OUTER
HOUSE, COURT OF SESSION [2006] CSOH 66 |
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OPINION OF LORD CLARKE in the causes SIMON STEPHEN Pursuer; against THE MOST NOBLE SIR GUY DAVID INNES KER
& OTHERS Defenders: ญญญญญญญญญญญญญญญญญ________________ |
Pursuer:
Defenders: Stuart;
Turcan Connell WS
3 May 2006
Introduction
[1] These
two actions came before me for debate on the Procedure roll. What I shall refer to as the first of the two
actions relates to two notices to quit dated
[4] In
article 2 of the second action it is averred:
"The pursuer is the tenant
of the farm. There is no written Lease. Some of the lands forming the farm have been
farmed by the pursuer and his ancestors since around 1830. From about
Averments in virtually the same terms appear in
Article 2 of the first action. In
article 3 of both actions the following averments appear:
"Following upon the death of
Mrs Margaret Jane Stephen the entire tenant's interest in the Lease vested in
the pursuer by operation of the common law.
When one tenant in a joint tenancy dies and the deceased's interest in
that tenancy does not vest in a legatee or any other nominated beneficiary, the
entire tenancy accrues to the surviving tenant."
It is, furthermore, averred in article 4 of both
actions, as follows:
"Margaret Jane Stephen died
on
In relation to both farms, the defenders, in fact,
served two notices both dated
"... you are required to
remove from ALL and WHOLE the interest of the late Margaret Stephen in the
tenancy of ALL and WHOLE the farm and lands of Meikle Geddes, Nairn lying in
the county of .... of which subjects you are now the tenant, pursuant to
your Notice dated 25 March 2004, in terms of the Contract of Lease between
The Right Honourable Frederick Archibald Vaughan, Earl of Cawdor and Margaret
MacDonald or Stephen and William Duncan Stephen dated 29 April and
4 May, both 1909, of which you are now in right of the tenant's part,
pursuant to your Notice dated 25 March 2004. This Notice is given in pursuance of sections
22(2)(g) and 25(2)(a), (b) and (d) of the Agricultural Holdings Act 1991, as
amended. The tenancy has been terminated
for the purpose of our clients using the land for agriculture only. This Notice is given without prejudice to the
right of our client, the Landlords, to enforce any other Notice served upon you
at the same time as this Notice. We
would advise that, in giving this Notice, we are acting entirely for the Trustees
of Cawdor Marriage Settlement Trust and are of the view that the effect of this
Notice will be to bring the entire tenancy to an end, owing to the absence of the
necessary consents for the operation of tacit relocation as at Whitsunday dated
2005." (emphasis added)
The second notice served in relation to the subjects
to which the first action relates was in the same terms as the first notice
apart from, as has been seen, the date upon which the pursuer was required to
quit the subjects. In the second action
the relevant notices are inter alia
in the following terms:
"... you are required to
remove from ALL and WHOLE the interest of the late Margaret Stephen in the tenancy
of ALL and WHOLE the farm and lands of Broomhill, Piperhill, Nairn lying in the
County of Nairn and within the administrative district of The Highland Council
at the term of Whitsunday (15 May) 2005, of which subjects you are now
the tenant, pursuant to your Notice dated 25 March 2004 in terms of
the oral Lease of the said farm. This
Notice is given in pursuance of Sections 22(2)(g) and 25(2)(a), (b) and (d) of
the Agricultural Holdings Act 1991, as amended.
The tenancy is being terminated for the purpose of our clients using the
land for agriculture only. This Notice
is given without prejudice to the right of our client, the Landlords, to
enforce any other Notice served upon you at the same time as this Notice. We would advise that, in giving this Notice,
we are acting entirely for the Trustees of the Cawdor Scottish Discretionary Trust
and are of the view that the effect of this Notice will be to bring the entire
tenancy to an end, owing to the absence of the necessary consents for the
operation of tacit relocation as at Whitsunday 2005." (emphasis added)
Defenders'
Submissions and Discussion
"Further explained and
averred that said Notice terminates the interest in the tenancy of the late Mrs
Margaret Stephen transferred to the pursuer in terms of his Notice dated
In elaborating upon the point, counsel submitted that
the defenders' position was founded on a proper approach to the operation of
tacit relocation. The lease, in the
subjects, prior to the death of Mrs Margaret Stephen, operated on tacit
relocation from year to year. Upon her
death, as I understood that the defenders' position as advanced by counsel, the
lease could not thereafter be continued by tacit relocation because she could
no longer provide the necessary consent, either expressly, or by implication,
for the lease to continue for a further year.
