Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION

[2016] CSOH 11

A167/13

OPINION OF LORD JONES

In the cause

ALEXANDER GILMOUR McNAUGHTON

Pursuer;

against

(FIRST) SCOTT McKENZIE MAJOR (AP) and

(SECOND) MRS CAROLINE MAJOR (AP)

Defenders:

Pursuers:  Cleland;  Beveridge & Kellas SSC

Defenders:  McKinlay;  Balfour + Manson LLP

15 January 2016

Introduction
[1]        This action arises out of a dispute about the ownership of residential property located near Kilmarnock.  The pursuer is the son and executor nominate on the estate of the late John McNaughton (“Mr McNaughton”), having been appointed on 6 February 2013.  The defenders are husband and wife, and live in the property which is the subject of the dispute, to which I shall refer as “number 2“. 

Background
[2]        Mr McNaughton was born on 13 July, 1922.  Throughout his life, until shortly before his death on 10 August 2008, he lived next door to number 2, in what I shall refer to as “number 1”.  In their present configuration, numbers 1 and 2 are semi-detached cottages in a single building, with a yard to the rear (together, “the subjects”).  The last recorded disposition of the dominium utile of the subjects was granted by John Robertson in favour of John Arnot by disposition, dated 16 May 1868, and recorded in the General Register of Sasines on 20 May 1868.  By disposition, dated 22 September 1961, and recorded in the General Register of Sasines on 31 March 1987, the superiority title to the subjects was conveyed by Metropolitan Pensions Association Limited (“Metropolitan”) to Mr McNaughton.  Mr McNaughton’s mother lived at number 2, until her death on 20 May 1991. 

[3]        Number 2 lay empty until sometime towards the end of 1992 when, by arrangement with Mr McNaughton and his wife Ruth (“Mrs McNaughton”), the defenders moved in to number 2, where they continue to live.  The defenders paid the sum of £15 per week to the McNaughtons in connection with their occupation of number 2, until about 2006, but the precise basis on which they did so is one of the few factual matters in dispute in this case, and I shall return to discuss that issue later in this opinion.  By a non domino disposition, dated 4 October 2006 and recorded in the General Register of Sasines on 22 November 2006, number 2 was conveyed to the defenders by neighbours, Mr and Mrs Burns.  Mr Burns is the brother of the second defender.  The pursuer discovered the existence of the disposition in favour of the defenders sometime in 2007.

[4]        In this action, the pursuer seeks production and reduction of the disposition in favour of the defenders, together with decree ordaining the defenders to vacate number 2.  The matter came before the court for proof on 16 June and the two succeeding days.

The evidence
For the pursuer
[5]        The pursuer was represented by Mr Cleland.  The first witness called was the pursuer.  He said that he was born in 1943, and is now a part-time taxi driver.  He was born in the cottages and he lived there when he went to school.  He left when he married.  He worked with his father, who was a coal merchant and he was a coal worker.  He went back to live there for a year or two before his father died.  At one time, there was an internal passageway connecting number 1 with number 2.  The defenders moved in at about the end of 1992, and they have lived there ever since.  Before they moved in, there was nobody living there after his grandmother, Jane McNaughton, died.  After his father died, the pursuer lived in number 1 for some months only, and now it is vacant.

[6]        In 1992, number 2 was habitable, but it needed work to make it comfortable.  The Burns had approached the pursuer’s father and mother to see what was happening about the cottage, and asked if the defenders could rent it.  They were told that they could rent it for £15 a week but, if they wanted to do anything to it, they would have to do it themselves.  The pursuer learned of that arrangement from his mother.  He had no discussion with his father about the arrangement.  His understanding was that the defenders paid £15 a week and in return they were able to live in number 2.  Everything was verbal, there was nothing in writing.  As far as he knew, the £15 was paid in cash.  The pursuer was asked about the defenders’ assertion on record that the £15 was paid as a contribution towards the insurance of the cottages.  He took it that his mother paid the insurance “because she did everything”.  The pursuer said that it was not the case, as averred by the defenders on record, that his mother and father approached the defenders about number 2.

