News archive

Sheriff court case concerning an alleged servitude right of access over a property in Aberdeen. In 1992 Jessie Sharp granted a disposition of a small area to the owner of the neighbouring property (her brother, Peter Sharp) in which she purported to reserve a right of access over the property to any garage to be built on the part she retained. No garage was built until her successors in title, the Gardens, built one in 2010. However, the Arrowsmiths (the successors in title to Peter Sharp) argued that the clause in the 1992 disposition created only a personal right between Jessie and Peter Sharp which did not transmit to their successors in title. They contended that, without a garage, there could be no servitude right as the purpose of the servitude could not be achieved.

The sheriff principal rejected that argument finding that the 1992 disposition did create a heritable and irredeemable servitude right of access over the Arrowsmiths’ property. The clause satisfied many of the common requirements for the creation of a servitude. Although the word “servitude” was not used, that is not fatal to the creation of a servitude and the clause contained a reference to successors in title and an obligation to insert in future transmissions. There also was an express declaration that it was a “real and preferable” burden, the deed did not expressly exclude the constitution of a servitude and there were no indications that the right was intended to be personal. Further, the sheriff principal took account of the fact that the garage was likely to be a permanent construction when coming to the conclusion that it was likely that the parties had contemplated that the right would continue for the benefit of singular successors.

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.

Estate of A R Ellis deceased v HMRC, [2013] UKFTT 775 TC02426

The First-tier tax tribunal has confirmed that a taxpayer’s election as to his main residence is conclusive as long that the property in question was in fact one of his residence.

The Tribunal decision can be found here.

Outer House case considering the interpretation of a break clause in a lease of premises at Almondvale Office Park in Livingston.

The clause was clear in that CBS (the tenant) was required to serve notice exercising the break and pay a lump sum before terminating the lease. However words had been omitted from a third part of the clause and, although a third and additional requirement appeared to be intended, it was unclear what it was.

CBS sought to exercise the break, served the notice and paid the lump sum. However, RPS (the landlord) argued that CBS had not validly terminated the lease contending that payment in respect of repairs required to be made in terms of the clause before CBS could terminate. (A schedule of dilapidations had been served on CBS by RPS prior to the termination but the parties had been unable to agree the sum due.) In RPS’s view the third part of the clause had three possible meanings. These were that: prior to the termination date, the tenant had to either (a) pay and perform all its obligations in full; or (b) pay all its monetary obligations; or (c) pay all sums over and above the lump sum.

In the first place Lord Woolman found that omission of words left the third part of clause with no natural meaning. In the second place, when considering what a reasonable person would have understood the clause to mean, although use of the words “in addition” did indicate that a third requirement was intended, omission of the words meant that it was not clear what the requirement was (the fact that RPS had offered three possible meanings in itself suggested this).  As such, it was not possible to interpret the clause as imposing a third obligation on CBS prior to termination of the lease.

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.

Sandra McDonald, Public Guardian has provided an update on the current power of attorney position.

Outer House case concerning arbitration proceedings in respect of a lease over Pentlandfield business park at Roslin in Midlothian. Midlothian Innovation let the premises from Robert W Ferguson & Co.

The lease was for 5 years and included an option to purchase as at 1 July 2007. The parties had also signed a minute of agreement. Both of the documents stipulated that, if the option were exercised, Robert W Ferguson would grant a renunciation of the lease.  Midlothian exercised the option on 1 December 2006 and a renunciation was signed on 2 July 2007. However, on 16 August 2007 both parties signed a joint application form seeking the appointment of an arbitrator in respect of a dispute over compliance with the repairing obligations in the lease. The arbitration proceeded slowly but in 2011 Robert Ferguson (the surviving partner of the firm of Robert W Ferguson & Co) changed his position and argued that, given the granting of the renunciation, the arbitrator had no power to make an award.

Lord Woolman rejected that argument. Although the acceptance of a renunciation by a landlord implies a discharge of all claims against the tenant, the renunciation is potentially subject to any further agreement made by the parties. The parties had freedom of contract and were entitled to agree not only that they had a dispute arising out of the lease, but also that they wished to resolve it by arbitration. The signing of the joint application form demonstrated the parties’ intention to have the dispute referred to arbitration and Mr Ferguson’s participation in the proceedings until 2011 implied that he consented to the arbitration. Lord Woolman found that the arbitrator had jurisdiction and the proceedings should proceed to a conclusion.

