Decision of the Scottish Land Court

The Buccleuch Estates Ltd (Applicant)
v
Robert Hyslop T/A Robert Hyslop & Sons (Respondent)

Case reference SLC/94/18
before
Iain F Maclean, Deputy Chairman, and Tom Campbell
21 March 2019

Introduction

[1] The Applicants own an area of land extending to 10.19 ha or thereby known as the Whitehill West Grass Parks (“the subjects”). In this application, they seek orders declaring that a formally constituted grazing lease in terms of section 3 of the Agricultural Holdings (Scotland) Act 2003 (“the 2003 Act”) granted by them in favour of the Respondent over the subjects is terminated; that the Respondent has no right or title to occupy the subjects; and for ejection of the Respondent therefrom. In response, the Respondent lodged skeleton answers and a motion that the application be remitted to the Court of Session, which failing, that it be sisted for a period of two months to allow for negotiations. The Applicants having intimated their opposition to the Respondent’s motion, on Thursday 14 March 2019 we heard the submissions of Sir Crispin Agnew of Lochnaw Bt., Q.C., instructed by Dales Solicitors LLP, Galston, Ayrshire, for the Respondent, and Gavin MacColl Q.C., instructed by Anderson Strathern LLP, Solicitors, Edinburgh, for the Applicants, on the opposed motion.

Remit to the Court of Session

[2] Sub-section(2)(a) of section 85 (Remit from Land Court to sheriff or Court of Session) of the 2003 Act provides that any person with an interest in a matter that is before the Land Court for determination under the 2003 Act may make an application to the Land Court requesting that it remit the matter to the Court of Session under section 85(1) of the 2003 Act. Section 85(1) provides that where – (a) a matter is before the Land Court for determination by virtue of the Agricultural Holdings (Scotland) Act 1991 or the 2003 Act; and (b) an action in respect of the matter could competently have been brought before a sheriff or in the Court of Session, the Land Court may (at its own instance or following a request under section 85(2)(a)) remit the case to the sheriff within whose jurisdiction the action could have been brought, or to the Court of Session, if it considers that to be appropriate.

The submission for the Respondent

[3] Sir Crispin explained that the ground for the motion to remit was not that of contingency, because there were as yet no other proceedings between the parties pending before the Court of Session or indeed any other court. The position was that the Respondent maintained a claim against the Applicants for payment, quantum meruit, in respect of advice tendered and services rendered by him to them on a consultancy basis in connection with an open cast coal mining site at Glenmuckloch and its conversion into an energy park. The Land Court had no jurisdiction to deal with that pecuniary claim, but if the present application were to be remitted to the Court of Session, the Respondent might then counterclaim in that same process for payment of the monies he claimed were owed to him. There was an extensive history to the present dispute over the monies the Respondent claimed he was owed by the Applicants, an overview of which was to be found set out in the Respondent’s agents’ letter to the Applicants’ agents dated 3 December 2018 [Production 5], but, put shortly, whilst the Respondent’s claim against the Applicants in respect of advice and services provided during the 2010 – 2013 period had been settled, the Respondent’s claim for the ensuing 2014 – 2017 period remained unresolved. Where the grazing lease fitted into this narrative was that it had been the latest in a series of such leases granted (at a peppercorn rent of £1 per year) by the Applicants to the Respondent whilst discussions between the parties were ongoing, in the course of which the conveyance of the subjects to the Respondent had featured as a possible element in a future negotiated settlement of his remuneration claim.

[4] In response to questions from members of the court, Sir Crispin made clear that he was not disputing that the Land Court had jurisdiction over the present application, and would be entitled, in the exercise of the discretion conferred on it by section 85 of the 2003 Act, to decline the application to remit. Nor was he suggesting that considerations of efficiency or convenience favoured a remit to the Court of Session: disposal of the proceedings for declarator and removal raised by the Applicants in the Land Court would not necessarily be facilitated by being yoked to the Respondent’s prospective action for payment, or vice versa. It emerged that what really lay behind the motion was a concern on the Respondent’s part that were the present application to be determined in the Applicants’ favour before the merits of his remuneration claim had been brought before a court, there was a risk that the subjects would no longer be available to form an element of the settlement he was seeking to achieve, as for instance if the Applicants, having recovered vacant possession of the subjects, were to sell or lease them to a third party in the intervening period. The series of grazing leases over the subjects granted by the Applicants in the Respondent’s favour were really a sham, intended merely to preserve the position for so long as parties’ negotiations continued.