[7]        In cross-examination, the pursuer was asked about the superiority title and he said that he first saw it when he was a young boy.  He said that it was well known that the McNaughtons did not own the cottages.  His parents had the keys for number 2 when his grandmother lived there.  They did not have keys after the defenders moved in.  In re-examination, the pursuer said that the keys to number 2 were handed over to the defenders, and that there had only been one set.  He was told by his mother that the defenders were paying rent at £15 per week.  His father was paying the council tax.

[8]        The pursuer’s second witness was John Kitson, a retired chartered accountant, aged 71.  He was a neighbour of Mr McNaughton, and visited him once a week.  Mr Kitson helped Mr McNaughton with paperwork and council tax.  He knew the defenders as neighbours.  He was told that they had nowhere to live, that number 2 was empty and that Mrs McNaughton invited them to stay there.  Mr McNaughton told him that they were tenants and they paid rent to him.  He did not say anything about who owned number 2.  Mr Kitson believed that Mr McNaughton had lived in the cottages all his life.  Mr McNaughton never gave him the impression that he did not own the property.

[9]        In cross-examination, Mr Kitson said that Mr McNaughton had told him on several occasions that the defenders were paying rent.  There was no re-examination, and counsel closed his case.

For the defenders
[10]      Ms McKinlay appeared for the defenders, and her first witness was the second defender.  She testified that she was 46 years old, that she is married to the first defender and that they have two daughters, aged 19 and 20, both of whom live with the defenders at number 2.  The defenders moved into number 2 on 1 December 1992.  They had been given access prior to their marriage on 20 March 1992 to carry out improvements, such as the installation of a new bathroom suite.  The defenders were told that they could do what they wanted to the house.

[11]      The second defender was asked to narrate the circumstances in which she and her husband came to live at number 2.  She said that her brother, William Burns, was in conversation with Mrs McNaughton when no one was living there.  Mrs McNaughton asked her brother if he knew of anyone who would want it.  Mr McNaughton’s mother had been living there and had died.  Mrs McNaughton told the first defender’s brother that it would go back to the crown if it was left vacant.  The second defender then spoke to Mrs McNaughton, and told her that the defenders would like to move in.  Mrs McNaughton agreed.  The defenders were to pay the sum of £15 per week towards the insurance.  Renting the property was never discussed.  The second defender’s brother and wife had told her that it was common knowledge that the McNaughtons did not own the property.  Mrs McNaughton said that, because they did not own number 2, she could not take rent.  There was nothing in writing.

[12]      Since 1992, the defenders have put in two bathroom suites, they have replaced most of the ceilings, installed new windows, rewired the house and put in a new header tank.  The last major work was to the kitchen, in 2006.  They have painted the outside of the building three times.  They recorded their own disposition in 2006.

[13]      In cross-examination, the second defender said that she and her husband moved in when they were in their twenties.  They were looking for somewhere to live, and they had their name down with the local authority.  They could not afford to buy a house.  She was not present when her brother had the conversation with Mrs McNaughton about number 2.  The second defender accepted that the property was capable of being let.  They got the keys from the McNaughtons, and they needed the McNaughtons’ consent to move in.  She accepted that they could not have just walked in and started living there.  The second defender said that she did not understand what Mrs McNaughton meant when she said that number 2 would go back to the crown.  It was her understanding that the McNaughtons did not own it and that they could not afford the upkeep.

[14]      The second defender accepted counsel’s suggestion that, if the defenders did not pay the £15 a week, they would be in breach of what they had agreed with Mrs McNaughton.  She also accepted that “in exchange for £15 a week” the defenders “were allowed to live there”.  She paid Mrs McNaughton in cash and the arrangement continued after Mrs McNaughton died in 1995.  She continued to pay that sum until 2006.  After they recorded the disposition, the defenders stopped paying.  The second defender agreed that the defenders were paying £780 a year towards the insurance premium and that, if the premium was £1,560 a year, that was a large amount to pay for insurance.

