What is happening at Colstoun Mains? Land reform and agricultural holdings in microcosm

Martinmas is the latest of the four Scottish quarter days in the calendar year. It might not be a day or a date known to many – by statute it falls on 28 November – but those involved in Scots property goings-on sometimes have occasion to interact with it. For example, Martinmas 2004 is when the feudal system was abolished in Scotland. That is now the stuff of legal history. Of more relevance to current society is the fact that Scottish quarter days often crop up in agreements about land, such as leases of rural property.

One individual who is acutely aware Martinmas is fast approaching is a gentleman called Andrew Stoddart. The reason he knows Martinmas is imminent is because that is when his occupancy of a farm is due to end.* I am reticent to blog about individual cases, but I have decided to offer a few words here. First, I do this in the knowledge that the case is relatively well-known: there is a high profile petition about it, there was a demonstration at Holyrood about other his situation, and the Channel 4 News journalist Alex Thomson describes him as a “focal point“. [Update: see also this statement from the Scottish Tenant Farmers Association, which was published online after this blog was uploaded.] This makes me doubt that any blog by me will jeopardise what might be a sensitive situation. Second, I do so on the basis an increasing number of people have asked me what is going on (in conversation and online), so I have decided to offer an attempt to explain matters. Third, I am guessing from the spike of traffic to my blogs about the case of Salvesen v Riddell (see below) that people are interested in this and trying to piece it all together. That would be a tricky task without a central resource. So here goes.

A few quick disclaimers. For the lawyers reading this, I am pitching this to non-lawyers, so please don’t heckle too much. For the non-lawyers reading this, as noted I am aiming for you as a readership. If I confuse matters, please comment below and I will try to clarify.

Most importantly, please note I am doing all of this from a desktop level. I have not had sight of any lease or any partnership agreement. (More on partnership agreements below.)

Here are some key questions, and my attempts to answer them.

What is happening at Colstoun Mains?

An area of land was leased by the landowner to a business entity called a limited partnership. The people involved in that LP were the active farmer – Andrew Stoddart – and the landowner (or a representative of the landowner – I will use “landowner” throughout this blog). As with many similar arrangements across rural Scotland, the landowner had no particular role in this LP, other than an ability to bring the LP to an end. The reason a limited partnership was used rather than a more general partnership was to allow the landowner to financially insulate himself from the business – i.e. only the farmer’s investment would be on the line if the business failed. The landowner was thus the “limited partner”, the farmer was the “general partner”.

That sounds a bit weird. Why use such a complex arrangement?

Leases of agricultural land can sometimes attract something called security of tenure, which is a right for the tenant to stay on the land in most circumstances. That entitlement to remain can subsist even after the passing of what was originally planned to be the termination date. It is not possible for a landlord to body-swerve these rules.

A human being with a secure tenancy can basically use tenanted land until retirement or death, at which time that tenancy could go to a family member. That cycle could continue provided the farm is being used productively as an agricultural unit.

In a situation when land is not subject to such a tenancy (i.e. it is vacant), landowners might not want any new occupants to tie-up land in a way that has no end date in sight. The LP tenancy provided a work-around to the security of tenure regime. Whilst the landowner could not end the lease, he could end the tenant. No tenant, no lease.

The LP could have been set up for a set number of years, perhaps 15, or it would run from year to year but in such a way that the landowner (as limited partner in the LP) could serve a notice to end the partnership.

That’s quite a scheme. Does this still happen?

A law was passed in 2003 to stop partnership tenancies like this being valid, whilst at the same time providing new forms of fixed-term tenancies which meant further partnership tenancies were unnecessary.

So what happened to the existing LP tenants?

Here’s where it gets interesting. And potentially confusing.

In 2003 there was a perception that a strong right to buy land would be introduced for farmers who did not own the land they worked on. That did not quite happen – in 2003 a right was conferred, but the right was not given to farmers who were part of a limited partnership, and the extent of the right was only pre-emptive. That is to say a right of first refusal which could not be used to force a sale, it would only kick-in if and when a landowner decided to sell the land.

Be that as it may, the climate in the early noughties was such that some landowners took steps to wash their land of any farmers who might benefit from such a right. This meant steps were taking to bring existing limited partnerships to an end. Holyrood reacted by legislating to give farmers in that situation what was essentially a promotion: they would no longer be partners in a finite tenancy, instead they would be tenants in their own right, with security of tenure.

So they get to stay then?

No. There was a legal action brought by one landowner on a number of grounds, which eventually provided a decision that the landowner’s right to property under the European Convention on Human Rights had been infringed. I have blogged about this here, here, here, here, here, here, here, and here (my most recent blog being the first link). I also have three articles in the Scots Law Times about the matter.

