Scottish Court of Session Decisions

The Small Landholders (Scotland) Act 1911 (1 and 2 Geo. V, cap 49) enacts—Section 1—“From and after the commencement of this Act, and subject to the provisions thereof, the Crofters Acts shall be read and construed as if the expression ‘landholder’ were substituted for the expression ‘crofter’ occurring therein, and shall have effect throughout Scotland.” Section 26—“.… (3) A person shall not be held an existing yearly tenant or a qualified leaseholder under this Act in respect of—…( f) Any land that is not a holding within the meaning of the Agricultural Holdings (Scotland) Act 1908.… (6) Notwithstanding anything contained in sub-section (1) of this section, the holding of any existing yearly tenant or qualified leaseholder within the meaning of this Act shall not, for the purposes of the Landholders Acts, be deemed to include any lands or heritages at the commencement of this Act forming part of such holding and occupied by a sub-tenant of such existing yearly tenant or qualified leaseholder whether paying a rent or not.”

Section 32—“With respect to statutory small tenants the following provisions shall have effect:—… (8) In determining the rent the Land Court shall, so far as practicable, act on their own knowledge and experience, taking into consideration all the circumstances of the case, holding, and district, including the rent at which the holding has been let, the proposed conditions of the renewed tenancy, the improvements made by the landlord and tenant respectively, and the then condition and value of such improvements; and shall fix as the rent to be paid by the tenant the rent which in their opinion would be an equitable rent for the holding between the landlord and the tenant as a willing lessor and a willing lessee. …”

The Agricultural Holdings (Scotland) Act 1908 (8 Edw. VII, cap. 64) enacts—Section 35—“(1) In this Act, unless the context otherwise requires—… ‘Holding’ means any piece of land held by a tenant which is either wholly agricultural or wholly pastoral, or in part agricultural and as to the residue pastoral. …”

The Crofters Holdings (Scotland) Act 1886 (49 and 50 Vict. cap. 29), as amended by the Small Landholders (Scotland) Act of 1911, enacts—Section 6—“(1) The landlord or the [landholder] may apply to the [Land Court] to fix the fair rent to be paid by such [landholder] to the landlord for the holding, and thereupon the [Land Court], after hearing the parties and considering all the circumstances of the case, holding, and district, and particularly after taking into consideration any permanent or unexhausted improvements on the holding and suitable thereto which have been executed or paid for by the crofter or his predecessors in the same family, may determine what is such fair rent and pronounce an order accordingly.”

The Duke of Hamilton and others, the testamentary trustees of the late Duke of Hamilton, appellants, being dissatisfied with a decision of the Scottish Land Court in an application by Mary M'Neill, widow, and John M'Neill, eldest son of the late Allan M'Neill, respondents, for an order fixing a first fair rent of the holding at Auchenhew, of which the appellants were proprietors, applied for a case for the opinion of the Court. Appeals were also taken by the appellants in similar applications ( v. infra) by Alexander M'Alpin, Peter Mackinnon and another, Mrs Mary Hamilton, and Helen Fullarton and others, which cases, together with an appeal in an application by Mrs Mary M'Kelvie, were all heard together.

The Case set forth—“3. The said tenants are the widow and son of the late Allan M'Neill, who became tenant of the said holding in 1880, at a yearly rent of £55, and continued tenant till his death in 1909. Allan M'Neill became tenant of the said holding in succession to his father James M'Neil or M'Neill. Since Allan M'Neill's death the said Mary and John M'Neill have continued the tenancy as from year to year. At the date of the application the rent was £44, 6s. 6d., the reduction having arisen as follows:—

In 1898 a piece of ground extending to 76·36 poles, together with two cottar houses, the rents of which were received by Allan M'Neill, and included in the rent of £55 paid Page: 331↓ by him to the estate, was resumed for a feu, and the rent reduced by £5, 5s. to	£49	15	0
In 1901, after the report of David Stevenson mentioned in paragraph 14, the rent was fixed of new at £49, 15s. as from Martinmas 1901.
In 1910 further ground extending to 113·628 poles was resumed for a similar purpose, and the rent reduced by	£1	8	6
In 1911 a cot-house on the ‘holding had become uninhabitable, and as the rent paid by the tenants had included £4 for the said cot-house, a further reduction to that extent was made.	4	0	0
	5	8	6
	£44	6	6

