Pursuer: Peoples QC, Harper Macleod

Defender: Agnew of Lochnaw QC, Wright Johnston & Mackenzie

12 November 2010

[1] The pursuers are the majority of the executors dative of the late Mrs Margaret MacLean, who was tenant of Achaleven Croft, Connell, Argyll, and who died intestate on 23 August 2006. Neil MacLean, the deceased's husband and the third executor, is not a party to the action. It appears that, at least at the date of the summons, he continued to reside at the croft. The defender is the landlord of said croft. The question which arises in this case is whether the pursuers have relevantly averred a valid transfer by them to Josephine McGrath of Mrs MacLean's interest as tenant. They aver that they did so by virtue of first, written intimation by them as majority executors to the defender on 6 February 2007 of the nomination of Miss McGrath as successor to said interest and secondly, confirmation issued on 24 December 2007. They seek declarator of the transfer and declarator that a notice by the defender dated 14 September 2009 purporting to terminate the tenancy in terms of sections 16(3) and (4) of the Succession (Scotland) Act 1964 is invalid. They also seek reduction of said notice.

[2] It is helpful at the outset to set out the statutory provisions which apply.

Section 14 of the Succession (Scotland) Act 1964 ("the 1964 Act") provides that on the death of any person, every part of his estate falling to be administered under the law of Scotland, "shall, by virtue of confirmation thereto, vest for the purposes of administration in the executor thereby confirmed and shall be administered and disposed of according to law by such executor".

[3] Section 15 of that Act provides that where any heritable property has so vested in an executor, and it is necessary for him in distributing the estate to transfer that property to certain qualifying persons, the executor may effect that transfer by endorsing on the confirmation a docket in favour of that person.

[4] Section 16 relates to leases and, at the relevant time, was in the following terms:

"(1) This section applies to any interest, being the interest of a tenant under a lease, which is comprised in the estate of a deceased person and has accordingly vested in the deceased's executor by virtue of section 14 of this Act; ..........

(2) Subject to subsection (4A), where an interest -

(a) is not the subject of a valid bequest by the deceased.........

and there is among the conditions of the lease (whether expressly or by implication) a condition prohibiting assignation of the interest, the executor shall be entitled, notwithstanding that condition, to transfer the interest to any one of the persons entitled to succeed to the deceased's intestate estate, or to claim legal rights or the prior rights of a surviving spouse or civil partner out of the estate, in or towards satisfaction of that person's entitlement or claim,

(3) Subject to subsection (4C), if in the case of any interest -

(a) at any time the executor is satisfied that the interest cannot be disposed of according to law and so informs the landlord, or

(b) the interest is not so disposed of within a period of one year or such longer period as may be fixed by agreement between the landlord and the executor or, failing agreement, by the relevant court on the application of the executor -

(ii)........ from the date of the death of the deceased,

either the landlord or the executor may, on giving notice in accordance with the next following subsection to the other, terminate the lease (in so far as it relates to the interest) notwithstanding any provision therein, or any enactment or rule of law, to the contrary effect."

[5] Section 11 of the Crofters (Scotland) Act 1993, ("the 1993 Act") provided at the relevant time as follows:

"(1) where, owing to the failure of a crofter to bequeath the tenancy of his croft or of such a bequest to receive effect, the right to the tenancy of the croft falls to be treated as intestate estate of the deceased crofter in accordance with Part I of the 1964 Act, and the tenancy is transferred in pursuance of section 16(2) of that Act, the executor of the deceased crofter shall as soon as may be furnish particulars of the transferee to the landlord, who shall accept the transferee as tenant; and the landlord shall notify the Commission accordingly.

(2) If at the expiry of a period of 3 months commencing with the relevant date the executor has not furnished to the landlord particulars of any transferee in accordance with subsection (1) above, the landlord shall forthwith notify the Commission to that effect.

(3) In this section "the relevant date" means -

(a)...

(b) where the deceased crofter has otherwise failed to bequeath the tenancy, the date of death of the deceased crofter;....

(4) if at the expiry of said period of three months it appears to the Commission, whether from a notification under subsection (2) above or otherwise, that the executor has not furnished to the landlord particulars of any transferee in accordance with subsection (1) above, the Commission may give notice in such manner as they think proper, whether by advertisement or otherwise, to persons who may claim to be entitled -

(a) to succeed to the intestate estate of the deceased crofter, or.....

