Scottish Court of Session Decisions

In 1977 the Duke of Roxburghe sold certain salmon and other fishings on the River Tweed, known as "the Junction Beat", to Heritage Investments Ltd ("the company"). In the years which followed doubts arose about the legal position, especially in relation to the alveus of the river. Partly in order to remove these doubts, in 1995 the Duke disponed the alveus and the solum of certain islands to the company. On the bed of the Tweed between Lower Floors Water and Junction Water, where "the wondrous Michael Scott...bridled the Tweed with a curb of stone"

(Sir Walter Scott, The Lay of the Last Minstrel Canto II, xiii), there is an ancient dam or cauld known as the "Kelso Cauld". The Cauld, which is about four hundred metres wide, had originally been constructed to try to ensure a sufficient flow of water through a lade to a mill erected nearby on the banks of the river, but the mill is not now driven by water power and the Cauld no longer serves its original purpose. At the same time as he granted the disposition in 1995, the Duke and the company entered into a Deed of Conditions ("the Deed"), the purpose of which was to regulate the future maintenance and management of the Cauld. The Deed provided that, if any dispute arose over its terms, it was to be referred to an arbiter. In 1996 the Duke and the company were unable to agree on the interpretation of Clause (FOUR) Sixth of the Deed; an arbiter was duly appointed and an arbitration took place in which the company were the claimants. The arbiter heard a debate on the matters in issue and thereafter, at the request of both parties, he stated a case for the opinion of this court.

The dispute between the parties came about as a result of events in January 1996 when the River Tweed froze and the ice caused a breach, measuring about thirteen metres across at the upstream point and about ten metres across at the downstream point, to form in what is described in the Deed as the Western Section of the Cauld. A question arose as to whether the Duke was liable under the Deed to repair the breach and restore the Cauld to its previous condition. This is the subject of the present proceedings. In July 1996, pending resolution of that dispute, the Duke and the company entered into a minute of agreement which provided for certain stabilisation works to be done. Even after the stabilisation works, the breach is still more than eleven metres wide at the upstream point and more than nine metres wide at the downstream point.

For the most part the dispute between the parties turns simply on the construction of the terms of the Deed. Presumably, the parties hoped and intended that the Deed would define their legal relationship clearly and in a manner which would minimise the room for misunderstandings or disputes. In fact, it was drafted in language which is at once obscure and infelicitous and which seems calculated to maximise the scope for misunderstandings and disputes. All that the court can do in such a situation is to try to descry from this unsatisfactory language what the parties' intention was. In doing so, we bear in mind, however, that the deed is intended to impose real conditions (Sub-Clause (FOUR) Twelfth) and that, in the words of Lord Kinnear in Anderson v. Dickie 1915 SC (HL) 79 at p. 83, the

The relevant authorities were referred to, and the guidance which they enshrine was confirmed, in the speech of Lord Macmillan in Kemp v. Magistrates of Largs 1939 SC (HL) 6.

Although the particular dispute is confined to the terms of Sub-Clause (FOUR) Sixth, the parties accepted that the sub-clause required to be read in the broader context of other provisions in the Deed. Clause (THREE) records that the Cauld had been divided into an Eastern and a Western Section. Clause (FOUR) is divided into a number of sub-clauses. Sub-Clause First provides that the Eastern Section is to be improved by the installation of a new fish pass, while Sub-Clause Second goes on to provide that certain repairs are to be carried out, including the in-filling of a breach to the same dimensions as far as possible as the remainder of the Section. Similarly, under Sub-Clause Third repairs are to be carried out to certain parts of the Western Section. According to Sub-Clause Eighth the Duke is to organise the works to the Western Section under Sub-Clause Third, while the company are to organise those to the Eastern Section under Sub-Clause Second. The critical term for present purposes is Sub-Clause Sixth, but it is convenient also to set out Sub-Clause Seventh:

Sub-Clauses Thirteenth and Fourteenth create servitudes and are in these terms:

The dispute between the Duke and the company concerns the scope of the Duke's obligations under Sub-Clause Sixth. The thrust of the company's interpretation of his obligations can be discerned in the terms of their first crave in the arbitration where they ask the arbiter to:

The arbiter proposed to pronounce a decree arbitral making a finding in terms of this first crave. The Duke disputes the interpretation which would justify such a finding and so the first question proposed by the Duke in the Stated Case is:

In answering this question the first point which we must determine is whether, as counsel for the Duke contended, the intention of the parties in Sub-Clause Sixth was to impose on the Duke an obligation to pay costs of maintenance rather than an obligation actually to do any maintenance. At first sight, as counsel submitted, the wording of the Sub-Clause seems to support the view that their intention was that he should do no more than pay the relevant costs. In support of that approach counsel drew attention to the distinction which is drawn in Sub-Clauses First, Second and Third between carrying out works and bearing the costs of those works. These are not insignificant points. None the less, we have come to the view that Sub-Clause Sixth was intended to impose an obligation on the Duke to maintain the Western Section "as he thinks fit or as may be necessary to comply with" the Salmon (Fish Passes and Screens)(Scotland) Regulations 1994 (S.I. 2524) and to pay for that maintenance. In reaching that conclusion we have had regard to a number of factors explored in argument before us.

