Scottish Court of Session Decisions

The Lands Clauses Consolidation (Scotland) Act 1845 (8 Vict. c. 14) provides—“With respect to lands acquired by the promoters of the undertaking under the provisions of this or the special Act, or any Act incorporated therewith, but which shall not be required for the purposes thereof, be it enacted as follows:—(Sec. 120) “Within the prescribed period, or if no period be prescribed, within ten years after the expiration of the time limited by the special Act for the completion of the works, the promoters of the undertaking shall absolutely sell and dispose of all such superfluous lands in such manner as may deem most advantageous, and apply the purchase money arising from such sales to the purposes of the special Act, and in default thereof all such superfluous lands remaining unsold at the expiration of such period shall thereupon vest in and become the property of the owners of the lands adjoining thereto in proportion to the extent of their lands respectively adjoining the same.”

The Callander and Oban Railway Company by their Act of 1878 (41 and 42 Vict. c. 167) obtained authority to take compulsorily for the purposes of their undertaking certain lands in the town of Oban belonging to Mr Robert Macfie, Airds House, Appin. By section 36 of the Act they were authorised to complete their works by 16th July 1882. On the ground compulsorily acquired from Mr Macfie they erected a railway station, quay, and sea-wall.

Mr Macfie on 11th March 1896 raised an action against the Callander and Oban Railway Company concluding for declarator that two plots of ground marked A and B on the plan produced, being part of the ground acquired from him, “not having been required or used by the defenders for the purposes of their undertaking, and not being required, have become superfluous lands within the meaning of section 120 of the Lands Clauses Consolidation Act, and vested in and became the property of the pursuer from and after 17th July 1892, or at least that they are now vested in and have become the property of the pursuer.” The two plots in question amounted to little over half-an-acre. The ground acquired by the company from the pursuer consisted to a great extent of ground which had been reclaimed from the foreshore. They built a retaining wall, and filled up the whole of the ground to one level. Along the centre of the ground they made a road to the station, on each side of which there was a triangular plot of ground, being the two plots in question. One of these, A, was directly contiguous to the station buildings, and B was separated from A by the breadth of the roadway. The plots of ground were surrounded with walls and iron railings, and laid out with shrubs and flowers as ornamental grounds. A was crossed by a road, one branch of which led to the cellar under the refreshment room, and another was used as an access to the back of the station. Plot B was separated from the Station Hotel only by the Black Lynn Burn. From the year 1886 Mrs Campbell, the proprietrix of the hotel, made repeated offers to purchase the plot B from the company, which were submitted to the directors, but were declined. Reports, however, were made by the secretary to the directors in regard to the value of the ground, and they frequently discussed the question of disposing of it. The secretary wrote in 1889 to an intending purchaser that “My directors … are disposed to sell if a suitable offer is made.” In point of fact no sale was effected of either plot within the statutory period.

In July 1892 the Post Office authorities opened negotiations for the acquisition of plot A for a new Post Office, and on 10th August the secretary was authorised by the directors to state that “a certain portion of the ground at Argyle Square,” being the land in question, “can be sold, and the directors will consider proposals for its purchase.” Negotiations proceeded till in December 1894 the directors remitted “to Mr Anderson and Mr Neave” (the solicitor of the company) “to endeavour to come to an arrangement.”

In March 1895 they remitted “to secretary and solicitor to take the necessary steps for sale of ground.”

The sale was not carried out, Mr Neave having advised that the company could not give a good title. Thereafter the company let part of plot B to the Post Office authorities on a five years' lease, while the other part of it was leased for the same period to Mrs Campbell.

The Post Office authorities commenced to erect buildings on the ground leased by them, and the pursuer, having warned them that this was in contravention of his rights, and intimated a claim to the company that the lands had re-vested in him, raised the present action.

The Caledonian Railway Company were sisted as parties to the action in virtue of an agreement with the Callander and Oban Railway Company to work their line; and intimation was made to the Lord Advocate on behalf of the Post Office.

The pursuer pleaded—“(1) The plots of ground referred to in the summons not having been required or used by the defenders, the Callander and Oban Railway Company, for the purposes of their undertaking, and having thus become superfluous land within the meaning of the 120th section of the Lands Clauses Consolidation Act 1845, the pursuer, as proprietor of the adjoining lands, is entitled to decree in terms of the first, second, and third conclusions of the summons.”

