Scottish Court of Session Decisions

 

OUTER HOUSE, COURT OF SESSION
	[2014] CSOH 65
CA15/13	OPINION OF LORD WOOLMAN   in the cause   IAIN HAWTHORNE and KATHLEEN HAWTHORNE   Pursuer;   against   PHILIP ANDERSON &c   Defender:   ________________

 

Act: Sandison QC; Brodies LLP

Alt: Mr Moynihan and Duthie; Simpson & Marwick LLP

 

4 April 2014

 

Introduction

[1] In late 1989 the pursuers instructed Peterkins to act as their solicitors in the purchase of Bieldside House, Aberdeen. Before taking entry, the pursuers agreed to sell on the main house, while retaining two sites on either side. The two conveyancing transactions settled respectively on 28 February and 1 March 1990. Subsequently, the pursuers built a house on one of the two retained sites (site 1).

[2] The pursuers have been unable to develop the other retained area of ground (site 2). For many years they were prevented from doing so, because Aberdeen City Council refused to grant planning permission. In 2012, that prohibition was removed when the council did grant permission to build a house on the site. The permission is, however, a notional one. It cannot be implemented, as the site does not have an appropriate means of access.

[3] The pursuers raised the present action for professional negligence in 2008. They seek damages of £525,000 from the defenders as representing the lost development value of site 2. There are four questions for determination. First, has the claim prescribed? Second, did Mr Anderson breach the duty of care that he owed to the Hawthornes? Third, is there a causal connection between the loss claimed and the alleged breach? Fourth, what is the proper value of the claim?

 

The facts

Bieldside House

[4] Bieldside House lies on the south side of North Deeside road in the Cults area of the city. A house has stood there since the 17^th century. The present building was erected in the 19^th century. Together with the walled garden and gazebo, it is category B listed. The Deeside public walkway (formerly a railway line) and Deeside golf course lie to the rear of the subjects. Originally, the subjects were part of a larger estate comprising several other buildings, most with the prefix 'Bieldside' in their name. Over the course of time, those properties were sold and they are now held on separate titles.

[5] The principal means of access to the subjects runs in front of the main house and joins North Deeside Road at either end ('the horseshoe drive'). There is another access located to the west of the main house, which also joins the public road ('the Mill Drive'). It is used by the occupants of Bieldside Mill and Bieldside Mill Cottage and their visitors. It leads down a steep incline to site 2. The Mill Drive is about 6 metres in width, but buttress walls at the entrance reduce its width to about 3.5 metres. The parties' dispute centres on this second access.

 

The parties

[6] Mr Hawthorne is the managing director of McCalls Limited, a highland-wear dress specialist with several shops throughout Scotland. When he purchased Bieldside House (aged 33), he had already been involved in several residential developments in Aberdeen. His wife has had an important voice in some of the key decisions relating to the present dispute. Throughout their marriage, however, she has left most of the business dealings to her husband.

[7] Mr Anderson qualified as a solicitor in 1971. He became a partner in the firm of Milne and McKinnon, the predecessor to Peterkins, in 1973. Prior to 1989, Mr Hawthorne had instructed Mr Anderson to act on behalf of McCalls Limited and in respect of some of his property ventures. The two men became friends. From time to time, they would lunch together to discuss personal and business matters. Subsequently their families met and socialised with one another.

[8] Mr Anderson has an imperfect memory of the purchase of Bieldside House. That is hardly surprising. The transaction took place many years ago and was one of many with which he was dealing at the time. By contrast, Mr Hawthorne has a clear recollection of the events leading from his first interest in Bieldside House to the present day.

 

Purchase of Bieldside House

[9] Mr and Mrs Matheson formerly owned Bieldside House. Sometime in the mid-1980s they decided to sell the subjects and move into Bieldside House Cottage, a more compact property nearby. They instructed Peterkins to sell Bieldside House on their behalf. Mrs Janice MacCarthur was Peterkins' property manager at the time. She and Mr Anderson prepared the sale particulars, which indicated that the subjects presented a development opportunity.

[10] At that time, the Aberdeen property market was sluggish and the subjects did not attract a purchaser. For a period, the Mathesons let the subjects to tenants. Mrs MacCarthur approached Mr Hawthorne in early 1989. She knew him because she was married to one of his business partners. She told him that Bieldside House had been on the market for some time. Mr Hawthorne knew the property as he had attended a social event there some years previously. He visited the site and concluded that it had development potential. He was aware that a neighbouring property, Bieldside Mill, had received planning permission. In his eyes, that augured well. He decided to purchase the subjects. His intention was to reside in the main house with his family and to sell part of the land for development purposes. No missives were concluded. I understand that may have occurred because Peterkins was acting for both parties.

