Inner House case considering the entry of apartments at the Hamilton Grand in St Andrews on to the valuation roll (for non-domestic rates). Old Course had furnished 2 (out of 26) of the apartments at development and used them as showhouses when selling the other apartments. The assessor entered the showhouses on to the valuation roll with the description “showhouse”.

Old Course appealed against the entry arguing that the showhouses should have been excluded[1] from the roll on the basis that they were dwellings[2]. Although the apartments in question were used as showhouses, Old Course argued that, in terms of the legislation, it is the nature of the subjects (i.e. the natural physical characteristics) which determines whether or not a property is a dwelling and that the use to which the subjects are put is irrelevant.

The Inner House refused the appeal noting that:

 “in characterising subjects for the purposes of valuation for rating it is proper to look not only to their physical circumstances but also to the use to which they are put.  Subjects are valued in their actual state and according to their existing use”.

The court found there was nothing in the legislation to support Old Course’s arguments that use of the subjects is irrelevant and that Old Course’s proposed interpretation of the legislation would lead to absurd results.

The full judgement is available from Scottish Courts here.

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[1]  In terms of s.73 of the Local Government Finance Act 1992.

[2] In terms of s. 72(2) of the 1992 Act.

This is a Sheriff Court case concerning the liability for repairs to the roof of a building in Edinburgh.

The building was formerly a single dwelling but subdivided into three flats and fell within the definition of a tenement in terms of the Tenements (Scotland) Act 2004. The title deeds contained a burden sharing the cost of repairs to the roof on the basis of the assessed rentals for the flats.

Ms Waelde was seeking the recovery of the costs of repair of a skylight and Velux window in the roof of the property from the owner of one of the other flats.

Velux Window
With regard to the Velux, Mr Ulloa argued that, because the Velux had been added after creation of the burden, the burden did not apply to it. That argument was not accepted by the sheriff who, noting that the repairs were to the outer edge of the frame of the Velux and the wall separating the building from the building next door, was “attracted by the idea” that a roof should:

“be taken to include parts added thereto which are of the same character; and that an obligation to contribute to the cost of maintaining it created by the type of burden in the present case should be treated as extending to the cost of maintaining same.”

Also, the sheriff noted that Mr Ulloa had bought his flat after the Velux window had been added and took the view that Mr Ulloa had acquiesced in the presence of the Velux and the burden should be interpreted in a way consistent with the window forming part of the roof.

However, although the sheriff could make a finding in principle that Ms Waelde could recover the costs of repairs to the Velux, Ms Waelde did not provide evidence as to the rateable values of the flats and consequently the sheriff found that her case in that regard had to fail.

Skylight
With regard to the skylight, the sheriff found that the repairs (replacement of Flashband tape on the surfaces of the glass panes themselves) were not repairs to the roof and consequently the title burden did not apply. However, the sheriff found that the skylight acceded to the roof. And, whilst that did not mean the skylight became part of the roof, it did mean that it was part of the building. But, as the roof was common property and the skylight acceded to it, the skylight was common property too (the sheriff noted that he came to this conclusion with some hesitation). In terms of the Tenement Management Scheme (TMS) contained in the 2004 Act, common property is “scheme property” and in terms of Rule 4(2)(a) of the TMS, MR Ulloa was liable for one third of the cost of maintaining the skylight.

The full judgement is available from Scottish Courts here.

Inner House case concerning a petition for judicial review of the decision of Fife Council to grant planning permission for the building of a new Madras College on greenbelt land at Pipeland on the outskirts of St Andrews.

Background
The current Madras College is located on two sites and in need of replacement. The Executive Committee of Fife Council (as the education authority) had agreed, amongst other things, that a replacement school should, where possible, be situated on a single site. Planning permission for the building of a new school on a single site at Pipeland was granted on 16 May 2014 subject to a number of conditions.

