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SECOND DIVISION, INNER HOUSE, COURT OF SESSION
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Lord Justice Clerk
Lord Osborne
Lord Wheatley
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[2007] CSIH 42
A1/05 and
A4/05
OPINION OF THE LORD
JUSTICE CLERK
in
RECLAIMING MOTIONS
in the causes
SIMON STEPHEN
Pursuer and Respondent;
against
The Most Noble Sir GUY
DAVID INNES KER, Bt, Tenth Duke of Roxburghe; The Right Honourable SIMON
FREDERICK MARQUIS, Third Earl of Woolton; and ROBERT CHEYNE TURCAN WS (The
Trustees of the Cawdor English Marriage Settlement Trust and of the Cawdor
Scottish Discretionary Trust)
Defenders and Reclaimers:
_______
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For Pursuer and Respondent: J G Reid QC, Carruthers: Russel and Aitken
For Defenders and Reclaimers: Johnston QC; Turcan Connell WS
5 June 2007
I Introduction
[1] The
defenders are the trustees of the Cawdor English Marriage Settlement Trust and
as such are proprietors of Meikle Geddes Farm, Nairn. They are also the Trustees of the Cawdor
Scottish Discretionary Trust and as such are the proprietors of Broomhill Farm,
Nairn. The pursuer has raised two
actions against them relating to the tenancies of these farms.
[2] In
the first action (the Meikle Geddes action) the pursuer seeks declarator that
he is tenant of Meikle Geddes and reduction of two notices to quit, both dated
12 May 2004 and served on him by the defenders on 13 May 2004, requiring him to
remove from the interest of the late Margaret Stephen in the tenancy of Meikle
Geddes at Whitsunday (15 May) 2005 and at Whitsunday (28 May) 2005
respectively.
[3] In
the second action (the Broomhill action) the pursuer seeks declarator that he
is tenant of Broomhill and reduction of two notices to quit, both dated and
served on him on the same dates, requiring him to remove from the interest of
the late Margaret Stephen in the tenancy of Broomhill at Whitsunday (15 May)
2005 and at Whitsunday (28 May) 2005 respectively.
[4] The
defenders served two notices on the pursuer in each case because they were
uncertain as to the anniversary date of the lease.
[5] In
an Opinion dated 3 May 2006 the Lord
Ordinary expressed the view that the defences to both actions were
irrelevant. By interlocutors of that
date, he appointed a hearing on the question of the orders that were to be
pronounced (cf Stephen v Innes Ker,
2006 SLT 1105). By interlocutors of 8 May 2006 he reduced the notices to
quit in both actions. By interlocutors
of 23 May 2006 he
corrected the interlocutors of 8 May 2006 to the
effect inter alia of pronouncing no
declarator in either case.
[6] In
these reclaiming motions the defenders seek dismissal of both actions. Since the defenders accept that if the
notices fail, the pursuer will continue to be sole tenant of both holdings, the
pursuer does not insist in his conclusions for declarator.
[7] In
the Meikle Geddes action the first notice to quit is in the following terms:
"On behalf of and as instructed by our clients, the
Trustees of the Cawdor Marriage Settlement Trust, Landlords of the subjects
aftermentioned, we hereby give you notice that 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
Nairn and within the administrative district of The Highland Council at the
term of Whitsunday (15th May) 2005, of which subjects you are now the tenant,
pursuant to your Notice dated 25th 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 29th April
and 4th May, both 1909, of which you are now in right of the tenant's part,
pursuant to your Notice dated 25th 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 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 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 consent for the operation of tacit relocation as
at Whitsunday 2005."
The second notice to quit is in
identical terms, except that it specifies an ish date of Whitsunday (28 May)
2005 and, per incuriam I think, it states
in the last sentence that in giving the notice the defenders' agents are
"acting entirely for the Trustees of the Cawdor Scottish Discretionary Trust."
[8] In
the Broomhill action the notices are in similar terms, except that they are not
founded on a written lease.
II The facts
[9] I
need not quote from the parties' pleadings.
They contain inaccurate and irrelevant averments and serve only to
confuse matters. In its bare essentials,
the relevant and undisputed history is as follows.
