Sheriff Court case considering a lease of residential property at 39 Calside Road in Dumfries.  The landlords (Calmac) were seeking to recover possession of the property from the tenant at the end of the term. The issue for the court was whether the lease was a short assured tenancy (in terms of the Housing (Scotland) Act 1988).

For a tenancy to qualify as a short assured tenancy, it must be “for a term of not less than 6 months” (s 32(1) of the 1988 Act).

The lease stated:

 “The Date of Entry will be 29th April 2011. The Let will run from that date until 28th October 2011…”

The general rule for calculating time periods, known as the civilis computatio, is that the whole of the day on which a period commences is excluded and the whole of the day on which it ends is included (days being indivisible for the purposes of the rule).

Following that rule, the period of the lease in question would be one day short of 6 months. The sheriff rejected Calmac’s argument that there is a general exception to the rule for leases (on the basis that the date of entry should always be counted when computing the term of a lease).  However, after considering the authorities, he found that use of the words ‘date of entry’ in the lease meant that it had been contemplated that the tenant would take entry on that date thus creating an exception to the general rule[1].

Consequently, the lease ran from midnight on the 28^th April meaning that its term was exactly 6 months and the lease was correctly constituted as a short assured tenancy.

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.

Appeal to the Inner House in respect of decision of the Outer House on 1 September 2011.  The case relates to a disposition of flats at Queen’s Gardens in Aberdeen. Skene disponed the property to Mr Pocock in 2000. However, a page of the disposition was substituted changing the recipient of the property to Howemoss Properties Limited (a company of which Mr Pocock was a director) and the price (possibly for SDLT reasons) without Skene’s consent. In 2002 Howemoss sold one of the flats to a Mr Torr.

In 2003 Mr Pocock was sequestrated and Mr Alexander was appointed as permanent trustee and began to investigate Mr Pocock’s property transactions. A judicial factor was also appointed in respect of the law firm which had acted for Mr Pocock and who, following an investigation, produced a report in June 2004 outlining the changes made to the disposition. The trustee raised successful actions in relation to other properties transferred by Mr Pocock but in April 2005 was still trying to locate the conveyancing file relating to the Queen’s Gardens property. In July 2007 the trustee received an opinion from senior counsel relating to the Queen’s Gardens property and wrote to the Keeper of the Registers of Scotland and Mr Torr’s solicitors (in August and September 2007) indicating that he intended to raise an action proving the tenor of the original disposition in favour of Mr Pocock. The police became involved in November 2007 and in early 2008 the trustee instructed agents to commence proceedings.

Mr Torr granted a standard security over the flat in favour of Abbey National plc in February 2008 at which point Abbey National are believed to have discovered that the disposition in favour of Mr Torr had not been registered (despite being granted 6 years previously) although the extent of their title investigation was unknown.

In the Outer House Lord Uist rejected arguments by Abbey National that:

1. the trustee’s action was barred by mora, taciturnity and acquiescence; and
2. the trustee was personally barred from reducing the Howemoss disposition (meaning Howemoss had no title to grant the disposition in favour of Mr Torr) as a consequence of the common law principle of adoption of forgery.

The Inner House refused Abbey National’s appeal and indeed went further allowing the trustees cross appeal to the effect that Abbey National’s arguments relating to mora, taciturnity and acquiescence were irrelevant.

Mora, taciturnity and acquiescence
It was necessary to consider all the circumstances of the case. However, Abbey National’s arguments referred only to the date of the judicial factor’s report (in 2004) and the date the action was raised (2008) which was to ignore the events which occurred between those dates. Those events did not support a categorisation of the trustee’s conduct as taciturnity and acquiescence:

“On the contrary, the steps taken by the [trustee] amounted to investigation, consultation, the seeking of appropriate advice, warnings to both the Keeper and to a current heritable proprietor (Mr Torr), and the raising of an action. For this reason alone we find Abbey’s averments of taciturnity and acquiescence to be inadequate and irrelevant. Furthermore we agree with senior counsel for the [trustee] that the [trustee] was entitled responsibly to seek information and advice before raising a court action with all its consequences. In other words, while the [trustee] was alerted to the problem in June 2004 by [the judicial factor’s] report, he was entitled to take the steps he did before launching into a litigation which, if not well-based in fact and law, could result in considerable losses to the sequestrated estate.”

