Sheriff court case considering the existence of a servitude right of parking.

Johnson, Thomson and Thomson owned an area of land in Rutherglen (part of the Cuningar Loop) which was used as a residential site for showmans’ caravans. They sought declarator that they had a servitude right of parking over a narrow strip of vacant ground owned by T G & V Properties Limited. JT&T argued that the right had been created by prescription as they and their tenants had parked vehicles on the strip openly, peaceably and without judicial interruption, for over 20 years.

The case raised the following preliminary questions for the court:

1. whether Scots law recognises a “free-standing” servitude right of vehicular parking (i.e. an independent right which is not merely ancillary/secondary to a primary right of vehicular access); and
2. whether such a right (which could be unlimited as to the number and type of vehicles to be parked there, and potentially covering the whole of the burdened property at all times) is repugnant[1] with ownership of the servient tenement.

Free standing right of parking?
After considering the authorities, the sheriff found that Scots law does recognise a free-standing servitude of parking. Although servitudes created by prescription[2] require to be “known to the law” (there is some times said to be a “fixed list” of servitudes), that requirement has some flexibility to deal with changing circumstances and modern conditions. As such, servitudes rights can be acceptable where they are “similar in nature” to existing known servitudes. The sheriff considered Moncrieff v Jamieson[3], in which it was found that a servitude right of vehicular parking could exist as ancillary to a servitude of access. The sheriff noted that, although it was not the point the case decided, the judgements had indicated in passing that a free-standing right of parking could exist and the sheriff could think of no compelling reason why a right of parking should be confined to an ancillary status:

“In summary, while I acknowledge that Moncrieff does not represent a strictly binding judicial recognition of the existence of a free-standing servitude right, in my judgment the debate on this narrow issue is ended for all practical purposes by the overwhelming current of eminent obiter dicta in that case.  It is futile to stand Canute-like against it.  From Moncrieff, it is but a short skip in logic to conclude, by analogy with the ancillary right recognised in that case, that an independent free-standing servitude right is, at least, similar in nature thereto.”

Repugnant with ownership?
T G & V and the other defenders argued that the alleged servitude was repugnant with their ownership of the servient land because the exercise of the right could result in the entire area of the servient tenement being covered by vehicles, every day and all day, thus excluding them from any practical or realistic enjoyment or use of their land. However, the sheriff took the view that the repugnancy issue was not engaged in this case and referred to the judgements in Moncrieff which pointed out that many well known servitudes involve structures being erected or objects being placed on the servient land. The sheriff pointed to Lord Stott’s test in Moncrieff which asks whether the servient owner retains “possession and control” of the servient land”:

“For my own part, I see much force in Lord Scott’s reasoned articulation of the repugnancy principle.  A servitude right of parking may well substantially restrict the rights of the owner of the servient tenement and the uses to which, from time to time, he can put the surface of the land, but his rights as proprietor are not sterilised.  He can build over the servient tenement, he can build under it, he can advertise on hoardings around it, or otherwise utilise the boundary walls.  Indeed, he can park on it himself, or use it for any other purpose, provided he does not interfere to any material extent with the reasonable exercise of the servitude right by the dominant proprietor.  The servient proprietor may not have physical occupation of the surface of the land when the servitude right is being exercised, but he remains the owner of the land, he remains in control of it, he remains in (legal) possession of it, and he is at liberty to exploit its residual uses.”

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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[1] i.e. so restrictive that the value of ownership would be lost. Servitudes which are repugnant with ownership are not permitted in terms of s76(2) of the Title Conditions (Scotland) Act 2003.

[2] Servitude rights constituted by express written grant no longer require to be of a known type as a result of section 76(1) of the Title Conditions (Scotland) Act 2003.

[3] Moncrieff v Jamieson 2008 SC (HL) 1.

This is an Inner House case in which the John Muir Trust sought reduction of the Scottish Ministers’ decision to grant consent for the construction of 67 wind turbines at Stronelairg near Fort Augustus.

