Supreme Court case considering whether the Scottish Ministers had given adequate reasons for their decision to approve the Fife Structure Plan with modifications; Ms Uprichard arguing that the reasons given by the Ministers had not adequately addressed her objections to proposed modifications to the plan.

 In brief, the essence of Ms Uprichard’s objection was that the modifications to the plan did not contain any modification to the strategy within the plan that St Andrews should become an economic driver for Fife (by significantly expanding the town). In support of her contention that there should have been such a modification, she referred to both a 1998 study which asserted that St Andrews was “at its landscape capacity” and to the “Grant Report” which concluded that there was limited scope for development.

Amongst the reasons given by the Ministers for not modifying the structure plan on the basis of objections such as those given by Ms Uprichard, was “reason 33” to the effect that the Grant Report had indicated that there was some scope for development (subject to mitigation) to the west of St Andrews. Ms Uprichard argued that this did not address her objection (which she claimed was that the available capacity could not accommodate the scale of the planned development rather than that there was no capacity for development). Ms Uprichard’s arguments were rejected in the Inner house and her appeal to the Supreme Court was also dismissed.

The assertion that St Andrews was at landscape capacity appeared in Ms Uprichard’s’ letter of objection and reason 33 addressed objections of that general tenor by referring to the finding of the Grant Report that there existed some scope for development to the west of St Andrews. The broader point made by Ms Uprichard that the scale of development envisaged in the structure plan would damage the landscape setting of the town was addressed by the substance of further reasons given by the Ministers. The Supreme Court found that the reasons given, when read as a whole, provided an intelligible explanation to a well-informed reader such as Ms Uprichard as to why the Ministers were not persuaded by her objections.

The full judgement is available from the Supreme Court here.

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

Outer House case in which Whyte and Mackay sought to enforce an adjudicator’s decision requiring Blyth & Blyth to pay them almost £3m in damages.

Blyth & Blyth had designed the structure of a new bottling plant at Whyte and Mackay’s Grangemouth premises. Whyte and Mackay claimed that the foundations were defective and would result in settlement and damage to the building. They referred the resulting dispute to an adjudicator (as they were entitled to do in terms of the contract between the parties)[1].

When Whyte and Mackay sought to enforce the adjudicator’s decision in the Court of Session, Blyth & Blyth argued that the adjudicator had failed to give adequate reasons for his determination and that to enforce the decision was incompatible with Blyth & Blyth’s rights under the European Convention on Human Rights.

Reasons for the decision
Lord Malcolm found that the adjudicator had failed to give adequate reasons for his determination as he had failed to deal with Blyth & Blyth’s contention that, even if the additional piling deemed necessary to make the foundations adequate had been specified in their design, Whyte and Mackay would not have been prepared to pay the additional time and financial costs required to carry out the extra work. This was potentially a complete answer to the claim and a very significant omission from the adjudicator’s decision. As such, it was sufficient to justify reduction of the award.

Human Rights
Arguably of more importance, however, was Lord Malcolm’s finding that to enforce the adjudicator’s award would be a disproportionate interference with Blyth and Blyth’s right to their possessions under article 1 of the first protocol to the Convention on Human Rights.  Lord Malcolm observed that adjudication is a “rough and ready” process which is “designed to provide a speedy and relatively cheap provisional award pending a final determination by litigation, arbitration or agreement”; the “rough and ready” aspect being particularly true in large and relatively complicated cases such as this one. He also noted judicial concerns as to whether difficult questions of law should be referred to adjudication. Whilst a court, in the face of a Convention challenge, will usually be able to justify enforcement of an adjudicator’s award on the basis of the general interest benefits arising from adjudication (e.g. speed, cost, efficiency and cash-flow requirements), this was a case where such benefits were largely, if not entirely absent. No general or public interest had been served by Whyte and Mackay taking the dispute to adjudication (it would be many years until the cost savings gained by the absence of piling would be outweighed by the projected losses and the bulk of the claimed losses would not occur until 2035/6).

