The Trustees of the Eighth Earl Cadogan’s 1961 Settlement Trust v Neil Butler and Linsey Butler [2024] CSIH 22
Hamish Lean acted for Neil and Linsey Butler (the “tenant”) in their recent success in a case raised against their landlord, the Trustees of the Eighth Earl Cadogan’s 1961 Settlement Trust. The case concerned the tenant’s proposal to carry out an agricultural improvement, which was objected to by the landlord.
The tenant served an improvement notice to erect a large general-purpose agricultural building. The landlord’s existing buildings ranged from 50 to 70 years old and were very close to the end of their working life. They were also poorly situated with inadequate access.
Although the building that the tenant proposed to erect was a general-purpose building, it was intended to enhance their dairying operation.
The lease, whilst not prohibiting the tenant from carrying on a dairying enterprise, did make it clear that the tenant was not entitled to compensation for dairying improvements. The farm was let specifically for the growing of arable crops and livestock husbandry. The landlord’s objection was that because the tenant was going to use the new building for dairying, the Land Court should not grant approval.
However, the Land Court decided that it should consider whether the proposed improvement was reasonable and desirable on agricultural grounds for the efficient management of the holding.
The Court said that that was an objective test and that the tenant’s business practices were accordingly irrelevant. Improvements should only be approved where they are such as to be reasonably required to allow the tenant to carry out the type of farming specified in the lease.
The Court found on the evidence that the proposed building was reasonably required to carry out arable cropping and livestock husbandry. Accordingly, the Court allowed the improvement, and it will be subject to compensation at the end of the tenancy.
The landlord subsequently appealed the Land Court’s decision to the Inner House of the Court of Session but the appeal was refused.
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