[5] Sir Crispin acknowledged that parties’ settlement negotiations had not achieved consensus, and that the Respondent had no contractual right to insist on renewal of the grazing lease over the subjects in connection with which the present application had been brought, still less on a transfer of title to the subjects into his name. He did, however, emphasise that courts today were keen to encourage parties to resolve their disputes by negotiation, and he contended that the interests of justice favoured the adoption by us of a broader rather than a narrower approach in exercising the discretion conferred on us by section 85 of the 2003 Act. Were the Land Court to proceed with the present application in isolation from the wider aspect of parties’ dispute, it might reduce the prospects of ongoing negotiations between the parties achieving an overall settlement between them.

[6] The Respondent, we were informed, had been surprised by the timing of the present application, which had been made at a point in time at which he had understood negotiations between the parties to remain live, and only the previous week, his agents had put forward a proposal to the Applicants’ agents, to which they had received the response that it would be relayed to their clients. No further response had yet been received from the Applicants’ agents to the Respondent’s proposal. Accordingly, if we were not with him on his motion to remit, Sir Crispin invited us instead to sist the present application for a period of two months to allow further negotiations between the parties to take place, and/or enable the Respondent to instigate the proceedings he had in contemplation in respect of his remuneration claim in the Court of Session, at the end of which period, the motion to remit could be revisited in light of the contents of the Court of Session pleadings, which would give the Land Court a better view of the overall picture.

[7] Finally, in anticipation of the submission he was expecting to hear directed against him by Mr MacColl, Sir Crispin referred us to a passage in a decision of a differently constituted court (The Chairman, sitting with Tom Campbell) in Stornoway Wind Farm Limited v Crofters having rights in Stornoway Wind Farm Site (RN SLC/59/17; Order and Note of 4 December 2017) at paragraph [4], in which the principles that fell to be applied in deciding whether a motion to sist should be granted were adumbrated:

“The applicants’ agents have referred to a number of authorities for guidance as to when a sist should be granted. These are to the effect that the general principle is that an action should be litigated to a conclusion without interruption (MacPhail, Sheriff Court Practice (3rd ed para. 13.71), that any interruption must be in the interests of justice, the onus of demonstrating which being on the party wishing to sist (Connell v Grierson (1865) 3 M 1166 per Lord Deas at 1167; MacPhail ibid at 13.73) and that “it would be improper, against the wishes of one of [the parties], to sist merely to await the result of another action between different parties where the decision in that action would not be binding upon the court, or where it is not clear that the decision in that action would affect the result of the case” (MacPhail, ibid para 13.79). Those principles seem to us to be unobjectionable and none of the respondents who have moved for a sist has taken issue with them.”

It was his submission that a sist here would, in the circumstances he had outlined, be in the interests of justice, but (as we understood him) he acknowledged that in order for us to be clear that the decision in the remuneration claim would indeed affect the result of the present application, we might want first to see the Court of Session pleadings, in which case, we took it, he would wish us, if we were minded to grant the second part of his motion, to refuse the first part only in hoc statu.

The submission for the Applicants

[8] Mr MacColl’s formal motion was that we should refuse the Respondent’s motion in both of its parts. At the beginning of his own submission, he offered two preliminary observations on the submission we had just heard. Firstly, the role of the court was to adjudicate on the rights of the parties before it, not to compel parties to enter into a particular settlement agreement. Secondly, the role of the court was not to privilege one party’s preferred settlement position when to do so would cut across the existing rights of the other party. Sir Crispin’s submission rejected both of those propositions. When he had submitted that it would be in the interests of justice for the court to accede to his motion, what he really meant was that it would be in his client’s commercial and tactical interests were the court to do so. Sir Crispin was unable to say to the court that the Respondent had any contractual right to compel the Applicants to convey the subjects to him. The Respondent claimed that he had an entitlement to payment, quantum meruit, for work he had done for the Applicants, but his only remedy in such circumstances would be to raise an action that, if successful, would result in a decree for payment of a sum of money. As he succinctly put it at a later stage of his submission, the ordinary courts simply didn’t have the power, in these circumstances, to order payment in kind rather than in money. All that the Respondent could say, in support of his motion, was that from a commercial and tactical perspective, it would be inconvenient for him if the Land Court were to determine the present application against him at this stage.