Background
In their decision letter the Ministers intimated that they had decided not to hold a public local inquiry stating that they had taken into account 96 objections “and all material considerations”.  They expressed the view that there were no significant issues which had not been adequately considered “in the application, Environmental Statement and Supplementary Environmental Information, consultation responses and third-party representations” and that they had had sufficient information to be able to make an informed decision on the application without the need for a public local inquiry.

Outer House
The trust argued challenged the consent on the basis that the Ministers acted unlawfully and/or unreasonably in granting the consent:

• without the advertising of, and/or consulting on, the supplementary environmental information; and
• without giving adequate reasons for not following Scottish Natural Heritage advice (SNH having objected in principle to the wind farm on the ground of its impact on wild land).

The trust also argued that the reasons given in the decision letter for granting the consent were inadequate.In the Outer House, Lord Jones found that the trust’s challenge to the Ministers’ decision should succeed for the following reasons.

• A report recommending that Highland Council did not object to the wind farm on condition that the developer make changes to the layout of the proposed wind farm was additional information which had required notification by way of advertisement and/or consultation (in terms of The Electricity Works (Environmental Impact Assessment) (Scotland) Regulations 2000 and Environmental Impact Assessment Directive 2011/92/EU).
• The Ministers decision letter did not take into account SNH’s objection in principle to the wind farm (on the basis that it would have significant adverse impacts resulting in a loss of wild land and that it was not possible to mitigate those impacts).
• With regard to SNH’s objection in principle to the wind farm, the Ministers had failed to give adequate reasons for their decision in the decision letter.

Inner House
The Scottish Ministers appealed the decision of Lord Jones. After Lord Jones’ decision was issued, the Scottish Ministers amended their pleadings to state that notices advertising the fact that additional information had been received by the Scottish Ministers (and that it would be placed on the Council’s planning register and made available for public inspection) had been published in September 2012. That notice indicated that any further additional information would also be placed on the planning register and made available for inspection but stated that no further public notices would be issued.

The 2012 notice was published advertising the receipt of additional information after the Scottish Ministers had received a response from the Scottish Environment Protection Agency to the effect that SEPA were not objecting to the wind farm. The trust argued that the regulations should be interpreted so as to require the publication of a notice each time additional information was received and, in particular, that a further notice should have been published on the receipt of the Council’s decision letter.

The Inner House allowed the appeal.

• The Regulations and Directive require notification of receipt of additional information (including notification of where it can be found although the notice does not require to include the content itself) by the Scottish Ministers. However, they do not require that there is more than one notice. (Indeed the Regulations are clear that only one notification of additional information is required.) The court noted that the notice puts interested members of the public on guard that additional information will appear on the Council’s website and the public can then check the website from time to see the information. The court also noted that, if the trust’s arguments were correct, multiple notices would be required where the public was already aware of the potential for additional information and the fact that they could find it on the Council’s website.
• As regards the Ministers’ decision letter, the court found that Lord Jones’ erred by focussing on the absence of the words “in principle” from the letter. Despite the absence of those words, the court held that the letter had clearly addressed the substance of the SNH objection. It was apparent that careful consideration had been given to the visual impact of the development and its effect on wild land.
• The Ministers had concluded that the energy benefits and the contribution the development would make to sustainable economic growth outweighed the environmental aspects.  That was a planning judgement which they were entitled to make and the terms of the decision letter left no real doubt as to what the reasons for the decision had been.

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 the Scottish Parliamentary Corporate Body sought an order for removal of a group of individuals camped within the grounds of the Scottish Parliament.

In a previous judgment Lord Turnbull found that the campers had no lawful right to encroach upon the corporate body’s property. However, a further hearing was granted to consider evidence on the proportionality of granting the order removing the camp to allow the corporate body’s right to the removal order to be assessed against the campers’ right to freedom of expression and freedom of assembly and association under the European Convention for the Protection of Human Rights and Fundamental Freedoms.

After hearing evidence from both parties, Lord Turnbull found that the granting of the order was proportionate. In coming to that conclusion, he rejected the campers’ contention that camping on the property continuously was essential to the protest and noted that the corporate body had been prepared to discuss the possibility of a daily (but not permanent) protest. As such, there were other opportunities for the campers to legitimately exercise their rights of freedom of speech and assembly.  The rights granted under the convention were found not to give individuals absolute freedom to choose the manner of the expression of their rights to the detriment of others and it was accepted that individuals can stretch their rights too far if they seek to permanently or indefinitely occupy land belonging to others (even where they only occupying small areas, pose no threat to public order and cause no damage).