Counsel for the defenders submitted that the position was as
follows. The lease had been held pro indiviso by the pursuer and his
grandmother, Mrs Margaret Stephen. The
pursuer had acquired his interest in the lease upon the death of his father,
who had prior to his death been a joint tenant, along with the pursuer's
grandmother. It was accepted, on behalf
of the defenders, that on the death of his grandmother, the pursuer succeeded
to her interest in the lease. As I
understood the defenders' position they contended that this was so because of
the operation of section 16 of the Succession (
"16(1) This section applies to any interest, being
the interest of a tenant under a lease, which is comprised in the estate of a
deceased person and has accordingly vested in the deceased's executor by virtue
of section 14 of this Act; and in the
following provisions of this section 'interest' means an interest to which this
section applies.
(2) Where an interest -
(a)
is not the subject of a
valid bequest by the deceased, or
(b)
is the subject of such a
bequest, but the bequest is not accepted by the legatee, or
(c)
being an interest under an agricultural
lease, is the subject of such a bequest but the bequest is declared null and
void in pursuance of section 16 of the Act of 1886 or section 20 of the Act of 1949,
and there is among the
conditions of the lease (whether expressly or by implication) a condition
prohibiting assignation of the interest, the executor shall be entitled,
notwithstanding that condition, to transfer the interest to any one of the
persons entitled to succeed to the deceased's intestate estate, or to claim
legal rights or the prior rights of a surviving spouse out of the estate, in or
towards satisfaction of that person's entitlement or claim; but shall not be entitled to transfer the
interest to any other person without the consent of the Landlord".
Section 16(8) is to the following effect:
"Where an interest is an
interest under an agriculture lease and is the subject of a valid bequest by
the deceased, the fact that the interest is vested in the executor under the
said section 14 shall not prevent the operation, in relation to the legatee, of
paragraphs (a) to (h) of section 16 of the Act of 1886 or, as the case may be,
subsections (2) to (7) of section 20 of the Act of 1949." (The equivalent of section 20 of the 1949 Act
is now section 11 of the 1991 Act).
Section 12(1) of the 1991 Act provides as follows:
"A person to whom the lease
of an agricultural holding is transferred under section 16 of the Succession
(Scotland) Act 1964 (referred to in this section as 'the acquirer') shall give
notice of the acquisition to the landlord of the holding within 21 days after
the date of the acquisition, or, if he is prevented by some unavoidable cause
from giving such notice within that period, as soon as is practicable
thereafter and, unless the landlord gives a counter-notice under subsection (2)
below, the leases shall be binding on the landlord and on the acquirer, as landlord
and tenant respectively, as from the date of the acquisition."
As has been seen, at one stage in his pleadings, the
pursuer avers that his grandmother's interest in the lease was bequeathed to
him.
[6] Section
11(1) of the 1991 Act provides:
"Subject to subsections (2)
to (8) below, the tenant of an agricultural holding may, by will or other
testamentary writing, bequeath his lease of the holding to his son-in-law or
daughter-in-law or to any one of the persons who would be, or would in any circumstances
have been, entitled to succeed to the estate on intestacy by virtue of the
Succession (Scotland) Act 1964".
[7] It
appeared, from the submissions of counsel for the defenders, that whether by
operation of the law of testate or intestate succession, it was accepted that the
pursuer had succeeded to his grandmother's interest in the leases and the
defenders as landlords had accepted that as being the position. But the fundamental point, upon which the
defenders' case relied was that on succession there remained two distinct
interests in the leases, the pursuer's own as an individual and his interest as
successor to his grandmother. Because of
that situation, tacit relocation was no longer possible at the ish date. The approach to the matter, it emerged,
relied on what was conceived to be the law as set out in certain
authorities. The first of these, to
which I was referred, was the case of Coates
v
"In my opinion, what senior
counsel for the defenders contended is correct during the currency of a
lease. Thus it is well settled that if
one of two joint tenants becomes bankrupt during the currency of the lease and so
abandons of the lease, that does not terminate the right of the joint tenant
but that the surviving tenant is entitled to continue in his possession of the
subjects let (Young v Gerard;
Buttercase & Geddie's Tr.
v Geddie)."