4. At and since the commencement of the Act of 1911 there were no cot-houses, or cottar houses, and no cottars on this holding. 5. The total extent of the holding as let to and possessed by the tenants at the commencement of the Act of 1911, and at the date of their application, is 44·473 acres or thereby, of which about 43 acres are arable and pasture land, the remainder being sites, roads, and waste. 6. The whole existing buildings on the said holding were erected by and at the expense of the said James M'Neill and Allan M'Neill, the predecessors of the present tenants, with a substantial contribution from the estate in the case of (1) a new byre, and (2) of the double cottage after mentioned. They have been maintained entirely by the said James M'Neill, Allan M'Neill, and the present tenants in succession. No payment or consideration or material aid has been received from the estate by them or any of them in respect thereof except the contribution above mentioned to the erection of the new byre and of the double cottage, and wood from estate sawmill in 1888 to the value of £8, 5s. 9d. 7. These buildings on the holding include (in addition to the byre, barn, stable, and ordinary farm offices) the following subjects:—( a) The main or usual dwelling-house of the holding, erected about 1866, inhabited by the tenants, except when let to summer visitors. ( b) Double cottage near shore, erected in 1906–7, to which the estate contributed wood and slates at a cost of £123, 18s. 6d. ( c) Building, in or at steading, used by the tenants as their summer dwelling-house and for other purposes—erected about 1897–8. 8. The said double cottage was erected by the said Allan M'Neill on the site of two cot-houses for which rents amounting to £7 per annum or thereby had been received by him, which rents were included in the rent of £49, 15s. paid by him to the estate. It is situated between 200 and 300 yards from the steading. There is no fence or enclosure round it. The land between it and the sea is part of the pasture ground of the holding. The said double cottage can be inhabited either as one dwelling-house or as two separate dwelling-houses. Sometimes one part has been let furnished to summer visitors, while the tenants, having also let their main dwelling-house, have inhabited the other part during the period of summer letting, sometimes both parts have been let to summer visitors either as one dwelling-house or as separate dwelling-houses. Usually neither part has been let except during the summer months. But at Martinmas 1911 one part of the said double cottage was let furnished by the tenants to Miss Young for twelve months from Martinmas 1911 to Martinmas 1912, excepting summer months, it being agreed that Miss Young should vacate these premises for two months of the summer season in order that they might be let by the tenants to summer visitors. Miss Young removed to another house during July and August 1912, and these premises were let by the tenants to summer visitors for these months. Miss Young again occupied the premises in September. She paid £30 for the ten months of her occupation; the summer visitors paid £25 for those two months' occupation. In 1912 the other part of this double cottage was also let furnished to summer visitors for two months at £11 a month. 9. The said double cottage is not in present circumstances necessary to or utilised for the working and cultivation of this holding. The present tenants form one household and occupy together the main dwelling-house of the holding. In the event of each joint-tenant having a separate household in consequence of marriage or otherwise the double cottage is suitable for this holding as the farm dwelling-house of one of the joint-tenants. 10. The building in or at the steading referred to in paragraph 7 ( c) hereof is under the same roof as the main or usual dwelling-house of the holding, and separated from this dwelling-house by a barn. It has internal communication with the said dwelling-house through this barn. It is chiefly built of brick. It is not inhabited or used or fitted for use as a dwelling-house except during the summer letting season. It is furnished and ordinarily used by the tenants for their own habitation when the main dwelling-house and both parts of the double cottage are let to summer visitors. It has sometimes been let to summer visitors. It is used during the remainder of the year as a storeroom for potatoes and feeding stuffs, and sometimes as sleeping accommodation for domestic servants or members of the tenants' family and for general purposes in connection with the holding. In present circumstances this building is not necessary to the working and cultivation of this holding as an agricultural or agricultural and pastoral subject, but it is suitable and is useful during part of the year for that purpose, and might become necessary to the holding if hired labour were introduced or if the system of working and cultivation came to be altered. 11. It was not disputed that the said uses of the said double cottage, main dwelling-house, and the other building were reasonable and customary at the commencement of the Small Landholders (Scotland) Act 1911 and were not inconsistent with the working and cultivation of the holding. 12. The said double cottage and building have been for some years entered in the