In coming to this conclusion, Lord Malcolm also dismissed Whyte and Mackay’s argument that a decision not to enforce the adjudicator’s award on the basis of article 1 of the first protocol would undermine the whole adjudication scheme, finding such a contention to be “exaggerated and unconvincing”.

A further challenge to the award under article 6 of the Convention (the right to a fair hearing) was rejected on the basis that article 6 is only engaged when a civil right or obligation is being determined and an adjudication cannot be regarded as a final determination of the right or obligation at stake.

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 considering a claim for damages under the Occupiers Liability (Scotland) Act 1960. Mr Dawson worked as a self employed courier and was delivering a package to Ms Page’s cottage. Building works were taking place at the cottage and the surroundings resembled a building site.  After making two unsuccessful visits to the cottage to deliver the package, Mr Dawson left the package under an oil storage tank in the back garden. As he was leaving the cottage he slipped on a wet plank over a trench in the garden and injured his hand.

Mr Dawson’s claim for damages failed in the Outer House.  After noting wet planks are slippery and a notice is not required to point that out, Lord Glennie found that there was no requirement on Ms Page to exclude people from the site or give warning of the risks. The Inner House observed that the fundamental aim of the 1960 Act had been to the restore a broad test of reasonableness in relation to such claims and rejected Mr Dawson’s appeal which was based the argument that Lord Glennie should not have reached the conclusion that a state of affairs which is obvious is not a danger.

The full decision 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 rent review under a lease of premises in Helensburgh.  The landlords were the trustees of a pension fund. The tenants were Argyll and Bute Council.

On 19 July 2010 a surveyor wrote to the Council purporting to act for the landlord in relation to a rent review of the property and specifying that the revised fair market rent for the property was £58k. The letter contained several errors (including naming an entirely different company as landlord and stating an incorrect review date).  On 24 August 2010 the surveyor again wrote to the Council in relation to the rent review of the property and specifying the rent but this time correcting the errors in the previous letter. The Council did not serve a counter notice but continued to pay the rent payable prior to the review and the trustees sought declarator that the rent had been effectively reviewed.

In the Outer House Lord Menzies held that the errors contained in the letter dated 19 July were failures to comply with the fundamental requirements of the lease and the letter did not operate as an effective rent review notice.  However, the second letter did satisfy those requirements. On appeal the Council argued that the second letter had failed to address in express terms all of the errors which had been contained in the first letter and that the recipient was faced with two competing or contradictory notices and two overlapping periods for service. As a result, the Council argued, the “reasonable recipient” test had not been met.

The Inner House refused the appeal. The notices had been served under different clauses of the lease; the first under a provision dealing with a ‘timeous’ rent review at the relevant term and the second under a separate provision dealing with invoking a ‘late’ rent review. The terms of the notices were different due to the distinct purpose of the different provisions. They were not competing notices and there was no scope for confusion as a consequence of the issue of both notices, assuming that the reasonable recipient applied his common sense.

The full report is available from Scottish Courts here.

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

The Information Commissioner has highlighted  “serious concerns” with the City of Edinburgh Council’s handling of an information request relating to statutory repairs. The Commissioner’s decision is available here.

Sheriff Court case concerning the division and sale of a property on Shiskine Drive, Maryhill in Glasgow. Mr Collins and Ms Sweeny each had a one half pro-indiviso share in the property (which was incapable of division). Mr Collins sought a sale of the property on the open market and division of the proceeds. Ms Sweeney sought an order compelling the sale of Mr Collins share of the property to her. She argued that there were equitable considerations which justified the granting of such an order; pointing to the fact that she could afford to acquire and maintain the property whereas Mr Collins could not, referring to other litigation between the parties (including an exclusion order) and making a case for the purchase of the property by her for the sake of a child of the relationship between the parties.

The principle issue for the court was whether the court could competently grant decree for the sale to a co-proprietor, against the will of the other proprietor, rather than on the open market.

