Inner House finds Land Court correctly construed fence repair clause in agricultural lease dispute

About this case:

• Citation:
  [2023] CSIH 41
• Judgment:
  External link
• Court:
  Court of Session Inner House
• Judge:
  Lord Carloway

It was held by the Land Court that tenant Robin Batchelor had not breached the terms of his lease by failing to carry out fence repairs he was obliged to contribute to the cost of. His landlord, the trustees of the Roxburghe Second Discretionary Trust, challenged the Land Court’s construction of the repairing obligation and its finding that business common sense supported the construction it adopted.

The appeal was heard by the Lord President, Lord Carloway, together with Lord Pentland and Lord Boyd of Duncansby. Sutherland, advocate, appeared for the appellants and Frain-Bell, advocate, for the respondent.

Only tenable interpretation

Under clause 6 of the lease, which the respondent acquired the tenant’s interest in from his father, the tenant was to pay half the cost of maintaining fences and gates on the farm to the landlord. The lease was also subject to a set of conditions for the let of farms on the Roxburghe Estate dated to August 1954, Regulation VIII of which bound the tenant to maintain fixed equipment, including all permanent fences, following the landlord putting it into a “thorough state of repair” at the start of the lease.

After the respondent inherited the tenancy in January 2021, a letter was written to him by the estate’s factor, Mr Jackson, informing him that repairs were needed to certain buildings and fences, and a fencing contractor would be arranged. The respondent emailed the factor in April 2022 stating he would telephone him to discuss the repairs, but no such call ever occurred. This prompted the appellants to serve notice on the respondent demanding he remedy the breach of his tenancy conditions within six months.

While the respondent accepted that repairs were required, he did not consider that this amounted to an obligation for him to carry out the works. Additionally, he disputed that certain buildings requiring repair were part of his holding. The dispute went to the Land Court, which held that the only tenable interpretation of clause 6 was that the respondent’s obligation was limited to paying half the cost of fence repairs to the appellant.

It was submitted for the appellants that the Land Court failed to adopt the proper approach to construction of the contract, as it failed to consider whether clause 6 and Regulation VIII would both have effect when read together. Its reasoning amounted to an exercise in speculation, and the matter could not be determined by reference to the court’s specialist knowledge of agricultural practice.

Intention to modify

Lord Carloway, delivering the opinion of the court, began by observing generally: “The intention of the parties is most obviously gleaned from the language which they have chosen to use in the context of the contract as a whole. The court should not normally search for drafting infelicities in order to justify a departure from the natural meaning of that language. It should identify what the parties agreed, not what it thinks common sense may otherwise have dictated.”

He said of the terms of the lease: “In this lease, clause 6 provides that the respondent is to pay to the appellants one half of the cost of maintaining the fences. How, then, does that fit in with the provision of Regulation VIII which applies to all the Roxburghe Estate leases? It is certainly different from it. The intention must have been to modify it.”

On the implications of that construction, Lord Carloway said: “The phraseology of clause 6, in imposing an obligation on the respondent to pay one half of the costs, presupposes that the appellants have already incurred a cost in relation to fence maintenance. That in turn must mean that it was intended that the maintenance would have been instructed, or carried out, by the appellants. Put another way, as the Land Court determined, the obligation on the respondent is limited to paying to the appellants the costs of maintenance.”

He concluded: “It is a necessary corollary of that payment obligation that the maintaining itself is to be done by the party to whom the respondent is directed to make payment, namely the appellants. The appellants’ construction makes no sense since it would oblige the respondent not only to maintain the fences, gates and gateposts, but also to pay the appellants one-half of the costs of doing so.”

The appeal was therefore refused.