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valuation roll as three separate houses and the tenants entered as proprietors and occupiers thereof by the county assessor for the purposes of the Valuation Acts. For the purposes of these Acts the said subjects are treated by the assessor as erections made or acquired by the tenants but not made or acquired for agricultural purposes within the meaning of section 4 of the Lands Valuation (Scotland) Amendment Act 1895. 13. The island of Arran has for many years been one of the resorts most frequented by summer visitors. The tenants of agricultural or pastoral holdings have been in use to let their dwelling-houses, one or more, on their holdings, and sometimes other buildings temporarily fitted for habitation as furnished houses or apartments, with or without attendance, mainly to summer visitors, usually for periods varying from one to three months, at rents which vary according to the season, the period, and the quality of the accommodation. They have improved, renewed, and in many cases rebuilt their houses or built new houses on the holding both for their own comfort and convenience according to modern standards and in order to attract summer visitors. This letting has been recognised as a customary and reasonable use of the buildings on holdings which has been and is contemplated both by proprietors and tenants in Arran as in similar places of summer resort. This use is not inconsistent with the working and cultivation of the holdings which have been inspected by the Court. It provides an auxiliary or subsidiary occupation during part of the year for the tenants and members of their families. 14. Until 1900 it does not appear that the rents of agricultural holdings in Arran included any charge or addition for summer letting by tenants of the houses on their holdings. In 1900, in consequence of certain tenants in the south end of Arran, including the said Allan M'Neill, having made complaints about their rents, the proprietors instructed the late Mr David Stevenson, of Crossburn, Troon, a well-known land valuer, to inspect and report on the holdings of these tenants. Mr Stevenson was instructed (1) to value each holding as an agricultural subject, without adding anything in respect of summer letting, (2) to state the extent and condition of the buildings on each holding, and (3) to give the numbers and names of any cottars on the holding, and in the cases of cottars paying rent to the tenant the amount of such rents. Mr Stevenson valued these holdings and reported according to these instructions. Mr Stevenson's valuations when obtained were considered by the late Mr Patrick Murray, the then factor, and by the proprietor, with reference to the effect of summer letting upon Mr Stevenson's figures. The rent of this holding then payable was £49, 15s., which included cottars' rents paid to the tenant. Mr Stevenson reported that the new rent of this holding should be £42, 10s., in which sum he included cottars' rents amounting in all to £10, 12s. 6d. paid to the tenant, but did not include any addition for summer letting. An abstract of Mr Stevenson's valuations was prepared for the proprietor, on which Mr Patrick Murray wrote his remarks on the various new rents. An excerpt therefrom dealing with the holdings forming the subject of applications before the Land Court was produced. The entry in that excerpt dealing with the present holding shows an estimate of the revenue then derived by the tenant from summer letting, and bears that there was ‘added for letting’ the sum of £7, 5s., which represents the difference between the former rent and the amount of Mr Stevenson's valuation. The rents as so fixed by Mr Murray and the proprietor were intimated in March 1901 to the tenants concerned. They were informed that the new rents would take effect as from Martinmas 1901, and were requested if agreeable to continue tenants of their holdings at the rent fixed to sign an accompanying agreement to pay the proposed new rent as from the said term. The tenants were not made aware that the rents proposed by Mr Stevenson had been altered, or that any addition had been made for summer letting. The tenants agreed to pay the rents fixed and intimated as aforesaid. The rent of this holding was accordingly continued at £49, 15s., subsequently reduced as already explained to £44, 6s. 6d.… 16. There was no dispute regarding the boundaries, extent, pr area of this holding as it was occupied and possessed by the tenants at and since the commencement of the Small Landholders Act 1911. There was no application made to the Court for any order defining or limiting the boundaries, extent, or area of the said holding by either tenants or proprietors. The question whether the double cottage and the other building referred to in paragraphs 8, 9, and 10 should be excluded or severed from the holding for the purposes of the Small Landholders Acts was not raised until the hearing on the evidence on 3rd and 4th January 1913, when this question was stated and argued for the proprietors, though verbal notice that objection would be taken to extra houses being included in holdings for the purposes of the Act had been given in Court at a previous sitting by the agent for the proprietors. 17. The Land Court, after inspection of the holding, fixed a fair rent for the holding as possessed by the tenants at and since the commencement of the Act of 1911. They took into account in fixing such fair rent the value of the sites of all the buildings upon the said holding, including the sites of said double cottage and building and also the value of the proprietor's said contribution to or expenditure on the said double cottage. The Court were of opinion that in fixing a fair rent for the said holding no addition or allowance should be made, and no addition or allowance was made, in respect of the revenue derived, or which might be estimated as likely to be derived, by the tenants from letting the said double cottage or the said building in the circumstances stated in the preceding paragraphs. The Court were of opinion that no cause had been shown for excluding or severing from the said holding for the purposes of

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the Small Landholders Acts the said double cottage and building (referred to in argument as ‘the extra houses’) or any portion of them, all of which were included in the holding as possessed by the tenants at and since the commencement of the Act of 1911.”

The order of the Land Court was—“ Edinburgh, 27 th June 1913—The Land Court having considered this application, find and declare that the applicants are joint landholders within the meaning of the Act; and having considered all the circumstances of the case, holding, and district, including any permanent or unexhausted improvements on the holding and suitable thereto executed or paid for by the applicants or their predecessors in the same family, have determined and do hereby fix and determine that the fair rent of the holding is the annual sum of Thirty-one pounds sterling.”