His Lordship continued:
"In my opinion, however, the
position is different where the lease is one which requires to be continued by
tacit relocation. Tacit relocation is
based on the implied consent of all parties to a lease. As Lord President Clyde said in Smith v Grayton Estates Ltd at page 41:
'Tacit relocation is not an
indefinite prolongation of a lease. It
is the prolongation each year of the tenancy for a further one year if the
actings of the parties to the lease show that they are consenting to this
prolongation. For as in all of contracts
a tacit relocation of reletting must be based on consent. In the case of tacit relocation the law
implies that consent if all the parties are silent on the matter. Hence where there are joint tenants, tacit
consent by both of them is necessary to secure the prolongation and to enable
tacit relocation to operate. Silence by
both is necessary to presume that both the tenants wish the tenancy to continue
for another year'.
In the instant case, as senior
counsel for the defenders accepted, since the missives relied on were silent as
to the duration of the lease, at best for the defenders the lease could be
construed as a lease for one year only.
It follows that the defenders must rely on tacit relocation in this
case. In my opinion, however, there
could be no tacit relocation here unless all of the original tenants under the
lease or their successors continued in existence. Thus, when the lease first case to be renewed
by tacit relocation, tacit consent of the three joint tenants could only be
implied so long as they remained in existence.
Once Robert Logan died, however, the position was different. If his interest had been taken up by his
heir, tacit consent of all three joint tenants might still be implied. But there is no averment as to what
happened to his interest, and accordingly, one cannot assume that the heir
ever took it up. If the heir did not
take up Robert Logan's interest before the term of the lease expired, Robert
Logan's interest would lapse and there would not therefore be any room for
tacit relocation (
"Explained and averred that
following the death of the said Margaret Jane Stephen and the giving of Notice
dated 25 March 2004 by the pursuer to the Landlords under Section 12 of
the 1991 Act the pursuer succeeded to said Margaret Jane Stephen's interest in
the joint tenancy".
"In my view, therefore, at
common law, the effect of the notice by one of these two tenants is to stop the
running of tacit relocation and to terminate this lease at Martinmas 1959. The alternative construction of the notice by
one of two joint tenants involves the consequence that the tenant who desires
to terminate the tenancy, and has given notice to that effect, must none-the-less
be deemed to have consented to its prolongation from year to year until such
time as the other tenant agrees also to give a notice. Such a result is neither in accordance with
principal nor equity."
Lord Sorn at page 356 said this:
"The doctrine of tacit
relocation is based on implied consent, silence being taken for consent in this
particular context. That being so, it
seems to me that tacit relocation needs the consent of all the parties, through
their silence, whose consent would be necessary to the making of a new lease on
the same terms. It is in fact a
relocation or a renovation of the lease in principle. That situation did not obtain in the present
case in view of the notice given by one of the tenants, and that is enough for
the decision of the case. It was
suggested that the notice was ineffective because it was not given jointly by
the tenants as joint tenants; and that
only a joint notice could affect a joint tenancy, but this I am not able to
agree with. The landlord has been
dealing with a joint tenancy, and a notice from one tenant that he is not
willing to go on is in effect a notice that there is no longer such consent as
is necessary to keep a joint tenancy in existence."
Later his Lordships said:
"I think it is satisfactory
that we have reached this conclusion, because the result of the opposite view
would put joint tenants into a curious relationship with each other. Not only would each tenant be bound for the
currency of the lease, but after the lease had expired, each would continued to
be bound for an indefinite period until one could persuade the other to unite
in giving a joint notice of removal."
[11] Section
25(1) of the 1991 Act is to the following effect:
"This section applies where
notice to quit is duly given to the tenant of an agricultural holding who
acquired right to the lease of the holding -
(a) under section 16 of the Succession (
(b) as a legatee, under section 11 of this Act."