[10] From about 1961, both Meikle Geddes and Broomhill were
agricultural holdings held on separate tenancies, the tenants in both cases
being the pursuer's grandmother, Margaret Stephen, and his father, James
Stephen.
[11] James Stephen died in 2000.
He bequeathed his interests in both leases to his widow. His widow did not accept the bequests. The pursuer thereupon succeeded to those
interests as intestate estate.
[12] The tenancies of James Stephen and Margaret Stephen, and of
Margaret Stephen and the pursuer, should properly be described as tenancies in
common; but I shall refer to them, as they are now generally referred to, as
joint tenancies (cf Coats v Logan 1985
SLT 221, Lord Ross at p 225).
[13] Margaret Stephen died in August 2003. Her executors validly transferred her
interests in the tenancies to the pursuer under section 16 of the Succession (Scotland) Act
1964. The pursuer gave timeous notices
of his acquisitions of those interests and the defenders did not object to the
acquisition in either case.
[14] Since then the pursuer has farmed both holdings as sole
tenant. At all material times the
tenancies have been running from year to year on tacit relocation (1991 Act, s
3).
III The statutory framework
The Succession (Scotland) Act 1964
(the 1964 Act)
[15] Section 16 provides inter
alia as follows.
"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 s 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 ...
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 -
... (ii) ... of
the landlord ... "
The Agricultural Holdings (Scotland) Act 1991
(the 1991 Act)
Agricultural
holdings
[16] Section 1(1), so far as relevant to these cases, defines an
"agricultural holding" as being "the aggregate of agricultural land comprised
in a lease ... "
Succession
to agricultural tenancies
[17] Section 12 provides inter
alia as follows.
12-(1) 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 within that period, as soon as is practicable thereafter and, unless the
landlord gives a counter notice under subsection (2) below, the lease shall be
binding on the landlord and on the acquirer, as landlord and tenant
respectively, as from the date of the acquisition ... "
Notices to
quit
[18] Section 21, so far as relevant to these cases, provides as
follows.
"21-(1) ... a
tenancy of an agricultural holding shall not come to an end except by operation
of a notice which complies with this subsection notwithstanding any agreement
or any provision in the lease to the contrary ...
(3) A
notice complies with subsection (1) above if-
(a) it
is in writing;
(b) it
is a notice of intention to bring the tenancy to an end ...
(4) The
provisions of the Sheriff Courts (Scotland) Act 1907 relating to
removings shall, in the case of an agricultural holding, have effect subject to
this section.
(5)
Notice to quit shall be given either -
(a) in the same manner as notice
of removal under section 6 of the Removal Terms (Scotland) Act 1886; or
(b) in the form and manner
prescribed by the Sheriff Courts (Scotland) Act 1907,
and such notice shall come in place of the notice
required by the said Act of 1907.
Section 22 provides inter alia as follows.
"22-(1) Where not later than one month from the
giving of a notice to quit an
agricultural holding ... the tenant serves on the
landlord a counter-notice in writing requiring that this subsection shall apply
to the notice to quit, subject to subsection (2) below and to section 25 of
this Act, the notice to quit shall not have effect unless the Land Court
consent to the operation thereof.
(2) Subsection (1) above shall
not apply where -
...
(g) section 25(1) of this Act applies, and the
relevant notice complies with section 25(2)(a), (b) and (d) of this Act ... "
Section 25 provides inter alia as follows.
25-(1) 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 (Scotland) Act 1964 ...
(2) 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 -
...
(ii) where, when he acquired right to the lease, the
unexpired period was two 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 than three years after the said acquisition ...
(d) where he was not a near relative of the deceased
tenant from whom he acquired right, he acquired right to the lease after 1 August 1958."
Sheriff Courts (Scotland) Act 1907
(the 1907 Act)
[19] Sections 34 and 36 of
the 1907 Act provide for removings from lands exceeding two acres which are
held on a probative lease and without a written lease respectively. In chapter 34 of the Ordinary Cause Rules
1993 (SI No 1956) (Actions relating to heritable property), rule 34.6 provides inter alia that notices of removal under
those sections shall be in Form H2. A
notice to quit in Form H2 must narrate inter
alia "You are required to remove from
(describe subjects) ... "
[20] A similar form applies in summary removings (Act of Sederunt
(Summary Cause Rules) 2002 (SI No 132), chap 30, rule 30.6, Form 3a).