The questions of law included—“2. Were the Land Court bound to exclude from the holding for the purposes of the Small Landholders Acts (Scotland) 1886–1911 the following subjects, all which formed part of the holding as possessed by the tenants at and since the commencement of the Act of 1911—( a) That portion of the double cottage let furnished to Miss Young, with the site thereof, referred to in paragraph 8 of the Stated Case; ( b) the other portion of the said double cottage, with the site thereof, referred to in paragraph 8 of the Stated Case; ( c) the building in or at the steading, with the site thereof, referred to in paragraph 10 of the Stated Case, or any, and if so which of them? (3) In the event of the preceding question, or any branch thereof, being answered in the negative, were the Land Court bound, in fixing a fair rent for the holding, to include in such fair rent a sum, or allowance, in respect of revenue derived, or which might reasonably be expected to be derived, by the tenants of the holding from letting furnished the said subjects, or any of the said subjects not excluded from the said holding for the purposes of the Small Landholders Acts.”

The note of the Land Court relating to the questions was—“It may be convenient to indicate the view which we take as to the construction of the Small Landholders Acts 1886 to 1911 with regard to several questions which have been raised and argued in many applications, particularly as to the effect of the provision in the excluding clause, section 26 (3) ( f), and the manner in which tenants' improvements and also summer-letting by tenants are to be taken into account in the fixing of fair rents for landholders under either the 1886 or the 1911 Act.

There are several preliminary considerations which are of weight in construing particular sections of either of these Acts.

In the first place, it should be kept in view that the Landholders Acts, indeed the great body of statutes dealing with the relation of landlord and tenant from 1449 to 1911, have been expressly framed for the purpose of making material changes in the powers and rights of landlords for the benefit of tenants, and particularly the class of small tenants. These statutes, and particularly the Landholders Acts, are in the view of the Legislature remedial statutes, and therefore in case of doubt should be interpreted so as to carry out their spirit and intention.

In the next place, the Small Landholders Act of 1911 is directed by section 35 to be read and construed with the Crofters Act, and it is enacted by section 1 of the same Act that, subject to the amending provisions and qualifications, the Crofters Acts shall have effect throughout Scotland. It is clear from the Acts that the sitting tenant whose holding satisfies the conditions laid down by the Acts becomes by force of statute entitled to the status and rights of a landholder or of a statutory small tenant, as the case may be, at the date when the Acts apply to his holding. In the case of the landholder, the essential conditions of his tenure are fixed by section 1 of the Crofters Act of 1886, as extended and qualified by section 10 of the Act of 1911. His right to a fair rent is conferred by section 6 (1) of the Act of 1886, and his right to compensation on renunciation or removal is conferred by sections 8, 9 (partially) and 10 of the same Act. The landholder who is a yearly tenant acquires the rights and becomes subject to the obligations imposed by or under the Acts by force of the Act of 1911 at the date when that Act came into operation—1st April 1912.

1. We deal first with the construction and effect of section 26, sub-section 3 ( f), of the Act of 1911, which provides that a person shall not be held an existing yearly tenant or a qualified leaseholder under the Act of 1911 in respect of …( f) ‘Any land that is not a holding within the meaning of the Agricultural Holdings (Scotland) Act 1908.’

In the first place, it must be observed that there is no single definition in the Small Landholders Acts of the statutory holding of a yearly tenant or qualified leaseholder. One must collect a description from the positive enactment of section 2, the exclusions in section 26 (3), and the other provisions of the Act of 1911. The original definition in section 34 of the Act of 1886 has been repealed, but parts of it are substantially re-enacted by section 26 (1) of the Act of 1911, which, inter alia, includes in the holding, for the purposes of the Acts, ‘The site of any dwelling-house erected or to be erected on the holding, or held or to be held therewith, and of any offices or other conveniences connected with such dwelling-house,’ and 26 (3) ( b) of the same Act so far as relating to garden ground only appurtenant to a house. In the next place the definition of a holding which is contained in section 35 (the interpretation clause) of the Agricultural Holdings (Scotland) Act 1908 is not as such or in every part of it in the Act of 1911. The parts of that definition which refer first to market gardens, and secondly to land let to a tenant during continuance in the landlord's employment, are separately dealt with and altered by section 26 (3) ( d) and section 26 (7) of the Act of 1911. Accordingly there remain the opening words which describe the nature or character of a holding under the Act of 1908 as ‘Any piece of land held by a tenant

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which is either wholly agricultural or wholly pastoral or in part agricultural and as to the residue pastoral.’ This description also appears in the English Agricultural Holdings Act of 1908, section 48. It substantially re-enacts section 35 of the Agricultural Holdings (Scotland) Act of 1883, which is identical with section 54 of the Agricultural Holdings Act (England) of 1883.

