MARK PATTINSON AGAINST JOHN MILLER MATHESON [2022] ScotCS CSIH

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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> MARK PATTINSON AGAINST JOHN MILLER MATHESON [2022] ScotCS CSIH_43 (23 September 2022) URL: http://www.bailii.org/scot/cases/ScotCS/2022/2022_CSIH_43.html Cite as: 2022 Hous LR 78, 2022 GWD 32-473, [2022] CSIH 43, 2022 SLT 1289, [2022] ScotCS CSIH_43, 2022 SCLR 500

FIRST DIVISION, INNER HOUSE, COURT OF SESSION

[2022] CSIH 43

XA70/21

Lord President

Lord Woolman

Lord Pentland

OPINION OF THE COURT

delivered by LORD CARLOWAY, THE LORD PRESIDENT

in the special case under section 1(7) of the Scottish Land Court Act 1993

in the application of

MARK PATTINSON

Applicant

against

JOHN MILLER MATHESON

Respondent

____________

Applicant: T Young; Currie Gilmour & Co (for Murchison Law, Inverness)

Respondent: Colquhoun; P Black, Solicitors, Dingwall

23 September 2022

Introduction

[1]

The respondent contends that the tenancies of two crofts in Shieldaig were validly

transferred to him, following upon the death of his father. The applicant, who is the

landlord, maintains that the tenancies have been terminated and that therefore the entries

made by the Crofting Commission in the Crofting Register (nos. C4444 and C4445) in the

respondent's name are invalid.

[2]

The special case for the opinion of the court concerns the correct interpretation of the

statutory provisions which govern the transfer of croft tenancies upon the death of the

crofter, viz: section 16 of the Succession (Scotland) Act 1964 and section 11 of the Crofters

(Scotland) Act 1993. The court requires to address two primary issues. The first is whether

the steps taken by the respondent to transfer the tenancies to himself were sufficient in terms

of the provisions. The second is whether his failure to transfer the tenancies within

24 months of his father's death meant that he could no longer do so.

Statutory provisions

Succession (Scotland) Act 1964

[3]

Section 14(1) of the 1964 Act provides that a deceased person's heritable and

moveable estate shall:

"by virtue of confirmation thereto, vest for the purposes of administration in the

executor thereby confirmed and shall be administered and disposed of according to

law by such executor."

Section 15(2) provides for disposal of heritage by means of a docket on the confirmation.

This acts as a link in the deduction of the title from the deceased.

[4]

Section 16(2) permits the executor to transfer an interest in a lease notwithstanding a

prohibition on assignation. In the case of a croft, if a transfer is not effected within

24 months of the death, "either the landlord or the executor may, on giving notice ... to the

other, terminate the lease ..." (s 16(3A)).

Crofters (Scotland) Act 1993

[5]

Section 11(1) of the 1993 Act requires the executor of an intestate deceased crofter to

give notice to the landlord of any transfer under section 16(2) "as soon as may be". If notice

is given, the landlord must accept the transferee as tenant and notify the Crofting

Commission accordingly. If no notice is received within 24 months, the landlord "shall"

notify the Commission (s 11(2)). It is then required to give notice, to the landlord, any

confirmed executor and each person who may be able to succeed to the intestate estate, that

they propose to terminate the tenancy, declare the croft to be vacant and to invite any

representations on what should happen to it (s 11(4)). If, having considered any

representations, the Commission is satisfied that a person is entitled to a transfer, in

satisfaction of a claim to succeed to the estate, the proposal is not to be implemented (s

11(5)). There are additional provisions in the event that a transfer does not then take place.

Facts

[6]

Angus Matheson died on 14 September 2012. He left no will. He was survived by

his son, the respondent. At the time of his death, Mr Matheson was the tenant of two crofts.

The respondent was the only person entitled to succeed to the crofts in terms of section 2 of

the 1964 Act.

[7]

On 8 September 2014, the respondent sent a letter to the applicant together with a

partially completed Crofting Commission form entitled "Intestate Succession Transfer by

Executor Notice to Landlord(s)". The letter explained that he was requesting the transfer of

the crofts to him following upon the death of his father. He apologised for the delay, stating

that he had been unsure of the procedure. The Form gave details of the crofts and the

"Deceased Crofter". It named the respondent as Mr Matheson's executor, but gave no

further details, because at that stage there had been no confirmation or even any

appointment of an executor. Nevertheless, the respondent stated that he was the transferee

and he signed the Form as "Executor". He sent a copy to the Commission. It responded by

advising him of the steps which he required to take in order to complete the transfer.