[11] In about March or April 1989, Mr Hawthorne returned to the subjects with Mr Anderson and walked around the whole site. According to Mr Hawthorne, in the course of the walk, the two men discussed how best to realise the site's development potential. They agreed that it naturally divided into three parts:

a.     Bieldside House The main house itself, together with the horseshoe drive and garden ground to the front and the walled garden to the rear.

b.     Site 1 The area of ground to the front and east of Bieldside house where a tennis court was then located.

c.     Site 2 The area of ground lying to the rear and south-west of the main house.

[12] Initially, Mr Hawthorne did not tell his wife about his interest in the subjects. She had recently given birth to their first child and he wished the purchase to be a surprise. He took her to view the subjects in about May or June 1989. She indicated that she liked the location, but thought that the main house would be too large for the family. Her preference was to reside in a new house to be built at the subjects. She liked site 1 because it was flat, close to the main road, and had a sunny aspect. But if planning permission was refused for site 1, she was willing to reside in a house built on site 2. She saw that as the less attractive option, not least because it is located down a steep incline.

[13] Mr Hawthorne decided to follow his wife's wishes. He realised that he would have to find a purchaser for the main house, as they could not afford to build a new home without the capital sum generated by a sale. A solicitor friend put Mr Hawthorne in touch with Mr Harding, who indicated that he and his wife were interested in purchasing the main house. By November 1989 the two men had reached an agreement that the Hawthornes would sell it to the Hardings for £260,000. They then passed the matter to their respective solicitors to draw up formal missives.

[14] The Hardings' solicitors were Paull & Williamson ('P & W'). On 28 November they sent a draft offer to Peterkins with a sketch plan annexed, prepared by the first pursuer. It shows the main house and ground in the centre, together with two flanking sites labelled site 1 and site 2. Site 2 included the whole length of the Mill Drive. Mr Anderson revised the draft and returned it on 22 January 1990, but without mentioning the plan.

[15] Two provisions in the missives related to development at the subjects. First, Mr and Mrs Harding undertook not to object to any planning application made by the pursuers in respect of either site 1 or site 2. Secondly, the missives included the following clause:

"Option to Purchase Site 2

In the event, and in that event only, that the seller obtains detailed planning permission in accordance with clause 1 above for the erection of a dwellinghouse on Site 1, then, within six weeks of that date, the seller shall be bound to offer and the purchaser shall be bound to accept an offer to sell Site 2 to the purchaser at a price of £15,000 with entry six weeks after the date*"

 

[16] Despite its heading, that clause is properly analysed as a conditional sale agreement. On the occurrence of the specified event, neither party had the right to withdraw. Each was bound to implement its side of the bargain. The first pursuer explained his rationale for the clause as follows. His main aim was to develop site 1. He thought that generating a cash sum from site 2 would have been useful in building their house and developing their business. He valued site 2 as being worth only £7,500 as garden ground. Accordingly, he was delighted to receive double that amount from the Hardings.

[17] The first pursuer has throughout believed that both sites 1 and 2 should be capable of independent development. That was because he believed "that the integrity of Bieldside House could be maintained by the development of two houses." Because the Mill Drive was already being used as an access driveway for two other properties, it appeared to him to be a "no brainer" that it would serve as the access to site 2.

 

Instructions

[18] The critical question concerns the instructions given to the defenders. The first pursuer's initial position was as follows:

"I did give Philip Anderson my instruction that sites 1 and 2 had to be capable of separate development. I had instructed Philip Anderson prior to December 1989 of our intention to build our house on either site 1 or site 2 and develop the remaining site either by building ourselves or selling on."

 

[19] As indicated above, Mr Anderson has no recollection of this chapter of events. He accepts that the site visit may have taken place, but cannot say more than that. He added, however, that he would not have regarded himself as qualified to provide planning advice. Accordingly, he thought that if any discussion had taken place during the course of the site visit, it would have been of the 'back of a fag packet' variety. Further, he was adamant that he was never instructed to ensure that site 2 was capable of independent development.

The Title

The plans

[20] The disposition granted in favour of the pursuers by the Mathesons did not have a plan attached. Instead, it referred to the prior titles for a description of the subjects. But because of the division of the subjects in the conveyance to the Hardings, a new plan was required. On 13 February 1990 the defenders wrote to Mr Bill Bakewell, architect, of Grampian Design Associates ('GDA') and asked him to prepare the necessary plans for the sub-division of the subjects. On 26 February 1990 the defenders sent the first pursuer revised site plans and asked him to confirm that they were in order. It appears that they may have sent him a further copy two days later. In a letter to the council dated 8 March 1990, Mr Bakewell stated that the division of the policies would provide "two manageable sized pieces of land."