Now it is possible to read clause ( f) of section 26 (3) in two ways. (1) It may be read as a direction to exclude from the subject of tenancy for the purposes of the Act of 1911 any part of it which by itself is not ‘land either wholly agricultural or wholly pastoral, or in part agricultural and as to the residue pastoral.’ Or (2) it may be read as meaning that if the subject tenanted taken as a whole is not a holding under the Agricultural Holdings Act 1908 it shall not be a holding under the Act of 1911. The former construction does not appear reasonable or practicable in application. If every part of the area of the subjects tenanted must be agricultural or pastoral, then gardens, orchards, plantations of trees, fish ponds, landing stages, and other permanent improvements for which the tenant would be entitled to receive compensation at outgoing under the schedules of the Crofters Act of 1886 or the Agricultural Holdings Act of 1908 would be excluded. It seems unreasonable and inequitable that the existence on the subjects tenanted at the commencement of the Act of 1911 of any buildings or permanent improvements which the tenant would be entitled to make under the Agricultural Holdings Act or the Crofters Act 1886 should be excluded from falling under the operation of the Act of 1911. Land used also for sporting purposes or for peat cutting and similar purposes would not be either wholly agricultural or pastoral in this extreme literal sense. This reading would also require the exclusion of land occupied by improvements lawfully made by a tenant for his comfort and convenience though not strictly necessary for the working of or adding a definite value to the holding. This would be difficult to work out in practice and not less unfair to the tenant. On this reading subjects tenanted would often resemble a kind of chequer or mosaic—bits of land, parts of buildings, held under the Landholders Act, interspersed with other bits of land or parts of buildings left to be held on ordinary defeasible tenure.

There are many ways in which the buildings existing on a holding at the date when the Small Landholders Acts apply to the holding may happen to be greater in extent or size than is necessary strictly for the working of the holding at the time. The holding sometimes consists of two or more holdings which were formerly separate but have been combined in one, and therefore has two or more sets of buildings. Or the holding may have been reduced in size by rearrangement or resumption of part of the land for other purposes. Or it may be held or have been held by joint-tenants, and therefore reasonably required separate dwelling-houses. Or the tenant may have built a new dwelling-house, but also retained the old dwelling-house because both together were not larger than modern standards of comfort or propriety required for the accommodation of a family and any hired servants who might be occasionally required to help in the working of the holding, or because the old dwelling-house could be used for temporary occupation during part of the year as a dwelling-house, while used at other times for storing implements or produce or general purposes. It must also be kept in view that a landholder's holding may, and in ordinary circumstances will, continue to be held by the landholder, his heirs or legatees, or statutory assignees in perpetuity. So long as the statutory conditions of tenure are observed the tenure is indefeasible, subject to the contingencies of resumption or failure of heirs, legatees, or statutory assignees. Accordingly it would be specially unreasonable to exclude any parts of buildings or bits of land forming part of the actual tenancy to which the Act applies, which, though not strictly necessary at the time for the working of the holding, may become necessary or useful to future landholders in working the holding or using it for any purposes sanctioned by the Act. If once excluded these are excluded for ever. Similarly, these words if taken in the extreme literal sense would exclude existing pertinents, adjuncts, and accessories of the subjects corporeal or incorporeal. Accordingly the reasonable construction of these words appears to be that they are meant only to prescribe that the subject of the tenancy taken as a whole must be agricultural or pastoral, or partly agricultural and partly pastoral in its character (as distinguished from a subject which taken as a whole is urban, industrial, or mercantile in character) in order to come within the scope of the Act of 1911.

There is no reason, and so far as we are aware there is no authority, for adopting the narrower view of this particular clause. Under other clauses of this sub-section (3) which refer to land which is usually definitely marked off by limit or title it may be practicable and reasonable to sever such land from the remainder of the land held in tenancy for the purposes of the Act, e.g., glebe land, policy, woodland, public recreation ground, or land acquired under Act of Parliament for a public undertaking, But under this clause 3 ( f) the subject of tenancy is intended to be taken as it is let and possessed at the commencement of the Act, with its buildings, improvements, adjuncts, pertinents, and accessories—in short, with everything on it or held and possessed in connection with it under the same tenancy. If, for example, the land cultivated or pastured is only an adjunct or accessory of a country residence or of an inn, or of a fishing or of a public ferry, or of a factory or a shop or an auction mart, let and possessed under the same tenancy, then the subject of tenancy is not a ‘holding’ within the meaning of the Act.

