Appeal in the Land Valuation Appeal Court of the Court of Session concerning the valuation of unit in the Silverburn Shopping Centre in Glasgow. The unit was a deli selling food and coffee as a franchise of Coffee Republic. The assessor entered the unit on the Roll as a shop with an annual value of £159,000 as it was not a licensed restaurant, was adjacent to shops and could be easily altered to shop use. However the Valuation Appeal Committee allowed an appeal by the unit’s owner, Monti Marino and applied a lower ‘restaurant’ rate entering a value of £87,000. The assessor then appealed the Committee’s decision to the Court of Session.

The court refused the appeal noting that it has long been established that lands and heritage are valued in their current state without regard to the potential for physical adaption (providing that use is beneficial and is not subject to arbitrary restrictions).

The question of whether the subjects should have been entered in the Roll as a shop or as a restaurant or café was a question of fact for the Committee. At least five considerations pointed to the unit being a café or restaurant:

1.  the layout of the premises with tables and chairs for diners and seats outside;
2. the extent of food-based spending at the premises by comparison with food outlets that are valued as shops;
3. the fact that only a minority of the trade was take-away;
4. the fact that food was prepared on the premises for service at the tables; and
5. the availability of customer toilets.

The Committee’s decision was not unreasonable and there was therefore no error in law. Also, with regard to the assessor’s contention that the Committee should not have ignored the rental evidence of the zoned shops, the Committee was entitled to adopt that valuation which it considered to be supported by the evidence relating to other food outlets at the Centre. Since the Committee regarded the subjects as a restaurant, it was entitled to reject the values taken by the assessor from shops in the mall.

The full judgement is available here.

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

Outer House case concerning an alleged breach of duty under the Occupiers’ Liability (Scotland) Act 1960 at Lakeland’s store on Hanover Street in Edinburgh. Miss Brown argued that a two-fold failure by Lakeland to install a handrail and to signpost an existing alternative exit on George Street (which had a ramp and handrail) resulted in her falling down a flight of stairs at the Hanover Street exit.

Whether or not Lakeland had breached its statutory duty depended on whether it had been negligent. The question for the court was whether Lakeland had done or omitted to do something which had, as its reasonable and probable consequence, injury to others. This was a matter of fact and circumstance. Consideration was given to the knowledge and magnitude of the risk and the practicality and effectiveness of preventative measures.

Lord Woolman found that Lakeland had not been negligent. As regards knowledge of the risk, it was noted that there had been no history of accident amongst perhaps 3 million persons to have visited the store. In relation to magnitude of the risk, there was no risk of falling far (Miss Brown had fallen four or five steps). With regard to practicality of preventative measures, Lakeland had already established a disabled entrance (on George Street) which complied with the relevant legislation and had taken steps to bring its existence to the notice of customers. As to effectiveness of preventative measures, there was no evidence that, had Lakeland installed a handrail at the Hanover Street entrance, it would have prevented Miss Brown’s accident. Further, Lord Woolman also took account of  the expert evidence of two architects which indicated that it was unclear whether planning permission would have been granted for a handrail.

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.

Judicial Review seeking to reduce a conditional consent and the related deemed grant of planning permission for a 59 turbine wind farm development situated 5 miles south of Dufftown and just over a mile outside the northern edge of the Cairngorms National Park.

William Grant were part of a group of third party objectors. The main thrust of their argument was that, having concluded that there was a need for the wind farm at the site, the planning reporter was then “anxious not to find too many things in the way of a consent” and allowed the need for the site to override other important adverse factors.

Section 36 of the Electricity Act 1989 provides that a generating station cannot be constructed except with the consent of the Scottish Ministers. Section 57(2) of the Town and Country Planning (Scotland) Act 1997 provides that, on the granting of such consent, the Scottish Ministers may direct that planning permission is deemed to have been granted subject to any conditions specified by the Ministers.

William Grant argued that section 25 of the 1997 Act, which requires that regard must be had to the development plan in making any determination under the planning acts, also applied, contending that the Scottish Ministers’ direction under s57(2) was flawed due to a failure to afford the development plan the enhanced status required by s25.

This argument was rejected by Lord Malcolm:

“In my view it is clear that the purpose of a section 57(2) direction is to allow circumvention of the process of a planning application, including any need for a determination in terms of section 37 of the 1997 Act (which does specify that regard is to be had to the development plan). By contrast, section 25 applies to decisions under the planning acts when it is a requirement that regard is to be had to the development plan. There are several provisions in the 1997 Act where one finds such a requirement. Section 57(2) is not one of them.”

Lord Malcolm found that, although the need for the site may have played a significant part in the overall conclusion, the decision was an “entirely normal and rational exercise of the kind of judgement required” in such applications and also rejected various other grounds of challenge based on policies in the local plan and supplementary guidance.

