SHERIFFDOM OF TAYSIDE CENTRAL AND FIFE AT PERTH

Case ref.: A198/08 JUDGMENT OF SHERIFF DEREK D LIVINGSTON

In the cause

MRS EDNA JEAN NELSON, residing at The Beild, High Street, Kinross, and MRS HELEN JOHNSTON NELSON, residing at Craigton House, Cleish, By Kinross.

PURSUERS

Against

MESSRS R AND J KINNAIRD, a firm formed under the Law of Scotland and having a place of business at Findatie Farm, Kinross, KY13 7LZ

DEFENDERS

Act: Sutherland

Alt: Lean

PERTH 2011 The Sheriff having resumed consideration of the cause finds the following facts admitted or proved.

FINDINGS IN FACT

1. The Pursuers are Mrs Edna Jean Nelson residing at The Bield, High Street, Kinross and Mrs Helen Johnston Nelson residing at Craigton House, Cleish, by Kinross.

2. The Defenders are Messrs. R & J Kinnaird a firm formed under the Law of Scotland and having a place of business at Findatie Farm, Kinross, KY13 7LY.

3. The Pursuer are the heritable proprietors of the two fields identified as being fields NT1789/7318 (the larger field) and field NT1789/0003 (the smaller field) set out in the documents contained in no.5/1 of process which consist of 49.342 acres at Findatie, Kinross. They became the heritable proprietors of the subjects in question on 30^th January 2008. The area of ground extends to 13 hectares and 36 decimal or one hundredth parts of a hectare (13.36ha) at Findatie, in the Parish of Port Moak and County of Kinross and forming the Westmost of those fields or enclosures at Findatie being the subjects more particularly described in, disponed by and shown in pink on the plan annexed and executed as relative to the Lease by the Pursuers' predecessors in title Alexander Nelson and John Nelson in favour of the Defenders and all and whole that area of ground extending to 6 hectares and 29 decimal or one hundredth parts of a hectare (6.29 ha) at Findatie in the Parish of Port Moak in the County of Kinross forming the eastmost of those two fields or enclosures at Findatie aforesaid being the subjects more particularly described in, disponed by and shown coloured pink on the plan annexed and executed as relative to the Lease by the Pursuers' predecessors in title Alexander Nelson and John Nelson (the Nelsons) in favour of Defenders. The largest of the fields has a reference number NT/17685/99169 and the smaller of the two fields has a reference number NT/17939/99221. During the course of the Defender occupation of the land the reference numbers altered. The Defenders own the neighbouring farm known as Findatie Farm. It borders these fields.

4. The Defenders agreed a lease of these fields in March 1995 from the Nelsons who were then the heritable proprietors. They had acquired ownership in June 1983 and remained so until the present Pursuers became the heritable proprietors in 2008.

5. The initial period of let was from about 6^th March 1995 until 30^th December 1995. The terms of that lease were set out in writing by way of a holograph missive from JL Anderson, Solicitors as agents for the Nelsons and an acceptance by Ross Kinnaird on behalf of the Defenders. Inter alia it was agreed there would be a seasonal grazing let. Negotiations had started in about January of that year with Alexander Nelson representing the Nelsons and Ross Kinnaird the defenders.

6. The said lease was renewed on the same terms and conditions from 1^st January 1996 terminating each year on 30^th December and thereafter recommencing on the same terms and conditions on the 1^st of January of the following year. This continued until 30th December 2006.

7. Each year a brief conversation took place involving generally Alexander Nelson and Ross Kinnaird to the effect that there would be a fresh lease on the same and conditions as before. This conversation took place generally in November when Ross Kinnaird would pay Alexander Nelson the second instalment of rent for the year. The first instalment of rent in the year was usually paid in March.

8. In November 2006 no such agreement was reached. The Defenders had fallen into arrears of rent and the Pursuers were becoming disenchanted with the arrangement.

9. In early 2007 the Defenders were asked to vacate the two fields by John Nelson. Ross Kinnaird asked John Nelson to allow them to stay until the end of the year ie 30^th December 2007. The Pursuers agreed to this.

10. No agreement was reached by the parties in relation to the Defenders occupying the fields in 2008.

11. Following upon the Pursuers becoming owners of the subjects in 2008 they noted that the Defenders had sheep grazing on the subjects. The Defenders were asked to remove the sheep and initially did so and almost immediately reinstated them.

12. The Defenders shortly thereafter claimed that they had an agricultural lease and thus had security of tenure.

13. The B9097 road runs past the fields which were let by the Nelsons to the Defenders. If driving along the B9097 a clear view can be obtained of what is in the fields. Both of the Nelsons passed the fields regularly by car or van and could see into the fields.

14. A seasonal grazing let is one which is for less than 365 days. Its purpose is for grazing rather than crop growing.

15. Clause 4 of the missive of let provides, "The land shall be occupied by you for the grazing of cattle, horses, ponies and sheep and/or for mowing only and for no other purposes whatsoever. In particular no cultivation shall take place."

16. Clause 5 provides, "You accept all lands, buildings, hedges, fences and fixed equipment on the subjects as satisfactory for your purposes. You will not call upon the proprietors to carry out any repairs of whatsoever nature. You will be obliged to keep all lands, buildings, hedges, fences and fixed equipment in good condition (and in the case of hedges and fences in stockproof condition) throughout the period of let and carry out all or any necessary repairs of whatsoever nature."

17. Clause 15 of that lease states, "You undertake at 30^th December 1995 to flit and move your whole goods, gear or animal stock as appropriate from the said subjects without any process of law and to leave the said subjects clear and redd and in every way tenantable after your waygoing."

18. It was further agreed orally at the time the lease was entered into that the Defenders would plough and then could grow a crop of spring barley on the larger field with that being undersown with grass seed. Without these crops being planted the larger field would not have been suitable for grazing having had potatoes on it the year before and these potatoes having been lifted and there being no crops and no grass on the field. The Defenders carried out this work in 1995 and similar work in the smaller field, with the Nelsons acquiescence in 1996.

19. The growing of the barley and the under sowing of the grass seed in the larger and smaller fields in 1995 and 1996 respectively contradicted the terms of the written lease entered into by the parties. The purpose of that growth was to substantially increase the quality of the grass for grazing in the two fields.

20. As a matter of course at least one of Alexander Nelson and John Nelson would check the fields let on 30^th December and sometimes on 31^st December each year when they found them to be clear of livestock and crops.

21. Both Alexander Nelson and John Nelson regularly inspected the fields. They viewed them several times a week. At no time other than in 1995 and 1996 did they see any crops growing in the fields when they viewed the spring barley planted to improve the grass crop for grazing purposes.

22. Alexander Nelson was experienced in agricultural matters and is well aware of the difference between a grazing lease and an agricultural lease.

23. The Defenders erected a slurry tank which is a large metal tank which holds waste from dairy cows at least partly on the subjects let in 2006.

24. There is a farm subsidy system which involved applications being made by use of an integrated agricultural census sheet (an IACS form) which record what land a farmer occupies, what use he makes of the land and the subsidies he is claiming on the land.

25. There are random checks made by the Government body concerned (The Rural Payments and Inspections Directorate) regarding the accuracy of the information contained in these forms. No check was ever made in relation to the forms submitted by the Defenders.

26. The Defenders submitted an IACS form in 1995 when they made a claim regarding spring barley being grown in the larger field and being undersown with grass.

27. An IACS form was submitted for 1997 by the Defenders claiming that winter wheat was grown in the smaller field.

28. An IACS forms submitted by the Defenders for 1998, 1999 and 2000 claimed that spring barley was being grown in the smaller field.

29. At no time did the Nelsons agree or acquiesce to the fields let to the Defenders being used for anything other than grazing purposes.

Finds In Fact and Law

30. It has been proven on the balance of probabilities that the defenders remained in the subjects let for no more than 364 days per annum vacating same by December 30^th of each year.

31. It has been proven on the balance of probabilities that the defenders operated the fields let to them for grazing purposes only and that in any event they at no time had the consent or acquiescence of the Nelsons to do otherwise.

