RECENT DEVELOPMENTS IN CROFTING LAW: WHAT HIGHLAND PRACTITIONERS NEED TO KNOW IAIN F. MACLEAN, ADVOCATE, TERRA FIRMA CHAMBERS

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1 RECENT DEVELOPMENTS IN CROFTING LAW: WHAT HIGHLAND PRACTITIONERS NEED TO KNOW by IAIN F. MACLEAN, ADVOCATE, TERRA FIRMA CHAMBERS Introduction to the legislation 1. The subject of my talk today is recent changes in crofting law. As you will all be aware, we have been cursed to live in interesting times, so there is no shortage of material to talk about, due to the successive interventions of the Scottish Parliament in 2007 and In the preface to the most recent book (2000) published on Crofting Law, my colleague Sir Crispin Agnew of Lochnaw Bt., QC, refers to the old joke that the definition of a croft is an area of land surrounded by a sea of legislation. That joke has never been both less funny or more true, as those of us who have had to grapple with the legislation in recent times would readily confirm. In that preface, Sir Crispin observed that the legislation is often obscure and difficult to construe, and in 2000, he was dealing only with then tidily consolidated Crofters (Scotland) Act 1993 ( the 1993 Act ). The 1993 Act has since been heavily amended by the clumsily entitled Crofting Reform etc. Act 2007 ( the 2007 Act ) and then further amended by the Crofting Reform (Scotland) Act 2010 ( the 2010 Act ), both of which contain important provisions of their own in addition to the changes they effect to the 1993 Act. Both of these Acts passed into law in less than optimal, indeed somewhat chaotic, circumstances, and the ensuing legislation is crying out for a thorough-going consolidation to render it into a usable statutory code, but although section 52 (2) of the 2010 Act expressly anticipates that a Bill consolidating the law on crofting may be introduced in the Scottish Parliament, and reserves the power to the Scottish Ministers, in that event, by order, to make such modifications of enactments relating to crofting as in their opinion, facilitate, or are otherwise desirable in connection with, the consolidation of the law on crofting, we should not hold our breath: all the indications are that consolidation is not a legislative priority. In the meantime, we as lawyers must get used to navigating our way round sections of the amended 1993 Act like section 23 (Vacant crofts), where after section 23 (3) comes section 23 (3ZA), section 23 (3ZB), section 23 (4), section 23 (5), section 23 (5ZA) through to section 23 (5ZE), then section 23 (5A) through to section 23 (5E) and then through the regular sections 23 (6) 23 (12), finishing with section 23 (12A). When you consider that many of these sub-sections have their own paragraphs and subparagraphs, so that one can find oneself referring in an Opinion to section 23 (5ZC)(b)(ii) of the 1993 Act, and you factor in the current in-house style of the Scottish 1

2 Parliamentary draftsmen, which invariably requires the reader of a particular section constantly to flick backwards or forwards in pursuit of cross-references to other sections of the statute which qualify the section you re reading in order to make any sense of the provision, you have what seems to me to be a thoroughly unsatisfactory state of affairs. Sir Crispin, I understand, is not planning a new edition of his book, but Derek Flyn of this parish and Keith Graham, formerly Principal Clerk of the Scottish Land Court, are engaged in preparing a new edition of the still useful Donald J. MacCuish and Derek Flyn book on Crofting Law, which was published in It is a heroic endeavour, and I do not envy them their task. For the time being, then, the only source of up to date commentary on the new statutory provisions of which I am aware is to be found in Greens Annotated Landlord and Tenant Legislation, where you will find a text of the 1993 Act as so amended and texts of the balance of the other two Acts, as annotated by Derek Flyn and Eilidh Ross. A copy of the 1993 Act as amended can be found on the Crofting Commission s website, and is a useful resource, not least because, if you appear before the Scottish Land Court, you will find that for ease of reference and portability, it is a printed off and bound copy of that text from which the members work when the Land Court is sitting. One final point of practical advice I would proffer in this regard is that any of you who find yourselves regularly having to delve into issues of Crofting Law would be as well to assemble a file containing in chronological order copies of all of the various Crofting Acts as they were passed, because to this day it remains the case that it is sometimes necessary to delve into the history of a croft to establish either its status or its extent (indeed with the advent of the new Crofting Register, this may occur even more frequently in future), and in interpreting the information which such inquiry throws up, it can be important to have a grasp of the statutory provisions which were applicable when particular events in the history of the land in question occurred. The historical background 2. Although this talk is entitled Recent Developments in Crofting Law, it is necessary, in order to understand where we are now, to say something about how we got here. I shall begin by making some general remarks which aim to set the recent changes in their proper historical context. Some of what I m about to say may seem almost insultingly obvious to some of you, but for those of you who have had less exposure to crofting law, I hope that it will provide some useful insight. 3. As solicitors within the crofting counties, you will all have some passing familiarity with the historical events which led to the 1884 Report of the Royal Commission headed by Lord Napier into the condition of the crofters and cottars in the Highlands and Islands and the subsequent enactment of the Crofters Holdings (Scotland) 2

