Scottish Court of Session Decisions

[1] The pursuers are a police authority. They are heritably vest in certain property at Kirktown of Echt, Aberdeen, comprising the former Echt Police Station. They are in particular the successors in title of the County Council of the County of Aberdeen who were disponees in a Feu Charter dated 19 February 1901 granted in their favour by Charles Alexander Pirie. The defender is the successor to the said Alexander Charles Pirie as superior.

[2] In terms of said Feu Charter the land was disponed in return for payment of annual feu duty of three pounds, nineteen shillings and seven pence Sterling.

[3] It was a further condition of the grant:

[4] The building referred to was duly erected. The pursuers aver however that it is no longer required for the purpose of providing a dwellinghouse for a police constable and offices for use as police cells. They have resolved to market the building for sale as a self-contained dwellinghouse. The question which gives rise to this action is whether they may do so without requiring to comply with a clause in the Feu Charter purporting to create a right of pre-emption in favour of the superior. The relevant clause provides:

[5] All burdens, conditions, restrictions, objections, provisions and declarations in the Feu Charter were expressly declared to be "real and preferable burdens upon and affecting the said piece of ground..."

[6] In this action the pursuers seek declarator that the relevant provision is of no force and effect and that they are entitled to sell, alienate and dispone the subjects to any other party without first making a written offer to sell the same to the defender as provided for in the relevant declaration. They further seek certain consequential orders. The matter came before me on procedure roll. It was agreed between the parties that the matter in issue gave rise to questions, relating to and arising from the proper construction of the relevant clause, which could be resolved at debate. It was accepted that if the pursuers' arguments were preferred they would be entitled to decree de plano and that if the defender's arguments succeeded it would be appropriate for the action to be dismissed. It was not suggested by either party that any question of severability of any part of the relevant provision arose.

[7] Counsel for the pursuer submitted that the clause fell to be construed strictly. Reference was made to Halliday, Conveyancing Law and Practice, Volume 2 at paragraph 32-71. Reference was further made to the speech of Lord Dunedin in Anderson v Dickie 1915 SC (HL) 79 at page 89 where it was said:

[8] In two respects the language of the relevant clause was insufficiently clear. In the first place, insofar as a written offer was to be made "at the like rate or price that may be offered for the same", uncertainty was inherent in the use of the adjective "like". In ordinary language this did not mean "the same" but merely "similar". The Shorter Oxford English Dictionary provided that when used as an adjective the word meant "Having the same characteristics as some other person or thing; similar; resembling; analogous". Secondly it was not clear what was comprehended by the words "the original cost of said buildings", which sum was to provide the maximum figure payable by the superior. By contrast reference was made to McElroy v Duke of Argyll 1902 4 F. 885 where the clause in question allowed repurchase at a price:

Although it was accepted that prior to the erection of the buildings it was not possible to insert a figure, there was no provision for the cost to be recorded or providing how it was to be calculated and ascertained. In particular it was left uncertain as to whether the cost was restricted to the physical cost of construction or whether it included also professional fees such as for architects.

[9] Further, reference was made to the speech of Lord Kinnear in Anderson v Dickie at p.84 in which he quoted with approval observations made by Lord Brougham in The Taylors of Aberdeen v Coutts 2 S and McL 609 663 as to:

[10] In Anderson v Dickie it was held inter alia that a restriction declared to be a real burden could not be enforced in respect that the description of the ground said to be affected was not sufficiently definite. The approach in Anderson v Dickie was followed in the Inner House of the Court of Session in Aberdeen Varieties Limited v James F. Donald (Aberdeen Cinemas) Limited 1939 S.C. 788. It was there held that it was not sufficient if the extent of the burden did not clearly appear on the face of the deed but could only be ascertained by reference to an act of Parliament.

[11] Against that background it was argued that since both in relation to the assessment of the price to be offered by the pursuers and in the assessment of the maximum amount which the defender would require to pay it would be necessary to look to evidence extrinsic to the deed, the test described by Lord Brougham could not be satisfied.

[12] As indicated above, counsel for the pursuer accepted that if these arguments did not prevail the appropriate course would be for the Court to dismiss the action. In particular, he did not strongly (and in my view could not) resist the submission made on behalf of the defender that the pursuers did not aver (and were thus not offering to prove) that the relevant cost (if sufficiently clearly described) was not ascertainable. Counsel for the defender had submitted that in that event some proof might have been necessary.

[13] Counsel for the defender accepted that a clause such as the relevant clause required, under reference to Lord Dunedin in Anderson v Dickie and Halliday's Conveyancing Law and Practice, to be construed strictly. In its context, however, reference to "the like ... price" plainly meant the same price offered by another party. The first part of the quotes definition in the Shorter Oxford English Dictionary did not assist the pursuers. Although the point taken in this case had not been argued, it was instructive to note that in Christie v Jackson and another 1898 S.L.T. 245 and, more recently, in Matheson v Tinney 1989 S.L.T. 535, the validity of clauses of pre-emption which provided for offers to be made "at the like rate or price" was upheld. The language appeared to be a commonly accepted style of long usage.