THEREFORE

1. Sustains the Pursuers first plea in law subject to deletion therefrom of the words "and interdict";

2. Repels the second and third pleas in law for the Pursuers and the Defenders pleas in law in the principal action and sustains the Pursuers third plea in law in the counterclaim and repels the Defenders first plea in law in the counterclaim and the Pursuers first two pleas in law in the counterclaim;

3. Grants decree as first, second, fourth, fifth and seventh craved for the Pursuers;

4. Dismisses craves three and six for the Pursuers and dismisses the counterclaim;

5. Finds the Defenders liable to the Pursuers in the expenses of this action; allows an account thereof to be given in and remits the same when lodged to the Auditor of Court to tax and to report.

INTRODUCTION

1. In 1995 Alexander Nelson and John Nelson who are the respective spouses of the present Pursuers let two fields at Findatie in Perthshire to the Defenders in this case. A missive (number 5/2 of process) was entered into by solicitors acting on behalf of the Nelsons and accepted by the Defenders and in terms of that missive what was being provided was a grazing let of the two fields which bounded the Defenders own land at Findatie. The Kinnairds accepted the terms of the missive. It was agreed between all parties that the essential elements of the dispute here were whether or not the two fields were let by the Nelsons to the Defenders for grazing for less than a year at a time in which case there was no security of tenure or whether alternatively the let had been for agricultural purposes and/or for at least an uninterrupted year in which case security of tenure applied. As unfortunately is very prevalent these days this proof took place over a number of days separated by lengthy periods starting on 11^th December 2009 for one day, followed by the proof being discharged at the adjourned diet due to new information coming to light some two months later, recommencing on 10^th August 2010, continuing to 11^th August 2010 and then with evidence being concluded on 12^th October 2010. I heard submissions from parties on 2^nd November 2010.

THE LAW

2. Both parties accepted that matters were governed by the Agricultural Holdings (Scotland) Act 1991. In short if the factual situation was as contended by the Defenders the Pursuers action would fail and the Defenders would be entitled to decree in terms of their counterclaim. The Defenders position was that they had planted crops on the fields from the inception of the lease for agricultural purposes, no discussions had ever taken place regarding the renewal of the lease, let alone agreement and that they had occupied the subjects permanently rather than vacating same annually for at least a day at the end of December. The Pursuers in contrast argued the parties actings essentially consisted of following the terms of the written missive entered into in 1995 with that being renewed each year and the Defenders had vacated the subjects at the end of December each year. The Pursuers accepted there had been crop growing in 1995 and 1996 but argued this was ancillary to the seasonal grazing lets entered into. I was also referred to the follow cases by parties.

Sansom v Chalmers 1965 SCLR App 135

Dallas v Muir SCLR(1) 78

Bell v Inkersall Investments Ltd 2006 SLT Reports 626

Alexander Bishop Loudon v James Hamilton and Others [2010] CSIH 36

Morrison-Low v Paterson No 3 1985 S.C. (H.L.) 49

Scottish Youth Hostels Association v Paterson, Scotland Land Court 21^st August 2007

MacKenzie v Laird 1959 SC 266

In addition parties also referred to Lord Gills book "The Law of Agricultural Holdings in Scotland" Third Edition Chapter 4.

THE AGRICULTURAL HOLDINGS (SCOTLAND) ACT 1991

3. Section 1 of the 1991 Act provided inter alia as follows.

"(1) In this Act (except sections 68 to 72) "agricultural holding" means the aggregate of the agricultural land comprised in a lease, not being a lease under which the land is let to the tenant during his continuance in any office, appointment or employment held under the landlord."

Section 2 was in force when the parties entered into the written lease in this case. It provided inter alia as follows.

"(1) Subject to subsection (2) below, where, under a lease entered into on or after 1^st November 1948, land is let for use a agricultural land for a shorter period than from year to year, and the circumstances are such that if the lease were from year to year the land would be an agricultural holding, then, unless the letting was approved by the Secretary of State before the lease was entered into, the lease shall take effect, with the necessary modifications, as if it were a lease of the land from year to year.

(2) Subsection (1) above shall not apply to -

(b) a lease entered into (whether or not the lease expressly so provides) in contemplation of the use of the land only for grazing or mowing during some specified period of the year ..."

Section 3 provides as follows.

"Notwithstanding any agreement or any provision in the lease to the contrary, the tenancy of an agricultural holding shall not come to an end on the termination of the stipulated endurance of the lease, but shall be continued in force by tacit relocation for another year and thereafter from year to year, unless notice to quit has been given by the landlord or notice of intention to quit has been given by the tenant."

Section 85(1) provides inter alia that-

"lease" means a letting of land for a term of years, or for lives, or for lives and years, or from year to year."

Regulation 2 of the Agricultural Holdings (Scotland) Act 2003 (Commencement No.3, Transitional and Savings Provisions) Order 2003 provides

2 - (1) any lease of land to which Section 2(2)(a) of the 1991 Act applies on 27^th November 2003 shall continue to have effect until the expiry of that lease as if -

(a) that section had not been repealed by Section 1(3) of 2003 Act, and

(b) Section 3 of the 2003 Act and any other provisions of that Act would have had effect in relation to that land had not commenced.

THE AGREEMENT BETWEEN THE NELSONS AND THE DEFENDERS

4. The original agreement entered into between the Nelsons and the Defenders contained a number of provisions some of which it may be helpful to refer to. The offer commences,

"On behalf of our clients Alexander Nelson and John Nelson proprietors of two fields or enclosures at Findaty (hereinafter called "the Proprietors") we hereby offer to let to you (but excluding legatees, sub-tenants, assignees, creditors and manager for creditors) on a Seasonal Grazings Lease [my bold] those two fields or enclosures at Findaty in the Parish of Portmoak and Country of Kinross believed to extend to 49.342 acres or thereby and which are shown coloured pink on the plan annexed and signed as relative hereto and that on the following terms and conditions: ...

...2 "The period of let will be from the date of entry hereunder to 30 December 1995.

3 The rental shall be Four Thousand Eight Hundred Pounds (£4,800) Sterling payable as to one half thereof at the date of entry and the remaining one half thereof on 1^st July 1995.

4 The land will be occupied by you for the grazing of cattle, horses, ponies and sheep and/or for mowing only and for no other purposes whatsoever. In particular no cultivation shall take place.

15. You undertake at 30^th December 1995 to flit and remove your whole goods, hear, or animal stock as appropriate from the said subjects without any process of law and to leave the said subjects clear and redd and in every way tenantable after your waygoing. "

EVIDENCE

5. In the course of this proof I heard evidence from the following witnesses.

1. The First Named Pursuer.

2. The Second Named Pursuer.

3. Alexander Nelson.

4. John Nelson.

5. Euan David Lawrie.

6. Thomas Ross Kinnaird.

7. James Ross Kinnaird.

8. George Thomas Hepburn.

THE PURSUERS

6. The evidence of the Pursuers was in short compass and was not seriously disputed. It basically amounted to the fact that they were the owners of the two fields which were the subject matter of the disputed lease and they had become the owners of same in 30^th January 2008 having had them transferred to them by Alexander and John Nelson who are the husbands of Edna Jean Nelson and Helen Nelson respectively.

7. I formed the impression with both these witnesses that they had no first hand knowledge of what had occurred over the years and their evidence really simply came down to the fact that they are currently heritable proprietors of these fields but their ownership had only commenced on 30^th January 2008.

ALEXANDER NELSON

8. The next witness to give evidence was Mr Alexander Nelson. He explained in his evidence that he had 13 years experience of farming and 4 years of letting. He was well aware of the difference between a field occupied by farm animals and one upon which crops are grown and the implications i.e. one is a grazing lease generally whilst the latter will be an agricultural lease. In 1995 following upon the termination of an earlier lease of the two fields he had been approached by Mr Ross Kinnaird on behalf of the Defenders seeking a grazing lease. The approach had taken place in January 1995 and Alexander Nelson and his brother John agreed to provide a grazing lease to the Defenders which was signed by the Kinnairds following upon an offer drafted by the Nelsons solicitors J L Anderson. The missive of let in question has been lodged as number 5/2 of process.