Adoption of forgery
The crucial element  of adoption of forgery is that a person who knows about the forgery, and knows that a third party is being misled into relying upon the forgery, says or does nothing to alert the third party to the problem. In effect it was therefore necessary for Abbey National to prove that the trustee not only knew that the disposition was falsified, but also that Abbey National were intending to lend Mr Torr money in reliance upon that falsified disposition, and yet did nothing to prevent Abbey from relying upon the falsified disposition. Abbey National did not argue that they relied upon the falsified disposition itself – the nature and extent of their investigation into the title in respect of 5 Queen’s Gardens being unclear.  Perhaps more importantly, there are no arguments made on Abbey National’s behalf that the trustee knew that Abbey National were, or were likely to, rely upon the falsified disposition. Furthermore, the trustees actings (in particular the letter to Mr Torr’s solicitor), did not disclose a picture of an adoption of forgery. On the contrary, the trustee had taken active steps to warn Mr Torr’s agents that his disposition was from a non-owner and that court proceedings challenging that disposition would be raised.

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.

Outer House case concerning a GP practice operating at the Terra Nova Medical Centre on Dura Street, Dundee.  Michael John Morris and others (the pursuers) were doctors who had retired from the practice. They argued that they were the current tenants of the centre and that (following a number of changes in the composition of the practice) all bar one of the current partners and the partnership practising at the centre had no right or title to occupy the premises.  One of the original partners (and tenant under the lease), Dr Ritchie remained in the practice but chose neither to pursue the action nor raise defences to it.

The pursuers had bought the centre from the Dundee City Council in 1993 then entered a sale and leaseback transaction with MPIF Holdings Ltd in 2006. The lease contained a general prohibition on assignation and subletting but allowed assignations between partners in the practice without the landlord’s consent whilst requiring notification of assignations to the landlord. Despite the pursuers’ retirement from the practice, there had been no assignation of the lease to the new partners. Indeed the new partners had refused to accept an assignation of the lease from the pursuers. As a consequence, the pursuers and Dr Ritchie retained the tenancy obligations meaning that if the partnership failed to pay the rent, MPIF’s claim would be against the pursuers and Dr Ritchie rather than the partnership.

The new partners and partnership contended that none of the pursuers had occupied the premises as individuals and argued that the partnership paid the rent and occupied the centre with knowledge of the landlord and the agreement of the tenants (i.e. the pursuers and Dr Ritchie).  As such, a right of occupancy subsidiary to the lease (possibly similar to a licence) had been created.

Lord Woolman rejected these arguments:

“The transfer of a real right, which includes “a right to occupy or use land”, requires to be in writing: Requirements of Writing (Scotland) Act 1995 s. 1(2) and 1(7). The defenders do not point to any document in support of their claim. Even if such an agreement could be established by actings, many questions would arise about the contours of the agreement. Who are the parties? When was it made? What is its duration? Was a new agreement made each time a new partner was assumed? Can the permission be withdrawn and if so by whom – the landlord or the pursuers or both? The complete absence of specification on these points is in my view unsurprising. It demonstrates that there was no such agreement. It is also unclear how this private arrangement would fit with the Lease. I cannot see how an agreement arose which is in some way derivative of the lease, yet contradicts its terms.”

Consequently, it was held that the new partners and partnership had no right or title to occupy the centre.

Lord Woolman also rejected an argument by the new partners that the pursuers had no title to sue due to the absence of Dr Ritchie from the action. This argument was based on the rule of common property that the consent of all common owners must be obtained in decisions relating to the management of the property (including in the granting of a lease and in a removing). However, after reviewing the authorities, Lord Woolman noted a modification of the rule to the effect that a mere squatter would not be entitled to a defence based on the rule. As it had been held that the new partners and partnership were in occupation without a right, they were therefore not entitled to query the pursuers’ title to sue.

