Scottish Court of Session Decisions

The Commissioners of the Caledonian Canal were proprietors of ground on the north side of the canal at Banavie. By the 28th section of the Caledonian and Crinan Canals Act 1860 (23 and 24 Vict. cap. 46) the Commissioners were empowered to feu “any lands which may not be required for the purposes of the canal in any way and at such time as they shall think most expedient.”

In 1871 they granted a feu of a portion of this land to one Robertson, and his heirs and assignees whomsoever. The feu-disposition contained the following restriction—“Declaring always, as it is hereby expressly provided and declared and agreed to by our said disponee and his foresaids by acceptation hereof, that he or they shall forthwith enclose the said piece of ground with a sufficient fence, and uphold and maintain the same in complete repair, and that it shall not be lawful to nor in the power of our said disponee or his foresaids to erect any building on the said piece of ground for a public-house or inn, or for the sale of exciseable or other liquors, nor to convert into or use any building to be erected on said piece of ground as a building for any such purpose, the same being hereby expressly prohibited; and that if he or they shall do in the contrary, then and in that case he and they shall thereby forfeit their right to the foresaid piece of ground and buildings to be erected thereon, and this feu-right, and all that may or can follow thereupon, shall be absolutely void and null without declarator, and the said piece of ground and buildings thereon shall revert, return, and belong to us or our successors as if these presents had never been granted.”

Upon the feu—disposition there was written a minute bearing to be dated September 12th 1896, which was in the following terms—“The Commissioners of the Caledonian Canal, incorporated as above mentioned, hereby withdraw all objections competent to them to the erection of a temperance hotel on the subjects above disponed. Duncannon, Secretary.”

Mr Alexander John Pople Menzies, Advocate, Edinburgh, acquired the feu in May 1897. The disposition in his favour, which was dated 18th May and recorded 25th June 1897, contained the declaration that it was granted “always with and under the declarations specified and contained in the said feu-disposition” of 1871.

In February 1898 Mr Menzies raised an action against the Commissioners of the Caledonian Canal craving for declarator that “the pursuer, as vassal presently infeft in the subjects hereinafter described, and his heirs and assignees whomsoever, are entitled to erect upon the said subjects, or any part thereof, a building for a public-house or inn, or for the sale of exciseable or other liquors, and to convert into and use any building to be erected on the said subjects, or any part of them, as a building for any such purpose, and that without the consent of the defenders as superiors of the said subjects, or their successors.”

The pursuer averred—“(Cond. 7) The defenders have no patrimonial interests which can be injuriously affected by the presence of licensed premises on the subjects belonging to the pursuer. In particular, the defenders have no land so situated that its value to them would be in anyway injured by the presence of such licensed premises. There are at present, and have been for about fifty years, licensed premises, namely, ‘The Lochiel Arms,’ situated on land within one hundred yards of the said heritable property of the defenders. (Cond. 8) Since the original grant of the said feu the said conditions in the feu-disposition have been altered and modified. … (Cond. 9) Since the date of the said feu-disposition the circumstances of the locality have greatly changed. It is now a railway terminus of considerable importance, and a much greater tourist centre than at that date, and demands much greater facilities for accommodating that traffic. Notwithstanding the greatly increased public demand, the whole supply of accommodation for that traffic continues, owing to the said conditions, a monopoly in the hands of the proprietor of the said ‘Lochiel Arms,’ who is one of the members of the incorporation called as defenders, and has not in any material degree been improved by him since 1871, and is now quite incapable of properly accommodating the traffic. There is ample scope, and there is a demand for the erection of an additional licensed hotel in the neighbourhood.”

The pursuer pleaded, inter alia—“(3) The defenders having no legitimate patrimonial interest to protect by enforcing the said conditions, the pursuer is entitled to decree in terms of the conclusions of the summons. (4) In the circumstances, any interest the defenders may ever have had in imposing and enforcing the said conditions having now ceased to exist, the pursuer is entitled to decree. (5) The said conditions being useless and vexatious, are null and void and of no effect.”

The defenders admitted that the Lochiel Arms was in the vicinity of the subjects, that since 1871 a railway had been made, and that more tourists came, but quoad ultra denied the pursuer's averments quoted supra. They averred that they were proprietors of other ground at Banavie which was not feued, and of houses and ground there occupied by their servants, that all the ground feued or leased by them was subject to the same restrictions as regards the sale of intoxicating drink, and that they considered the ground in question a most unsuitable site for a licensed house.

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They pleaded, inter alia—“(5) The defenders are entitled to be assoilzied in respect of the said restriction in the feu-right. (6) The vassal in the feu-right having consented to be bound by the said restriction, the onus is upon the pursuer to show that the superiors have no legitimate interest to enforce it.”

