This is an Inner 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
In the Outer House 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] and Lord Tyre found that, when the notice was read as a whole, a reasonable recipient 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.).

The Inner House agreed with Lord Tyre’s findings and refused an appeal. Deciding the issue was a matter of assessing the impression immediately made on a reasonable recipient of the notice with knowledge of the relevant background and context. After considering the factors which were known by the Landlord in this case[2], the court said the following:

“Against that background, what would the reasonable landlord have understood as being the meaning of the letter received?  We accept that (s)he would, no doubt, observe that the heading of the letter – not the notice itself (which is contained in paragraph 2 of the letter) – refers to only two of the leased units.  But on proceeding to read the whole letter, it would be clear that the heading was simply incomplete; what the tenant plainly intended was to intimate that the right to terminate conferred in clause 4.2 was being exercised.  That was, for the purpose of the landlord/tenant relationship, the operative part of the letter.  It was not as if any part of the letter sought to open negotiation for the termination of Tyco’s tenancy of only two units and retention of a tenancy of unit 1.  We can accept that (s)he might have paused in respect of the definition of “the Lease” in paragraph one.  However, that pause would, we consider, have been a brief one.  We agree with the Lord Ordinary that, on reading the letter as a whole, there would have been no real doubt.  It was simply too improbable that Tyco were serving notice under a lease which had expired, particularly given the specific reference to the then current break option clause in paragraph 4.2 of the Minute of Variation.”

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] 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.

[2] Which the court noted as follows:

• “that, by 11 January 2016, the date for the expiry of the lease entered into in 2004 was long since passed and by that time, parties’ contractual rights and obligations were contained in the whole terms of the 2004 and 2011 documents read together (the original lease read together with the Minute of Variation);
• that Tyco were tenants of units 1, 3 and 4 under contractual terms which were unitary in relation to those premises;
• that Tyco had never had any right to terminate their tenancy in relation to individual units;
• that clause 4.2 of the Minute of Variation provided only for termination of Tyco’s whole tenancy;
• that, to exercise the clause 4.2 right, Tyco required to provide written notice at least six months prior to 31 August 2016 but the notice did not need to be in any particular form;
• if Tyco were going to exercise the break option, it would be sensible to service the clause 4.2 notice well in advance of the end of February 2016 – notice in the course of January 2016 would not be at all surprising; and
• that if Tyco were, after 31 August 2016, to be tenants of unit 1 only, parties would require to enter into a new agreement as the terms of their existing agreement were not divisible and made no allowance for partial severance of the tenancy.”

LKS is now more than 5 years old and, to celebrate, the current version of the LKS Property and Conveyancing Casebook is now available freely available here.

Inner House case considering a dispute as to the existence of a servitude right of access in the title of a property at Coates Crescent in Edinburgh.

Background
Nos. 6 and 7 Coates Crescent had both previously been owned by National Mutual who sold no. 6 in 1994 and no. 7 in 1996. ASA subsequently acquired title to number 6 and Kashmiri subsequently acquired title to no.7.

Although no express grant of servitude had been included in the disposition, ASA argued that when National Mutual had sold no. 6, a servitude right of access (in favour of no.6) had been granted by implication over a car parking area forming part of no.7 (to a garage and further parking area used by the owners of no.6).

Arguments
ASA pointed to the following factors in support of their contention:

1. there were steps and a gate leading from the rear garden of No 6 into the car park at No 7;
2. tenants and sub-tenants at no.6 had used the steps and gate to obtain access from the rear of No 6 across the car parking area of No 7 since at least 1988; and
3. the need for effective fire escapes from no.6 across the disputed area.

As such, ASA argued that, when National Mutual separated the ownership of no.6 from no.7, there was an inference or presumption that National Mutual would have intended that a servitude over the car park would be created as an incident of the conveyance.

