Background
Outer House case in which William Tracey sought damages from SP Transmission in respect of overhead power cables and other equipment running through William Tracey’s site in Linwood which William Tracey argued amounted to an encroachment on the site.

William Tracey occupied the site as a tenant (of the William Tracey Private Pension Fund) from 1997 and then as the proprietor from 2006.

Prior to 1997, the site was owned by Thomas Houston & Son (Johnstone) Limited. Thomas Houston had agreed a wayleave in favour of Scottish Power plc allowing installation of the equipment on the site.  However the wayleave conferred only a personal right on Scottish Power and did not bind successor owners of the land. SP Transmission contacted William Tracey seeking to agree a wayleave in respect of the equipment in 2005 but William Tracey refused to grant the wayleave.

In December 2010 William Tracey issued a notice requiring SP to remove the equipment from the site (following a procedure contained the 1989 Act[1] which provides for the situation where ownership has changed and a wayleave is no longer binding on the landowner). Using powers available to it under the 1989 Act[2], SP then applied for a “necessary wayleave” which allows a licence holder to obtain a wayleave from the Scottish Ministers where the owner or occupier refuses to grant the wayleave voluntarily. The necessary wayleave was granted by the Scottish Ministers in August 2014.

Arguments
William Tracey argued that the necessary wayleave only had effect from August 2014 onwards and, as such, that it was entitled to damages in respect of the encroachment of the cables and equipment on its property between 1997 and August 2014.

Decision
Lord Brodie rejected that argument and dismissed William Tracey’s action. In doing so, he agreed with SP’s contention that, having regard to the wording used, the correct interpretation of the 1989 Act is that, when a change in ownership means that a wayleave ceases to be binding on an owner of land, the wayleave is nevertheless continued meaning that keeping the equipment on the property is lawful and not an encroachment. If the landowner wishes to bring that temporary state of affairs to an end, its only remedy is to give notice requiring removal of the equipment[3].  Following receipt of the notice the licence holder can then, if it requires, apply for a necessary wayleave from the Scottish Ministers (which may or may not be granted).

Lord Brodie also noted that, if William Tracey’s argument were correct, it would mean that, where landowner refuses to agree a wayleave with a licence holder, a delictual liability could be imposed on a licence holder doing no more than complying with its statutory duties. Moreover, in some cases, that liability would be unknown to, and unavoidable by, the licence holder.

The full judgement is available from Scottish Courts here.

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[1] Electricity Act 1989, sched 4, para 8 (1) and (2)

[2] Sched 4, para 6.

[3] Under para 8(2) of sched 4 and as William Tracey did.