[21] The Hawthornes understood that they had acquired title to the whole length and width of the Mill Drive. They were mistaken on both counts.

a) Length The pursuers did not acquire title to the upper third of the Mill Drive where it joins North Deeside Road. This occurred because that section was not properly delineated on the disposition plan. The defenders accept that the error is attributable to their negligence. It was cured in 2004 by means of a deed of excambion.

 

b) Width As a result of an earlier 'split-off' deed, the title to Bieldside House did not include a strip about 2 metres wide on the west side of the Mill Drive. The pursuers therefore only acquired title to about 4m.

 

Planning History

[22] Shortly after agreeing to purchase Bieldside House in 1989, the first pursuer instructed Mr Bakewell to do "everything possible to ensure the grant of planning permission" for the erection of a new house on site 1. Mr Bakewell contacted the planning department, which wrote to him on 18 August 1989. It indicated that the council might grant permission for the erection of one new house at the subjects. It expressed a preference for the house to be located upon site 2, on the basis that it would have less visual impact on the main house.

 

Superior's consent

[23] On 27 December 1989, the first defender wrote to Edmonds & Ledingham ('E & L'), seeking the consent of the feudal superiors for the construction of two houses at the subjects. He stated that it was unlikely that permission would be granted to construct a house on site 2. In reply E & L asked to see a plan for approval. The defenders complied in January. E & L indicated that the plan was not objectionable, but queried its location on site 1.

 

Planning policy

[24] In determining the various applications made by the pursuers, the council has taken into account the planning policies which have applied from time to time. An important factor has been the minimum area requirement contained in residential policy R3 in the 1991 Aberdeen City-District Wide Local Plan. It specifies that dwelling houses should only be erected on ground with a minimum area of 0.8 hectares. That requirement was not relaxed until the introduction of the Aberdeen Local Plan, Green Spaces - New Places, which was published as a draft in August 2004 and formally adopted in June 2008.

[25] The council has also taken into account (a) the amenity of the area, (b) the impact of any new development on the listed building; (c) road traffic problems; and (d) the impact on the mature trees at the subjects.

 

Site 1

1^st application

[26] The pursuers made the first planning application in January 1990. Like many subsequent applications, it met with significant objections from neighbours and others. In May 1990 the planning authority rejected the application. It did so on the grounds that it did not comply with planning policy R3, being contrary to the tree policy, detrimental to the amenity of the area, and not meeting the area restriction. The council added that it did not want to set a precedent for further applications of a similar nature.

[27] Following that refusal, there was a site meeting to discuss the planning position. It was attended by the first pursuer, Mr Bakewell and an official from the planning department. In his handwritten note of the meeting, the planning official recorded that the first pursuer "is aware of the 0.8 ha criterion within the R3 policy area, but is hoping for some 'leniency' judging the application on its individual merits." The minute adds that he "is clutching at straws and, while now a little hopeful, recognises that the R3 policy guidelines are reasonable in what they seek to achieve."

2^nd application

[28] In November 1990, the pursuers submitted a revised planning application using a site plan accurately showing the extent of their title. Mr Bakewell wrote to the planning authority on 22 November 1990 in respect of policy R3 and stated:

"it is understood that this matter is at present being reviewed by the council which may permit a sympathetic approach to the erection of one dwelling house in this particular instance. It should be noted that the original policies of Bieldside House - some 1.29 hectares has now been divided into two feus with the applicants retaining ownership of some 0.56 hectares and a shared use of the existing access drive off the North Deeside Road."

 

[29] The planning authority granted conditional consent on 14 March 1991. Normally, the next step would have been for the pursuers to apply for approval of the reserved matters in the consent. For some unexplained reason, that did not take place.

 

3^rd application

[30] In September 1991, the pursuers lodged a third application for full planning permission. To meet the area restriction, it included site 1 and most of site 2, bar the Mill Drive. The council granted consent on 23 January 1992, subject to a number of conditions, the most important of which was condition 7:

"that the area which comprises the application site will at no time be separated therefrom or sub-divided in order to preserve the amenity of the neighbourhood in general and the amenity and character of Bieldside House in particular which is a category B Listed Building, located in an R3 Residential area as defined in the City-District Wide Local Plan."

 

[31] That restriction has had a major impact on subsequent planning applications for site 2. If the pursuers had applied for approval of the reserved matters following the grant of conditional consent in March 1991, no such condition would have been imposed.

 

Erection of Bieldside Lodge

[32] Mr and Mrs Hawthorne built a house on site 1 in accordance with the planning permission, which they named Bieldside Lodge. They have occupied it since 1993. They have a servitude right of access over the horseshoe drive.

