Scottish Court of Session Decisions

[1] In 1901 the late Mr. Alexander Charles Pirie granted a feu charter in favour of the County Council of Aberdeen. It was subsequently recorded in the Register of Sasines. In terms of the charter he granted the Council a feu of an area of ground on which they were bound, by a condition of the grant, to erect a police station comprising a house, with appropriate offices and cells. The building was to have a value of at least £400 and the plans for it were to be submitted to Mr. Pirie and signed by him. The only return for the grant was a feu duty of £3 19s. 7d. yearly. The charter contained a declaration in these terms:

[2] The pursuers and respondents in this action of declarator are the Grampian Joint Police Board as the statutory successors of the Aberdeen County Council, while the defender and reclaimer is the successor of Mr. Pirie. In their first conclusion the pursuers seek declarator that the provision in the feu charter which we have quoted is of no force and effect and that they are, accordingly, entitled to sell, alienate and dispone the subjects to any other party without first making a written offer to sell them to the defender in terms of the declaration. The two remaining conclusions are consequential on the first. The Lord Ordinary sustained the first, second and third pleas-in-law for the pursuers and found, declared and decerned de plano in terms of the three conclusions. His decision is reported as Grampian Joint Police Board v. Pearson 2001 S.L.T. 90. The defender has reclaimed against the Lord Ordinary's interlocutor.

[3] In the Outer House a number of matters were in dispute and the Lord Ordinary decided most of them in favour of the defender. The pursuers have not challenged his decision on the points which they lost. The reclaiming motion was therefore concerned only with the two related issues on which the Lord Ordinary found against the defender and on the basis of which he granted decree in favour of the pursuers. Those issues concerned the provision that, if he chose to exercise the right of pre-emption, the defender would not in any event have to pay "a price to exceed the original cost of said buildings to be erected as a Police Station." Both in the court below and before us Mr. Stuart for the pursuers contended that the provision was not sufficiently clear to constitute a real condition, because the cost that was not to be exceeded was not specified in the charter nor was there any mechanism for determining it. Moreover, the term "cost" was imprecise and ambiguous. For the defender Mr. Reid, Q.C., maintained that the term was not imprecise and that, although the sum was not specified in the charter, in principle it could be established by evidence and the pursuers had not averred that it could not be ascertained.

[4] The Lord Ordinary's decision on these points is contained in paragraph 19 of his opinion and is in these terms (2001 S.L.T. at p. 94 C - E):

His Lordship can be seen to hold that the phrase in question does not meet the appropriate tests of clarity on two grounds. The first, which is contained in the two opening sentences of the paragraph, is that the precise figure of the cost is not inserted and the clause does not require a record to be kept and accepted nor is there any mechanism for ascertaining the relevant cost of the buildings. The second, which comes immediately after, is that the term "cost" is itself ambiguous: in particular it is not clear whether it covers professional fees and the Council's administrative, management and other overhead costs relating to the construction of the buildings.

[5] The starting point for considering the rival submissions is that both counsel accepted that the defender was seeking to rely on what he claimed was a real condition embodying a right of pre-emption in favour of the granter of the feu charter and his successors in title. Such a real condition constitutes a fetter on the pursuers' right of property and, since the presumption is in favour of liberty, any such condition which restricts the owner's use of his land must be very clearly expressed: Anderson v. Dickie 1915 SC (HL) 79 at p. 89 per Lord Dunedin.

[6] In the light of that principle it is convenient first to deal with the argument, which the Lord Ordinary accepted, that the restriction in this case was not very clearly expressed and in particular that the term "cost" was not entirely clear. In Hunter v. Fox 1964 SC (HL) 95 Lord Reid said, in the case of a negative servitude which appeared in the Register of Sasines, that the purchaser, who was entitled to rely on the faith of the record, was concerned with the words in the Register. Dealing with what was meant by a strict construction of those words, Lord Reid said (at p. 99):

It was not suggested that the wording of the provision in this case was self-contradictory or so obscure that one had to grope for the meaning. Rather, the suggestion was that it was ambiguous or reasonably capable of having more than one meaning.