[9] On the applicable law in relation to a remit, Mr MacColl agreed that whether or not to remit was a matter for the discretion of the Land Court, but before the stage of exercise of that discretion was reached, the Respondent had a preliminary hurdle to negotiate. The import of section 85(1)(b) of the 2003 Act was that for a remit to the Court of Session to be granted, the Land Court had to be satisfied that an action in respect of the matter before it could competently have been brought in the Court of Session. Section 39(2) of the Courts Reform (Scotland) Act 2014 (“the 2014 Act”) confers on the sheriff court exclusive jurisdiction in the civil proceedings defined in section 39(1) thereof, being any civil proceedings – (a) which a sheriff has competence to deal with, and (b) in which – (i) one or more orders of value are sought, and (ii) the aggregate total value of all such orders sought, exclusive of interest and expenses, does not exceed £100,000. Section 39(6) explains that for the purposes of the 2014 Act, an order is an order of value if it is – (a) an order for payment of money, or (b) an order determining rights in relation to property. Mr MacColl contended that the Respondent had put before us nothing to show that the order of value sought by the Applicants in the present application, being an order determining rights in relation to property, had a value of in excess of £100,000, so that an action in respect of the matter could competently have been brought in the Court of Session. At the stage of the Land Court exercising the discretion to remit conferred on it by section 85 of the 2003 Act, it should be satisfied that there existed “substantive cause” to do so: Telfer v The Buccleuch Estates Ltd. (RN SLC/119/07; Order and Note of 20 December 2012). “Substantive cause”, he submitted, meant a reason of true legal substance. One party’s tactical interest in negotiations was not such a cause.

[10] Mr MacColl also queried whether the counterclaim it had been indicated the Respondent intended to lodge in the Court of Session proceedings in the event of a remit would be competent, standing the terms of rule 25(1) of the Act of Sederunt (Rules of the Court of Session 1994) 1994 (S.I. 1994/1443)(as amended)(“the 1994 Rules”). Rule 25.1(1) provides that in any action other than a family action or an action of multiplepoinding, a defender may lodge a counterclaim against a pursuer – (a) where the counterclaim might have been made in a separate action in which it would not have been necessary to call as a defender any person other than the pursuer; and (b) in respect of any matter – (i) forming part, or arising out of the grounds, of the action by the pursuer; (ii) the decision of which is necessary for the determination of the question in controversy between the parties; or (iii) which, if the pursuer had been a person not otherwise subject to the jurisdiction of the court, might have been the subject-matter of an action against that pursuer in which jurisdiction would have arisen by reconvention. Rule 25.1(1)(b)(iii) has no relevance to the circumstances of the present application, but, Mr MacColl argued, the Respondent’s prospective remuneration claim equally did not meet the criteria of either rule 25.1(1)(b)(i) or (ii).

[11] The Respondent had been well aware of the Applicants’ intention to make the present application since 10 July 2018, when a pre-action letter so advising had been sent, and the Respondent’s own agents had acknowledged, in their letter to the court dated 22 November 2018, that the settlement discussions had broken down. So far as the Applicants were concerned, that remained the position, and as matters presently stood, the Applicants had little appetite for further discussion. The Respondent’s recent proposal had been relayed by the Applicants’ agents to their client as they were professionally bound to do, but it was Mr MacColl’s understanding that the proposal had been rejected, although this had not yet been formally communicated back to the Respondent’s agents.

[12] Mr MacColl characterised the Respondent’s fall-back position as being comparable to that of the character Wilkins Micawber in Charles Dickens’s novel David Copperfield, that something would turn up. Whatever remedy the Respondent might have in respect of his remuneration claim, it could not impact on the rights and obligations of the parties in respect of the grazing lease: these were distinct and separate issues, and accordingly, there was no proper purpose to justify a sist of the present application. His own procedural proposal was that we should instead allow parties a short period within which to adjust; on the Applicants’ side, that would at least entail the introduction by them of a preliminary plea directed against the relevance of the Respondents’ answers, setting up the possibility of the application proceeding to debate, although the Applicants wished formally to reserve their position at this stage as to whether they yet might apply for summary decree.

The Respondent’s rejoinder

[13] In a brief reply, Sir Crispin submitted that the expression “the matter” where it occurred in section 85(1)(b) of the 2003 Act was broad enough in its scope to allow the Land Court to look not merely at the issue of the grazing lease in isolation, but to take into account also, in the exercise of its discretion, the whole factual background to the grant of the grazing lease and its predecessors in the course of negotiations towards a settlement of the Respondent’s remuneration claim. In response to Mr MacColl’s point, under reference to section 39 of the 2014 Act, that the Respondent had failed to demonstrate that the order of value sought by the Applicants in the present application exceeded the £100,000 threshold to permit an action competently to be brought today in the Court of Session, Sir Crispin submitted that, taking an estimated value of £5,000 per acre, the subjects had a land value of some £125,000. That aside, however, it was not critical to his position that any remit be to the Court of Session: the Respondent’s remuneration claim if necessary could be brought instead in the sheriff court. By a similar token, although the Respondent’s original motion envisaged a counterclaim being lodged upon a remit of the present application to the Court of Session, the Respondent equally might proceed by way of a separate action in either the Court of Session or sheriff court, with which the present application might be conjoined after a remit. We took it that the Respondent would be content with any of these various outcomes. Finally, addressing Mr MacColl’s principal argument, that in the exercise of our discretion regarding remit, we should not do so in such a way as to benefit one party in negotiations, Sir Crispin contended that we equally should be alert to avoid prejudice to that party in the negotiations.