 

The conditional sale agreement

[33] The grant of planning permission in respect of site 1 confronted the pursuers with a dilemma. They were willing to sell site 2, but only if it did not imperil their planning position for site 1. If they sold site 2 to the Hardings, they would breach Condition 7. If they did not do so, they would be in breach of the missives. On 21 April 1992, the defenders wrote to P & W as follows:

"We are advised that the planners indicated that a consent would not be forthcoming in respect of site 1 alone and in order to ensure the grant of the application it was amended to include Site 2. Clearly in these circumstances as you have correctly deduced it would not be advisable to proceed with the sale. In the circumstances it seems that there would be no possibility of obtaining a further consent for Plot 2..."

 

[34] Between 1992 and 1994 the parties and their solicitors tried to find a solution in terms of the Town and Country Planning (Scotland) Act 1972. They considered making an application under section 28A to vary the planning consent by deleting condition 7. They also considered entering into a section 50 agreement restricting the use of site 2 to residential garden ground. On 7 October 1992, the defenders wrote to inform P & W that the planning department would agree to vary condition 7, as long as site 2 remained as garden ground in perpetuity.

[35] Eventually in April 1994 the parties agreed to terminate the conditional sale agreement. Mr Harding explained his rationale as follows:

"Once Mr Hawthorne had obtained his planning permission he advised us that he had given away the rights to develop the plot of ground to the Planning Department - in exchange for the planning consent to build Bieldside Lodge on site 1. At that point my thoughts were that site 2 became worthless. It was essentially agricultural land with no value. The price at £15,000 was then too high. On making enquiries into the planning situation I was satisfied that there would be no possibility of planning permission being granted for Site 2. I took the view that our position was protected without any further action on our part. Accordingly it was agreed by both sides that the option would come to an end."

 

Site 2

[36] The pursuers decided to develop site 2. At that stage, they believed that they owned the whole of the Mill Drive. They were aware of the difficulty created by condition 7, but hoped that planning policies and in particular the area restriction would change over time. From 1995 onwards, they made a series of applications for planning permission. In doing so, they had the benefit of architectural and planning advice.

 

October 1995

[37] The Hawthornes lodged their first application for site 2 on 20 October 1995. It showed the Mill Drive as the access route. The application stated that the buttress walls at the entrance would be demolished to widen the access to 5m. In July 1996, the council refused permission on several grounds. They included: (a) that the proposal was contrary to the R3 policy by reason of tree loss; (b) that it would reduce the size of the feu; (c) that it would set a precedent to the detriment of the character of the area; (d) that it would create a road safety hazard; and (e) that it would result in the overdevelopment of the site.

[38] With regard to road safety, the Divisional Roads Surveyor indicated that the gap between the buttress walls formed a 'pinch point'. Only one vehicle could pass between them at a time. That meant that right turning vehicles arriving at the site would have to wait on the busy North Deeside Road. There were also concerns about the narrow splay of vision available to drivers entering or leaving the Mill Drive.

[39] In February 1997 the Scottish Office refused the pursuers' appeal against that decision. The reporter stated that his initial impression was that "the problems of visual impact, tree loss, and the relationship of the site to a listed building" were themselves so serious as to merit refusal. He added that the access issue was itself "a very sound and decisive basis for refusal on its own."

[40] Despite this setback, the pursuers remained optimistic. They decided to wait until planning policy altered before making a further application. That did not occur until the draft local plan was published in August 2004.

 

1997 to 2005

[41] At Christmas 2003, a solicitor who had formerly worked at Peterkins told the first pursuer at a social event that there was a title problem at the subjects. On querying matters with the first defender, the first pursuer learned that he and his wife did not have title to the top third section of the Mill Drive. The first pursuer understood that the problem had arisen by reason of feudal reform, rather than fault, and could be rectified.

[42] In 2004, the Hardings sold Bieldside House to Mrs Ruddiman. She and her husband (who are both solicitors in Aberdeen) have resided there since then. They are opposed to the development of site 2 and are not prepared to grant a servitude right of access over the horseshoe drive in favour of site 2. The first defender wrote to Mrs Ruddiman's solicitor, indicating that the pursuers sought to rectify the disposition granted to the Hardings. He also prepared an initial writ for that purpose.

[43] After negotiation, the parties executed a deed of excambion, which was registered in November 2004. Under that deed, Mrs Ruddiman conveyed title to the upper third of the Mill Drive to the pursuers. Mr Hawthorne accepted that he had not taken a close interest in the details, but understood that "we would now own the entire driveway from the top all of the way down". The plan annexed to the deed showed, however, that the pursuers' title did not extend across the whole width of the Mill Drive.