Page: 830↓

The defenders, the Callander and Oban Railway Company, pleaded—“(5) The land being required by these defenders for the purposes of their undertaking, and having on that account been retained by them, is not superfluous land within the meaning of the statute. (6) The said lands not being superfluous lands within the meaning of the statute, the defenders should be assoilzied with expenses.”

The Lord Ordinary (Low) allowed a proof, the import of which sufficiently appears in the opinions of his Lordship and of the Lord President, infra.

On 3rd March 1897 the Lord Ordinary pronounced the following interlocutor:—“Finds that the portion of the plot of ground marked A on the plan produced with the summons, which the directors of the Callander and Oban Railway Company agreed to sell to Her Majesty's Postmaster-General in the year 1895, and the plot of ground marked B on said plan, became superfluous lands within the meaning of section 120 of the Lands Clauses Consolidation (Scotland) Act 1845, and vested in and became the property of the owner or owners of lands adjoining thereto from and after the 17th July 1892: Appoints intimation of this action and of this interlocutor to be made to the Lord Advocate (as representing Her Majesty's Woods and Forests), in order that he may sist himself as a party to the action, if so advised: Reserves meantime the question of expenses, and grants leave to reclaim.”

Note.—“If the directors of the Callander and Oban Railway Company had not tried to sell the plots of land in question, but had all along dealt with them as if they were lands which the company required and intended to hold, I should have thought, although even then the question would have been attended with difficulty, that the pursuer could not succeed.

The two plots of ground, which have been referred to as A and B, were parts of certain lands which the company, in the exercise of their compulsory powers, acquired from the pursuer. These lands lay between Argyle Place and Aird's Place and the sea, and to a great extent, if not wholly, consisted of ground which had been roughly reclaimed from foreshore. The ground was bounded on the north by a stream called the Black Lynn. The company, at considerable expense, built a retaining wall along the stream, and filled up the whole of the ground to one level. Across the centre of the ground they made a road leading from Argyle Square to the station. On each side of the road there was a triangular plot of ground—the plots in question—which they surrounded with walls and iron railings, and laid out with flowers and shrubs as ornamental ground. The two plots of ground together amount to very little over half an acre.

There is no doubt that by so dealing with the plots of ground the company made the approach to their station much more sightly and attractive than it would have been if the plots had been covered with buildings, or left in the rough state in which they were when the company acquired them. It was said, however, that such a use of the ground was not one of the purposes authorised by the company's Act, and that the plots are therefore in the same position as regards the present question as if they had lain waste. Now, there are no statutory limits or requirements as to the size or style of railway stations, and if a railway company thinks it advisable to spend money upon what is merely ornamental, that is a matter between them and their shareholders. Therefore I am not prepared to assent to the view that to lay out a small piece of ground as ornamental ground in front of an important station is necessarily so beyond the powers of a railway company that they are liable to forfeit the ground so laid out at the end of ten years if they cannot show that they require it for strictly railway purposes. I think that is a question of circumstances. If a small piece of ornamental ground formed part of a scheme for making a station attractive and convenient, I think that the Court would be very slow to hold the ground to be superfluous. If, on the other hand, it appeared that the ground had been laid out merely as a temporary expedient to prevent unsightliness, until a good opportunity arose of disposing of it, or until it should be required for other purposes, I do not think that the fact that the company had expended money upon the ground would prevent it falling into the category of the superfluous.

In the present case, however, I think that there are strong grounds for believing that the two plots were never designed to be kept permanently as ornamental ground. Although small in extent, they are very valuable, being apparently worth from four to five thousand pounds. It is most unlikely that the directors of a railway company, which never seems to have been overburdened with funds, should have dedicated such valuable ground to such a use. The presumption seems to me to be that the directors laid out the plots as they did until the ground could be otherwise used or disposed of, and that view is, as I shall show, entirely consistent with the actings of the directors.

But (apart from the actings of the directors) there is a great deal to be said for the view that the plots are not superfluous, because there is a reasonable prospect of their being required for railway works.