3 Act 1886 ( the 1886 Act ). The Napier Commission heard graphic testimony as to the hardships faced by the crofters and cottars in the Highlands and Islands in eking out a subsistence existence on holdings of generally very limited productive capacity under the burden of high rents, and without either security of tenure or rights to compensation for tenants improvements. They held their lands on yearly leases terminable by the landlord at a year s notice. The three cornerstones of the 1886 Act, which endure to this day, were the rights it conferred on crofters: (i) to security of tenure, subject to compliance with statutory conditions; (ii) to have a fair rent fixed for the holding; and (iii) to payment of compensation for permanent improvements on termination of the tenancy. The security of tenure conferred by the 1886 Act was given to crofters, who were defined by section 34 to mean:... any person who at the passing of this Act [being 25 June 1886] is the tenant of a holding from year to year, who resides on his holding, the annual rent of which does not exceed thirty pounds in money, and is situated in a crofting parish, and the successors of such a person in the holding, being his heirs or legatees. The crofter was afforded the right to bequeath his croft to a member of his family, being his wife or any person who, failing nearer heirs, would succeed him in case of intestacy. Thus it is that there are yet many crofts which have passed down through generations of the same family from 1886 to the present day. It is perhaps because of the possibility of an almost perpetual succession, that there has been a tendency, within the crofting community, to lose sight of the essential truth that, as it was explained by the late Lord Elliot in Sutherland v. Sutherland 1986 SLT (Land Ct.) 22, crofting, for all its statutory overlay, is fundamentally a relationship of landlord and tenant, and that while crofting tenure is sui generis and unlike other forms of leasehold tenure in many respects, it remains a special variety of leasehold, albeit with some features of ownership. 4. Another reason why people tend to lose sight of the fact that while a croft may indeed be part of a family s birthright, it is still merely a form of leasehold tenure, is that only a small minority of crofters will ever have had anything resembling a written contract of lease. There has hitherto been precious little need of one, given that the critical terms and conditions were all laid down by statute, and subsequent to the coming into force of section 25 of the Small Landholders and Agricultural Holdings (Scotland) Act 1931, any contract or agreement under which the crofter was deprived of any right conferred on him by any provision of the Acts was void unless approved by the Land 3

4 Court. The equivalent provision today is section 5 (3)(a) of the 1993 Act, although the formerly unqualified nature of that provision was curtailed by the 2007 Act so that contracting out of certain important sections of the 1993 Act, namely sections 8, 12 19, 21 and 37 of the 1993 Act, is now by section 5 (3)(b) permissible subject to intimation to the Commission. 5. The 1886 Act was followed by a series of four further Acts, culminating in the Small Landholders Act 1911 ( the 1911 Act ). These five Acts became known collectively as The Small Landholders Acts , which was the title of the first legal treatise on this area of law by C.N. Johnston QC, who became the Court of Session judge Lord Sands. The 1911 Act set up the Scottish Land Court, which took over the judicial and administrative functions that hitherto had been carried out by the Crofters Commission in its first incarnation. The 1911 Act substituted the term landholder for the term crofter and extended the statutory protection to every holding in Scotland which at 1 April 1912 was held by a tenant who resided on or within 2 miles from the holding and who by himself or with his family cultivated the holding with or without hired labour, provided that the rent was less than 50 ( 30 in Lewis) whatever its extent or, where the rent exceeded 50, the acreage exclusive of common grazing rights did not exceed 50 acres; and the tenant or his family predecessors had provided or paid for the whole or the greater part of the buildings or other permanent improvements on the holding without receiving payment or fair consideration from the landlord therefor. Where the tenant was at 1 April 1912 an existing yearly tenant, he became a landholder from that date; where he had benefited at that date from a lease of longer duration, he would become a landholder at the expiry of its term. The 1911 Act distinguished between landholders, who or whose predecessors in the tenancy had provided the majority of the buildings or other permanent improvements on the holding, and statutory small tenants, who had not. The rights of statutory small tenants were less extensive than those of full landholders. Provision was also made for the constitution of new holdings to which the statutory tenures would apply either by agreement between the landlord and the tenant followed by application to the Land Court for registration of the new holding or on the initiative of the newly constituted Board of Agriculture, although it was not until after the passing of the Land Settlement (Scotland) Act 1919 that a significant number of new holdings were created by such means. The Board of Agriculture was empowered to acquire land for this purpose by agreement with the landlord or by exercise of compulsory purchase powers, and elaborate land settlement schemes were drawn up, under which the land was divided up into individual holdings for let to tenants, many of them men who had returned from the First World War. By this means, the Board of Agriculture, later the Secretary of State for Scotland, and now the 4