[7] The Lord Ordinary held that it was not "entirely clear" whether the "cost" was restricted to the physical cost of construction or included professional fees, such as those of architects. In construing the term "cost" we take account of its context. The cost in question is the "cost" of the buildings to be erected as a police station. That was a cost that the County Council were to bear in order to provide the police station on the land that the superior had granted to them in return for the payment of the feu duty. Since the County Council had not been required to pay a capital sum for the purchase of the land, the cost of erecting the police station was, in effect, their total capital outlay in providing the facility. That cost was also to represent the ceiling of the superior's obligation to pay for purchasing the subjects with the buildings. In essence, therefore, the provision was designed to ensure that, however much the property, including the police station, increased in value, the superior was not to pay the County Council more than their capital outlay on the new police station. In other words, the Council would not make a profit out of the transaction. Approaching the matter in that way, we consider that the "cost" in question was simply the cost which the County Council would have to pay for erecting the police station. This "cost" would, naturally, include any expenditure on professional fees to architects and others who played a part in the construction of the buildings. If - a possibility envisaged by the Lord Ordinary - the County Council had used their own staff for design or other services, that might have made the calculation of the cost more complex but it would not in our view have changed the position in principle. On the other hand, since the cost in question is the cost of "the buildings to be erected", it appears to us that the focus is on the cost of the buildings rather than on any administrative, management or other overheads of the County Council. We do not, accordingly, share the Lord Ordinary's doubt as to whether or not such overheads might fall within the term "cost" in this provision. For these reasons we do not consider that the term "cost" is ambiguous or reasonably capable of having more than one meaning and we therefore reject the second of the Lord Ordinary's reasons for holding that the condition was unenforceable.

[8] It is not in itself sufficient, however, that the words in the title should be clear. They must also fully specify the restriction so that a purchaser who consults the Register and reads the terms of the condition can understand the extent of the burden over the subjects. This was, of course, never better expressed than in the speech of Lord Brougham in Tailors of Aberdeen v. Coutts (1837) 2 Sh. & M'L. 609 where, referring to the older authorities, he said (at p. 663):

It should be noticed that, although Tailors of Aberdeen concerned a condition to pay a sum of money, Lord Brougham's proposition applies to any obligation cast upon purchasers, whatever its nature. It therefore applies to any obligation which would rest on the pursuers to sell the subjects to the defender. But, in truth, the supposed obligation on the pursuers is not disclosed fully on the face of the title, nor are its exact nature and amount specified there. Mr. Reid argued, however, that, although the figure for the cost of construction could not be found in the feu charter itself, it could in principle be ascertained from any extant records of the County Council and evidence could be led as to that figure. It seems to us that, to adapt Lord Brougham's words, Mr. Reid was proposing to send the pursuers to seek for the cost of the police station and, hence, for the extent of the condition affecting their land, among such of the ledgers, account books and other records of the old County Council as happen to be extant in Register House or elsewhere. That is not permitted and, on the authority of Tailors of Aberdeen, the provision in this charter does not constitute a valid and enforceable real condition.

[9] In making the submission that evidence about the cost would be permissible, Mr. Reid relied on a passage in the speech of Lord Kinnear in Anderson. That case concerned a restriction on a purchaser of lands who was taken bound not to sell or feu "any part of the ground occupied as the lawn between the ground" feued to A and the mansion house, except on certain conditions. In his speech Lord Kinnear dealt with, and accepted, the argument that the alleged restriction was not specific enough to be enforced because its extent could not be ascertained by a purchaser "without travelling beyond the four corners of his titles". Lord Kinnear held (at p. 87) that the restriction in that case was indeed too inspecific since "the title discloses no specific burden upon any specific part of the respondent's land". This was because a purchaser in 1910 could not ascertain what the words in question meant without going beyond the four corners of the title. In reaching that conclusion Lord Kinnear dealt with the argument by counsel for the appellant that oral evidence could be admitted to identify any person or thing mentioned in a written document - and, hence, the area of ground in question. He said that it might be that in certain circumstances that rule might be applicable to a document intended to create a real burden. He went on (at p. 86):

The role for evidence which Lord Kinnear envisages is limited. He presupposes that the title contains a specific burden and that it is imposed on a definite piece of ground. Evidence may then be used to apply the burden so described to the external facts, i.e. to identify a specific subject which has already been exactly described in the deed. What is not permissible is to use evidence for the purpose of defining a subject which has not been exactly described.