If an extension of the station is required, the company have no ground which could be made available except these two plots. It was said by several witnesses of great skill and experience that the station accommodation is ample, and that there is no prospect of any more being required. I think, however, that the balance of the evidence is, upon the whole, the other way. The traffic has largely increased, and is increasing; and the probability is, that, owing to the opening of new lines, it will continue to increase in the future.

I think that a terminal station upon a line upon which the traffic is increasing,

Page: 831↓

and upon which there is already a large passenger traffic in summer, cannot be regarded as well equipped when it has only one refreshment room and one room for both left luggage and parcels, and no office—except a booking office—for any official. I therefore think that the necessity for increased station accommodation is likely to arise, although within what period it is impossible to foretell; and, as I have said, the plots in question are the only ground available.

Further, the defenders founded strongly on the fact that plot A is not wholly used as pleasure ground. It is crossed by a road, one branch of which leads to the cellar under the refreshment rooms and another branch to the back of the station. These accesses are of the nature of proper railway works, and accordingly the defenders contended that the plot of ground upon which they are placed could not be regarded as superfluous. It is plain, however, that the defenders would not have acquired the whole of plot A for the purpose of making an access to the cellar and the back of the station. A road along the station wall would have been equally convenient; and I imagine that the road was placed where it is simply because the defenders had no particular use for plot A, and by taking the road round one side of it, they were able to lay out the plot more tastefully. The strong point for the defenders in regard to plot A is, that it immediately adjoins the railway station and is the ground upon which any extension of the station must be built.

If, therefore, it had not been for the actings of the directors in regard to the ground (I refer to both plots), I should, upon the whole, have been of opinion it was not superfluous, on account of the reasonable probability which appears to me to exist of its being required for extension of the station.

Unfortunately, however, the directors have dealt with the ground in a way which is inconsistent, in my judgment, with any other supposition than that in their opinion it was superfluous.

The time limited by the company's special Act for the completion of their works expired in July 1882, and they had ten years from that date within which to sell superfluous lands. The question of disposing of the ground does not appear to have been brought prominently before the directors until about 1886. From that time forward, however, it was repeatedly the subject of consideration at Board meetings.

A great deal was said about reports which Mr Anderson, the secretary, made to the directors in regard to the value of the ground, and plans which he had prepared, showing how it could be best utilised. Now I do not think that the fact that the directors discussed the question of disposing of the ground, and made inquiries as to its value, is in itself of much importance. The question whether lands are or are not superfluous must often be a delicate one for a railway company, and I think that it is quite reasonable for the directors in considering it to ascertain what price they could get for the lands if they came to be of opinion that they could do without them and resolved to sell them.

But in this case the directors went far beyond getting information as to the value of the lands and the chances of the market. They dealt with actual offers. They actually concluded a contract for the sale of a large part of plot A, and they only did not do so as regarded plot B because the price offered did not satisfy them; and there is no suggestion in the minutes or correspondence that they ever had any doubt as to their power to sell the ground, or as to the advisability of doing so, provided they could get a sufficient price.

Plot B is separated from the Station Hotel only by the Black Lynn Burn, and Mrs Campbell, the proprietrix, was anxious to acquire that plot, chiefly because she wished to cover over the burn, which she considered to be prejudicial to the hotel. She accordingly made repeated offers to purchase the ground, and it is plain that her offers were refused for no other reason than that the directors did not consider the price which she offered high enough. Mr Brown, the only member of the Callander and Oban Board who was examined, said that even if Mrs Campbell had offered a sufficient price, the directors would not have agreed to sell to her until they had consulted their engineer as to whether or not the ground was required for railway purposes. I think that Mr Brown's recollection must be at fault upon the point. In the first place, there is no indication in the minutes or the correspondence that the directors considered it to be necessary to consult anyone as to whether or not (apart from the question of price) it was prudent to sell the ground. On the contrary, the plain inference to be drawn from the documentary evidence is that the only thing which stood in the way of a sale to Mrs Campbell was the price. In the second place, when the Post Office authorities offered for a portion of plot A what the directors considered to be a sufficient price, an agreement of sale was concluded without the engineer or anyone else being called in to advise the directors.