[14] It was clear - in the absence of any qualification - that the phrase "the original cost of said buildings" encompassed all sums expended by the disponees in the fulfilment of their obligation to construct the building in question. That, in any event, was clear if construction contra proferentem was applied. The phrase would therefore cover - to meet the pursuers' particular concern - any professional fees. It was a matter of observation that in their pleadings the pursuers did not seek to advance the argument which they now sought, in this respect, to make. Instead they had averred that the original cost was not known to them and that they had no record of it.

[15] In addition the argument based on the observations of Lord Brougham was misconceived. Properly understood in its context the reference to the need to specify a burden's "exact nature and amount" referred to the need for the measure of the burden to be clearly expressed. The observations were based on authority relating to obligations to pay sums of money. Clauses of pre-emption in which the measure of the offer to be made was the price in fact offered by a third party were well known and had long been in use. In relation to clauses of pre-emption Burns on Conveyancing Practice, p.223 indicated:

Halliday at paragraph 32-76 was to the same effect. If right, the argument of the pursuers struck at the heart of the validity of such clauses. It involved, as counsel for the pursuers appeared to accept, the consequence that the style of clause suggested by Halliday at paragraph 32-80 (providing for offer "at such price ... as any other person shall have offered for the same") could not be supported. Further - and in particular in relation to the pursuers' argument in relation to the need for extrinsic evidence relating to the original cost - it was important that Lord Kinnear in Anderson v Dickie had recognised that "however accurate and detailed the description may be, it cannot prove the reality of the things described, and oral evidence may be needed to apply a specific written description to external facts" (page 86). Proceeding on the basis of inter alia that authority, the First Division in McLean v Marwhirn Developments Limited 1974 S.L.T. Notes) 47 adhered to an interlocutor allowing proof to establish as matter of fact what "all existing pipes, connections, drains, sewers ... in and under adjoining land ... which are at present so used" ..., referred to in a 1953 grant of a right of servitude, were. In the present case extrinsic evidence would be needed not to define the obligation but to apply a specific written description to external facts. Even the capping provision in McElroy required assessment to be made in evidence of wear and tear. The clause under discussion in Aberdeen Varieties Limited v James F. Donald (Aberdeen Cinemas) Limited was quite different in nature from the clause presently considered.

[16] I consider, in relation to all the issues raised - save the question of the adequacy of the specification of "the original cost of said buildings to be erected" - that the submissions made on behalf of the defender are well founded and fall to be preferred. In its context "the like ... price" plainly means the same price offered by another party - all as argued by counsel for the defender. When a golfer claims to have played "the like" he is claiming to have played the same number of strokes as his opponent. Moreover, if in this respect and in relation to "the original cost of said buildings" the language is sufficiently clear, the fact that extrinsic evidence would be needed to apply a specific written description to external facts would not in my view be of any materiality - again for all the reasons advanced by counsel by the defender.

[17] The question of the adequacy of specification of "the original cost of said buildings to be erected" gives rise, however, to more difficulty. This is clearly a critical provision, providing a cap for the price which the superior would require to pay. Now nearly 100 years on from the grant of the Feu Charter it would in fact provide the measure for any sale. This was not seriously disputed, and no doubt gives rise to the present action.

[18] The question is whether this is a condition which is "very clearly expressed" (Lord Dunedin in Anderson v Dickie). It seems clear that when Lord Brougham in Taylors of Aberdeen v Coutts referred to the need for specification of a real burden's "exact nature and amount", he was referring not only to the payment of debts or sums of money but to "whatever obligation is to be cast upon purchasers" (page 663) - all as plainly recognised by Lord Kinnear in Anderson v Dickie. Further, both parties referred with apparent approval to Halliday, Conveyancing Law and Practice Vol.2 at para.32.71, where it is said:

In the light of authority (and indeed the terms of the rest of the paragraph) it seems reasonable to suppose that by reference to strict construction contra proferentem the learned authors were seeking to underline the strict need for clarity if such provisions introduced by and in favour of the granters of deeds were to be effective (in particular as real burdens), and were not suggesting, by contrast, that ambiguities would fall to be resolved, as for example in insurance policies, contra preferentem.

[19] I have come to the view that the relevant phrase cannot be said to meet the appropriate tests of clarity. It is no doubt correct that no precise figure could be inserted in the deed (the buildings not having been erected) but there is no attempt to require any record to be kept and accepted, nor any mechanism provided for the ascertainment of the relevant cost. It is not, in my view, entirely clear whether the cost was restricted to the physical cost of construction or whether it included also professional fees, such as for architects. Even if that is wrong, it is not clear whether the administrative, management and other overhead costs of the County Council were included and, more important, if they were, on what basis they were to be calculated. If construction or design was not "contracted out" it is equally unclear upon what basis labour or architectural costs were to be assessed. The contrast with the clear terms of the capping provision in McElroy v Duke of Argyll is striking. In short, it seems to me that it cannot be said that in this respect the clause has - to use the words of Halliday - "precise definition ...... of the price payable on exercise of the right or the method by which it is to be ascertained."

[20] In the circumstances I shall repel the first and second pleas-in-law for the defender, sustain the first three pleas-in-law for the pursuers and pronounce decree de plano in terms of the first three conclusions of the summons. I shall reserve meantime questions of expenses.