Sheriff Court case concerning liability for the maintenance of Carbeth House in Killearn. The property comprised 9 flats each of which was subject to a deed of conditions.

Facts
A large crack which appeared in the west wall of the property on 16 August 2007 was examined by a building standards surveyor from Stirling Council on 17 August 2007 and found to be dangerous. The surveyor wrote to the owners of the flat requiring a protective fence to be erected around the wall and intimated that a dangerous buildings notice would be served on the owners by the Council. On the recommendation of a civil engineer and, following a majority vote of the proprietors (by email), a protective fence was erected together with scaffolding to support the wall (on 20 August 2007).

The crack in the wall was discussed, and the measures taken, explained at a meeting of the proprietors on 23 August 2007 (convened primarily to discuss another matter) and no objection was raised. A dangerous buildings notice was issued to the proprietors on 24 September 2007. Contractors were asked to tender for the repair works required by the dangerous buildings notice and, in September 2008, the proprietors voted by majority (again by email) to accept one of the tenders.

The proprietors were then asked to contribute money into a repair fund. However, Mrs Wallace and Mr Crossan declined to contribute. After some legal correspondence, solicitors acting for Mrs Wallace and Mr Crossan indicated in a letter (on 29 May 2009) that they would pay their share of the costs of the repairs on receipt of the appropriate engineer’s certificate and were anxious for the work to be carried out and the scaffolding removed.

In June 2009 the repair commenced. The repairs, along with additional works revealed as necessary when the initial work began, were completed on 12 October 2009. Mrs Wallace and Mr Crossan failed to pay their share of the costs and Mrs Garvie was authorised by a majority vote of the other proprietors to recover the sums due from Mrs Wallace and Mr Crossan.

Argument
Mrs Wallace and Mr Crossan argued that the sums could only be recovered if the works had been done in terms of the title deeds. In terms of the deed of conditions there had to be a meeting of the proprietors before works could be instructed (and, they argued, no scheme for works had been agreed at the meeting on 23 August 2007).

Decision
The sheriff found Mrs Wallace and Mr Crossan were liable to pay their share of the cost of the repairs (£6,483 in the case of Mrs Wallace and £6,858 in the case of Mr Crossan). He concluded that the wording of the deed of conditions was permissive and that the procedure in the deed of conditions was not the only method by which the proprietors could instruct repairs. Against that background the sheriff considered the situation by reference to the common law, consent and the Tenements (Scotland) Act 2004.

Common law
The wall was common property and, in terms of the common law, all of the proprietors were obliged not only to contribute towards the cost of the repairs but to actively ensure that the repairs were carried out. It is also a well known principle of the common law of common property that any one proprietor can instruct common repairs and then look to fellow co-proprietors for a contribution towards the cost. Quite apart from the deed of conditions, the sheriff took the view that all of the repairs were necessary and could be instructed by any of the co-proprietors and that Mrs Wallace and Mr Crossan were obliged to pay a share of the costs.

Consent
With regard to consent, Mrs Wallace and Mr Crossan had attended the meeting on 23 August 2007 at which the works and costs had been discussed and made no objection. The letter of 29 May 2009 could be treated as unconditionally binding Mrs Wallace and Mr Crossan to the costs including the increased costs and additional work. Even if not, they had been provided with information at each stage and were to be deemed to be renewing the authority given in the letter by failing to revoke it.

The Tenements Act
Initial scaffolding works
With regard to the Tenements (Scotland) Act 2004, the initial scaffolding work amounted to an emergency repair[1] and, as the deed of conditions did not provide for emergencies, the tenement management scheme contained in the 2004 Act applied. Any owner can instruct emergency repairs and the costs of such work are “scheme costs” (meaning they would be shared[2] amongst the proprietors).

Retention of the scaffolding
As to the retention of scaffolding in place after the meeting on 23^rd August 2007, the procedure for making the decision to do so was provided in the deed of condition (i.e. by majority vote at a meeting of the proprietors). In this case the meeting had not been convened in accordance with the deed and there was no vote. However, there had been a meeting at which it was discussed and the proprietors knew the scaffolding would need to remain in place until repairs could be organised. There was no evidence that Mrs Wallace and Mr Crossan had disputed the need to retain the scaffolding and there had been consensus amongst the proprietors at the meeting. As such, the sheriff found that a scheme decision had been made (in terms of the 2004 Act) but that the decision had been reached by an irregular procedure[3]. However, the irregularity did not affect the validity of the decision[4].