9. He explained that the concept of seasonal grazing meant that the grazing must be for less than 365 days and the land must be clear for at least one day in the year. This lease was until 30^th December 1995. He was directed to clause 4 of the lease which provides for no cultivation. He was also directed to various other parts of the lease including clause 15 regarding leaving at the ish date. His position was that it was clear that this was a grazing lease and that the purpose of use of the land was for grazing. He was well aware that a grazing lease meant that no security of tenure could be obtained by the tenants. His evidence was that both sides were quite clear as to what was being agreed. He had no doubt at all that someone from a farming background would understand the implications of a grazing lease and the lack of security that that provides. Negotiations had taken place involving him and his brother and Ross Kinnaird.

10. Mr Nelson then gave evidence about agreements which appeared to be outwith the terms of the missive of let. He explained that the Defenders had been extremely anxious to obtain entry but the larger of the fields was not at the time suitable for grazing and it was agreed that the Defenders would in the spring of 1995 plough the larger of the two fields and sow spring barley and undersow with grass seeds and then harvest the spring barley in August/September of 1995 and then use it for grazing for the latter part of the season. This was very much from his perspective ancillary to the main purpose of grazing and grazing could not have taken place without this happening since the larger field did not have a reasonable quality of grass. The Defenders had separately cropped the smaller field to grass in 1996. They had done this voluntarily with a view to improving the grass for their dairy cattle and did so with the Nelsons agreement.

11. Mr Nelson was adamant that he and his brother kept a close eye on matters. His brother drove a haulage lorry for the firm and went past almost daily whilst he often drove past the fields himself. The B9097 road went past the fields and when driving either a car or a lorry the fields could be viewed.

12. Mr Nelson explained that the inevitable practice of the brothers was to check on 30^th December that the fields were clear. Discussions invariably took place in November when Ross Kinnaird paid the second instalment of rent for the year. Mr Nelson's evidence was that Ross Kinnaird would ask him about the following year and that he would be told that they could continue on the fields as before so long as the rent was paid on time. Neither side felt it was necessary to put anything in writing. He trusted Mr Kinnaird and had thought that Mr Kinnaird trusted him. The same rent was charged throughout the time the defenders occupied the fields with the Nelsons' agreement. In his view this was a seasonal grazing lease and everyone was clear about matters. Until 2008 there was never any suggestion that the Defenders considered they had an agricultural tenancy. Each year on 30^th December the fields were empty of livestock and he would also check from time to time on 31^st December when they would also be empty. Had there been an agricultural lease there would have been no need to empty the fields. Leaving the fields empty was consistent with a grazing let. Equally had there been crops growing he and his brother John would have had noticed this. If they had seen crops they would have questioned this.

13. He stated that although he was aware of a slurry tank having been built by the Defenders he had not realised for some years that the tank was on their land. No permission was granted by the Nelsons and it was doubtful that they would have granted permission. The exact location of the slurry tank meant it was unclear as to whose land it was on since it was round about the boundary. It was a large metal tank and he confirmed that slurry would in his view not necessarily indicate agricultural use.

14. He was also asked about Integrated Agricultural Census Sheets (IACS forms). At this point in his evidence it was agreed on all sides that these are forms which are completed in May of each year and give details of the use of the land for the purposes of subsidies. He believed that there were only random checks on IACS forms. He did speak to Mr McTurk at the Government Agency in question who is responsible for processing these forms and Mr McTurk confirmed there had been no physical check made of the property and no visit in relation to the forms submitted by the Defenders relative to the fields. Mr McTurk had told him that there had been a telephone call from Robert Kinnaird asking what was in the fields in 1997, 1998, 1999 and 2000 and this all had come after the parties dispute had started in 2008. He had received this call from the Defenders before Mr Nelson had been in touch. Mr Nelson did say he would have expected copies of IACS forms to be kept relative to each claim.

15. In cross examination Mr Nelson accepted that he had no recent practical farming experience since 1970 and he was unaware of when the IACS system had started although he thought it was between about 1993 and 1995. He had originally suggested that he and his brother had become owners in 1994 but he was referred to the disposition number 5/1 of process which showed that they had in fact taken entry at 8^th June 1983. He explained that he had simply made an error here and had mentally been thinking that they had become owners after the lease with the previous tenants had expired in 1994. He was strongly cross examined on this point and it was put to him that he was being selective with his evidence. He was quite clear that the lease was a grazing lease although he accepted that clause 4 of the lease entered to by the parties did not entirely reflect the true position in that the Defenders had offered to plough, sow and under sow with a view to having grass for grazing.

16. He was somewhat defensive at times using terms such as, "If you wish to pick faults". He was directed to the Defenders Inventory of Productions and in particular the letter signed on 16^th July 2008 by Thomas McTurk. In that there were various abbreviations used for what the Defenders had claimed in their IACS forms to have been growing. He explained that SB referred to Spring Barley whilst TGRS referred to Temporary Grazing, OTH referred to other and RGR constituted rough grazing. He explained that spring barley is grown in the spring but possibly counter intuitively was also stated that winter wheat is grown in the autumn. The 1997 entry indicated on the face of it there was winter wheat in the smaller field and between 1998 and 2000 inclusive there was spring barley grown. He was unaware what would happen if a form was filled in inaccurately. He stated he had only become aware of the slurry tank some two years after it had been built. It was pointed out to him that the fact he was unaware of that for two years indicated that he may be could not see as much as he thought he could. His position was however that it was at the far end of the area let and was not easily seen. He was adamant that each year the lease was renewed on the same terms with the exception of the first year's lease which had run from March until December 30^th with the leases thereafter running from 1^st January to 30^th December. He was clear that the fields had been examined on 30^th December of each year and stated that if the court heard evidence that there had been crops in the smaller field then that would be wrong.

17. In re-examination he stated that spring barley had been planted in the small field in 1996 by the Defenders but he never saw crops otherwise. There were no animals in the fields on 30^th December. He trusted Mr Kinnaird but wished to verify matters. The fields were checked on other dates as well.

18. It is my opinion that Mr Nelson gave his evidence in a clear confident manner. Whilst he was on occasions a little defensive I did feel that was rather more due to annoyance at the situation and finding himself in court when he felt he had behaved in a perfectly honest straightforward manner and that his trust had been betrayed. I did not consider the issue of when he became an owner to be anything other than error made by him. It certainly seemed to me to have absolutely no bearing on the case and indeed I did rather feel that there was far too much time spent on what was clearly in my view a simple error which had no bearing on matters. It is my view that this witness was telling the truth as he recalled it. I was certainly perfectly clear that he understood the implications of allowing crop growing on the subjects and of having the fields left vacant for 1 day a year.

JOHN NELSON

19. The second witness to give evidence for the Pursuers was John Nelson the brother of Alexander Nelson and former joint owner with Alexander Nelson. He gave evidence that he had experience in farming from childhood and had been a farmer for 7 years before going into haulage. He stated that he would recognise the difference between a field with crops and one without. From his evidence it was clear that he was very much the secondary person in the negotiations with Ross Kinnaird and much of the information he had was hearsay from his brother Alexander. He was aware of the difference between a grazing lease and a full agricultural lease and had the Defenders asked for a full agricultural lease that would have been refused. He was also aware of the fact that the grazing lease, to avoid becoming a full lease, could be for no more than 364 days per annum. He had agreed with the Kinnairds that they could sow barley in the larger field and it could be grazed by the end of September once the straw had been removed. This was due to the fact that the big field was bare. It was Sandy who attended at the meetings with the solicitors. Both of them had checked the fields regularly when passing and he and Sandy would normally check on the 30^th of December of each year. In some years only one of them checked and in other years both did so. They were checking that the property had been vacated. The arrangements regarding the following year took place in November each year when Ross Kinnaird would speak to Sandy Nelson. He had trusted Ross and Jimmy Kinnaird. He had known them for a long time. Each year's discussions were based upon the lease as per the previous year other than after the first year the lease ran from January where as in the first year it had run from March. The field was always clear on the 30^th of December when inspected and also on 31^st.

20. In 1996 John became aware that the Defenders had cropped the small field and undersowed it with young grass. It was cropped with barley. This however was not unexpected and had according to him been discussed previously at the very first discussions due to the fact that the grass that was in the small field was of poor quality.