Lord Turnbull also took account of damage caused to the property by the camp, the impact of the camp on the rights of other people to enjoy the property without disturbance and the camp’s interference with the rights and duties of the corporate body. As a result, it was held that the balance that required to be struck ‘came down firmly’ in favour of a finding that the granting of the removal order was proportionate.

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 considering the repairing obligations contained in a lease and sub-lease of 3 floors of Riverside House at Riverside Drive in Aberdeen.

The lease and sublease referred to common parts which included a car park. Defects were found in the concrete decking of the car park and remedial works had to be carried out. The question for the court was whether, in terms of the lease and sublease, the cost of the works was to be met by the sub-tenant or by the landlord.

The lease (between the landlord and tenant) was a full repairing and insuring lease under which the tenant was obliged to pay a service charge which was defined by reference to “Service Expenditure” which was incurred by the landlord in carrying out “Landlord Services” (which included repairs). An express exception from the Service Expenditure was “expenditure incurred in respect of or pertaining to the initial construction of the Building or the Service Systems”.

In terms of the sub-lease, the sub-tenant was obliged to pay to the tenant the sums which the tenant was obliged to pay to the landlord by way of the service charge under the lease.

The tenant paid the costs of remedial works to the car park as part of the service charge and sought to recover those from the sub-tenant. However, the sub-tenant argued that in terms of the exception from Service Expenditure, latent defects (such as the defects in the car park) “pertained to” the initial construction of the building and could not be recovered by way of the service charge.

Lord Tyre rejected the sub-tenants argument finding that it was appropriate to place emphasis[1] on the fact that the lease was a full repairing and insuring lease under which it was intended that the tenant would relieve the landlord of the cost of repair and rebuilding even in relation to inherent or latent defects.

 In Lord Tyre’s view, a reasonable person having all the background knowledge available to the parties would have understood the phrase “in respect of or pertaining to the initial construction of the Building” extended only to works carried out during the construction phase and any related snagging. The sub- tenants interpretation placed too much weight upon the words “or pertaining to”.  Lord Tyre found that those words could be seen as a reference to costs such as professional fees associated with the construction of the building, which were not strictly costs of construction.

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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[1] Per the approach in @SIPP Pension Trustees v Insight Travel Services Ltd 2016 SLT 131

Outer House case concerning the validity of a break option served by a tenant to a landlord in respect of premises in the Glover Pavilion at Aberdeen Science and Technology Park.

Background
The lease was originally of units 3 and 4 in the pavilion and was for a period of 10 years ending in February 2014 and contained a break option exercisable after 5 years. However, in October/November 2011 the parties entered a minute of variation, which amended the lease to include additional premises (unit 1), extended the term of the lease until August 2021 and included a new break option exercisable by the tenant 5 years after the “effective date” provided in the minute of variation (on providing 6 months’ prior notice).

Arguments
The tenant served a notice exercising the break option in January 2016. However, the landlord argued that the notice was invalid as the heading of the letter containing the notice referred only to units 3 and 4 (followed by the term “the Premises” in parenthesis) and not to unit 1. The landlord argued that this created confusion by attributing a new meaning to a defined term (i.e. arguing that the premises had been redefined in the letter as being units 3 and 4 without unit 1). In addition, it was argued that, when this was error was taken with the first paragraph of the letter which referred only to the lease and not to the minute of variation (although the tenant had referred to the minute of variation in the second paragraph of the letter), it had the effect that the notice applied only to the original lease and not the lease as varied by the minute of variation.

Decision
Lord Tyre rejected those arguments and granted declarator that the notice had been validly served.

The test to be applied was how a reasonable recipient with knowledge of the terms of the lease would have understood the notice[1]. Lord Tyre began by rejecting the landlord’s argument that the reference in the first paragraph of the letter to “the Lease” was to the lease prior to it being varied by the minute of variation.  The notice required to be read as a whole and it was readily apparent from the notice that the sender was fully aware of the existence of the variation and of its terms. A reasonable recipient of the notice with knowledge of the lease would have understood the notice to refer to the lease as it had been at the date of the notice (i.e. as varied.). Lord Tyre took the view there was no ambiguity.

