Petition for Judicial Review in which Trump International sought to challenge the Scottish Government’s decision to grant permission for an offshore wind farm near its golf resort at Menie in Aberdeenshire[1].

Trump argued that the Scottish Government:

1. should have held a public inquiry before reaching its decision; and
2. should not have granted consent in terms of s36 of the Electricity Act 1989 as the wind farm developer did not hold a licence to generate electricity.

Public inquiry
Trump contended that the Scottish Government’s failure to hold a public inquiry would raise in the mind of the fair-minded and informed observer a real possibility that the decision-maker was biased.

S36 argument
Trump founded on the decision in Sustainable Shetland v The Scottish Ministers in which Lady Clark found that consent to build a wind farm could not be granted to developers who did not already hold a licence to generate electricity.

Decision
Lord Doherty rejected these arguments. The decision not to hold a public inquiry had been lawful (the Minister has a wide discretion as to whether or not to hold a public inquiry) and Trump had not set out any objective justification as why it indicated bias. As regards s36 of the 1989 Act, Lord Doherty disagreed with the interpretation taken by Lady Clark in Sustainable Shetland and found that the Act conferred power on the Scottish Government to grant s36 consent even though Aberdeen Offshore did not have a licence to generate electricity.  Trump’s petition was dismissed.

The full judgement is available from Scottish Courts here.

(See also appeals to the Inner House and Supreme Court.)

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.

Our DIY training session on property auctions in Scotland is now available. It  includes slides, speaker’s notes and a detailed handout covering the following:

• a general guide to sales by auction in Scotland;
• process and procedures at auction sales;
• the important general and special conditions;
• conflict between the auctioneer’s general conditions and those issued by the firm;
• considerations from both buyer’s and seller’s perspectives;
• the differences between auction sales in Scotland and England; and
• VAT implications where there is a TOGC.

The course objectives can be seen here.

It is priced at £40 and can be purchased below:

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Background
Outer House case concerning a lease of premises at Corstorphine Road Retail Park in Edinburgh. Aviva were the Landlords and McDonald’s, the tenant. McDonald’s operated a restaurant with a drive through from the premises. Aviva entered an agreement with Costa for the construction of a coffee shop with a drive through to be situated on the car park. In terms of the lease with McDonald’s, McDonald’s consent was required for such an arrangement. McDonald’s refused consent and the question for the court was whether McDonald’s refusal of consent was unreasonable.

Arguments
Before coming to a decision, McDonald’s sought information from Aviva on the impact of the proposals on traffic and parking and instructed expert advice from ADL Traffic Engineering Limited. ADL advised that, following construction of the coffee shop, the car park would not be fit for purpose at peak times and the development would impact negatively on McDonald’s. Following that advice, McDonald’s concluded that the proposals would materially adversely affect its trade and refused consent.

Aviva obtained a report from its own engineer Dougall Baillie Associates (DBA) which indicated that sufficient parking would remain after construction of the Costa store. They argued that McDonald’s should have been aware of the DBL report and it was not reasonable for them to rely solely on the ADL report.

Decision
After noting that the onus was on Aviva to demonstrate that the refusal was unreasonable, not on McDonald’s to prove the opposite, Lord Malcolm found that Aviva had failed to show that any reasonable tenant would have granted consent. In all the circumstances there was nothing unreasonable in McDonald’s choosing to follow ADL’s views. The court did not require to decide whether it agreed with the refusal of consent or the reasons for it. McDonald’s did not need to demonstrate that the expert advice was correct, nor justify the conclusions upon which the decision to refuse consent was based. The only question was whether McDonald’s had acted in a reasonable manner. In that regard, Lord Malcolm said the following:

“[McDonald’s] did not “expert shop”, nor tailor matters to obtain the advice it wanted. There was no need for [McDonald’s] to seek another view, nor to place the ADL report before DBA before reaching a decision on what to do. There was no obligation upon [McDonald’s] to come to its own independent view on the traffic impact of the DBA proposals. It was entitled to rely on the advice received from ADL. There was nothing unreasonable about the conclusions on which the refusal of consent was based.”

The full judgement is available from Scottish Courts here.

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.