21. By 2006 the Pursuers were getting irritated about late rent payments. In 2006 there had been a discussion with Ross Kinnaird and no agreement had been reached regarding a lease for 2007. In April 2007 John had asked Ross Kinnaird to remove. Mr Kinnaird had pleaded to stay and stated that he had a problem with his dairy cattle and he wouldn't have grass for them without use of the field and it was agreed that they could stay until the end of 2007. Mr Kinnaird stated they could do what they wanted then. At no time had the Defenders suggested they had an agricultural tenancy. There was no attempt to negotiate a fresh lease for 2008 and at the beginning of 2008 the fields were transferred to the current Pursuers. A cheque was also sent in 2008 for rent which was returned.

22. He was asked about the slurry store which had been erected in about 2006. He had noticed it and could see if from the road but not clearly. He had not realised for a while that it was possibly built on their land. No permission had been sought.

23. In cross examination he accepted he knew of George Hepburn and it was put to him that according to George Hepburn's diary various crops were grown. He simply thought that this was wrong. He accepted there might have been some electric wire at the fence between the two fields but did not consider that would have stopped cattle. He disputed that there was silage bails in the field or that these were easily visible from the main road.

24. My view about this witness was that on balance he was trying to tell the truth but his dealings generally were not personal and it seemed that Alexander Nelson was the more important of the two witnesses. I did however accept his position that he had not noted crops growing when he had been inspecting and that he had viewed the fields regularly both during the course of the year and also at the end of the year.

EUAN LAWRIE

25. The third witness to give evidence was Euan Lawrie. He had been a farmer since he left school. He had previously worked for the Defenders between about 1996 and 2001 and had left them on good terms. His position was that from his recollection the big field was always planted with grass and he did not think this had ever changed up until his departure from working for the Defenders. In the small field there was barley and grass. Grazing took place in this in the years up to when he left. He confirmed that undersowing barley was a common way to make grass. He could not remember animals on the fields but thought there probably was some. He was certain there were no animals on 30^th and 31^st December of each year although he did not particularly recall emptying the fields in these years. There were never any bales left in the fields and he accepted that if someone was driving along the road travelling in lorry or truck that person could see what was in the fields. There was a fence between the two fields but he could not remember the condition.

26. In cross examination he stated that he had started work with the Defenders when he was sixteen. He did "a bit of everything" when he started but for the last year or two he was more a dairy man. He knew George Hepburn. He was referred to George Hepburns diary and accepted that on the face of it that showed on 19^th March 1997 that what was being supplied was fertiliser to a wheat crop with a second application of fertiliser on 14^th April 1997 and that that wheat crop would have been grown towards the end of 1996. Mr Hepburn had carried out stock work but mainly drove the tractor. He was of the view that silage would have been visible from the road. He was clear that there would have been sheep in the fields over the five years throughout the winter. He then indicated that that would include the 30^th and 31^st December.

27. He was prepared to accept that he might be mistaken on the basis of George Hepburn's jottings.

28. In re-examination he accepted that George Hepburn's diary also showed another field of 16 acres in size, the same size as the smaller field which was a sheep field. He stated in re-examination that he could not specifically remember there being animals on the field on a particular date.

29. In response to question from me he could not specifically remember moving sheep out of the fields but equally stated that it might have been his responsibility.

30. I consider that this witness seemed to me to be genuinely attempting to tell the truth although a little vague. His concession about George Hepburn's jottings indicating that he might be mistaken simply appeared to be a man who would not readily assume mistakes by others. On the other hand his vagueness along with his concessions meant I should be careful about relying upon his evidence.

31. Following upon the evidence of Euan Lawrie the Pursuers closed their case.

ROSS KINNAIRD

32. Thomas Ross Kinnaird (known as Ross Kinnaird) then gave evidence. He is 70 years of age and is a partner in the Defenders with his son James and his wife Alice. He accepted that the original lease was a grazing let.

33. His position was that rent was paid every year in January. This of course did not accord with the fact that the lease started in March. He said that at no time was any extension of the lease discussed or indeed a fresh lease. He did not seem to think that that was strange and was quite happy to go along every January with the rent and renew the previous lease. He claimed he could remember no specific l discussion about renewal up to 2007 when the rent cheque was returned. The rent never changed. He paid the rent generally to Sandy Nelson but if he was not there he would leave the rent cheques in a sealed envelope.

34. He accepted that the larger field let was always a grass field.

35. He was referred to the IACS forms. In his evidence he accepted there was until about 2005 benefits to claiming that the properties had crops growing on them due to the subsidy system. He stated that the information contained in the IACS forms was accurate. He was referred to the letter from Mr McTurk and indicated that the letter accurately reflected the information in their IACS return and the actual use made of the ground. He had asked for a record of their claims and his position was that the form accurately recorded matters. Column 1 related to the large field and column 2 to the small field although the field numbers changed in 1997 and 1998. The abbreviations were SB for spring barley, TGRS for temporary grass, OTH constituted other use and referred to the part which was not cultivated and for which they would receive no money. RG was rough grazing. WW constituted winter wheat.

36. He accepted that clause 4 of the offer did not accurately reflect the agreement reached due to the fact that in the previous year there had been a crop of potatoes in the large field and that had left it bare. It was not capable of being grazed. The agreement was that the Defenders would occupy the property, sow a crop of barley and undersow the grass bringing it back as productive grass for dairy cows. He denied taking steps each year to renew the stock. His position was that rent was paid on 1^st January and 1^st July in two separate cheques to each partner other than in 1995 when it had been paid in March and July. Payments were mostly handed personally to Sandy Nelson but from time to time he handed them into the Nelsons' office. He could not recall any special discussions at all regarding the renewal of the lease.

37. His evidence was that the large field was always a grass field and they took two cuts of silage from it. The cattle grazed there until housed. They were kept indoors over the winter from October and the sheep came in.

38. There was three methods of storing silage namely storage pits, Ag Bags and a tower. The Ag Bags were stored outside. There were 7 bags most years. They were situated in the southwest corner of the field and could be seen from the road.

39. George Hepburn was a young local. He drove a tractor for them and fed the animals. He was no longer employed by them. He had been employed by the Defenders from 1994 to 1999. The witness was referred to George Hepburn's diary and objection was taken to this. It appeared to me however that the diary was simply evidential and that fair notice had been given of matters and I allowed the evidence. He was referred to the first page of the diary and confirmed the diary was in George Hepburn's writing and the large field was the 32 acre field whilst the middle field was what might be described otherwise as the small field and was the smaller of the two fields let. He was referred to a diary entry of 19^th March 1997 and to the first entry relating to the start of the growing season and to the reference to nitrogen being added to the middle field and was clear that this related to winter wheat being grown in 1997. He was clear that the field to which nitrogen was applied was the smaller field of the two let. He was also referred to the third entry of 14^th April 1997 and to winter wheat being grown in the smaller field. His position was that winter wheat had been grown in 1997 in that field followed by spring barley in 1998, 1999 and 2000.

40. He claimed there was no way he would have made a false claim on the IACS form because the risk was too great. The slurry store was erected in 2005 and that contained a quarter to a million gallons. It needed planning permission. They were the only neighbours and therefore didn't have to ask themselves permission. They did not obtain consent from the landlords and took the view they did not need this standing the fact the land was let to them.

41. He stated that on 31^st December 2007 Sandy Nelson asked that the sheep were removed from the fields. He agreed to do this but then spoke with agricultural consultants and on legal advice put the sheep back on. His position was that in the middle to late nineties what was growing was readily apparent from the public road and he could not believe that the Pursuers would not see that there were crops rather than grass. There were no protests throughout this time at the Defenders actions.

42. In cross examination he accepted he was the only partner involved in the discussions with the Pursuers. He had needed the fields for grazing and had agreed to rent the fields from the Pursuers.

43. He was asked about a right to buy or right of pre-emption and stated that he believed there to be such a thing but that they had never been down that route. He accepted that the first paragraph of the lease refers to seasonal grazing and accordingly to him a seasonal grazing lease was one which was virtually for the spring, summer and early autumn. It referred to the season that the grass was growing. A full agricultural lease involved the tenant having full use of the land 365 days a year and he could do what he wanted. He was asked about a right of pre-emption in relation to the fields let but stated he had never gone down this route. He then admitted having tried to submitting a pre-emption claim through agents but he could not recall much about this although he admitted that Hayes McCubbin and McFarlane who had submitted an application must have consulted him. It would appear from his evidence that what they were trying to do was register the pre-emption rather than buy at this stage. He admitted they had been making payments and the Pursuers had been very polite. There had been a variety of reasons why they had not been able to pay on time. He remembered a conversation with John Nelson in the first part of 2007 but could not recall the conversation being about termination. He said he was in milking parlour and he might not have been able to hear it all. He claimed he could not recall saying that the property was all theirs at the end of 2007.