[15]      The second defender said that she first saw Mr McNaughton’s title in or about 1996 when she went to Edinburgh and searched in the General Register of Sasines.  She said that she regarded the title as a “superiority title” and discussed the matter with Mr and Mrs Burns.  The 2006 disposition in their favour was drawn up after the defenders took legal advice about title.

[16]      Asked again about the weekly payment, the second defender accepted that the arrangement was that, in exchange for £15 a week, the defenders were allowed to live in the house.  She said that the money was for insurance, that is what they were asked for and that is what they paid.

[17]      The defenders’ second witness was Christine Burns.  She was 49 years old, and had lived near the subjects for 28 years.  The Burns’ land and the subjects are “next door” to each other.  She had been born and brought up two and a half miles away, and Mr McNaughton was good friends with her grandmother.  Because she knew the McNaughton family, she would drop in to visit.  On occasions, Mr McNaughton would be next door looking after his mother.  Mrs McNaughton was “really worried” about the house being left empty.  It would go back to the crown as unclaimed property.  Mrs Burns thought that was mentioned even before Mr McNaughton’s mother died.  It was brought up at the time when she was ill. 

[18]      Following the death of Mr McNaughton’s mother, the Burns visited the McNaughtons and number 2 came up in conversation.  The McNaughtons did not know what they would do with it.  The Burns mentioned that the defenders were looking for somewhere to live.  Mrs McNaughton said there was no way it could be let, and money was not discussed.  She said she could not take rent.  She paid insurance on the whole building.  Following that conversation, the defenders went to visit number 2, and Mrs Burns went with them.  The house was very old and needed a huge level of modernisation.  For example, the floorboards had rotted.

[19]      Mrs Burns was asked about the circumstances in which she and her husband granted the disposition to the defenders.  She said that the defenders had approached a solicitor and had taken advice from him.  When the disposition was being worked on, part of the job was to find who the rightful owners had been.  They found that there was a disposition granted in 1868 in favour of John Arnot.  Her sister-in-law had earlier made enquiries in Edinburgh and found the superiority title for the lands, but there was no particular reference to the building.

[20]      In cross-examination, Mrs Burns said that Mrs McNaughton had told her that the title deeds had been held by a lawyer and they were lost.  Mrs McNaughton had said that there was a title deed in favour of Mr McNaughton.  She told Mrs Burns that it was not the full title; she said it was for the land.

[21]      Mrs Burns agreed with Mr Cleland’s proposition that the defenders paid £15 a week and, in exchange, they were allowed to live in number 2.  She also accepted that if there was no such payment, the defenders would not have been allowed to live there.  She rejected counsel’s suggestion that it was not true that the payment was for insurance.

[22]      The last witness for the defenders was William Burns.  He said that he was aged 54, and a company director.  When the defenders married, the Burns visited them frequently.  The defenders said that they would be looking for a house.  Mrs McNaughton suggested that she would allow them to move in.  She would be happy enough to let them move in for a share of the repairs and the building insurance.  She made it clear that the McNaughtons did not own the property.

[23]      In cross-examination Mr Burns said that he became aware that Mr McNaughton held the superiority title when they were in the process of granting the disposition in favour of the defenders.  He said that he was 100 percent sure that Mrs McNaughton had said that the McNaughtons did not own the property and he was 100 percent sure that the payment was for repairs, upkeep and insurance.

The issue
[24]      Section 1(1) of the Prescription and Limitation (Scotland) Act 1973 (“the 1973 Act”), as it was in force prior to 28 November 2008, and so far as is relevant to this case, provided as follows:

“If in the case of an interest in particular land, being an interest to which this section applies,—

(a)        the interest has been possessed by any person… for a continuous period of ten years openly, peaceably and without any judicial interruption, and

(b)        the possession was founded on, and followed

the recording of, a deed which is sufficient in respect of its terms to constitute in favour of that person a title to that interest in the particular land, or in land of a description habile to include the particular land…

then, as from the expiration of that period, the validity of the title so far as relating to the said interest in the particular land shall be exempt from challenge.”

Section 15(1) provided that “’possession’ includes civil possession, and ‘possessed’ shall be construed accordingly”.