First, Clause (THREE) records that the Duke and the company wish to carry out various improvements to and to "regulate the future maintenance and management of the Kelso Cauld". This indicates that the Deed is intended to regulate the future maintenance of the Cauld. The only terms which purport to deal with maintenance are Sub-Clauses Sixth and Seventh. So, if the argument for the Duke is correct, the Deed does not actually place any responsibility on either party to maintain the Cauld: it does no more than regulate the future payment for any maintenance which is done. On this interpretation the Deed does not achieve the purpose set out in Clause (THREE). Secondly, in terms of Sub-Clause Fourteenth the company grant the Duke and his successors the servitude rights of access and egress over the company's property "which will be required by the Duke for the maintenance and renewal of the Kelso Cauld to enable the Duke to fulfil his obligations in terms of these premises". The clause envisages that the Duke will require access for the maintenance and renewal of the Cauld to enable him to fulfil his obligations in terms of the Deed. Unless the Duke actually has an obligation of maintenance under Sub-Clause Sixth, he has no such obligation under the Deed and, to that extent, Clause Fourteenth is devoid of content and inept. Thirdly, the intention cannot have been that the access should be exercised only for the purposes of the works to be done by the Duke in terms of Sub-Clauses Third to Fifth, since for those limited purposes a less formal arrangement than a servitude would have sufficed; the grant of servitude rights indicates that the parties contemplated that the Duke would be doing work of maintenance and renewal for an indefinite future period in order to fulfil his obligations under the Deed. Fourthly, since Sub-Clauses Seventh and Thirteenth are in substance mirror images of Sub-Clauses Sixth and Fourteenth, mutatis mutandis the same reasoning applies to them and, on the approach advanced by counsel for the Duke, Clause Thirteenth would be similarly devoid of content and inept. Fifthly, the 1994 Regulations lay down requirements for the construction of inter alia dams and fish passes. Sub-Clause Sixth can be given a meaning if it is interpreted as making the Duke responsible for such maintenance of the Western Section as may be necessary to comply with those requirements of the Regulations. It makes little or no sense, on the other hand, if it is interpreted as limiting the Duke's responsibility to meeting maintenance costs, since the Regulations impose no requirements as to costs.

For the remainder of this opinion we proceed on the basis that Sub-Clause Sixth was intended to impose a maintenance obligation on His Grace. It is fair to say that, although his counsel began, logically enough, with their argument that Sub-Clause Sixth imposed no obligation to maintain the Western Section of the Cauld, as the hearing progressed, they laid greater emphasis on their other arguments. In particular, there was a general argument based on the manner in which such conditions must be interpreted. Even assuming that the condition were to be interpreted as imposing an obligation on the Duke to maintain the Cauld, there was no "exact expression" of an obligation to reinstate the breach in the Western Section to the levels shown on Plan No. 1 annexed to the Deed. In our view that general argument must be given effect, as our examination of the particular arguments shows.

On behalf of the company Sir Crispin used a variety of elements to build up his contention that the Duke was under the obligation described in the first crave. The principal element was to be found in the first sentence of Sub-Clause Sixth, laying on the Duke the responsibility for maintaining the Western Section at his own cost. In interpreting that obligation the court should recall that under Sub-Clause Third repairs and other works were to be carried out to the Western Section, while Sub-Clauses Fourth and Fifth contemplated modifications to the main fish pass in the Western Section. The maintenance obligation in Sub-Clause Sixth would come into operation after the Western Section had been put into good order under these other Sub-Clauses. What was therefore intended was that the Duke was to maintain this Section of the Cauld, in the sense of keeping it in the same state and character as it would have once it had been put into good order. When in good order this Section would have no breach in it and its crest would be at the levels shown on the plan annexed to the Deed. So, an obligation to carry out maintenance of the Section was an obligation to reinstate the Section to those levels.

