual residence obligation with a deemed undertaking by the tenant that, if he does not reside on the holding, he will ensure that a person will reside on it with the skills and experience necessary to farm it in accordance with the rules of good husbandry). Notwithstanding the nominal entitlement of the landlord under Clause 4(f) of the Lease to exercise the power to enter without notice, this potential for disagreement means that the landlord would, in practice, be well advised to give notice to the tenant of an intention to enter the farmhouse for a specified necessary purpose at a specified reasonable time, so that any issue in connection therewith can be flushed out in advance and awkward and inflammatory stand-offs on the doorstep avoided.

[40] The Notice of Irritancy did not specify any particular occasion or occasions upon which the Landlord or her servants or others authorised by her have been refused entry to Castleside Farmhouse by the Respondent, and the Applicant’s pleadings were equally silent thereon. Although the point was not taken against the Applicant, it does seem to us that as a matter of fair notice, if a landlord is purporting to irritate a lease on the basis of breach of such a condition, it is incumbent upon that landlord to specify the occasions on which entry was refused. The Applicant, very sensibly, has tried to negotiate entry to Castleside Farmhouse with the Respondent rather than simply despatch her husband and have him arrive on the Respondent’s doorstep without notice and demand to be admitted. The Respondent, in response to the Applicant’s attempts to arrange entry, has not gone out of her way to accommodate the Applicant in this regard (Counsel for the Applicant’s characterisation of her as being “uncooperative and unresponsive” in answer to Mr Lewis’s various attempts to fix a date and time for taking entry was entirely fair), but at least on the evidence we heard, nor has she ever, in terms, refused access. As the evidence emerged, it became clear that the Applicant, her husband, and persons authorised by her such as tradespeople have, after a certain amount of to-ing and fro-ing, been afforded entry to the farmhouse in the relatively recent past, the most recent occasion before the issue of the Notice of Irritancy having been in the Summer of 2014, and there was no subsequent occasion in the period to 19 June 2015 when entry was actually denied. Owing to the atmosphere of distrust which exists between the parties, and more particularly, we suspect, between the Respondent and Mr Lewis, the Respondent has made it clear that she would wish there to be an independent third party present when the Applicant exercises her power in terms of Clause 4(f) of the Lease to authorise her husband or others to enter the farmhouse. The Respondent is a single woman living alone in a remote location, and in such circumstances, we consider that it would be reasonable, and in the interests of both parties, for Mr Lewis to enter the farmhouse only at a time when there is such a third party available to be present. In any event, we are not satisfied, on the evidence, that the Applicant has established that she had, on any particular occasion in advance of the issue of the Notice of Irritancy, a necessary purpose to enter the farmhouse, in respect of which entry was denied by the Respondent. The only item in the Annexure to the Notice of Irritancy which relates to the interior of the farmhouse is reference FH: 16 (“Bedroom 3: ceiling needs decorating to rectify stains caused by leak”), which originated as long ago as the 2006 Record of Condition. There is, in any event, no contractual provision in the Lease imposing on the tenant any obligation in relation to matters of interior decoration.

Cutting of thistles and weeds

[41] Paragraph (iv) of the Annexure to the Notice of Irritancy alleges breach by the Respondent of Clause 9 of the Lease. Clause 9 of the Lease, so far as founded upon by the Applicant, provides that “The tenant shall annually cut all thistles and other noxious weeds before flowering …” Clause 9 goes on to stipulate the obligations of the tenant in relation to the dressing, trimming and cleaning of hedges on the Farm and for killing of all vermin and moles and the destruction of all rabbits on the lands let but no case for irritancy is advanced on the basis of breach of that part of the clause. Clause 9 of the Lease concludes with the words that “In the event of the tenant failing to carry out any or all of the foregoing obligations, the landlord shall be entitled to have the work carried out to her satisfaction and to charge the tenant with the cost thereof.”