Outer House case in which a property developer sought damages from his solicitors in respect of professional negligence.

The developer argued that, as a result of the solicitors’ negligence (in failing to advise him correctly), he entered a contract to sell land which was conditional on him obtaining planning permission (for residential development) within a period of 12 months and which made provision for the purchaser to withdraw from the contract if planning was not contained within the period but contained no corresponding provision allowing the developer to withdraw in the same situation. Consequently, when the developer failed to obtain planning permission, he was unable to withdraw from the contact and, as a result, and claimed that he was unable to accept an offer from an alternative purchaser at a higher price.

After considering the evidence of various witnesses, Lord Brodie found that the developer had failed to show that the solicitors were guilty of a failure to exercise reasonable care. Although the solicitors’ had given no direct advice to the developer himself, Lord Brodie held that the solicitors had given advice on the effect of the clause to the developer’s father who he found to be acting as an agent for the developer with actual authority to conclude the missives on his behalf. Lord Brodie accepted evidence to the effect that the developer’s father had repeatedly given instructions to the solicitors[1]

in the past (on behalf of, and with the knowledge of, the developer) and noted:

“It may be that there was no express agreement between father and son conferring the authority of the latter on the former. Indeed I would be surprised were that so. What is more probable is that they developed a way of working over a series of transactions, without ever formalising it. They were practical men operating in a very dynamic environment who were, reasonably enough, interested in making money in a booming market. Neither had much interest in “paper work”.”

The full judgement is available from Scottish Courts here.

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Background
Sheriff Court case relating to a landlords’ failure to comply with the Tenancy Deposit (Scotland) Regulations 2011 in respect of a property at 4/6 Admiralty Street in Edinburgh.

The landlords failed to pay a deposit of £750 into an approved tenancy deposit scheme as required by regulation 3 of the 2011 regulations and made deductions from the deposit before returning it to the tenant at the end of the lease. In terms of regulation 10, where the landlord fails to comply with its duty under regulation 3, (following an application by the tenant) the sheriff must order the landlord to make a payment not exceeding 3 times the deposit to the tenant. Following an application from the tenants, the sheriff ordered the landlords to pay the maximum monetary payment of three times the deposit.

Argument
The landlords appealed challenging the sheriff’s decision on, what were essentially, 3 grounds:

1. that the summary application made by the tenants, although made timeously[1], sought declarator (that the landlord had failed to comply with its duties) but not payment (of the deposit/penalty) and was consequently incompetent;
2. that the sheriff had made an error in allowing an amendment to be made to the summary application outwith the time limit; and
3. that the sheriff had made an error in the exercising of his discretion as to the amount of the penalty (arguing that the sheriff had given no explanation for exercising his discretion in the way he did).

Decision
Summary application
It was implicit in the landlords’ argument that the unamended application was incapable of providing the tenant with a statutory payment (in terms of regulation 10). However, the Sheriff Principal found that the grant of declarator to the effect that a landlord has failed in its duties under regulation 3 is the trigger for a payment under regulation 10. The landlords in this case had admitted their failure to pay the deposit into the statutory scheme which engaged a mandatory requirement on the sheriff to make an order for payment. Whilst it would have been prudent for the tenant to have separately sought an order for payment, the summary application as drafted was sufficient to trigger a payment under regulation 10.[2]

Discretion
There are no rules as to the approach the sheriff should take in assessing the order and the regulations do not contain matters or criteria which the court must consider. Therefore, in the view of the Sheriff Principal, the sheriff has “complete and unfettered discretion” as to the award to make and an appellate court has little, if any, justification for intervening. Whilst procedural fairness suggests a sheriff must have regard to any mitigation, in this case, no evidence had been led in mitigation and it was difficult to see what effect the mitigation might have had. The Sheriff Principal noted:

“As I have observed the sheriff is entitled to impose any penalty including the maximum to promote compliance with the regulations especially at this early stage in their operation and implementation. I regard this as important. It is clear that the appellants made deductions from the deposit at the end of the tenancy directly contrary to the letter and spirit of the regulations. As the sheriff states – “the very thing which it seems to me this legislation was designed to avoid or at least mitigate.””