The Lord Ordinary ( Kincairney) on 25th January 1899 repelled certain of the parties' pleas, which it is unnecessary to refer to for the purposes of this case, and allowed a proof.

The defenders reclaimed, and the First Division on 1st March 1899 adhered to the interlocutor of the Lord Ordinary. A proof was taken, the result of which, so far as material to the case, sufficiently appears in the opinions of the Lord Ordinary and of the Lord President, infra.

The Lord Ordinary on 20th September 1899 pronounced the following interlocutor:—“Finds (1) that by feu-disposition, dated 26th July, and registered in the General Register of Sasines 25th August, both in the year 1871, the defenders disponed the subjects described on record, situated on the north side of the Caledonian Canal, at Banavie Locks, to John Robertson as vassal therein; (2) that in the said disposition it was provided that it should not be in the power of the vassal to erect any building thereon for a public-house or inn, or for the sale of exciseable or other liquors, the said provision being fenced by a clause of forfeiture; (3) that by docquet endorsed on said feu-disposition, dated 12th September 1896, the defenders withdrew all objections competent to them to the erection of a temperance hotel on the said subjects; (4) that the pursuer is the singular successor of the said John Robertson, having acquired the said subjects by disposition dated 18th May, and recorded in the Register of Sasines 25th June 1897; (5) that the pursuer concludes for declarator that he is entitled to erect on said subjects a building for a public-house or inn, or for the sale of exciseable liquors therein; (6) that the pursuer has failed to prove that the defenders have no legitimate interest to maintain and enforce the foresaid prohibition so far as not waived by the foresaid docquet: Therefore repels the pleas-in-law for the pursuer, and assoilzies the defenders from the conclusions of the summons, and decerns: Finds the defenders entitled to expenses,” &c.

Opinion.—“In this action, which the pursuer has brought for the purpose of establishing his right to erect a public-house or inn for the sale of exciseable liquors on a piece of ground near Banavie, feued from the Commissioners of the Caledonian Canal, notwithstanding a clause in the feu-disposition, fenced by a clause of forfeiture, expressly prohibiting that use of the feu, I with some hesitation allowed a proof, and a reclaiming-note against my interlocutor was refused. The proof has now been led, consisting in part of the evidence taken on commission of the Speaker of the House of Commons and of the Lord Advocate, two of the Commissioners of the canal. Parties' counsel were heard on the proof at the close of the summer session, and I have now to dispose of the case after considering the proof. I had considerable difficulty in allowing evidence at all, and it seems to me that the proof, which has been chiefly led by the pursuer—the defenders having adduced only one witness—comes to very little, and that the case does not now present much difficulty.

In my opinion, delivered when I allowed a proof, I referred to the more important authorities* on the nature and effect of restrictions on rights of property in heritage, and I do not require to say much as to the law. It is thus expressed by Lord Rutherfurd Clark, Lord Ordinary in the case of Lord Zetland v. Hislop, 8 R., at p. 677—‘Wherever a feu contains any restriction on property, the superior or the party in whose favour it is conceived, must have an interest to enforce it. Such is the doctrine laid down in the case of The Tailors of Aberdeen v. Coutts.’ I think that this dictum must be read as applicable to questions arising between the superior or other party in his right, and the singular successor of the original vassal. In deciding this case in the House of Lords ( 9 R., H. of L., p. 40) Lord Watson expresses his concurrence in this opinion. He says (at p. 47) that he agrees that The Tailors of Aberdeen v. Coutts does determine that a superior cannot enforce a restriction on property in a feu-disposition unless he has some legitimate interest. He adds, however, that the superior in such a case is not bound to allege his interest, and that ‘the onus is upon the vassal who is pleading a release from his contract, to allege and prove that, owing to some change of circumstances, any legitimate interest which the superior may originally have had in maintaining the restriction, has ceased to exist. The law was so stated, and in my opinion correctly stated, by Lord Neaves in Campbell v. The Clydesdale Banking Company.’

Upon this dictum by Lord Watson, and on the judgment of Lord Neaves referred to, the defenders founded the contention that it must be assumed that when the feu-disposition was granted the superior had a legitimate interest in the restriction sufficient to entitle him to enforce it, and that such interest could not be disputed or disproved; that it did not signify whether that interest could be expressed in intelligible language or not, and that the vassal

The authorities referred to were:— Brown v. Burns, May 14, 1823, 2 S. 298; Coutts v. Tailors of Aberdeen, August 3, 1840, 1 Robinson 296; Wilson v. Cairnduff, June 21, 1876, 3 R. 863; Zetland v. Hislop, March 18, 1881, 8 R. 675, rev. June 12, 1882, 9 R. (H. of L.) 40; Magistrates of Edinburgh v. Drummond, December 2, 1857, 20 D. 156; Gold v. Holdsworth, July 16, 1870, 8 Macph. 1006; Ewing v. Campbell, November 23, 1877, 5 R. 230; Waddell v. Campbell, January 21, 1893, 25 R. 456; and Campbell v. Clydesdale Banking Company, June 19, 1868, 6 Macph. 943.

