Report

By

The Scottish Land Court

For the Year from 1st January to 31st December 1926.

TO THE RIGHT HONOURABLE

SIR JOHN GILMOUR, BART., D.S.O., M.P.,

SECRETARY OF STATE FOR SCOTLAND, ETC.

We beg to present our Fifteenth Annual Report, which deals with our proceedings for the year ending 31st December 1926. In January the Court sat in Edinburgh and disposed of cases from Inverness-shire, Arran and South Uist. In February the Court sat in Edinburgh and Dumfries. In March the Court proceeded to Aberdeen and disposed of appeal cases there, while one Division sat at Acharacle, Argyllshire, and disposed of 27 cases from the Estate of Dorlin. In April the Appeal Court sat in Edinburgh and at Wick, while one Division sat at Aberdeen, Tomintoul, and Rogart; another visited Lewis, and a third sat at Aberfeldy and Killin. In May one Division sat at Dornoch, Brora and Helmsdale, Wick, Stroma, Thurso, Melvich, Polerscaig, Strathnaver, Bettyhill, Dalcharn, Talmine, Kinlochbervie, Lochinver, Stoer and Elphin. Another Division sat at Cross, Barvas, Knockiandue, Carloway, Miavaig and Mangersta in Lewis. It thereafter proceeded to Skye and sat in Portree, Islands of Rona and Raasay, and at Staffin, Kilmuir and Dunvegan. Another Division visited Dingwall, Ardgay, Dundonnell, Aultbea and Gairloch. In June the Court sat in Edinburgh, and thereafter proceeded to Lerwick, when all the Shetland appeals were disposed of. It returned to Edinburgh and heard a complicated question of compensation under a Scheme of the Board of Agriculture in Wigtownshire. One Division also sat at Huntly, another at Inverness, Kingussie and Fort William, and another at Kyle of Lochalsh, Sheildaig and Dumfries. In July one Division remained in Shetland and sat at Lerwick, Walls, Brae, Braehoulland, Catfirth, Whalsay, Dunrossness, Sandwick, Baltasound, Mid Yell, West Yell and Mossbank. Another Division visited South Uist and sat at Daliburgh, Eriskay, Gerinish, Locheynort and Creagorry, Benbecula. While in South Uist the Court fixed rents for 12

new holdings and 37 enlargements constituted on the farm of Drimsdale and Drimore in accordance with an agreement between the proprietrix and the Board of Agriculture. Thereafter cases were heard in Skye, at Ardvasar, Elgoll and Breakish, and afterwards at Carnbaan, Tarbert, Lochfyne. Another Division visited Stranraer and Newton-Stewart, and thereafter proceeded to Orkney, holding sittings at Kirkwall, Birsay, Walls, Swona, St. Margaret's Hope and Sanday. Thereafter it disposed of cases in Arran. A special visit was paid to Dornie, Kintail, to dispose of urgent cases there.

In October the Court sat in Edinburgh, and Appeal Courts were held at Lochmaddy, North Uist, Uig, and Kilmuir, Skye. One Division also sat at Portree. In November the Court sat in Edinburgh; one Division held sittings at Wick, Dornoch and Aberdeen, another sat at Breakish, Skye, Arisaig, Acharacle, Portnahaven, Islay, and Furnace, Argyllshire, and a third at Oban, Kilmarnock and Brodick. The Court were also occupied inspecting the estate of Waternish, Skye, in connection with a Scheme for small holdings proposed by the Board of Agriculture, regarding which the Secretary of State for Scotland requested the Land Court to enquire and Report in terms of Section 9 (11) (g) of the Land Settlement Act, 1919. The Report was duly made to the Secretary of State. In December sittings were held at Edinburgh, Campbeltown and Perth.

COMPENSATION.

In the case of The Earl of Stair v. The Board of Agriculture we had to decide a question of compensation arising out of the constitution of small holdings on the farm of Culreoch, Wigtownshire, which will have an important bearing on all future cases of compensation in connection with the formation of Schemes. for small holdings initiated by the Board of Agriculture. The case first came before us on a question of the relevancy of the Landlord's claim, but as the contentions of parties challenged the right of the Secretary of State for Scotland to approve of a Scheme in the terms in which this one was framed, we held that we had no jurisdiction to enquire into the validity of the Secretary of State's actings, and intimated that, if the parties desired to challenge the form of the Order, they would require to take proceedings in the Court of Session. This they accordingly did, and propounded certain question of law in a Stated Case, which the Court of Session answered. The case was then ready for disposal by us of the Landlord's claims for compensation; which amounted to £6,589. 17s. 10d.