Completion of the works
The same analysis applied to the repairs carried out. A vote took place by email after circulation of the projected scheme costs. The majority approved the scheme and, even though Mrs Wallace and Mr Crossan may not have voted in favour of the scheme, they did consent. Again, although this did not follow the procedure contained in the deed of condition, the sheriff found that there had been a valid scheme decision (albeit reached by an irregular procedure).

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.

Sheriff Court case in which commercial estate agents sought payment of fees under a sole selling agreement they entered with Mr and Mrs Ferguson in respect of the sale of licensed premises (known as “the Lounge”) in Bathgate. In terms of the agreement the estate agents were entitled to payment “upon conclusion of a contract for the sale of or other disposal of the business and premises…”.

The estate agents were initially instructed (in October 2010) to sell the premises at offers over £300k with sitting tenants. However no offers were received and the tenant of the downstairs bar area gave up his tenancy. The Fergusons decided to refurbish the whole premises and the tenant of the upstairs music venue (a Mr Ward, who had continued to trade for a short time after the bar stopped trading) relocated to other premises owned by the Fergusons. The premises were then remarketed without a sitting tenant at offers over £200k.

Discussions took place between the Fergusons and the estate agents to the effect that it was preferable to sell the premises with a sitting tenant which led to a belief, on the part of the estate agents, that the Fergusons wished to dispose of the premises by lease rather than sale. A former barman also intimated interest in the premises. The estate agents prepared further sales particulars (which were not approved by the Fergusons) advertising the premises for let.

The estate agents then (in July 2011), in the mistaken belief[1] that the former barman had, or was to, acquire an interest in the premises stopped marketing the property and invoiced the Fergusons for fee of £5k plus VAT. The Fergusons then entered missives for a 5 year lease of the premises with Mr Ward in August 2011.

The sheriff found that the estate agents were not entitled to payment in terms of the sole selling agreement finding that the existence of missives of let between the Fergusons and Mr Ward was not an event which gave rise to the estate agent being entitled to remuneration in terms of the agreement.  In particular the word “disposal” in the agreement related to the disposal of the sellers’ interest in land and that the missives entered into between the Fergusons and Mr Ward did not constitute a disposal of an interest in land nor was it a long lease and therefore did not trigger any entitlement to payment under the contract.

Appealing that decision, the estate agents argued (amongst other things) that the sheriff had been wrong to read the words “interest in land” into the agreement after the word disposal and that the word “disposal” should be given it’s plain and ordinary meaning which was the “rearranging of affairs”. The estate agents also contended that the missives of let were not simply a renewal of the existing lease: the missives referred to both parts of the property (upstairs and downstairs); there was a change in rent and a new date of entry. In coming to his conclusions the sheriff, it was argued, had placed an interpretation on the contract which was contrary to commercial sense or reality.

Those arguments were rejected by the sheriff principal who refused the appeal finding that, against the factual and statutory background[2], the sheriff had not erred in coming to his conclusions. The Sheriff Principal also took the view that the ordinary meaning of the word “disposal” was “alienation” and, with regard to the commercial purpose of the agreement, said the following:

“The suggestion that the commercial purpose of the agreement is to ensure the [the estate agent’s] remuneration in circumstances which include the other party entering into missives of let with the sitting tenant is, in my view, absurd. That contention disregards completely the fact that there are two parties to the contract and in respect that the purpose of the contract is to achieve either a sale of the premises or, as contended for by [the estate agents], a lease of the premises. The commercial reality or purpose of the contract is for both parties to achieve such a result. Without achieving the sellers’ purposes the estate agent will not receive remuneration. The commercial purpose contended for on behalf of [the estate agents] would be to have the other party as a “hostage” for the duration of the contract. It would mean that the seller would be unable to conduct and regulate their business affairs by renewing a lease or renegotiating a lease with an existing trading tenant without triggering liability to pay a fee to the estate agent”.

 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.

Petition for Judicial Review in which Mr McGinty sought reduction of the National Planning Framework for Scotland 2 (NPF2) to the extent that it designates a new power station and transportation hub at Hunterston. Mr McGinty’s argument was that the Scottish Ministers had not complied with their obligations relating to notice and consultation with regard to the proposed development.

Outer House decision
In the Outer House Lord Glennie found that, although Mr McGinty (a bird watcher living 5 miles from the proposed development) had title to raise the action, he did not have “a real and legitimate interest to protect” or a “real and practical” interest to bring the proceedings. Lord Glennie also found that Ministers had not been shown to have failed to comply with their notice and consultation requirements.