This argument depends on interpreting the word "maintenance" in the phrase "maintenance costs" in a particular way and on then applying that interpretation to the obligation which is to be spelled out of the words. In truth, the most helpful of the authorities which Sir Crispin cited to us was Lanark County Council v. Bent Colliery Co. 1949 S.L.T. 154. It concerned the interpretation of a bond in which a company bound themselves to construct a bridge, the bridge thereafter to be "maintained" by the company at their own expense. As is obvious - and as is in any event acknowledged in the Lanark case - when divorced from any context, the verb "maintain" is ambiguous: it can refer to repairing something and keeping it in good condition or else to keeping or preserving something in its original state. In the Lanark case the Second Division considered that the second of these meanings had been intended by the parties. Here, an obligation simply to repair the Western Section of the Cauld would be less burdensome than an obligation to keep it in the state it was in after being put into good order. Applying the presumption in favour of freedom, irrespective of any other indications from the context, we should require to interpret any real condition as imposing at most an obligation to repair. But in any event the context supports that interpretation of "maintenance", since the Duke's obligation is qualified by the words "as he thinks fit or as may be necessary to comply with the aforementioned 1994 Regulations". As Lord Justice Clerk Thomson points out in Lanark County Council, 1949 S.L.T. at p. 159, where an obligation to maintain is qualified by words which introduce the element of degree, this is in itself enough to show that the obligation is one of repair only. In the present case also, the qualifications show that any obligation on the Duke is one of repair only. The foundation of the company's argument accordingly collapses.

The qualifications themselves are most curiously drafted. As counsel for both parties accepted, they mean that the Duke can perform his obligation in one of two ways: he must either maintain the Western Section of the Cauld "as he thinks fit" and pay the cost, or he must maintain it "as may be necessary to comply with the ... 1994 Regulations" and pay the cost. We were not addressed in detail on the effect of an obligation which can be performed in alternative ways. See, for instance, Gloag, Contract, p. 720. The factual position appeared to be, however, that the Duke had undertaken, in terms of the 1996 minute of agreement, to carry out certain works to stabilise the breach in the Cauld, but that he had never indicated that he thought fit to do more. Sir Crispin therefore accepted that, in terms of the alternatives, the Duke was not bound to do more than was required to comply with the 1994 Regulations. But that basic obligation was to be supplemented by an obligation, founded on the last two sentences of the Sub-Clause, not to permit the levels of the crest and sides of the Cauld to be altered and, where they had been altered, to do what was required to restore them to their levels on the relevant plan. On this basis also Sir Crispin contended that the Duke was now obliged to reinstate the breach to the levels on the plan.

This argument also must be rejected. It depends crucially on interpreting the last two sentences in the Sub-Clause as imposing an obligation on the Duke not to permit, and hence to make good, any alterations in the level of the crests brought about by the actings of nature. But there is another interpretation of those sentences, which is that the Duke is not deliberately to alter the crests and sides except with the prior consent of the company. There being these two interpretations, it could on no view be said that the supposed obligation had been expressed exactly or very clearly. For this reason alone, the condition would not meet the test laid down in the authorities for the constitution of a real condition. In fact, however, the reference to "the prior consent of the Company" can only be to consent given before the Duke embarks on an alteration of the Cauld. The sentence therefore contains nothing more than a prohibition on the Duke deliberately altering the levels of the sides and crests. It imposes no positive duty on the Duke when, as here, the levels have changed due to natural causes. The vital element in the argument for the company is therefore missing.

The third argument for the company was based on the obligation to comply with the 1994 Regulations, which do not come into force in respect of the Cauld until 1 January 2000. So far as the reference to the Regulations is concerned, it appears that before the arbiter counsel for the Duke argued that, since the Regulations do not yet apply to the Cauld, the Duke is not at present under any obligation in terms of Sub-Clause Sixth to comply with them. That argument was not pressed before us and we express no view about it, save to say that it is by no means difficult to suppose that, where regulations are going to apply to the Cauld within a few years of the signing of the Deed, the parties may have agreed that any maintenance done in terms of it is to meet the standard which will prevail under those Regulations.

The argument for the company rested on Regulation 3:

Under Regulation 2 "the operator" means the owner of the dam, in this case the Duke. The argument was attractive in its simplicity. It began with the fact, which appears not to be controversial, that the breach in the dam is in essence a fairly wide gap where all the material forming the Cauld has been swept away; the floor of the gap is formed by the river bed. In those circumstances, counsel argued, the water now ran "through" the Cauld rather than over it and it could not be said that this flow was necessary to maintain the stability of the Cauld. The Duke could reasonably prevent the water from running through the Cauld in this way by doing the necessary work to fill the breach. The Duke was therefore failing to comply with Regulation 3 and in terms of Sub-Clause Sixth he was obliged to do the maintenance work necessary to bring the Cauld up to a state where it was watertight and complied with Regulation 3.