IV The Lord Ordinary's
decision
[21] The Lord Ordinary concluded that on his acquiring the interests
of Margaret Stephen in the joint tenancies, the pursuer became sole tenant of
both holdings (para [20]) and that the notices to quit were invalid. He considered that the idea of a notice to
quit in respect of the interest of Margaret Stephen in either lease was "a
legal nonsense" (ibid). He held that section 25 of the 1991 Act, on
which the notices were founded, did not apply to a case where a surviving
tenant in a joint tenancy became sole tenant (para [21]). He also doubted whether the notices to quit
were valid in form, but he did not rest his decision on that point in the
absence of submissions on it (para [22]).
V The legal background
[22] Counsel agree that both actions raise identical issues that can
be resolved without enquiry (Stephen v
Innes Ker, supra, at para [3]).
[23] The 1991 Act confers on the tenant security of tenure by
entitling him to contest a notice to quit served on him by the landlord by means
of a counter-notice requiring that the operation of the notice to quit shall be
subject to the consent of the Land Court on certain specified grounds (s
22(1)). A tenant who has acquired right
to the tenancy by succession to a deceased tenant and is a near relative of
that tenant is entitled to contest a notice to quit by counter-notice; but in
that case certain additional grounds of consent are available to the
landlord.
[24] However, where the successor tenant is not a near relative of
the deceased tenant, he cannot contest a notice to quit if the landlord
complies with the requirements of section 25(2) (s 22(2)(g)).
[25] The pursuer was not a near relative of Margaret Stephen (1991
Act, s 25, Sched 2, Pt III, para 1). If
Margaret Stephen had held the entire tenancy and if the pursuer had succeeded
to it, he would have been defenceless to a notice to quit served in accordance
with section 25(2). By these notices to
quit the defenders seek to terminate that part of the tenant's interest to
which the pursuer has succeeded from Margaret Stephen. If either notice has had that effect, there
will have been a deficiency in the consents necessary to prolong the lease by
tacit relocation at Whitsunday 2005 (1991 Act, s 3). The entire tenancy will therefore have come
to an end on that date (Smith v Grayton
Estates Ltd, 1960 SC 349; Coats v Logan, supra).
VI Submissions for the
parties
[26] Senior counsel for the defenders submitted that the policy of
the legislature was to confine security of tenure in the case of successor
tenants to those who were near relatives (Haddow
House Estate Trs v Davidson, 1982
SLT (Land Court) 14). The expression
"tenant" in the 1991 Act could refer, where appropriate, to one of a number of
joint tenants (eg Howson v Buxton, (1928) 97 LJKB 749; Lloyd
v Sadler, [1978] QB 774, Megaw LJ
at p 783). Smith v Grayton Estates Ltd (supra) was an example. In that case, a notice by one of two joint
tenants effectively terminated the tenancy.
The Lord Ordinary had erred in holding that the pursuer did not acquire right
to "the lease" (s 25(1)) because he already had one half of that right (at para
[21]). It was sufficient that the
pursuer acquired the deceased's half share.
In section 12(1) of the 1991 Act the reference to "a person to whom the
lease ... is transferred" should be read to mean "a person to whom an interest in
the lease ... is transferred." The right
to serve an incontestable notice to quit under sections 22(2)(g) and 25 was
available to the landlord against an acquirer of the deceased's interest in a
joint tenancy. If that were not so, an
acquirer such as the pursuer would have security of tenure even though he was
not a near relative of the deceased.
That would defeat the policy of the 1991 Act.
[27] Counsel for the pursuer submitted that (1) on his acquiring
Margaret Stephen's interest, the pursuer became sole tenant of the holding and
Margaret Stephen's interest ceased to exist; (2) the notices to quit, being
directed at that interest, were therefore invalid; (3) in any event, procedure
by notice to quit under section 25(2) applied only to an agricultural holding
and not to an interest in a tenancy; and (4) the Lord Ordinary was right in his
doubt as to the validity of the notices in point of form.