After considering the authorities, the sheriff concluded that, even if proved, the equitable considerations did not constitute a defence to Mr Collins’ absolute right to insist on a sale on the open market. Although there was authority for the court to make an order for the sale of a pro-indiviso share to a co-proprietor, this only applied where both parties consented. In the absence of consent, where the property cannot be divided, a co-proprietor has an absolute right to insist upon sale on the open market and cannot be obliged to sell to a co-proprietor against his will.

The full judgment is available from Scottish Courts here.

(See appeal to sheriff principal here.)

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

Inner House case of some complexity in which the Liquidator of the Letham Grange Development Company sought reduction of a security over the Letham Grange resort near Arbroath. The case involves a number of companies all controlled by a Mr Liu and his family.

The Liquidator argued that the holder of the security, Foxworth (a company controlled by Mr Liu), had not acquired the rights under the security in good faith and for value. The Liquidator had previously successfully challenged a disposition by Letham Grange in favour of Nova Scotia Limited (also a company controlled by Mr Liu) on the basis that it was a gratuitous alienation. (The property which had been purchased by Letham Grange for £2,105,000 was sold to Nova Scotia for only £248,100.)

In the Outer House Lord Glennie found that there had not been a gratuitous alienation accepting Mr Lui’s evidence that the price had been reduced as there had been loans made by Mr Liu’s family in favour of Letham to finance the original purchase and that Foxworth (having assumed liability) was obliged to repay those loans to the family.

The Inner House have allowed an appeal finding that, to avoid a gratuitous alienation, the consideration given in exchange for the granting of the disposition of the resort to Nova Scotia required to be enforceable at the time when the disposition was granted. However, at that date, there was no enforceable obligation binding Nova Scotia to repay the loans to the family. Even if that had not been the case, taking account of all of circumstances, the Inner House found that the various transactions surrounding Letham Grange had been intended to defeat the claims of lawful creditors.  For those reasons a decree granting reduction of the standard security was granted.

The full judgement is available from Scottish Courts here.

(NB: See appeal to the Supreme court here.)

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

Inner House case relating to an agreement for lease of subjects at the Maxim office park in North Lanarkshire. Tritax were owners of the development and Regus were to take a lease of part of the development. Monies were to be made available to Regus in respect of its fit out costs as an incentive.  Regus did not comply with restrictions on the type of tenant imposed by sale agreements and so HUB (a company created to run the restaurant and other facilities at the development) was interposed to sub-let to Regus.

In terms of the agreement for lease, HUB were to deliver a letter to Regus (although the letter was not addressed to Regus) from the Bank of Scotland relating to sums which the Bank held on deposit in respect of the fit out costs. This letter formed the crux of the case and was in the following terms:

“We understand that Heads of Terms have been agreed between TAL CPT and Regus (Maxim) Limited for the lease of the first floor of Building 1 at Maxim.

It may assist the proposed tenant to have confirmation from us that, on behalf of the landlord (Tritax Eurocentral EZ Unit Trust) and TAL CPT, we hold the sum of £913,172 to meet the landlord’s commitment to fit-out costs. These funds will be released in accordance with the drawdown procedure agreed between the parties, whereby the proposed tenant’s contractors will issue monthly certificates.

This is subject always to agreement of wider commercial terms with the incoming tenant.”

Regus carried out the fitting out works and issued invoices to HUB who confirmed that the costs were properly incurred and that the contribution should be paid to Regus. However, the bank refused to release the costs as there had been a default in the facility agreement and they were exercising a right of retention over the sums referred to in the letter.   Regus sued for payment of the costs from the bank. In the Outer House Lord Menzies had dismissed the action. He found that he was unable to construe the letter as amounting to a unilateral undertaking by the bank of a legally enforceable obligation to pay the sum to Regus. On appeal to the Inner House, Regus relied on two arguments:

1. The letter was an undertaking in terms of which the bank were obliged to make payment.
2. That the letter contained negligent misrepresentations acted on by Regus to its detriment and the bank were obliged to make reparation to the Regus for breach of a duty of care.