The case presented a novel view of the rights or liabilities of the Board of Agriculture in constituting Schemes for new holders. Their previous practice had been to take over the buildings and ask us to assess the value thereof. That value as assessed was then paid by the Board to the Landlord in a slump sum, and was recovered by the Board from the landholders by means of annuities spread over a number of years. Under the

Order relating to the Culreoch small holdings the Board fixed equipped rents for the whole subjects including buildings, and maintained that they were not liable for any sum in respect of the value of the buildings, but that the sole compensation due to the Landlord in respect of the buildings or otherwise was the capitalised value of the difference between the fair economic rent of the farm and the rents as fixed under the Scheme by the Board.

The Landlord maintained that, in considering the question of compensation, the Court were not restricted to the view that the use to which the proprietor had put the farm was the sole measure of the loss, but that he was entitled to adopt as the basis of his claim what was the most lucrative method of utilising the farm. We held that this proposition was sound, but that the onus lay upon the proprietor to shew conclusively that the alternative method of utilising the farm was not only practical, but would have given him a better return. The farm had always been let as a dairy farm, and we found in fact that, in the process of its conversion to the purposes of small holdings, no actual damage had been done to the buildings, but if anything their structural value had been improved. The proprietor apparently had recognised this fact, and accordingly he led evidence for the purpose of shewing that, if, instead of using the farm as a dairy farm, he had let out the land for grazing, demolished the steading and sold the materials at scrap value, and let or sold the houses on the farm for residential purposes, he would have obtained a better pecuniary return. He pointed out that, owing to its proximity to Stranraer, a good marketing centre for cattle, the farm would have readily lent itself to these purposes. We held, however, that the proposed Scheme, looking to the capabilities of the soil, would not have been a practical course which a prudent proprietor would have adopted, and that the suggestion of letting or selling the houses as residential properties was too problematical to found a claim of damages. Moreover, on a consideration of the figures, we came to the conclusion that the best and most economical use to which the subjects could be put was as a dairy farm, and that the breaking up of the farm would not have been a better commercial speculation. We therefore held that the proprietor had failed to prove that the conversion of the farm to small holdings had resulted in any loss or damage to the buildings for which he was entitled to recover compensation, and that the claim under his first two heads, viz., value of buildings and loss of rent, resolved itself into a claim for compensation for the capitalised difference between the best economic rent of the farm as a dairy subject and the rents paid for small holdings, after making the appropriate allowances for rates and cost of maintenance. We assessed this sum at £606. 10s. Od., and in addition allowed him compensation for loss of shooting rent and increased cost of management amounting to £240. We reserved our opinion as to whether, in different circumstances and on a different set of facts, a proprietor might not be enabled to prove loss in respect of damage to buildings.

An important point was decided in Gillies v. Board of Agriculture, which enabled the Court to distinguish that case from Smith v. Marquis of Aberdeen, decided by the Court of Session in 1917. In the latter case the Court of Session held that a discharge of rights of compensation granted prior to the passing of the 1911 Act, with regard to a holding which had come within the statutory jurisdiction for the first time under that Statute, was ineffectual to extinguish rights of compensation conferred upon a tenant by subsequent legislation, in respect that at the date of the discharge no statutory rights of compensation existed, and therefore these could not be discharged ab ante. In Gillies v. Board of Agriculture, the Court had to deal with a discharge of compensation relating to a holding which had been a statutory holding since the passing of the Crofters Act of 1886. The discharge was granted in 1911, at a time when both parties must have been aware that there were statutory rights which could be enforced or discharged. The Court therefore held, distinguishing the case from Smith v. Marquis of Aberdeen, that the discharge was binding, and that the tenant's statutory right to claim compensation had been effectually surrendered.

In the case of The Stornoway Trustees v. Jamieson, a tenant who, on entering his holding in 1920, had paid to the outgoing tenant a sum of £455 in respect of permanent improvements, averred that since that date he had executed further permanent improvements on the buildings, the total amount expended being £1,800. The holding extended to 1 acre 37 poles arable and outrun, and the fair rent was 18s. The Court held that the tenant was only entitled to recover from the landlords the value of the permanent improvements in so far as these were suitable to the holding. They disallowed the claim in so far as the buildings were in excess of the requirements of the holding, and assessed the compensation at the sum of £369. 5s.

LANDHOLDER'S STATUS.

In the case of Whyte v. Garden's Trustees, a protracted litigation took place between a landlord and tenant in which the contradictory actings of both parties gave rise to serious complications involving the question whether once a Statutory Small Tenant had been found by the Land Court to be a Landholder through the Landlord's failure to provide buildings suitable to the holding, the landholder's status could be altered simply by agreement between the landlord and tenant. We held that the effect of the legislation embodied in the Landholders Act was twofold. It not only conferred certain personal rights upon the tenant for the time being, but also impressed upon the subjects of the tenancy a character which could not be destroyed merely by the will of the landlord and tenant, in respect that Section 17 imposed upon the Board of Agriculture a duty in the public interest to see that once a holding had been declared to be a landholder's holding, it should not be converted into a statutory small tenancy or an ordinary agricultural tenancy without their consent.