Scotland’s tenant farmers are facing considerable uncertainty as a consequence of two significant rulings by the Court of Session in recent months that effectively call into doubt the competence of the Agricultural Holdings (Scotland) Act 2003.
The latest ruling last month enforced a notice to quit on a tenant in a Limited Partnership tenancy (Salvesen v Riddell).
In a highly complex decision, Lord Gill, presiding over the Court of Session, judged that the measures put in place to protect tenants in Limited Partnership arrangements were not compatible with the European Court of Human rights.
Limited Partnerships are devices that allowed landlords to circumvent the 1949 Agricultural Holdings (Scotland) Act, which granted security of tenure to farm tenants.
In effect, the lease was granted to a partnership formed between the tenant and the landlord that had break periods, usually every five years.
To terminate the tenancy the landlord merely dissolved the partnership at the appropriate term. As they were the most common form of tenancy available from the sixties until the 2003 Act came into being, most prospective tenants agreed to their terms and conditions.
That decision by the Appeal Court overturned the Land Court’s original award in 2010 of security of tenure to Andrew Riddell of Peaston Farm in East Lothian. He previously held a Limited Partnership tenancy, but was given a notice to quit in 2003 by his landlord Alistair Salvesen.
The outcome of the case, concerning a notice to quit early in 2003 on a Limited Partnership tenancy ahead of the due date of 2008, means that the tenant, whose family have been tenants at Peaston for 110 years, will now have to leave the farm and it will be resumed by Mr Salvesen who purchased it in 1998.
Crucially, the court rejected the argument, supported by the Land Court, that the Single Farm Payment (SFP) was not part of the earnings of the farm and therefore should not be taken into account in rental calculations.
Lord Gill stated that, in his opinion, rent should be assessed primarily on the basis of open market lets, suitably adjusted to take account of factors such as scarcity and ‘marriage’ value.
Highlands & Islands (Labour) MSP David Stewart – a strong advocate for the rights of tenant farmers- says: ‘It was the last Labour Government that brought in the Agricultural Holdings Act (Scotland) 2003 which was set up to protect the rights of the tenant farmer.
‘This ruling by the Court of Session is really concerning and seems to have removed the security that tenant farmers once had.
‘Along with Community Land Scotland, I will be looking closely at this ruling and it’s effects’.
This case is particularly distressing since Mr Riddell was found dead, not in suspicious circumstances, shortly before he and his family were due leave the land which his family had farmed for over 100 years.