[10] That approach has been applied in subsequent cases. In McLean v. Marwhirn Developments Ltd. 1976 S.L.T. (Notes) 46 the pursuer sought declarator of her servitude right to use for drainage and sewerage certain drains under the defenders' land which had been so used in 1953 at the time when an express grant of a servitude of drainage had been made to her predecessor. The grant gave the dominant tenement "the right to use for the drainage, sewerage and supply of water ... all existing ... pipes, connections, drains, sewers ... in and under the adjoining lands ... which are at present so used." The servient tenement included the land owned by the defender. The pursuer offered to prove which pipes, connections, drains and sewers in and under the adjoining lands had been used for drainage, sewerage and the supply of water at the time of the grant in 1953. The Lord Ordinary allowed a proof before answer and this Division affirmed his interlocutor. In doing so, they assumed, without deciding, that the same tests fell to be applied to the grant of a servitude as to the grant of a real burden or condition. Approaching the matter in that way, they held that the deed sufficiently described the servitude in question and also defined the pipes etc. embraced within that right as those used for the drainage and sewerage of the pursuer's land at the date when it had been disponed by the proprietor of Portree Farm. The court held that the proof which the pursuer sought was designed simply to apply a specific written description to external facts, i.e. to identify on the ground the pipes etc. specifically described in the disposition. It therefore fell within the category of proof which was regarded as permissible in Anderson. The same approach was applied by the House of Lords in Axis West Developments v. Chartwell Land Investments 1999 S.L.T. 1416 in which Lord Hope of Craighead, with whom three of the other Law Lords expressly concurred, approved McLean (at p. 1419 G - H).

[11] Mr. Reid sought to persuade us that any evidence as to the sum paid by the County Council for the construction of the police station would fall within the same rule: it would be evidence designed simply to apply a specific written description to the external facts. In our view that is not so. Here there is no doubt about the subjects to which the condition is said to apply. The problem arises because the restriction has not been fully and sufficiently described. In that situation the evidence which Mr. Reid envisages might be led would not be evidence to identify a specific subject already exactly described but evidence for the purpose of defining a restriction which has not been exactly described. And that, in the words of Lord Kinnear, is just what the law will not permit. Putting the matter in another way, the pursuers are being required to look beyond the four corners of the deed to ascertain the extent of the restriction. And that, too, is just what the law will not permit.

[12] Mr. Reid further argued that, if the court held that this condition was not sufficiently specific, it would be impossible to insert into a feu charter an effective condition of pre-emption of this kind, enforceable against subsequent proprietors, since the building cost would not be known at the time when the deed was being drafted and it could therefore not be specified in the condition. We do not agree that an effective condition could not be drafted. As the Lord Ordinary suggests, provision might have been made for a record of the cost to be kept and acknowledged in some way or else the deed could have provided specific machinery for ascertaining the cost. The clause of redemption which was upheld in McElroy v. Duke of Argyll (1902) 4 F. 885 shows that appropriate machinery could be devised, by way of the appointment of arbiters or otherwise. In addition, we note that Style 156 in the Encyclopaedia of Scottish Styles Vol. 5, p. 186 provides for the price on pre-emption not exceeding a particular sum "which is hereby for this purpose taken as being the original cost of the buildings and others which the feuar is hereby taken bound to erect and to pay for...". This would be a highly practical and simple solution, especially in a case like the present where the superior was to be shown and was to sign the plans for the police station before it was constructed. We therefore see no reason why a condition could not be drafted which would meet the requirement set out in Professor Halliday's Conveyancing Law and Practice Vol. 2, paragraph 32-71, that there must be "precise definition of ... the price payable on exercise of the right or the method by which it is to be ascertained." In this case, however, the condition does not fulfil that requirement.

[13] For these reasons we agree with the Lord Ordinary that the relevant phrase in the condition does not meet the appropriate test for the imposition of an effective real condition or real burden. The reclaiming motion must therefore be refused.