The full judgement is available from Scottish Courts 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 concerning an application to exercise a right to buy croft land at the Pairc Estate in South East Lewis. Pairc Crofters Limited was the owner of the land and had leased it to Pairc Renewables Limited. The Pairc Trust is the crofting community body which sought to exercise the right to buy. It sought purchase both the interest of Pairc Crofters as owner and the interest of Pairc Renewables as tenant.

The Scottish Ministers granted the trust’s application. Pairc Crofters and Pairc Renewables appealed to the sheriff. The sheriff referred the devolution issues arising from the appeal to the Inner House. The court required to consider whether Part 3 of the Land Reform (Scotland) Act 2003 (which contains the crofting right to buy) is incompatible with the European Convention on Human Rights. Specifically the landowners and their tenants claimed that Part 3 contravened Article 6(1) (right to a fair trial) and/or Article 1 of Protocol 1 (right to protection of property) of the Convention. If Part 3 had been incompatible with the Convention rights, the making of the 2003 Act would as a consequence have been outwith the legislative competence of the Scottish Parliament (in terms of the Human Rights Act 1998 and the Scotland Act 1998).

The landowner argued that Part 3 does not provide sufficient safeguards for landowner’s rights. Although A1P1 makes no mention of procedural requirements, the landowner contended that the procedure employed must give the proprietor a reasonable opportunity of putting its case to the decision maker. And, in the landowner’s view, Part 3 did not do that.

The court took the view that the landowner’s case depended on the proposition that the safeguards for a landowner’s rights required to have been explicitly spelled out in the 2003 Act. However, this is not the case. The question of competence depends on how the legislation operates in practice and not on how any specific provision may appear if looked at in isolation. (It may be that proper interpretation of the Act, the terms of other legislation, or the principles of the common law may restrict the impact of the Act so that it cannot be said to be incompatible with Convention rights.)

As regards Part 3 of the 2003 Act:

1. The provisions requiring the crofting community’s approval (to exercise of the right to buy) by ballot were compatible with article 6 (the right to a fair trial). Regulation 2 of the Crofting Community Right to Buy (Ballot) (Scotland) Regulations 2004 requires that the ballot be carried out in a “fair and reasonable manner”. In the event that the landowner considers the ballot to be unfair, it had a judicial remedy under the same regulation.
2. The exercising of the right to buy is at the discretion of the Scottish Ministers. Section 74(1)(n) of the 2003 Act requires that the applicant must in every case satisfy the Ministers that the proposed purchase is in the public interest. In making a judgment as to the public interest, the Ministers must act compatibly with A1P1 (right to protection of property). In assessing the broad overall consideration of the public interest, the Ministers must take account of the interests of persons who may be adversely affected by the decision, such as the landowner. When the Ministers decide where the overall public interest lies, the central consideration will be that of balancing the harm to the landowner against the benefit of the proposal to the wider public.
3. The 2003 Act gives the landowner adequate means to put forward his case. On receipt of the community body’s application, the Ministers are obliged to invite a number of interested parties, including the landowner, to submit their views in writing on the application (s 73(8)(a)). The Ministers are then under an express obligation, when considering whether to grant the application, to have regard to all views that have been received (s73(12), (13)). In addition to the statutory procedure the Ministers also have a duty at common law to observe such additional procedural safeguards as are necessary to attain fairness.
4. Lastly, the legislation provides for an adequate level of scrutiny of the factual issues that an application to exercise the right to buy may raise. It does so in three separate ways:
   1. in the requirement of the details that the crofting community body must provide in the prescribed form of application;
   2. in the requirement that the Ministers must invite views on the proposal from interested parties, including the landlord, and from the public; and
   3. from the right given to any interested party, again including the landlord, to refer any question relating to the application to the Land Court.

The Inner House found that, when considered as a whole, the legislative provisions and principles of administrative law offer a level of protection “equal to or surpassing that” which is required by the European Convention on Human Rights.

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.

On 27 November the Scottish Government announced it is postponing the next revaluation of non-domestic rates until 2017.  In addition it has announced a comprehensive review of the non-domestic rates system.