With regard to the omission of unit 1 in the heading in the letter, Lord Tyre, despite noting that careless drafting was to be discouraged, said the following:

“…in my opinion no reasonable recipient would be misled into interpreting the notice [so as to redefine the definition of “the Premises” in the contract] or even of being left in any reasonable doubt that [there had simply been a clerical error]… I am satisfied that the reasonable recipient would not have been perplexed in any way by the error in the letter heading.  The operative element of the notice is sufficiently clear and unambiguous to avoid any such perplexity, and the fact that the ingenuity of lawyers can suggest theoretical ambiguities is not to the point.”

The full judgement is available from Scottish Courts here.

[1] Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 as recently applied in Scotland in West Dunbartonshire Council v William Thompson and Son (Dumbarton) Ltd  2016 SLT 12.

Background
Inner House case concerning an alleged contract relating to the purchase of a local authority flat at Partick Bridge Street in Glasgow in 1989.

Mr Khosrowpour claimed that he had loaned £8k to Mrs Mackay for the purchase of her flat and that the parties had entered a contract by which Mrs Mackay would remain in the property for the rest of her life without repaying the loan but that Mrs Mackay would make a will transferring it to Mr Khosrowpour on her death. Mrs Mackay also granted a standard security (securing all sums due and which may become due) in favour of Mr Khosrowpour in 1991.

Although Mr Khosrowpour said that Mrs Mackay had originally granted a will passing the property to him, she later executed a new will directing that her executors pay the sale proceeds of the flat to her children (who included Mr Khosrowpour’s former wife).

Mr Khosrowpour sought damages for breach of contract from Mrs Mackay’s executor

In the Outer House it was found that the contract related to heritage and, as such, required formal writing for its constitution. However, Mr Khosrowpour argued that, because of his payment of the funds and Mrs Mackay’s execution of the first will, Mrs Mackay was personally barred from relying on the lack of formalities to resile from the agreement. As such Lord Turnbull found that Mr Khosrowpour had set out a stateable case regarding personal bar and allowed a proof (an evidential hearing) to consider whether it could be established. The executor appealed to the Inner House.

Arguments
The pursuer argued that the rule of rei interventus (where there are important actings by the party seeking to rely on the agreement which are known to and permitted by the other party and which are unequivocally referable to the purported contract) applied. However, in the Inner House the court observed that the actings of the party who relies upon the invalidity of the bargain to escape from it fall under the rule of homologation, not rei interventus and that was the rule that applied to this case.

The consequence of this is that, unlike the rule of rei interventus, there is authority to the effect that homologation does not apply unless actings (in this case accepting the funds and writing the first will) took place at a time when the alleged homologator (in this case, Mrs Mackay) was aware of the right to resile. As such Mrs Mackay’s executor argued that Mr Khosrowpour had produced no evidence that the first will was executed at a time when the deceased knew that it was within her power to resile from the verbal agreement (meaning she could not be personally barred from changing her will). There then followed some discussion as to whether there is a rebuttable presumption that parties are aware of their rights with the onus of proving the opposite resting on the party contradicting the proposition (i.e. whether it should be presumed that Mrs Mackay was aware that the verbal agreement was not binding). However, in the view of the court, there is no presumption albeit that, in certain cases, depending upon the particular circumstances, the courts will not allow a party to rely upon alleged ignorance in the absence of clear proof.

Decision
The Inner House allowed an appeal. The circumstances in this case did not entitle Mr Khosrowpour to the benefit of any presumption that, when executing the first will, Mrs Mackay was to be taken as having been aware that she knew of her right to withdraw from the arrangement. Moreover, the court was not persuaded that Mrs Mackay should have borne responsibility for any ignorance on her part in that regard.  As to the suggestion that Mrs Mackey could have obtained legal advice, the court found:

“As a proposition no doubt that is true, and in a different context might well be significant.  However, this was a family matter, and when a formal legal document was prepared and executed, it directly contradicted the alleged oral bargain.”