Decision
In the sheriff court, the sheriff rejected ASA’s arguments and found that there was no implied servitude, noting that the crucial question to be considered was whether the alleged servitude was reasonably necessary for the enjoyment of no.6. In the sheriff’s view, whilst use of the servitude was convenient, the evidence produced by ASA did not show it to be reasonably necessary for the enjoyment of no.6 (Although there was evidence that occupiers of number 6 preferred to use the disputed access route through the rear of no.7, it was not far from the garage and parking area used by no.6 to the front entrance of no.6 via the street).

The Inner House refused ASA’s appeal stating that the law should be slow in recognising servitudes by implied grant for a number of reasons:

“First, when property is divided, it is always possible to create servitudes by express grant.  If a servitude right is important, it can generally be expected that the matter will be raised in negotiation and that an appropriate clause will be inserted into the disposition.  The question of an implied grant only arises where no express provision has been made. Secondly, claims for implied rights inevitably involve a degree of uncertainty, and if an expansive approach is taken to the creation of such rights there is a risk that a substantial number of dubious or even extravagant claims may be made.  Thirdly, and more importantly, servitude rights are real rights created over heritable property.  In this area of the law certainty has always been regarded as crucial, because of the perpetual existence of such rights.  Fourthly, perhaps the most important factor is that real rights bind the whole world, and will be binding on any future purchaser of the servient property.  Any such purchaser should be able to discover the existence of real rights easily.  Normally this is achieved by express grant and the recording of the relevant deeds in the Land Register.  Implied rights, however, do not appear in the Land Register.  Thus there are strong policy reasons for restricting the recognition of such rights to cases where their existence is reasonably obvious from the surrounding facts and circumstances.  Cases where the right is reasonably necessary for the enjoyment of the dominant tenement can be said to fall into the latter category.”

In this case, although ASA had been able to show substantial use[1] of the route, they had been unable to show that that the alleged servitude was reasonably necessary for the convenient and comfortable enjoyment of no.6.

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] But not for a sufficient period for a servitude to be created by prescription. (ASA also attempted to argue that, because the reason they were not able to rely on prescription for creation of the servitude was that the properties had been in common ownership until 1996, their application for a servitude by implication should be looked on favourably. However, the court found that it had to apply the law relating to implied servitudes on the evidence available.)

This is an 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 with the stated intension of remaining there until Scotland declares itself an independent country.

Lord Turnbull found that the corporate body was the valid proprietor of the grounds on which the camp was located, that the campers had no lawful right to encroach upon the corporate body’s property and found that arguments made by the campers concerning the impact of the Treaty of Union (leading to the creation of Great Britain) on the provision of the corporate body’s powers by the Scotland Act 1998 had no foundation. Lord Turnbull also rejected arguments based on rights claimed by the campers under The United Nations Declaration on the Rights of Indigenous People of 2007 and, in addition, found that the campers’ occupation of the camp did not fall within rights of access (the “right to roam”) created under the Land Reform (Scotland) Act 2003.

However, Lord Turnbull did find that, as the corporate body is a public body, it is unlawful for it to act in a way which is incompatible with the European Convention for the Protection of Human Rights and Fundamental Freedoms. As such, it was necessary to consider whether granting an order for removal of the campers was compatible with the rights guaranteed by the convention; in particular article 10 (freedom of expression) and article 11 (freedom of assembly and association). Consequently, Lord Turnbull granted a procedural hearing anticipating that it would lead to a further hearing to consider evidence on the proportionality of granting the order removing the camp (i.e. 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).

The full judgement is available from Scottish Courts here.

(See decision on human rights issues here.)

An Act of the Scottish Parliament making provision for:

• a land rights and responsibilities statement (to be reviewed every five years) to contain principles for guiding the development of public policy on land rights;
• establishing a Scottish Land Commission (to monitor the system governing ownership and management of land and to recommend changes in the public interest);
• a public register of persons with a controlling interest in land (aimed at improving transparency of landownership);
• requiring that Ministers issue guidance on the circumstances in which landowners should carry out engagement with the community;
• empowering communities to buy land where it is necessary to further sustainable development;
• the application of non-domestic rates to shootings and deer forests;
• empowering local authorities to change the use of inalienable common good land;
• additional powers for Scottish Natural Heritage to intervenewhere the management of deer by landowners and occupiers is not delivering in the public interest;
• amendments and procedural clarifications to be made to the access rights over land  contained in Part 1 Land Reform (Scotland) Act 2003; and
• reform of the agricultural holdings legislation (aimed at improving relationships and re-dressing imbalances between tenants and landlords).