This conclusion is confirmed by considering the nature and character of some of the other exclusions, e.g., 26 (3) ( g), which implies that land other than permanent

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grass parks is not excluded from a holding though it may be partially occupied or used by the tenant for a trade or calling which is not primarily agricultural or pastoral.

The provision in section 1 (8) of the Act of 1886 points in the same direction. The only trade or business which a crofter is prohibited from exercising on his holding is opening without the landlord's consent any house on the holding for the sale of intoxicating liquors. So do the provisions of section 10 of the Act of 1911. The landholder is expressly authorised to make such use of his holding for subsidiary or auxiliary occupations as in case of dispute the Land Court may find reasonable and not inconsistent with the cultivation of the holding.

Now it would be unreasonable to suppose that the Legislature intended that the use by a tenant of a building or a portion of land of the subject let, with the landlord's consent or acquiescence, up to the commencement of the Act, for some auxiliary or subsidiary occupation, in the same manner and to the same extent as he would if a landholder immediately become entitled to do by force of section 10, should exclude either (1) the subject of tenancy, or (2) the building or part so used from the operation of the Acts. The cases of Mackintosh v. Lord Lovat, 14 R. 282, 24 S.L.R. 202 (hotel), Taylor v. Earl of Moray, 19 R. 399, 29 S.L.R. 336 (travelling grocery business), and the only English case on the English Agricultural Holdings Acts, Morley v. Jones, 1888, 32 Solicitors' Journal 630, do not conflict with the view we have indicated. In each of these cases the principal subject of the tenancy was not agricultural or pastoral but mercantile, and the cultivated or pastoral land was a mere adjunct or accessory…. .

III. A question has also been raised whether the fair rent for a holding must include some proportion of or some allowance for any revenue derived by the landholder from keeping paying guests, boarders or pupils, or letting one or more furnished houses or buildings on his holding to summer visitors.

It is not disputed that this practice is reasonable and usual, and is not inconsistent with the proper cultivation of the holding. It may be, and is on parts of some estates lying near a mansion-house or a game preserve, prohibited by the conditions of tenancy without the proprietor's consent. It has become by general custom a use which is reasonable in itself, and contemplated by both landlord and tenant, except where forbidden by contract between the landlord and his tenant. The practice has been general among all classes of farmers, clergymen, and schoolmasters, and tenants of country houses for many years. Indirectly it is an advantage to the landlord, because tenants who desire to attract summer visitors or boarders or pupils improve their houses and keep them in more thorough repair than would otherwise be required. The main advantage to the small tenant is that he gets ready money for payment of his rent and necessary expenditure on the holding. On the other hand, the small tenant and his family, in the case of letting the dwelling-house, have to remain on the holding for its cultivation, and therefore suffer the inconvenience of having to live in an extra cottage, or often in a part of the steading or a makeshift building during the period of summer letting.

The letting may be for one or for two, or sometimes for three, months of the year or longer. To a large extent both letting and revenue are uncertain. All the risk and expense fall on the tenant alone. Any revenue is derived entirely from the work and expenditure of himself and his family. No doubt summer visitors frequently buy eggs, fowls, butter, and garden produce from the holding. If this can be called a market, it is a market created by the labour or enterprise and at the sole expense of the tenant and his family.

These considerations apply as strongly to the case of the landholder as to the case of the ordinary agricultural tenant. There is this additional consideration in the landholder's case, that he maintains, and when necessary renews or replaces, at his own expense, the buildings on the holding, whether they were provided by the landlord or by the landholder and his predecessors.

So far as we know it has not been usual to charge rent or increase the existing rent in respect of the tenant and his family making use of the buildings on any agricultural holding either for summer-letting or for keeping paying guests or boarders, or for other auxiliary or subsidiary occupations such as spinning, weaving, and other home industries, unless the landlord had provided or improved or contributed to improve the buildings for the special purpose of making or aiding the tenant and his family to make such subsidiary or auxiliary use of them.

It does not appear that any addition to or increase of rent of any agricultural holdings in respect of summer-letting was made on the Arran estate until about fourteen years ago.

