Scottish Court of Session Decisions

The Agricultural Holdings (Scotland) Act 1908 (8 Edw. VII, cap. 64), sec. 1 (1) and (2) ( a), and First Schedule, Part III (26), is quoted supra in rubric.

In an arbitration under the Agricultural Holdings (Scotland) Act 1908 between William Macgillivray, formerly tenant of the farm of Garbole in the county of Inverness, and William Dalziel Mackenzie of Farr, the landlord, the arbiter George Alexander Ferguson, Surradale, Elgin, stated a Case for the opinion of the Sheriff.

The Case set forth, inter alia—“The claimant, the said William Macgillivray, claimed from the respondent, the said William Dalziel Mackenzie, the sum of £348 for the laying down of temporary pasture on 96 1 2 acres or thereby of the said farm of Garbole more than two years prior to the determination of the tenancy at Whitsunday 1920.

The claimant entered the farm of Garbole at Whitsunday 1886, and vacated the farm at Whitsunday 1920 with the exception of the arable land under crop, which he vacated at the separation of crop 1920 from the ground.

Under the general articles, conditions, and regulations of the respondent's estate, by which the claimant was bound for the period from 1886 to 1900, it was, inter alia, provided that ‘tenants shall not be restricted to any system or particular course of cropping.… Tenants may, if they choose, lay the whole of their farms under grass, provided the land be first properly cleaned and liberally manured and sown down with a sufficient quantity of good seeds.’

By lease entered into between the parties, dated 29th February and 5th March 1904 (in which said general regulations, articles, conditions, and regulations were not incorporated or referred to), the respondent let to the claimant the said farm of Garbole for the space of five years and crops from and after the following terms and periods:—As regards the fallow land the first day of April 1900; as regards the houses, second year's grass, and pasture land, at the term of Whitsunday 1900; and as regards the arable land under crop, including hay crop, at the separation of the crop of the year 1900 from the ground, it being provided and agreed that after the term of Whitsunday 1905 the tenancy should be continued from year to year so long as the same was not terminated by either party at the term of Whitsunday on giving at least one year's written notice to the other party of his intention to terminate the same. With regard to the cultivation and management of the said farm, the lease does not prescribe any course of cropping, but provided and conditioned that the cultivation and management should be according to the most approved rules of good husbandry, and it was further thereby specially conditioned and agreed that the tenant should not break up or bring under cultivation any land on the said farm which at his entry was not cultivated as arable land without the express consent of the proprietor. At the claimant's outgo the proprietor or incoming tenant was bound to take over the whole corn crop, dung, and fallow land, and the first and second year's grass, and also the third year's grass in the event of the arable land being then worked under the six course rotation.

When the claimant entered in 1886 the arable land on the farm extended to 111·376 acres (exclusive of permanent pasture), which were in first and second year's grass, corn crop, and fallow. At his entry the claimant took over from his predecessor all the first and second year's grass, corn crop, and fallow, and paid therefor. Prior to the year 1900 a field, extending to about six acres, was resumed by the respondent. Thus the above 111·376 acres was reduced to 105 acres or thereby. Up to the year 1900 the said arable land was cultivated in a five-shift course.

In 1900, when a new lease was entered into, the claimant received no payment and no other consideration from the respondent in respect of grass or pasture on the farm nor for corn crop and fallow land. He constructively entered on the new lease in succession to himself as awaygoing tenant under the old lease. At entry under the new lease there was no temporary pasture

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on the arable land of the farm laid down more than two years prior to the determination of the tenancy. The claimant continued to cultivate and manage the said arable land (extending to 105 acres or thereby) on the five-shift course until 1914. He then resolved to lay the farm under grass. In September 1916, after a large part (about three-fifths) of the arable land had been laid down in temporary pasture, he informed the respondent that he had done so. In the spring of 1917 the claimant informed the respondent that he intended to continue as he had begun till the whole of the farm was in temporary pasture. The parties are at issue on the question whether permission was asked or granted to the claimant to lay down the temporary pasture. I have not been able to see how it can be suggested that permission was asked or granted to do what had in large measure (about three-fifths) already been done. Certainly the respondent took no exception, nor could do so on practical grounds, because what the claimant proposed to do, and did, was to improve the farm by making a statutory improvement which did not require the landlord's consent. If the landlord had objected, assuming he had right to do so, I consider he would have acted contrary to his own interests.

At awaygoing the claimant left on the farm 96 1 2 acres of temporary pasture, all laid down after 1st January 1901, and more than two years before the determination of the tenancy.

By laying down the said temporary pasture the claimant deprived himself of his right at the determination of his tenancy to get valuation for the grass crop and others as specified in said lease. The claimant is now claiming for the benefit accruing to the land by the laying down of said temporary pasture.