 

2005 application

[44] After the publication of The Green Spaces: New Places Policy Document, the pursuers decided to make a further application for site 2. Before doing so, they invited their neighbours to come to their house to view the plans. They hoped to overcome, or at least minimise, any objections. On that occasion, Mr Ruddiman told Mr Hawthorne that title to the Mill Drive was divided, that the pursuers did not own its whole width, and that they therefore had an access problem in relation to site 2.

 

[45] The defenders' file contains a handwritten note dated 27 April 2005, although it appears in sequence for 2004. It appears to record the subsequent discussion that took place between Mr Hawthorne and Mr Anderson:

"Att. With Iain going over ... plan discussing in light of titles. Pointing out the extent of the access might limit access for development but we could only get what the Mathesons possessed."

 

[46] Mr Hawthorne was greatly concerned about this new problem, but nonetheless made a further planning application in August 2005. The Council refused the application in February 2006 solely on the ground of road safety. Mr Hawthorne decided not to appeal the refusal. On 2 September 2005 he wrote to Mr Anderson setting out all his concerns about access to site 2. In December 2005, the pursuers transferred title to site 2 to their children for tax reasons.

 

November 2006 application

[47] The pursuers applied again for planning consent in November 2006. They proposed widening the entrance to the Mill Drive to about 4.8 m. The council refused this application in September 2007 on a variety of grounds. They included the impact on trees, the setting of the listed building, and road safety. The council stated that the access route required to be a minimum of 5m wide. The pursuers chose not to appeal against this refusal.

Sale of Bieldside Mill

[48] In 2008, the Mathesons placed Bieldside House Cottage on the market. The pursuers were keen to acquire the title, because it included the 2m wide strip on the western side of the Mill Drive. Their offer to purchase the property was unsuccessful, despite their understanding that they had made the highest bid. The Ruddimans were the successful purchasers.

 

2010 application

[49] In their March 2010 application, the pursuers made a radical change to their approach. They proposed that access to site 2 should be taken from the horseshoe drive, despite the fact that they did not have title and knew that the Ruddimans would not agree to grant a servitude right over it. Although the planning officials recommended approval, the council refused the application by a narrow voting margin in August 2010. The appeal against that decision was refused on 20 January 2011 on grounds that are now familiar. It was stated that the siting, scale, layout, design and landscape impacts of the proposed house were at odds with the terms of various planning policies.

 

2012 application

[50] In April 2012, the pursuers re-applied for planning permission, again using the horseshoe drive as the means of access. They also proposed a novel design for the proposed house. The drawings show a semi-subterranean building, with grass on its roof. The proposed car parking is at some remove on site 1. Mr Hawthorne explained that they made the application "to demonstrate that site 2 is capable of residential development." The council granted conditional approval on 19 July 2012.

[51] The pursuers' case essentially came down to a single issue. Should the defenders have noticed the adverse features in the title and warned the pursuers about them? The answer turns on whether the defenders provided an adequate report on the title. Questions of both fact and law are involved.

 

Credibility and reliability

[52] A great deal hinges on the nature of the instructions and the information given by Mr Hawthorne to Mr Anderson. Because the transaction took place so many years ago, the witnesses understandably had difficulty in recollecting matters. Mr Anderson had tried to reconstruct the sequence of events by looking at the available documents. They were not, however, complete. Some of the conveyancing files had been destroyed after 10 years, in accordance with the defenders' routine policy. In addition, as Mr Hawthorne had instructed Mr Anderson in respect of several transactions which were proceeding at the same time, it was possible that there may have been relevant entries in other files.

[53] Mr Anderson was hesitant in parts of his testimony and self-deprecating in others. He was clearly embarrassed by some of the mistakes that the defenders had made in the course of their involvement with Bieldside House, but he fairly owned up to them. I concluded that he was trying to assist the court and that I could place reliance on his evidence so far as it went.

[54] Mr Hawthorne gave the initial impression of being confident and certain in his answers. As matters progressed, however, his recollection was not as sure as he first presented. His answers became less precise and he was often unable to reply to direct questions in a straightforward fashion.

[55] In order to evaluate Mr Hawthorne's testimony, I considered it in conjunction with that of Mr Harding. There were sharp conflicts between them in respect of three matters: (a) who first proposed the conditional sale agreement; (b) how many houses Mr Hawthorne intended to build at the subjects; and (c) whether Mr Hawthorne adopted a cavalier attitude to one legal plan he was sent.

[56] There is a degree of ill feeling between the two men. It culminated in an incident when Mrs Hawthorne parked her car on the horseshoe drive, its wheels partly on the gravel and partly on the grass. According to Mr Hawthorne, he saw Mr Harding place a boulder in front of one wheel to prevent it moving off. He asked Mr Harding "in no uncertain terms" what he was doing. When Mr Harding came across and stood over him "in a domineering fashion", Mr Hawthorne lost his temper. He struck Mr Harding, causing him to fall to the ground.