(b) to claim legal rights or prior rights of a surviving spouse or civil partner out of that estate

requiring them if they desire to have the tenancy of the croft transferred to them in or towards satisfaction of their entitlement or claim to give intimation accordingly to the Commission before such date as may be specified in the notice, being a date not earlier than 6 months after the relevant date; and the Commission may, subject to subsection (5) below, nominate as successor to the tenancy any one of the persons who have so given intimation.

(Subsection (5) requires the Commission to consult with the executors before making a nomination).

(6) The Commission shall give notice to the landlord of any person nominated by them in pursuance of subsection (4) above, and the landlord shall accept that person as successor to the tenancy of the croft.

(7) The nomination by the Commission, in pursuance of subsection (4) above, of any person as successor to the tenancy of the croft shall transfer the interest of the tenant under that tenancy to that person, and such transfer shall be in or towards satisfaction of that person's entitlement or claim in the intestate estate of the deceased crofter."

[6] Section 23 of the Crofters (Scotland) Act 1993 applies where a croft has become vacant, by operation of section 16(3) of the 1964 Act or otherwise. The landlord must give notice to the Commission and by virtue of subsection 3 he cannot let the croft without the permission of the Commission. Any such let is null and void and the occupier of the croft may be served by the Commission with a notice to give up occupation. Under subsection 5, where a croft is vacant the Commission may require the landlord, within a specified time scale, to submit his proposals for relating the croft, and if he does not do so, the Commission may re-let the croft.

[7] Finally, section 4 of the Executors (Scotland) Act 1990 provides as follows:

"In all cases where confirmation, is or has been granted, in favour of more executors dative then one, the powers conferred by it shall accrue to the survivors or survivor, and while more than two survive a majority shall be a quorum, and each shall be liable only for his own acts and intromissions."

The Pleadings

[8] The pursuers aver that at a meeting on 23 January 2007, the majority of the trustees took a decision at the end of that meeting to transfer the tenancy to Josephine McGrath. They then aver that "In implement of their said decision, they instructed the executry's law agents, MacPhee & partners to notify the landlord of the nomination of Josephine. The letter of 6 February was sufficient to effect an immediate transfer of the tenancy to Josephine. Section 16(2) of the 1964 Act did not require the pursuers to do more than they in fact did in order effectively to transfer the tenancy to Josephine." In the first conclusion they seek declarator that the interest was transferred by virtue of the written intimation of 6 February and the subsequent confirmation of the executors to the interest. The letter of 6 February 2007 (6/1 of process) is in the following terms:

"The Executors of the late Mrs Margaret MacLean, acting under and in terms of Sect.4 of the Executors (Scotland) Act 1900, hereby nominate Miss Josephine McGrath, residing at ....to succeed to the tenancy of (One) Achaleven Croft and (two) to be put forward for a new short-assured tenancy of Achaleven farmhouse.

Josephine would intend to personally reside in the farmhouse and personally operate the croft as soon as these transfers have been completed. We believe she is already known to you. However, should you require any further personal or other information in order to deal with this nomination, do please let us know."

[9] It is averred that "The effect of intimation to the landlord of the nomination of Josephine was to transfer the tenancy to her with immediate effect."

[10] The defender admits that he furnished the particulars of Miss McGrath, as intimated in this letter, to the Crofters Commission but the circumstances in which they did so are averred as follows:

"Further explained and averred that there has been an ongoing family dispute between Neil MacLean and the pursuers as who should succeed to the tenancy of the croft. Neil MacLean, as an executor, purported to nominate himself to be tenant of the croft on or about 16 November 2006 and the pursuers' purported nomination followed thereon on 6 February 2007. On 12 December 2006 the Crofters Commission wrote to Neil MacLean informing him that they had changed their records to show that he had succeeded to the tenancy of the croft. The Crofters Commission wrote to Neil MacLean again on 20 December 2006 stating that they had received a fax "from MacPhee and partners requesting that the Commission take no steps at this time to enter you as the registered tenant". The defender's agents did write to the Crofters Commission on 16 February 2007 wherein said letter stated inter alia "I originally wrote to you on 22 November with details of Mr Maclean's nomination as successor to his late wife's crofting tenancy. My client has since received a further nomination, a copy of which I enclose. If you require further information please do not hesitate to contact me." Said letter was provided to the Crofters Commission for their consideration in the whole circumstances." It is averred that in the circumstances said letter was not an acceptance of the purported nomination, but was a confirmation that the nomination had been forwarded to the Crofters Commission.