5 Scottish Ministers, became the largest crofting landlord in Scotland. The 1911 Act introduced a right to assign the tenancy with the consent of the Land Court where the landholder was unable to work his holding through illness, old age or infirmity. 6. It is important to note that the scheme of the 1886 Act, and of all the legislation which followed it until 1955, was to confer security of tenure on the individual crofter or landholder, not to attach a particular status to the land which was held by him in tenancy. We are familiar today with the idea that croft land has a special status, which can only be removed by following the particular statutory procedures for resumption or decrofting, but this has been the case only since Before that date, it was in various circumstances possible that an area of land, the tenant of which had on 25 June 1886 or 1 April 1912 been entitled to the statutory protection, could fall out of crofting on becoming vacant. The landlord could let it on another form of tenure or keep it in hand, not subject to crofting controls. Quite what those circumstances were are explored in a number of factually and legally highly complex Land Court cases in modern times, when some of our more rapacious landlords, with an eye to development opportunities, have expended considerable time and resources to investigate the history of particular holdings and employed clever lawyers to argue that they were not, or were no longer, held on crofting tenure, to deny the putative crofter his statutory rights, such as the right to purchase, and establish that the land in question was not subject to crofting controls. 7. The reach of the Crofters (Scotland) Act 1955 ( the 1955 Act ), in contrast to the position under the 1911 Act, extended only over the crofting counties. It transferred the statutory protection to the holding rather than the holder. Section 3 (1) of the 1955 Act introduced a definition of croft as meaning: (a) as from the commencement of the 1955 Act, every holding (whether occupied or not) situate in the crofting counties which was, immediately before the commencement of the 1955 Act, a holding to which any of the provisions of the Landholders Acts as relating to landholders applied; (b) as from its commencement, every holding (whether occupied or not) situate as aforesaid which was, immediately before the commencement of the 1955 Act, a holding to which any of the provisions of the Landholders Acts relating to statutory small tenants applied; and 5

6 (c) as from the date of registration, every holding situate as aforesaid which was constituted as a croft by the registration of the tenant thereof as a crofter under section 4 of the 1955 Act, which provided for the registration of new crofts. The term crofter was defined as the tenant of a croft (as so defined). Thus, the holdings of all current landholders and all statutory small tenants became crofts, subject to the same statutory regime, and landholders and statutory small landholders both became crofters. The Crofters Commission was revived and took on the administrative functions previously carried out by the Land Court, which was in future confined to its judicial function. The previously very limited right to assign established by the 1911 Act was extended to sanction non-family assignation subject to the consent of the Commission, and the right to bequeath was also extended to include bequests outwith the crofter s family, albeit also subject to Commission consent. It was, then, with the 1955 Act that the crofting legislation took on the form we are familiar with today, and the definition of croft provided in the 1955 Act remains at the core of the definition of croft in the 1993 Act, although that definition has been extended to include other more recently conceived means by which lands may acquire or be recognised in that status. Another innovation in the 1955 Act was the duty it imposed on the Commission to compile a Register of Crofts, which then as now, must have seemed like a good idea at the time, about which I shall have more to say later. 8. In 1976, the Crofting Reform (Scotland) Act 1976 introduced the crofter s right to buy, absolute in relation to the site of the dwelling-house on or pertaining to the croft tenanted by him, and qualified by the landlord s right of objection in respect of the rest of the croft land tenanted by him. It is a point worth making that before the 1976 Act, there was never any impediment to a landlord agreeing terms voluntarily to sell a croft to its tenant, and indeed where this occurred, before 1955, the operation of confusio would extinguish the tenancy and arguably have the effect of removing the land from crofting tenure. But where land is imprinted with croft status, the purchase by the tenant of his croft, while this will operate to extinguish his own tenancy, will not free the croft from crofting controls. Where there is a crofting estate consisting of 100 crofts, and one of the crofts falls vacant, the landlord of that crofting estate is expected to give notice to the Commission and put forward proposals for re-letting, which failing, a tenant may be imposed on him. Theoretically, where an individual crofter purchased his croft, if he opted not to let it, then it would be open to the Commission to insist on installing a tenant on him. That this did not, generally, happen, was a matter of policy rather than of law: the Commission s policy was not to require an owner-occupier who was making use of his croft to let it. A crofter who purchased his croft could no longer be a crofter in 6

7 terms of the statutory definition, because crofter meant the tenant of a croft, and was instead deemed to be that oxymoron, the landlord (or owner-occupier) of a vacant croft : Cameron v. Bank of Scotland 1989 SLT (Land Ct.) 38. We may have thought that with the introduction of the concept of the owner-occupier crofter in the new legislation, we had seen the last of that concept, but that may not be the case, as I shall explain later (see paragraph 14 infra) saw crofting law being consolidated, and then peace reigned until our devolved politicians, egged on by the Scottish Crofting Foundation (now the Scottish Crofting Federation) and others, decided to get in on the act. Crofts 9. As an advocate, receiving instructions from firms all across the crofting counties, I have been afforded an insight into how the patterns of crofts, and of crofting, differ across that area. Crofts vary enormously in size. In the Western Isles, they can be almost postage stamp sized, but recently, I was instructed in a case on the mainland where the croft extended to nearly 1000 acres. The paradigm example of a croft which we see in our minds eye is a rectangular parcel of land of some 5 to 10 acres of ground, within a township of corresponding adjacent rectangular parcels of ground, each with a whitewashed house in the middle, and in some parts of the Highlands, that s exactly how it is, but in others, a different pattern is manifested. In some places in the North, there are crofts where the croft house is situated in a row of other croft houses forming a little village at some distance from the croft land, hence the need for the provision in what is now section 12 (2) of the 1993 Act that a crofter shall be entitled to a conveyance of the site of the dwelling-house on or pertaining to the croft. There are crofts I have had to deal with which consist of several non-contiguous areas of ground not the consequence of some past apportionment. We think of crofts in an entirely rural setting, but due to urban sprawl, croft status can be an issue even close in to centres of population. It is, of course, crucial, in any conveyancing transaction within the crofting counties, to establish the croft status of the subjects of sale, which is why Clause 15 of the Highland Standard Clauses (2007 Edition) specified in the Deed of Declaration by the Faculty of Solicitors of the Highlands dated 17 September 2007 and registered in the Books of the Lords of Council and Session for preservation 18 September 2007 stipulate that: The provisions of the Crofters (Scotland).Act 1993 do not apply to the Property. Any Decrofting Direction or Resumption Order under the Crofting Acts relating to the Property shall be exhibited prior to and delivered at Settlement. The Annotated Guide (2007 Edition) to the Standard Clauses optimistically notes under this clause that The seller should tell his solicitor if there are any crofting rights 7

