Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2011] CSOH NUMBER133
A853/09	OPINION OF MORAG WISE QC Sitting as a Temporary Judge in the cause CREWPACE LIMITED Pursuers: against MARK ROBERT FRENCH and MRS ROHAISE FRENCH Defenders: __________

Pursuers: Sutherland; Murray Beith Murray

Defenders: Upton; Turcan Connell

12 August 2011

[1] This is an action for declarator, payment and interdict. The pursuers seek declarator that the defenders have unlawfully interfered with their heritable interest as joint landlords in the lease subjects of Rockside Farm, Bruichladdich, Isle of Islay, Argyll by resuming areas of ground from those lease subjects without their consent. The second conclusion is for payment of £104,733. Interdict is sought in the third conclusion against the defenders resuming any areas of ground from the lease subjects without the consent of the pursuers or from selling same. Interim interdict was granted at the outset of the proceedings. The case came before me for a discussion on the procedure roll of the defenders' first and second pleas-in-law.

[2] The background to the action is that the pursuers own an area of ground known as and forming Rockside Hill on Islay which extends to 776.5 hectares. The defenders own an area of ground known as and forming Rockside Farm on the island, which extends to 14.51 hectares. There is a single agricultural lease over both the subjects owned by the pursuers and the subjects owned by the defenders. The tenants are Rockside Farming Company Limited. The defenders are Directors of that company. The dispute arises out of various transactions entered into by the defenders in respect of land owned by them but subject to the aforesaid single lease. In 2004 the defenders let land falling within that category to a distillery company for a period of 50 years. In 2005 they sold a plot of ground and in 2007 they sold a further plot of ground. The pursuers were not informed of these transactions nor were they party to them. Their complaint is that their consent ought to have been sought because of the interest they have as "joint landlords" under the single lease over subjects owned partly by them and partly by the defenders.

Submissions for the defenders
[3] Mr Upton's primary motion on behalf of the defenders was to sustain their first and second pleas-in-law and dismiss the action on the basis that the pursuers' pleadings as a whole were irrelevant and failed to give fair notice. His fall back position was that in any event particular passages within the pursuers' pleadings were irrelevant and lacking in specification and should not be remitted to probation. He began by setting out the narrative of the way in which the pursuers came to be landlords in terms of a lease that also involved the defenders. It is averred that in 1986 a David Doyle granted a lease of 2386 acres of land at Rockside on Islay to the limited partnership of Rockside Farm; that the lease was varied by two Minutes of Agreement in 1986 and 1993, and that in 1997 Mr Doyle, his spouse, the original tenant and Rockside Farming Company Limited were party to an assignation. It is averred that Rockside Farming Company Limited are the tenants. It would appear that the pleadings suggest that the lease was assigned to those tenants in 1997. The pursuers then aver that they own part of the subjects of the lease and that the defenders own the remainder of the subjects. The parties are described by the pursuer as "joint landlords". It is further averred that the defenders took title to their part of the subjects of the lease by two dispositions from the executors of Mr Doyle and his spouse, recorded in 1999 and 2001. While there are no specific averments about the title to the subjects when the lease was granted, it could be inferred that in 1986 Mr Doyle owned the whole subjects, that he was a predecessor in title to the pursuers, and that title to the subjects was split at some time after the lease had been granted, so as to devolve partly to the pursuers and partly to the defenders. Thus, the original landowner, Mr Doyle, had granted a lease but subsequently ownership of one part of the subjects of the lease was conveyed to one party (the pursuers) and ownership of another part was conveyed to a second party (the defenders). It is also averred that in terms of the lease the rent is £8,700 per annum and that this has been apportioned so that £4,000 is payable to the pursuers and £4,700 to the defenders. The averments about the letting of some of the subjects owned by the defenders to Kilchoman Distillery Company in 2004 and the sales in 2005 and 2007 are pled in article 3 of Condescendence. It is specifically averred that each of these transactions was preceded by a resumption of the areas of land in question without "the prior knowledge or consent of the pursuers as joint landlord". It is specifically averred that the lease contains no right permitting the tenant to unilaterally renounce any part of the lease subjects and that the pursuers did not discharge or consent to discharge the tenant of the obligations incumbent upon the tenant in respect of the said lease or under the Agricultural Holdings (Scotland) Acts.

[4] Counsel referred to the meaning of "resumption" as discussed by Lord Gill in chapter 13 of The Law of Agricultural Holdings in Scotland (3^rd Ed), where the following is stated:

"The right of a landlord to resume part of the holding during the currency of a lease is a matter of contract. Where there is no written lease there is no power to resume". (Para. 13.01. p.141).

The learned author further writes:-

"At common law, the tenant has an implied right to compensation for a resumption unless the resumption clause excludes it." (Para. 13.09, p. 144).

So far as statutory provisions are concerned, only section 29 of the Agricultural Holdings (Scotland) Act 1991 was in point. That provides that a partial notice to quit may be served on certain defined grounds.

[5] On the basis of the averments of fact narrated above, the pursuers plead that they "have an interest as joint landlords under the said lease in the whole of the said subjects". According to Mr Upton this averment is irrelevant. The parties could be "joint landlords" only insofar as they own two heritable subjects which when formerly held on a single title, were let to a tenant under a lease which remains current. A lease by a party's predecessor in title conveys to his successor in title to one part of the leased land no "interest" in a part of that land to which that party is not a successor in title. Further it was argued that the nature of the "interest" of the pursuers was not specified. It was well-established that rights in land were either real or personal. The real rights are ownership, lease, liferent, security, servitude and probably possession. However, the pursuers aver no such right on the defenders' heritable property. Personal rights arise from contract, delict, unjustified enrichment and statute. The pursuers do not offer to prove that the defenders had contracted with them, or committed a delict against them, and they invoke no legislative provision. While it is averred that the defenders are unjustifiably enriched, the pursuers do not relevantly or specifically aver any ground why any enrichment has been unjustified, and in any event, their averred "interest" must be logically prior to the transactions to which they object and which they claim have given rise to an obligation in unjustified enrichment. Accordingly, Mr Upton argued, the averment fails to give fair notice of the source and nature of the pursuers' "interests". Insofar as there is any averment about it, it is said only that "the interest as landlord in the lease is a single interest which is the common property of the joint landlords". It was argued that this averment was irrelevant. The interests of a landlord in a head lease are that he is the owner of the subjects and quoad his subjects the debtor and creditor in the tenant's rights and duties. However, a sale by a landlord of one part of a property that he has let neither grants to the purchaser an interest in the subjects reserved nor reserves to the seller an interest in the subjects disponed.

[6] On the issue of "common property" it was said that the subjects which may be common property are real rights in land, goods and incorporeal property. There is no res in law which arises on a sale by a landlord of one part of a property which he has let which could be the common property of him and his purchasers. Reference was made to Professor Reid's text "The Law of Property in Scotland" (Butterworths: 1996). In chapter 1, at para. 5 of the book the real rights recognised in Scots Law are listed. At para. 10 there is a separate list of rights resembling real rights. Neither of the lists relates to any rights the pursuers could be said to have in the defenders' land. Nor do they offer to prove that they have any such rights. The matter could be tested by asking what it was that the pursuers assert they own as "common property". Professor Reid discusses common property in his text later in chapter 1 at para. 17. It was clear that the "landlords interest" is not something that could be a commonly owned item of property. Mr Upton referred also to the discussion of common property in Bell's Principles at 1071-1078. He argued that nothing Bell has to say about common property is consistent with the idea of "landlord's interest" being, or being capable of being, common property. The averment of the pursuers that the rents have been apportioned between the parties was itself inconsistent with Bell's statement that in common property "all [are] equally entitled to enjoy the uses and services derivable from the subject." If the "landlords interest" was the parties' common property, then it would have to be capable of being conveyed or burdened as a separate estate. It is inherent in common property that each proprietor "may sell or convey his pro indiviso share" - Bell's Principles at 1073. The primary remedy in the event of a dispute between co-proprietors is division or sale.