[42] The evidential basis of this aspect of the Applicant’s case was once again very thin. The Respondent testified that she cut thistles and weeds annually after she had cut hay and silage on the arable sections of the Farm. She had a cutter (mower) but no topper, and so would defer tackling the topping of weeds on the outlying fields “so as not to knacker the cutter” before the hay and silage had been cut. She topped docks in the fields by the river early, and often twice a year. The cutting of hay and silage on the arable sections of the Farm would, of course, necessarily achieve the cutting before flowering of the noxious weeds in those fields. In the Respondent’s Answers it was averred that the work of topping thistles, etc. “may not have been done during the course of 2014” as a result of her dislocated knee. In evidence, the Respondent explained that in 2014 she was confined to the farmhouse on crutches at the relevant time following on her accident at Perth races and so was reliant on the assistance of neighbours to keep up with the farm work. Her neighbours did her hay and silage for her in 2014, with the Respondent herself not being out on the tractor again until November of that year. The Respondent, in examination-in-chief, did not expressly affirm that the weeds in the outlying fields were cut before flowering in 2014, but nor did she expressly state that they were not, and she was not cross-examined on this point. Mr Lewis was inclined to dispute that any weeds were cut annually by the Respondent, but his evidence on this point amounted to nothing more than unsupported assertion of unqualified general impression, and we are not inclined to attach much weight to it.

[43] Mr Jones’s evidence, derived from his visits to the Farm in May and June 2016, was to the effect that the arable parts of the Farm were very weedy, which we have to say did not accord with our own general impression, formed on our visit to the Farm some six months later, although we recognise that in the month of December, any such issue would be less apparent to us than to him visiting the Farm before hay and silage were cut. As we understood his evidence, however, he attributed the presence of weeds (in which category he included daisies, dandelions and buttercups) in the arable sections of the Farm to insufficient quantities of fertiliser having been applied to old grassland, leaving it with less vigour to compete with encroaching weeds. This speaks to a shortcoming of soil husbandry but not necessarily to a failure on the part of the Respondent to comply on an annual basis with her obligations under Clause 9 of the Lease. We discuss later in this Note the meaning of the term “noxious weeds” as it is used in Clause 9 of the Lease, but for present purposes we can say that we do not consider that Clause 9 was intended to impose an obligation annually to cut daisies, dandelions and buttercups, the infestations of which noted by Mr Jones being attributable not to lack of annual cutting before flowering but to deficiencies in the Respondent’s soil husbandry. Mr Jones characterised the permanent grassland on the Farm as being generally less weedy, which would suggest to us that some system of control of annual weeds had been in operation in the years immediately preceding issue of the Notice of Irritancy.

[44] The Respondent spoke to her inability to top every weed around the periphery of some fields owing to the topography of the land, as well as to legal prohibitions on spraying weeds close to rivers and conditions of agricultural support schemes that imposed restrictions on cutting to the edge of field margins. Every farmer will be familiar with these problems, and we do not consider that, properly construed, Clause 9 of the Lease falls to be taken as meaning that if every noxious weed on the Farm is not cut annually, the tenant is in breach and vulnerable to incurring an irritancy. As we previously have explained, it is necessary, in interpreting the Lease, to do so in such a way as to render the parties’ contract workable in a practical sense, and as we interpret it, the purpose of Clause 9 of the Lease is to impose on the tenant an ongoing obligation to take effective steps every year to control thistles and other annually recurring noxious weeds by cutting prior to flowering (i.e. before the stage of seed dispersal). It does not set out to require what would be the impossibility of eradicating every noxious weed on a farm. We did not hear submissions on the meaning of “noxious weeds” as that expression is used in Clause 9 of the Lease, but we note that in the New Shorter Oxford Dictionary, “noxious weed” is said to denote, specifically in Australia and New Zealand, a plant considered harmful to animals or the environment.

[45] Closer to home, the Weeds Act 1959, a United Kingdom-wide statute, conferred powers on Ministers to serve upon occupiers of land notices requiring them to take such action as might be necessary to prevent the spread of specified injurious weed species, being spear thistle, creeping or field thistle, curled dock, broad-leaved dock, and ragwort. The five species of weed singled out by the Weeds Act 1959 are annual, biennial or perennially recurring plants, and we infer that the obligation in Clause 9 of the Lease to “annually cut all thistles and other noxious weeds before flowering” was intended by the original parties to the Lease to apply to weeds of that nature. For the avoidance of doubt, we would state that we do not consider that Clause 9 of the Lease is directed towards securing the cutting annually of a leguminous shrub like gorse, contrary to the assumption upon the basis of which the Annexure to the Notice of Irritancy appears to have proceeded.