Inner house decision
The Inner House has refused an appeal. It was unable to conclude that the Minister’s statutory requirements on publicity had not been fulfilled (finding that advertising in the Edinburgh Gazette was sufficient to comply with the requirement that the plans be advertised in a newspaper circulating in the area). It also found that the consultation period had not been obviously inadequate and noted, when considering the adequacy of the consultation documents, that as NPF2 was at a more general/higher level of qualifying plans, there was less need for a comprehensive environmental report. (On the basis a specific environmental impact assessment would still be required before the project actually proceeded).

However, in coming to its conclusions, the court did find that Mr McGinty had sufficient standing to raise the action holding that, the fact that the matter was one of public interest and Mr McGinty shared his interest with many other Hunterston residents, did not prevent him relying on that interest as an individual in order to complain.

“We have yet to consider the specifics of the petitioner’s challenge but applying the approach now desiderated by the Supreme Court, it may not be permissible to dismiss it as that of a mere busybody. He lives in an area which he has good reason to believe may be affected by a specific sort of development which will have an adverse impact on a specific coastal environment, about which he avers he is knowledgeable and in which he pursues a specific leisure activity which is of importance to him, as it is of importance to many others. He wished to make representations on the very matter which would have been relevant to the environmental assessment which the respondents were obliged, by both domestic and European law, to carry out. Accordingly, at least at this stage of the examination of the question, it appears that it can be said that the petitioner has standing to bring these proceedings.”

The full judgement is available here.

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

Inner House case (for appeal to Supreme Court, see here) concerning agreements between RBS and a property developer. In July 2007 the bank and the developer entered written agreements for loans of £845k and £560k in respect of the purchase of  two plots of land at Gleneagles on which the developer was to build two houses.

The repayment date for the loans was in August 2008 and, when the developer failed to repay the loans at that date, the bank sued the developer for recovery of the funds. However, the developer counter claimed arguing that he had only entered into the loan agreements on the basis of assurances given by the Bank that it would make additional funding (of up to £700k) available to fund development on the plot and claimed damages in respect of the bank’s breach of those assurances. The assurances said to have been given by the bank included a telephone call prior to the signing of the agreements in which the developer was told that, in addition to the sums lent to buy the land, the bank would advance further “funding for the development”.

In the Outer House Lord Glennie found that bank had agreed a “collateral warranty” obliging them to lend for the development of the plots. However, the Inner House allowed an appeal finding that the telephone call only amounted to a statement of future intention and that legal obligations would only arise when the parties entered a written contract.

“If the [developer] considered that the [written agreements] did not properly reflect what he understood was to be agreed, or had been agreed orally, then he ought not to have signed the agreements. At all events, whatever the [developer] thought was the position, the informed observer would understand the written agreements to cover all matters agreed to date. It may well be that, at that time, the [bank] fully intended to enter into a further bargain with the [developer] to advance additional funding for the building works. However, they had not done so and did not do so. That may have been contrary to the spirit of the negotiations prior to the signing of the written agreements, but that spirit, or its moral content, cannot be taken as creating a legally binding voluntary obligation.”

The full judgement is available from Scottish Courts here.

(NB: See Supreme Court decision here.)

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

Sheriff Court case in which the tenants under a short assured tenancy of property at Cumberland Street in Edinburgh sought to enforce the terms of the Tenancy Deposit Schemes (Scotland) Regulations 2011 against their landlord (an experienced property agent).

The landlord terminated the lease (on 12^th January 2013) and retained the tenants’ deposit of £1150. When the tenants contacted the landlord to recover the deposit (on 17^th February 2013), the landlord  claimed that he was entitled to retain the deposit due to damage caused to the premises by the tenants (but failed to produce any evidence). After lengthy correspondence between the parties the landlord repaid half the deposit to the tenants.

The 2011 Regulations obliged landlords to pay deposits to the scheme administrator of an approved tenancy deposit scheme by 24th November 2012 and also provides a free dispute resolution scheme in relation to the return of the deposits. If a landlord fails to comply with his obligations under the regulations, he is obliged to pay an amount not exceeding three times the amount of the deposit to the tenant.

The landlord admitted that it had failed to comply with his obligations under the regulations but argued that, following the correspondence, the parties had settled the matter and that, as the most the tenants would have been entitled to in terms of any arbitration under the statutory dispute resolution scheme was £1150, payment of three times the deposit was excessive.