[25]      It is the pursuer’s case that he has possessed an interest in the land which includes number 2 for a continuous period of 10 years openly, peaceably and without any judicial interruption and that the disposition, dated 22 September 1961, and recorded in the General Register of Sasines on 31 March 1987, is sufficient in respect of its terms to constitute in his favour a title to that interest.  The defenders do not challenge the pursuer’s contention that there has been no judicial interruption in respect of number 2.  Nor do they argue that the disposition is not sufficient in respect of its terms to constitute in his favour a title to that interest.  It is not their case that they have a real right of ownership in number 2, because such right could only be acquired in the circumstances of this case by operation of the provisions of section 1(1) of the 1973 Act.  Since their disposition was recorded on 22 November 2006, they cannot contend that they have had the necessary possession of number 2 to create a real right of ownership in it.

[26]      The issue in the case comes to be whether or not Mr McNaughton possessed number 2 for 10 years before sections 1 and 2 of the Abolition of Feudal Tenure etc. (Scotland) Act 2000 came into force on 28 November 2004, on which date superiority interests in land ceased to exist.  If he did, the superiority title became a good title to the dominium plenum.  The pursuer accepts that, if he did not have such possession, he has no title to number 2, and has, therefore, no title to sue in these proceedings.

Submissions
For the pursuer
[27]      It is accepted by the pursuer that Mr McNaughton did not have actual possession of number 2 throughout the necessary continuous period of ten years, and it is submitted on his behalf that the issue, therefore, is how any possession that he had over number 2 is to be characterised.  Mr Cleland contended that, if it can be established that the relationship between Mr McNaughton and the defenders in respect of number 2 was that of a landlord and tenant, then there would be no doubt that this would amount to civil possession. 

[28]      Counsel submitted that, by far the most likely explanation for the payment of £15 per week from the defenders to Mr McNaughton and/or his wife was that it related to payment of rent.  The defenders’ position that it represented their share of the insurance over the whole building cannot be correct, given the amount involved.  This suggests that, for their share alone, presumably for their half of the subjects, the annual insurance came to £780.  That clearly represented a far higher figure than would be expected to be paid for insurance for domestic premises and is a figure which entirely contradicts the insurance paid over the cottage shown in the agreed certificates which are at number 6/9 of process.  They show that the annual premium for 1993 to 1994, for example, was £277 for the buildings, and £158 for the contents.  For the year 2003 to 2004, the figures were £280.69 and £82.17 respectively.  If that is so, argued counsel, it is difficult to see what else these weekly payments of £15 amounted to or what other purpose was fulfilled by them being made, other than as payment of rent.

[29]      Mr Cleland accepted that there was never any written lease between the parties that would normally be required for a proper landlord and tenant relationship to be established. However, he submitted, a lease can be created verbally if for less than one year.  Such a lease can continue by tacit relocation and for the same duration as the original lease.  Counsel contended that the best way to characterise the relationship between Mr McNaughton and the defenders was one of landlord and tenants, with the defenders paying the deceased and his wife for the privilege of living at number 2.  The only term of that relationship which seemed to exist was that the payment of £15 would pass weekly from the defenders to Mr and Mrs McNaughton.

[30]      In any event, submitted Mr Cleland, it is important to look at the actual relationship between the parties living in both parts of the building throughout that time and considering that relationship, in the context of what constitutes civil possession.  For the period when Mr McNaughton’s mother was living in number 2, she was not paying any rent to live there.  Standing Mr McNaughton’s title in the 1987 disposition, which covered the whole subjects, there is no doubt that she possessed number 2 on his behalf.  Mr and Mrs McNaughton were responsible for payment, maintenance and repair over the whole building.  Unsurprisingly, given her age, they required to care for her and visited her on a daily basis.  Counsel argued that, to that extent, it can be said that Mr McNaughton's mother was essentially living in a “granny flat”.  Both during that period of time, and after the defenders moved in, Mr McNaughton had responsibility for the insurance of the subjects which were insured as a whole.  He was responsible for the maintenance and upkeep of parts common to the building, such as the roof.  There was evidence that he was responsible for payment of council tax over the whole subjects. 