Arguments
In the Outer House, the petitioners had argued that the council decision (and preceding planning officer’s report) had treated the education authority’s criteria as if they had been overriding planning requirements and so had failed to balance the educational considerations with the relevant planning considerations for the alternative sites. The petitioners also contended that the decision to rule out an alternative site at North Haugh (identified as a school site on the local plan) as it was too small ignored the possibility of combining it with the current playing fields at Station Park (with which it could have been linked by means of an underpass).

Decision
Lord Malcolm refused the petition in the Outer House and the petitioners appealed.

The Inner House allowed that appeal.

As the locating of the school at Pipeland was contrary to the development plan, it could only be approved if justified by sufficiently weighty material considerations[1].  In this regard, national planning policy provides that such a development can be approved where there is proven need and an absence of a suitable and available alternative site.

Where the planning authority was satisfied as to the need for the school and that the effect of a school on the greenbelt could not be mitigated, the key question was whether the school should be at Pipeland or on an alternative site with less environmental consequences. As to that, the planning authority:

“had to assess the respective merits and demerits of the other sites as compared with the merits and demerits of Pipeland.  The preferences and requirements of the applicant were relevant factors, but by no means decisive.  Any applicant developer, whether for retail, housing, or an educational development, will be influenced, perhaps primarily influenced, by its own interests.  The role of the planning authority is to reflect and safeguard the wider public interest in the proper planning of development in the area, including appropriate protection and conservation of the environment.  This is where the question of the suitability of alternative sites comes into the picture.  Given the acknowledged significant harm caused by development at Pipeland, if, in the opinion of the planning authority, a satisfactory alternative could be found which is consistent with the development plan and causes significantly less environmental harm, that would be a clear reason for refusal of the current application.”

In this case, the court found that the factor which had influenced the planning authority’s decision was the separation of the North Haugh site and the conflict this brought with the education authority’s desire for a single site. The planning authority had accepted the education authority’s decision as to the site instead of exercising its own planning judgement. However, the planning authority should have made up its own mind as to the alternative sites and have done so with regard to planning considerations[2].

“The planning authority was diverted from the planning judgment which it required to carry out if properly exercising its jurisdiction.  The full council was effectively told that it should ignore the issue as to whether the green belt could be protected by using an urban site, because the applicant had already considered the matter and its decision was determinative.  Thus the councillors were put in the position that if they wanted a new Madras College, and that had been a pressing need for many years, they would have to sanction development at Pipeland.”

 The full judgement is available from Scottish Courts here.

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[1] In terms of s25 of the Town and Country Planning (Scotland) Act 1997

[2] The judgement includes a postscript on the dangers involved when a Council is both an applicant and a planning authority.

Outer House case in which a property developer (Mr Barr) sought reduction of a personal guarantee executed by him in favour of Dunbar Bank in 2008.

Background
In 2006 Mr Barr and his business partner sought to acquire land near Tain for a development. To do so they established a limited partnership (Edenroc) registered in the Isle of Man which was to purchase the property with funding from Dunbar Bank.

Extensive negotiations took place between the bank and Edenroc during which 6 facility letters (each of which superseded the previous letter and only the last of which was executed) constituting offers of loan were sent to Edenroc by the bank. The first four of the letters made reference to the requirement for a joint and several guarantee to be granted by Mr Barr and his business partner. However, this requirement was not included in the last two letters which made reference (as had the fourth letter) to a requirement for “[a]ny other security as we [the bank] may, at our absolute discretion, require.” The fifth facility letter had been sent with a further separate letter addressed to Edenroc confirming that there was to be a joint and several guarantee granted by Mr Barr and his business partner. That letter also included an annexed form which Mr Barr and his business partner had signed as evidence of their agreement to the proposal.

The formalities of the loan transaction were executed 5 days after the final (sixth) facility letter and Mr Barr attended at Edenroc’s solicitors’ office to sign the personal guarantee. The document he signed was an individual guarantee by him (including a cover page indicating that it was an individual guarantee) and not a joint and several guarantee granted with his business partner.