44. The IACS forms had been filled in, in consultation with their agricultural consultants. He said that copy forms would be in their offices or Hay McCubbins office but it would be drafts rather than copies. He accepted that in the first instance this was a grazing lease. He also accepted that Alexander Nelson was an honest man and had accepted his cheques in good faith. He accepted they had not agreed an agricultural lease. He accepted that it was fair that both sides intention was to enter into a grazing lease and the Defenders had never, until 2008, asserted it was an agricultural lease. It was pointed out to him that the attempt to register his pre-emption rights appeared to constitute an assertion of an agricultural lease. He stated that his consultants had advised him to do this.

45. He accepted that the Pursuers had at no time agreed that the fields could be used for crop growing.

46. His position was that the small field was ploughed in 1996 when winter wheat was sown and that the field was then ploughed in the winter of 1997/early 1998 with spring barley sown and a similar procedure taking place in 1999 and in 2000 when spring barley was sown and undersown as grass.

47. At this point in my view Mr Kinnairds evidence became very messy. The Pursuers agent put to him a letter which had been written to the Registers of Scotland by his solicitor.

48. The issue basically came down to what appeared to be inconsistent statements. Production 5/2/1 of process is a letter from his solicitor, Mr Lean, then of Blackadders to the Pursuers then solicitors together with a letter from the Defenders solicitors to the Registers of Scotland which apparently set out the Defenders position i.e. that they considered themselves to be fully secure agricultural tenants of the land. Paragraph 2 of the letter to the Registers states "Although the lease entered into in 1995 between our respective clients purported to be a seasonal grazing let in fact approximately 30 acres of the ground in question was bare land after potatoes had been grown on it in the previous year. It was not capable of being grazed or mown. In 1995, our clients grew a crop of spring barley on the ground, undersown with grass. They grew a crop of spring barley on the remaining 19 acres in 1996. Again the ground was undersown with grass. The whole area has been occupied permanently by our clients. They have occupied the ground as of right as agricultural tenants. No annual agreement has been made in respect of each year of their occupation. They did not vacate the ground in question on the 31^st of December of each year but remained in permanent occupation".

49. Similarly he was referred to the Defences and counterclaim as originally lodged in May 2008. In the defences it was stated by the Defenders "When the Defenders took entry to the subjects in March of 1995 approximately 30 acres was bare land having had potatoes in the previous year. It was not capable of being grazed or mown. During that first year of occupation the Defenders grew a crop of spring barley on those 30 acres, undersown with grass. The Defenders grew a crop of spring barley on the remaining 19 acres in the following years and that crop was undersown with grass. Since taking up occupation of the whole of the 49.342 acres in March of 1995 the Defenders have remained in continual occupation and have used the land for agriculture for the purposes of a trade or business and have paid rent in respect of their occupation. In 2006 the Defenders built a slurry store partially on the subjects."

50. In the statement of facts in the counterclaim by the Defenders they stated "The Defenders first took up occupation of the subjects in March of 1995. They have remained in continual agricultural occupation of the subjects since that date and have paid rent to the Pursuers predecessors in title Alexander Nelson and John Nelson. When they first took up occupation of the subjects they grew a crop of spring barley on approximately 30 acres of the subjects and in the following year grew a crop of spring barley on the remaining 19 acres. The fact that the Defenders were growing crops on the subjects in successive years would have readily been apparent to Alexander Nelson and John Nelson."

51. The witness asserted point blank that what was in that letter could not have been what he had told his solicitors since the measurements of the acreages were wrong. It was pointed out to him that the letter was much more consistent with the Pursuers position than the Defenders. He claimed he had not seen the letter and had he done so he would have corrected the inaccuracies. He denied that he had changed his version of events.

52. At this juncture I adjourned the proceedings. It seemed to me that there was a potential conflict between the Defenders agent and his clients. The case was adjourned until 24^th September as a procedural calling when I was informed that Mr Lean was continuing to act. Mr Kinnaird then continued his evidence on 12^th October.

53. He claimed that the letter from Blackadders to Anderson Beaton Lamont did not reflect the information given to his solicitors. He accepted that part of the letter from his solicitors was accurate but not the parts relating to the smaller field stating that the year was wrong and that it described a crop of spring barley being grown in 1996. He claimed he had told his solicitor that winter wheat was sown in 1996 and spring barley in the year after that. He claimed it was simply a coincidence that his solicitor had written a letter which coincided with the evidence given by Alexander and John Nelson and Euan Lawrie. He did not really explain why it took until Mr McTurks letter arrived before his pleadings were put into a form which in the main coincided with what is now his position.

54. He accepted that it was January 2008 that he first indicated that he thought that his firm had an agricultural lease. He further accepted that he never asked the Nelsons for permission before planting or sowing crops or erecting the slurry tank. He accepted that Mr McTurks information relied upon the his IACS returns. He suggested he paid the rent in July and December (which contradicted his previous assertion that he paid in January) and that whilst there had been brief queries for a couple of years by Sandy Nelson to him to the effect of "Are you quite happy?" after that there was nothing more.

55. In re-examination he was clear that Mr McTurks letter accurately represented what was grown in the two fields from 1995 to 2008. He denied submitting false information. There was no agricultural payment for growing grass up until 2004. He claimed that there would have been a few pedigree sheep on the two fields on the 30^th December each and these would have been visible.

56. I did not find Mr Kinnaird's evidence credible or reliable. I did not think it likely that no discussions would have taken place over a substantial number of years when parties were meeting regarding the continuation /renewal of the lease. I thought there was no credible explanation advanced for the discrepancies between his position in correspondence, in the defences and counterclaim as originally lodged and in the evidence given. He regularly failed to answer questions properly but instead gave the information he wanted to provide. He was adamant in evidence in chief about having made payments of rent in January of each year but later changed that to December. This was significant standing his reference to working on New Years day. I considered he was highly unlikely to have been growing crops as he claimed for a number of years without realising that might well change the nature of the lease. He also denied matters such as registering a pre-emption right and then claimed his agents had done this as though he had no knowledge of what his agents were doing.

JAMES ROSS KINNAIRD

57. The next witness was James Ross Kinnaird who is a partner in the Defenders along with the previous witness Ross Kinnaird and is Ross Kinnaird's son. It was clear from his evidence that he had not been directly involved in discussions between the parties during the existence of the lease of the two fields with negotiations being carried out by his father. He confirmed that the large field had been a grass field throughout the occupancy with the field being ploughed and then being sown with spring barley and undersown with grass for the purpose of producing a grass crop. His evidence was that the large field had been used for mowing for silage and for grazing with cows and sheep. His position was that the silage was stored in Ag Bags next to the road. His position was the smaller field was ploughed in 1996 and a winter wheat crop established there. He went on to claim that spring barley had been harvested in the smaller field in 1997, 1998, 1999 and 2000.

58. He confirmed that the IACS forms were completed by their agents but on the basis of information provided by them. Somewhat strangely he indicated that their agents would be personally liable for wrong information given although upon questioning by me he withdrew that. He said he had never seen the Nelsons carrying out an inspection of the fields on the 30^th or 31^st December.

59. In cross examination he claimed that he would have known what was in the fields without requiring to see the letter from Mr McTurk and that he had attended his solicitor with his father. He claimed not to know where his solicitor had obtained the information from that was in the defences lodged or in the letter to the Registers of Scotland. He said that it would surprise him if the information put forward was that grass was undersown with barley in the smaller field in 1996 and also to be unaware that it had been put forward that winter wheat had been in the smaller field in 1997. He was adamant that he had sowed the fields. The witness was also adamant that they had grown winter barley once and it did not work and therefore he accepted this was inconsistent with George Hepburn's diaries if they referred to winter barley being grown by the Defenders. It also became clear that the witness had been somewhat misleading when referring to Ian Hope submitting accurate IACS forms since Ian Hope had only become involved since 2006. He claimed the small field had been out of commission for grazing for four years. He accepted that the cattle would have been out of the fields most years but stated there would have been sheep out in the fields as at 30^th and 31^st December.