The respondent pleaded, inter alia, as follows:—1. The claim is incompetent and irrelevant in respect ( a)…; ( b) the said lease does not come within the scope of the Act of 1908 (see section 35). 2. That the provisions of the Act do not apply to the laying down of temporary pasture, whereby virtually the whole arable portion of the farm is converted into pasture, and that the Act only contemplates an improvement effected by a partial conversion of the arable ground into temporary pasture, consistent with the history and proper working of the arable land. 3. The permission which the proprietor gave to the claimant to depart from the terms of his lease as regards the cropping of the farm is a ‘benefit’ in the sense of the Agricultural Holdings (Scotland) Act 1908, and falls to be taken into account in ascertaining the amount of compensation, if any, to which the claimant is entitled. 4. Alternatively, ( a) the operations carried out by the claimant being made in implement of the obligations contained in his lease, he is not entitled to compensation therefor, or ( b) the laying down of temporary pasture in respect of which the claim is made having been done in order in a measure to make ‘suitable and adequate provision’ to protect the holding from injury or deterioration consequent on the concession given to the claimant, he is not entitled in view of the provisions of section 23 (3) of the Agricultural Holdings (Scotland) Act 1908 to any compensation in respect thereof. 5. In any case the claimant is not entitled to any compensation except in respect of the excess of the ground under temporary pasture at his waygoing over the ground under temporary pasture at his entry at Whitsunday 1900. 6. The claimant not having made any improvement in the sense of the Agricultural Holdings (Scotland) Act 1908, he is not entitled to any compensation. 7. No improvement having been effected in the holding at the claimant's waygoing by the alleged laying down of temporary pasture in question as compared with the state in which the holding would have been found had the tenant conformed to his contractual obligations, he is not entitled to compensation. 8. In any case the seeds sown by the claimant do not constitute a laying down of temporary pasture in the sense of the Agricultural Holdings (Scotland) Act 1908. 9. That after due advertisement no offers were received for the farm, and therefore there is no incoming tenant.

The arbiter repelled the respondent's pleas 1 and 2 and proposed to find the following facts admitted or proved:—1. The claimant voluntarily, and not in fulfilment of any contractual obligation, laid down temporary pasture as contemplated and with the seeds specified in the Agricultural Holdings (Scotland) Act 1908, Schedule 1, Part III (26) on 96 1 2 acres or thereby of the farm of Garbole subsequent to 1st January 1901, and more than two years prior to the determination of the tenancy of said farm. 2. An improvement has thereby been effected, and the sum of £348, which is the sum claimed, fairly represents the value thereof to an incoming tenant. 3. At the commencement of the lease of said farm in 1900 all the pasture on the arable lands and the corn crop belonged to the claimant, and the said temporary pasture in respect of which the claim is made, was laid down by him on the arable land of said farm, exclusive of any land which at his entry in 1900 was not cultivated as arable land. 4. In laying down said temporary pasture the claimant not only complied with the most approved rules of good husbandry but in addition made the improvement claimed for. 5. No permission was asked or received by the claimant to effect the said improvement, and no benefit was given or allowed by the respondent to the claimant in consideration of the latter executing the improvement. 6. The holding suffered no injury or deterioration from the action of the claimant in making said improvement or in connection therewith, and the making of the improvement was not done for the purpose of making provision to protect the holding from injury or deterioration resulting from any act of the claimant. 7. The respondent was informed in September 1916 that the claimant had laid down about three-fifths of the arable land in temporary pasture. He was also informed

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in the following spring that the claimant proposed to lay down the remainder of the arable land in temporary pasture. He made no complaint, attached no condition, and stated no objection either then or subsequently. 8. The claimant was within his right in making said improvement. In any event the respondent acquiesced in or raised no objection to his doing so. 9. The farm as advertised was not the same subject as was tenanted by the claimant in respect that 700 acres or thereby of pasture were excluded. 10. The respondent entered into possession of the farm, is reaping the benefit of the improvement, and is liable to compensate the claimant therefor.”

On the merits the arbiter makes the following observations:—“It is known to every practical agriculturist that a great benefit is given to land by a lengthy course of well laid down grasses and other seeds. The Acts of 1900 and 1908 recognise such an improvement. The arbiter found on inspection of the arable land on Garbole that the laying down in temporary pasture had been well executed. The pastures were surprisingly rich for a farm situated at such a high elevation, giving clear evidence of being well laid down both as regards seed and tillage and constituting an undergrowth that gave valuable feeding to the soil and merited compensation to extent of at least the sum claimed.”

The questions of law stated for the opinion of the Sheriff were—“1. In the circumstances stated does the Agricultural Holdings (Scotland) Act 1908 apply as regards the right of the claimant to compensation for improvement for temporary pasture referred to in section 26 of Part III of Schedule 1 of said Act? 2. Does the laying down of said temporary pasture in the circumstances stated constitute an improvement for which the claimant is entitled to compensation under said Act? 3. Is the arbiter entitled to find that the respondent had given or allowed no benefit to the claimant in consideration of the claimant making the improvement?”