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could not be heard to dispute his obligation unless he could show some change of circumstances since the original grant by which the superior's interest, whatever it was, was destroyed.

I do not assent to that statement of the law, and I do not think it is what was intended or expressed by Lords Neaves and Watson. I think that their Lordships laid down that there is a strong presumption that the superior has a legitimate interest in the restriction for which he stipulates, and to which the vassal has consented, and that the onus of showing that there is no such interest is on the vassal, and when the question is between the original contractors, the presumption in favour of the superior may be all but insurmountable. But when the question is between a superior and the singular successor of the original vassal, I doubt whether it would be absolutely conclusive that there had been no material change in the circumstances since the constitution of the feu, and whether it would be impossible for the vassal to show that the superior had not at the date of the action, and that he never had, any legitimate interest to enforce the restrictions. Suppose, for example, that it could be shown that the restriction was at first imposed in the sole interest of Mr Cameron of Lochiel for the purpose of protecting the Lochiel Arms Hotel at Banavie from competition, it rather appears to me that the pursuer could object to the enforcement of the restrictions in that interest without change of circumstances. When, as here, the question is between a superior and a singular successor of the original vassal, I am disposed to think that the vassal could object to the enforcement of the prohibition against the erection of a public-house if he could show certainly that the superior had no legitimate interest in enforcing the prohibition. I have thought it proper to notice this argument of the defenders, and to indicate the limits within which I would assent to it. But I do not pursue the point, because I do not find it necessary to rest on it my opinion, which is otherwise favourable to the defenders.

When it is said that the superior must have an interest, I apprehend that it is not intended that he must be able to prove that the maintenance of the restriction will be beneficial to him. He cannot be bound to do more than show that it may possibly be beneficial, and that it is not obviously useless. If he can state a legal interest, it must be for him to judge whether in any particular case he will benefit by enforcing it.

The pursuer's averments in point of fact are substantially these three. He says (1) that there has been a change of circumstances since 1871; (2) that the clause was inserted, and is being enforced, solely in the interests of Mr Cameron of Lochiel; and (3) that whether that be so or not, the defenders have no legitimate interest which the law will enforce.

(1) I think the pursuer has proved the first point, that there has been a change of the circumstances since 1871, and that it is a change which may affect the interest of the defenders. The change is twofold—firstly, the traffic has much increased, and will probably continue to increase in consequence of the new railway or railways. It is not clear that this change affects the defenders' interests. But there is another change, namely, that the prohibition against building an hotel has been withdrawn, and it is only the prohibition against selling exciseable liquors which remains. Now, in the case of Zetland Lord Selborne mentions, as one of the interests which a superior has in regard to such building restrictions, the consideration that the property of the feu may possibly revert to him through irritancy, and that he might find himself saddled with buildings on his property which he did not desire. The defenders have no such interest in this case, where the prohibition is only as to the use, and not the nature of the buildings. This consideration may not be of great importance, but it rather appears to some extent to displace the defenders' argument as to the necessity of a change of circumstances, and it would be of great importance if that were the only ground on which the defenders maintained their right to enforce the prohibition. But that it clearly is not.

[ His Lordship then dealt with the case based upon the second ground above stated, with regard to which he held that the pursuer's averments were not proved.]

(3) The pursuer maintains that, if that be not their interest, the defenders have no interest. He has led evidence to the effect that it would be for the benefit of the defenders to have additional hotel accommodation. Such additional accommodation is, he says, wanted, and would increase the number of travellers by the canal, and he further leads evidence to prove that the erection of an hotel where spirituous liquors were sold could do no harm, either to the canal itself, to the houses belonging to the defenders, or to the land which they have still unoccupied. The pursuer's evidence on this point is not of much weight or consequence. The only important witness is the agent of Messrs Cook & Company. Otherwise it consists mainly of the opinions of people who cannot be regarded as experts—the questions are not for evidence of experts—but who had no better means of forming an opinion or a guess than any member of the public. One may conjecture, however, without such evidence, that if a new hotel were built on the pursuer's feu, visitors would come to it, and that they might come by the canal, and thereby increase its revenue. I assume that that would happen.