Phew. That’s a lot of blogs and stuff. Can you explain that quickly?

Many factors were at play here, but the comparison with landowners who had taken no action to end a limited partnership was important. Such lazy, benign, indifferent or whatever landowners were faced with a three year extension to any LP arrangement – a time period that would allow business matters to be reorganised, perhaps. The comparison between those notional landowners and the landowners who acted was stark. Holyrood legislation cannot breach the ECHR (or, for that matter, EU law), so this law was declared to be ineffective by the Court of Session and then the Supreme Court. The leading opinion in the Court of Session was given by the recognised agricultural law specialist Lord Justice Clerk Gill (as he then was). I will return to that point below.

Does that mean a landowner’s human rights are more important than a tenant’s human rights?

No ruling was made about the tenant’s rights, so it would be a logical leap to reach that conclusion. Be in no doubt: tenants have rights too. A timely blog by Dr. Frankie McCarthy at the University of Glasgow details this, in relation to the private rented sector.

Actually, wait, I just asked about the tenant. Can we call the farmers “tenants”?

No but yes but no.

At the outset, the tenant would have been the legal entity, the limited partnership.

Then by [defective] law the farmer became the tenant outright.

When the law was struck down, one analysis of the Scotland Act 1998 (the founding statute for Holyrood) suggests that the law was never the law at all, but actually the UK Supreme Court delayed its decision for a little while for all of this to be sorted. Remedial legislation was passed to try to fix the guddle, in the shadow of knowing what was too much of an imposition in human rights terms on a landowner.

So does this mean the Scottish Parliament is unable to confer rights on tenants or similar categories of people in different situations?

No. For example, the Scottish Parliament has legislated to impose a liability (for asbestos exposure) on insurers when previously there was no liability and that survived a court challenge. The Court of Session under Lord President Gill (as he then was) ruled that the crofting community right to buy contained in the Land Reform (Scotland) Act 2003 was not a breach of a landowner’s rights under the ECHR. This was the same (now promoted) judge who was involved in the Salvesen case: it would be wrong to assume our judges are striking down legislation for the sake of it.

From this it can be argued with some confidence that Holyrood could have passed something called the “Upgrade of Farming Partners (Scotland) Act 2003”, provided it properly considered such legislation across the three stages of parliament whilst providing a fair, non-arbitrary, proportionate scheme with proper compensation. Such an act could have been acceptable in human rights terms.

Has the landowner done anything contrary to law?

No, as far as I can tell from the publicly available facts. It was neither illegal nor contrary to any agreement to take steps to end the partnership back in 2003, nor is it now. An initial statement from the landowner in question is available here.

No-one is really saying this is not legal. The strongest that might be ventured is it is not cricket.

Should the farmer lose his home?

I understand the farmer has been on the farm for some 22 years. That’s quite an innings: this is longer than I have lived anywhere and his children have spent all their lives there. Whether the landowner is engaging in effective farm management, and whether the landowner is being fair, mechanical, heartless or whatever, is not for me to judge. (The effective farm management point is mentioned in the Scotland 2015 broadcast from 10 November 2015, where the factor points out the landowner “has taken the view that they would like to farm the land in hand” (just after 10 minutes into the broadcast, available for 21 days from this blog’s publication).)

I will offer a few points for consideration. Some of this is quite academic, please forgive me for that diversion. (Sorry, I am an academic lawyer, this happens sometimes.) Skim on to the next question if you wish to dodge my musing.

First, the landowner can quite legitimately point to the duff legislation and say something like: “that defective law is the problem, not me. That legislation gave false hope that a 15 year agreement might become a longer and possibly perpetual right to possess, so look to the government for any compensation or interim alternative arrangements.”

In fact, here is a further statement from the landowner that is roughly to that effect.

Second, a contrast. I understand in South Africa that when a landowner seeks to recover possession from an occupier there are rules about “just and equitable” evictions, meaning landowners have to wait for a reasonable period of time before a court order would be granted. This is detailed very briefly in my Storify of a presentation by Professor Anne Pope, from the University of Cape Town. Whether or not the landowner may get compensation from the state is another matter, but there you see the beginnings of a more social aspect to property law. This is far from an exact analogy to Scotland or indeed to this individual case (note also this further further statement from the landowner, stressing the farmer is not being made homeless), but comparative law can be instructive.