8 affecting the Property. boundaries. I shall return later to the always problematic issue of croft 10. Just as crofts can vary greatly in their physical extent across the crofting counties, and in the uses to which they can be put, so does the extent to which crofters (and indeed landlords) have made use of their rights under the crofting legislation. Take the right to buy: in the Northern Isles, owner-occupation for long has been the norm, whereas in the Western Isles, people have preferred to remain as tenants. Now that the status of owner-occupiers and tenants has been aligned with regard not only to duties but also eligibility for financial assistance from the Crofting Counties Agricultural Grant (Scotland) Scheme it will be interesting to see whether this changes. Another good example of geographical variation relates to the fixing of rents. On some estates in the North of Scotland, applications to fix rents have taken place regularly since 1886, and the records of those rent reviews can be a valuable historical resource. By contrast, in other areas, because, one supposes, the estates are small, the crofts are small, and the rents are small, no review has taken place in generations. Rents indeed may be so small that it is scarcely worth the landlord s while to pursue payment of them, but failure timeously to pay the rent due is of course a breach of one of the Statutory Conditions of Tenure and would leave a tenant in a vulnerable position, so rent should always be proferred. Often, rent will be reviewed only where the tenant is exercising his or her right to buy, prompting the landlord to have the rent reviewed in advance of the sale, the crofting value of the land, and thus the price payable by the crofter in terms of 14 (2) of the 1993 Act, being the current rent multiplied by a factor of 15. Duties of crofters and owner-occupier crofters relating to residency, use, misuse and neglect of crofts defined as: 11. Historically, crofting was all about agriculture. Holding in the 1886 Act was any piece of land held by a crofter consisting of arable or pasture land or of land partly arable and partly pasture and which has been occupied and used as arable or pasture land (whether such pasture land is held by the crofter alone, or in common with others) immediately preceding the passing of this Act... The statutory condition that a crofter must cultivate his croft, the expression cultivate defined so as to include: the use of a holding for horticulture or for any purpose of husbandry, inclusive of the keeping and breeding of livestock, poultry or bees, and the growth of fruit, vegetables and the like, was first introduced by section 10 (1) of the 1911 Act, which also contemplated that the landholder might make use of his holding for subsidiary or auxiliary occupations as in 8

9 the case of dispute the Land Court might find to be reasonable and not inconsistent with the cultivation of the holding. Under the 1993 Act, as amended, the statutory conditions in section 5 and Schedule 2 no longer contain a positive duty to cultivate the croft. Instead, that duty has been promoted into the main body of the 1993 Act, as section 5 (2), and set out in more prescriptive form. By section 5C (2)(a), the crofter must (i) cultivate the croft; or (ii) put it to another purposeful use, so that every part of the croft which is capable of being cultivated or put to another purposeful use either is cultivated or put to such purposeful use, and by section 5C (2)(b), the crofter must keep the croft in a fit state for cultivation (except insofar as the use of the croft for another purposeful use is incompatible with that). Without prejudice to that generality, in determining whether section 5C (2)(b) is complied with: regard is to be had to whether appropriate measures (which may include the provision of drainage) are routinely undertaken, where requisite and applicable, to control or eradicate vermin, bracken, whins, broom, rushes and harmful weeds : section 5C (3) of the 1993 Act. 12. A crofter may put the croft to another purposeful use other than cultivation if the landlord has consented or (where the landlord s consent has not been forthcoming) the Commission have consented. The meaning of cultivate in section 5 C (8) of the 1993 Act remains the same in substance as in the 1911 Act, except that it has been extended to include the planting of trees and the use of the land as woodlands, while purposeful use means any planned and managed use which does not adversely affect (a) the croft, (b) the public interest, (c) the interests of the landlord or (if different) the owner; or (d) the use of adjacent land. 13. The crofter s positive duty to cultivate and maintain his croft, or put it to another purposeful use, under section 5 C is complemented by the negatively stated duty in section 5 B not to misuse or neglect his croft. A crofter misuses a croft where he (a) wilfully and knowingly uses it otherwise than for the purpose of its being cultivated or put to such other purposeful use as has been consented to under section 5 C(4); (b) fails to use the croft for the purpose of its being cultivated; or (c) fails to put the croft to any such purposeful use. A crofter neglects a croft where the croft is not managed so as to meet the standards of good agricultural and environmental condition (i.e. the cross-compliance obligation under the Single Farm Payment Scheme) (section 5 B (3)) but where a crofter, in a planned and managed manner, engages in, or refrains from an activity for the purpose of conserving (a) the natural beauty of the locality of the 9