[7] Mr Upton explored the implications of the pursuers' claim that their interest as landlords was one of "common property". It was clear that the common property could not be the land itself as there was no dispute that each party owns his own part of the lands absolutely. Accordingly, a sale of the "landlords interest" would require to be capable of being a sale of something other than the land. That something would appear to be conceived of as the sum of the landlord's rights and obligations. It would accordingly be necessary to conceive of a contract of the sale and purchase of all of the parties' rights and obligations under the lease and their conveyance to a third party who would thereby become the tenant's landlord but to whom ownership of the land would not be sold. If such a transaction were possible then the result would be a tripartite arrangement in which the land would be owned by the parties, the landlord's rights and obligations would be held by the new, landless landlord and the tenants would retain their lease. It was submitted that this would be an absurdity. The situation could not arise because the "landlord's interest" was not something severable from the parties' rights as land owners. This became even clearer when the practical implications of such a sale to a third party were examined. If the power of resumption referred to in the pursuers' pleadings at article 3 was relevant, then it must mean that the lease created a contractual power of resumption. If so, Mr Upton posed a question about how such a power could operate. Resumption is determination of the lease in respect of the subject resumed; the result is that the resumed subjects are the unburdened property of the landlord. If a third party could somehow acquire the landlord's whole rights, they would necessarily include any power of resumption. If the hypothetical third party owner of the landlord's interest exercised that right, the lease would accordingly terminate in respect of the resumed subjects. To whom would they then belong and who would have the power to dispose of them? On one view it would be the land owner because he owned the land and there was no longer any lease over it. On another view, the power would fall to the third party "landlord", otherwise there would be no sense or purpose of his having a power of resumption if he could derive no benefit from it. If, as owner of the "landlord's interest", the right and benefit of letting the land belongs to that third party, why should he not also be able to exercise that right over the resumed subjects? If a tenant is entitled to compensation for resumption and the "landlord's interest" comprised all of the landlord's rights and obligations, then a third party acquiring that interest would be obliged to pay the compensation. That would suggest that ownership of the resumed land, or at least the right to dispose of it, would belong to the hypothetical third party. Mr Upton also argued that if the tripartite hypothesis of landlord, tenant, landlord's interest was possible, then the right of irritancy of a lease for non-payment of the rent would be rendered senseless. The power to irritate would belong to the owner of the "landlord's interest" but the beneficiary would be the land owner to whom the subjects would then revert. Further examples were given of aspects of an ordinary lease that would be affected by the notion that the "landlord's interest" was somehow separate property, such as the common reservation to the landlord of the rights to minerals. If the "landlord's interest" was separate from ownership then would it include a right to enter upon the land owner's property and work the minerals? Other issues might include the obligations of the landlord to ensure or to pay compensation for improvements. It would be difficult to ascertain who would be obliged to make such payments, the owner of the "landlord's interest" or the land owner to whom the insured subjects and improvements would pass at the determination of the lease. These were said to be intractable issues that were unknown to the law because the "landlord's interest" was not something recognised as an interest severable from the ownership of the land. The notion of a "head tenant" being interposed is recognised in law but that was another matter, it was not a grant of ownership of the landlord's interest but a grant of a lease.

[8] The nub of the argument was that the right of land ownership of each party was absolute and separate from the right of land ownership of the others. If the land itself was not common property, there was nothing else that could go by the name of "landlord's interest" that was common property. Accordingly the pursuers' averments about common property were irrelevant and in any event gave fair notice of what the subject was that was averred to be common property.

[9] Counsel then examined the following averments made by the pursuers:-

"... as the landlord's interest in the lease is common property, the pursuer's consent is required for the management of the landlord's interest in the lease, including any resumption of land which forms part of the lease. The defenders have managed and used that part of the lease subjects which they own to reduce the extent of the subjects covered by the lease, and they have done so without having obtained the consent of the pursuers as joint landlords. The defenders have thereby unlawfully interfered with the pursuers' heritable interest as joint landlords in the lease subjects". [Closed Record p 15B-C].

He submitted that the irrelevance of the claim that landlord's interest was common property resulted in the averments that followed also being irrelevant. The pursuers had identified no contract, rule of common law or legislative provision which deprived the defenders and the tenant of their land of the freedom to contract as they wished in respect of that land.

[10] Moving to the averments of unjustified enrichment, Mr Upton submitted that the pursuers' pleadings disclosed no ground on which any enrichment of the defenders was legally unjustified. As the pursuers themselves offered to prove that the right to the rents had been apportioned between the parties, then on their own pleadings no question of the "resumptions" causing them financial prejudice was disclosed. So far as interdict was concerned, there was no basis on which the apprehended actions would be unlawful which would entitle the pursuers to interdict.

[11] Mr Upton anticipated that the pursuers might rely on passages in Lord Gill's book "The Law of Agricultural Holdings in Scotland (3^rd Ed) in support of a claim they had rights as joint landlords. However, Mr Upton argued that such passages required to be understood in context. In particular, where Lord Gill writes at para. 3.05:-

"Where the subjects of let are divided among several proprietors, all of the proprietors together constitute the landlord of the holding",

it should be noted that the learned author makes reference to section 50 of the Agricultural Holdings (Scotland) Act 1991, a statutory provision providing for the determination of claims for compensation where an agricultural holding is divided. Section 50 applies only where the rent payable by the tenant has not been apportioned with his consent. The pursuers' own averments are to the contrary on that issue. Secondly, section 50 is concerned with a tenant's right to compensation which the present case is not. More fundamentally it was argued that in cases where the land subject to an agricultural lease was owned severally by different proprietors, it has been found necessary by Parliament to make a specific statutory provision that matters should proceed "as if the holding had not been divided". This simply reinforced rather detracted from the conclusion that at common law separate proprietors of a single holding do not constitute a single landlord of the holding. Had that been the position at common law there would have been no need for section 50. Mr Upton also argued that the legislative intention behind the Agricultural Holdings Acts was largely to improve the position of tenants in comparison with their position at common law. One can see why it might have been regarded as beneficial, or at least convenient, for agricultural tenants to be entitled to disregard for the purposes of compensation payments a division of the holding. However that was not authority for a proposition that in any case of divided ownership, one of several land owners has a common law right to object to the release from the lease of land owned by another. It was noted that Lord Gill's text also narrates that the subjects of let were divided among several proprietors, each proprietor must conjoin in any notice to quit and it is incompetent for each to serve a notice relating to that part which is owned by him. The case of Bebington v Wildman [1921] 1 Ch. 559 is cited in support. In a footnote to the relevant passage Lord Gill also records the following:-

"In Secretary of State for Scotland v Campbell 1959 SLCR 49, the holding was owned by two proprietors. A notice of resumption was served by one of the proprietors which related to the parts of the holding owned solely by that proprietor. Both proprietors sought to enforce the notice in a joint application with the tenant, but the tenant did not take the point that the notice itself had been served by only one of the proprietors; cf Land v Sykes [1991] 1 E.G.L.R. 18."