On 28th February 1921 the Sheriff ( Watt) answered the three questions in the affirmative.

Note.—“A careful and able argument was submitted by the agent for the landlord, but I am unable to give effect to his contentions.

(1) It appears to me that the Agricultural Holdings Act 1908 applies to all claims that can be made after it came into operation, and that the mere fact that the lease was entered into prior to the Act does not disentitle the tenant to claim compensation for improvements. It was argued that the Act does not operate retrospectively, and stress was laid on a principle enunciated in Gardner v. Lucas ( 5 Rettie (H.L.) 105), that unless there is a contrary expressed intention an Act of Parliament is to be presumed to be prospective and not retrospective. That was a very different case, and dealt with section 39 of the Conveyancing Act of 1874 referring to the execution of deeds. The terms of section 1 of the Agricultural Holdings Act are general, and plainly apply to all improvements whether under past or future leases.

(2) That the laying down of the temporary pasture by the claimant was an improvement for which he is entitled to compensation I cannot doubt. It is one of the improvements specified in Part III (26) of the First Schedule of the Act, and occurring among those in respect of which consent of or notice to the landlord is not required. The arbiter says it was in the landlord's interest, though I have no doubt, in view of the great expense of labour and the state of the cattle market, it was also in the tenant's interest. It was argued that the provision in the lease that the cultivation and management should be according to the most approved rules of good husbandry fairly read meant that the farm should be cultivated by rotation, and further that laying down the whole 96 1 2 acres in temporary pasture was not within the purview of Part III (26) of the First Schedule of the Act, which assumed that only a portion of the farm would be laid down in temporary pasture. I cannot agree with this. It is found in fact that laying the said acreage down in temporary pasture is according to the most approved rules of good husbandry, and there is no limit to the proportion of the farm that may be so laid down. It was suggested alternatively that the tenant could not claim as for an improvement seeing that if by laying down the temporary pasture he was cultivating the holding according to the rules of good husbandry, he merely fulfilled a contractual obligation— Earl of Galloway v. M'Clelland, 1915 S.C. 1062. But the tenant was under no contractual obligation to lay down the temporary pasture. Great stress was laid on the case of Findlay v. Munro, 1917 S.C. 417. The circumstances there clearly distinguish it from the present case. In Findlay's case the condition of the farm as to grass at the termination of the tenancy was the necessary result of the fulfilment by the tenant of his contractual obligation under the alternative mode of cropping of which he availed himself. His act in laying down the pasture was not a positive voluntary act which seems necessary to warrant the claim. Here the tenant was free to cultivate according to the rules of good husbandry, which did not necessitate laying down the area in question in temporary pasture.

It was further argued that no compensation was payable because the improvement was made for the purpose of making provision to protect the holding from injury or deterioration (see section 23 (3)). It was said it was done to avoid damage due to not following a rotation in cropping. There is no substance in this contention. No damage was suggested as being prevented. It was not to protect the holding from deterioration, but on the contrary a positive and deliberate act to improve the subjects.

The question (2) put by the arbiter does not raise the point as to whether the claim should only be for the excess of temporary pasture at the ish over that at the entry to the subjects in 1900, and this was not the subject of argument before me.

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(3) In my opinion the landlord gave no ‘benefit’ to the tenant in consideration of the latter executing the said improvement. The alleged ‘benefit’ according to the contention of the landlord's agent was his permission to turn the farm into temporary pasture, or his acquiescence in the change to temporary pasture. The ‘benefit’ contemplated by section 1 (2) ( a) of the Act must I think be a ‘particular benefit in consideration whereof the tenant has executed the specific improvements that are in question.’ It is so put by Lord Kinnear in the case of M'Quater v. Fergusson, 1911 S.C. 640, at p. 644. While opinions on the Bench differed much as to the construction of ‘benefit’ in section 1 (2) ( a) the meaning put on the term by Lord Kinnear above quoted seemed to meet with general approval. A majority of the whole Court differed from Lord Dunedin when he held in M'Quater's case that the ‘benefit’ must be ‘specially mentioned and allowed’ taking the view that it might be implied— Earl of Galloway v. M'Clelland, 1915 S.C. 1062. There is no express or implied benefit here given or allowed in consideration of executing the special improvement claimed for.”

The landlord appealed.

The contentions of the parties sufficiently appear from the Stated Case and the Sheriff's note.

The following authorities were referred to— Earl of Galloway v. M'Clelland, 1915 S.C. 1062, 52 S.L.R. 822; Findlay v. Munro, 1917 S.C. 417, 54 S.L.R. 316; Fergusson v. M'Quater, 1911 S.C. 640, 48 S.L.R. 560; Carron Company v. Donaldson, 1858, 20 D. 681; Bairds v. Harper, 1865, 3 Macph. 543; Rankine on Leases, p. 279; Connell on the Agricultural Holdings Acts, Introduction.

At advising—