[57] Mr Harding accepted that the altercation took place, but said that he had not been influenced by his personal difficulties with Mr Hawthorne and that he had come to court to tell the truth. Mr Harding was formerly the chief engineer of an oilfield engineering company. During his time in the witness box, he took considerable care in answering questions, particularly in relation to documents that were placed in front of him. Both the content of his answers and his demeanour convinced me that any personal prejudice he held against Mr Hawthorne did not influence his testimony.

[58] Mr Harding explained the genesis of the conditional sale agreement as follows:

"Within the missives of sale is a clause which is described as an option. It wasn't supposed to be an option. It was supposed to be a requirement that we would buy site 2 but only once Mr Hawthorne had obtained planning consent for the building of his home. Mr Hawthorne needed that second parcel of ground for his planning application to meet the planning requirement that a minimum amount of land was needed to enable the application to proceed. Without site 2 in addition to site 1 the application would be refused. At that time Mr Hawthorne did not want the extra land. He simply needed it for his planning application. In all my discussions with Mr Hawthorne at the time of our purchase he did not mention any intention to construct two houses. He was only interested in a single house."

 

[59] That account makes sense. I accept that Mr Harding had no real interest in site 2. He thought that it might be useful, either to keep a horse there for his children; or as a possible site for a retirement home for himself and his wife, should planning policies change. Mr Hawthorne had much more incentive to suggest the conditional sale. It fitted his strategy. He wished to maximise the chances of securing planning permission at the subjects, while realising a further capital sum from site 2 if he secured consent for site 1.

[60] According to Mr Harding, from early in the course of their discussions, Mr Hawthorne indicated that he only intended to construct one house on site 1. That fits with the fact that by late 1989, Mr Hawthorne knew that the planning department would only countenance one house at the subjects. I conclude that his clear intention was to build only one house and transfer site 2 to the Hardings, as being surplus to requirements.

[61] Thirdly, according to Mr Harding, he noticed errors on the 1990 disposition plan. They concerned the lack of marking to the railway line and site 2 not including an exit to the main road. He pointed these out to Mr Hawthorne, who replied "We've spent far too much money on solicitors' bills, we're just going to sign it as it is". Despite Mr Hawthorne's denial that he made this response, it was consistent with my impression of how he might well respond in that situation.

[62] Because I prefer the evidence of Mr Harding on these matters, it causes me to query the extent to which I can rely upon Mr Hawthorne's evidence. My concern may not, however, be as important as I first thought. In the course of cross‑examination, Mr Hawthorne significantly diluted his evidence. His final position appeared to rest on the discussion he had with Mr Anderson during the course of the site visit. Mr Hawthorne said that they talked about optimising the site's development potential. From that discussion, he believed that Mr Anderson should have inferred that the pursuers wished both sites 1 and 2 to be capable of independent development. That is very different from giving express instructions.

[63] I conclude that the dominant consideration operating on Mr Hawthorne's mind was to obtain planning permission for site 1. By the end of 1989, he thought that there were reasonable prospects of achieving that goal, but he recognised the importance of the area restriction contained in policy R3. It acted as a significant brake on planning development at the subjects. Everything that occurred must be viewed against the constraint it composed. Mr Hawthorne may have had a notion that site 2 might also be developed, but that was not disclosed to Mr Anderson. By the date of settlement it had receded in importance. That is the only explanation for the pursuers agreeing to enter the conditional sale agreement. If they wished to develop site 2, why did they arrange to transfer it to the Hardings?

Prescription

[64] The defenders argue that any claim has prescribed: section 11 (3) of the Prescription and Limitation Act (Scotland) 1973; Glasper v Rodger 1996 SLT 44. They maintain that if the pursuers had exercised reasonable diligence, they would have been aware of the title problem at a much earlier date. There were various strands to the submission. Mr Moynihan contended that by early 1990, everyone accepted that sites 1 and 2 had to be combined to meet the requirements of policy R3. Mr Harding testified to that effect. If he had thought otherwise, he would have reacted when the pursuers submitted their planning application for site 1 using ground from site 2. Mr Moynihan also argued that the pursuers should have looked more carefully at the sketches and plans attached to the various planning applications lodged for site 2. They accurately set out the extent of the pursuers' title.

[65] The question of prescription must be set in context. The defenders themselves did not appreciate that there were any title problems in respect of the Mill Drive for a lengthy period. On each occasion, their knowledge arose after a direct query from Mr Hawthorne. With regard to the length, he made the query in early January 2004. With regard to the width, he made the query sometime in early 2005. Prior to those dates, the defenders never suggested that the pursuers' planning applications were flawed.