10 croft, or (b) the flora and fauna of that locality, his so engaging or refraining is not to be treated as misuse or neglect as respects the croft (section 5 B (4)). 14. The third duty imposed on crofters by the 2010 Act is the residency requirement under section 5 AA of the 1993 Act, which I shall discuss later. The same duties are imposed on owner-occupier crofters by section 19 C of the 1993 Act, and the Commission is, by section 26 A of the 1993 Act, now under a positive duty to investigate suspected breaches by crofters or owner-occupier crofters of any of these duties. By section 19 B of the 1993 Act, a person is an owner-occupier crofter if three conditions are satisfied. Firstly, the person must be the owner of a croft. The second condition is that the person (a) was the crofter of the croft at the time of acquiring it (or is such a crofter s successor in title); (b) acquired title to the croft as the nominee of a crofter (or is such a nominee s successor in title); or (c) purchased the croft from the constituting landlord (or is such a purchaser s successor in title). The third condition is that the croft has not been let to any person as a crofter at any time since it was acquired or constituted. A constituting landlord is the owner of the land at the time it was constituted as a croft under section 3 A of the 1993 Act or such an owner s successor in title immediately before the croft is sold to the purchaser: section 19 B (6) of the 1993 Act. In order to be an owner-occupier crofter, all three of those conditions require to be satisfied, and the Commission are of the view that in consequence of the first of those conditions, a person who owns part only of a croft cannot be an owneroccupier crofter. Such persons are instead considered by the Commission to have the status of landlords of part of a vacant croft. As such, they are not subject to the regime for the enforcement of duties contained in sections 26 A 26 K of the 1993 Act (the source of the Commission s ongoing ability to regulate such persons use of the part croft is sections of the 1993 Act) and nor can they avail themselves of those rights which the 1993 Act as amended confers on owner-occupier crofters, such as the right to apply for division of the part croft under section 19 D or to let the part croft on a short lease under section 29 A. Enforcement of duties 15. The duty to enforce is triggered where the Commission receive (a) a report from a grazings committee under section 49 A (1) of the 1993 Act, or (b) information in writing from a person mentioned in section 26 A (3) of the 1993 Act relating to such a matter. Section 49 A (1) imposes a new duty on grazings committees to report to the Commission as soon as reasonably practicable after the period of one year beginning with the day section 38 of the 2010 Act came into force, by my reckoning 1 April 2013, and five yearly thereafter, on (a) the condition of the common grazing; (b) the condition 10

11 of every croft of a crofter sharing in a grazing; (c) the condition of every owner-occupied croft of an owner-occupier crofter sharing in the grazing; and (d) any other matter the Commission may require. A measure better designed to set neighbour against neighbour would be difficult to conceive of and I hear on the grapevine that already, this is causing problems on the ground in getting people to agree to serve on grazings committees, although I would note in passing that section 49 A (1) contains no obvious sanction in the event of breach. The persons mentioned in section 26 A (3) are (a) a grazings committee; (b) a grazings constable; (c) an assessor appointed by the Commission; and (d) a member of the crofting community within which the croft in question is situated. By section 26 A (4), the Commission must investigate whether or not the duty to which the report or information relates is being complied with, unless they consider the information included in the report or otherwise received is frivolous or vexatious. Member of the crofting community is a recurring expression in the amended 1993 Act but it is not itself defined. Crofting community is however defined in section 61 as meaning all the persons who (either or both) (a) occupy crofts within a township which consists of two or more crofts registered with the Commission; and/or (b) hold shares in a common grazing associated with that township. 16. Where the Commission consider that there has been a breach of duty, they must, unless they consider there is good reason not to, give the crofter or owneroccupier crofter notice to that effect, giving him 28 days to make representations to the Commission (section 26 C (2) of the 1993 Act) to which the Commission must have regard where they have been received within the time (section 26 C (3)), and to which the Commission may have regard if late (section 26 C (4)). The Commission must then, before the expiry of the period of 14 days beginning with the date on which the representation period ends, decide whether the duty is being complied with (section 26 C (5)). Although this is not spelled out, I would take it that the representations which the relevant person may make within the 28 day representation period must be directed towards showing that the duty is in fact being complied with in order to be relevant. Clearly, if you are consulted by a client who has received such a notice from the Commission, you will not have long to assemble the material to draft persuasive representations in response. If the Commission do decide that a duty is not being complied with, they must, under section 26 D, before taking action to either terminate the tenancy under section 26 H or require the owner-occupier crofter to let it under section 26 J, give the relevant person written notice giving the person an opportunity to give an undertaking to comply with the duty before the expiry of such period as the Commission consider reasonable. In terms of section 26 D (2), the notice must (a) explain that the undertaking must be given before the expiry of 28 days beginning with 11