[31]      Mr Cleland’s primary submission was that Mr McNaughton obtained good title based on 10 years possession as at 31 March 1997, to cover the period both when his mother lived in number 2, when it then lay vacant and then when it was occupied by the defenders.  His “fall-back” submission was that, even if I were not satisfied that the necessary possession was exercised for the period between 31 March 1987 and the defenders taking occupation in late 1992, there was ten years possession from the time they took occupation until shortly before the end of 2002

[32]      In support of his contentions, counsel referred to a number of text books and decisions, some of which I mention later in this opinion.

For the defenders
[33]      Ms McKinlay submitted that the only possession which is relevant in this case is either the natural or civil possession of Mr McNaughton.  Between 31 March 1987 and May 1991 (when she died) number 2 was possessed by Mr McNaughton’s mother.  She had occupied it since the 1920’s, some 60 years prior to the recording of the disposition in 1987.  She is a third party.  She is neither the party claiming the right nor his successor.  Counsel contended that the period of her possession between 1987 and 1991 is, therefore, not relevant for prescription.  There is no basis upon which to conclude that Mr McNaughton’s mother possessed number 2 other than on her own account.  She possessed prior to Mr McNaughton’s acquisition of the superiority and its subsequent recording.  Ms McKinlay asked, rhetorically, on what basis her possession of number 2 could have altered from being natural possession on her own account to civil possession on behalf of Mr McNaughton.  The pursuer seeks to claim that such an alteration took place by virtue of the fact that Mr McNaughton’s mother became elderly and Mr McNaughton provided care for her.  That is true of many families and neighbours and cannot be considered relevant to the alteration of the nature of the possession of heritable property. That is particularly so, when there was no evidence presented that she even knew about Mr McNaughton’s interest in number 2 arising from the recording of the superiority disposition.

[34]      Thereafter, between May 1991 and December 1992, number 2 was unoccupied.  Mr McNaughton did not live there.  There was no evidence as to what, if anything, was done by Mr McNaughton in respect of number 2 during that period.  In fact it would appear that it was the defenders who emptied number 2 of Mr McNaughton’s mother’s furniture and carried out works to make the subjects habitable.  In the absence of evidence as to possession, that period ought, also, to be disregarded.

[35]      The real issue in dispute, argued counsel, is as to the nature of the possession of number 2 during the period in which the defenders have been in occupation since 1992.

[36]      Possession involves more than physical control and must be accompanied by an intention to hold for one’s self or on one’s own account.  Possession must be open.  In support of these contentions, Ms McKinlay referred to Johnston:  Prescription and Limitation, second edition, at paragraphs 18.12 and 18.14.  

[37]      The defenders regarded number 2 as their home.  They were told they could do whatever they wanted to it.  They did considerable renovation works including a new bathroom, replacement ceilings, rewiring and internal decoration.  Neither Mr McNaughton nor indeed Mrs McNaughton took any interest in that matter and there was no evidence that the defenders ever sought permission for any such work to be done.  There was no evidence that the McNaughtons were ever inside number 2 again, after 1992.  Counsel submitted that it is difficult, therefore, to ascertain what actions by Mr McNaughton could be said to demonstrate an intention on his part to hold for himself or possess number 2 openly based on the recorded deed.  The pursuer’s own evidence as to why he believed his father owned the subjects was “because of the deed”.  He explained that he was aware of the existence of a deed, albeit his recollection of when he became aware of it was clearly incorrect being before it was executed.  Nonetheless, other than the existence of this deed “in a brown envelope” the matter of ownership was not discussed.  The second defender and Mr and Mrs Burns were all clear in their evidence that they had no discussions at all with Mr McNaughton about his ownership of the subjects.  Their interaction was solely with Mrs McNaughton who was clear in her discussions with them that the McNaughtons did not own number 2.  It is only Mr Kitson who claims that, sometime after 1999, Mr McNaughton told him that he was receiving rent from the defenders.  Mr McNaughton does not appear to have said anything of that nature to anyone else, including his own son.  Mr Kitson did say that there was no discussion as to ownership, although he had assumed Mr McNaughton owned the subjects because of what he said about receiving rent.  There was no other evidence presented that might be regarded as an open assertion by Mr McNaughton as to his right to possess number 2 as owner.  It might have been anticipated that there would have been some evidence as to what was known in the community about the ownership of the subjects by Mr McNaughton, or the fact that he leased number 2 to the defenders, had such evidence been available. 