The full judgement is available from Scottish Courts here.

Background
Inner House case in which Northern Rock sought damages from the solicitor of one of its customers. Headway Caledonian Ltd borrowed sums from Northern Rock to finance the purchase of a Business Park in Hamilton. In return it granted a standard security in favour of Northern Rock. Some years later, Headway’s solicitor sent a draft discharge of the standard security to Northern Rock requesting that it sign and return the document. In the accompanying email, the solicitor stated that the company intended to sell the subjects and redeem the loan. However, that information was incorrect as Headway only intended to sell part of the subjects and to redeem part of the loan. (The reason for the error was unknown.)

Northern Rock (which had not instructed solicitors to act on its behalf in the transaction) relied on the email and granted the discharge of the standard security. The solicitor then registered it in the Land Register. As a result the loan became unsecured. Headway then became insolvent and the Northern Rock raised an action for damages against the solicitor and her firm in respect of its losses.

The solicitor argued that the lender was a third party to whom she did not owe a duty of care.

In the Outer House Lord Doherty agreed with that argument finding that, in the circumstances: (1) it was not reasonable for Northern Rock to rely on the solicitor’s statements without checking them by seeking clarification from the solicitor and/or looking at their file; and (2) that it was not reasonably foreseeable by the solicitor that Northern Rock would rely on the statements without such checks.

Decision
The Inner House allowed an appeal finding that, in the circumstances, it was reasonably foreseeable that Northern Rock would rely on the solicitor’s statements and sign and return the discharges. Consequently the solicitor was to be taken to have assumed responsibility for her statements. The Inner House considered that Lord Doherty had not considered whether it was fair just and reasonable to impose a duty on the solicitor:

“As a consequence of the Lord Ordinary’s approach, he did not go on to consider whether the imposition of a duty of care would be fair, just and reasonable.  The context was, for the reasons I have explained, a background of assumption of responsibility and reasonable foresight of significant economic loss suffered by a bank in a sufficiently proximate relationship with a solicitor who had previously shown herself to be a trustworthy source.  The context was also, importantly, that that solicitor whilst acting outwith her mandate and instructions made a serious error and put in train a series of events which caused the bank to suffer significant loss.  What then of the fact that the loss could have been avoided if, having received the email which ought never to have been written and the attachments which ought never to have been sent, the bank had checked its file?  Does that mean that it would not be fair, just and reasonable to hold the solicitor liable?  I cannot identify any policy reason for doing so.  Nor can I conclude that that fact demonstrates that the solicitor should be relieved of liability.”

The full judgement is available from Scottish Courts here.

Inner House case considering the entry of apartments at the Hamilton Grand in St Andrews on to the valuation roll (for non-domestic rates). Old Course had furnished 2 (out of 26) of the apartments at development and used them as showhouses when selling the other apartments. The assessor entered the showhouses on to the valuation roll with the description “showhouse”.

Old Course appealed against the entry arguing that the showhouses should have been excluded[1] from the roll on the basis that they were dwellings[2]. Although the apartments in question were used as showhouses, Old Course argued that, in terms of the legislation, it is the nature of the subjects (i.e. the natural physical characteristics) which determines whether or not a property is a dwelling and that the use to which the subjects are put is irrelevant.

The Inner House refused the appeal noting that:

 “in characterising subjects for the purposes of valuation for rating it is proper to look not only to their physical circumstances but also to the use to which they are put.  Subjects are valued in their actual state and according to their existing use”.

The court found there was nothing in the legislation to support Old Course’s arguments that use of the subjects is irrelevant and that Old Course’s proposed interpretation of the legislation would lead to absurd results.

The full judgement is available from Scottish Courts here.

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[1]  In terms of s.73 of the Local Government Finance Act 1992.

[2] In terms of s. 72(2) of the 1992 Act.

Sheriff court case in which the City of Edinburgh Council sought decree for payment of arrears of rent and recovery of possession of a property at Springwell Place in Edinburgh.