The Post Office authorities first opened negotiations for the acquisition of ground for a new post office in July 1892. The matter was brought before the directors at a meeting held upon the 10th August 1892, and the minute bears that the secretary was authorised to state ‘that a certain portion of the ground at Argyle Square can be sold, and the directors will consider proposals for its purchase.’ That was a very plain indication of the directors' opinion that a portion, at all events, of the ground in question was superfluous, because it was only upon the assumption that it was superfluous that it could be sold. The Post Office authorities subsequently proposed that, instead of their purchasing a piece of ground, the company should build a post office, which they (the Postal authorities) should take on lease. That proposal was

Page: 832↓

declined, but by letter of 7th September 1893 the secretary, Mr Anderson, intimated that the company ‘are willing to sell land for this purpose.’ Finally, in the end of 1894, the Post Office authorities offered a sum of £2350 for a portion of plot A. After some correspondence, that offer was in March 1895 approved of by the directors, and they remitted to the secretary and the solicitor ‘to take the necessary steps for sale of ground.’

The sale of the ground was not in fact carried out, because Mr Neave, the solicitor of the company, advised that they could not give a good title. Mr Neave was not examined as a witness, and the letters which he wrote upon the subject are very guarded, and the impression which they convey to my mind is, that they do not disclose his full reasons for advising that the company could not give a title. He simply says that the lands are not superfluous lands, and that therefore the company could not sell them. No doubt he noticed that the ten years during which it was competent for the company to sell superfluous lands had expired before the agreement with the Post Office was made.

What, then, is the result as regards the present question of the directors having agreed to sell a portion of plot A to the Post Office and negotiated for the sale of plot B?

The directors are the proper persons, in the first instance, to decide whether lands are or are not superfluous, and they have the best means of judging as to what is required for the purposes of a railway. And when it is proved that they have deliberately acted in a way which showed that their opinion was that the lands were not required, I think that the onus is shifted. It is then for the directors to show that the lands never were superfluous, and to explain their previous actings and reconcile them with the position which they now take up.

It seems to me that in a question with the Callander and Oban Railway Company the decision of the House of Lords in the London and South-Western Railway Company v. Blackmore, 4 E. & I. App. p. 610, is in point. There a railway company had, during the currency of the ten years, sold certain lands. These lands not being in town, or building lands, or built upon, an adjoining proprietor had a right of pre-emption. In an action at the instance of the adjoining owner the sale was set aside, and it was held that his right of pre-emption had arisen—the contention of the company that the sale being set aside they were entitled to continue to hold the lands until the expiry of the ten years, as if the sale had never been made, being repelled.

Lord Westbury, after saying that the sale must be set aside, put the point thus—‘But then the question arose, were the directors to be remitted to their former position, and placed in a capacity to determine what to do with these lands as if they had never proceeded to deal with them as superfluous lands? That is a question which at first sight appeared to me to deserve much consideration, but undoubtedly in the cases referred to it has been held—and I am by no means inclined to disagree with the decision—that the act of the directors in putting up the lands for sale stamps the lands absolutely with the character of superfluous lands, and that the directors are estopped from denying that they have that character under the Act of Parliament.’

Now, if an attempted sale of lands during the currency of the ten years stamps them with the character of superfluous lands and once gives rise to the right of pre-emption, an attempt to sell at the end of ten years, after the directors have had the full period allowed by statute to consider whether the lands are or are not required for the purposes of the special Act, must also do so.