Submissions for Defenders

[11] Counsel for the defenders had three main propositions. First, that the pleadings regarding the letter 6/1 of process do not amount to an averment of transfer of the tenancy under the legislation. The letter is simply a nomination, not a transfer as required for the purposes of the legislation. Second, even if the letter could amount to a purported transfer, it was not valid as it had not been preceded by confirmation. In any event, if subsequent confirmation could validate a prior purported transfer, it could only do so if confirmation followed within the period of a year from the death.

[12] Dealing with the first of these points Counsel submitted that the pleadings aver a decision to transfer the tenancy to Josephine, not an actual transfer. The nomination in that letter is relied on in the pleadings as being "in implement" of that decision. The hallmark of tenancy is possession, but in this case no physical transfer of possession is relied upon. For transfer to be effective there must be some sort of formal transfer to the transferee, by docket under section 15 or otherwise. The requirement for the executors to furnish to the landlords details of the transferee only arises under section 16 once a transfer has been made. If the tenancy has not been transferred within the relevant period the landlord may terminate the tenancy. If the landlord has allowed someone to remain in occupation notwithstanding the absence of a transfer, the Commission may step in and declare the croft vacant. Under section 23 the landlord is not entitled to re-let the croft except with the consent in writing of the Commission, and the Commission may call upon the landlord to submit proposals for re-letting, failing which they may re-let it themselves. In any event, the power of a majority of trustees to act as a quorum only arises where confirmation has been granted so they could not have been acting under that section, as they purported to do. Any decision purportedly made under s.4 at that time is invalid. At common law executors can act by majority unless their actings are contrary to the interests of the estate (Mackenzie v Mackenzie 1888 13R 507). However here they rely on the Act and the letter implies existence of a confirmation which they did not have.

[13] A straight reading of the letter is indicative of a transfer which is still to be done. The word "as soon as these transfers have been completed" makes that clear. To effect a transfer there must ether be a formal document or a transfer of possession. The furnishing of particulars of a transferee to the landlord under section 11 is not in itself enough to effect a transfer under section 16.

[14] Counsel then referred to page 91 of Agricultural Holding Styles, Gill & Fox, where a sample form of an instrument of transfer of an agricultural holding is to be found, which states that the executor "now being vested in the interest" "hereby transfers the interest.... in terms of section 16 of the Succession (Scotland) Act 1964". It was submitted that in relation to a croft a similar document was required. The pursuers sought to rely on Cumming v Lady Cathcart 1940 ALCR 47 as authority for the proposition that transfer of a tenancy may take place without any formal deed of transfer but in that case there was an application to the Land Court for leave to assign the holding, under the Small Landholders (Scotland) Act 1911, which was granted and was followed by rei interventus in the form of the building of a house by the assignee. In the present case there is only the letter to the landlord.

[15] Turning to his second and third points, counsel submitted that even if the letter could be read as an effective transfer, it was invalid as the executors had not been confirmed to the interest at the time of the letter. Moreover, if a purported transfer could be validated by subsequent confirmation, that confirmation required to be obtained within a year of the death. He submitted that until there is a vested right, by virtue of confirmation, the executors have no power to utilise section 16 of the 1964 Act and if they purport to do so, their actings are ineffective at that time. The right to transfer on intestacy only arises as a result of vesting of the property on confirmation under section 14. Confirmation under that section enables an executor to transfer property under section 16. The effect of section 16(3) is that they require to do so within one year of the death. Even if a subsequent confirmation could validate a transfer, for the transfer to be valid, both the transfer and the confirmation must take place within a year of the death. It is impossible to validate such a transfer after the landlord's right of termination arises one year after the death. Counsel referred to Gill on Agricultural Holdings, 3^rd ed 1997, paragraph 34.01 of which states the following:

"Succession to an agricultural lease on intestacy is a two-stage process, involving, first, a transfer of the deceased's interest under section 16 of the 1964 Act and, second, a completion of the transferee's title to it under section 12 of the 1991 Act. For there to be a valid transfer, the executor must validly confirm to the deceased's interest in the lease, and thereafter transfer it timeously and to an eligible transferee, the "acquirer"."