Scots law should not always be viewed in isolation. Building on that, consider also what Lizzie Cooke writes in her (English law) text, Land Law (OUP, 2012 at page 11):

The human rights affirmed by the [ECHR] are not by themselves property rights; they do not, by themselves, give anyone a right over a particular piece of land. Having property is not, under [the ECHR], a human right. By contrast the South African Constitution, for example, gives all its citizens the right to a home (although it has not yet been possible to make that right a reality). The [ECHR] gives you the right not to be deprived of your home only if you have one in the first place.

Professor Cooke is actually writing about Article 8, the right to a home; she then goes on to discuss how the protection of property (i.e. not just a home) is dealt with, including whether or not a landlord’s right to recover possession simply because a lease has come to an end and for no other reason is compatible with a tenant’s human rights. Cooke notes that until recently a court would never interfere in such a situation to allow a tenant to stay, but now it might when the landowner is a public authority. (See also McCarthy’s blog on this point, citing the extra-judicial comments of Lord Neuberger.) This wider analogy with South Africa, and Cooke’s further thoughts, are useful all the same. Can or should Scotland learn from this?

Third, a theory. I recently attended an event at the University of Glasgow by Professor John Lovett of Loyola University, New Orleans. Lovett drew my attention to the work of Joseph William Singer, who wrote about The Reliance Interest in Property, a 140 page article in the Stanford Law Review that analysed what property right if any a community might have in a resource it has come to rely on (the example in that article being two steel plants in Ohio – I was struck by an analogy with Upper Clyde Shipbuilders). The relevant union in the US sought to buy the plants. The relevant US courts recognised no right to do so. I suspect a Scottish court would not recognise a right in a similar situation either. Should there be such a right? (Note, the recently introduced statutory community rights of acquisition in Scotland may provide one mechanism to deal with such situations, but that is by no means clear.)

Now what?

Yeah, it must be nice referring to 140 page articles and highfalutin theories. What about the guy who needs to leave the farm he has been in for 22 years?

In 1886 occupiers of land in the Crofting Counties (the Highlands and Islands) were given the right to stay there. Around the Second World War, the national interest dictated that eviction of tenant farmers was not to take place. Landowner rights were curtailed by statute. Could that happen here?

Bluntly, there is no time for Holyrood to legislate for this particular case. Hence the frantic attempts to sort out mediation, but forced mediation is seen by some as a contradiction in terms. Outside looking in, it appears that this mediation would be played out with one party holding most of the cards. That party can let the clock tick, whilst the other party will be conscious of every tock that brings Martinmas closer, but even that is simplistic. The other player here is the Scottish Government, as this letter from an agent for the tenants shows. Martinmas might be an ending of sorts, but there could be more to come.

Is this indicative of a wider malaise in tenant farming?

Serious as it is, the post-Salvesen v Riddell bùrach does not affect a huge number of holdings. I understand the number of farm holdings facing this exact situation is eight. There is no doubt that those affected by it are affected profoundly, but there are other fundamentally important provisions about agricultural holdings in Part 10 of the Land Reform Bill. Absent any sea change in government or landowner policy in these specific cases, the focus now can only be on Part 10. I offer some final thoughts about that.

If that legislation does not get the balance right between a number of competing interests, tenant farming in Scotland might not be the vibrant sector that both the Scottish Government and the Agricultural Holdings Legislation Review Group hope it will be.

More importantly, if that legislation tries to do too much at a late stage of the Holyrood process, you can bet your bottom dollar someone will challenge the legislation in court. That makes the job of the Rural Affairs and Climate Change Committee, who are reporting on the Land Reform Bill, all the more crucial. With pressures of parliamentary time, that Committee is probably the last chance to give land reform a really thorough analysis in this Holyrood term.

How this will all square with the impending Scottish elections is something I offer no thoughts on, but I will be watching very carefully.

UPDATE: I was contacted by one of the interested parties in this case to note that I should have included comment from the Scottish Tenant Farmers Association on this matter. Here is a recent News Release. The most recent news release is linked to in the second paragraph.

* FURTHER UPDATE, 26 NOVEMBER 2015: A statement now appears on the Scottish Land and Estates website on behalf of Mr Andrew Stoddart and The Trustees of The Colstoun Trust, to the effect that mediation has taken place between Andrew Stoddart and the landowner. It states the terms for payment of Mr Stoddart’s waygoing claim and his occupation of the house, grazing land and farm buildings until January 2016 have been agreed. It also notes that any liability of the Scottish Government for its role in this situation has not been covered in this particular mediation.

A statement with more detail from Andrew Stoddart is available at Lesley Riddoch’s website.

** FURTHER FURTHER UPDATE: On 23 January, The National newspaper carried a report about the auction of Andrew Stoddart’s equipment, which seems to be definitive end to this particular situation.