 And earlier in the decision she had stated:

“In dealing with non-compliance no distinction has been drawn by the legislators between the careless or devious; the experienced or inexperienced, the culpable or inadvertent. Likewise the strict liability consequences of non-compliance allow the court to promote rigorous application of the regulations pour encourager les autres. In other words deterrence.”

The full judgement is available from Scottish Courts here.

(See appeal to Inner House here.)

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.

Sheriff Court case concerning the validity of an irritancy notice.

Background
Shetland Leasing were the landlords, and Mr Younger the tenant, under the lease of commercial premises at North Ness Industrial Estate in Lerwick.

Shetland Leasing served a notice on Mr Younger (under s4 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985) advising that they had failed to pay rent and interest due in terms of the lease and demanding payment of £10,167.64 (stated to be the outstanding rent) within 14 days failing which Shetland Leasing would terminate the lease. The notice also stated that once payment had been received Shetland Leasing would advise as to the interest due.

Mr Younger did not pay and Shetland Leasing served a termination notice on Mr Younger. Mr Younger’s solicitors then sent the outstanding rent to Shetland Leasing’s solicitors and Mr Younger remained in the premises. Shetland Leasing sought declarator that the lease was at an end and summary ejection of Mr Younger from the premises.

Argument
Mr Younger argued that the irritancy notice was invalid as it did not adequately convey what required to be done in order to comply with it. In particular it did not include adequate specification of the rent said to have been in arrears: the rent was said to be for a period of 5 months rent but the actual figure quoted in the notice did not equate to that. Mr Younger contended that it was unclear whether the sum of £10,167.64 included interest and, because it was unclear which months had been paid in full and which had not, he could not calculate the interest due on the lease.

Decision
The Sheriff found that the lease had been validly terminated and granted decree for summary ejection of Mr Younger.

The purpose of the notice was to give a clear and unambiguous intimation to the tenant that there were arrears of rent which required to be paid within a specified period, failing which the landlord could rely on the irritancy clause in the lease to bring it to an end. The notice served by Shetland Leasing clearly demanded rent only and not interest.

In terms of s4 of the 1985 Act the landlord must demand payment of: “the sum which he has failed to pay together with any interest thereon in terms of the lease “. The lease made the tenant liable to pay interest on unpaid rent from the due date for payment until payment was “actually made”. The interest could not be calculated until payment was made. The sheriff found that the obligation as regards interest was to pay it within a reasonable period after payment of the rent. It followed that it was not necessary, or appropriate, that the notice demanded payment of the interest and its validity of the notice could not be attacked on that basis.

The sheriff also found that, although the notice referred to Mr Younger’s failure to pay interest when in fact there was no obligation to pay interest at that point, it did not make the notice invalid as Mr Younger ought to have known by reference to the lease that it was not payable at that time and could not have been misled by the assertion.

With regard to Mr Younger’s assertion that the arrears were overstated, the sheriff said:

“That is not a defence that is open to a tenant who has received such a notice and has done nothing in response to it. It may well be the case that the sum claimed in such a notice is inaccurate. That could be so for a variety of reasons. But in this case we are dealing with a commercial lease. The defender is a man of business. In running his business he must maintain records. He ought to know whether or not he is actually in arrears with his rent. He ought to be able to calculate from his records the extent to which he is in arrears with his rent. But all that the defender avers is that he was aware that he was in arrears of rent to some extent but was unaware of the exact amount. If it is truly the defender’s position that the section 4 notice overstated the arrears he could, and should, have responded to the notice by asserting a lower amount of arrears than was claimed and by paying that lower amount.”

The full judgement is available from Scottish Courts here.

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.

Inner House case concerning a brownfield site at St David’s Harbour in Dalgety Bay owned by Eadie Cairns Limited. The site had been previously used for both commercial and residential purposes until 1980 when it became derelict.

Background
In 2007 Fife Council produced a planning brief for developers proposing a mixed use development on the site. Eadie Cairns submitted an application for outline planning permission for a commercial and residential development along the lines of the planning brief. The Council failed to determine the application timeously and it was made the subject of a public local inquiry.  The Council opposed only the residential part of the application. In November 2007, the reporter at the inquiry allowed an appeal against the failure to determine the application and granted outline planning permission[1]. In October 2009 Eadie Cairns applied for detailed planning permission for 27 flats, a restaurant/bistro and a lighthouse. Planning permission was refused and the reporter[2]  refused an appeal on the basis of the siting of the flats.