[38]      Ms McKinlay accepted that the nature of possession may be civil, and recognised that it is on that basis that the pursuer claims to have acquired an unchallengeable title to number 2.  She submitted that there ought to be clear evidence as to civil possession, given the fact that it would result in an unchallengeable right to the property.  In support of that proposition she referred to Reid:  The Law of Property in Scotland, at paragraph 121, and Johnston at paragraph 18.13. 

[39]      There are clearly recognised legal relationships which constitute civil possession.  The circumstances in which the defenders came to occupy number 2 do not constitute civil possession.  On the evidence, the McNaughtons gave the keys to number 2 to the defenders. They did so on the basis that, in the event that no one occupied number 2, it would be returned to the crown.  On the evidence of the second defenders and Mr and Mrs Burns, no lease was agreed as Mrs McNaughton told them that the McNaughtons did not own number 2.  The defenders agreed to contribute to the joint insurance policy.  The matter was never discussed again.  Other than the payment towards the insurance, there was no relationship between the parties except as neighbours.  The defenders’ occupation of number 2 did not acknowledge the right of ownership of Mr McNaughton; they were clear that they did not believe that he owned the property.

[40]      Ms McKinlay said that she accepted that, in the event that the pursuer proves that a lease had been entered into between Mr McNaughton and the defenders for the prescriptive period, then this would constitute civil possession.  It is the position of the defenders that no lease was entered into and there is, in addition, no evidence to support a finding that there was.  A lease is a contract. As such, there must be consensus in idem between the parties to constitute a lease.  Counsel referred to Prickard v Ritchie 1986 SLT 466 at page 470, and Paton & Cameron:  Landlord and Tenant, at page 85.

[41]      There was no consensus between the parties as to a lease or its essential terms.  The second defender was clear in her evidence that the defenders did not reach agreement with Mr McNaughton to lease the property at number 2.  They did not discuss the issue of their occupancy of number 2 with Mr McNaughton at all.  They did not agree to pay rent.  They agreed with Mrs McNaughton to pay a specified sum each week in respect of the joint insurance of the subjects.  Mrs McNaughton was clear to them that she could not let number 2 to them or charge rent, as they were not the owners.  Whilst the pursuer seeks to make something of the fact that the actual cost of insurance appears to be less than the defenders’ share, the second defender was clear in her evidence that she was young, had no experience of insuring her own property and, as the relationship with the McNaughtons over the years was good, she never thought to raise the matter again.  She did not become aware of the actual cost of the insurance until Mr McNaughton’s latter years. 

[42]      The second defender was also of the view that Mrs McNaughton had asked for the money for the joint insurance because the defenders were young and she did not trust them to make sure they were insured in what was a semi-detached property.  Counsel argued that it might be observed that £15 per week would be a low rent for a two bedroom house.  Mrs McNaughton explained that, in the event that no one occupied number 2, it would go back to the crown. Mr and Mrs Burns had had similar discussions with Mrs McNaughton, and Mrs Burns in particular recalled being present when the defenders made the arrangement with Mrs McNaughton.  That is the basis upon which they agreed to occupy number 2 and not by virtue of a lease which was expressly excluded in the discussions.  The pursuer was not present for the discussions and was not, therefore, a party to the arrangement.  It was on the basis of that understanding, namely that the McNaughtons did not own number 2 and that they merely wished a contribution to the shared building insurance, that the defenders took occupation of number 2.  They took the keys and the matter was not discussed again.  There was no paperwork at all, which makes any reference to a lease between Mr McNaughton and the defenders.