Section 25(2) of the 1991 Act goes on to provide as
follows:
"Notice to quit is duly
given to a tenant to whom this section applies if -
(a) it complies with section 21 of this Act; and
(b) it specifies as its effective date -
(i) where, when he acquired right to the lease,
the unexpired period of the lease exceeded 2 years, the term of outgo
stipulated in the lease;
(ii) where, when he acquired right to the lease,
the unexpired period was 2 years or less, the term of outgo stipulated in the
lease or the corresponding date in any subsequent year, being a date not less
than one nor more that 3 years after the said acquisition;
(c) where he was a near relative of the deceased tenant from whom
he acquired right, it specifies the Case set out in Schedule 2 to this Act
under which it is given; and
(d) where he was not a near relative of the deceased tenant from
whom he acquired right , he acquired right to the lease after
Counsel for the defenders accepted that the declarators
sought i.e. that the pursuer is the tenant of the relevant subjects, would have
been appropriate as at 11 May 2004, prior to the notices to quit, but not
thereafter. The argument, as I have it
noted it, was that, "The notice terminated the interest which had passed to the
pursuer. There could, in that situation,
be no agreement to lease because the contract no longer existed." The matter was put another way, by counsel
for the defenders, in the following terms, "There were joint tenants interests
and one of these has been terminated by notice and therefore tacit consent
could not be given regarding that terminated interest. In effect, the interest of one of the joint
tenants no longer existed."
Counsel referred to Gill "Law of Agricultural Holdings in
The
Pursuer's Submissions and Discussion
[14] Junior
counsel submitted that the pursuer's case was based, in the first place, on the
following proposition. By operation of
common law, timeous intimation by a previous joint tenant, to a landlord, of
his willingness to continue with a current lease operates to secure the tenancy
in the remaining tenant in a case where the other joint tenant has become legally
disabled or has died. The key to this
approach, it was contented, was the indication by the remaining tenant that he
wished to continue the lease after the other tenant became, by legal disability
or death, unable to continue. The approach
was vouched by the proposition stated in Gill
op. cit. at para 14.7 which is to the
following effect, "In such a lease the extinguishment of the interest of one
joint tenant during the contractual currency does not extinguish the rights of
the others". In the present case, the
pursuer had shown his willingness to continue with the tenancies after the
death of his grandmother, by continuing to farm the subjects. He had, however, gone further by serving a
section 12 notice on the landlords. The
serving of that notice was "a prudent thing" for the pursuer's solicitors to do
but it was now accepted, on behalf of the pursuer, that the pursuer had not
acquired his grandmother's interest in the tenancies by virtue of section 16 of
the Succession (
[15] Junior
counsel for the pursuer went on to make a further submission to the effect that
if the court was not with him in his submissions thus far, the pursuer's case
was supported by having regard to human rights law. Reference was made to section 3 of the Human
Rights Act 1998. The court should
interpret the provisions of the domestic legislation, in such a way, as not to
infringe the pursuer's property and possessory rights which were protected by
article 1 of protocol 1 of the European Convention on Human Rights. Reference was made to James v
Parties'
Replies
[17] As
regards the pursuer's argument based on the ECHR it was submitted that Article
1 of the First Protocol was not engaged in the circumstances of these
cases. The rights of the pursuer were
rights of possession under the leases and subject to the law in relation to
such leases. The convention gave the
pursuer no greater rights than under domestic law
Decision
"The expression 'joint
tenancy' refers in the strict sense to the indivisible right of tenancy held by
a body of trustees or by the members of an unincorporated association. In such cases there is accretion of the right
to survivors.
In contrast, in a tenancy in
common held by a number of tenants pro
indiviso the share of each tenant descends to his successor, either be it
by bequest or by transfer, unless there is a survivorship destination. This case is invariably referred to as a
lease to joint tenants."
In Provost,
Magistrates & Councillors of
"Property may be vested in
two or more person either jointly or in common.
Where property is held jointly their owners have no separate estates but
only one estate vested in them pro
indiviso, not merely in respect of possession but also in respect of the
right of property. The right of a joint
owner accresces on his death to the others and cannot be alienated or disposed
of either inter vivos or mortis
causa. Instances of this mode of holding
are found in the ownership of trustees, the rights of members in the property
of a club, and joint liferents.