VII Conclusions
[28] The issues raised by the parties are whether the pursuer held
the interest of Margaret Stephen as a discrete element of the tenancy; and if
he did, whether it is competent to give a notice to quit in respect of a
partial interest in a tenancy.
The nature of the pursuer's interest in the tenancy
[29] The defenders' case in each action stands or falls on the
proposition that after the pursuer's succession to it, Margaret Stephen's
interest in the tenancy survived as a discrete element of the pursuer's tenancy. In my view, it did not. On the transfer to him of Margaret Stephen's
interest, the pursuer perfected his right to it by giving the defenders a
notice of acquisition to which they did not object (1991 Act, s 12; Coats v
Logan, supra, at p 227). At that point, in my view, the interests
constituting the joint tenancy merged in the hands of the pursuer. Therefore, at the date of the notices to quit
there no longer existed the partial interest to which those notices were
directed. That is a sufficient reason
for the refusal of these reclaiming motions.
The validity of a notice to quit an interest in a lease
[30] Even if the interest of Margaret Stephen in either lease
survived the acquisition of it by the pursuer, the notice to quit would be invalid,
in my view, because the procedure of notice to quit is not available to a
landlord in respect of a partial interest in a tenancy.
[31] The law relating to notices to quit is an aspect of the law of
removings. In terms of the 1991 Act the
giving of a notice to quit is a means of removal of a tenant from a specified
tract of land. Section 22(1) refers to a
notice to quit given under section 21 as being a notice to quit an
"agricultural holding," that is to say "the aggregate of agricultural land
comprised in [the] lease" (s 1(1); cf s 25(1)).
That indicates, in my view, that the operation of section 21 is confined
to notices to quit requiring removal from the entire holding. I agree on this point with the view recently
taken by a Division of the Land Court in a
similar case (Salvesen v Graham, 2006 RN SLC/242/04).
[32] Section 21(4) of the 1991 Act applies the provisions of the
Sheriff Courts (Scotland) Act 1907
relating to removings to a notice to quit given under that section. It is not disputed that, in consequence, a
notice to quit an agricultural holding must comply with Form H2 (supra).
Form H2 requires that the notice must specify the "subjects." The subjects, in my view, are the land held
under the lease. If a tenant fails to
comply with a valid notice, the landlord's remedy is to sue for removing. A removing consists of the physical removal
of the tenant, by judicial decree, from the subjects of let.
[33] From these considerations I conclude that a landlord cannot by
notice to quit extinguish a partial interest in a tenancy.
[34] The same conclusion follows, in my opinion, from section
21(3)(b) of the 1991 Act, which provides that a notice to quit must be "a
notice of intention to bring the tenancy to an end" (1991 Act, s 21(1);
(3)(b)). In view of the wording of Form
H2, I take that to mean an intention to bring the tenancy to an end by means of
the notice itself. The notices in these
cases are not notices of intention to bring the tenancy to an end, at any rate
by means of the notices themselves. Each
gives notice of intention to bring part of the pursuer's interest in the
tenancy to an end. On this basis, the
tenancy would not be brought to an end by the notice. It would be brought to an end by operation of
a legal principle that would come into play as a consequence of the notice's
having had effect. That, I think, is
recognised in the non-statutory statement with which the notices end. I conclude therefore that these notices
cannot be held to be notices complying with section 21.
Whether section 12 of the 1991 Act applies to a partial interest in a
tenancy
[35] If I am right in my conclusions so far, it is unnecessary to
decide whether counsel for the pursuer is right in his submission that section
12 of the 1991 Act does not apply at all to the acquirer of an interest in a
joint tenancy. Section 16 of the
1964 Act relates to the transfer to an acquirer of the deceased's "interest
under a lease," which may be only a partial interest. Section 12 of the 1991 Act, however, applies
to a person to whom "the lease" of an agricultural holding is transferred. If, as counsel for the pursuer suggests, that
distinction is crucial, the consequences are far from clear. On the other hand, it may be that the
reference in section 12 to a person to whom the lease has been transferred
should be interpreted to include a person to whom a share in it has been
transferred. Since we have not heard
detailed submissions on this point, I express no view on it.
