Succession: Crofting tenancy transfers in intestacy

When the tenant of a croft dies, there is an opportunity to transfer their interest to a successor, but that opportunity is not absolute and is subject to time limits. The procedure can be found in ss 10 and 11 of the Crofters (Scotland) Act 1993 and s 16 of the Succession (Scotland) Act 1964.

In Pattinson v Matheson [2022] CSIH 43, a special case stated by the Land Court, the Inner House was asked to determine how s 11, which deals with transfers on intestacy, and s 16 operate and how the time limits ought to be applied.

Procedural omissions

The respondent’s father, the tenant of two crofts in Shieldaig, died intestate in 2012. The respondent, Matheson, was the only person entitled to succeed to the tenancies. In 2014 he sent the applicant a purported notice confirming that he had succeeded, which he copied to the Crofting Commission. At that time, he had not been appointed executor dative; he was not so appointed until 18 September 2018. Confirmation was granted in his favour on 30 November 2018. On 4 June 2019, the respondent’s solicitor sent further notices to the same purported effect as those previously sent to the applicant and to the Crofting Commission, and on 13 June 2019 a docket was signed by the executor transferring the tenancies.

The Crofting Commission was satisfied that the correct procedure had been followed and registered the respondent’s tenancies in the Crofting Register. The applicant disputed that the procedure had been correctly followed and argued that, having failed to comply with the time limits, the respondent could not competently have transferred tenancies, which should be terminated. He challenged the entries in the Crofting Register by applications to the Land Court.

Section 11 of the 1993 Act requires the executor of an intestate deceased crofter to serve notice of a transfer on the landlord “as soon as may be”, and to copy that notice to the Commission. This applies where the deceased’s interest in the tenancy falls to be treated as intestate estate in accordance with part 1 of the 1964 Act and transferred in pursuance of s 16(2) of the 1964 Act. Part 1 determines who can succeed, and s 16 specifies the mechanics of the transfer including, for these purposes, a provision allowing the landlord to give notice to terminate the tenancy where it has not been transferred within 24 months. The Lord President confirmed that s 11 only applies after a transfer under s 16(2); however the two sections do not sit well together and perhaps require further consideration.

The question for the Land Court was whether Matheson had complied with the statutory requirements and within the time limits in the Acts. To transfer the interests in the tenancies, two stages must be gone through: transfer under s 16 of the 1964 Act and intimation on the landlord under s 11 of the 1993 Act. The difficulty faced by Matheson was that in order to transfer the interest in the tenancy effectively under s 16, he would have to be the executor; when the notice was served in 2014 he was plainly not. When the second notices were served in 2019, he was the executor, but the Land Court still found against him, holding that the intimations of transfer on 4 June were also invalid as preceding the transfer itself (the date of the docket).

Retrospective validation

It was against that decision that the special case was brought. Noting that the spirit of the crofting legislation was to enable a crofter to secure succession to the family croft, the Inner House found in Matheson’s favour. While he was not the executor in 2014, the 2014 notices were retrospectively validated by the subsequent grant of confirmation. While a docket transfer would not have been possible until confirmation was granted, an assignation of the tenant’s interest in the lease was a competent method of transferring the interest, and what the respondent had produced amounted to an assignation and had been intimated to the landlord. As a result, the tenancies had transferred to the respondent.

What, then, is the purpose of the 24 month period? The Lord President described the period as a protective one designed to provide ample time to allow the administration of the estate to reach a point where the interest in the tenancy could be competently transferred without the threat of termination, because it is only following the end of that period that the landlord can, but need not, serve notice to terminate the tenancy. While 24 months sounds like a long time, in practice it may not be. The Inner House’s decision suggests that all that need be done within that period is to serve on the landlord a notice (provided that the notice meets the rather basic requirements for an assignation and that it is served by the person who will end up confirmed as executor), and then to proceed at a pace that suits the administration of the rest of the estate and the application for confirmation.