[46] What is well vouched for in the oral evidence and in the productions is the presence, around the Farm, of a number of unspread middens that clearly have been in situ for some considerable time, and upon which weeds not surprisingly have found a foothold. On inspection, we could see why these middens have not been spread: they contain stones, some of significant size, which any contractor employed to spread manures would look askance at, concerned that were he to attempt to do so, he would be putting his machinery at risk. The weeds on these middens are not susceptible to cutting in the manner contemplated by Clause 9 of the Lease, and it seems to us that the fundamental problem here is with the middens rather than with the weeds on the middens. This is, in our view, an example of a situation where the appropriate remedy for the landlord would be to issue a demand to remedy which, if not complied with within a reasonable time, could be followed up by an application to the Land Court for consent to the operation of a notice to quit in terms of section 22 (2)(d) of the 1991 Act. Even if we are wrong about that, however, there remains to be addressed the issue of waiver raised by Mr Lean for the Respondent.

Waiver

[47] Mr Lean’s argument, that esto the Respondent was in breach of any of her obligations under the Lease as set out in the Notice of Irritancy, the Applicant had by her actions waived her entitlement to terminate the Lease on the basis of those breaches, can be stated shortly. Mr Lewis had acknowledged in evidence that, as indeed appeared from the terms of paragraph (ii) of the Notice of Irritancy, the items listed in the Annexure had been outstanding since at least 11 July 2013 and had not been subject to any further inspection prior to the issue of the Notice of Irritancy on 19 June 2015. In the period between 11 July 2013 and 19 June 2015, the Respondent had tendered, and the Applicant had accepted, instalments of (backhand) rent on four separate occasions, the last of which, on 28 May 2015, had been a mere three weeks before the issue of the Notice of Irritancy. It was inconsistent for the Applicant to insist on her right to enforce the irritancy based on breaches by the Respondent of obligations under the Lease, of the existence of which she had been well aware during the period she was accepting those instalments of rent.

[48] The rejoinder of Counsel for the Applicant to that submission can be even more shortly stated. It was that Mr Lean’s argument that the Applicant had waived her entitlement to found upon the breaches set out in the Notice of Irritancy by accepting instalments of rent in respect of periods after she had become aware of the fact that such breaches had occurred was irrelevant in the absence of averment and proof of actings by the Respondent in reliance upon the Applicant’s waiver. The mere fact that the Respondent had continued to pay rent and remained in possession of the Farm could not amount to such reliance because those were her ongoing obligations under the Lease.

[49] We think, on our reading of the authorities cited, that Counsel for the Applicant was correct in his analysis of the relevant law, and that the Respondent has indeed failed to prove that she acted in reliance upon the Applicant’s waiver. We are not here in the same situation as was said to pertain in both HMV Fields Properties Ltd v Bracken Self Selection Fabrics Ltd 1991 SLT 31 and Wolanski & Co Trustees Ltd v First Quench Retailing Ltd 2004 Hous LR 110, where the landlords had exercised their option to irritate a lease and had subsequently accepted rent from their tenants, conduct which, it was argued by the tenants, was inconsistent with the lease having been terminated. In HMV Fields Properties Ltd v Bracken Self Selection Fabrics Ltd, the Inner House recognised that acceptance of rent was, in all normal circumstances, an act so unequivocal that it must be taken to amount to a waiver of an irritancy. However, whether or not a subsequent acceptance of rent amounted to an unequivocal act amounting to waiver of a notice of irritancy was a question of fact which had to be answered in the light of all of the surrounding circumstances. That approach was followed in the Wolanski & Co Trustees Ltd case.

[50] Here, the Applicant did not exercise any option she may have had to irritate the lease in 2014, but that is not the end of the matter. Rankine states in The Law of Leases in Scotland (3rd Ed.: 1916) at page 543 that the option to irritate must be declared within a reasonable time. Mr Lean, in his closing submissions, complained that the Applicant was not, in these circumstances, entitled to “store up” breaches on the part of the Respondent from previous years, continue to accept rent tendered by the Respondent, and then rely on those now historic breaches in a notice of irritancy. We think that is correct, and that this is particularly relevant in the context of what might be termed successive breaches of a recurrent obligation. We have in mind here the obligation imposed on the Respondent in Clause 9 of the Lease to “annually cut all thistles and other noxious weeds before flowering”. The Respondent in her pleadings acknowledged that this obligation may not have been obtempered in 2014, but even to the extent that it may not have been, the Applicant chose not to irritate the Lease on that basis in 2014. She delayed to do so until 19 June 2015, by which time, in our opinion, the 2014 breach was effectively spent, but the time available to the Respondent to meet her obligation under Clause 9 of the Lease had not yet elapsed, the noxious weeds in question not flowering until well into the months of July and August. In these circumstances, we consider that the Applicant’s case for irritancy on the basis of breach of Clause 9 of the Lease fails.