60. In re-examination he admitted he had spent a lot of time over the past two years thinking about the two fields in dispute and not about the other fields.

61. I did not find this witness credible or reliable. Where he had personal knowledge of matters I considered his evidence appeared to be dressed up to provide what was required. He claimed his solicitor had been given the correct information and he had attended the meeting but I simply cannot accept that particularly standing Mr Lean's submissions. I also found him at best to be misleading in his confident assertion of his agent's personal liability for wrong information being supplied on the IACS forms.

GEORGE HEPBURN

62. The final witness was George Hepburn. He started working for the Kinnairds in about July 1995. He did admit that his diary "might not be 100% accurate of measurements and bags and things". He emphasised that the diary was just for himself. He had applied nitrogen fertiliser to wheat according to the diary to the middle field (the smaller of the two fields) on 19^th March 1997. The evidence from the diary was that in the larger of the two fields he had spread fertiliser on 29^th March 1997. On 14^th April 1997 it was recorded he had spread nitrogen fertiliser to the middle field to a wheat crop.

63. In cross examination he accepted that when he had seen the diary he had been surprised to see mention of winter wheat in the smaller field between 1995 and 2000 since that did not accord with his recollection. He had in fact previously thought it was spring barley in 1996/97. He expressed surprise that a witness had stated there had only ever been winter barley at Findatie once particularly since this did not accord with the entries for 29^th April 1996, 20^th April 1997 and 27^th May 1997. He accepted he could be wrong about there being winter barley and that he could be wrong therefore about there being winter wheat. He accepted it was possible that if his diary was wrong about one crop it could be wrong about another.

64. In re-examination he indicated that he would have been able to tell winter wheat from spring barley as well as winter wheat from winter barley. He was emphatic there had been no electric fence between the fields meaning stock could wander from one to the other. He did consider that the diary was more likely to be accurate than his recollection. He emphasised again the diary had simply been for his own use.

65. I considered this witnesses diary could not be regarded as reliable. It seemed to me that on occasions he tried to play down the accuracy of the diary and the diary entries simply did not accord with any of the parties positions in relation to the growth of winter barley. I had no doubt he was an honest witness but I did feel for some reason he tried to play down the accuracy of the diary leading me to have doubts about it which were substantially reinforced by the witnesses own recollection which fitted in with that of the Nelsons and the position as originally put forward by the Kinnairds as well as the fact he appeared to be the only witness who suggested winter barley being grown over two years.

SUBMISSIONS FOR THE PURSUER

66. Both parties helpfully lodged written submissions. Mr Sutherland asked me to accept that the agreement was one for seasonal grazing lets. The fields were vacated each year as at 30^th December. In the first year the large field required to be cultivated before it could be grazed and there was agreement that that could be dealt with by sowing spring barley undersown with grass. That was ancillary to the main purpose of the grazing. Further lets followed on identical terms for the following years except in relation to the dates. The smaller of the two fields was ploughed and sown with spring barley under sown with grass in order to improve the quality or yield of the grass. That continued until 2007. The Pursuers were never asked by the Defenders about further cultivation of the fields and would not have agreed to that. They were also never asked about construction in the fields and would not have agreed to that. They regularly checked the fields. Cultivation of the small field at the same time as grazing the large field could not have been possible due to the state of disrepair of the dividing fence which was not stock proof.

67. He argued that the Defenders position either had to be that they had sought to deceive the Pursuers or alternatively, and this seemed to coincide with Ross Kinnairds evidence, they thought it was a series of grazing lets until seeking legal advice in 2007/2008.

68. His position was that it was likely the Defenders would try to tailor their evidence with a view to have the facts fit an agricultural tenancy. He argued that no weight should be attached to the IACS information standing the fact that Mr McTurk had never spoken to it and it was contradicted by the evidence of the Nelsons and Mr Lawrie as well as the letters on behalf of the Defenders to the Registers of Scotland and their defences and counterclaim. He argued that Mr Lean is an extremely experienced solicitor in these matters and was not a person who make mistakes of this type.

69. He also pointed out that we had three different versions of what was in the fields from the Defenders, including the suggestion that the current Record was also materially wrong in relation to when the small field was in winter wheat, but the first of these had matched with what the Pursuers position had been all along and with the recollection of Euan Lawrie albeit Mr Lawrie was only 85% clear about matters.

70. He submitted that it was also contradictory that the Defenders on the one hand stated they had wanted the fields for grazing for their dairy herd but then they appear to suggest that for four years they deprived themselves of the use of one of the two fields for grazing. He also suggested it was unlikely that the Defenders would not make any contact with the Pursuers to secure the fields for 1996.

71. He suggested that Euan Lawrie and the Nelsons would not have got matters so wrong as to miss the fact the smaller field was out of grass for four whole years.

72. He also pointed to Ross Kinnairds own evidence and to the fact that he regarded Alexander Nelson as an honourable man. He suggested that this was entirely inconsistent with the fact that Ross Kinnaird was effectively accusing Alexander Nelson of lying.

73. Mr Sutherland referred to Section 2(2)(a) of the 1991 Act and submitted that what we have here is a series of leases which were entered into in contemplation of the use of the land for grazing. His position was that the contemplated use of the land was simply for grazing or mowing and it was for less than 365 days of the year. In support of this he referred to the written documentation and Ross Kinnairds evidence.

74. He also pointed out under reference to Bell v Inkersall Investments Limited since the Defenders did not attack the validity of the written lease in their pleadings it was not open to them to argue that it was a sham. He also referred to Scottish Youth Hostels Association v Paterson in support of this.

75. Mr Sutherland went on to argue that the sowing of spring barley undersown with grass was not regarded as creating an agricultural lease where it was ancillary to the main grazing purpose of the lease. In this connection he referred to paragraph 4.15 of Gill and to Sansom v Chalmers as well as the more recent case of Dallas v Muir.

76. He was asking the court to draw the conclusion that the agreed/contemplated use of each field was for grazing throughout the duration of each of the lets and certainly during the first let which was set out in writing.

77. In relation to the length of the tenancy he pointed out again that the lack of averments that the original lease was a sham made it clear that that lease was for less than a year. He referred to Loudon v Hamilton and Others as authority for the fact that the court should take a practical approach in interpreting duration - if the intention was to have a seasonal grazing let by definition it must be for 364 days for more.

78. Mr Sutherland went on to refer to the important aspect that the term was enforced in each year. He referred to Gill at paragraph 4.17 and pointed out that the court had heard evidence from the two Nelson brothers that they checked the fields every year at the end of December to ensure they had been vacated. There was no evidence to contradict the Nelsons in that regard other than the fact it was stated they had not been seen. He submitted that standing the fact that the field was cleared on the 30^th of December there was no need to inspect on the 31^st.

79. In relation to the slurry store he argued that although logically that must have remained there over 30^th December since it was constructed after 2003 it could only have given rise to a SLDT of 5 years on the assumption it was allowed to remain there of consent but there was not crave or plea in law in the counterclaim to support that nor any esto case.

80. Mr Sutherland again did refer to Gill at 4.17 as providing an explanation as why security of tenure will not exist even though the occupancy is subsequently extended. He also referred to the case of MacKenzie v Laird as authority for the fact that a succession of seasonal grazing lets over a number of years comes within S2(2)(a). He also referred to Loudon v Hamilton and Others and Scottish Youth Hostels Association v Paterson as authority for the view a succession of seasonal grazing lets over a number of years falls within this sub section.

81. Mr Sutherland referred also to Bell v Inkersall and the issue of a party founding upon his own breach of contract. He suggested that even if the court preferred the Defenders evidence in relation to the vacation of the subject and the construction of a slurry tank these were simply examples of the Defenders breaching the contract. He went on to suggest that this could also apply even if the court were to accept the Defenders evidence that they did indeed crop the fields in other years. He referred to McBryde on The Law of Contract at paragraph 20.21 as authority for it being the law that a party to a contract cannot take advantage of their own wrong.

82. In conclusion Mr Sutherland asked me to grant the craves of the Initial Writ and refuse the counterclaim. He submitted that the interdict sought should also be granted to prevent the Defenders from re-entering the fields once they had removed and also suggested that standing the fact there were split craves if I took the view that an agricultural lease had been created in relation to one of the fields only I could deal with that separately.