[16] It was submitted that the process of succession on intestacy to a crofting interest under section 16 of the 1964 Act and section 11 of the 1993 Act, was similar, in that there required to be both a transfer and confirmation of the interest in name of the executors.

[17] Reference was then made to paragraph 34.03 which states as follows:

"If the lease is one which does not expire on the tenant's death, it is essential before section 16 can be operated that the executor should confirm to the deceased's interest in the lease. For this purpose the deceased's interest should be included as a specific item of estate on the inventory. If the executor fails to confirm to the deceased's interest, he has no title to transfer it. The confirmation ought always to precede the transfer, but it has been held that the executor may validly transfer prior to the confirmation. In that case both the transfer and the confirmation were within one year of the death. It is almost certain that such a transfer would be invalid if the subsequent confirmation was obtained outwith the one-year period."

[18] The case referred to in that passage was Garvie's Trustees v Garvie's Tutors 1975 SLT 94. That case related to an interest under the Agricultural Holdings (Scotland) Act 1949. The executors of the deceased gave notice on the landlord that they had transferred the interest to themselves as tutors of the pupil son of the deceased. Six days later they obtained confirmation. The court concluded that the grant of confirmation operated retrospectively to validate the transfer, in which case the notice was good. Counsel then referred to Mackay v Mackay 1914 SC 2000, which had been relied on by the court in Garvie's Trs as authority for the proposition that the defect in title could be cured by confirmation retroactively. In Mackay testamentary trustees granted an assignation before they were confirmed to the estate. The court held that any defect in their title to do so was cured by the subsequent grant of confirmation.

[19] In both Garvie's Trs and Mackay, the executors had been acting under a general conveyance granted to them under a trust disposition and settlement. They thereby acquired a beneficial interest which they could assign to a third party, any defect in title being cured by the confirmation drawing back to the date of the assignation. In the present case they could only obtain any right to dispose of the interest by virtue of the confirmation which vested the interest in them as executors. Prior to confirmation, they had no title. Garvie's Trs is not authority for a general proposition that an executor dative can purport to effect a transfer before confirmation and have it retrospectively validated. In any event, even if it could be done, it would have to be done within the year. In the event that there is not transfer within a year, the landlord's right to terminate under section 16(3) of the 1964 Act arises. If confirmation is not obtained until more than a year after the death, there has not been a valid transfer during that period and the landlord's right to terminate crystallizes and cannot be taken away.

[20] This proposition is supported by Rotherwick's Trs v Hope and ors 1975 SLT 187 in which no disposal was made within the year nor did the executor confirm to the estate. The court concluded that confirmation was "essential before any executor or executrix has a vested interest in the disposal of the lease and before s.16 operates. Without confirmation s. 16 does not apply." The opinion continues: "I also am of opinion that, even if the executrix confirms, the provisions of s.16 (3)(b) insist that any disposal of such an interest by an executrix must be made within one year of the death of the tenant in any case other than those mentioned in ss(1) and (2). Failing such disposal, the landlord may give notice to terminate the lease in the manner set out in s.16 (4)."

[21] The decision in Rotherwick's Trustees was approved by the House of Lords in Morrison Low v Paterson 1985 SC(HL) 49. In that case the landlords had allowed the executors to remain in occupation and pay rent. The parties were under the belief that the previous lease continued but the court held that a new lease constituted by actings had created. Lord Keith of Kinkell said the following: "The deceased made no valid bequest of his interest under the lease such as he might have made under the Agricultural Holdings (Scotland) Act 1949 section 20(1) as amended. Further the executors of the deceased never confirmed to his interest under the lease, and accordingly it never vested in them as it could have done by virtue of the Succession (Scotland) Act 1964, section 14(1), so as to become available for transfer by the executors to one of the persons mentioned in section 16(1) of that Act. Under section 16(3) any such transfer is required to be made, except in special cases of which this is not one, within the period of one year after the death of the deceased. As authority for the proposition that in these circumstances the lease of 1929 had come to an end not later than the expiry of that period, so that there ceased to be any person in right of the tenant's interest under it, counsel for the landlord cited Lord Rotherwick's Trustees v Hope 1975 SLT 187, a decision of Lord Robertson sitting in the Outer House. The correctness of that decision was not questioned by counsel for the appellants, and I see no reason to doubt it. It must, therefore, be accepted that the tenant's interest under the lease of 1929 has indeed come to an end, and that neither the appellants nor any other person are now in right of it."