Correspondence, which the court has not seen, was exchanged between the respondent and

the Commission between 10 November 2014 and 29 March 2017.

[8]

It was only much later, possibly as a result of the Commission's promptings, that the

respondent took active steps to complete a transfer. He was appointed as executor-dative on

18 September 2018 and obtained confirmation on 30 November 2018. The main flurry of

activity, however, took place in 2019. On 3 June, the respondent, as executor, executed a

"Form of Docket" nominating himself as the person entitled to his father's estate. The next

day he sent a notice to the Commission advising them that he had: been appointed executor-

dative; confirmed to the estate; transferred the tenancies by docket to himself; and given

notice of the transfer to the applicant. On 13 June, he executed another docket, purporting to

transfer the tenancies to himself again. This was endorsed on the confirmation.

[9]

The applicant's law agents wrote to the respondent's agents on 1 July, seeking sight

of the confirmation and stating that their client "reserved" his position in relation to the

transfer. On 19 August, the Commission informed the respondent that he would become

the tenant once the crofts had been registered in the Crofting Register. That registration

took place on 8 October. On 11 October, the applicant's agents intimated that their client did

not consent to an extension of the 24 month time limit. He was going to take steps to have

the crofts declared vacant. On 27 November, his agents served notices purporting to

terminate the tenancies with effect from the following day. These notices were intimated to

the Commission on 13 December. The applicant subsequently made two applications to the

Land Court, challenging the entries in the Crofting Register.

The Land Court

[10]

The Land Court determined that a tenancy did not terminate automatically if it had

not been transferred within the 24 months. Rather, it became terminable at the instance of

the landlord. Automatic termination was inconsistent with the landlord's right to terminate

and with the Commission's right to terminate in certain circumstances (1993 Act, s 11). The

respondent's intimation to the applicant was invalid because it had not been given by an

executor and had not been preceded by the transfer of the deceased's interest to the

respondent. On confirmation in November 2018, the tenancies became vested in the

respondent as executor. However, his subsequent 4 June 2019 notices were invalid because

they predated the docket transfer which took place 9 days later. The tenancies were

terminable by the applicant from 24 months after the death, as they had not been disposed

of. The applicant had been entitled to terminate the leases and had done so.

[11]

The questions in the special case are:

Did the Land Court err in holding that the purported intimation made by the

respondent to the applicant on 8 September 2014 was not a valid notice for

the purposes of section 11(1) of the Crofters (Scotland) Act 1993?

If the answer to question 1 is in the negative, did the Land Court err in

holding that the notices served by the respondent's agent on 4 June 2019 were

not valid for the foresaid purposes?

Did the Land Court err in holding that it remained open to the respondent to

confirm to and/or transfer under section 16(2) of the 1964 Act his late father's

interest in the tenancies of said crofts after the period of 24 months referred to

in sections 16(3)(b) and (3A) of the 1964 Act and section 11(2) of the 1993 Act

had expired without a valid transfer of the interest having taken place?

In the whole circumstances did the Land Court err in holding that the

respondent is not the tenant of said crofts?

Submissions

Respondent

[12]

Transferring a tenancy of a croft upon the death of the tenant was a two-stage

process (McGrath v Nelson 2011 SLT 107 at para [41]). First, any transfer must take place

under section 16 of the 1964 Act. One way of bringing about a transfer was to docket the

confirmation (ibid at para [40]). The alternative was a common law assignation, which did

not require any special form of words or action (Rankine: Leases (3rd ed) at 181; Requirements

of Writing (Scotland) Act 1995, s 1(2)). Secondly, the particulars of the transferee must be

notified to the landlord, who must accept the transferee as tenant (1993 Act, s 11(1)).

[13]

The respondent's actions, in signing and intimating the 2014 notice to the applicant,

had transferred the crofts. If writing were required, the wording in the declaration signed at

the end of the 2014 Commission Form constituted assignation. Between the intimation of

the 2014 notice and the confirmation, the 2014 notice was invalid because the respondent

had not obtained confirmation. The grant of confirmation on 30 November 2018 cured that

invalidity (Garvie's Trs v Garvie's Tutors 1975 SLT 94). If the invalidity of the 2014 notice was

not cured by the confirmation, the respondent's actions in 2019, following confirmation,

were sufficient to effect a transfer. The 2019 notice was valid intimation for the purposes of

section 11(1).