[43]      Thus, Ms McKinlay submitted, in order to conclude a lease, parties to it must reach consensus on the cardinal elements namely, “(1) the parties to the contract with consensus in idem between them, (2) the heritable subjects let, (3) a consideration for the let and (4) a period of time for which the subjects are let.”  In that regard, counsel referred to Paton & Cameron at page 5.  There has been no consensus on these cardinal elements.  The defenders had no discussions with Mr McNaughton.  He would require to have been a party to any lease, properly to constitute civil possession.  There was no consideration for the let agreed, simply because the defenders did not, on the evidence, agree to lease number 2.  The sum to be paid was agreed to be a share of the insurance of the building of which number 2 was part.  The pursuer gave no evidence as to the duration of any lease.  There was no evidence from the second defender that the issue of duration was even discussed with Mrs McNaughton, and Mrs Burns confirmed positively that it was not discussed.  Counsel submitted that it is not possible to characterise the relationship as one of landlord and tenant in the absence of evidence as to consensus on the cardinal elements of a lease.

[44]      In the absence of a landlord and tenant relationship, which the defenders accept would constitute civil possession, it is clear that possession by the defenders would only amount to civil possession where it acknowledged or was derived from the right of Mr McNaughton.  The right claimed is that of ownership.  The possession would need to be established to be on his behalf as owner.  It was clear from the evidence of the second defender that she did not acknowledge that Mr McNaughton had any such right to number 2. 

Decision and reasons
[45]      Both parties recognise that the pursuer can succeed in this action only if he establishes that Mr McNaughton had civil possession of number 2 for 10 years, prior to 28 November 2008.  I reject counsel for the defenders’ contention, however, that, in the circumstances of this case, civil possession can only be established if it is proved that the defenders occupied number 2 as tenants under a lease.  In order to explain why, it is necessary to understand the nature of the rights conferred on Mr McNaughton by the terms of the 1961 disposition in his favour.

[46]      It is clear from the dispositive clause that Metropolitan conveyed to him “ALL and WHOLE that piece of ground part of the Lands of …”  Those lands are then identified and the boundaries of the piece of ground are described.  The disposition did not, therefore, purport to be a conveyance of the superiority only.  Later in the deed is an assignation of the feu duties, which indicates that there are burdens of feu grants existing on the title.  (Halliday:  Conveyancing Law and Practice, second edition, volume 2, paragraph 32-113)  As is agreed by the parties, the subjects are situated on the piece of ground conveyed.  The right which Mr McNaughton acquired by virtue of the conveyance was “the right … to the lands ex facie simple and absolute, as a grant of superiority is truly a grant of the lands themselves.”  Further, “the right of the vassal is no more than a burden upon the dominium directum”.  (Middleton and Paterson v Earl of Dunmore (1774) M 10944)  Mr McNaughton, therefore, obtained the right to possess the subjects, subject only to the burden of the dominium utile. 

[47]      On the matter of possession, both counsel referred me to Johnston:  Prescription and Limitation second edition at paragraph 18.12, in which the author expresses the view that it is clear that “a possessor can continue in possession through others who have the physical (or ‘natural’) possession of the thing”.  The author gives a number of examples to illustrate the point.  One of those is of landlords having civil possession through the natural possession of their tenants.  Similar examples are given in other textbooks to which I was referred.  It is important to note, however, that the various examples given by the authors of the circumstances in which civil possession of heritage can exist through the natural possession by another are only examples.  There is no definitive list.

[48]      One of the authorities cited by Mr Cleland in the course of argument was the decision in Hamilton v Macintosh Donald Ltd 1994 SC 304 (“Hamilton”) in which the Lord Justice-Clerk (Ross) set out the legal principles which are to be applied when determining whether there has been prescriptive possession.  In the course of doing so, the Lord Justice-Clerk noted that possession may be natural or civil and, in illustrating the latter, referred to “acts of possession” which “may have been carried out on the claimant’s behalf by servants, employees or persons licensed by him.”

[49]      The question in this case is whether the defenders’ occupation of number 2 constituted an act of possession by Mr McNaughton.  As Lord Prosser said at first instance in Hamilton, although in a different context, that question falls to be determined by a consideration of the whole facts and circumstances as established in the evidence.  The dispute about whether or not the defenders can properly be regarded as having been tenants under a lease is an unhelpful and ultimately unnecessary diversion. 