The development failed in 2011 and the bank sought to enforce the individual guarantee against Mr Barr who sought reduction of the guarantee on the basis that he had been induced into entering it by misrepresentations by the bank.

Arguments
In particular he claimed that the prior facility letters (referring to the joint and several guarantee) were misrepresentations and that one of the bank’s employees (who was said by Mr Barr to have informed him that the bank never called up guarantees). Although Mr Barr accepted that he had signed the guarantee freely, he said he had signed the document without reading it and was unaware of the content and did not think it was necessary to obtain legal advice (although he had signed it in the presence of a friend who was usually his solicitor but in this case was acting for Edenroc).

Decision
Lord Armstrong rejected those arguments, holding that no misrepresentations were made to Mr Barr and that he had not been induced by the bank to sign the guarantee.

Lord Armstrong concluded that no express representation had been made by the bank in terms of the final facility letter that a joint and several guarantee would be required from Mr Barr. As each of the facility letters superseded the last, and only the final letter was executed, it was that letter which governed the documentation required at completion of the loan transaction. (The letters prior to the final letter merely represented ongoing negotiations and the signed form which had been sent with the fifth letter simply indicated Mr Barr’s (and his business partner’s) willingness to provide a joint and several guarantee if the funds had been advanced in terms of that letter (i.e. if the fifth letter had been the final letter)).

Moreover, there was no basis for inferring from the relevant documentation, however implicitly, that the guarantee required would be joint and several. In particular, Lord Armstrong noted that Mr Barr had not been a party to the facility letters (which had been between the Bank and Edenroc- a separate legal entity Mr Barr had gone to some trouble to set up).

Lord Armstrong also found that he did not believe Mr Barr’s evidence (taking account of his previous experience as a developer) that he had not read the document, did not appreciate the significance of what he was doing and, in particular, that he would not have signed the document without the bank’s alleged representations.

In coming to his conclusions Lord Armstrong noted:

“In the context of cautionary obligations it is well settled that as a general rule the cautioner is expected to look after his own interests and to make such enquiries as he considers necessary or appropriate.”

The full judgement is available from Scottish Courts here.

Background
Inner House case concerning the interpretation of a lease of premises at the Gyle Shopping Centre in Edinburgh under which Gyle was the landlord and Marks & Spencer, the tenant.

Gyle entered an agreement with Primark for the erection of a new store on land which included part of a car park. However, M&S’s premises were let together with a one-third pro indiviso share of shared areas which included the car park. In two previous decisions Lord Tyre found (1) that M&S had not consented to the building of the Primark Store and that the building of the store without consent would be a breach of the lease[1] and (2) that M&S was not personally barred from preventing Gyle from erecting the store on the car park[2].

Gyle then wrote to M&S and requested consent but did not receive it. In this case Gyle sought declarator that a refusal of consent to the Primark development by M&S amounted to an unreasonable withholding of consent. In the Outer House Lord Tyre granted the declarator[3]. M&S then appealed that decision.

The relevant clause in the lease provided that certain works could be carried out to the shared areas by a shopping centre management committee (which included a representative from M&S) where the parties (including M&S) consented that they accepted that the works would not render the mall or shared areas materially less adequate, commodious or convenient to them. The clause also provided that the consent could not be unreasonably withheld.

Arguments
M&S argued that the clause permitted works of redevelopment, modernisation, refurbishment, replacement and renewal, but not a new development such as the new Primark store. In particular they argued that the clause did not permit removal of the shared areas from M&S’s lease and that it did not permit the piecemeal erosion of M&S’s real property rights without formal documentation recorded in the appropriate register.

Decision
The Inner House allowed the appeal. In doing so, the court noted that it is necessary to consider the structure and provisions of the lease in the context of well-established principles of Scottish land law. As to which, the court said:

“Scots law governing land tenure and leases is based upon written titles registered either in the Land Register (formerly the Register of Sasines), or in the Books of Council and Session, or in both.  A duly recorded title relating to land is a real right which can be defended against the world.  It is not a mere personal right binding only the granter and grantee.  The real right runs with the land, and is passed to successors in title.  Alterations in title generally require a written deed duly registered or, following the introduction of digitalisation, an alteration in the electronic land register.”