[22] Under crofting legislation a new lease could not in these circumstances come into existence because the permission of the Crofters Commission is required, so the lease would simply have come to an end.

[23] In Assurabcefoeningen Skild v International Oil Pollution Compensation Fund (no1) 2000 SLT 1333 Lord Gill considered, in different circumstances, the question of whether retrospective extension of a time limit would be competent. Noting that a similar point was considered in the context of succession in Gifford v Buchanan 1983 SLT 613, in relation to an executor's right to apply for an extension of the twelve month period under section 16 of the 1964 Act, he observed that in Gifford "The ratio of the court in refusing the application was that since the landlord had served notice of termination, it was on any view too late for the executor to seek an extension of the period. However, the majority were of the view that the emergence, on the anniversary of the death, of the landlord's right to terminate the lease extinguished the executor's right to transfer the tenant's interest. Therefore the court could not resuscitate the executor's right by granting any subsequent application for an extension."

[24] In Gifford v Buchanan 1983 SLT 613 the executors had not disposed of the interest within a year of the death and the landlord served a notice to terminate in terms of section 16(3). The executors then sought an extension of the period to enable them to dispose of the interest under section 16(2). The Court concluded that the application was incompetent once the landlord had served a notice of termination. However, the majority of the court, as Lord Gill noted in the Skild case, concluded that in any event the application was incompetent in not being brought within one year of the death, since at that point the landlord's right to terminate emerged under section 16(3).

[25] In the present case, confirmation was only obtained after the period of one year. The purported transfer therefore remained invalid at the anniversary of the death and the landlord's right to terminate emerged on the operation of section 16(3). Once that had happened, it was too late for the executors to seek to validate it by retroactive confirmation, even assuming that such a step were competent in the first place.

Submissions for the pursuers

[26] Counsel for the pursuers submitted that the proper course in the present case was to allow a proof before answer. Taking the pursuer's averments pro veritate, it can be said that the executors did take action within on year of the death to transfer the interest under the lease. The pleadings contain averments of a decision being taken and this was followed by the letter to the landlord furnishing particulars of the transferee. As Garvie's Trs illustrates, the fact that the executors at the date of nominating her were unconfirmed is not fatal to the validity of the transfer. On the facts here before any action is taken by the landlord to bring the lease to an end confirmation was obtained. Any objection which there might have been based on defect in title was cured by the confirmation retroactively to the date of intimation of the transfer of Josephine.

[27] The notice given to the landlord is, on a fair reading, plainly intended to bring about an immediate transfer of the interest to Josephine. Fairly read it is the nomination of a new tenant to the landlord with the intention that the landlord will, as required, give particulars to the commission. The letter does seem to contemplate some action on the part of the landlord rather than some uncompleted act on the part of the executors. When one understand the scheme one can understand why the words were used. The matter which is important is the nomination to the tenancy of the croft.

[28] In Garvie's Trs the terms of the notice sent to the landlord were such that the executors were giving notice that with immediate effect they had transferred an interest in the lease to the tutors. There does not appear to have been any separate document. All that is required is something which fairly construed can be seen as intending to operate as a transference of the subjects, which is the plain intention and effect of the letter here. The whole exercise was intended to be the method of transferring the tenancy to Josephine.

[29] The question of whether a transfer has been effected depends not just on section 16 but on section 11 of the 1993 Act. Under section 11(1) it is for the executors to select one of an eligible class and, having notified the landlord of the nominee, the landlord has no alternative but to accept and to notify the commission who then amend their records. If the executor has not nominated within three months the landlord must notify the Commission, so they have a role to play even in the first three months. They can advertise to get people who would be eligible to come forward and make a claim, and the Commission may after six months nominate a successor, subject to certain requirements. Section 11(7) provides that the nomination process itself by commission is enough to effect a transfer. It is a simple procedure and meant to be so.

[30] As to the method by which transfer under section 16 was achieved in the present case, counsel submitted that properly understood s16(2) confers on executors the power to select a successor to the late tenant from amongst an eligible class. In this case, following upon selection, the pursuers instructed that a letter be written giving the landlord particulars of the person selected as successor. In a question with the landlord there cannot be a completed transfer of the deceased's interest until intimation to the landlord by the executor of the particulars of the person to whom the executors have decided the tenancy should be transferred. On receiving these particulars the landlord is bound to accept the nominated person as tenant and from that moment it can be said there has been a transfer of the tenancy to the nominated person. The executors are not themselves tenants they simply have this power to select, so the pursuers have set forth a relevant case that there has been a transfer of the tenancy to Josephine and the legal moment of transfer was 6 Feb 2007.