In 1900 the estate instructed Mr David Stevenson to make a valuation and report with regard to a considerable number of holdings in the south end of the island, the tenants of which had complained that their rents were too high. Mr Stevenson was instructed to state the extent and condition of the buildings, give the number and names of any cottars on the holding, the rents, if any, paid by such cottars to the tenant, and the state of cultivation of the holding, and ‘to value each holding as an agricultural subject, without adding anything in respect of house-letting to summer visitors, it being intended that this should be considered separately.’ Mr Stevenson made a valuation and report according to these instructions. Mr Murray, then factor, revised the rents arrived at by Mr Stevenson by adding where he thought fit a sum for summer-letting, chiefly in cases where Mr Stevenson's rent was materially lower than the existing rent. The new rents as fixed by Mr Murray were intimated to the tenants concerned by a formal letter, the terms of which certainly suggested that the new rents were the rents fixed by Mr Stevenson. The

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tenants concerned were not aware that any addition had been made for summer-letting. Nor was the present commissioner of the estate aware that the rent of any farm on the Arran estate included a charge for summer-letting until the inquiry under application from these tenants brought out the fact. The question for us is whether we are bound in fixing a fair rent for the holding of a landholder to include any special allowance for or any proportion of revenue derived by the tenant and his family from these auxiliary and subsidiary uses.

The Act has committed to the Land Court, as to our predecessors the Crofters Commission, the largest discretion in fixing a fair rent after hearing parties and considering the circumstances of the case, holding, and district. A fair rent is what, to the best of our judgment, we think fair as between landlord and tenant for the particular agricultural or pastoral holding during the first septennial period and succeeding periods.

Now every fair rent includes rent (1) for the whole land comprised in the holding, including the sites of all existing buildings and offices, after allowing for the existing value of improvements on the land made by the landholder or his predecessors in the same family without payment or fair consideration received, and (2) for all existing buildings and offices on the land, unless and in so far as not provided or paid for by the landholder or his predecessors in the same family without payment or fair consideration received. No tenant is to be rented on existing improvements made by himself and his predecessors in the same family unless or except in so far as in respect of payment or fair consideration received they have become landlord's improvements. Accordingly if the house or building has been wholly provided or paid for by the tenant or his predecessors in the same family no rent can be charged upon it. If the landlord has contributed material or money to the building or its extension or renewal, then the existing value of his contribution is taken into account in fixing the fair rent.

Further, we have, in view of section 10 of the Act of 1911, to take into account that this section has ‘expressly conferred’ on the landholder the right to make such use of his holding for subsidiary or auxiliary occupations as in case of dispute the Land Court may find reasonable and not inconsistent with the cultivation of the holding.

Now in this case also, if the landlord has provided or aided or contributed to provide buildings to be used, and which are used wholly or partially, for any such subsidiary or auxiliary occupation, it is fair that the value of this provision, aid, or contribution should be taken into account in fixing a fair rent for the landholder.

We have had instances in the northern counties of a landlord building an addition to the tenant's dwelling-house in order that the tenant might use it as a post-office or shop or workshop, for which an allowance is properly and fairly made in fixing the rent. But there is nothing in the Acts to suggest that we are bound to include in the fair rent any charge or allowance in respect merely that the tenant uses the holding, or any building on the holding erected by the labour and expense of himself or his predecessors in the same family, for a purpose which the section above quoted has authorised him to use it.

The Landholders Acts 1886–1911, like the Agricultural Holdings Acts, confer many new rights on the tenant. All these undoubtedly increase the value of the holding to the tenant, e.g., fixity of tenure, freedom of cultivation, no rent on his own improvements, compensation for permanent improvements, the right to renounce on a year's notice, right of bequest, as well as the rights conferred by section 10. These are not circumstances of the case, holding, and district. All these are rights not granted by or flowing from the landlord, but freely conferred by the Legislature for reasons of public policy. We might add the abolition of landlord's hypothec and the concurrent right to take ground game. Are we to include in the fair rent of the tenant a charge in respect of fixity of tenure, or of the right not to be rented on his own improvements, or of the right to compensation at renunciation or removal, or of freedom of cultivation conferred by section 10? That would be making the tenant pay yearly compensation for the restriction or abolition of powers formerly belonging to the landlord which Parliament thought it expedient and right to restrict or abolish. Where Parliament intends that compensation in any form shall be given for loss arising from changes of the law it makes special provision for that purpose as is made for example in the Act of 1911 in the case of land taken for new holdings or for enlargements.

Therefore we think it follows that a fair rent should not include any charge or allowance for the tenant's use of the holding in the manner sanctioned by section 10 of the Act of 1911, unless and in so far as the landlord has provided or aided to provide buildings or equipment for the purpose of such use being made by the tenant.

There is no dispute that the use of buildings on holdings for summer-letting, entertaining paying guests or boarders, is a customary and reasonable use, and not inconsistent with the cultivation of the holding. We are dealing with a lawful use of existing buildings on the holding for the purpose of summer-letting (entertaining paying guests or boarders and the like), which use prevailed before the commencement of the Act of 1911, and has since continued under the Act without appreciable change in its degree or extent. Extreme cases may be figured where this use may be increased to such an extent as to be inconsistent with the cultivation of the holding. When that happens the use can be restrained within reasonable limits.