 And, having noted the benefits of clarity, certainty, and accessibility for the public which arise from the principles, the Court went on to say:

“Against that background, any intention by contracting parties to dispense with the well‑settled and accepted conveyancing requirements relating to real rights in land would, in our opinion, require to be very clearly expressed.  Moreover any such approach would generally be regarded as ill-advised, as the resultant informal approach to title alterations would be likely to lead to confusion and doubt about the nature and extent of a party’s title to and/or interest in the land.”

Then, looking at the particular wording in the lease, the Inner House concluded that there was nothing in the provisions of the lease which would permit an interpretation altering M&S’s real rights and boundaries and allowing the building of the Primark Store.

 The full judgement is available from Scottish Courts here.

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[1] Gyle Shopping Centre General Partners Ltd as Trustee for and General Partner of Gyle Shopping Centre Limited Partnership v. Marks and Spencer Plc, 25 March 2014. See summary here.
[2] Gyle Shopping Centre General Partners Ltd as Trustee for and General Partner of Gyle Shopping Centre Limited Partnership v. Marks and Spencer Plc, 6 August 2014. See summary here.
[3] Gyle Shopping Centre General Partners Ltd as Trustee for and General Partner of Gyle Shopping Centre Limited Partnership v. Marks and Spencer Plc, 12 February 2015. See summary here.

Background
Outer House case considering a petition for judicial review challenging a decision of the Scottish Ministers (adopting the recommendation of their reporter and) refusing Glenmorie Wind Farm Limited’s application for permission to build 34 wind turbines in Easter Ross, north of Inverness.

At the centre of the case was proposed development’s proximity to, and potential impact on areas of wild land and the fact that, after the reporter’s report but before the Scottish Minister’s decision to refuse permission for the wind farm, Scottish Natural Heritage issued a new map identifying areas of wild land and the Scottish Government published a new National Planning Policy.

Arguments
Glenmorie argued that:

1. there had been procedural unfairness, a breach of natural justice and a  denial of legitimate expectations;
2. the Ministers had left material considerations out of account and had given inadequate reasons for the decision; and
3. that the Ministers had made a methodological error in coming to their decision.

Decision
Procedural unfairness
After the new map was issued and the new policy was published the Ministers invited submissions from the parties but later withdrew the request when they realised that further representations were not required and they had sufficient information to make the decision. Glenmorie had accepted this at the time but contended that the Ministers had considered the new map/policy and drawn adverse implications from them when reaching their decision and so should have allowed Glenmorie to make further representations in relation to the new map/policy. However Lady Wise rejected this argument noting that Glenmorie had indicated that they had been content that the Ministers were entitled to reach a decision without hearing further representations, that there was no suggestion that representations were considered from any of the parties and that, whilst the withdrawal of the invitation to make representations had resulted in inconvenience to (all of) the parties, that did not equate to material prejudice to Glenmorie.

Material considerations
Lady Wise also rejected Glenmorie’s contention that their position on the new map/policy was a material consideration which ought to have been taken into account and concluded that, when the Minister’s decision letter was read together with the reporter’s report, there was no lack of intelligibility.

Methodological error
In addition Glenmorie contended that the reporter fell into error by adopting an inconsistent approach when considering the impact on the landscape character of the proposed development on the one hand and, on the other hand, the cumulative impact. (Essentially, they argued that the reporter identified other nearby wind farms when considering the cumulative effect of those with the proposed wind farm but failed to take account of their detrimental influence on the wilderness qualities of the land). Again, this argument was rejected by Lady Wise who found that appropriate reference had been made to the other wind farms and that it was not inconsistent to describe the key characteristics of the landscape character of the site area as including “openness, vastness and remoteness” while acknowledging, in the context of the particular proposal, the cumulative impact it would have when seen in conjunction with other wind farm developments nearby.

