Background

The Pursuers being the majority of the executors dative of the late Mrs Margaret MacLean (who died on 23 August 2006) sought to establish that they had effectively transferred Mrs Maclean’s interest as tenant of Achaleven Croft, Connell, Argyll to Josephine McGrath.

Written intimation of the nomination of Josephine McGrath was given by the majority of the executors to the landlord, Thomas Lorne Nelson, by letter dated 6 February 2007. It was averred that “The effect of intimation to the landlord of the nomination of Josephine was to transfer the tenancy to her with immediate effect”. Confirmation had not been obtained at this stage and indeed was only issued on 24 December 2007.

Decision

It was held that the combined effect of sections 14 and 16 of the Succession (Scotland) Act 1964 is that an interest under a lease can only be transferred by an executor who obtains Confirmation. Section 15 provides that the transfer can be effected by a docket on the Confirmation. That is not the only method by which transfer can be achieved but the fact that it is provided for supports the contention that some act or deed of transfer is required and that intimation alone of the particulars of a transferee under section 16(2) would not be sufficient for the purpose. Intimation of particulars to the landlord under section 11 of the Crofters (Scotland) Act 1993 then completes or validates the transfer, it is not the method by which the transfer is in fact effected. It is the second part of a two stage process, and both stages are required for a transfer to be valid. In this case the letter could not be read as importing an actual transfer. Either possession must be transferred or there must be some document, however informal, transferring the interest. As such a document was not present it was held that there had not been a transfer.

Lady Dorrian in her opinion states that if she is wrong about that and the letter can be seen as a purported transfer, the question then arises whether such a purported transfer can be validated by subsequent confirmation. From the terms of the statutory provisions and the case of Garvie's Trs she reached the view that a transfer by unconfirmed executors may be validated by subsequent Confirmation, but only if that Confirmation is obtained within a year of the death. Under section 11(3) of the Crofters (Scotland) Act 1993 if the interest is not disposed of according to law within a year, the landlord is entitled to terminate the lease. The interest can only be disposed of according to law by a confirmed executor. If Confirmation does not take place within the year then there has not been a disposal according to law within the period required. The landlord's right to terminate thereupon arises and cannot be defeated by a subsequent Confirmation, even where notice to terminate has not yet been served.

Comment

The importance of time limits when dealing with crofts and succession are highlighted by this case. To obtain Confirmation within one year of the date of death is clearly paramount. The transfer can be effected prior to Confirmation and validated by it. But that transfer must be by way of a document, however informal, transferring the interest. Ideally executors should aim to obtain Confirmation well within the one year period and then effect a docquet transfer leaving no doubt about the validity involved.

Note

The Crofting Reform (Scotland) Act 2010 extends this one year period to two years. At the time of writing the relevant part of the Act has not yet been brought into force.

The Decision in this case has been Appealed. We will bring you our opinion on that Appeal at CaseCheck once the Appeal has been heard and a Judgment issued.