Mr Upton accepted that the law appeared to be that where ownership was divided, a tenant was entitled to disregard either a notice to quit or a notice of resumption served by one proprietor only, even if it was a notice to quit or of resumption which referred only to the subjects owned by the landlord serving it. However, he argued that nothing in pursuers' pleadings disclosed any relevance between law on those matters and the present case. First, he noted that the pursuers do not aver that the "resumptions" proceeded by way of the service on the tenants of notices of resumption or indeed notices to quit. The pleadings did not disclose the mechanics by which the lands came to be resumed. There was no apparent connection between the point being discussed by Lord Gill and the present case. Secondly, as the point was not taken by the tenant in Secretary of State for Scotland v Campbell it could hardly be authority for a relevant proposition. Thirdly, the principal authority cited by Lord Gill was Bebington v Wildman. That case was distinguishable, according to Mr Upton, as a case where the tenant had not recognised the division of the tenancy. In the present case the pursuers do not aver that such a situation arises. Indeed, the averment that the rents have been apportioned tends to suggest the opposite. Fourthly, Bebington was in any event a case concerned with a question between landlord and tenant about the validity of an ostensibly competent notice. On the other hand the present case concerned relations between the two landlords years after certain transactions have terminated the lease over part of the lands of one of them. There was nothing in the pursuers' averments to disclose whether those transactions were unilateral and proceeded by compulsion or whether they were bilateral and proceeded by agreement. The decision in Bebington was that the tenant had a right to object to certain notices and that the rule existed for the tenant's benefit and protection. Similarly, Land v Sykes was also concerned with the protection of the tenant's interest by ensuring that notices were served by parties in terms which leave the tenant in no doubt about their effect. Further, in Land, a partial notice to quit by a landlord of part of the subjects only was held to be valid. The fifth and final point made on this matter by Mr Upton was that even if there was anything in the pursuers' pleadings to disclose that cases about a tenant's right to object to a notice to quit (or of resumption) were relevant, the point that the rule, or those rules, exist for the benefit of the tenant as a defence to a removing is plain on the authorities. In the particular case of agricultural holdings, the principal rule which renders Bebington and other authorities on valid service of a notice to quit important is that contained in section 21 of the 1991 Act. It provides:-

"(1) Subject to section 20 of this Act and to subsections (6) and (7) below, 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."

Mr Upton submitted that there was some authority to support a proposition that a landlord and tenant could by agreement renounce an agricultural lease notwithstanding the absence of notice in terms of section 21 of the Act. In Knapdale (Nominees) Ltd v Donald [2001] SLT 617 a landlord failed to establish on the facts that his tenant had by agreement renounced an agricultural lease. In his decision, Lord Kingarth, albeit obiter, discussed whether an agreement short of notice could terminate a lease notwithstanding the terms of section 21 His Lordship expressed the view, albeit with some hesitation, that it may well be possible for a landlord and tenant to contract out of section 21 and agree that a lease will be renounced without notice. Counsel argued that in the present case, where on the pursuer's averments, land has been resumed in circumstances which may well have arisen through bilateral agreements between the defender and the tenant, there was no ground for holding that such actings were challengeable at the instance of a landlord of another part of the subjects of the same lease, still less that they afforded a ground for an action of unjustified enrichment.

[12] Returning to Lord Gill's text, Mr Upton argued that where the learned author states that in a situation of more than one landlord over a single tenancy all the landlords must concur in any action for recovery of unpaid rent, the context of the case cited in support of the proposition was important. That was the case of Schaw v Black (1899) 16 R 336, which concerned a plurality of landlords of the same lease, who were all the whole proprietors pro indiviso of the land that was the subject of the lease. Accordingly it was not a case of divided ownership and thus not authority for a proposition about a case of divided ownership according to Mr Upton. Any cases (such as Clydesdale Bank v Davidson 1998 AC (HL) 51) where the subject of the lease was the common property of two or more landowners did not assist with the circumstances of the present case. Further, while Lord Gill's text continued in relation to the issue of divided ownership by stating that notices other than notices to quit competent to the landlord under the 1991 Act must also be served by all the proprietors together, the decision cited in support, Stiles v Farrow [1977] 241 EG 623 was distinguishable on its facts from the present case. In Stiles no apportionment of rents had been agreed with the tenants, contrary to the situation between the parties here. Further, Stiles concerned a specific question of statutory construction of section 8 of the English agricultural holdings legislation. Accordingly, the court ought not to take it as authority for a proposition on a matter of Scots land law. The final relevant section in Lord Gill's text that was of note was paragraph 3.05 where his Lordship expresses the following view:

"Whenever the title to the holding becomes divided during the currency of the tenancy ... ... they together constitute the 'landlord' of the holding."

However, the footnote to that part of the text cites section 50 of the 1991 Act in support, and as already noted, section 50 relates only to a situation where the rent has not been apportioned. It was in any event irrelevant to a claim being made at common law.

[13] In summary, counsel submitted that, while a much respected text on the law of agricultural holdings in Scotland might at first glance be thought to provide some support for at least a part of the pursuer's case, there were sufficient differences between the propositions there being made and the circumstances of the present case that they did not. The learned author was not, in the passages referred to above, discussing any claims such as those advanced by the pursuers in this action. The text was concerned mainly with valid forms of notice and related matters. Mr Upton contended that the pursuers were effectively unable to cite any authority for the proposition that at common law, between divided owners of leased subjects there exists a right or interest as would be required to render the action relevant. There was no precedent for the granting in these circumstances of the remedies sought. Accordingly the action should be dismissed.

[14] Mr Upton's secondary submission related to the irrelevance and lack of specification of particular averments made by the pursuers. The first of these related to averments in article 3 of Condescendence (Closed Record p. 11C-E) where the pursuers make averments about the power to resume land being restricted and the three transactions complained of being invalid as a result. It was submitted that while the averments presuppose a restriction on a power to resume land, by reference to the nature and extent of the subjects, the pursuers do not specify the source of either the power or of the restrictions. They do not aver that either arises from the lease, or from statute, or at common law. The averments were accordingly irrelevant and in any event failed to give fair notice. Esto there were any restrictions on the defenders' right to contract with a tenant of their land and there vested in the pursuers a right to enforce such restrictions, then the appropriate remedy would be to reduce the transactions which breached their right and were allegedly invalid. Thus the averments were irrelevant to the remedies for which the pursuers conclude.

[15] Secondly, the pursuers then averred (Closed Record p. 11E-12A) that since the pursuers became joint landlords the defenders have refused to consent as joint landlords to the service of any notice to increase the rent of the leased subjects. It was contended that this averment has no relevance whatsoever to the pursuers' case that the defenders have invalidly resumed subjects from the tenant and thus unjustifiably enriched themselves of the pursuers' expense. It should be deleted. Thirdly, there is an averment also in article 3 (Closed Record p. 11B) that the pursuers did not discharge or consent to discharge the tenant of the obligations incumbent upon the tenants in respect of the lease or under the Agricultural Holdings (Scotland) Acts. Such an averment lacked specification in relation to the obligations to which reference was being made. The terms of the lease were not incorporated into the pleadings and even if the defenders must be taken to know its whole terms, they are entitled to notice of the obligations the discharge of which in respect of the resumed subjects is said to aggrieve the pursuers. No particular obligations under the Agricultural Holdings Act are identified. Fourthly, an attack was made on the pursuers' averments at page 11B-C of the Closed Record where it is averred that the lease to the distillery company purported to grant to that company as tenants under the lease a right to take water from a part of the burn owned by the pursuers and in respect of which part of the pipe from the burn to steading building runs over the land owned by the pursuers. Following an amendment by the pursuers there remained an argument that it was unclear whether and if so why any grant of a right to take water from the pursuers' burn formed a ground of action against the defenders. If it meant that the right was purportedly granted over their property in the lease by the defenders of the second resumed subjects to the distillery company, then the pursuers would be protected by the principal nemo dat quod non habet and their remedies would be partial reduction of that lease and interdict against the distillery company. Accordingly the averment was not relevant to support the pursuers' conclusion.