If the directors had been able to give any explanation of their actings in regard to the ground which showed that their actings were not inconsistent with the position which they now take up, I have no doubt that they would have done so. But no satisfactory explanation has been forthcoming. Mr Anderson, the secretary, who prepared numerous reports upon the subject and conducted the correspondence, was not examined. I think, however, that it is plain from the documentary evidence that his opinion all along was that the ground was not required by the company and should be sold. Mr Bolton, the chairman of the company, was said to be too ill to attend the proof, but it was not said that he could not be examined on commission. The only individual who had anything to do with the proceedings who was examined was Mr Brown, and I do not consider that the explanations which he gives are satisfactory. He says, in the first place, that the company were willing to sell to the Post Office, although they would not have sold to a private individual. I do not think that Mr Brown has any distinct recollection of what passed at the meetings, and the documentary evidence leads me to conclude that the directors would have sold as readily to a private person as to the Post Office, if the former had offered as good a price. Further, a desire to favour the Post Office as being a branch of the public service is really beside the question, because the directors could not sell one foot of ground to the Post Office or anyone else, unless it was ground which was not required for the purposes of the special Act—that is to say, superfluous ground. Mr Brown says in the next place that the directors never applied their minds to the question whether plot B was ground which they ought to sell or not, because they never had an offer at a price which was worth considering. Now, unless the directors were prepared to sell to Mrs Campbell if she offered them a sufficient price, they treated her in a way which it is impossible to justify. In the first place, they undoubtedly gave her to understand that the only reason for declining her offer was deficiency in the price. In the second place, at their meeting of 22nd November

Page: 833↓

1889, they instructed the secretary ‘to inform Mrs Campbell that inquiries are being made for the vacant ground near the station, and ascertain whether and for what quantity she desires to acquire it.’ That was inviting her to offer for the ground. In the third place, they allowed Mrs Campbell's agent, by arrangement with the secretary, to travel to Glasgow on three different occasions to have a personal interview with them on the subject. It seems to me to be impossible to believe that the directors would have acted in that way unless they had been prepared to sell the ground to Mrs Campbell if she came up to their views of an adequate price.

I have therefore come to the conclusion, although with regret, that so far as the Callander and Oban Company is concerned, the directors, by agreeing to sell part of plot A to the Post Office, stamped the portion which they so agreed to sell with the character of superfluous lands. In regard to plot B, although the actings of the directors are not perhaps so unequivocal as in regard to plot A, there are much stronger grounds (apart from the actings of the directors) for holding the former to be superfluous land than the latter. Practically the only use to which it has been suggested that plot B could be put, is that it the station was extended over plot A, it might be necessary to shift the road from Argyle Square on to plot B. If, therefore, plot A must be regarded as superfluous land, I think that it necessarily follows that plot B must also be so, and I can find no ground for distinguishing between different parts of plot B.

In regard to the portion of plot A other than that which the directors agreed to sell to the Post Office, there is more difficulty. It is to be observed in the first place that the pursuer now recognises that he cannot claim the whole of plot A, and he has restricted his claim so as to leave a free entry from the north to the strip of ground, thirteen feet in width, running along the wall of the station to form an access to the cellar and the back of the station, in lieu of the roads which now run round plot A. Now I do not think that it is proved that the directors ever contemplated selling the whole of plot A. On the contrary, I think that there are indications that they did not do so. Thus the minute of the directors' meeting of 10th August 1892 (when the Post Office first approached them) ran thus:—‘Mr Anderson authorised to state that a certain portion of the ground at Argyle Square can be sold.’ Further, the directors never had any offer before them for the purchase of the remainder of plot A, and they never intimated to anyone that they were willing to sell that ground, and although plans were prepared showing buildings covering the whole of plot A, these buildings included railway offices. Therefore I am of opinion that the defenders are not estopped by their actings from pleading that the portion of plot A, not included in the sale to the Post Office, was not at the end of the ten years superfluous, and as it is the only ground available for building an office, or a second refreshment room, or a parcels office, and is quite suitable for these purposes, I think, for the reasons which I have already stated, that I am justified in holding that it was not, as matter of fact, superfluous.” …