[31] Cumming v Lady Cathcart's Trs shows that the transfer of a tenancy may take place without any formal deed of transfer. The method recommended in Gill & Fox is a practice which might usefully be followed but it is simply a method of bringing about a result. What is done here is sufficient in its terms to effect the transfer. Counsel accepted that there must be some sort of step intended to operate as a transfer but that it was satisfied by the terms in which the letter was drafted.

[32] Turning to the defender's proposition that an executor cannot effect a transfer at all until after confirmation, counsel submitted that executors dative do, by reason of their appointment, acquire a right to administer the estate. To ingather estate the executor must take the additional step of confirmation, but that is not the moment he acquires rights. The appointment gives him the sole right to apply for confirmation. In substance that is no different to the situation in Garvie's Trs. There was a right which had to be followed up by the further step of confirmation. The position of executor dative is in this respect no different from that of a trustee.

[33] So far as the authorities are concerned the present case unlike Rotherwick's trs, Morrison Low or Gifford, involves a transfer or disposal within one year of the death. In those three cases there was no disposal within one year and in at least two there was a failure to confirm to the tenant's interest. However, here, as in Garvie's Trs, there has been a transfer by sufficient actings before confirmation. The only difference is that in this case confirmation was obtained more than one year after the death of the tenant.

[34] Rotherwick's Trustees, was a case in which there had never at any time been confirmation and that was seen as fatal, but it is not authority for the proposition that confirmation has to be obtained within one year. It appears to have been thought that there would be a difference in result if there had been some action within the year and a confirmation by the time the matter came to court. In Garvie's Trs it was unnecessary to decide whether confirmation, if obtained more than one year after the death, would have made any difference to the result. It is not authority for the proposition that the curative effect of subsequent confirmation is restricted to cases where the confirmation is granted within a year of the death.

[35] The view expressed in Gill on Agricultural Holdings is not supported by authority and is unsound in law. If there is a transfer within one year there is no reason in principle or basis in authority for denying validity to that transfer in the situation where the executor is granted confirmation before the landlord takes action to bring an end to the lease.

[36] Counsel indicated that he was not seeking to doubt the correctness of Gifford v Buchanan. The ratio there was that actings on the part of the representatives of the late tenant after service of a notice cannot be relied upon to defeat the notice that has been served. It is not authority for the proposition that if there is a disposal during the year confirmation must also follow within the year for it to validate the disposal.

[37] It is correct to focus on whether there has been a disposal rather than focus on the date of confirmation. The plain intention of section 16(3) is to provide for the case in which there has been no disposal within the period allowed by law, and not where there has in fact been a disposal within that period by unconfirmed executors. What the defenders are seeking to do is to treat these two situations in the same way, but the cases do not vouch the proposition that a disposal within the first year is in no better position as a matter of law than a case in which there has been no disposal at all during that period. In the former case confirmation before notice of termination can operate to cure any objection to the disposal based on lack of confirmation.

Response for the defenders

[38] Counsel submitted that the pursuers analysis of section 16 is flawed. His use of the word disposal regarding what the executors did is wrong. Before confirmation they did not have any real right in this property - it was effectively a conditional transfer which was invalid until confirmation was obtained. What they did at that stage could not be described as a disposal because they had nothing to give. As Rotherwick's Trustees said, unless there was confirmation in the year section 16 did not apply, in which case the executors could not have transferred or disposed of the interest in terms of section 16(2) within the year. There cannot be a disposal of something without a vested right. The problem is highlighted in Meston on the Succession (Scotland) Act 5^th Ed p130 where he observes:

"One particular difficulty facing executors in connection with agricultural leases shows up in acute form a general problem of Scots Law. It is not at all clear in Scotland who owns the deceased's property between the date of his death and the appointment and confirmation of his executor."

[39] The provision in s11(7) that nomination by the Commission of any person shall be sufficient to transfer the interest to that person is needed because the Commission have no right in the interest. This supports the argument that you need an actual transfer and that the letter is not good enough.