The form of the notices
[36] It occurs to me that two other points as to the form of the
notices might have arisen in these cases, namely the date of the ish and the
terms of the statement appended to the second Meikle Geddes notice.
The date of ish
[37] Where there are two possible anniversary dates of a lease, the
landlord is entitled, in my opinion, to serve notices against both dates, each
notice being without prejudice to the other.
But at the stage where the landlord, in judicial proceedings, asserts
his right to remove the tenant, he cannot, in my opinion, keep his options
open. He must specify on which notice he
founds.
[38] Counsel for the defenders at first insisted in both notices but,
when pressed on the point, founded only on the notices that required removal at
Whitsunday 28 May. Since these tenancies
were entered into before 13 July
1991, section 1(4) of the Term and Quarter Days (Scotland) Act 1991
applies. Under the Broomhill lease,
which is unwritten, 28 May is the appropriate date (s 1(1)(a)). But if the tenancy of Meikle Geddes is
governed by the written lease of 1909 to which the notices refer, the date of
Whitsunday is that which is specified in the lease. Since neither party has produced this lease,
I infer that it is lost. If that is the
case, I think that the notice specifying 28 May would be valid, at least in
that respect, on the view that the tenant could not be prejudiced by the giving
of the later of the two possible dates.
The second Meikle Geddes notice
[39] Since this notice is self-contradictory as to the party serving
it, the question arises whether it is invalid on that account (Rae v Davidson, 1954 SC 361, Lord
Justice Clerk Thomson at p 369) or whether the reference to the Cawdor Scottish
Discretionary Trust in the statement annexed to it can be disregarded as having
been made in error. Since the pursuer has not raised the
point, I express no view on it.
VIII Disposal
[40] I propose to your Lordships that we should refuse the
reclaiming motions.
|
SECOND DIVISION, INNER HOUSE, COURT OF SESSION
|
Lord Justice Clerk
Lord Osborne
Lord Wheatley
|
[2007] CSIH 42
A1/05 and
A4/05
OPINION OF THE LORD
OSBORNE
in
RECLAIMING MOTIONS
in the causes
SIMON STEPHEN
Pursuer and Respondent;
against
The Most Noble Sir GUY
DAVID INNES KER, Bt, Tenth Duke of Roxburgh; The Right Honourable SIMON
FREDERICK MARQUIS, Third Earl of Woolton; and ROBERT CHEYNE TURCAN WS (The
Trustees of the Cawdor English Marriage Settlement Trust and of the Cawdor
Scottish Discretionary Trust)
Defenders and Reclaimers:
_______
|
For Pursuer and Respondent: J G Reid QC, Carruthers: Russel and Aitken
For Defenders and Reclaimers: Johnston QC; Turcan Connell WS
5 June 2007
[41] I entirely
agree with the Opinion of your Lordship in the chair and have nothing to add.
|
SECOND DIVISION, INNER HOUSE, COURT OF SESSION
|
Lord Justice Clerk
Lord Osborne
Lord Wheatley
|
[2007] CSIH 42
A1/05 and
A4/05
OPINION OF THE LORD
WHEATLEY
in
RECLAIMING MOTIONS
in the causes
SIMON STEPHEN
Pursuer and Respondent;
against
The Most Noble Sir GUY
DAVID INNES KER, Bt, Tenth Duke of Roxburgh; The Right Honourable SIMON
FREDERICK MARQUIS, Third Earl of Woolton; and ROBERT CHEYNE TURCAN WS (The
Trustees of the Cawdor English Marriage Settlement Trust and of the Cawdor
Scottish Discretionary Trust)
Defenders and Reclaimers:
_______
|
For Pursuer and Respondent: J G Reid QC, Carruthers: Russel and Aitken
For Defenders and Reclaimers: Johnston QC; Turcan Connell WS
5
June 2007
[42] I entirely
agree with the Opinion of your Lordship in the chair and have nothing to add.