SUBMISSIONS FOR THE DEFENDER

83. At the commencement of his submission Mr Lean made reference to Sections 1, Section 85 (1), Section 3 and Section 2 of the 1991 Act. He also referred to the 2003 Act which created new forms of limited duration tenancies. His position was that Sections 1, 3 and 85 (1) taken together provide for security of tenure with an exception being contained in Section 2(2)(a) where land was let seasonally for grazing or mowing.

84. Mr Lean submitted that when the parties entered into the lease they knew that part of the subjects were not capable of being grazed and a crop of spring barley was grown in the larger field in 1995 whilst the Defenders evidence is that they grew winter wheat in the smaller field in 1997 and spring barley in that field during 1998, 1999 and 2000.

85. He quoted from Gill at page 45 that "Seasonal letting for other crops generally has the inevitable result that an agricultural tenancy is established. According to English authority, the exception may apply to a lease which permits ploughing and cropping and stabling if these as subsidiary to the maintenance of the land for grazing. The only Scottish authority on the point is the Land Court on usual facts in Sansom v Chalmers.

The only safe advice for the landlord is to prohibit the tenant from using the land for any purpose other than grazing or mowing"

86. Mr Lean argued that Sansom v Chalmers must be used extremely carefully having been described by commentators as having "unusual" facts and circumstances. The case could be distinguished from the circumstances here. The activities carried out by Mr Chalmers related to ploughing, sowing, fencing, fertilising and ditching. The ploughing and sowing were in respect of grass, rape and turnips all of which were grown for grazing by livestock as standing crops in the ground. The court there had found that the other activities carried on by Mr Chalmers were "incidental to the grazing rights he enjoyed, initiated by the Sansoms and enacted as a quid pro quo for rental concessions. They were of a nature of a sub-contract within the main contract for grazing rights. Indeed they were designed to benefit the deceased. The use of the land by the second party for his own benefit and purposes was for grazing and mowing only. That is what the whole circumstances and upon the evidence was contemplated by the parties".

87. He submitted that the agreement entered into by the parties was dressed up as a grazing let was for entirely different purposes and therefore there was security of tenure requiring a notice to quit in terms of Section 21 of the 1991 Act.

88. Mr Lean went onto submit that the Defenders position was that after taking up occupation of the land in 1995 they remained in continual occupation without entering into a series of annual grazing lets. The Defenders had remained in permanent occupation after the expiry of the original lease and had continued to use the ground for agricultural purposes in the course of their business as farmers. They had grown crops on the ground up to the year 2000 and had erected a slurry store on the ground in 2006. They had also stored silage bails on the land. Their position was that there had been no annual discussions or agreements. He argued that following the case of Morrison-Low v Paterson No 3 that where a proprietor has admitted someone into possession of agricultural ground and regularly accepted rent the irresistible inference is that a tenancy has been created and it is not necessary that there was not a particular occasion on which a tenancy was agreed.

89. Mr Lean went on to distinguish Bell v Inkersall from Morrison-Low in that in Bell v Inkersall the tenant signed a written grazing agreement and therefore was held barred from arguing that he was a secure tenant.

90. The next case referred to by Mr Lean was Loudon v Hamilton in which the Inner House looked at the circumstances in which a grazing tenant argued he was a secure tenant. In that case the court upheld the Land Courts findings commenting in particular that the grazing tenant in the case had signed IACS returns on the basis that he was in temporary occupation of the land in question only.

91. He submitted that if I found that the Defenders remained in continual occupation of the land for agricultural purposes after 1995 and there was no annual agreement then the Defenders were protected and with no notice to quit having been served the Pursuers action must fail and the Defenders counterclaim must succeed.

92. Mr Lean rehearsed the evidence of the Nelsons and Kinnairds but suggested I should treat Sandy Nelson's evidence with caution on the basis he had given a selective and edited version of when he and his brother came to own the two fields in question. He also referred to the fact that they had both insisted they had regularly visited the farm on 30^th December both had initially said that both attended and thereafter that it must be one or the other.

93. He referred to evidence given by John Nelson about investigations relative to the slurry tank and also about the rent arrears in 2006 and about the fact that Sandy Nelson was not examined on this.

94. He submitted that the evidence of what happened in 2006 given by John Nelson did give rise to certain difficulties in the precise status of the Kinnairds continuing occupation in 2007. His position was that the Kinnairds continued occupation was perfectly consistent with the case presented on their behalf as secure agricultural tenants.

95. As far as Euan Lawrie was concerned he referred to the fact that Euan Lawrie had indicated that agbags would have been visible from the road and that sheep were grazing in the larger field over the winter months and that he remembered sheep on the fields on 30^th and 31^st December. His submission was that to that extent Mr Lawrie's evidence supported the version of events presented by the Kinnairds and discredited the Nelsons.

96. He pointed out that Mr Hepburn was relying on a large part on his contemporaneous diary. He submitted out that Mr Hepburns evidence from his diary provided evidence that he was applying nitrogen fertiliser in the smaller of the two fields on a crop of winter wheat in 1997. He suggested that if the court accepted the evidence of Mr Hepburns diary then that had far reaching effects on the credibility of the Nelsons. He suggested that the clear and contradictory evidence given in relation to the growing of winter wheat by Ross Kinnaird and James Kinnaird was not wholly surprising and was insufficient to discredit Mr Hepburns evidence.

97. Mr Lean also submitted that the evidence of Mr McTurks letter supported the Defenders.

98. Mr Lean submitted that Mr Kinnairds contradictory positions and how two different versions had been presented by the court should simply be interpreted as a memory fault by the Defenders and that after enquiry into the facts with the Department the proper version of events was put forward.

99. Mr Lean helpfully provided me with draft findings in fact and law and suggested in essence that the principal action should be dismissed and decree granted in terms of the counterclaim.

100 Both parties were agreed that expenses should follow success and that in the event of divided

success I should fix a hearing on expenses.

DISCUSSION AND DECISION

101 In general terms I found the first four witnesses for the Pursuers to be credible and those for the

Defenders less so. In saying this there are a number of points which seem to me important.

102. In this case taking into account S2 (2)(a) of the 1991 Act quoted above and the relevant case law as well as parties submissions I consider the matters I have to be satisfied about are firstly whether parties entered into a seasonal grazing lease and if so whether the growing which did take place on the two fields in the first two years that the Defenders occupied same was sufficient to effectively convert that to an agricultural lease. If the lease was a seasonal grazing one then I require to be satisfied about what followed and in particular whether further seasonal grazing leases were entered into by the parties and whether the fields were used for agricultural purposes and if so whether with Pursuers agreement or at least acquiescence and whether or not they were vacated for at least one day a year. It seems to me that legally speaking for the Defenders to be successful here they have to either satisfy the court that the original agreement was a sham transaction and falls to be reduced, and they have no pleadings to that effect, or that at a later stage the fields were used for agricultural purposes by the Defenders and the Pursuers actings were such that the Pursuers could be held to have agreed to or acquiesced in the creation of an agricultural lease or in the Defenders occupying the subjects for more than 364 days a year.

103. It is clear to me from all of the evidence given by all of the parties that the "contemplated" use of the land was for grazing or mowing and was for less than 365 days. There is uncontradicted evidence of this in the written lease itself and in the evidence of Sandy Nelson and Ross Kinnaird. Accordingly I find the original lease was a seasonal grazing lease.

104. The case of Bell v Inkersall Investments Limited referred to in submissions appears apposite to me. In that case Lord Gill made the point that the terms of the written lets lodged by the Defenders complied with the requirements of Section 2(2)(a) of the 1991 Act. At page 637 Lord Gill makes the point that the Pursuer does not suggest that any of the lets were a sham transaction. He refers to the alleged continuous occupation as being consistent with the Pursuer having been in breach of his occupancy obligations and his averments regarding carrying out various works to the estate as being consistent with illegally exceeding his rights under the lets. He goes on to say that since the Pursuer does not attack the validity of the lets it is not open to Counsel for the Pursuer to submit that on the face of them that the Pursuer occupies the land to which they relate under an entirely different form of contract. Equally in this case without very clear averments suggesting a sham transaction along with an appropriate plea in law it does not seem to me it is open to the Defenders here to argue the written lease is subject to reduction. There are no such averments but in any event as indicated below I consider the lease was correctly labelled as a seasonal grazing lease.

