Trustees of J Gibsone of Pentlands Trust v James Telfer

In a judgment issued today, 3 October, 2018, the Scottish Land Court has refused to authorise the resumption[i] of two smallholdings[ii] at Pentland Mains, Midlothian, which were to have been the site of Scotland’s national film studio, a project described by the Scottish Government in 2017 as being “of national importance”[iii].

The holdings, known as Nos 1 and 2 Pentland Mains, are part of the small (106.69 acres) Pentland Estate, owned by the Trustees of the Miss J M H Gibsone of Pentland’s Trust, and, together extending to  56.30 acres, they form over half the area of the estate.  The only people living on the estate are the respondent, Mr James Telfer, and his family.  The holdings, which are actively farmed, have been in the possession of the Telfer family almost continuously since their creation in 1915.

Apart from providing a site for the national film studio, a major driver of the resumption application from the point of view of the present owners was that it offered the prospect of solving a major problem afflicting part of the estate known as Clippens Yards.  This area is the subject of enforcement notices from Midlothian Council for the removal of tens of thousands of tons of material amassed there by a tenant who was running a waste disposal operation but abandoned the site leaving the owners to face the consequences.  The tenant has since died.  It is estimated that the cost of remediating the site is going to be in excess of £1m.  As well as providing a site for the national film studio, the deal struck by the owners with the developers (see below) makes provision for the restoration of this part of the estate.

That deal is a fairly complex one[iv] involving the sale of the whole estate by its present owners to a company called Clippens Developments Limited and a simultaneous sale by them of the part to be used as the film studio to a company called PSL Land Ltd.  In terms of missives concluded between these various parties, liability for clearing Clippens Yards would transfer from the present owners to Clippens Developments Ltd and be financed by them from the proceeds of sale to PSL Land Limited.  

Although much of the judgment (paras [21] to [55]) is taken up with a fairly technical discussion of the status of Holding No 1, the nub of this case was whether resumption of these holdings could be said to be a reasonable purpose “having relation to the good of the estate”. That is because, resumption of land from crofts (in the crofting counties of Scotland) and from smallholdings (elsewhere in Scotland) requires the consent of the Land Court under section 2 of the Crofters Holdings (Scotland) Act 1886 and that consent can only be given, in the case of smallholdings (but not crofts), where the purpose of the resumption has “relation to the good of the holding or of the estate”.  Clearly, extinguishing the holdings, which would be the effect of the film studio development in this case, would not be something “having relation to the good of the holding”, so the question was whether the resumption related to the good of the estate. It is critical to an understanding of the Court’s decision that an amendment which was introduced by the Crofters (Scotland) Act 1955 introducing “public interest” as a criterion for resumption applies only to crofts, not smallholdings.

The Court held[v] that, despite its potential to cure the problems of one part of the estate and relieve the owners of very onerous responsibilities under enforcement notices served by Midlothian Council in relation to Clippens Yards (see para [17] of the judgment), as a matter of law the purpose of resumption had to benefit more than the owners of the estate, present or future, and, in particular, had to benefit residents on the estate, however indirectly, incidentally or, even, minimally.  Since, far from benefiting the only residents on the estate, resumption would lead to their removal (compensated but against their will), it could not be said that the purpose of resumption had relation to the good of the estate.  

The Court acknowledged: 

  • that deciding the case in a way which would prevent the development of a national film studio on this site was a serious matter (para [76] of the judgment), but noted that it was not the only site in Scotland where a national film studio could be located[vi]

  • the enormous amount of work and expense which had gone into taking the proposal this far (para [77])

  • the difficult position in which its decision left the estate owners, whilst observing that “it is not apparent that the removal of a tenant on a secure tenancy from his holdings is a reasonable answer to that difficulty” (para [79]).

Read the full judgment.

 



[i] “Resumption” is the process by which land can be removed from a lease.  In this case it is subject to controls contained in sec 2 of the Crofters Holdings (Scotland) Act 1886 and needs the consent of the Land Court.
[ii] For an explanation of “smallholdings” and smallholding tenure see paras [2] to [8] of the Court’s judgment.
[iii] See para [12] of the judgment.
[iv] more fully described at para [11] of the judgment
[v] at paras [70] to [76]
[vi] It was chosen from a list of, first, 28 possible sites, then a short-list of two.

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