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.

Note by Sheriff Peter J Braid relating to a case concerning a standard security over property at Mucklets Crescent in Musselburgh. The debtor had died and her estate had been sequestrated.

Following the service of calling up notices and the expiry of the notice period, Accord (the creditor) sought declarator that:

1. Miss Edwards’ representative was in default (within the meaning of standard condition 9(1)(a) of schedule 3 to the Conveyancing and Feudal Reform (Scotland) Act 1970);
2. the subjects were not used to any extent for residential purposes within the meaning of section 20(2A) of the 1970 Act; and
3. Accord had the right to sell the subjects, to enter into possession of them and exercise all other rights and powers under the standard security, in terms of the 1970 Act.

The question arose as to whether Accord was entitled to seek declarator by ordinary action or whether they were bound to proceed under s24 of the 1970 Act (which provides for certain pre-action requirements to provide protection for the debtor).

The sheriff agreed with Accord’s argument that it was not necessary to proceed under s24. In terms of s20, which contains the right of sale, “where the standard security is over land…used to any extent for residential purposes“, the creditor can only exercise its rights by proceeding under s23A (which deals with a voluntary surrender and had no application to this case) or under s24. However, in this case, the property was not being occupied by any person at the time of enforcement and, as such, it could not be said that they were being used by anyone for any purpose, let alone used for residential purposes. The point of time at which the use was to be considered was that at which the creditor wished to exercise its remedies.

The purpose of the pre-action requirements was to give the debtor information and assistance. Since there was no living debtor, nor anyone using the house for residential purposes, it would be impossible for Accord to comply with the pre-action requirements. Further, the court had no power to dispense with those requirements. The sheriff agreed that the court should therefore proceed upon the basis that residential protections did not apply, meaning that the action should continue as an ordinary action with no pre-action requirement.

The sheriff noted that infelicities in the drafting of the Act could result in problems arising where the subjects were occupied; a creditor not necessarily being in a position to know what use is being made of the subjects. Moreover, there may be cases where the debtor has died but the subjects are still being used for residential purposes. The question would then arise as to how a creditor is to comply with the pre-action requirements.

The full note 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 an arbitration in relation to a lease and option to purchase (governed by missives, a minute of agreement and a minute of lease) Pentlandfield Business Park in Roslin.

Robert Ferguson had been a partner in a firm (subsequently dissolved) which was the landlord and seller of the business park. MITT was the purchaser and tenant. An arbitration commenced between the parties in respect of a clause imposing liability for repair and maintenance of the business park on the landlord. Mr Ferguson sought an interim interdict preventing the arbitration from progressing arguing:

1. that (by ruling on a claim that arose under the missives and minute of agreement rather than the lease when only the lease contained an arbitration clause) the arbiter had exceeded his jurisdiction; and
2. that the arbiter had no power to assess or award damages as the arbitration was governed by the common law.

Lord Hodge was not persuaded that Mr Ferguson had demonstrated a prima face case for interim interdict. The court would only interdict an arbiter from proceeding with an arbitration in exceptional circumstances which did not exist in this case. If, as Mr Ferguson contended, MITT did not have a valid claim under the clause in the lease, the arbiter would be able to dismiss the claim as irrelevant after a proof, the arbiter having jurisdiction to decide whether the claim under the lease was relevant.

With regard to the jurisdiction to award damages, Lord Hodge’s prima face view was that he was entitled to do so as the solicitors to both parties had signed an application to the chairman of RICS conferring a power to award damages. Also, by failing to raise any objections to the claims in the first three years of the arbitration, the parties had impliedly consented to confer on the arbiter the power to award damages.

 The full judgement of the Scottish courts is available here.

(See also related decision here.)

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

Inner House case relating to the sale of a house and garden in Alloway.  The seller, Mr McSorley also owned a small additional plot of land nearby, which was not part of the sale agreement.  However, the disposition mistakenly included the extra plot of land with neither solicitor noticing the error. A year later, the Drennans (the purchasers) sold on the entire estate to a third party, who asserted ownership of the additional plot.