By February 2010, the new proposed Dunfermline and West Fife local plan had been drafted. It  recorded that the Eadie Cairns site already had outline planning permission for commercial leisure and housing uses but also stated that if the permission were to remain unimplemented and expire the site should remain undeveloped and revert to greenspace. Eadie Cairns made representations opposing this aspect of the draft plan.

When considering approval of the plan, the Scottish Ministers required Fife Council to prepare a summary of unresolved issues in relation to the plan (including reasons the Council did not modify the plan in response to issues raised in representations). The Council identified Eadie Cairns objection to its site’s reversion to open space if planning permission lapsed and, as a reason for not accepting the objection, said:

“The site has significant planning history and was the subject of recent planning appeal.  The Draft local plan … maintains [the Council’s] position should the permission remain unimplemented.”

Meantime Eadie Cairns submitted a fresh planning application (for 24 flats, a restaurant/bistro and a lighthouse) after detailed discussions with Council’s planning officers. The Council again failed to determine the application timeously and Eadie Cairns again appealed to the Scottish Ministers. On the same day (3 May 2012) as the reporters ceased gathering information relating to the proposed local plan, Eadie Cairns sought to draw their attention to the fresh planning application stating that the planning officers’ support for the new application was inconsistent with the Council’s proposal for the site to revert to green space. The reporters refused[3] to consider this information and (noting that the outline permission for the site had lapsed) formally adopted the plan. The Scottish Ministers then refused the fresh application on the basis it did not accord with the plan.

Argument
Eadie Cairns sought an order quashing the entry relating to their site in the plan on the basis of the Council’s failure to give reasons. They argued that the reporters had not noticed the council’s failure and had not sought out their reasons (in contravention of national planning policy and guidance). The lack of reasons meant that the reporters could not properly scrutinise whether the proviso (i.e. that the site should return to greenspace) was appropriate or not.

Decision
Representations made by Eadie Cairns on 3 May 2012
The Inner House found that there had been no requirement for the reporters to take into account the representations Eadie Cairns had made on 3 May 2012 with regard to the fresh planning application. The statutory scheme involved a “cut-off date” at the point the reporter had completed examination. The purpose of the reporter’s examination was to assess issues raised in unresolved representations. The examination began at the point the Council summarised the objections and gave its reasons for not modifying the daft plan. Although the reporter could call for further representations, it was not obliged to consider any offers to provide additional representations. Consequently the “cut-off date” had long since passed by 3 May 2012.

Reasons given by Fife Council
The Inner House held that the Council had given no reasons for not modifying the proposed plan in terms of Eadie Cairns’ representations. Whilst the Council would not be criticised for giving reasons in a succinct, broad manner, intelligible reasons have to be given. The Council’s explanation of their position had been opaque. Their position, at the 2007 inquiry, was that commercial leisure, but not residential, development was appropriate for the site. However the inquiry had established that they had been wrong in relation to proper planning considerations and that a mixed commercial leisure and residential development was appropriate. Not only should the Council’s reasoning have provided coherent justification (preferably in the form of a material change in circumstances) for departing from the findings of the reporter in the 2007 inquiry, but it should also have given justification as to why the Council was no longer supporting the principles it had promoted in the 2007 planning brief.  In the absence of such reasoning there was:

“no apparent justification in planning terms for leaving an area of privately owned ground in amongst what is an urban development as, in effect, wilderness, especially in circumstances where it had formerly been the site of a bustling commercial harbour and remains what appears to be a prominent element in the local planning context.”

Reasons given by the reporters
The effect of this flaw in the Council’s reasoning had been that the issues had not been properly focused before the reporters. Whilst the reporters could have cured the flaw by requesting more information, they had not done. The Inner House found that no intelligible reason had been given by the reporters as to why the principle of commercial leisure and residential development established in 2007 was no longer appropriate for the site.

