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OUTER HOUSE, COURT OF SESSION
[2007] CSOH 148
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A306/05
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OPINION OF LORD MALCOLM
in the cause
ALLAN MacCOLL (AP)
Pursuer;
against
(FIRST) THE
CROFTERS COMMISSION AND (SECOND) KAREN MacGILLIVRAY (AP)
Defenders:
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Pursuer:
Sandison; Currie Gilmour & Co
Second Defender: Sir Crispin Agnew of Lochnaw, Bt. QC; Anderson Strathern
(for MacPhee & Partners, Solicitors, Fort William);
21 August 2007
[1] The
pursuer is the son and executor-nominate of the late John MacColl, who owned a
croft. He granted a tenancy of it to the
second defender, Ms Karen MacGillivray.
The action is defended only by the second defender. In terms
of section 23(3) of the Crofters (Scotland)
Act 1993, the consent of the Crofters Commission to the tenancy was required,
otherwise the tenancy would be invalid.
Objections were lodged and the Commission arranged a public meeting and
hearing. There was concern that the rent
agreed was greatly in excess of the open market value of the tenancy. The annual rental was г2,714.28 for the first
seven years, with a sum of г6,000 to be paid in respect of permanent
improvements. The second defender
informed the meeting that she considered that the figure was a fair one for
rent and that it was a coincidence that these sums amounted in total to
г25,000. The pursuer claims that in
granting the necessary consent the Commission was misled, in that in fact the
rental payments were part of the purchase price of the croft land. He therefore seeks reduction of the
consent. In her averments the second
defender explains that the arrangement was that after seven years she
would obtain the fixing of a fair rent at a much lower figure, and then decroft
the land for payment of fifteen times that lower sum. The seven annual payments were in respect of
permanent improvements, not rent. The
payments were to be made by the second defender's father on her behalf. Later in the pleadings the second defender
avers that there was an agreement between her father and the late Mr MacColl
whereby the former would purchase the croft.
She states that she wrote to the chairman of the meeting explaining that
"the parties were paying what the croft was worth by instalments as rent". She offers to prove that the Commission was
not misled, and that it appreciated that the payments represented the price for
the permanent improvements. In response
the pursuer avers that the arrangements now put forward by the second defender
were not disclosed to the said meeting.
Further the involvement of the second defender was a device designed to
conceal the interest of her father in the croft from both the first defenders
and the public, and that the apparent tenancy of the croft was a sham
transaction.
[2] The
pursuer's father died in August 2000. In
June 2003, as his executor-nominate the pursuer applied to the Scottish
Land Court for an order that the second defender does
not have a valid tenancy of the croft.
This was on the basis that the requisite consent of the Commission had
been obtained by fraud on the part of the second defender, and in particular by
her untrue representations at the said meeting and her concealment of the true
nature of the arrangements between her, her father and the late
Mr MacColl. After hearing
submissions on this, the Land Court
determined that it had no power to set aside the consent of the Crofters
Commission. The proceedings before the Land
Court were sisted in order to allow the pursuer to
raise the present action in the Court of Session. This explains why the only operative
conclusion in the summons is for production and reduction of the said consent,
and why the issue of the validity of the underlying tenancy is not ventilated
in this action.
It should also be noted that the
second defender has built a house on the croft at a cost of г40,000. The croft with the new house now has a value
of about г300,000. As a result she
pleads that if the action proceeds the pursuer should be ordered to find
caution in the sum of г300,000.
[3] At
a procedure roll hearing Sir Crispin Agnew of Lochnaw, Bt.
QC, submitted that the second defender's
plea to the competency of the action should be upheld on the basis that the
challenge to the decision of the Commission should have been made by way of a
petition for judicial review, not as an ordinary action of reduction. He accepted that judicial review procedure
would not be appropriate in respect of a challenge based on a complaint that
the decision was obtained by a fraud of the nature averred by the pursuer. However, he submitted that the Commission's
decision letter demonstrates that, whatever the motive of those involved, in
fact the Commission was not misled. Thus
any attempt to set aside the Commission's decision would require to be
addressed to the supervisory jurisdiction of the Court of Session and based on
one of the normal grounds for review of a decision by an administrative
body. Reference was made to Rule of
Court 58.3.(1), which states that an application to the supervisory
jurisdiction of the court must be made by petition for judicial review, and to Shetland Line (1984) Ltd v Secretary of State for Scotland 1996
S.L.T.653, a case relating to the scope for judicial review when the
decision-making body has made an error of fact.
In response Mr Sandison for the pursuer submitted that, for the
purposes of the debate, the pursuer's averments of fraud require to be
approached on the basis that they are true and accurate. The Court cannot assume from a reading of
selected quotations from selected documents that the pursuer's claim of fraud is
bound to fail. Mr Sandison accepted that
the Commission was exercising the kind of jurisdiction discussed in West v Secretary of State for Scotland (First Division) 1992 S.C.385, but
the action is not founded on an alleged failure of the Commission to exercise
its jurisdiction in a proper manner, nor that it was guilty of exceeding its
jurisdiction, but rather that a fraud was perpetrated upon it. This invokes the Court's ordinary
jurisdiction, not its supervisory jurisdiction as discussed in West.
Reliance was placed upon a decision of Lord Marnoch in Bell v Fiddes 1996 S.L.T.51, in which his Lordship upheld a submission
that an action of reduction of a Sheriff Court decree in absence on the ground
that the defender's solicitors failed to lodge a Notice of Intention to Defend
was not an application to the supervisory jurisdiction of the Court as defined
in West, and thus should not have
been raised by an application for judicial review, but rather as an ordinary
action of reduction.