Mr McSorley claimed damages from the Drennans on the basis that they knowingly sold property not belonging to them and that, as a third party had acquired the land in good faith, reduction of the disposition and rectification of the Land Register were not available. The sheriff and temporary sheriff principal accepted this argument and allowed a proof on the level of damages. However, on appeal, the Inner House recalled the sheriff court decisions and dismissed the action finding that a remedy of damages would be available where there was a breach of contract or breach of a delictual obligation. However, Mr McSorley’s pleadings had not contained arguments to that effect.

The Inner House also rejected the notion that purchasers like the Drennans must be deemed to be aware of the technical details of dispositions noting that, in any case dependent on allegations of deliberate and dishonest wrongdoing, it was essential for a pursuer to make specific and pointed arguments in that regard.

It was noted briefly that Mr McSorley may yet be able to pursue a remedy based on reduction of the deeds despite the third party purchase or that remedies based in unjustified enrichment or delict may also be available to him.

The full judgement of the Scottish courts is available here.

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

Inner House case in which Ms Kirkham sought damages from her Landlords after she tripped and fell over uneven paving slabs on her garden path. She relied both on the terms of her lease and the Occupiers Liability (Scotland) Act 1960. The claim had been rejected in the Outer House and was appealed to the Inner House.

Lease
In terms of the lease, Link undertook to:

1. Clause 5.3
   “carry out all repairs within a reasonable period of becoming aware that repairs need to be done”
2. Clause 5.4
   “carry out inspections, at reasonable intervals, of the common parts”.
3. Clause 5.8
   “keep in repair the structure and exterior of the house, including … pathways, steps or other means of access …”

 Taking each of the clauses in turn the Inner house agreed with the findings of the Outer House:

1. Clause 5.3 did not come into play unless Link was made aware of a repair requiring to be done (which had not been done). Also, on a proper construction of the clause, Ms Kirkham could not rely upon deemed knowledge.
2. Ms Kirkham’s garden path was not a common part. It was not a “common facility” shared by other tenants or residents, but rather was a dedicated access to Ms Kirkham’s property.
3. Clause 5.8 did not impose any repair obligation over and above what was to be found elsewhere in the tenancy agreement or in statute. The words “take reasonable care” did not require to be read into the clause so that there could be argued to be a breach of a duty to take reasonable care by failing to inspect the pathway regularly.

Occupiers Liability
In terms of sections 2 and 3 of the 1960 Act, Ms Kirkham was entitled to such care as, in all the circumstances of the case, was reasonable to ensure that she would not suffer injury or damage by reason of danger arising from the state of the premises. In order to succeed, Ms Kirkham would have had to establish Link’s failure to take reasonable care for her safety.  For example, she would require to show a failure to set up an adequate system of inspection, or failure to properly implement a system of inspection which was already in place.

However, in this case Mrs Kirkham failed to provide evidence as to what other landlords in the same situation as Link did by way of periodic inspection. Therefore it was not apparent what Link required to do in relation to the footpath. On the evidence available, it had not been established that the system undertaken was inadequate.

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 considering an alleged servitude right of access to a site for development on Dundee Road in West Ferry.  Harton Homes argued that a servitude right of access had been created by implication which led from their site to Dundee Road over the southern portion of a neighbouring property owned by Mrs Durk and through a gap in a wall which separating both properties from the road.

Both Harton’s property and Mrs Durk’s property had previously formed part of larger subjects owned by Mr and Mrs Callison who split the subjects in 1985 and sold parts to Harton’s and Mrs Durkin’s predecessors in title. The break off dispositions conveying these parts made no reference to a  servitude right of access. However, the route over which Harton claimed the servitude had been created by implication had been marked as “mutual” on the plans attached to the break off dispositions.