The Council let the property to Mr Smith under a Short Scottish Secure Tenancy Agreement for an initial period of 6 months after which it was renewed on a month to month basis until one of the Council’s managing agents served a notice to quit on the tenant requiring him to remove from the property in February 2015. On the same date a notice of intention to raise proceedings for possession was served in terms of s36 of the Housing (Scotland) Act 2001.

In terms of s36(5), where the landlord has served the appropriate notices and raised the proceedings within the relevant timescale, the court must grant an order for recovery of possession if the tenancy has reached its end, tacit relocation is not operating and no further contractual tenancy is in place.

However, in this case, the sheriff was advised that an agreement had been reached with Mr Smith whereby he would remain in occupation of the property on payment of an agreed sum by way of rent (which also included the rent arrears). At a subsequent hearing before the sheriff the council also sought an adjournment rather than decree in order to give the tenant an opportunity to comply with his obligations before it obtained the decree.

Although Mr Smith did not appear in court and did not lodge any response to the council’s action, the sheriff found that the agreement between him and the council constituted a contractual tenancy:

“[t]hree of the essential clauses of a lease appear to have been agreed, namely, the parties, the subjects and the rent.  In those circumstances, at common law, the duration of the lease would be implied to be one year”.

As such, the sheriff found that the council was not entitled to recover possession in terms of s36(5) as a “further contractual tenancy” was in place and council’s action was dismissed.

The sheriff also noted that, according to the council’s pleadings, the notice to quit had been hand delivered by the council’s managing agent and, if so, it had not been validly served as only Sheriff’s Officers have the authority to serve such a notice personally meaning that, even if there had not been a further contractual tenancy in place, the requirements of s36(5) would still not have been met.

The full judgement is available from Scottish Courts here.

Inner House case concerning the interpretation of a minute of agreement between the owners of a development site in Ayr (the trustees) and Dickie & Moore.

The Trustees and Dickie & Moore had concluded missives for the sale of the site but later Dickie & Moore resiled from the missives (after paying an abortion fee). Dickie & Moore had been attempting to obtain planning permission for the site. When they resiled from the missives, the parties agreed that Dickie & Moore would continue to seek planning permission and the parties entered the minute of agreement by which the trustees would reimburse Dickie & Moore for professional costs if the trustees were to agree unconditional missives (i.e. missives which were not conditional on the obtaining of planning consent) with a third party.

The trustees entered unconditional missives to sell the site to a third party and, despite the fact that they had not succeeded in obtaining planning permission, they sought recovery of their professional costs from the trustees.

The minute of agreement provided:

“AND WHEREAS it has been agreed between the parties that in the event of the Sellers concluding unconditional (that is not subject or no longer subject to a suspensive condition) missives with a third party for the sale of the said subjects extending to 6.293 hectares or a substantial part thereof during the shorter of the period when the Planning Consent obtained or to be obtained by DMH for the development of the said subjects remains extant and the period of five years from the date of these presents, as the case shall be, the Sellers will reimburse DMH the full amount of the said professional fees together with any further vouched professional fees (up to a maximum of TEN THOUSAND POUNDS (£10,000) STERLING) incurred by DMH in obtaining such Planning Consent”

The question for the court was whether, in terms of the agreement, Dickie & Moore were entitled to recover their professional costs incurred in pursing the planning permission when the trustees concluded unconditional missives with the third party despite the fact that Dickie & Moore had not obtained planning permission.

The Inner House (allowing an appeal) took the view that the whole structure and purpose of the agreement was predicated on Dickie & Moore successfully pursuing their outstanding planning application. The Court did not consider that the parties had agreed to a situation whereby Dickie & Moore could achieve nothing in respect of planning consent but, provided that there was a sale within five years of the date of the minute of agreement, would be entitled to payment of the fees they had already incurred. Lady Clark made the following comments as regards the commercial sense of the possible interpretations:

“It is very difficult to understand why it would make any commercial common sense for the [the trustees] to pay substantial fees, for which they were not liable, in circumstances where [Dickie & Moore] were not obliged to achieve anything in relation to future planning consent but became entitled to repayment merely in the event of a sale to a third party within five years of the minute of agreement.”

The full judgement is available from Scottish Courts here.