The Court also noted that the reporters had provided an erroneous, or at least materially incomplete, narrative of the planning history of the site and quashed the whole proposal relating to the site in the development plan.

The full judgement is available from Scottish Courts here.

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.

Inner House case in which Mr Barr appealed a decision of the Outer House refusing his appeal of East Renfrewshire Council’s decision to grant planning permission to Stewart Milne Homes Limited to construct a development in Newton Mearns.

Background
Mr Barr lived at Fa’side House which was adjacent to the proposed development and was accessed by a tree lined driveway. The planning brief stated that the development should deliver “protection of the existing tree boulevard along the access to Fa’side House”. Mr Barr argued that the Outer House failed to recognise that, when granting permission for the development, the Council had failed to take account of a key requirement in its own planning brief and thus failed to take account of a material consideration.

Decision
The Inner House refused the appeal finding that it was plain from the decision that the judge had correctly identified the legal issue submitted by Mr Barr. It also refused to accept that the Council had failed to have regard to the content of its planning brief. In the Council’s “Report of Handling” there had been express reference to the planning brief and its objectives, including the need to protect the tree boulevard.

In the court’s opinion, Mr Barr’s complaint was, in essence, not that the Council had failed to have regard to the objectives of the planning brief but that they had failed to reach a conclusion that the proposed development would, in a material way, breach the planning objectives. In effect, Mr Barr was arguing that the proximity of the trees to the new development would inevitably lead to the trees requiring to be removed for safety reasons. However, the court found that Mr Barr had failed to show that there was evidence before the Council to support this argument.

In the view of the court, Mr Barr’s criticism of the Council decision related to the merits of the planning decision and to matters on which the Council was entitled to reach a conclusion.

The full judgment is available from Scottish Courts here.

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.

Inner House case considering whether additional parties (including the Trump Organisation) could intervene in the case of Sustainable Shetland v The Scottish Ministers which concerned the Scottish Government’s decision to grant planning permission for a wind farm on Shetland.

Background
In the Outer House Lady Clark had, in essence, found that consent to build a wind farm could not be granted to developers who did not already hold a licence to generate electricity (this finding has become known as “the competency question”). As was noted by the Inner House, the competency question has caused a “degree of consternation” amongst wind farm developers.

The Scottish Minister’s sought to appeal the decision of the Outer House. However, although they have indicated that they wish to maintain environmental arguments, Sustainable Shetland have indicated that they do not wish to maintain an argument based on the competency question.

A variety of parties including the Trump Organisation[1], various wind farm developers and the RSPB then sought to intervene in the proceedings in terms of Rules of Court 58.8(2) (which allows parties directly affected by any issues raised in proceeding to intervene) and 58.8A (which allows parties to intervene in order to raise an issue of public interest).

Decision
Rule 58.8(2) – parties directly affected
The Inner house found that Trump and the other wind farm developers could not be said to be directly affected by the issues raised in the proceedings:

 “As a general rule, if a public law decision is challenged, for whatever reason, the range of persons able to enter the process remains limited to those who can show an interest in the outcome of the case; that is to say not in the potential legal reasoning employed by the court in reaching a decision, but in the decision itself. Neither Trump nor AES K2 and the related companies have any interest in the outcome of whether the Shetland windfarm goes ahead.”

Rule 58.8A – issues of public interest
Trump’s application under rule 58.8A also failed. They were not advancing a public interest point. The point which they sought to make was one intended as a protection of their private interests in the marketing of their Menie development.

The Outer House also rejected the RSPB’s application under rule 58.8A noting that, although they had interest in the bird life on the wind farm, they had had the opportunity to intervene in the Outer house proceedings and chose not to do so. Consequently, the Inner House did not consider it appropriate to allow the RSPB to enter the process at the appellate stage under the guise of a public interest intervention. Further, given the positions of Sustainable Shetland and the Scottish Ministers, the court did not consider that any propositions advanced by the RSPB would be likely to assist the court.

The full judgement is available from Scottish Courts here.

Inner House case in which SEPA and others appealed against a decision of Lord Hodge in the Outer House to the effect that the liquidators of Scottish Coal could (1) abandon mining sites and (2) abandon/disclaim the related statutory licences/permits (which in effect allowed the liquidators to avoid onerous obligations requiring restoration of the sites).