A servitude can arise by implication on such a division of property where it is reasonably necessary for the comfortable use and enjoyment of one of the resulting parts. However, Mrs Durk argued that there were other potential alternative means of access which could be taken from the north of the properties. Potential access routes existed from Ellislea Road (situated to the east of both subjects and perpendicular to Dundee Road) or via another looping access road from Dundee Road meaning that there was arguably no necessity to imply a servitude over Mrs Durk’s property. These routes were probably not as attractive to Harton as they were less convenient and their gradient and the presence of a narrow archway made them unsuitable for construction traffic.  Although the Callisons’ title to the larger subjects made reference to rights to use the alternative access ways, Harton argued that that these rights did not extend to their part of the property (suggesting that the rights stopped short of their property, or had been abandoned and that the use by them of the rights would illegally increase the burden on the servient property).

The main thrust of Harton’s argument  was based on there being a “common intention” among the parties’ predecessors in title in 1984/5 (about the time the larger property was split) that access for both properties be taken over Mrs Durk’s property. The sheriff noted that, while common intention may be relevant as potentially throwing light on whether the parties considered the access to be necessary at the time of severance, it could not per se be a distinct ground for setting up an implied servitude. In any event the sheriff found himself unable to conclude that there was a common intention that the access right Harton argued for be granted. At best there had been an anticipation that the access would be available in 1984 when an application for outline planning permission for houses on each of the properties was submitted. Further, although later planning applications in respect of services to the plots showed the access located clearly on Mrs Durk’s property, initial planning applications for houses had shown the access located centrally. Harton could also have created a gap in the wall to the south of their property (similar to that in Mrs Durk’s property), the sheriff noting that there was no evidence of a title impediment and insufficient evidence of any planning impediment to do so. (However, evidence suggested that Harton may not have wished to create another gap in the wall as the gap situated on Mrs Durk’s property was more convenient and allowed for turning.)

After considering the evidence, the sheriff was not persuaded that there were physical difficulties or title impediments which prevented use of an alternative means of access to Harton’s property. In all the circumstances, Harton had failed to prove that the servitude through Mrs Durk’s property was reasonably necessary for the comfortable enjoyment of their property.

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.

Two new Scottish statutory instruments have been published which make changes to the EPC regime in order to transpose provisions of Directive 2010/31/EU (relating to Energy Performance Certificates) into Scots law.  The provisions  come into effect on 1 October 2012  and  9 January 2013.

You can see a note of the main changes here.

Case concerning five linked appeals in the Land Valuation Appeal Court of the Court of Session.  The appeals related to entries in the 2010 Valuation Roll for five large industrial buildings in Inchinnan (ranging from 5,311 sq. m to 52,393 sq. m).

The valuation of the subjects had been difficult due to a lack of comparable rental evidence.Instead of using a revaluation scheme by the Scottish Assessor’s Association (SAA), the assessor had used local rental evidence to devise his own scheme. The first step was to derive a basic rate from rental evidence of smaller units in the area then to make a quantum adjustment to reflect the fact that the unit rate deceases as size increases.  The principle issue in this case was the size of the quantum adjustment applied.

The assessor’s approach was accepted by the Renfrewshire Valuation Appeal Committee. However, whilst the court refused the appeals in relation to the two smallest buildings (it considered that the assessor had reliable rental evidence for buildings of up to 6,000 sq. m), it allowed appeals in relation to the three larger buildings.

The assessor was entitled not to apply the SAA valuation scheme if in his judgement the scheme was not suited to the circumstances in the valuation area. The Committee had also been correct to reject Rolls Royce’s valuation which followed the methodology of the assessor’s scheme but applied the quantum adjustment from the SAA scheme. However, there were two main problems with the assessor’s calculation of the quantum discounts:

1. the assessor had relied on agreed valuations under the 2005 Valuation Roll and evidence of rental growth from those valuations (whereas, on the correct approach, a revaluation should be based on a fresh appraisal of the subjects without regard to their earlier values); and
2. the assessor had also relied on the current rent for the Rolls Royce premises which, on the evidence before the Committee, had not been an open market rent and had been based on pre-ordained contractual increases rather than contemporaneous review.

The cases in respect of the three larger buildings were returned to the Committee for a re-hearing and the assessor directed to reconsider his valuations in the light of the decision.

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.