The Scottish Government consultation, “Supporting Business – Promoting Growth” can be found here.  The consultation ends 22 February 2013.

Inner House case considering an appeal by Bagmoor against a decision of the Scottish Ministers to adopt the recommendation of their reporter and reject Bagmoor’s planning application for a 14 turbine wind farm at Stacain near Inveraray in Argyll.

The site lies within Glen Etive and Glen Fyne Special Protection Area which was created to protect golden eagles and the reporter’s recommendation to reject the application was based primarily on the effect the wind farm would have on the eagles.

In essence Bagmoor’s appeal was based on their complaint that the reporter had not given adequate reasons for his decision. This was rejected by the Inner House which found that on each substantive or determining issue the reporter had given intelligible reasons for his decision and refused Bagmoor’s appeal.

Procedure
Central to the decision was the procedure to be followed under Conservation (Natural Habitats etc.) Regulations 1994 (SI 1994 No 2716), which implement the Habitats (92/43/EEC) and Birds (2009/147/EC) Directives. Regulation 48 requires that an appropriate assessment is carried out as regards plans which are likely to have a significant effect on a European site (in this case, the Glen Etive and Glen Fyne SPA). This involves a two stage procedure, the first stage being a preliminary examination to determine whether an appropriate assessment requires to be carried out. The second stage is a detailed assessment of the plans. If plans can be clearly carried out without an effect on the site, there is no need for the more detailed assessment. The court had the following to say on the matter:

 “There is no prescribed formula as to how the two stage exercise contemplated by regulation 48 and the Court of Justice is to be carried out. There are several ways in which it might be done in the context of domestic planning legislation and, no doubt, the precise form will depend upon a range of facts and circumstances, including the nature of the permission sought and the conservation objectives to be protected. However, with an application such as the present, at least by the time the respondents elect to call it in and order a public inquiry, it ought to be made clear, at least in the normal case, that any preliminary examination stage has been passed and that what is to be carried out at the inquiry is an “appropriate assessment” in terms of regulation 48(1)(a). Public inquiries are not held in order to undertake preliminary examinations.

It may just be possible, in a rare case, for the respondents to order an inquiry yet leave it to the reporter to decide whether an appropriate assessment is required. If that were done, the first “screening” stage ought to take the form of a preliminary examination undertaken (or the form of which could be agreed) at a pre-inquiry meeting and before any assessment is embarked upon. What should not occur, as happened here, is that the reporter carry out a detailed assessment and then decide that such an assessment was required before re-assessing the same evidence to reach a substantive decision. Put another way, there was no point in the applicants adducing a body of detailed evidence and then inviting the reporter to determine whether there was any need to adduce it.”

The reporter’s decision
In coming to his conclusion the Reporter had taken account of evidence of displacement of eagles from another wind farm at Beinn Ghlas. Bagmoor argued that this evidence was too qualified or limited in character to justify a finding either that eagle’s occupation of  Beinn Ghlas had been affected by  the wind farm, or that a wind farm at Stacain would cause a similar abandonment. However the court noted that, in terms of the legislation, the reporter required to recommend approval of the application only if he could be “certain”, that the plan would not adversely affect the SPA’s integrity. In these circumstances, it had been sufficient for the reporter to find that the evidence left open the possibility that a wind farm at Stacain would lead to abandonment of part of the site by the eagles. The reporter had not therefore required to resolve every aspect of the evidence or every subsidiary issue relating to the site at Beinn Ghlas.

Bagmoor also objected to the reporter’s consideration of evidence from Scottish Natural Heritage that eagles had 99% chance of avoiding a collision with the turbines and the contribution that “behavioural displacement” (i.e. the eagles moving away from the wind farm site to avoid collisions) made to that figure. However, it was common ground the eagles would tend to shy away from use of the wind farm and that constructing the wind farm would represent a loss of foraging ground. The court found that the reporter’s reference to the 99% avoidance rate in this context was simply confirmation of what had already been clear and had been ascertained during his screening exercise. The displacement of the eagles had been “effectively confirmed” by that rate.

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.

The Legal Knowledge Scotland Property and Conveyancing Casebook containing all of our property and conveyancing case summaries is now available here.

Merry Christmas from Legal Knowledge Scotland.

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