The sheriff ordered that an amount of £3450 be paid to the tenants. The amount to be paid was not compensatory; it was a sanction or a penalty analogous to an award of punitive or exemplary damages[1]. In exercising the courts “unfettered discretion” when assessing the amount to be paid, the sheriff took account of the following:

“In this case the landlord was someone who may be presumed to have special knowledge of his obligations both in terms of the 2011 Regulations and the 2004 Act[2]. He failed to comply. It is averred that it was due to “oversight”. No further information was provided by [the landlord's solicitor]. In my opinion no proper explanation for his failure has been provided. He claimed retention of the pursuers’ deposit but failed to produce any evidence to support his claims. Had the dispute resolution procedure been available he would have been unable to seek retention of any part of the deposit without producing relevant evidence. The pursuers were placed in an invidious position and a compromise was reached on economic grounds. The fact that offers to settle this action have been made is in my opinion irrelevant to the issue to be determined.”

Sheriff Court case concerning an application by Edinburgh Woollen Mill to renew its lease of premises on the Lawnmarket in Edinburgh under the Tenancy of Shops (Scotland) Act 1949. Their landlords (trustees for the firm of Gold Brothers) were trading competitors and had served a notice to quit on the Woollen Mill requiring them to leave the premises at the end of the lease.

The 1949 Act allows a sheriff to determine that a tenancy be renewed for a period of up to a year at a rent, and on terms and conditions, that the sheriff thinks are reasonable. The purpose of the Act was to prevent small shopkeepers being evicted by speculators who purchased properties and gave the shopkeepers the option of either buying at an exorbitant price or being evicted.

After noting that the mischief which the Act was designed to address is no longer self-evident today and was not apparent in the circumstances surrounding the lease in question, the Sheriff refused the Woollen Mill’s application:

“[The 1949 Act] empowers, and requires, the court to act to avoid injustice, in the historic context of widespread economic oppression of small-scale shop traders. The types of protection envisaged includes allowing the trader time to relocate to another property, to preserve his business and goodwill, or to avoid the trader being forced out of business altogether through removal of premises from which to trade.

Turning to the present case, it is at once apparent that no such considerations exist. The parties have both known, since the defenders acquired the landlord’s interest approximately six years ago, that the lease would not be renewed consensually. That has left the pursuer plenty of time to anticipate and prepare for the trading realities that this would bring. The pursuer’s business will be somewhat diminished by ceasing trade from the premises, but otherwise continues uninterrupted, from its 300 other outlets. There is no threat to its goodwill or good name, as it can adapt other stores to carry their name, if they wish. The present dispute represents no more than an attempt to retain a highly successful site, and to keep it from a direct competitor. Such an attempt is understandable… ….It is, however, only an economic blow. It is not an injustice, and there is nothing unreasonable in requiring the pursuer to remove at the end of the lease.”

 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.

Issue
Outer House case in which property developers sought to appeal a decision of a reporter appointed by the Scottish Ministers. The reporter had refused an appeal by the developer of Perth & Kinross Council’s decision to reject a planning application for a mixed use development (initially including 1800 and latterly 1500 houses) adjacent to Huntingtower and Ruthvenfield in Perthshire.

The developers’ challenge was based on grounds of irrationality in various forms but also raised the issue of the significance to be attached to an emerging local plan as a material consideration when making planning decisions.

Background
The Perth area local plan (adopted in March 1996) included the developers’ site as a long-term development site. However, the Council refused permission for the development on 4 January 2012 on the basis that it did not comply fully with the development plan. On 10 January a decision was made to amend a new and emerging development plan (not yet adopted) so as to remove the developer’s site from the proposed housing allocation. As a result, the emerging local plan, which was published in January 2012, did not include the developers’ site within the housing allocation.

On 12 September 2012 the Scottish Minister’s reporter refused the developer’s appeal of the Council’s refusal of planning permission. The reporter found that the emerging local development plan was a material consideration and the conflict between it and the developer’s application was sufficient to justify refusing the permission (and thus departing from the adopted existing local plan).  The developer argued (amongst other things) that the reporter had been wrong to do so and also that the decision to remove the developers’ site from the housing allocation in the emerging plan (on 10 January 2013) was simply a consequence of the Council’s rejection of the developers’ planning application (on 4 January).