It was argued that a distinction should be drawn between (1) the use of the dwelling-house or principal dwelling-house on the holding for summer letting or keeping lodgers or boarders, and (2) the use for the same purposes of any other buildings on

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the holding which were not necessary for the working of the holding. In the former case it was stated for the proprietors that while maintaining their right to demand that some proportion of the revenue derived by the landholder from these uses in addition to allowances for ( a) site value and ( b) expenditure by the estate should be included in the fair rent, they did not insist in this demand for this proportion, while in the latter case the demand was insisted in.

The argument for this distinction was mainly founded on the practice of the assessor for the county in making up the valuation roll. Whenever he considered that buildings or structural improvements of buildings wholly or mainly provided or paid for by the tenant were not necessary for the working of a holding, he held that they were not erections or structural improvements made or acquired for agricultural purposes, and he entered the tenant as proprietor of these buildings and structural improvements at such rent as he considered to be the yearly value of these buildings or structural improvements as a separate subject. Whether this did not proceed on a too strict construction against the tenant of the Lands Valuation (Scotland) Amendment Act 1895 under which the assessor proceeded is debateable. In cases where the existing rent included a charge for summer letting, of which the assessor may not have been aware, it rather looks as if the tenant had to pay rates twice over on these erections and structural improvements. But these questions are for the Valuation Court to determine, and they will continue to arise under section 31 (6) of the Small Landholders Act 1911 in cases where a fair rent has been fixed.

However this may be, the action of the assessor for the purposes of the Valuation Acts forms no precedent or authority to qualify our duty in fixing a fair rent as between landlord and landholder under the Landholders Acts. As we have already said, when the question of the value to an incoming tenant of the buildings on a holding arises in consequence of the renunciation or removal of a landholder, it may be material to consider how far the existing buildings are in excess of what is reasonably suitable to each particular holding. But in fixing a fair rent the important consideration is by whom they were provided or paid for, in whole or in part, whether by the landholder or his predecessors in the same family, or by the landlord or his predecessors in title. Further, it seems inconsistent with the provisions of section 10 of the Act of 1911 to draw a fixed distinction between the principal and secondary or additional dwelling-houses or other buildings on a bolding in connection with letting. The right conferred on the landholder is to make such use of his ‘holding’ for subsidiary or auxiliary occupations as in case of dispute the Land Court may find to be reasonable and not inconsistent with the cultivation of the holding. These are the only qualifications. It is possible that a case may arise in which the use of a secondary or additional dwelling-house or any other building for summer-letting or for entertaining boarders or paying guests may not be reasonable and may be inconsistent with the cultivation of the holding. In that event such use will not be sanctioned. But no such case has yet come before us. The cases with which we have been dealing are cases of a continued use in substantially the same manner as prevailed when the Small Landholders Act applied.”

The appellants lodged a note, which set forth, inter alia—“2. The leading question of law (question 2 in the Case) which arises is whether certain dwelling-houses upon the subjects tenanted by the applicants form part of the statutory small holding. The said dwelling-houses are additional to the dwelling-house referred to in the Case as the ‘usual dwelling-house of the holding’ and have been referred to throughout the proceedings as ‘extra houses.’ These extra houses consist of—( a) A dwelling-house forming part of a double cottage; ( b) another dwelling-house forming the remainder of the said double cottage; and ( c) a third dwelling-house attached to the usual dwelling-house. In stating the Case the chairman of the Land Court has ignored the existence of the third dwelling-house referred to, but has inserted in the Case a reference to a building at the steading used by the applicants as their own summer residence, and treated it as though the appellants' argument as regards the third dwelling-house referred to it. The attention of the chairman of the Land Court has repeatedly been drawn to this inaccuracy, but he continues to represent in the case—contrary to the fact—that the appellants claim the building at the steading referred to as an extra dwelling-house outwith the statutory holding, and continues to refuse insertion of the statement of fact proved at the inquiry, and capable of verification at the inspection, regarding the third house referred to, which is claimed by the appellants to be an extra dwelling-house.”

The appellants argued that the extra houses were not part of the holding, but if they were the revenue derived from the summer-letting ought to be taken into account in fixing a fair or equitable rent, or if not the value of the site of the extra houses should be computed in fixing a fair or equitable rent, not as for agricultural land but as for building stances. Carmichael v. Morrison, 1912, 1 S.L.C. Rep. 42, was referred to upon the question of the fair rent.

The respondents argued that the decision of the Land Court was right and should be affirmed.

At advising the Judges of the First Division delivered the following opinions:—