12 the day the notice was given; (b) explain that the giving of the undertaking by the person constitutes acceptance by the person that the duty is not being complied with (i.e. it constitutes an admission by that person that he has been in breach); (c) sets out what the person must do to comply with the undertaking; (d) explain that if the undertaking is complied with, no further action will be taken in respect of that failure to comply; and (e) where given to the crofter, be copied to the landlord of the croft. Section 26 D (3) provides that the Commission may accept an undertaking subject to such conditions as they consider appropriate, and section 26 D (4) imposes on the Commission a requirement to decide whether to accept an undertaking before the expiry of the period of 28 days beginning with the day on which the undertaking is offered. How this will all operate in practice seems to me to be unclear, and once again, the time limits are very tight: this does seem intended to be a very summary procedure. Is it for the Commission, in giving written notice giving the person an opportunity to give an undertaking to comply, to indicate a period within which they would consider it reasonable for compliance to be achieved, or is it for the person who offers the undertaking? Does the provision permitting the Commission to accept an undertaking subject to such conditions as they consider appropriate mean that they will enter into negotiation with the person or his agents about conditions to be attached, and how will that fit in with the requirement that the Commission must decide whether or not to accept the undertaking within 28 days of its being offered? Where an undertaking has been accepted, by section 26 E (b) this operates as a stay of execution for as long as the period for complying with the undertaking has not expired. 17. Section 26 E (d) and (e) provide that the Commission may not take action under section 26 H where they have consented to a sublet of the croft by the crofter or under 26 J where they have consented to the let of the owner-occupier s croft on one of the new forms of short lease introduced by section 29 A (4) of the 1993 Act. 18. The new section 29 A (4) of the 1993 Act, which came into force on 1 October 2011, provides that the Commission may, in giving their consent to a proposed lease of an owner-occupied croft for a period not exceeding 10 years (a short lease ) impose such conditions (other than any relating to rent) as they consider appropriate. The new section 29 B of the 1993 Act provides that the tenant under a short lease of an owneroccupied croft is not to be treated as (a) a crofter; or (b) the tenant under a protected 1991 or 2003 Act agricultural tenancy. Thus, where the Commission consent thereto, an owner-occupied croft may be let on a short lease to a tenant who would not, by virtue of his status as such tenant, acquire the same legal rights as an ordinary crofter, such as the right to acquire the croft land tenanted by him under section 12 of the 1993 Act. 12

13 19. In the case of the residence duty mentioned in sections 5AA and 19 C (2)(a), the Commission may not take action under sections 26 H or 26 J where the Commission have consented to the absence under section 21 B. 20. In all those situations, if an application for consent has been made but not yet determined, the hand of the Commission is also stayed, but if the Commission have (a) decided that a duty is not being complied with, and (b) none of the circumstances mentioned in section 26 E apply, the Commission must, in terms of section 26 F (1), take one of the actions mentioned in section 26 F (2), being (a) in the case of a crofter, the tenancy termination procedure under section 26 H, or, (b) in the case of an owneroccupier crofter, the section 26 J letting procedure unless they consider that there is good reason not to. 21. Section 26 H sets out the procedure that the Commission must follow when terminating a croft tenancy. Section 26 H (1) provides that if the Commission are satisfied that it is in the general interest of the crofting community in the locality of the croft, the Commission must make an order terminating the tenancy unless they consider that there is good reason not to. Section 26 J sets out the procedure that the Commission must follow when requiring an owner-occupier crofter to submit to them a proposal for letting the owner-occupier s croft. It similarly provides that the Commission must, unless they consider that there is good reason not to, direct the owner-occupier crofter to submit to them a proposal for letting the owner-occupier s croft. What, I ask despairingly, does this mean? The clear imperative force of the word must is undercut in each of these three provisions by the words unless they consider that there is good reason not to. Do these two elements in combination result in a provision that simply means that, for instance, where the Commission are satisfied that it is in the general interest of the crofting community in the locality of the croft, they may or may not (i.e. it is a matter of discretion) make an order terminating the tenancy, or is there some subtle semantic difference between that and what is actually provided for which presently eludes me? And if the Commission are satisfied that it is in the general interest of the crofting community in the locality of the croft that they make an order terminating the tenancy, what would constitute a good reason for them not to do so? I fear we will only learn the answers to questions such as these once they have been litigated, which must surely follow. Appeal against enforcement and other decisions 13

14 22. Section 26 K of the 1993 Act provides for a right of appeal to the Land Court against the Commission s enforcement decisions, including a decision of the Commission under section 26 C (5) that a duty is not being complied with; a decision of the Commission under section 26 D not to accept an undertaking or to impose conditions on such an undertaking; and against the making of an order under section 26 H or section 26 J. The grounds for an appeal against the Commission s enforcement decisions are set out in section 26 K (6). These are the same grounds which apply to the general right of appeal against (a) any decision, determination or direction of, or (b) the imposition of a condition by, the Commission on an application made to them under the 1993 Act, which are set out in section 52A (3) of the 1993 Act, namely: (a) that the Commission erred in law; (b) that the Commission made a finding as to a fact material to the decision, order or direction but did not have sufficient evidence on which to base that finding; (c) that the Commission acted contrary to natural justice; (d) that the Commission took into account certain irrelevant or immaterial considerations; (e) that the Commission failed to take into account certain relevant or material considerations; (f) that the Commission exercised their discretion in an unreasonable manner. Ground (f) is essentially a statutory formulation of the ground of Wednesbury unreasonableness familiar from administrative law. The statutory grounds of appeal listed in sections 26 K (6) of the 1993 Act and section 52 A (3) of the 1993 Act correspond to the particular respects in which decisions can be challenged by way of judicial review (cf. Lord President Emslie s summary in Wordie Property Co. Ltd. v. Secretary for State for Scotland 1984 SLT 345 at page 347) and it follows that on appeal, it is not a question of whether the Land Court agrees or disagrees with the Commission s decision, but rather whether there was a material legal flaw in the Commission s approach. Any solicitor asked to advise on an appeal against an enforcement or other decision of the Commission would do well to read recent cases such as Wotherspoon v. Crofters Commission (Application RN SLC/224/07 Order of 13 May 2008); Stewart v. Crofters Commission (Application RN SLC/83/08 Order of 25 March 2009), Mackenzie v. Crofters Commission (Application RN SLC/80/10 Order of 16 March 2011) and Matheson v. Crofting Commission (Application RN SLC/32/10 Order of 22 August 2012) to develop a feel for what is required here. The absentee crofter 14