The Act received Royal Assent on 22 April but further regulations are required to bring the various provisions into force.

The Act is available here.

Notwithstanding yesterday’s disappointment there are a number of reasons to be optimistic about the future of Scottish rugby.

1. Glasgow winning last year’s Pro 12.  Edinburgh becoming competitive, reaching last year’s Challenge Cup final and in contention for a play off place.  I think it is a good thing that both Scottish teams do not automatically qualify for the European Cup.

2. There is now more coverage of Scottish rugby.  Although print media coverage has declined social media coverage is increasing all the time. Glasgow Rugby seem especially keen to use social media.  We in the Borders are also very lucky to have Border Rugby TV.

3. The SRU now seem to be taking women’s rugby more seriously with the appointment of Shade Munro and the amount of resources going into it.

4. Finally we seem to be moving in the right direction as far as regional academies are concerned.

5. Friday’s win for our under 20 team is tangible evidence of the growing number of players we at last have coming through and who seem ready for a career as a professional rugby player.  I suspect a lot of this is down to the work of Sean Lineen.

6.  The appointment of Richie Gray

7. The standard of the premiership continues to improve as does the coaching at that level.  It is now a very competitive league.

8. The news of the increased links with London Scottish is long overdue and could potentially give a number of younger players a great chance to experience a good level of rugby. Again I am glad to see Sean Lineen involved in this. We also need to consider whether the money we put into our national sevens squad could be better spent at London Scottish or on our premiership teams.

9. The Club internationals are a good addition to the rugby calendar.  I personally would still like to see our district teams play in the B&I Cup or have them play each other on the same weekends Edinburgh play Glasgow.

10. At last we have the makings of a Scottish wide competitive youth structure.

11. There seems to be more sponsorship money coming into our professional game and the SRU’s debt mountain could at last be paid off within a few years.

It is just a pity that so many years were wasted by a series of incompetent SRU administrations.

Merry Christmas and a Happy New Year to all from Legal Knowledge Scotland.

Inner House case considering the enforceability of contractual obligations contained in missives after the missives ceased to be enforceable.

Background
Mr McPherson and Ms Macaulay (the pursuers) sold a house and garden ground in North Connel to the Macqueens (the defenders) whilst retaining some adjacent land on which they intended to build two semi-detached houses. The missives contained conditions obliging the defenders (who also owed an adjacent property) to convey a strip of land to the sellers and also to grant a servitude right of access over an additional strip of land. The missives incorporated the Combined Standard Clauses (2009 edition) which include a clause providing that the missives will cease to be enforceable after 2 years.

Arguments
The pursuers sought an order for specific implement in order to compel the defenders to convey the strip of land and grant the servitude. The action was raised outwith the 2 year period and the defenders argued that it was time barred (as the obligations were either part of the missives or collateral to them and consequently ceased to be enforceable when the missives ceased to be enforceable). That argument was rejected in the sheriff court; the sheriff taking the view that the obligations to convey the strip and grant the servitude formed a separate contract to the sale of the house and garden (albeit recorded in the same document).

Decision
However, the Inner House allowed an appeal of the sheriff’s decision. The court agreed with the defender’s contention that the obligations to convey the strip of land and grant the servitude formed part of the overall consideration (in addition to the purchase price of £245k) and, as such, were an intrinsic part of the contract for the sale of the property and became time barred when the missives ceased to be enforceable.

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 LKS style bank now has a corporate section which includes new articles, dividends and a shareholder agreement.

The latest additions to the LKS style bank are:

1.3.4.3​ -​ Offer by landlord take renunciation of lease from tenant and grant new lease to tenant​​
1.3.3.2​ – Offer by assignee to take assignation of lease from assignor​.​

These are available to our subscribers here and for individual purchase here .