Conclusion

[51] The Applicant here chose to pursue the contractual remedy of irritancy. She did so ineptly, in that (i) many of the alleged breaches by the Respondent of her obligations under particular clauses of the Lease that were founded upon in the Notice of Irritancy were not, on a proper analysis, actually breaches of those clauses, and (ii) in relation to those alleged breaches that were at least relevant for inquiry, the evidence that the Applicant opted to place before us to make out her case for declarator of irritancy was generally ill-fitted and inadequate to the task. It might be thought too obvious a point to need labouring that where a landlord decides to give notice of irritancy in terms of a conventional irritancy provision, where the irritancy is likely to be contested, he or she should start by identifying the provisions of the lease of which the tenant is considered to be in breach, and then proceed to assemble the evidence needed to prove the fact of such breach as at the date upon which notice of irritancy is to be given. To rely, in seeking to prove that the Respondent was in breach of Clauses 4(f), 5, 7, 9 and 10 of the Lease, and that the Applicant accordingly had grounds for irritancy on 19 June 2015, principally on the evidence of the contents of a Maintenance Schedule last updated on 11 July 2013, and of the Report of an expert witness based on an inspection carried out nearly a year after the date of issue of the Notice of Irritancy that took no account of the terms of the Lease itself, was a somewhat quixotic approach which made for an unsatisfactory proof, through no fault either of the Applicant’s otherwise impressive expert witness, Mr Jones, whose Report simply reflected the terms of the instructions he had been given, as narrated in the second paragraph on the first page thereof, or of Counsel for the Applicant, who had to play as best he could the cards he had been dealt.

[52] As we previously have noted, the Respondent here had nothing to prove: the onus lay on the Applicant to establish the breaches identified in the Notice of Irritancy and thus any deficiencies in that evidence redounded against the Applicant. Our task in these proceedings was to determine whether the Applicant had made out the case for irritancy set out in the Notice of Irritancy dated 19 June 2015. We have concluded that she did not, but it is important to emphasise that in so concluding, we are not making any more general finding as to how well or badly the Respondent is farming the Farm. As we have related, there were aspects of the Respondent’s current farming operation about which we heard evidence that did cause us a not insignificant level of unease, and we quite understand why the Applicant and her husband should be concerned that the fortunes of the Farm presently may be on a downwards trajectory, and that unless urgent steps are taken to arrest that decline, it is only likely to accelerate. The Respondent would be unwise to interpret our decision on this application for declarator of irritancy as representing an endorsement by us of all that she is doing on the Farm: ultimately all that we have decided is that the Applicant has failed to make out the case for irritancy on the facts she chose to place before the Court.

Post script

[53] Whilst we were at avizandum in this application, the keenly anticipated new edition of the Right Hon Lord Gill’s Agricultural Tenancies, op. cit., was published. In paragraph 33-30, under the heading “Immaterial breach” in a section on “Defences to a notice of irritancy”, the learned author states that “A breach of the lease will not incur an irritancy if it is immaterial.” The authorities cited in support of that proposition are Alexander v The Royal Hotel (Caithness) Ltd 2001 SLT 17 at paragraph [49] and Graham’s Executors v Deanston Partnership 2014 SLCR 67. It runs counter to the position adopted by both parties in these proceedings that it was not necessary for the Applicant to prove that the breaches by the Respondent of her obligations under the Lease which were founded on in the Notice of Irritancy were material, in the sense of breaches which otherwise would justify the innocent party in rescinding the parties’ contract. Because the parties were at one on that issue, we did not hear developed submissions thereon.