Discussion

[14] It was notable that at no point in the course of his submissions in support of the Respondent’s motion did Sir Crispin positively assert that anything he had said would amount to a relevant defence in law to the present application. The crux of his case for a remit, which failing a sist, was that if his motion were to be refused, and the present application were to proceed to a decision in the Applicants’ favour before the Respondent had succeeded in negotiating a settlement with them of, or otherwise vindicating, his outstanding remuneration claim, a possible consequence thereof was that the Applicants might either sell or lease the subjects to a third party, thereby frustrating what evidently is his desire to keep the possibility of a future transfer of title to the subjects into his name “on the table” or “in play” meantime.

[15] It was implicit in Sir Crispin’s submission that should the present application be determined in the Applicants’ favour before the Respondent’s remuneration claim has been either settled or litigated by him to a successful conclusion through the ordinary courts, the Respondent would have no legal entitlement to interdict the Applicants from either selling or leasing the subjects to a third party pending one of those outcomes. That is because, as Sir Crispin acknowledged, the Respondent has no legal claim on the subjects themselves in satisfaction of his remuneration claim, upon the merits of which we are, in any case, in no position to judge. Whilst the fact that the Respondent paid only a peppercorn rent under the grazing lease may suggest that there was more (or perhaps less) to that transaction than meets the eye, and that it may indeed have been intended to operate as a holding position, pending the successful conclusion of then ongoing settlement negotiations between the parties, we are not persuaded that any such consideration would justify us effectively in manipulating the procedure in the present application so as to engineer a situation in which the subjects are rendered more likely to be available to satisfy the Respondent’s remuneration claim in the event of a negotiated settlement of that claim. Sir Crispin suggested that it would serve the interests of justice were we to do so: we fundamentally disagree. It would, in our view, be the very antithesis of justice for us to intervene in such a manner. The court would be venturing into very dangerous territory indeed if it were to be seen to be seeking, by procedural means, to tip the balance in favour of the particular extra-judicial settlement one party to an application evidently wished to achieve. We are not satisfied that it would be appropriate to remit the present application to the Court of Session (or for that matter to the sheriff court) for this reason.

[16] Where parties jointly move the court to sist proceedings because there are settlement discussions in train that they are optimistic will prove productive, we ordinarily will be very receptive to such a motion. By contrast, where, as here, one party, the Respondent, proposes that the application be sisted for a specified period for the stated purpose of enabling settlement negotiations to take place, and the other party, the Applicants, indicate that they have little appetite for further discussion, and wish instead to make progress with their application, the situation is very different. We do not consider that we should impose a sist for such a purpose on the Applicants, as to do so would serve no useful purpose in the face of their expressed opposition thereto. Standing the views we have expressed on the principal motion to remit, it follows that we see no merit either in Sir Crispin’s other suggested ground for ordering a sist, being to afford the Respondent the opportunity to formulate his remuneration claim and then commence proceedings in either the Court of Session or the sheriff court in connection therewith.

Decision

[17] We refuse both the principal and the subsidiary parts of the Respondent’s motion to remit, which failing to sist, the present application. Having so disposed of the Respondent’s motion, it is unnecessary for us to express any concluded view upon the secondary submissions we heard about the application of section 39 of the 2014 Act and rule 25.1 of the 1994 Rules, because the related questions of whether, in the event of a remit, (i) it properly would be to the Court of Session or the sheriff court; and (ii) the Respondent could proceed by way of counterclaim, or would require to raise a separate action, are in consequence no longer live for decision. We shall allow parties four weeks from the date of intimation of this order, to Thursday 18 April 2019, to adjust their respective pleadings, and appoint them to revert to the Principal Clerk in writing with their proposals for further procedure by close of business on Friday 3 May 2019.

Expenses

[18] Counsel were in agreement that the expenses of the motion should follow success, and that the court should sanction the employment of senior counsel for the purposes of the motion, and we so order.