[66] As the defenders did not know about the title problems, I would be slow to hold that the pursuers ought to have been aware of them prior to August 2003 (the cut-off date). I therefore hold that the claim has not prescribed.

Negligence

[67] The two conveyancing experts expressed different views on the issue of negligence. Professor Robert Rennie stated that the defenders were in breach of their duty of care. After the pursuers decided to sell Bieldside House to the Hardings "effectively it became a development purchase and the duties of Peterkins were then those of a solicitor engaged in such a purchase". In his opinion, the defenders should have given the pursuers a "sensible idea" of the nature, including the extent, of the title they were acquiring. In failing to do so, the defenders fell below the requisite standard. Professor Rennie cited the Canadian case of Graybriar Industries Ltd v Davis & Co (1992) 46 BCLR.2 (d) 164 at 181, where Thackray J stated:

"A person who goes to a lawyer with respect to a land transaction is entitled to expect that lawyer to investigate the state of any title that is germane to the matter and explain to the client exactly what it is that is portrayed by the state of the title."

 

[68] Professor Rennie accepted that an ordinarily competent solicitor (a) would not be expected to know the access dimensions required for planning permission; (b) might find it difficult to correlate the title as set out in the deeds and deed plans with the position on the ground; and (c) might have reasonably assumed that the title corresponded with the physical width of the Mill Drive. In Professor Rennie's view, however, it was "critical especially in a development purchase" for Mr Anderson to instruct an architect or surveyor to prepare dimensioned plans.

[69] Mr Donald Reid's opinion was that the defenders were not negligent. He stated that a solicitor does not have a duty to undertake a site inspection. He does, however, have a duty to provide the client with a report on the title. The level of detail will depend on the circumstances. If, for example, a solicitor is aware that a client has development intentions, he should ask himself whether he should be "thinking harder" about planning implications.

[70] Mr Reid's own investigation of the Bieldside House title disclosed (a) that the Mill Drive had been part of the policies until 1990; and (b) that the western strip was excluded from the title by way of a 1954 'split off' disposition. Nevertheless, Mr Reid stated that the defenders:

"could legitimately have concluded that the Mill Drive formed part of the title to Bieldside House as being acquired by Hawthorne from Matheson."

 

[71] Further, there was nothing in his examination of the title to suggest that the defenders:

"on their own initiative, with nothing coming to them from their clients or their examination of the titles to alert them to the alleged problem, to suggest that the fresh fully dimensioned plan be drawn up is in my opinion asking too much of them as a matter of duty. I can certainly see, in hindsight, that Peterkins might have done more than they did, including suggesting the drawing up of a fresh plan, but for them to have done so would in my view have been beyond the call of, rather than strictly in the line of, the duty of a solicitor of ordinary care acting with ordinary skill. I might also observe that the plans which were in preparation and circulation ... come close anyway to meeting this demand for a fully dimensioned plan."

 

[72] In my view, the defenders were not negligent. I reach that conclusion on the basis of the following factors. First, my finding that Mr Hawthorne did not instruct the defenders that he wished sites 1 and 2 to be capable of independent development materially affects the scope of their duty of care. They were instructed to acquire title in the context of the clients' intention to secure planning permission for site 1, which required both sites to be aggregated.

[73] Secondly, I accept Mr Reid's opinion that the defenders could legitimately have assumed that the whole of the Mill Drive was included in the title. Thirdly, the defenders gave accurate plans to the architect, who produced a disposition plan from which one could determine the dimensions by means of scaling. As Mr Reid put it, the plan did its job satisfactorily enough and it "very substantially" discharged the defenders of responsibility.

[74] For these reasons, I hold that the defenders were not negligent.

 

Causation

[75] If I am mistaken in relation to negligence, the question of causation arises. What would the pursuers have done if the defenders had given them the correct title information? I conclude that the Hawthornes would still have proceeded with the transaction. My reasons are as follows:

a.     No one thought that the success or failure of a planning application for site 2 depended upon the width of the Mill Drive. It was in use as an access by two other properties. Even the pursuers' planning expert, who had advised them about various planning applications, did not envisage a problem in this connection.

b.     By early 1990, the pursuers knew that the planning authority (a) would only permit one new house to be built at the subjects, (b) was prepared to consider site 1 as the location, and (c) would adhere to the area restriction policy.

c.     The pursuers were very keen to sell Bieldside House, in order to obtain the funds to enable them to construct Bieldside Lodge.

d.     Relative to the rest of the subjects, site 2 was worth very little.

e.     If the development of site 2 was so important to them, the pursuers would not have transferred it to Mr and Mrs Harding, nor would they have accepted condition 7.

