Inner House case considering the competency of the Lands Tribunal to discharge or vary conditions in a registrable lease in terms of s90 of the Title Conditions (Scotland) Act 2003.

The Co-operative Group, who were tenants under a 125 year lease of subjects at the Paisley Centre, sought to discharge or vary certain provisions including restrictions on the use of the property and a “keep open” clause contained in the lease.

The Lands Tribunal had rejected Propinvest’s (the landlord) preliminary arguments that it had no jurisdiction to vary or discharge the conditions. However, an extra division of the Inner House held that the Lands Tribunal had “gone too far, too fast and on inadequate foundation” in rejecting Propinvest’s challenge to their jurisdiction.

The Inner house found that the Lands Tribunal had not applied their minds to a significant aspect of the decision in George T Fraser Limited v Aberdeen Harbour (1985). It was clear that the legislature did not intend all title conditions in registrable leases to be susceptible to the Lands Tribunal’s jurisdiction[1] and, in Fraser, the Lord President (Emslie) had[2]: identified two potential areas of limitation:

1)     that the condition must “relate to land”; and

2)     that there must be an obligation. I.e. a burden on an established right.

With regard to the second area of limitation, the court in Fraser had held that the Lands Tribunal had no jurisdiction to interfere with a clause which, by excluding assignees without the landlords consent, essentially defined the tenant’s identity from the outset. Such a clause was not a true burden just an important delimitation of the initial grant.

The Inner House found that, when rejecting Propinvest’s challenge to its jurisdiction, the Lands Tribunal had not considered the second aspect of the Fraser decision and had failed to consider whether Fraser laid down a principle of general application which should have been followed. Fraser was plainly of high authority and it was at least arguable that the court there did seek to identify a principle of general application.

The Inner House sustained Propinvest’s appeal and allowed a proof before answer on all aspects of the dispute including whether the Co-operative Group could bring their application within the proper scope of the Lands Tribunal’s jurisdiction noting that a decision should not be reached without the fullest consideration of the Fraser decision.

The full judgement is available from Scottish Courts here.

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