[16] A wider argument was made about the appropriate remedies available to the pursuers generally. It was reiterated that it is unclear why the pursuers do not simply conclude for reduction of the allegedly invalid resumptions. If the power of surrendering or discharging the lease pro tanto over the resumed subjects was not the defenders unilaterally to exercise, then on the face of it the arrangements were invalid and challengeable at the pursuers' hand. It was well established that a remedy for allegedly unjustified enrichment does not lie where the pursuer has another remedy that could be brought - Transco plc v Glasgow City Council 2005 SLT 958, per Lord Hodge at paragraph 13.

[17] In relation to quantum the pursuers do not specify how or why the lease to the distillery company "has increased the value of the subjects leased by [the company] by at least ... £150,000" [Closed Record p. 19A-B] accordingly the averment failed to give fair notice of the case for at least that part of the land having gained in value. In any event, the relationship between the pursuer's conclusion for payment or the measure of a claim for recompense and such an averment is unexplained.

[18] Finally, it was noted that there is no specific averment that the tenant has unilaterally renounced any part of the leased subjects or any part of the lease, notwithstanding an averment that the lease contained no right permitting the tenant to do so. [Article 3, Closed Record p. 11A-B]. The ostensible grievance was that the defenders had resumed the subjects from the lease rather than any unilateral action being taken by the tenant. It was submitted that, even if the action as a whole was not dismissed, the averments identified in the foregoing argument should not be admitted to proof.

Submissions for the pursuers

[19] Mr Sutherland's motion was to repel the first and second pleas-in-law for the defenders and to allow a proof. The first chapter of his submissions related to the issue of resumption and/or renunciation. He noted that where the pursuers made averments in article 3 of Condescendence that the defenders had resumed various plots of ground from the leased subjects in 2004, 2005 and 2007 [Closed Record p. 8C-D; p. 9A-B], those averments were met by an admission that the tenant under the lease "renounced" their rights under the lease. On each occasion that the pursuers referred to a resumption the defenders respond by referring to renunciation. The pursuers' reference to "resumptions or purported renunciations" were made in light of the defenders' answers. Renunciation is the method by which a tenant gives up the whole or part of his lease before its stipulated ish date. It may be agreed to or acquiesced in by the landlord but the initiative for bringing the tenancy to an end in respect of that land is a matter which clearly lies with the tenant and is consented to by the landlord. Reference was made in this connection to Paton and Cameron Landlord and Tenant p. 328; Gill, The Law of Agricultural Holdings in Scotland (3^rd Ed) paras 14.02-04 and in Knapdale (Nominees) Ltd v Donald 2001 SLT 617. An agricultural tenant would have no statutory right to a rent reduction where there was a renunciation. Conversely, resumption is the method by which the landlord is able to take back part of the leased subjects during the currency of the contract. The landlord has no contractual power to resume unless there is a written lease which contains that power - Edinburgh Corporation v Gray 1948 SC 538. The extent to which the right to resume may be exercised is restricted by the terms of the resumption clause in the lease (Gill: Agricultural Holdings in Scotland at 13.01). Mr Sutherland submitted that at common law there is no requirement for a notice to be served for a landlord to exercise a power to resume if there is no requirement in the lease for such a notice (Kinninmouth v British Aluminium Co Ltd 1915 SC 271). Nor at common law was there any requirement for any particular form of notice to be given. If no notice was required at all, it may be sufficient simply for the landlord to allow a sufficient period of time to allow the tenant to make such statutory claims as may be appropriate. Mr Sutherland contended that the basic distinction between resumption and renunciation is not acknowledged by the defenders in their pleadings or addressed in submissions. The averments that the tenants at all material times agreed to the renunciation might be construed as implying that the initiative to remove the land from the lease was that of the defenders. Whether the matter might legally be construed as renunciation of resumption was a matter for determination in law rather than simply subjective characterisation. It was submitted that the admissions made by the defenders should be construed as admitting that the resumptions had taken place. If that was the case then the matter was conclusive against the defenders. Alternatively, if the defenders have not confused or misunderstood the terminology, they appear to be non-candid averments of the defenders which failed to make clear what the defenders' true position is in relation to each of the three transactions. A power of resumption was said to be quite distinct from the statutory power to quit part of the holding under section 29 of the 1991 Act which created a power which did not exist at common law.

[20] Turning to the legal issues arising from there being a single lease where ownership of the whole was divided, it was submitted that while not expressly averred this was clearly a lease subject to the Agricultural Holdings (Scotland) Act 1991. It was contended that the division of ownership of the land covered by the lease did not create two different leases on the same terms between the tenants and the pursuers on the one hand and the tenants and the defenders on the other. This was said to be a consequence of the Leases Act 1449, which creates a "real right" in the land by which the lease is viewed as a single mutual contract which is binding on the successors of the original owners. In consequence, there is a single lease which applies to the aggregate of all the land comprised in the lease. Accordingly the common law meaning of a lease is reflected in the definition of an agricultural holding as the aggregate of the agricultural land held under a lease. The 1991 Act defined a lease as the letting of land for a term of three years, or for life or lives and years or from year to year. A tenant was defined as the holder of land under a lease of an agricultural holding and includes persons acting in a number of capacities. The landlord is defined in the 1991 Act as any person for the time being entitled to receive the rents and profits or to take possession of an agricultural holding and includes persons acting in a number of capacities. Mr Sutherland's position was that the division of ownership in a lease does not alter the fact that there is still a single contract, not a multiplicity of leases between the tenant and different landlords. It is in light of that fact that section 84(4) of the 1981 Act provides that a tenant only has to serve notice under the Act on the original landlord until the tenant has received notice of any other person who is also the landlord. Gates v Blair 1923 SC 430 was authority for the proposition that at common law a landlord is not entitled to serve a notice to quit in respect of only part of the leased subjects with a view to terminating the whole lease. Notice to quit would require to cover the whole subjects if the landlord wished to bring the whole lease to an end. Mr Sutherland argued that the position of landlords where the ownership of the leased subjects was divided could be contrasted with the position of joint tenants. A lease remained valid and binding on both joint landlords until the lease was capable of being brought to an end in its entirety. In contrast where there were joint tenants on a lease running on tacit relocation, it could be brought to an end by one of the joint tenants notifying the landlord that they intend to remove from the lease subjects. This would bring to an end the implied consent to the renewal of the lease by the tenant - Smith v Grayton Estates Ltd 1960 SC 349. This raised the question of how a landlord might be able to terminate a lease running on tacit relocation where the landlord's interest has become divided between two different land owners.