In the case of property held
in common each proprietor has a title to his own share which he may alienate or
burden by separate act. On the death of
one of the common owners whose share will pass under his will or transmit to
his heirs."
(See the references by Lord
Ross to this case in the case of Coates
at page 225).
It is the second of the two situations described by
Lord Justice Cooper which, in my judgment, reflects the position in the present
cases. The legal consequences of that
being so are set out in Paton and Cameron, Landlord and Tenant pages 60 to
61 as follows:
"As the tenant's obligations
in the lease are obligations ad facta
praestanda it follows that in the absence of a provision to the contrary
each of the joint tenants is liable in solidum
for implement of all the obligations, including payment of rent; and this also applies to obligations arising
as a result of tacit relocation. The
fact that one of the two lessees does not occupy the subjects does not exempt
him from liability for the non-observance of conditions by the other. Each joint tenant is entitled to insist on
joint possession and management, although the subjects are partly agricultural
and partly mineral. Each tenant has a
distinct right to his pro indiviso
share which he can transmit by assignation to a third party, if assignation is
not excluded; and if he dies intestate,
his interest in the lease passes to his own executors, unless there is
provision to the contrary. On the other hand
a lease may be granted in favour of two lessees and the survivor, and in this
event the predecessor's share will accrue to the survivor."
If that be a correct description of the legal
situation which applied, while the pursuer and his grandmother were tenants
under the leases, and I consider that it is, the pursuer's primary proposition,
in support of his case, that on his grandmother's death her interest in the
leases automatically accresced, as it were, to him, by operation of law, is
unsound. After her death, Mrs Stephen's
interest in the leases vested in her executors.
They had the power to transfer that interest to the pursuer. The defenders accept that her interest was
transferred to the pursuer by Mrs Stephen's executors. The question which then arises, it seems to
me, is this - who, at that point in time (i.e. upon the transfer of the
grandmother's interest to the pursuer) were the parties to the leases. The answer to that question is that the
parties to the lease were the pursuer and the defenders. There were no longer joint tenants. There was one single tenant. The nature and terms of the leases otherwise
remained the same. The position is distinguishable
from the position of the case of Coates
where there had been no transfer of the deceased's joint tenant's interest to
the surviving tenant. For that reason I
do not consider that that decision is decisive of the present cases. For the operation of tacit relocation of the
lease, from the tenant's side, once the pursuer had become the sole tenant,
there was only one person, with one interest, to give consent to the
continuance of the lease, as tenant, i.e. the pursuer. The position of the defenders, advanced in
these cases, in my judgment is, accordingly, misconceived in suggesting that
because, at the ish, Mrs Stephen was no longer surviving there could not be
relocation. To talk, in the terms of the
defenders' notices, of the pursuer being required "to remove from ALL and WHOLE
the interest of the late Margaret Stephen" in the leases, seems to me to be a
legal nonsense. The legal position is
that the whole, undivided and unshared interest in the leases, as tenant,
vested in the pursuer when Mrs Stephen's executors transferred her
interests to him, this not being objected to by the defenders and it being
expressly acknowledged on their behalf, before the court, that this had been
validly done.
"where notice to quit is duly
given to the tenant of an agricultural holding who acquired right to the lease
of the holding -
(a) under section 16 of the Succession (
(b) as a legatee, under section 11 of this Act."
In the present cases, the pursuer already had right to
the leases of the holdings as against the landlords under the leases. It seems to me that the provisions of section
25 are designed to cover the position where a stranger, as it were, to the
lease acquires for the first time an interest in it by succession, whether on
intestacy or by bequest and to provide the landlord with some protection in
that situation. It does not follow that
these provisions are appropriate, or necessary, where there is in existence a
joint tenancy and the surviving tenant becomes the sole tenant. It follows, therefore, that I am of the
opinion that the sole basis for the defenders seeking to contend, before
the court, that these leases have been validly terminated is unsound. I am of the view that the leases remained
capable of being continued by tacit relocation and any termination of them
required to be effected by the law in relation to leases held on tacit
relocation.