15 23. Before I leave the area of enforcement of duties, I should say a little more about absenteeism. For many years, the efforts of the Commission in tackling absenteeism appeared to be somewhat desultory. This may not have been such a bad thing, because my sense is that provided, as was usually the case, the crofter had made arrangement locally to enable a neighbour to make use of the croft in his absence, this was not often a great bone of contention, particularly in close knit crofting communities where the absentee crofter s family had been part of that community for generations. As crofting communities have become more diverse, so the tolerance of absenteeism has, in certain areas, broken down and various initiatives have been pursued by the Commission to address the perceived problem. Before the 2010 Act came into force, the Commission were working their way through a backlog of some 900 croft absentee cases which had been on record for more than 10 years. The Commission, relying on a saving provision contained in Article 6 of The Crofting Reform (Scotland) Act 2010 (Commencement No. 2, Transitory, Transitional and Saving Provisions) Order 2011 (SSI 2011 No. 334) ( the Commencement No. 2 Order ), have been prosecuting these outstanding cases to a conclusion on the basis of the statutory procedures which were in place prior to the coming into force of the 2010 Act amendments, so that an order terminating the tenancy in such cases will be issued under the now repealed section 22 of the 1993 Act. Under section 22 of the 1993 Act, the requirement was for the crofter to be ordinarily resident on or within 16 km rather than 32 km of the croft, and the Commission had a discretionary power to terminate the tenancy where this was determined to be in the general interest of the crofting community in the district in which the croft was situated. This may, or may not, mean the same as what is provided for in the new section 26 H (1) of the 1993 Act, as discussed in paragraph 21 supra. Assuming that Article 6 of the Commencement No. 2 Order does apply to these backlog cases on the basis that they arise out of investigations commenced under section 22 prior to 1 st October 2011, then one consequence is that no appeal will lie to the Land Court under section 26 K (3) of the 1993 Act and the only means of challenging the Commission s decision will be by way of an application to the Court of Session for Judicial Review. The Commission have made clear that buying the croft will not of itself resolve the problem of a crofter s absentee status, and furthermore, in relation to owneroccupied crofts, their published policy guidance, accessible on the Commission s website, is that they will not normally approve short lease tenancies for non-resident owneroccupier crofters, which otherwise might have provided a stop gap measure for such persons until such time as they were able to return to take up ordinary residence, unless the non-resident owner-occupier crofter has applied to the Commission under the new section 21 B of the 1993 Act for consent to be ordinarily resident other than on, or within 15

16 32 km of, the croft, and that application has been successful. The Commission may consent to a crofter or an owner-occupier crofter being ordinarily resident other than on or within 32 km of the croft or owner-occupied croft only if they consider there is a good reason for the person not to be so ordinarily resident, and so once again, a very wide discretion has been vested in the Commission and how that discretion will be applied in practice largely remains to be seen. In the meantime, all there is to go on are the contents of the Commission s Legislative and Policy Guidance on Consent to be Absent, again accessible on the Commission s website, which set out factors which the Commission either must or may take into consideration. I am not, in this talk, going to comment on the high politics of crofting reform, such as the constitutional changes which mean that regulatory and other decisions are now taken by a Commission in which the majority of Commissioners have local electorates to satisfy, but I would observe that, under the Commission s internal scheme of delegation, there are many cases in which the file will be allocated to the [local] Commissioner (unless conflicted) and the decision effectively will be taken by that one man or woman, subject to rubberstamping by the Commission as a whole. Other decisions, presumably those considered to be likely to be more contentious, such as whether consent to be absent should be granted will, by that scheme of delegation, be allocated to sub-groups of three Commissioners. There is, thus, very considerable power invested in the allocated Commissioner(s) in relation to individual applications. 24. It seems to me to follow from all of the above that taking on a croft tenancy in future should be seen as a source of significantly onerous burden, and this must be explained to any client who consults you about acquiring a croft, whether as intending owner-occupier crofter or as tenant. Given that to keep a croft in the sort of condition which the legislation appears to contemplate would be a more or less full time job, and given also that no one could support a family on the income derivable from cultivation of a single small croft alone, and any other purposeful use would need to be pretty profitable to achieve that end, I find it difficult to avoid the conclusion that these changes in the legislation reflect a certain amount of muddled thinking on the part of our politicians as to how the more effective regulation of crofting they are supposed to usher in will help create stronger, more sustainable communities, and I would predict that the law of unintended consequences will operate. I was amused by a story which appeared in the WHFP recently about how a young couple wanting to build on a croft encountered difficulty in accessing the croft house grant because the officials administering the scheme were not convinced by their active crofting credentials, an excellent example of how one objective of the legislation, that crofts be actively used, can clash with another, that of encouraging population retention. It will be interesting to see, also, once the new 16