[21] According to Mr Sutherland, the rights of the tenant under the lease could not be compromised by one of the land owners serving a notice to quit only in respect of the area of land that they own. In order to terminate the lease against the tenant it would be necessary for both of the landlords to act together in serving a single notice to quit against the tenant in order to prevent tacit relocation of the lease. It would also be necessary for both landlords to act together in order to raise removal proceedings against the tenant if the tenant did not leave the lease subjects voluntarily at the expiry of the notice period. - See Gill, The Law of Agricultural Holdings in Scotland para.3.05 and the authorities referred to there. Unlike Mr Upton, Mr Sutherland contended that Lord Gill was discussing common law principles when various statements relating to divided ownership of tenancy subjects are made. The first statement is to the effect that where the subjects of let are divided among several proprietors, all of the proprietors together constitute the landlord of the holding. While Mr Upton had focused on the footnote to that proposition referring to section 50 of the 1991 Act, it should be noted that the footnote was highlighted by the abbreviation "c.f. 'at the start'". As that abbreviation is of the Latin word "conferre" meaning "compare" it was submitted that what the learned author was doing was inviting the reader to compare the general position of the landlord at common law as regards the service of a notice to quit with the position that applied under section 50 of the 1991 Act where the tenant would be entitled to pursue the original landlord for the whole amount of compensation.

[22] The second statement in the text being discussed read "since each owns a different part of the holding, all must conjoin in any notice to quit". That proposition arose because of the inability to terminate the entire lease as seen by Gates v Blair. Mr Sutherland submitted that the situation could not be made any different by each individual proprietor serving a notice to quit in respect of their own parts only, because each notice would suffer from the same defect. Thus there required to be a single notice to quit to which all the landlords conjoined. The third statement was "it is incompetent for each to serve a notice relating to that part which is owned by him". The authority for that proposition is Bebington v Wildman [1921] 1 Ch. 559. In that case a tenanted farm was sold in two lots, with Mr Wildman purchasing Lot 7 and the other purchaser acquiring Lot 1. The purchaser of each lot served separate notices to quit on the tenant in respect of the areas of ground that each of them had purchased. It was held that there was no doubt that the defenders' notice taken by itself was not a good notice to terminate the tenancy as it was a notice to deliver up part of a tenancy and not the whole. As each notice was effectively void ab initio the two notices together could not be treated as a valid notice. The fourth relevant sentence from Lord Gill's text is in the following terms:-

"Conversely, no one proprietor is entitled to serve a notice to quit in relation to the whole".

The case of Secretary of State for Scotland v Prentice 1963 SLT (Sh. Ct.) 48 is cited in support. In that case the Forestry Commission had become part owners of grazing land subject to an existing lease and they sought to rely on the statutory power to serve a notice to quit part of the subjects. The sheriff relied on the statutory definition of landlord to the effect that in order to prevent the provision for tacit relocation having an effect all the persons defined as landlord for the purposes of the Act must be party to the notice to quit.

[23] The case of Stewart v Moir 1965 SLT (Land Ct.) 11 is also cited in support of this sentence of the text. In that case an agricultural tenancy was made up of four separate parts, each with its own proprietor. Two of the proprietors purported to serve a notice to quit in respect of their own part of the lease subjects. The case was concerned with the law of removing at common law rather than under the agricultural holdings legislation. The court held that, assuming that the applicants to the court were the "landlords", their notices to quit were invalid as they related to only part of the agricultural holding. Secretary of State v Campbell 1959 SLCR 169 was also cited in the text as a case in which the principle that all owners must be party to the notice could have been applied but that the point was not taken. The final relevant case under this section was Land v Sykes [1991] 1 EGLR 18. It should be noted that the case was also preceded with the abbreviation c.f. in the footnote in the learned author's text. It was accepted that the case involved a principle of English law which was different from Scotland. However, the essential finding in the case was that where there were two separate land owners owning the lease subjects a notice to quit served by one land owner in respect of the whole of the lease subjects was not valid, whereas a subsequent notice to quit against only the subjects owned by that proprietor was valid. That distinction was because of the underlying principle arising from the Law of Property Act 1925 in England that there existed two separate leases where a formerly single lease came within divided ownership. It was submitted that by referring to Land v Sykes with the abbreviation c.f. the learned author was merely inviting the reader to compare the different outcomes that applied between England and Scotland.

[24] The next relevant statement in the text being examined was that "all must concur in any action for unpaid rent". The footnote to this proposition referred to Schaw v Black (1889) 16 R 336. Although that case concerned pro indiviso proprietors, the Lord Ordinary who decided it referred to the earlier case of Cargill v Muir 16 S 408 and drew the distinction between the concept of pro indiviso ownership where there was a single undivided interest in a right, but that right was owned by a number of persons and each person owned their own part which could be sold off, and where there was a single part which was owned by pro indiviso by a number of persons. The view was expressed that the pro indiviso ownership was joint property. While the Outer House decision was overturned on another aspect of the case, Lord Shand in the Inner House clearly disagreed with the Lord Ordinary's reasoning in this respect and held that the case was one of common property. Thus it could be deduced that Lord Gill clearly considered that in light of the previous principles and the overturning of the Lord Ordinary's judgment that part owners and pro indiviso owners were to be treated in the same manner.

[25] The last relevant sentence of Lord Gill's text as explored by Mr Upton was one in which the learned author makes the point that, as is the case with common law notices such as notices to quit, where the 1991 Act entitles the landlord to serve a notice in any particular context then this too must be served by all the proprietors. Mr Sutherland submitted that the case of Stiles v Farrow (1976) 241 EG 623, albeit set against the background of English property law concepts, supported the contention that a single notice had to be given in respect of the whole tenancy subjects where there were two part owners to the subjects of lease. It was suggested that the point being made was that the position as regards notices which are purely statutory in origin is the same as it is for common law types of notices, namely that all the property owners have to be a party to a single notice.

[26] Mr Sutherland submitted that the following general principals were well established. First a lease is a mutual contract, creating mutual rights and obligations. Secondly the lease gives rise to a separate real right in favour of the tenant over the whole subjects. Thirdly where ownership of the ground becomes divided there remains a single lease which subsists over the whole of the lease subjects. Fourthly, where ownership of land which is subject to a lease is divided amongst two or more owners no one owner is entitled to take any measure affecting the relations between the landlord and the tenant unless the other landlord is a party to that notice. On the basis of these general propositions, it was submitted that no substantial distinction was to be drawn between co-owners of property subject to a lease and the owners of separate areas of ground subject to a single lease. It was also submitted that each separate owner of land must be seen to have a pro indiviso share in the landlords part of the lease subjects, otherwise the unity of the lease as a single lease over the whole subjects would not exist. Reference was made to Bell, Commentaries, 7^th Edition, Vol 1 pages 63-64. It followed that if the separate land owners under a lease were unable to act unilaterally in matters such as notices to quite the whole or to any part that they own, it was logical to apply the same principle to a part of the part. If it was possible for one of the landlords to act unilaterally in terms of resuming part of the subjects, the effect could easily be that the landlord resumed out of the lease one of the most valuable parts of the lease subjects, entitling the tenant to a significant reduction in rent. It would also give rise to the tenant having potential claims against the landlords jointly where the resumption was opposed by the tenant or where it was accepted by the tenant but also led to statutory claims for disturbance, reorganisation payments and other compensation against the landlords. Such a claim would be against both owners as joint landlords. The effect of resumption can accordingly affect not just the value of the resuming landowner's interest in the lease, but have a consequential effect on the other landowner's interest. Assignation was said to be another example of a situation that would require the consent of both landowners where the subjects were in divided ownership. It was submitted that there was no material distinction between the owners of separate parts in the lease and the pro indiviso owners of the whole lease (Clydesdale Bank v Davidson 1998 SC (HL) 51 at 60(B)-(G).