SEPA’s arguments
Abandonment of land
SEPA argued that the liquidator did not have the power to abandon or disclaim property.  Whilst a liquidator could disclaim land in the sense of declining to deal with it, the land continued to be owned by the company and the liabilities arising from ownership continued to be enforceable. Lord Hodge, they argued, had been in error when he stated that a liquidator could disclaim “by taking steps to terminate the company’s ownership of the land”.

Abandonment of the statutory licences
With regard to the liquidator’s power to abandon or disclaim the statutory licences:

1. there was no power to “disclaim” in the sense that a liquidator could terminate a licence unilaterally and without reference to the statutory surrender procedures;
2. even if  1. were wrong and a liquidator did have a general power to disclaim property, the scheme laid out in the CARs[1] created a form of licence that could not be renounced in that way, even if other licences could be so renounced; and
3. it had been within the legislative competence of the Scottish Parliament to promulgate the CARs with that effect.

Decision
Abandonment of land
A person can abandon land, in the sense of leaving it physically, intending to give up its use permanently. However, the Inner House found that that was not what was under consideration in this case. What required to be decided was whether a person can “abandon” or “disclaim” ownership of land. There are a number of methods by which a person’s ownership can be terminated: destruction of the land itself, where the owner ceases to exist, by operation of law (e.g. enforcement of a security or a compulsory purchase) or by voluntary transfer to another person. However, there is no legal process whereby a person can transfer land into oblivion. A person cannot abandon the ownership of land in the sense of casting away the real right.

The court also noted the difference between the insolvency regimes in England and Scotland created by s178 of the Insolvency Act 1986, which allows a liquidator in England (but not in Scotland) to “disclaim” onerous property[2].

Abandonment of the statutory licences
The CAR regime prohibits activities which have or are likely to have a significant adverse impact on the water environment. In particular, activities liable to cause pollution are controlled but controlled activities can be carried out by a “responsible person” on the grant of a licence by SEPA. Liquidators are expressly included within the definition of “responsible person”. In addition to being an asset, licences bring with them associated liabilities and can be varied or terminated on application to SEPA which, if it grants an application to surrender a licence, must specify the steps necessary to avoid a risk of adverse impact on the water environment and to leave the water environment in a state that complies with European, UK and Scottish legislation.  On a broad interpretation of the regulations the provisions expressly impose the surrender regime on liquidators[3]. In the view of the Inner House:

“The alternative and narrower interpretation would require the CARs to be read in a way that goes against the ordinary meaning of the language used. Specifically, the CARs do not say that a liquidator is a “responsible person” only for so long as he does not exercise a power to disclaim. Such an interpretation is contrary to the plain meaning of the CARs and ignores the additional problem that a Scottish liquidator does not, in any event, have a general or statutory power to disclaim. It would be a curious construction of an explicit provision that a liquidator is a responsible person and, therefore, responsible for ensuring compliance with the statutory licence, only for as long as he chooses. The narrower interpretation of the CARs is further undermined by the existence of the specific surrender provisions.”

Competence of the CARs
In the Outer House Lord Hodge had the view that the Scotland Act 1998[4] required him to take a narrow interpretation of the CAR regime. However, the Inner House disagreed. Even when taking a broad approach to interpreting the provisions, and although the effects of the provisions would be felt by liquidators of companies being would up in England, the CAR regime dealt with matters which formed part of the law of Scotland and did not form part of the law of England. Also, when considering whether the provisions dealt with reserved matters (i.e. corporate insolvency) the court found:

 “The purpose of the CARs as a whole, and the provisions relating to a liquidator in particular, is an environmental one. Neither the CARs as a whole, nor the provisions relating to liquidators, have as their purpose an insolvency objective. The effect on liquidators of companies possessing a CARs licence is no more than a loose or consequential connection. In all the circumstances, those provisions of the CARs which are said to restrict the power of a liquidator cannot be said to relate to reserved matters.’”

The Inner House allowed the appeal and directed that the liquidators did not have the power to “abandon (otherwise disclaim)” the sites or the statutory licenses.

The full judgement is available from Scottish Courts here.