[54] Alexander was a decision of an Extra Division of the Inner House consisting of Lords Cameron of Lochbroom, Gill and Dawson on an appeal from a decision of the sheriff at Wick on a case stated to him by an arbiter appointed under Schedule 7 of the 1991 Act. The issue before the Extra Division was whether it constituted a relevant defence to an “incontestable” notice to quit an agricultural holding, given under section 22(2)(d) of the 1991 Act following on service of a demand to pay arrears of rent, for the tenant to plead exercise of a right of retention on the basis that the landlord was in breach of his obligation to put the fixed equipment on the farm into a thorough state of repair. The Extra Division held that it was. A right of retention of rent at common law existed where a landlord was in material breach of his obligations under the lease and there was nothing in the wording or scheme of the 1991 Act to alter that position. Paragraph [18] in Alexander appears in the opinion of the Hon Lord Gill (as he then was), with whom Lords Cameron of Lochbroom and Dawson both agreed, whilst adding additional comments of their own. In paragraph [18], Lord Gill observed that:

“The tenant’s only effective remedy to enforce the landlord’s compliance with the terms of the lease is to retain his rent. It is not disputed in this case that the tenant is entitled to do so at common law where the landlord is in material breach of his obligations (Rankine, p 326). The tenant’s entitlement to retain rent in such a case is based on the principle of mutuality of obligations. The right of retention may not be available to the tenant in respect of every breach by the landlord of the terms of the lease. It may be a matter of circumstances in the individual case.”

[55] Although this was not a case involving enforcement of an irritancy, Lord Cameron of Lochbroom, in his opinion, drew attention to section 21(6) of the 1991 Act, which provides that:

“Nothing in this section shall affect the right of the landlord of an agricultural holding to remove a tenant whose estate has been sequestrated under the Bankruptcy (Scotland) Act 1985 or the Bankruptcy (Scotland) Act 1913, or who by failure to pay rent or otherwise has incurred irritancy of his lease or other liability to be removed.”

Pointing out that section 21(6) of the 1991 Act preserved the landlord’s right to enforce an irritancy and thus bypass the notice to quit provisions of the 1991 Act, he observed at paragraph [9] that:

“I cannot think that Parliament intended that a defence which was available to a tenant in response to a proposed irritancy, should not be available also in regard to the notice to quit provisions of the Act, whether or not the notice to quit required the consent of the Land Court. I do not consider that, properly speaking, the provisions of s 22 are to be regarded as a statutory remedy distinct from the common law … Rather, the provisions operate as restrictions on the operation of notices to quit within the general provision in s 21 that a tenancy of an agricultural holding shall not come to an end except by operation of a notice which complies with subs (1), notwithstanding any agreement or any provision in the lease to the contrary. The demand for rent due and hence the notice to quit must operate within the terms of the lease itself.”

[56] In Graham’s Executors, the landlords of a farm sought to enforce an irritancy based on the failure of the tenant timeously to pay rent. The Land Court (Lord McGhie and Mr J A Smith) considered whether the tenant had any defence to the irritancy on the basis of an entitlement to withhold in response to breach by the landlord of his obligations under the lease. It held that the express provisions of the lease precluded the tenant from relying on the landlord’s breaches as a justification for non-payment, but that even if there had been no contractual provision excluding operation of the principle of mutuality in this context, the breaches identified would have been of insufficient materiality to justify withholding rent. As it was put at paragraph [13] of the Note appended to its Order:

“it is well established that a breach must be of some materiality to justify operation of the principle of mutuality. A breach requires to be “material” before it can justify operation of the principle of mutuality: Alexander v The Royal Hotel (Caithness) Ltd 2001 SLT 17 at para [18]. What is to be regarded as a “material” breach will depend on the nature of the tenant’s obligations; in this case an obligation to pay rent.”

[57] As we read the Alexander and Graham’s Executors decisions, they strictly provide authority for a somewhat narrower proposition than that set out in paragraph 33-30, deriving from the application of the principle of mutuality of obligations, and it is not immediately apparent to us that either case directly bears upon what seems to us to be the separate issue of whether, in the case of a lease in which, as here, the irritancy clause fences all of the conditions of the tenancy, the landlord in exercising his contractual right must prove that the breach founded upon is material for an irritancy to be incurred. On the basis that Scots law recognises three types of breach of contract, being (1) trivial breaches, (2) non-material breaches, and (3) material breaches which justify rescission of contracts (Professor William W McBryde, The Law of Contract in Scotland (3rd Ed; 2007) at paragraph 29-88), we would have no difficulty accepting the proposition that “A breach of the lease will not incur an irritancy if it is trivial”, and indeed our approach in dealing with this application may be taken as reflecting that position, but in the absence of full submissions we would wish to reserve our opinion on the issue of whether the stronger proposition that any breach must be material for a conventional irritancy to operate also holds good. In the circumstances of the present application, it would make no difference to the outcome if we did accept it, because a requirement to prove material breach would have set the bar for the Applicant to succeed above the height we have held she has failed to clear.