[27] Counsel for the pursuer also argued that a lease is an incorporeal right in land and is heritable. The list of heritable rights is set out by Professor Reid in his text on The Law of Property in Scotland, chapter 1 at paragraph 14, is expressly acknowledged not to be an exhaustive list. Accordingly it was submitted that there was nothing to preclude the landlords interest in the lease being a thing which would be classified as a right which is heritable and also incorporeal. That would be consistent with the principle that a lease is a single interest which consists of mutual rights and obligations and which can be owned in different parts. It was also consistent with the authority requiring each of the landlords in a lease to act together in order to exercise their rights. It was disputed that the defining necessary characteristics of common property were that it was capable of being conveyed or burdened as a separate estate and must be capable of division or sale of the common subjects. There can be common property in a close or stair or a downpipe. The landlord's interest in the lease should in the present case be viewed as a right of common property arising out of the existence of the lease and the rules for the management of common property ought to apply.

[28] In response to Mr Upton's submission that the proper remedy for the pursuers if they had the right averred would be one of reduction, it was submitted that that was incorrect. There was no suggestion that the purchasers and lessee concerned had not acquired their rights in the respective areas of ground in good faith and for value. In those circumstances the transactions would only be reducible if they were void ab initio. If that was not the case reduction was not the appropriate remedy.

[29] In relation to the defenders' secondary submission about the relevancy and specification of certain averments, it was submitted that the averment that the defenders had refused to consent to the service of any notice to increase the rent of the leased subjects was relevant to show that the defenders were aware of the nature of the requirement for both landlords to act jointly or order to make changes to the lease. On the issue arising from the averments about the lease to Kilchoman Distillery Company, it was submitted that the relations between the pursuers and the defenders did not fall into the category of a bilateral arrangement. The position of the landlords is not the subject matter of the contract. There was no basis for another remedy on the face of things. It was submitted that Transco Plc v Glasgow City Council 2005 SLT 958 was to be distinguished because there was no dispute in that case that the Local Authority had a statutory duty to maintain the bridge and that it the pursuers could have required the Local Authority to perform their statutory duty to do so. As the pursuer had averred that they had an alternative remedy open to them, they were required to aver why they had a remedy in recompense when they could have required the local authority to perform their statutory duty. In the present case it was submitted that there was no other remedy available. On the issue of the lack of specification of an averment concerning an increase in value of the subjects lease by the Distillery Company, it was submitted that it was a pure question of fact whether a particular transaction involving land had resulted in an increase in value. Finally, in answer to the challenge to an averment that the tenant was not permitted to unilaterally renounce being an irrelevant one, it was submitted that the averment arises from the distinction to be drawn between resumption of land by the landlord and renunciation by the tenant. The averment was made in response to the defenders own averments regarding renunciation.

Reply on behalf of the defenders
[30] Mr Upton made a number of points in reply to the pursuer's submissions. First in relation to renunciation, it was submitted that the renunciation of a lease is a matter of express or implied agreement by the landlord and tenant (Knapdale Nominees v Donald 2001 SLT 617). Thus it was misleading to suggest that the principal distinction between renunciation and resumption was that the tenant initiates the former and the landlord the latter. The pursuers described the transactions to which they object as "resumptions by the defenders or purported renunciations by the tenant". The relevancy of their averments depends on the weaker alternative which is that the removal of the three areas of land from the lease took place with the agreement of the tenants. The importance of this was that where a landlord and tenant have entered into such an agreement and it has been implemented, then it cannot at some future date be set aside as invalid. The discussion had acknowledged the relationship between the defenders and the tenants, thus any suggestion that the transactions were not done by agreement between the defenders and the tenants was implausible. There is no offer to prove that the tenants did not agree to what was done.

[31] So far as resumption was concerned, in so far as the summons claimed any restriction on a contractual power of resumption in the lease, there were no relevant averments to support such a case. While there were references to a power of resumption, these were not averred to be found in the lease. There was no explanation of the intended context of those averments. If it was a clause in a lease that was being founded upon then the summons should say so and either quote the clause or identify it on an incorporated copy of the contract. As the pursuers has conceded that whether notice is required for resumption depended on what the contract says, then without averring the terms of the lease and offering to prove that it required notice to be served, the pursuers could not derive any relevant support from the notice cases.

[32] The fact that the 1991 Act applied to the lease in the present case was not relevant. No provision of that legislation was pled as a ground of action. There was no suggestion that there was a right granted to the pursuers by the 1991 Act which the defenders had infringed. Thus any such definitions used in the Act were not material to the dispute. In particular, the rules in the 1991 Act for service of notices on or by a tenant were irrelevant where the pursuers do not plead that anything has been done which required the service of such a notice. The reference to the 1449 Act was equally irrelevant. That legislation entitled the tenant to maintain his lease despite a change in the landownership. It had nothing to do with relations between two landlords in a case of divided ownership.

[33] On the analysis by the pursuers of the relevant paragraph text by Lord Gill (paragraph 3.05) it should be acknowledged that the authority of the first sentence of that paragraph was limited to the questions covered by the statutory provisions and the cases cited which were questions of tenants compensation, common law notice to quite, statutory notices to quit, notices required for resumption, statutory notices to arbitrate and action for payment of rent. The analysis of the case law cited showed that two of the issues were answered by the case law in a manner contrary to the learned author's text (Campbell & Land). The context of the issue of the action for payment of rent was not divided ownership at all (Schaw). Leaving aside the cases dealing with the construction of particular statutory provisions, there was only one common law rule in the case of Bebbington, namely that if a tenant has by a single contract leased lands owned by two people, he is entitled to object to a notice purporting to compel him to remove from a part but not from a whole. That decision was based on the obvious grounds of commercial commonsense and fairness, since he did not contract to lease one part only, then (absent express agreement for such an outcome) he should not be compelled to continue as tenant in respect of only a part. It was submitted that such an issue had nothing to do with the present case or the remedies for any irregularity in such a notice. Importantly all of the questions addressed in Lord Gill's text were questions between landlord and tenant rather than the rights and obligations as between one landlord and another. The pursuers' reliance on the text depended on a strained inference that the author meant to be understood to be addressing questions which the text neither states nor even suggests are being addressed.

[34] It was further submitted that the pursuers' case depended on blurring the distinction between land which is the common property of two or more co-proprietors which is let on a single lease and lands which are in the divided ownership of two or more proprietors which are let on a single lease. It was fundamental to note that the much analyzed paragraph of Lord Gill's text (paragraph 3.05) was headed "Divided Ownership" and was immediately followed by a separate paragraph headed "Pro Indiviso Proprietors". Accordingly there was no suggestion that Lord Gill incurred any risk of blurring the distinction. The only instance in which it might be said that the learned author had not strictly observed the distinction was when he referred in a footnote to Shaw v Black, but that should not be taken as meaning that it was being suggested, as the pursuers' counsel had contended, that part owners and pro indiviso owners were to be treated in the same manner. It was clear from reading Schaw that none of the judges involved were addressing "divided ownership" where two landowners owned two adjacent pieces of land on separate titles. In any event, Lord President Inglis had opened in Schaw with a remark that it was a very special case and that its decision would not establish any general rules.

[35] With reference to the case of Land v Sykes 1991 1 EGLR 18 and the English Law of Property Act 1925, it was submitted that there are few fields in which English authority should be used with greater care that those of real rights in land et separatim unjustified enrichment.. Even if that was not so, it was not at all clear that the case law and legislation referred to supported the proposition that in English common law the landlords in a case of divided ownership have a community of interest. In any event, the 1925 Act expressly states that it was consolidating earlier enactments. It was not at all clear that there was room for the development of English common law along the lines which the pursuers seemed to infer. The editors of Woodfall on Landlord & Tenant (Thomson, Sweet & Maxwell, 2005) specifically state that far from their being such a community of interest:

"At common law, where the reversion was severed, the rent was apportioned between the severed parts according to the respective values. Covenants were also apportioned. Conditions were not capable of apportionment at common law". (para 16.066)

Neither side of the debate could rely upon these very difference English concepts.