[76] These points all suggest that site 2 was low down the pursuers' list of priorities. Mr Hawthorne appeared to recognise that fact. He was asked what he would have done if he had been informed prior to conclusion of the bargain that he could not obtain planning permission because of the width problem. He replied that he would have made enquiries about acquiring the western strip and also explored alternative forms of access. He was then asked what he would have done if the planning advice had been unclear. Mr Hawthorne paused for a long time before replying that he probably would still have progressed matters. That is an important answer. It squares with the factors I have mentioned above.

[77] There is another causation argument. I hold that the pursuers broke the causal chain by agreeing to vary the conditional sale agreement. If they had not done so, the Hardings and their successors would now own site 2. Plainly in those circumstances, the pursuers could not have advanced the present claim.

 

Loss

[78] The parties agreed that any loss of development value should be assessed in December 2005, when the pursuers conveyed site 2 to their children for tax reasons. The pursuers seek compensation of £525,000. They arrive at that figure by deducting the value of site 2 without suitable access for residential development (£25,000), from the value of the site with adequate independent means of access for the purposes of residential development (£550,000). The comparable figures for the defenders are £125,000 with access and £60,000 without access.

[79] Even allowing for the fact that valuation is as much an art as a science, these are sizeable differences. The discrepancy between the 'with access' figures can be explained by reference to the publication of the draft plan in 2004. The experts took markedly different views as to the attitude of prospective purchasers, once it was thought that the R3 policy would be relaxed.

[80] Mr Stewart and Mr Findlay, both of Ryden LLP, gave evidence on behalf of the pursuers. Mr Findlay took the view that there were reasonable prospects of obtaining planning permission for site 2 in December 2005. Mr Stewart proceeded on the basis that, after the publication of the draft plan, there was a near 100 per cent chance of success in obtaining planning permission for the site. He thought that wealthy individuals would be very interested in acquiring it.

[81] Mr Baxter Allen of Keppies, Glasgow, adopted the opposite approach. He concluded "that Site 2 as existing stands effectively no chance of successfully gaining planning permission for development." He based his view on the history of refusals, the access constraints, and the potential impact of the building on the landscape and the listed parts of the subjects. If in December 2005 a client had sufficient funds, understood the risks, and still wanted to go forward, Mr Allen would have said 'let's take the chance'. However, he would have been extremely guarded about the prospects of obtaining planning consent. Mr Allen was also concerned about the design of the house that had ultimately been approved. He thought that it might not have been attractive to potential purchasers, given that it is subterranean, single storey, has all its windows facing in one direction, and its car parking some distance away.

[82] In my view, a purchaser would have had to be very optimistic in December 2005 to be prepared to pay over half a million pounds for site 2. The planning history tells against such a valuation. I prefer Mr Findlay's view that after the publication of the 2004 plan, the planning prospects improved to perhaps 55 to 60 per cent. Taking a broad approach, I conclude that with access, the land would have been worth £200,000.

[83] I take a similar approach to the 'without access' figure. Mr Allan thought that a wealthy individual would be prepared to pay £60,000 for the site. Mr Stewart thought it was worth much less. The exercise is a peculiarly speculative one, but I conclude that the correct valuation is £40,000. Accordingly, if I had been making an award, I would have assessed damages at £160,000.

 

Two final matters

Mr Allan

[84] During cross-examination, Mr Allan disclosed that although there is no formal association, his firm has had links with the defenders since 2004. The name 'Keppie' appears on the main door of the defenders' offices. Keppie has used rooms within to hold meetings. The defenders' website states that Keppie is able to offer planning services.

[85] Individuals must think carefully before accepting instructions to act as an expert witness. The court expects them to be scrupulously impartial. In this instance, Mr Allan's links with the defenders should have been notified at a much earlier stage.

 

The excambion

[86] A material irregularity occurred in relation to the deed of excambion. The defenders inserted a provision into the document after it had been signed by the pursuers. The matter arose in this way. Ledingham Chalmers, the solicitors for Mrs Ruddiman, wrote to the defenders on 7 October 2004 in relation to the buttresses to the garden walls. They stated that in their view, their clients had a servitude right of support for the walls, but they wished it to be expressly incorporated into the deed. The letter continued:

"We appreciate that you wouldn't want to go to the bother of having the deed re executed but if your clients were agreeable to the change we would be happy for you to run off pages 1 and 2 (as amended on the copy pages attached) onto three pages which we would then attach to the last page of the deed."

 

[87] The defenders acceded to that suggestion, but without seeking authorisation from the pursuers. Mr Anderson could not explain why this regrettable event occurred.

 

Conclusion

[88] I hold that the pursuer's claim fails on the basis of both negligence and causation. Accordingly, I shall grant decree of absolvitor in favour of the defenders. Meantime I shall put the case out by order to deal with expenses.