Decision
Lord Glennie refused the appeal. The reporter had been entitled to consider whether the emerging local development plan was a material consideration. The developer’s site was of a scale and importance such as to make it of major significance in the development of West/North West Perth. That being so, the fact of the emergence of the local development plan was a material consideration. In such circumstances, while recognising the statutory priority given to the plan-led planning process (i.e. the existing development plan), it was legitimate, when assessing the weight to be afforded to that consideration, to take into account the benefits to the public interest of the wider planning framework of the statutory local development plan process. The reporter found these factors to be of sufficient weight to outweigh the provisions of the existing development plan and her decision had made it clear that she had approached the issue in that way.

Lord Glennie also noted that the reasons for removing the developers’ site from the emerging local development plan (other than the simple refusal of the developer’s application on 4 January) had been before the reporter and that her reference to them had made it clear she had taken account of them.

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 concerning a planning application made by Archid in October 2009 to convert an office on Thomson Street in Dundee into a residential building.

Background
Archid received a notice dated 1 December 2009 advising that Dundee City Council had granted planning permission for their development on 26 November 2009. The notice also contained the reasons for the decision and, although the notice purported to grant the permission, the reasons appeared to be justifications for a refusal of permission. Archid then applied for and were granted (on 18 March 2010) a building warrant in connection with the works.

However, on 11 May 2011, Archid received a second notice (also dated 1 December 2009) from the Council advising that planning permission for the works had in fact been refused on 26 November 2009 and that an incorrect decision notice had been issued[1]. The covering letter also stated that the Council’s Enforcement Officer had visited the site, asked that all works cease and that the site be restored to its original condition.

Arguments
Archid sought judicial review. They argued that, having issued their original decision notice, the Council could not thereafter just ignore it and issue a new decision letter refusing the permission. Until the planning permission was revoked or modified in accordance with the statutory procedure[2] (which provides protection for the applicant in respect of work already carried out and provides a separate review process[3]) or reduced by an order of the court, the permission stood.

The Council argued that the person within the planning department who sent out the first notice had had no authority to do so. His authority extended only to giving notice of decisions taken to grant or refuse planning permission. The decision taken by the Council was to refuse permission. In those circumstances he had no authority to give notice that permission had been granted. It followed, they contended, that the first notice was simply a nullity and could be ignored.

Decision
Lord Glennie took the view that the presumption expressed by the maxim omnia praesumuntur rite esse acta (“all things are presumed to have been done duly and in the usual manner”) was applicable with the consequence that the first notice was presumed to be validly made and to have legal effect unless and until reduced following a court process.

 “An interested member of the public should be able to rely upon a notice issued by a public authority as having been issued correctly and with the appropriate authority; that is all the more pertinent in the case of a document granting planning permission, since the grant of planning permission runs with the land, and may be relied on by persons who were not party to the original application or privy to any correspondence or telephone communications passing between the applicant and the authority.”

The validity of the second notice depended on the status of the first notice (at the time the second was issued). The first notice being valid, the Council could not[4] then correct it as the Council was functus (i.e. having discharged its duty, the Council could not then review its own decision.).  Also it could not simply ignore it and make another order, because then there would be two conflicting orders in respect of the one matter. Lord Glennie therefore concluded that the first notice was valid and that the second notice was ultra vires (i.e. outwith the Council’s powers) and had to be reduced.[5]

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 Mr and Mrs Motion sought interdict to prevent their neighbours, Mr and Mrs Binnie from encroaching on, or interfering with their property (consisting of two cottages, a paddock and a strip of land) and from interfering with or obstructing servitude rights of access (over farm roads) to that property. The Motions’ titles to the property and servitude rights were registered (and defined on plans) in the Land Register without exclusion of indemnity.

In their defence, the Binnies argued that the Motions did not have a vehicular right of access over part of the access route, contending that to exercise a vehicular right would involve them driving over part of the Binnies’ property. This, they argued, was not a challenge to the Motions’ title but a challenge to the physical extent of the servitude rights.

However, in the view of Lord Bannatyne, it was impossible to read the Binnies’ arguments as anything other than a challenge to the Motions’ title. The Motions’ rights were set out clearly on plans and registered in the land register but the Binnies did not seek to rectify the register. As such, the Binnies’ defences were found to be irrelevant. In coming to his conclusion Lord Bannatyne quoted from the Scottish Law Commission’s Report on Land Registration (SLC Report No. 222) which states:

“Rights in land are what the Register says they are and the Register says what the Keeper decides it should say. The Keeper giveth and the Keeper taketh away.”; and

“Everything that the Keeper touches turns to valid.”

 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.

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