But that is not the view which the defenders take. I do not think it necessary to quote their evidence on the point. I refer in particular to that of the Speaker. They all hold that it would or might possibly be detrimental to the proper and orderly management of the canal, and the behaviour of their employees, to have another public-house in its immediate vicinity. They think, besides, that the proposed

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hotel would be so close on the canal that it would be unsafe. They think there might be such risks, and that they have a legitimate interest to avoid them. Such are the views of the Superintendent of the canal, and of those of the Commissioners whom the pursuer has thought proper to examine. I think they are such as reasonable men are entitled to hold. They may be well founded or not. That is not the question. It is, I think, no business of mine to determine whether they are sound or mistaken. It is enough if I am satisfied that they are bona fide reasons. If the defenders entertain the view that the business of the canal will be carried on better if they limit the number of public-houses on its banks so far as they have power to do so, then I think that by the clause of the feu-contract they have kept that within their own hands, and are entitled to act on their own judgment and discretion; and it is only if I am satisfied that they are enforcing this prohibition for no real interest of the canal, but from mere caprice or want of due consideration, or desire to favour Mr Cameron, or to force the pursuer to pay a higher price, that I can say that the interests which they put forward and assert are not actual and legitimate interests.

In the case of Zetland Lord Selborne observed that ‘the object of a restriction against carrying on a trade of this nature, without licence from the superior, is that the superior may judge for himself what number of public-houses, and in what part of the town, may be permitted by him without prejudice to the value and amount of his other property,’ which clearly shows that, in his Lordship's opinion, it was not for the Court to judge whether the superior was right in thinking the enforcement of the condition was for his interest. It was enough that that was his honest view, and that it was not palpably and obviously groundless.

While I do not profess to form an opinion that the views expressed by the Speaker, the Lord Advocate, and Superintendent are well founded, because I do not consider that I am either bound or entitled to do so, I am as far as possible from being of opinion that they are not well founded. They impress myself, and I do not doubt that if a new public-house were built on the pursuer's feu, such detrimental consequences might possibly follow, although they might not, and that the defenders have a legitimate interest to guard against such contingencies by enforcing the clause in their feu-contract.

There is some evidence as to possible injury to the feuing value of unfeued ground. There may, no doubt, be something in that. But considering how little of such land there remains, and how small the prospect seems of feuing it, the apprehension seems somewhat intangible and shadowy. It is not what the Commissioners and Superintendent chiefly dwell on. Still, I am not prepared to say that it should be wholly disregarded.

I am therefore of opinion that the pursuer has failed to prove either the illegitimate motive which he alleges, or the total absence of interest on the part of the defenders, which he seeks to establish, and I am of opinion that it follows that the defenders are entitled to absolvitor.

Since the action was raised the position of the pursuer has undergone a singular transformation. At the date of the action, 23rd February 1898, he was tenant of the Lochiel Arms, hut his lease was nearly run out. In these circumstances he purchased this feu, and endeavoured by this action to establish his right to build on it a licensed hotel which would, no doubt, compete with the Lochiel Arms. He would not wish to do that so long as he was tenant of the Lochiel Arms, but only after his lease had expired. But since the record was closed Mr Cameron and he have concluded a new lease for nineteen years, from Whitsunday 1901, with breaks in favour of the pursuer at Whitsundays 1904 and 1909, and he has come under an obligation not to build or occupy, during the currency of the lease, any other hotel at Banavie or Corpach. The pursuer's interest in this action had therefore for the time being vanished, and he could not and would not make any use of a decree in terms of the conclusions until Whitsunday 1904 at the earliest. That incident has not been placed on record, and no plea as to the cessation of the pursuer's present interest to raise the action has been founded on it. That, however, really does not signify, seeing that in any view the pursuer loses the case, although it is possible he may have partially attained the object of it in another form.

The pursuer reclaimed, and argued—The objections taken by the Commissioners were not such as disclosed an enforceable interest. (1) There had been a change of circumstances since 1871 sufficient to affect the defenders' interests. The fact of the great increase in traffic was important as showing that there was need for increased hotel accommodation. Further, the withdrawal of the prohibition against building a hotel, which left only the restriction against selling liquors, was of importance. The result of these changes was that the defenders could not table the same interest now as they could when the feu-disposition was granted. (2) The defenders had now no real interest in enforcing the condition. They could not show that their patrimonial interest as owners of the adjacent land would be injuriously affected. The mere vague speculation that the existence of a licensed house on the subjects might be detrimental to the management of the canal and the behaviour of the employees was of too unsubstantial a character to show that they had any real interest. The existence of the Lochiel Arms within 100 yards of the spot in question showed how little substance there was in the defenders' apprehensions. They had therefore no legitimate interest which the law would enforce, and in such circumstances a vassal was entitled to disregard such a condition as this— Naismith v. Cairnduff, June 21, 1876, 3 R. 863; Earl of Zetland v. Hislop, March 18, 1881, 8 R. 675, June 12, 1882, 9 R.

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(H. of L.) 40; Brown v. Burns, May 14, 1823, 2 S. 298. In the case of Waddell v. Campbell, January 21, 1898, 25 R. 456, the stipulation was only enforced because the question was one between the original contracting parties, while here the pursuer was the singular successor of the original vassal.

Counsel for the respondents were not called upon.