[4] I
am satisfied that the submissions for the pursuer on this issue are to be
preferred. The second defender's
argument depended on persuading me that the pursuer's averments that the
decision had been obtained as a direct result of a fraud were bound to
fail. Sir Crispin placed particular
reliance on the Commission's decision letter of 21 October 1996 (production 7/16) which, amongst
other things, said "The Commission also noted the rental agreed between both
parties for the croft tenancy. We
recognised however, that the agreed sum to be payable over a staggered period
is a fair assessment of compensation payable in respect of the tenancy of the croft". Even on the face of it, this does not
necessarily contradict the case averred by the pursuer, which, in essence, is a
complaint that the tenancy was a sham designed to cloak the fact that the real
transaction was a purchase of the land by the second defender's father. In any event, I agree with Mr Sandison's
submission that it is not open to me, on the basis of the pleadings and the
very few documents that were looked at in the course of the debate, to conclude
that the pursuer's case of fraud is bound to fail. I therefore repel the second defender's plea
to the competency.
[5] Sir
Crispin also argued that the action, although seeking only the reduction of the
Crofters Commission decision, is, in effect, an attempt to reduce the second
defender's tenancy, and that in the absence of any offer to provide restitution
in integrum, it is plain that the
case is irrelevant. Mr Sandison's
short answer was that all that is sought is reduction of the consent to the
tenancy granted by the Crofters Commission.
The consequences of reduction of that decision, if any, and whether
there is a need for restitution, will be for the Scottish
Land Court to consider in due course in the
context of the proceedings before that Court.
Given the history of how the case came to be raised in the Court of
Session, namely for the sole and specific purpose of reviewing the validity of
the decision of the Crofters Commission, and standing the context and nature of
the sisted proceedings in the Land Court, I consider that Mr Sandison's
submissions in this regard are well founded.
It also follows that the defender's plea for caution for г300,000 falls
to be repelled, even if it is competent, which I doubt.
[6] Finally,
under reference to a passage in the speech of Lord Dunedin in D & J Nicol v Dundee Harbour Trustees 1915 S.C.(H.L.) 7 at 12/13, Sir Crispin
submitted that in order to qualify title to raise these proceedings, the
pursuer must demonstrate that he is vindicating a right of the late Mr MacColl
which the defenders now seek to deny or infringe. That test cannot be met. Even if it could, the late Mr MacColl
would have no proper interest to pursue the matter, thus neither can his
executor. Further, his estate has not
lost anything, since a fair sum was agreed for the land and Mr MacColl was not
defrauded. Given that an executor is eadem persona cum defuncto, it is as if the pursuer was challenging his
own agreement. I record at this point that Sir Crispin
departed from the suggestion in his Note of Argument that only the Crofters
Commission enjoys title to raise these proceedings.
[7] In
response Mr Sandison noted that Lord Dunedin said that he was not risking
a comprehensive definition of what constitutes title to sue. As executor the pursuer has title to the croft
land, and the action concerns whether there is a valid Crofters Commission
consent to a tenancy over the land.
Legal title to the land qualifies sufficient title and interest to raise
the present proceedings. Rules which
allow a defender to plead against an executor all defences available to the
defender against the deceased do not arise in the circumstances of the present
case. Further and in any event, there is
a public interest in the reduction of a fraudulently obtained decision from a
public authority, which itself is charged to protect the public interest. Mr Sandison referred to a decision of the
Queens Bench Division in Northern Ireland
(R (Burns) v County Court Judge of Tyrone [1961] NILR 167) where it was
held that when an order is obtained by perjured evidence, certiorari will lie
whether or not the party obtaining the order was privy to the perjury. Lord MacDermott LCJ stressed the need to
promote the due administration of justice if and when it is alleged than an
order has been obtained by fraud.
Similar considerations should make the court cautious about dismissing
the present action on issues relating to the pursuer's title to sue.
[8] Again
I prefer Mr Sandison's submissions.
Lord Dunedin said in the
passage mentioned that for a person to have title to sue "he must be a party
(using the words in its widest sense) to some legal relation which gives him
some right which the person against whom he raises the action either infringes
or denies". It is plain that the
language used was not intended to be construed in a technical or restrictive
fashion. Even bearing in mind his
Lordship's disclaimer of a comprehensive definition, I see no reason to
conclude that his formulation excludes the pursuer in the circumstances of the
present case. The pursuer has title to
and responsibility for a croft which he offers to prove is the subject of a
Crofters Commission decision which was procured by fraud, and should therefore
be reduced. He has a clear interest in
the reduction of the decision, and the matter is far from academic. So far as the second defender is concerned,
she is said to be responsible for the fraud, and she actively resists the order
now sought by the pursuer. Insofar as
Sir Crispin's submissions can be understood as suggesting that the pursuer must
be treated as challenging his own actings, I consider this to be
misconceived. The maxim relied upon has
no application to this case. The pursuer
is not relying upon any claim or right of the deceased. In any event, there is no good reason to
proceed upon the basis that it is necessary to assume that the late Mr MacColl
was party to the alleged deception of the Commission.
[9] The
overall result is that I shall repel the second defender's first, second,
seventh and eighth pleas, and quoad ultra
allow a proof before answer.
