Forthtay Limited Employee Trust has lost its appeal against a Scottish Government decision that saw it forced to sell an area of its land in St. Andrews to a community body.
A landowner has failed in an appeal against a Scottish Government decision requiring the sale of an overgrown area of land in St. Andrews to a community group.
The Land Reform (Scotland) Act 2016 (the "2016 Act") Part 5 introduced the "Right to buy land to further sustainable development" – essentially a right that allows community bodies to seek the consent of the Scottish Ministers to exercise compulsory purchase of land or buildings for the purposes of furthering the achievement of sustainable development.
Poets' Neuk (a company limited by guarantee that was formed to benefit the community of St. Andrews) was given consent to do just that to exercise the right to buy land on the west side of Greyfriars Gardens in St. Andrews. The land was labelled as neglected and Poets' Neuk plan to transform what they described as an "eyesore" plot of land into a public poetry garden honouring Mary Queen of Scots.
The landowner, Forthtay Limited Employee Trust, challenged the Scottish Minister's decision to approve Poets' Neuk's application in terms of Section 69(1) of the 2016 Act citing "apparent bias". Forthtay wish to develop the land and open a café on it.
However, following a hearing in Dundee Sheriff Court earlier this year, Sheriff Timothy Niven-Smith concluded that the Scottish Ministers had acted lawfully.
Forthtay may well appeal the decision (and it had until 13 May 2025 to do so but no information is available as to an appeal just yet), but if the sale goes ahead, it will be the first time a private landowner has been forced to sell land to a community group in Scotland.
The legislation
The Land Reform (Scotland) Act 2016 (the "2016 Act") – Part 5
In considering an application under Part 5 of the 2016 Act (the right to buy land to further sustainable development), the Scottish Ministers must only allow the transfer of land to a community body if (a) the sustainable development conditions set out in the Act are met and (b) the procedure set out in the Act has been complied with (Section 56(1)).
The case centred around the sustainable development conditions set out in Section 56(2):
"(a) the transfer of land is likely to further the achievement of sustainable development in relation to the land,
(b) the transfer of land is in the public interest,
(c) the transfer of land —
(i) is likely to result in significant benefit to the relevant community... to which the application relates, and
(ii) is the only practicable, or the most practicable, way of achieving that significant benefit, and
(d) not granting consent to the transfer of land is likely to result in harm to that community."
Section 56(4) of the 2016 Act provides that, in determining whether the sustainable development conditions are met, the Scottish Ministers may take into account the extent to which, in relation to the relevant community, regard has been had to the relevant guidance issued under Section 44 of the Act. This provides that the Scottish Ministers must, among other things, have regard to relevant human rights.
Legal arguments – Forthtay (the landowner)
Forthtay's appeal was based on four grounds:
1. That the Scottish Ministers had failed to consider the benefit to "sustainable development"
Forthtay said that the Scottish Ministers had failed to ask whether allowing the transfer of the land would be of greater or lesser benefit to the goal of "sustainable development" than the status quo.
2. Article 1 Protocol 1 of the European Convention on Human Rights (ECHR) applied
Article 1 Protocol 1 of the ECHR provides that: "Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law...".
Forthtay argued that the failure to consider the benefits to sustainable development means that no proper analysis of its Article 1 Protocol 1 rights has been made. It said that scrutiny of the Scottish Minister's decision falls far short of being "close or penetrating", which was part of a three-stage test that the Scottish Ministers ought to have adopted, in terms of R v Shayler 2003.
Forthtay submitted that there was no serious exercise in where the balance of benefit lies in respect of sustainable development. The Scottish Ministers should have recognised the application for what it is – namely a poetry garden with no economic benefit. Further, it was submitted that the Scottish Ministers have "fallen seriously short of the high standard required when depriving a party of his property right".
3. Undue influence
Forthtay's third ground of appeal was that the Scottish Minister's decision fails to properly consider the public interest, in that it has been unduly influenced by irrelevant considerations.
Forthtay argued that it was clear from some of the points made in the decision that there had been a "serious, fatal, failure of impartiality". The Scottish Ministers had, in Forthtay's submission, became "invested in the success of the application". Specific reference was made to the following comments in the decision:
"This is the first application of its kind in Scotland and, if granted, is likely to generate interest not only in St. Andrews but also further afield and therefore influence land use in Scotland more widely."
"Ministers have considered the likely effect of granting (or not granting) consent to transfer of land, on land use in Scotland and concluded that such a transfer is likely to have an impact on land use in Scotland through leading by example."
4. Regeneration
Forthtay's final ground of appeal was that the decision did not adequately consider the issue of regeneration. It argued that the Scottish Ministers ignored Forthtay's proposals to form a café, which it had been working towards for some time.
Further, it was submitted that the Scottish Ministers' decision proceeds on the false assumption that the only way in which regeneration can be achieved is to grant Poets' Neuk's application.
Legal Arguments – the Scottish Ministers
1. Failure to consider the benefit to "sustainable development"
It was accepted that there is no statutory definition of "sustainable development". The Scottish Ministers were entitled to take an "integrated approach" to sustainable development. Therefore, it had not applied the wrong legal test, all that was required was that it needed to be satisfied that the transfer of land is likely to result in significant benefit to the relevant community.
2. ECHR
The Scottish Ministers said that it had issued guidance that makes it clear that it is reasonable for local communities to expect engagement about land. Having regard to this guidance and its consideration of the lack of consultation, a close and penetrating examination of the facts here would lead the court to conclude that there was justification for the removal of Forthtay's property rights and that the actings of the Scottish Ministers were ECHR compliant.
3. Undue influence
The Scottish Ministers stated that its decision set out the range of considerations it made in reaching the conclusion that the transfer was in the public interest. It submitted that in terms of public interest there are no restrictions on what may or may not be relevant and what requires to be considered may vary from application to application.
The mere fact that the Scottish Ministers did not find in favour of Forthtay is not a factor pointing towards bias. The Scottish Ministers submitted that there was simply no real possibility of bias in this factual matrix.
4. Regeneration
The Scottish Ministers submitted that it did consider regeneration. Its conclusion was that if the land was not transferred, the lack of regeneration proposed by Poet's Neuk could not constitute a harm to the community, although it would amount to a missed opportunity.
The Scottish Ministers also criticised Forthtay's suggestion that the history of failed planning applications to site a café on the land and the well documented history of the poor condition of the land ought to be ignored.
Decision and discussion
Sheriff Niven-Smith preferred the Scottish Ministers' submissions. He was "satisfied that the Ministers had regard to the legal framework and applied the correct test in law to the questions they required to answer".
Sheriff Niven-Smith was not satisfied that the Ministers failed to consider material considerations or that they acted irrationally in their decision making and was not satisfied that there was any real possibility of bias. Forthtay's appeal was therefore refused.
Comment
The balance of individual property rights and the public interest is a debate which appears at the centre of Scotland's approach to land reform. This decision is significant in that it is the first case of its kind to be considered by the Sheriff Appeal Court and, as such, it is helpful in providing guidance as to how the Court may interpret the 2016 Act.
This article has been co-authored by Trainee Brendan Naughton.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