[14]

Section 16(3)(b) and (3A) of the 1964 Act granted landlords and executors a power to

terminate a lease which had not been competently transferred within 24 months. However,

the fact that the landlord or executor had to take action to bring the lease to an end was

incompatible with the argument that summary termination took place after 24 months. The

implication of the use of "may" was that the landlord and the executor could each decide

not to terminate. Until the lease was terminated, it remained in effect and part of the

deceased's estate (1964 Act, s 14(1)). The dicta regarding section 16(3) in Rotherwick's Trs v

Hope 1975 SLT 187 (at 189), Gifford v Buchanan 1983 SLT 613 and Morrison-Low v Paterson

1985 SC (HL) 49 (at 79) were obiter and ought not to be followed.

Applicant

[15]

To transfer a croft tenancy under section 16, three stages had to be completed within

24 months. First, the executor had to confirm to the deceased's interest in the croft.

Secondly, the executor had to transfer the interest. That could be by conventional

assignation or by docket on the confirmation in a specified form (1964 Act, s 15(2) and

Sch 1). Thirdly, notice of the transfer had to be given to the landlord (1993 Act, s 11(1)). A

well-established line of authority emphasised the importance of the 24 month time limit

(Rotherwick's Trs v Hope; Gifford v Buchanan; Morrison-Low v Paterson; Sproat v South West

Services (Galloway), 9 November 2000, unreported, paras [19] [22]; McGrath v Nelson).

Stage 3 could not occur until stages 1 and 2 had been completed.

[16]

The 2014 notice was invalid. At the time it was sent, the respondent had not

completed stages 1 or 2. Even if a subsequent confirmation could validate an earlier

transfer, there were still insuperable problems. No confirmation had been granted within

the 24 months. The principle in Garvie's Trs v Garvie's Tutors could not cure the fact that

stage 3 had been attempted prior to stages 1 and 2. The tenancies had been validly

terminated by the applicant by 27 November 2019. The 2019 notice was issued before

stage 2 had been completed. The respondent did not purport to transfer the crofts until

9 days later.

[17]

In many cases, a failure to confirm to, and to transfer, an interest in a tenancy within

the 24 month time limit would result in automatic termination (Rotherwick's Trs v Hope at 189

- 190; Morrison-Low v Paterson at 76). That was consistent with the general purpose of section

16; a reasonable time limit should be set for the beneficiaries to take up the tenancy. The

landlord was entitled to know what claims of succession to the lease were to be made

(Rotherwick's Trs at 189). A lease running year-to-year on tacit relocation could not validly

be renewed in circumstances where the tenant had died and nobody had confirmed to his

interest in the tenancy (Rotherwick's Trs; Wilson v Stewart (1853) 16 D 106). Section 16 did not

apply where confirmation had not been granted.

Decision

[18]

Section 16 of the Succession (Scotland) Act 1964 provides the mechanism by which

an interest in a croft can be transferred upon the crofter's death. "Interest" is defined as

"any interest ... which is comprised in the estate of a deceased person and has accordingly

vested in the deceased's executor by virtue of section 14" (s 16(1)). When the tenant dies, the

croft tenancy will vest in the executor upon the grant of confirmation (s 14(1)). In

consequence section 16 cannot operate without an executor who has confirmed to the

tenant's interest. Until confirmation is granted, the intestate estate is in statutory limbo. The

landlord cannot give the executor notice to terminate, if there is no executor. However,

confirmation, once granted, has retrospective effect to the date of death. Transfers executed

by the executor prior to the grant of confirmation will be validated (Garvie's Trs v Garvie's

Tutors 1975 SLT 94, Lord Thomson at 96 97).

[19]

The executor has 24 months from the date of death (s 16(3A)) within which to

transfer the tenancy to a beneficiary, after which, the landlord "may" terminate the lease

(s 16(3)). Critically for this case, there is no time limit during which the interest must be

transferred. Rather, the 24 month period is a protective one. It simply allows the executor

time to carry out the necessary steps to confirm to the estate and to transfer the interest

without the threat of termination.