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 the extent of a public road (the A801) at Whitecross near Linlithgow.  The question for the court was whether an embankment to the east of the road formed part of the public road or was the private property of the Council.

Morston argued that the public road extended all the way from the fence at one side of the road to the fence at the other side and included the embankment. If this were the case it would allow them to take access to the road from a proposed development on the east side of the road without making a ransom payment to the Council.

After noting that much could be said for both sides of the argument, Lord Malcolm came to the conclusion that the embankment did not form part of the public road.  In deciding whether the land formed part of the road, the question to be resolved was whether the disputed ground had been ‘dedicated to public passage’. This would depend on the particular facts and circumstances.

When the local authority acquired the land (in the 1960’s) the part on which the embankment was situated would have allowed the addition of a second carriageway to the road. Lord Malcolm noted attractions in the argument that, having built a widened embankment for the purpose of holding the land in reserve for possible future use as a highway, the roads authority had dedicated that land for public passage. He noted also that the widened embankment was held in the Council’s roads account. However, prior authorities indicated that the matter should be tested by the use, character and function of the land at the time not by future intentions. At no time had the embankment been put to use as a highway, or as part of a highway.

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 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 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.

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. The Council‘s argument that it was also invalid as it had not been signed by an officer of the landlord (as specified in the notice clause of the lease) was rejected by Lord Menzies as this was not a mandatory requirement; the provisions of the notice clause not suggesting that different methods of service would result in invalidity.

After considering the rent review clause as a whole, Lord Menzies also found that time was of the essence in relation to the 3 month period by which any counter notice (requiring determination of the rent by an independent surveyor) had to be served by the Council in terms of that clause. The failure of the Council to serve a counter notice within that period meant that the rent had been effectively reviewed at the review date.

The full report is available from Scottish Courts here.

(See also appeal in the Inner House here.)

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

Inner House case concerning a compulsory purchase order (CPO) made in relation to property on Argyle Street/Robertson Street in Glasgow.  The owners of the properties which were subject to the CPO raised an appeal in which they sought to quash the decision of the Scottish Ministers to confirm the CPO.  The CPO had been issued as part of a back-to-back scheme between the Council and a developer for the conversion of the property into, amongst other things, a hotel and apartment complex.

However, the scheme had fallen through when the developer became insolvent and the Irish Government’s National Asset Management Agency failed to re-instate a guarantee by Anglo Irish Bank.

Although all of the parties were then agreed that the CPO should not take effect, there were two practical difficulties:

1. there is no statutory procedure by which the Ministers can rescind a decision made by them to confirm a CPO; and
2. there is no statutory procedure by which an acquiring authority can withdraw a confirmed CPO.

This meant that the CPO would remain valid until it expired by the passage of time (on 7 September 2013) adversely affecting the interest of property owners (and that of their heritable creditors) in the property.

The Council therefore granted an undertaking which extended to successors in title confirming that it would take no further steps to acquire the land subject to the CPO.  The court took the view that, in this case, that was the best means by which the Council could give effect to its intention not to implement the CPO. After considering the authorities and noting that it is possible for a local authority to abandon its rights under a CPO by its conduct, the court found that, all the more so, it was possible for it to abandon its rights by express words.

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.

English High Court case concerning a break option contained in a sublease between Cancer Research (the landlord) and PCE (the tenant).  PCE sought to exercise the break option which was conditional on payment of the rent up to the break date.  The break date occurred shortly after a quarter day and, after receiving an invoice for a full quarter’s rent (payable quarterly in advance) from Cancer Research, PCE sent an email to Cancer Research’s managing agents advising them that a payment had been made for the rent for the period between the quarter day to the break date and asking whether that was the correct basis for calculating the rent for that period. The managing agents did not respond.

Cancer Research then argued that the PCE had failed to terminate the lease properly contending that, to do so, PCE would have to (amongst other things) pay the full rent for the quarter in advance. The court agreed with Cancer Research.  On the September quarter day it could not be said with certainty that the sublease would terminate on the break date as the tenant may have been in breach of another condition of the break option. The clear obligation on the quarter day to pay a full quarter’s rent could not be retrospectively reduced merely because an event which occurred after that date operated to terminate the sublease from the future date.

PCE’s alternative argument based on estoppel also failed. On the facts before the court, there was no basis for finding that there was a duty on the part of the Landlord to tell the Tenant that the Landlord believed the full rent was due.

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.

Sheriff court case considering the decision of the City of Glasgow Licensing Board to refuse an application to vary a premises licence for an Indian Restaurant known as The Dhabba at Candleriggs in Glasgow.  The owners sought the varying order so as to include within the premises licence external seating for 24 people on the pavement outside the restaurant and to amend the operating plan to include the provision of outdoor drinking.