[36] It was submitted that in relation to general principles, where the parties were apart was the point at which it was submitted on behalf of the pursuers that where ownership of land subject to a lease was divided amongst two or more owners that precluded any one owner from taking any measure affecting the relations between the landlord and the tenant without the other landlord being a party to that notice. There was no authority or principle in support of that proposition. There was no reason of justice or policy why the one landlord and tenant should not be at liberty to affect the relations between them as they chose. The context of the relationships involved was a contract. If there was any rule against the defenders doing what they did, it must be found in the contract and no express clause in the contract was invoked to support such a contention. Accordingly the pursuers' case must by default be based on an implied term of the contract or nothing at all. Nothing was pled or argued about any implied term of the lease.

[37] Mr Upton accepted that if the rents had not been apportioned then questions could arise which cannot arise in the present case. If only a single sum of rent is payable, then clearly both landlords have an interest in the tenant's obligation to pay rent. Where as in this case the rents have been apportioned, the shared interest in a single sum of rent is absent. The pursuers pointed to no other interest which the owner of one part has in what is transacted between the tenant and the owner of the other part. All of the examples given by the pursuers about the apportionment of claims for disturbance or reorganisation payments or other compensation were wholly distinguishable from the present case where there is no suggestion that the tenants have any objections to or claims arising from what has happened. If it was correct that all acts of management must have the assent of both landlords, then one landlord could simply veto the other landlord from suing for rent even if, as in the present case, it was apportioned. If such an absolute and comprehensive right of veto as was being suggested by the pursuers was the law, it was particularly curious that it had given rise to no decisions of the courts in any dispute between landlords.

[38] The law presumes that the defenders may use or dispose of their land as their own unless restrained by law or contract. The pursuers do not identify a law or an express or implied term of a contract which restrains the defenders from agreeing with their tenant to terminate the lease in respect of part of the subjects. Accordingly it was reiterated that the whole action was irrelevant. If any remedy in terms of the contract had existed, it would not then lie in unjustified enrichment. It was contended that the pursuers could not begin to make out a loss in this case as the land at issue was not theirs and the rents had been apportioned. The defenders motion for dismissal was reiterated.

Discussion

[39] The principal issue for determination in this case is one that does not appear to have been litigated previously in this court. It concerns the nature of the rights, if any, of one landlord vis a vis another landlord, where each owns a separate area of land, both areas being subject to a single lease entered into when all of the land was in the same ownership. In such a situation issues can arise about whether or not the tenant has recognised or accepted the division of ownership. In this case there is no such difficulty, as it is accepted that the rent due by the tenant has been apportioned as between the two landlords. Another feature of this particular case is that while the defenders as individuals are owners and thus landlords in respect of one portion of the land subject to the lease, they are also the Directors of the tenant, Rockside Farming Company Limited. The relationship between landlord and tenant, at least so far as the defenders are concerned, is accordingly not an " arms length" one.

[40] In essence the pursuer's case is that their interest in the lease is "common property" held by them and the defenders as "joint landlords". Accordingly, they claim to have the same or at least a similar interest in the whole subjects of the lease that they would if they were pro indiviso owners with the defenders of all of the land, so far as management, control and disposal thereof is concerned. The defenders contend that no such right of common property exists where the land that is the subject of the lease is in divided ownership, albeit that there are a number of consequences in relation to the rights of the tenant vis a vis the landlords in such a situation.

[41] In my opinion, the defenders' argument that there is no right that can be characterised as the "landlords' interest" severable from the right of ownership is to be preferred. A landlord's interest is, in my view, inextricably linked to his title. No authority was cited by Mr Sutherland in support of a proposition that, by acquiring land that was subject to a tenancy involving that land and land owned by another, the owner of one part somehow acquired a right in respect of the other part. The nature of the right said to be acquired was not specified, other than that it was said to be some kind of unnamed incorporeal heritable right. I agree with counsel for the defenders that any such right would not appear to fall within the accepted descriptions of real rights as summarised by Professor Reid in The Law of Property in Scotland, chapter 1, para 14. Nor would it appear to be a personal right, such as that flowing from contract. While a lease gives rise to a real right in favour of the tenant, the landlord or landlords' rights are contractual, primarily the right to receive rent. The lease may impose restrictions on the manner in which a landlord can deal with his own land, but the idea that the landlord of one part of the subjects of lease gains some incorporeal heritable interest over the subjects owned by the other landlord does not stand up to scrutiny. As Mr Upton pointed out, if the "landlord's interest" is a heritable right, severable from ownership, it would require to be capable of disposal separately from the land itself. In my view, the correct characterisation of the situation in which the parties find themselves is that the tenant, Rockside Farming Company, has two landlords under the lease, one for Rockside Hill ( the pursuers' land) and one for Rockside Farm ( the defenders' land). The rent in the lease relative to both parties' lands having being apportioned, the tenant has separate obligations to each landlord in that regard. The provisions of the Agricultural Holdings (Scotland) Act 1991 impose certain restrictions on landlords which give important protections to the tenant. The legislation is not designed to address the rights of landlords inter se. Thus any "landlords interest" said to have been interfered with by the three transactions in question would have to be a common law right.

[42] During the course of argument, both sides analysed in some detail a passage from Lord Gill's text, The Law of Agricultural Holdings in Scotland (3^rd edition) at para 3.05, pursuers' counsel claiming that the passage lent support to his contention that each landlord had a right qua landlord over the whole subjects of let and defender's counsel claiming that the passage and the authorities cited therein did not support such a proposition. In my opinion, the context of the passage in question is important. It is headed "Divided Ownership" and deals mainly with the requirements for serving various notices under the 1991 Act where the subjects of let are divided between different owners. The following passage of the text, para 3.06, is entitled "Pro Indiviso Proprietors" and deals not just with notice requirements but also the restrictions on the proprietors inter se. In particular, under reference to the House of Lords decision in Clydesdale Bank v Davidson (1998 S.C.(HL) 51), it is stated that all pro indiviso proprietors must concur in any decision as to the management, alteration or disposal of the subjects. In the Clydesdale Bank case, Bell's Principles paras 1071-1072 were cited in support of that proposition. (at p55 C-D). In contrast, there appears to be no general rule that in the case of subjects of let in divided ownership the separate proprietors must concur in such acts. No such general rule is stated by Lord Gill in his passage on divided ownership. What is clear from the passage in question (para 3.05) is that in relation to specific notices, the tenant is entitled to insist that the landlords act together. For those purposes, the separate proprietors may in a sense be regarded as a single entity so far as the tenant is concerned. The reference to section 50 of the 1991 Act in the context of an examination of the nature of any interest one landlord may have in the subjects owned by the other landlord is in my view irrelevant. Section 50 expressly provides that a tenant is entitled to seek any compensation to which he may be entitled under the 1991 Act as if the subjects of let were not in divided ownership where the rent has not been apportioned with his consent or under statute. That Parliament saw fit to legislate on the matter supports a contention that at common law the position would be that a tenant would not be entitled to ignore the divided ownership of the subjects of let. In any event, the provision would not apply to a case such as this where the rent has been apportioned and the tenant would accordingly not be able to regard the landlords as a single entity for the purpose of compensation. It is not clear why the footnote referring to section 50 is prefaced with the abbreviation "c.f." given that section 50 is a statutory example of a tenant being able to treat two landlords as a single entity for a specific purpose. What I do not accept is that anything in the text or the footnote referred to supports a proposition that there is some common "landlord's interest" that prevents one title holder disposing of his land, or part of it, without the consent of the other landlord. Each landlord is restricted in his dealings with the tenant, particularly when serving certain notices on the tenant and in some situations the landlords are required by law to act together for the tenant's protection. The very existence of those specific requirements again supports the position that, for situations where no such restriction has been stipulated, each landlord may act alone.