[20]

Rotherwick's Trs v Hope 1975 SLT 187 is distinguishable; the critical feature there

being that there had been no confirmation of an executor (see Lord Robertson at 189 - 190).

McGrath v Nelson 2011 SLT 107 is equally distinguishable; it having been decided upon a

view, perhaps somewhat narrow, that the wording in the relevant letter did not amount to a

transfer of the croft (see Lady Dorrian at para [44]). In Gifford v Buchanan 1983 SLT 613 the

landlords had given notice to terminate in advance of the application by the executors for an

extension of the period within which a transfer could be made (see LJC (Wheatley) at 614, cf

Lord Robertson at 616 adhering to his opinion in Rotherwicks' Trs v Hope). The issue of

whether a lease could be transferred after the statutory period in section 16(3) was not

contested in Morrison-Low v Paterson 1985 SC (HL) 49 (see Lord Keith at 76 citing

Rotherwick's Trs v Hope).

[21]

A confirmed executor has the power to circumvent any prohibition on the

assignation of a tenant's interest by transferring the interest to a person entitled to inherit on

intestacy (1964 Act, s 16(2)). Transfer under section 16 is distinct from inter vivos assignation,

which can only be effected in accordance with section 8 of the Crofters (Scotland) Act 1993

and requires the consent of the Commission (s 8(1)). It is an implied condition that a crofter

will not purport to assign his tenancy except in accordance with that provision (1993 Act,

Sch 2(2)). In contrast, section 16 places no formal requirements on the mode of transfer of an

interest.

[22]

Confirmation was not granted until over 24 months had passed since Mr Matheson's

death. The landlord had the right thereafter to give notice of termination to the executor.

That would have been effective to terminate the lease, had it been done whilst the interest

remained vested in the executor. It may be that, following the principle in Garvie's Trs, a

notice given to the respondent whilst he was an unconfirmed executor would have been

validated by confirmation. However, that did not happen.

[23]

Section 11 only applies if there has been a transfer under section 16(2). That can only

occur once an executor has been confirmed. Section 11(2) obliges the executor to notify the

landlord of any transfer under section 16(2) "as soon as may be". Once that notification

occurs, the landlord must accept the transferee as the tenant (s 11(1)). If there is no such

notification within three months of the death, the landlord has a duty to commence the

procedure under section 11 by informing the Commission "forthwith" that no notice has

been received (section 11(2)). It will then notify persons who might wish to succeed to the

intestate estate and have the tenancy transferred to them (s 11(4)). The Commission can

nominate a relative and intimate that to the landlord. If there is no nomination, the croft will

be declared vacant (s 11(8)). Attempting to rely solely on section 16 by-passes the

Commission's ability to control the succession. It would enable the landlord to nominate his

own tenant instead of the deceased's relatives succeeding. This is contrary to the spirit of

the crofting legislation; a pillar of which is to ensure that a crofter can secure succession to

the family croft "without any expense or process of law" (see MacIver v MacIver 1909 SC 639,

Lord McLaren at 644). That is so even if the respondent here could have progressed matters

in a more timely manner.

[24]

The respondent's letter of 8 September 2014 to the applicant together with the

accompanying Form would have been sufficient, had he been confirmed as executor at that

stage, to transfer the interest to him as an individual from the deceased's estate. That act

took place within the 24 month period. The subsequent grant of confirmation in 2018

retrospectively validated the transfer. There remains a dispute on whether the applicant

received the 2014 documentation. Assuming that it is proved that he did, all necessary steps

had been taken to transfer the crofts under section 16 of the 1964 Act and section 11 of the

1993 Act. Even if the 2014 documentation had been in some way deficient, the respondent's

actions in 2019 in completing and intimating the further documentation and endorsing a

docket on the confirmation were sufficient to effect th e transfer. The inconsistencies in dates

are of no moment. By the date of the applicant's notice of termination, the tenancy was no

longer vested in the respondent qua executor. The notice was therefore ineffective.

[25]

The court will accordingly answer questions 1 and 4 in the affirmative and question 3

in the negative. In view of the affirmative answer given to question 1, question 2 strictly

does not arise; had it done the court would have answered it in the affirmative.

Scottish Court of Session Decisions