The full judgement is available from Scottish Courts here.

Outer House case considering a contract between the Bank of Ireland and Knight Frank relating to a valuation which Knight Frank provided to the Bank in respect of a client’s property over which the Bank received a standard security.

Background
The Bank claimed that it had suffered substantial loss as a result of the valuation and sought damages for negligence from Knight Frank. However, Knight Frank’s standard terms provided that any contract to provide a survey report was subject to English law and that the English courts would have exclusive jurisdiction in respect of any dispute arising from it. The issue for the court was whether the standard terms formed part of the contract and, consequently, whether the court had jurisdiction to hear the case.

Knight Frank had provided a valuation for the Bank’s client in relation to the property (near Kilmacolm) which was to be the subject of a development. The Bank instructed its own valuation of the property from Knight Frank (by letter dated 2 May). This was provided and included Knight Frank’s standard terms. However, in a departure from its normal practice, Knight Frank had not sought to ask the Bank in advance for written confirmation that the standard terms formed part of the contract. Following receipt of the valuation, the Bank advanced a loan of £2.35m to the client in return for a standard security.

Arguments
The parties were agreed that the Bank’s letter of instruction constituted an offer that the offer had been accepted by conduct. The Bank argued that the offer was accepted by Knight Frank when it delivered the valuation report to the bank. The contract was accepted at the moment the report went through the bank’s letterbox at which point it was too late to introduce new terms (the bank argued that it would have been odd if the fulfilment of the contract –i.e. providing the valuation- were to be treated as a counter offer.)

On the other hand, Knight Frank argued that the delivery of the valuation report along with the standard terms constituted a counter offer which the bank had accepted when it relied on the report to grant the loan.

Decision
Lord Woolman preferred Knight Frank’s argument noting that it had been open to the bank to raise an issue with Knight Frank regarding the standard terms and it had not one so. It was irrelevant that the officer of the bank dealing with the transaction had not read the standard terms. The Bank could not “cherry pick” the document: i.e. it could not accept the valuation without also accepting the standard terms attached. In coming to his conclusion, Lord Woolman also took account of the facts that it had not been surprising to the bank’s employees (giving evidence in the case) that surveyors would seek to introduce their own standard terms into the valuation agreement and that the terms introduced were not unusual.

As such, Lord Woolman found that the court did not have jurisdiction to hear the dispute.

The full judgement is available from Scottish Courts here.

Background
Outer House case considering a planning appeal[1] arising out of Dumfries and Galloway Council’s adoption of the Dumfries and Galloway Local Development Plan 2014 (the 2014 LDP).

Calmac owned the Woodland’s House Hotel, situated between Woodlands and Newbridge to the north-west of Dumfries, and also had an interest in promoting a small scale housing development around the hotel.

Prior to the adoption of the 2014 LDP[2] the hotel (and Woodlands and Newbridge) lay within the settlement boundary of Dumfries. However, as a consequence of the adoption of the 2014 LDP the settlement boundary changed and the hotel then fell outside the boundary meaning that an application for the development around the hotel would be dealt with under different and, it was argued, more restrictive housing policies.

When, what was to become the 2014 LDP, was published as a Proposed Local Development Plan Calmac had made representations[3] to the Council regarding the proposed plan. However, a reporter (appointed to resolve unresolved representations) recommended that no modification be made to the plan in the area of Calmac’s property.

Arguments
Calmac appealed on the basis that the reporter had failed to consider its representations regarding the change in the Dumfries settlement boundary. Further, it contended that the reporter had failed to take account of a representation that Newbridge should have been reclassified as a village in the event the settlement boundary was moved (which would have resulted in less restrictive housing policies applying to the proposed development).

Decision
Lord Turnbull rejected those arguments and refused the appeals.