We reject this argument too. Again there is more than one flaw in it. The 1994 Regulations were made under various sections of the Salmon Act 1986, but Regulation 3 was made by virtue of the Secretary of State's power in Section 3(2)(c) to make regulations with respect to

As their form suggests, the 1994 Regulations supersede bye-laws which regulated these matters in the past. The relevant bye-laws were to be found in Schedule G to the Salmon Fisheries (Scotland) Act 1868 and over the years a certain body of case law accumulated on the interpretation of those bye-laws. Bye-Law 1 provided:

While there are differences between this bye-law and Regulation 3, there are also substantial elements in common, in particular the requirement of the bye-law that the dam is to be "made and maintained water-tight ... so that no water that can reasonably be prevented shall run through the dam" and the requirement of the regulation that the dam is to be "made and maintained watertight ... so that no water, which can reasonably be prevented, shall run through it ...." Where similar wording has thus been approved by Parliament in connexion with the same subject-matter, it is proper for the court, when interpreting the new regulation, to have regard to the interpretation which the court applied to the old bye-law.

In construing the requirement that no water "shall run through" the dam, it is necessary in the first place to recall that the regulations are made with the aim of affording a reasonable means for the passage of salmon. Provided that the breach in the Cauld did not let through water at such force as to prevent salmon from ascending the river, and provided that it did not diminish the supply of water to the salmon passes so as to make them inoperative, it would appear that the existence of the breach would tend to facilitate rather than to hinder the passage of salmon up the river. This observation in itself suggests that Regulation 3 would not have been aimed at preventing water running through the Cauld in that way.

This provisional conclusion is confirmed by the case law on the old legislation. Counsel referred us in particular to Lyall v. Carnegy (1900) 2 F. 423 and Hardie v. Walker 1948 S.C. 674. Both contain helpful observations. In the first, Lord President Balfour refers to "the regulation directed against allowing percolation of water through a dam-dyke" and to "the existing regulation against percolation" (2 F. at p. 429). In the same passage he also alludes to old decisions of the House of Lords establishing

These references show that the purpose of regulating the form of dams was to outlaw those which were constructed with holes through the fabric of the dam, permitting water but not salmon to pass through and so in effect trapping the fish by preventing them from ascending beyond the dam.

In Hardie Lord President Cooper interpreted Bye-Law 1 in the same way. He said (1948 S.C. at pp 684 - 685):

The Lord President then went on to consider whether a leaf pass in the dam meant that it was in breach of the Bye-Law:

Two matters of importance emerge from these authorities, each pointing to a flaw in the company's argument.

The first is that, in terms of Regulation 3, water runs "through" a dam when it runs through a hole penetrating the fabric of the dam and not when it simply runs through an opening cut in the crest of the dam: the water running through such an opening runs "over" the dam at a point where its crest is lower than at other points. We find support for that interpretation of the words "through it" in two other aspects of the Regulations. In Regulation 2 a "fish pass" is defined as meaning "any fish pass ... which facilitates the free passage, upstream or downstream, of salmon around over or through any dam." The regulation appears to envisage that the passage for the fish may go through the very fabric of the dam. Secondly, we note that the concluding words of Regulation 3 envisage the kind of hole which is bored into the fabric of a dam in order to allow water to escape and so reduce pressure on the dam.

In the present case, it cannot be said that the water flowing through the breach runs "over" the Cauld since the foot of the gap in the Cauld is formed by the bed of the river. But this does not oblige the court to conclude that, for the purposes of Regulation 3, the water runs "through" the Cauld. Rather, applying the established interpretation of that phrase, we must conclude that it does not, since the water is not running through a hole which penetrates the fabric of the Cauld. It is only penetrating holes of this kind which are of concern to Parliament since they can be inserted in a dam as part of a design to obstruct the passage of salmon. Therefore the existence of the breach in the Cauld does not mean that the Duke has failed to comply with Regulation 3.

The second point of importance is that Regulation 3 is concerned with ensuring that a dam is made and maintained watertight so that water does not run through it; it is not concerned with prescribing other aspects of the construction of the dam. In particular, as Lord Cooper points out in relation to the Bye-Law, it would not in itself make it unlawful for the owner of a dam to demolish it. Nor does it require that the dam crests should be maintained at a uniform level. There is therefore no obligation on the Duke, by reference to the terms of Regulation 3, to repair the breach in the Cauld, far less to do so by restoring its crest to any particular level.

For these various reasons we answer Question 1 in the negative. Since our conclusion is that there is no basis for the arbiter making a finding in terms of Crave 1 and since Crave 2 comes into play only if the arbiter makes such a finding, it follows that Question 2 should be answered in the affirmative. Questions 3 to 5 are superseded.