The court rejected Regus’s appeal. For a promissory obligation of the type argued for by Regus, clear words are required. The letter merely confirmed that, at the date of the letter, the bank held the funds on behalf of Tritax and TAL (the developer/development manager). It did not contain an unconditional obligation on the bank to pay the funds to Regus on demand as the bank’s own debt. The bank’s freedom to pay out the money would depend on the terms and conditions on which it held the funds and the letter also spelt out that release of the money was governed by an agreed procedure. In addition, the sentence referring to wider commercial terms made it plain that the confirmation was not unconditional. For the same reasons, whilst the letter made the representation that the bank held the funds; it did not make a representation that the money would be released whatever the circumstances when Regus came to demand payment.

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.

Case from the Court of Appeal for England and Wales concerning a developer’s claim for damages against a consulting engineer who failed to perform tasks by an agreed date. The developer (a farmer) sought damages in respect of the fall in the value of his development (due to the property slump) during the period of the delay.

In terms of an oral agreement (followed by a formal letter of engagement) reached with the developer on 6 September 2006, the engineer was to design a road and drainage to the developer’s site and to obtain s38 approval (allowing adoption of the road by the roads authority in terms of the Highways Act 1980) by March 2007. An initial s38 approval was not obtained until 17 February 2008 and even then some parts had not been finalised. In April 2008 the developer engaged another consulting engineer who obtained the necessary approval in June 2008. The judge found that the first engineer’s breach of contract delayed the development by 15 months and that had resulted in loss to the developer because of the reduced value of the development.

The question for the appeal court was whether the developer’s loss was too remote to allow recovery. The appeal court dismissed the engineer’s appeal agreeing with the judge’s finding that that the loss was not too remote as it was reasonably foreseeable as a serious possibility if there was a delay. It also agreed with the judge’s finding that the case was not one of the unusual cases where the nature of the contract and the commercial background, or other relevant special circumstances, mean that an implied assumption of responsibility for losses that can be reasonably foreseen was inappropriate.

The Court of Appeal’s comments on the length of delay are also worth noting:

 “It may well be that the reason for the absence of many cases of this kind is that the property market does not move as quickly as certain other types of market involving commodities and other goods, and it takes a very lengthy delay in breach of contract before a provable loss of value can occur. A few days or even a few weeks delay is unlikely to give rise to a demonstrable loss on the property market. It was the appellant’s delay of 15 months, in the Judge’s words an egregious delay, which in the present case gave rise to a quantifiable loss.”

The full judgement is available from BAILII here.

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

Outer House case in which Santander sought to recover losses from the Keeper of the Registers of Scotland after the Keeper accepted a forged discharge (discharging a security held by Santander) for registration. The discharge was subsequently reduced and the Land Register was rectified to show Santander’s security. However, the security only took effect as at the date of rectification meaning that a second security registered in favour of the Bank of Scotland (after the discharge was registered but before the rectification took effect) received prior ranking to the Santander security. The Bank of Scotland later sold the property in terms of their security and no proceeds went to Santander (who were still owed more that £240k in terms of the loan secured). Santander claimed that their loss arose as a result of the fault and negligence of the Keeper.

Lord Boyd found in favour of the Keeper. After deciding that the Keeper’s decision to register the discharge was a matter on which the court could adjudicate (i.e. it was not a policy decision purely at the Keeper’s discretion), the question for the court was whether the Keeper owed a duty of care to the Bank. This would depend on whether the Caparo test was satisfied. In order to satisfy the Caparo test Santander had to show that the loss was foreseeable, the relationship between Santander and the Keeper was sufficiently proximate and that it was fair just and reasonable to impose a duty of care on the Keeper. It was the last of these requirements on which Santander’s claim failed. Lord Boyd (after noting that the Bank had assumed certain risks in lending to its client whereas the Keeper had made no assessment of the fraudster’s creditworthiness or honesty or whether the value of the property would fully secure the loan), found that in the circumstances: where the loss was caused by the criminal acts of Santander’s client, it was not fair, just or reasonable that the Keeper should be liable.

The full decision is available from Scottish Courts here.

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