105. Dealing with the question of how the original agreement was affected by the oral agreement between the parties whereby the Defenders were to create grass by sowing spring barley under sown with grass it seems to me that that has to be regarded as ancillary. Otherwise it is difficult to see the lease of the larger field for grazing purposes could ever have operated. Without grass there was not going to be grazing. Therefore to suggest that the Defenders planting crops for the purpose of improving the grass or indeed providing grass for grazing is anything other than incidental to grazing rights appears to me to do damage to the English language. I have to consider whether or not the lease of the two fields was entered into "in contemplation of the use of the land only for grazing or mowing". It seems to me that that is exactly what was contemplated.

106. In Dallas v Muir the court, approving Sansom v Chalmers, stated "The case does confirm that activities such as ploughing and sowing might merely be incidental to grazing rights. This will be a matter of circumstances." The judgment goes on to state at page 81 "It may be added that, in this case, we treat the use of the field to take oats as ancillary to its main use for grazing." At page 83 it states "It is tempting to treat the present case as turning on the question of whether there was a history of ploughing permitted by the landlord. However we do not consider that a definitive test." The judgment later continues, "Similarly although we have no doubt that ploughing and reseeding are factors which would tend to point to the parties having an understanding that their agreement was not limited to one year, these works are not necessarily fatal to a finding that the parties contemplated no more than use for grazing or mowing if there is other evidence that the let as a short term grazing one"

.

107. In these circumstances I am satisfied the original lease was correctly labelled as a seasonal grazing let and that was not affected by the sowing of spring barley to improve the quality of the grass in 1995 in the larger field and in 1996 in the smaller.

108. Turning to the contractual relationship between the parties I find it virtually inconceivable that there would have been no discussion by either side as to what was to happen the following year in relation to the leases of the fields. That in particular seems to me to be the case in the early years. I could just about understand that a situation might arise in the later years where parties had got so used to working in a particular way that there was effectively a form of tacit relocation in its most literal sense, the parties by then having an understanding. However for Mr Ross Kinnaird for example to have expected the lease after December 1995 to continue without something having been said, particularly when he was meeting with Mr Nelson, seems to me to be highly unlikely. Accordingly I accept Mr Alexander Nelson's evidence that the grazing lease was renewed each year orally and regard this as much more probable.

109. I now turn to the issue of crop growing in the two fields as alleged by the Defenders.

110 . Bearing in mind that both of the Nelson brothers who gave evidence and the two Kinnairds are

experienced in farming issues I found it somewhat strange that if the Defenders were growing crops in the smaller field during the middle to end of the nineteen nineties that no one appears to have realised there might be an agricultural lease here until the Defenders took advice in 2008. The defenders after all were experienced in farming matters but also used consultants. I rather suspect that the reason for this is because the Defenders were well aware that the fields had been used for grazing as indeed that was what they had agreed to.

111. I found the contradiction between the two Kinnairds evidence and what was lodged as defences on their behalf as well as the correspondence sent to the Registers as being significant. It did seem to me to require a huge coincidence that the Nelsons version of events did to a great extent mirror what the Kinnairds were saying for several months after correspondence began in relation to this dispute if in fact that was simply an error of memory or an error by their solicitor. Mr Lean at no time conceded that he had misrepresented the Defenders factually nor did he give evidence of this. No file notes were lodged to suggest the Defenders true position was always consistent. I would also have expected that the Defenders would have had sight both of the correspondence from Mr Lean and the copy defences lodged and would have advised him of significant factual errors. There appears to me to be no credible explanation for these inconsistencies in the absence of very detailed file notes from the Defenders agent which would indicate that he simply failed to represent the Defenders position properly. Even in his final submission Mr Lean was gamely trying to excuse this as a lapse of memory by the Defenders despite the fact the Defenders in their evidence were clear there had been no such memory lapse.

112. I considered that the IACS evidence was neutral. It is unclear why the copy forms were never produced to the court since these should have been available but instead all we had was a summary from Mr McTurk. In any event standing the fact that no inspection had taken place and there was financial benefit to be derived from claiming for crop growing I am not prepared to place any reliance on the fact that a claim for money was made in relation to crop growing in these fields.

113. I also accept that standing the particular Alexander Nelson's clear knowledge of the legal implications it would be highly unlikely that he would have allowed crop growing to take place without taking action about it.

114. I also require to take into account the fact that Euan Lawrie and the Nelsons all have a recollection that the small field was used for grazing between 1995 and 2000. It is fair to say that that as well appears to have been Mr Hepburn's recollection although his diary disagrees with that.

115. I also accept Mr Sutherland's contention that Ross Kinnaird's evidence was strange in relation tot Sandy Nelson. He referred to Sandy Nelson as being an honourable man. He did that in the present tense. Bearing in mind he had sat through a fairly considerable volume of evidence given by both Nelson brothers which according to Mr Kinnaird was clearly untrue and in respect of which there could really be no issue of a mistake it appears to me that Mr Kinnairds description of Sandy Nelson in this way does not accord with his own evidence.

116. In relation to the slurry store again it seems to me that the building of this, if for agricultural purposes, was a breach of the lease by the Defenders and the Pursuers were unclear as to whether the slurry store was even actually located on their land. I am not satisfied on the evidence that a slurry store is inevitably for agricultural purposes but again it seems to me that is of no moment unless it can be shown the Pursuers agreed to this which what evidence there was seemed very much to the contrary.

117. Mr Hepburn's evidence gave me some concern but ultimately I could not accept his diary as being accurate. It did not accord with his memory and he himself appeared to be quite diffident regarding the contents of the diary and unclear as to how a number of entries had come about. His evidence also appeared to contradict the Defenders own version of matters e.g. in relation to the growing of winter barley His diary provided "evidence" of winter barley having been grown but this was entirely contradicted by the Defenders themselves. His diary also does not refer to 1998, 1999 and 2000 and he was not asked about this. Essentially his diary relates to the smaller field containing winter wheat in 1996/1997 and I am not satisfied about the accuracy of that.

118. In these circumstances I accept the Nelsons evidence that the only crops grown on the two fields were in 1995 and 1996 in the circumstances I have described.

119. On the issue of the fields being vacated for one day a year I accept the evidence of the Nelsons that they inspected the fields on the 30^th of December of each year albeit on occasions only one of them undertook the inspection and they found the fields to be clear. To some extent I am not sure how much that matters in any case. Provided the Nelsons were unaware that the Defenders were using the fields in breach of their lease conditions on 30^th or 31^st December it seems to me that they cannot be held to have acquiesced in a breach by the Defenders of their lease conditions.

120. Equally I am not satisfied that there were Ag Bags on the large field over 30^th December in one year. However had there been then unless it could be shown the Pursuers either agreed to this or acquiesced it does not seem to me to be significant. I am not satisfied they did either.

121. Whilst I accept that the Defenders could have successfully argued that they had an agricultural lease if I were satisfied that there had been what I might term non incidental crop growing and/or the occupation of the land without a break all with the Pursuers concurrence I am not satisfied that any of this has been proved although I do accept that were I to find that the Defenders had substantially grown crops from 1996 onwards for four years as was suggested that I could have possibly implied the Pursuers concurrence based upon the inspection regime operated by them having been in place.

122. I have come to the conclusion in this case that there was a series of annual lets between the parties with the Defenders due to vacate on 30^th December. Equally I do not accept that the Defenders were growing crops on the fields with the exception of the very limited purposes in 1995 and 1996 which I have found to be incidental to the grazing lease. In the circumstances I do not consider that there is an extant lease between the Pursuers and Defenders or any security of tenure and accordingly I am granting decree in terms of craves 1, 2, 4, 5 with expenses as 7^th craved. I am not inclined however to grant interdict. There was no evidence from which I could be satisfied that in the event that decree was granted against the Defenders they would re-enter the fields. Accordingly I consider there was insufficient to grant an interim interdict since I do not consider there is a threatened wrong here and even more clearly there is nothing to justify a perpetual interdict. I do consider however that the Pursuers have generally been successful in this case and for that reason I have found them entitled to the expenses of the action including the counterclaim.