The defenders reclaimed, and argued—1. The fair reading of section 120 of the Lands Clauses Act was that if at the end of ten years lands did not fall within the category of “not being required,” the section would not apply. Accordingly, that was the point of time to look at for the purpose of determining the question. There was no authority for the proposition that if lands were in use at that time, but there was a probability they might not be used at some future date, they were therefore to be regarded as superfluous. A fair reading of the evidence showed that the lands had been in actual use and occupation during the ten years, and that they were the only possible place which could be used for the extension of the station, and would in the ordinary development of the railway be applied for that purpose— Hooper v. Bourne, 1880, L.R., 5 App. Cas. 1. Yet the Lord Ordinary had awarded to the pursuer some of the land which was actually used by the defenders for access to their station. The onus of proving that lands were superfluous was upon the pursuer, and he had entirely failed to discharge it— North British Bailway Company v. Moon's Trustees, February 8, 1879, 6 R. 640, at 651. This case was in sharp contrast with any in which lands had been held to be superfluous. The land did not fall within any of the four categories of “superfluous” lands described by Lord Cairns in Great Western Railway Company v. May, 1874, L.R., 7 H. of L., 283, at p. 292; Norton v. London and North-Western Railway Company, 1879, L.R., 13 Chan. Div. 268; Stewart v. Highland Railway Company, March 8, 1889, 16 R. 580. Moreover, it was the case that the Court would take a more liberal view of small pieces of land such as these in close proximity to the station. The dealings of the directors, if looked at as part of the evidence, did not turn the scale to the effect of making the lands superfluous if it had been sufficiently proved from their use, actual and potential, that they were necessary to the company. It was evident that the directors had never considered the point as to whether the land was “necessary” in the sense of the statute. This was shown by the fact that they had entered into negotiations to sell after the ten years, when it was out of their power to do so. (2) Nor did the fact that they had entertained offers bar them from maintaining that the lands were not superfluous. There was no case where directors had been held thus barred by entertaining offers for small parts, subject to their getting a high enough price. Nor had the sale or proposed sale ever been held to be relevant except where the lands were put up to auction as superfluous— Carington v. Wycombe Railway Company, 1868, L.R., 3 Ch. App. 377. The authorities were against the view that there could be any detailed criticism of the

Page: 834↓

directors' dealings with small portions of the land if it were clear that the main part was wanted— Moody v. Corbett, 1866, L.R., 1 Q.B. 510, 34 L. J., Q. B. 166. The mere fact that the company purported to convey lands away was held not to be conclusive as showing they were superfluous, in Hobbs v. Midland Railway Company, 1882, L.R.. 20 Oh. Div. 418; Dunhill v. North-Eastern Railway Company, L.R. [1896], 1 Ch. 121. As regards the case of London and South-Western Railway Company v. Blackmore, founded on by the Lord Ordinary, the lands had as a matter of fact been sold by the company, and there was no evidence to the effect that they were not superfluous and that the company did not intend to dispose of them as such. The case, moreover, turned on the pre-emption clause of the English Act. Lord Westbury's opinion was founded upon “the cases referred to,” viz.— Carington v. Wycombe Railway Company, 1868, L.R., 3 Ch. App. 377; and Beauchamp v. Great Western Railway Company, 1868, L.R., 3 Ch. App. 745, which in no way justified it; and his remarks were obiter. As regards the attempted sale to the Post Office, even if it could be held that that could effect the position of the ground in 1892, they were authorised, for their own convenience, in treating them in an exceptional manner— Betts v. Great Eastern Railway Company, 1878, L.R., 3 Ex. Div. 182.

Argued for respondent—(1) It was common ground that since 1880 this land had been used only as ornamental ground with passages for purposes of access. That was not a purpose of the defenders' understanding— Betts v. Great Eastern Railway Company, supra. The negotiations for disposing of the land entered into by the directors were clear evidence that they did not consider it necessary. In short, there had been a prolonged course of treatment of it as superfluous, and they could not now come forward and suggest possible uses. The case of Stewart v. Highland Railway Company, supra, showed that it was the defenders' original bill which must be looked at for their “undertaking,” not a new bill for the purposes of extending their station. The fact that they had leased out part of the land to the Post Office after the ten years had elapsed showed that they could never have considered it necessary. (2) But assuming that the land was required and used till 1892, yet the directors, having unequivocally shown that they did not want the land and meant to sell it, had stamped it as superfluous, and were barred from maintaining that it was not. This was decided in London and South-Western Railway Company v. Blackmore, supra, a case exactly analogous to this. In accordance with that decision an attempt to sell the lands even at the end of ten years entitled the pursuer to found upon sec. 120. It was true that that was a case of application of the clause of pre-emption, but there was no distinction between the two clauses in principle. Nor did the fact that there was an out-and-out sale differentiate the cases, the point being that the directors' views on the matter were quite clear.

At advising—