The Licensing Board refused the application as: (1) granting the licence would be inconsistent with the licensing objective of preventing a public nuisance in terms of the s30(5)(b) of the Licensing (Scotland) Act 2005; and (2) the area was unsuitable for use for the sale of alcohol (in terms of the s30(5)(c)). The Board’s refusal was founded upon its conclusion that the location of the tables on a busy street would cause congestion.

The sheriff allowed an appeal of the decision. In the first place, there was inadequate evidence of the congestion, the only factual evidence before the Board being a plan of the subjects and an assertion by Bapu’s solicitor to the effect that the pavement was three metres wide and the tables took up one metre of that:

“In my view, absent some other material consideration or information, it does not logically follow that the mere narrowing of a three metre footpath by one metre, leaving two metres clear and available for pedestrians, would cause any congestion to occur, still less congestion of such an intolerable volume, intensity, frequency and duration as to cause a public nuisance. Something more would be required to justify those conclusions. That might be based, for example, upon factual information regarding the current and anticipated density and frequency of pedestrian and vehicular traffic at that location, viewed against an informed assessment of the likely impact upon such traffic of a narrowing of the footpath in the manner proposed in the application. No such information was before the Board.”

In the second place, the public nuisance anticipated by the Board was not linked to the sale of alcohol. It arose from the expected congestion which, if it had existed at all, would have been attributable to the physical presence of the tables and chairs (which had already been sanctioned by a section 59 agreement and planning consent). Thirdly, this also rendered the Board’s decision irrational as the congestion and public nuisance would exist whether or not the variation application was granted.

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.

Outer House case concerning a creditor’s right of sale over security subjects held under a standard security. The syndicate financed the purchase of a site at Eurocentral near Motherwell, on which a hotel and office complex (which remained unoccupied) were constructed, partly by means of a loan secured by a standard security.

The syndicate failed to make payments under the loan agreement and Hadrian (the holder of the security) demanded payment of the loan, served a calling up notice on the syndicate and began to market the subjects. Hadrian received an offer from the hotel operator for £5m and another offer from Calgacus Capital Limited (a wholly owned subsidiary of Hadrian) for £5.2m. The effect of the proposed deal with Calgacus would have been that (i) the syndicate’s members would have incurred a balancing payment of £2.3m in respect of capital allowances (which the syndicate argued would not have been triggered under the hotel operator’s bid) and (ii) that the syndicate would have been left owning the unoccupied office premises.

The syndicate sought interim interdict preventing the sale to Calgacus on the basis that the subjects had not been advertised properly. They also argued that (in engineering a bid from its own subsidiary which would result in a balancing payment) Hadrian had improperly used the procedure to apply commercial pressure to the syndicate to pay more towards their outstanding debt than the loan agreement provided for.  (The loan agreement prevented recourse to the personal assets of the members of the syndicate.)

Lord Hodge rejected the syndicate’s motion for interim interdict finding that the syndicate’s challenges in respect of both the advertising of the property and the improper use of powers were weak.  Also, if a more cogent case could be made successfully at a later stage, the syndicate would be entitled to an adequate remedy in damages.  In coming to this conclusion, Lord Hodge noted that the financial loss to the syndicate would have been greater than that of Hadrian if the interim interdict were not granted. However, Lord Hodge also took account of the fact that the syndicate’s members had decided they were not prepared to contribute further funds or buy a variation of the loan agreement when exposed to the tax clawback. In the absence of a clear legal wrong it was not appropriate to prevent Hadrian proceeding with the sale to Calgacus.

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 interpretation of missives between two builders for the sale of land at Broomhouse in Glasgow. The land was to be sold by Bellway to Persimmon for £4.16m. Bellway were to undertake works before the sale and the date of entry was tied to Bellway’s completion of these works (which involved the upgrading of a road and construction of a roundabout).

In terms of the missives, if the works were not completed before the longstop date, Bellway were to offer an alternative site of comparable size and value to Persimmon. In a previous decision Lord Glennie found that, although Bellway were not breach of contract at the point they failed to complete the works, the alternative site they offered to Persimmon was not of comparable size and value and, following the failure to offer an alternative site, Bellway were then in breach of contract.

Persimmon’s letter giving notice that they were rescinding the contract referred only to the fact the works had not been completed in time and not to the failure to provide an alternative site. In these proceedings Bellway argued that, as they were not limited to only one opportunity to offer a suitable alternative site, the contract was still open for performance and they were not in breach of contract. However, Lord Glennie found that the contract had been validly rescinded by Persimmon’s letter. In doing so he confirmed the principle that, providing the intension to rescind is clear, the fact that no reason is given or the wrong reason is given is not normally significant. Further, although Persimmon failed to issue an ultimatum notice [1] before rescinding the contract, even if they had served an ultimatum, Bellway would have been unable to comply as they did not have a comparable site in their land bank at the relevant time. Also, as Bellway’s argument had been that the alternative site they had offered fulfilled the requirements of the contract, the service of an ultimatum notice would have served no purpose.

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.