It was found that, although the representations made by Calmac regarding the position of the Dumfries settlement boundary had included a statement that Newbridge was not designated as a village (and went on to show that more restrictive housing policies would apply as a result), it did not suggest that the absence of the designation was incorrect or inappropriate.  As such, when considering Calmac’s representations, it was only necessary to provide reasons relating to the placement of the Dumfries settlement boundary. The reasons given by the Council and reporter in that respect (that the decision had been taken by identifying an appropriate and defensible boundary for the settlement of Dumfries, identifying a landscape buffer and reaching the conclusion that the housing needs of the area were otherwise met) were held to be an exercise of understandable planning judgement and, as such, were adequate.

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] Under s238 of the Town and Country Planning (Scotland) Act 1997.

[2] Under the Nithsdale Local Plan 2006.

[3] As they were entitled to do under s18 of the Town and Country Planning (Scotland) Act 1997.

Outer House case in which Mrs Shepherd sought damages from Travelodge following an injury sustained after slipping and falling following a diesel spill in Travelodge’s car park (situated near Dreghorn Services in Edinburgh).

Mr and Mrs Shepherd were motorcyclists and met other members of the Dunedin Chapter of the Harley Davidson Motor Cycle Club in the Travelodge car park (between 8.30 and 8.45) prior to riding to Staffordshire for an event. Before the bikers arrived there had been a diesel spill in the car park.

A manageress at Travelodge was informed of the spill sometime between 8.15 and 8.30. She logged a job with Travelodge’s maintenance company (in order to have the spill cleaned up) then phoned Travelodge’s health and safety manager and her divisional manager. On the advice of the health and safety manager, the manageress cordoned off the car park and put notices up saying that the car park was closed and advising that there had been spillage.

The bikers left the car park about 9am then stopped at Glencorse Barracks where Mrs Shepherd slipped and fell. The Court found, on the balance of probabilities, that the accident had been caused by diesel picked up by Mrs Shepherd on her boots at the Travelodge car park.

Mrs Shepherd argued that Travelodge were liable for the accident as they:

1. had breached their duty of care due in terms of s2 of the Occupiers Liability (Scotland) Act 1960;
2. had breached their common law duty of care; and
3. were vicariously liable for a breach of duty by the manageress.

Lord Boyd found that the accident had been foreseeable and the fact that it had happened some distance away from the original spill did not matter. In coming to this conclusion he noted that it was important that Mrs Shepherd had slipped as a result of diesel on the sole of her own boots and that it may have been different (i.e. not foreseeable) if she had slipped on diesel transferred to Glencorse on the soles of the boots of the other bikers.

 Lord Boyd also found that there was a duty of care both at common law and under the 1960 Act, noting that Travelodge were occupiers of the car park to which the public had access. That duty conferred an obligation on Travelodge to have a sign posted[1] at the entrance to the car park either closing the car park or at the very least warning people entering the car park of the danger.  The obligation would also extend to advising people who already had cars in the car park of the danger of slipping on the diesel. Travelodge had put up signs in this case, fulfilling the obligation and meeting the duty of care.

As to the actions of the manageress, Lord Boyd found that arguments to the effect that she should have acted more quickly were potentially problematic. From the evidence, the time frame between the Manageress finding out about the spillage and Mr and Mrs Shepherd arriving at the car park may be as little as a few minutes or, at the longest, half an hour. It was suggested that she may have sought the advice from the health and safety manager and carried out her instructions before contacting the maintenance company but Lord Boyd was not satisfied[2], on the balance of probabilities, that even if she had done so, the car park would have been closed before Mr and Mrs Shepherd arrived.

 As a result, Lord Boyd found in favour of Travelodge.

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] Although the diesel was visible in the wet by means of the distinctive rainbow effect in the water, Lord Boyd did not consider that it would be so obvious to a motorist, motor cyclist or pedestrian that there was no need to put up any sign. As such, the circumstances of this case were very different to those in Leonard v Loch Lomond & Trossachs National Park Authority.

[2] It was noted that the suggestion was made with the benefit of hindsight and it was difficult to say that the manageress was in breach of her duty of care by arranging for the spill to be cleaned up as a priority.