Discussion and decision

[40] The combined effect of sections 14 and 16 of the 1964 Act is that an interest under a lease can only be transferred by an executor who obtains confirmation. Section 15 provides that the transfer can be effected by a docket on the confirmation. That is not the only method by which transfer can be achieved but the fact that it is provided for supports the contention that some act or deed of transfer is required and that intimation alone of the particulars of a transferee under section 16(2) would not be sufficient for the purpose.

[41] Section 11 applies only where the tenancy is transferred under section 16. It requires the landlord to be notified of the particulars of the transferee "as soon as may be". Logically, it follows after the transfer has been made. Notification under section 11 completes the transfer. The effect of notification is that the landlord must accept the transferee as tenant. It can be seen therefore that there is in fact a two stage process involved: first, transfer under section 16, which may be effected by a docket on the confirmation or otherwise; and second, intimation under section 11 which completes the transfer. The intimation is undoubtedly an essential part of the process, as one would expect, and that is seen by section 11(4) which enables the Commission to step in if particulars of a transferee have not been furnished. However, although intimation of particulars under section 11 completes or validates the transfer, it is not in my view a method by which transfer is in fact effected. It is the second part of a two stage process, and both stages are required for a transfer to be valid.

[42] It was suggested that in Garvie's Trs there did not seem to be a separate letter or deed of transfer and that this supported the pursuers' position. However, I do not think that such a conclusion can properly be drawn. The issue in Garvie's Trs was not whether an act or deed of transfer had taken place. The first point was about the timing of the confirmation. The second point was that the intimation of particulars had been made by the transferor not the transferee as required under the agricultural holdings legislation. It is to be noted that the letter of intimation indicated in unequivocal terms that there had in fact been a transfer and it was not necessary for the court to inquire into how and in what circumstances that had been achieved. It is true that in Cumming the court proceeded on the basis that a formal assignation was not necessary, but that was in circumstances where, on the request of the tenant, an application for leave to assign to a named individual had been granted by the Land Court. The court noted that the granting of leave to assign was commonly seen as the final homologation of an agreement already concluded between the parties.

[43] Where the Commission step in to make a transfer under section 11(4), they may nominate as successor any qualifying person who has intimated a desire to have the lease transferred to him. Section 11(7) provides that the nomination of the Commission will transfer the interest. I do not think that this assists the pursuers' argument. First of all because under section 11(6) the Commission must give notice to the landlord of any person nominated by them and the landlord must accept that person as successor to the tenancy: the process under these provisions is accordingly still a two stage one. Secondly, because the interest does not vest in the Commission and a statutory requirement that the nomination suffices to transfer the interest is required to address that deficiency.

[44] The power to transfer rests in the executor and, although intimation to the landlord completes it, it is something of a technicality since the landlord must accept the transferee. Notification must be made by the landlord to the Commission but this is an administrative matter. The validity of a transfer at the hands of the executor depends on the actions of the executors not of the landlord. The executor is responsible for both stages: the transfer and the notification. Apart from the requirement to notify the Commission for administrative purposes, the role of the landlord is a passive one. The letter 6/1 of process envisages something quite different. It does not state that there has been a transfer, in fact it appears to proceed on the basis that transfer has yet to take place. It is at odds with pursuers' position on record and in argument that the letter effected an immediate transfer of the interest. I do not think that any very complicated procedure is required to satisfy the first step. However, I do think that there must be something which can fairly and properly be read as importing an actual transfer. I cannot read the letter as doing so. Either possession must be transferred or there must be some document, however informal, transferring the interest. Such a document is not present and I hold that there has not been a transfer under section 16.

[45] If I am wrong about that and the letter can be seen as a purported transfer, the question arises whether such a purported transfer can be validated by subsequent confirmation. From the terms of the statutory provisions and the case of Garvie's Trs I have reached the view that a transfer by unconfirmed executors may be validated by subsequent confirmation, but only if that confirmation is obtained within a year of the death. Under section 11(3), if the interest is not disposed of according to law within a year, the landlord is entitled to terminate the lease. The interest can only be disposed of according to law by a confirmed executor. If confirmation does not take place within the year there there has not been a disposal according to law within the period required. The landlord's right to terminate thereupon arises and cannot be defeated by a subsequent confirmation, even where notice to terminate has not yet been served. I will accordingly sustain the defender's first plea in law and dismiss the action.