[43] While there is support in the case of Bebington v Wildman [1921] 1Ch.559 for the proposition that in cases of divided ownership all of the landlords must conjoin in a notice to quit, that case does not assist the issue in the present case where there is no suggestion that any notice to quit was served. In any event, unlike the present case, in Bebington the tenant had not recognised the division of the tenancy. The issue here is whether the defenders and the tenant were able to release part of the land from the lease without reference to the other landlord. I deal below with the issue of whether a relevant case that a resumption took place has been pled. It is sufficient at this stage to note, however, that in the notice cases referred to by Lord Gill, there is only one involving a notice of resumption, Secretary of State for Scotland v Campbell 1959 S.C.L.R. 169 (incorrectly cited as 1959 S.C.L.R. 49). In that case land subject to an agricultural holding was owned by two proprietors. A notice of resumption was served by one of the proprietors relating to part of the holding owned by that proprietor. In a question of enforcement by both proprietors against the tenant, no point was taken that the notice had been served by only one of the proprietors. Thus the outcome, had the point been taken, is unknown. In the English case of Land v Sykes [1991] 1 E.G.L.R. 18, a partial notice to quit by a landlord of part of the subjects of let was in fact held to be valid.

[44] Further, I do not consider that the pursuers can derive any assistance from the cases of Schaw v Black (1889) 16 R. 336, Gates v Blair 1923 SC 430 or Stiles v Farrow [1977] 241 E.G.623. In Schaw the landlords were pro indiviso proprietors of the land that was the subject of the lease and thus had to concur in an action for recovery of rent. It is not a case concerning divided ownership. Gates v Blair was not a case concerning divided ownership and the rent involved was unapportioned. Stiles v Farrow was an English case involving the service of notices in a situation of divided ownership but where again there was no agreement on apportionment of rent. None of these cases deals with any question of the rights of landlords inter se, they are dealing with specific situations where the landlords must act together for the protection of the tenant. Accordingly, I do not consider that the p

ursuers can derive any assistance for their case from the passage in Lord Gill's text relating to notices in cases of divided ownership.

[45] Turning to the issue of how the parcels of land removed from the tenancy in 2004, 2005 and 2007 came about, the pursuers initially aver resumption but then aver resumption and renunciation in the alternative on more than one occasion (Closed Record page 10 D, 11 A-B). It is uncontentious that resumption is the method by which the landlord can take back part of the lease subjects during the currency of the contract. The extent of the power to resume is restricted by the terms of any resumption clause in the lease. At common law there is no requirement for a notice to be served before a landlord to exercise a power to resume unless there is a requirement in the lease for such a notice (Edinburgh Corporation v Gray 1948 SC 538). The pursuers' case appears to be that there may have been restrictions on the power to resume the subjects of let. However, there is no averment that it is a provision in the lease that imposes such a restriction and the lease is not produced nor is any of its provisions incorporated in the pleadings. There is no case averred that notice was required in terms of the lease. Accordingly no clear case averring breach of the provisions of the lease is made out. In any event, the possibility that the various portions came out of the lease by renunciation is pled as an alternative. While it was said by counsel for the pursuer that this was in response to averments made by the defenders relative to the acts in question being renunciations, the pursuers' case does appear to be based on the transactions taking either form. It is then subject to the weaker alternative rule. It was not seriously suggested that the tenant had been deprived of these subjects by the defenders without consent, given the close identity between the two. Neither was it contended on behalf of the pursuers that renunciation could not take place by agreement between landlord and tenant or that such agreement could not be implied. The discussion of section 21 of the 1991 Act in Knapdale (Nominees) Ltd v Donald [2001] S.L.T.617 is important in this context. In that case Lord Kingarth accepted, albeit with some hesitation, that notwithstanding the peremptory language of section 21 of the 1991 Act which appears to require a statutory notice before any tenancy of an agricultural holding can be brought to an end, where a landlord and tenant agreed to renounce and implemented that agreement, their agreement should not be able to be challenged as invalid later due to a failure to comply with the notice provisions. Lord Kingarth's decision on this point is consistent with the view that the policy of the 1991 Act is to provide agricultural tenants with protection from attempts by landlords to interfere with their security of tenure without due process. Where it is clear that no such protection is necessary because the parties have made their own arrangements, the legislation should not be so strictly interpreted as to allow consensual arrangements to be open to subsequent challenge. The undisputed facts in this case are sufficient to imply agreement, given the close identity of the defenders and the tenant company. In such a situation it is difficult to construct a legitimate interest on the pursuers' part to interfere with that agreement.

[46] Turning to the orders sought by the pursuers, first they seek declarator that the defenders have unlawfully interfered with their "heritable interest as joint landlords" in the lease subjects by resuming the said areas of ground from the lease subjects without their ( the pursuers) consent. No declarator that there was no power to resume or that it was done without notice is sought. I have already rejected the argument that there is a "landlord's interest" distinct and severable from the heritable title. The second conclusion is for payment of £104,733. The basis of that claim is said to be that the defenders have been enriched by their actions in unlawfully interfering with the pursuers' interest as "joint landlords", that the defenders' said enrichment is unjustified, thus the pursuers are entitled to recompense. I have concluded that the pursuers have not made out any relevant case based on unjustified enrichment. First, it is clear that the claim is dependent upon the pursuers having some sort of heritable interest that the defenders have benefitted from, a claim I have rejected. Secondly, if the defenders are enriched, they are so enriched by selling or leasing their own land. Enrichment is usually only unjustified when its retention cannot be supported by a legal ground (DollarLand (Cumbernauld) Ltd v C.I.N. Properties Ltd 1998 S.C.(HL) 90 at 98). Thirdly, as counsel for the defenders correctly pointed out, the pursuer is unable to identify any loss suffered by them. Had the rent under the lease not been apportioned, the pursuers may well have been able to overcome that particular problem. Finally, if the actings of the defenders were unlawful, as the pursuers claim, the primary remedy would normally be reduction. There are no averments to the effect that no other remedy is available to the pursuers. Accordingly, I conclude that no relevant case of unjust enrichment is pled. The claim for interdict, based as it is on the now rejected argument that the pursuers have some heritable interest as "joint landlords" with the defenders is also irrelevant.

[47] In light of the conclusions I have reached, I find it unnecessary to deal with each of the attacks on particular passages in the pursuers' pleadings in any detail. Had I found that a relevant case had been pled, I would in any event have excluded certain specific averments from probation as irrelevant but otherwise allowed a proof before answer. It was conceded for the pursuers that the averments relative to the taking of water from the burn by the Distillery Company (page 11C) could be the subject of an alternative remedy and I would have deleted those. I would also have deleted the averment about a refusal by the defenders to consent to the service of a notice to increase the rent as being irrelevant to the claim being made. For the reasons explained I would also have deleted the averments to a restriction on the power to resume land (page 11 C-E) in the absence of any averments about the source of the power or any restrictions thereon, particularly the absence of any specific provision in the lease.

Decision

[48] For the reasons stated above, I consider that the pursuers' case is irrelevant and I shall grant the defenders' motion for dismissal, reserving meantime all questions of expenses.