17 regime is firmly embedded, whether it has the effect of depressing the demand for croft tenancies, so that as was the case in some previous eras - it becomes a struggle to find people willing and able to take on crofts. Transmission of tenancies 25. Until recently, on intra-family succession to croft tenancies, the position was simple. It was drummed in to generations of crofting lawyers that only one person s name could go on the croft. A bequest of the croft which was not in favour of any one person was null and void in terms of section 10(1) of the 1993 Act. Failing a valid bequest, the right to the croft was to be treated as intestate estate of the deceased crofter in accordance with Part 1 of the Succession (Scotland) Act 1964 ( the 1964 Act ), and so would be available for transfer by the deceased s executor to any one of the persons entitled to succeed to the deceased crofter s estate under the laws of intestacy in pursuance of section 16 (2) of the 1964 Act, in which case section 11 (Intestacy) of the 1993 Act would apply. The law that only one person could succeed to the tenancy has been the cause of innumerable, often permanent, family rifts. Where as not infrequently is the case - the croft, including the croft house, is the deceased s principal or indeed only asset, the site of the croft house not having been decrofted, and there are two or more family members with equal claim on the testamentary estate, the executor had to make a choice as to who was to be the transferee, and try to engineer some equitable outcome as between those family members. This process often ended unhappily. The conventional wisdom was that only a specific bequest of the croft tenancy would suffice, but in Gardner v. Curran 2008 SLT (Sh. Ct.) 105, the outgoing Sheriff Principal of Grampian, Highland & Islands Sir Stephen Young Bt. QC, held that a bequest of the universitas of the estate in favour of one person would suffice to carry the croft tenancy to the residuary beneficiary. The process of effecting the transfer of the tenancy, whether in terms of a valid bequest, or under the laws of intestacy, is subject to various time limits and procedural requirements, which should be followed to the letter, and a valid transfer requires both confirmation to the croft tenancy and intimation of the transfer to the landlord under section 11 of the 1993 Act within a year of the death, failing which the landlord will be entitled to terminate the tenancy, as the recent, cautionary case of McGrath v. Nelson 2011 SLT 107 reminds us. 26. The requirement that any bequest be to any one person goes back to section 16 of the 1886 Act, and was linked to the similarly long standing (section 1 (4) of the 1886 Act) prohibition on sub-division, as it was referred to before the 2007 Act, the statutory reference in the amended section 9 of the 1993 Act now more aptly being to division. The prohibition on sub-division, and the limitation that the right of bequest 17

18 could be exercised only in favour of any one person, avoided the outcome of agricultural units being broken up into ever smaller and less viable units on every change of generation, as famously occurred under the succession laws of the French Civil Code. Sub-division used to require only the consent of the landlord, and from 1955, the consent of both the landlord and the Commission. Now, division, meaning in terms of the amended section 9 (6) of the 1993 Act, the division of a croft into two or more new crofts, requires only the consent of the Commission, and a crofter may, in terms of the amended section 9 (1), by will or other testamentary writing, (a) bequeath the tenancy of the whole of the crofter s croft to any one natural person; or (b) bequeath the tenancy of that croft to two or more natural persons provided that (i) each person would come into the place of the crofter in relation to the tenancy of that part of the croft; and (ii) no part of the croft would, were all the bequests accepted, be untenanted. Note here what I said before about the potentially onerous duties which attach to being a croft tenant, and note too that a legatee must formally accept the bequest, by giving notice of that bequest to the landlord, copied to the Commission, within 12 months of the crofter s death. Where both, or all, of the legatees of a part of the croft, accept the bequest, the executor must apply to the Commission for consent under section 9 to divide the croft accordingly (section 10 (4A)), and where such consent is forthcoming, each legatee comes into the place of the deceased crofter in relation to what is a new croft. 27. Thus, should the consent of the Commission to division be readily forthcoming, we may see a proliferation of smaller crofts, all of which theoretically are eligible for assistance under the various croft grant schemes and all of which will be even less economically viable than the typical croft is at present. If that consent is not readily forthcoming, testators, their executors and families will have been put to trouble and expense for no useful purpose. Presumably, a solicitor who is consulted by a crofter about his or her will must explain that yes, you can bequeath your croft in parts to each of your three children, but whether that scheme of division receives effect will depend on the exercise by the Commission of their discretion after you die. Only where the division contemplated in the will is between the part of the croft comprising the site of the dwelling-house on or pertaining to the croft to one natural person and the tenancy of the remaining part to one other such person can the testator be sure that consent to the division will be forthcoming, thanks to section 58 A (6 A) of the 1993 Act, to which I shall refer further in paragraph 28 infra. If not all of the part-croft legatees accept the bequest (section 10 (3) of the 1993 Act) or the Commission do not give their consent to the sub-division under section 9 (section 10 (4C) (a)) or such consent is given but an application for registration of that division in the Register of Crofts is not timeously made, the bequest is null and void (section 10 (4C) (b)) and the right to the whole croft 18