[50]      The starting point in seeking to answer the question identified in paragraph [49] is to notice the fact that, whoever may have been entitled to succeed to the estate of John Arnot, if anyone, the 1868 disposition is, as agreed by the parties, the last recorded title to the dominium utile of the subjects.  It is clear from the evidence that, when Mr McNaughton bought the superiority title from the feudal superiors in 1961, no one was exercising rights in respect of the subjects as owner of the dominium utile.  It is a reasonable inference that Mr McNaughton engaged someone, possibly the solicitors who acted for him in the conveyance, to conduct a search of the titles to the subjects, in order to discover who such owner might be.  I accept the pursuer’s evidence that Mr McNaughton had the disposition from Metropolitan, or a copy of it, in the family home, and Mr McNaughton knew, therefore, that he had a title to the subjects.  Such knowledge would, in any event, fall to be inferred from the terms of the disposition itself, which records that Mr McNaughton had paid the purchase price.  It is a reasonable inference, also, that Mr McNaughton’s intention in taking title was to establish a real right to the subjects for himself.  There would have been no point in his having incurred the costs associated with the conveyance in his favour if that had not been his intention.  For the same reason, he must have believed that it would be possible to establish his own real right.

[51]      On the evidence which was led, most of which on this point came from the defenders themselves, I hold it proved that they agreed to pay £15 per week and to carry out repairs and maintenance to number 2, in return for being given the McNaughtons’ consent to move in.  As the second defender accepted, they were not free simply to walk in and start living there.  I also hold it proved that, if the defenders did not pay the £15 per week, they would have been in breach of what they had agreed with Mrs McNaughton, and that they continued to make such payment until 2006.

[52]      The evidence establishes that the McNaughtons considered the payment of £15 per week to be rent.  I believe the pursuer when he said that his mother had told him that the defenders were paying £15 per week in rent and that, if they wanted to do anything to number 2, they would have to do it themselves.  The pursuer appeared to me to be a witness who was doing his best to tell the truth, although, as Ms McKinlay submitted, his memory was not good, and he was a little vague when answering questions about past events.  I found Mr Kitson to be a truthful witness, also.  He answered questions in a straightforward manner, and I could conceive of no reason why he should not be telling the truth.  I hold it proved, therefore, that Mr McNaughton told him that the defenders were tenants and that they paid rent to him.  Mr McNaughton never gave him the impression that he did not own the property.  Given that both Mr and Mrs McNaughton regarded the weekly payment as rent, I hold it proved that Mr McNaughton considered himself to be the landlord and the defenders tenants of number 2.  When he agreed that the defenders could move into number 2, therefore, he had the necessary intention to possess number 2.

[53]      I accept the evidence that, when Mr McNaughton was running his coal merchant’s business, Mrs McNaughton did the administration work.  It is unsurprising, therefore, that she was closely involved in arrangements for the defenders moving into number 2.  That does not cause me to doubt that the permission given to the defenders to move into number 2 was permission given by Mr McNaughton. 

[54]      I believe the defence evidence that Mrs McNaughton said to the defenders that the McNaughtons did not own the subjects; that she said that they could not charge rent; but that they wanted payment of £15 per week as a contribution to insurance.  What she told others about ownership of the subjects was, no doubt, what she believed to be the truth.  In these circumstances, it is unsurprising that Mrs McNaughton would wish to avoid potential problems by affecting that Mr McNaughton was the owner of number 2, and that could easily be avoided by describing the payment of £15 a week as a contribution to the cost of insurance.  As is observed by the Lord Justice-Clerk in Hamilton, however, quoting from an earlier case, when prescriptive possession is relied on, not to establish the extent of a real right to heritage, but, as here, to perfect title, “(i)t is the great purpose of prescription to support bad titles.  Good titles stand in no need of prescription.”  (Page 321G)  Further, on the evidence of what was actually paid for insurance, which I accept, £15 was clearly much more than a contribution towards the insurance in respect of number 2.  Mrs McNaughton’s belief and assertions to others, therefore, do not assist in the determination of whether Mr McNaughton had civil possession of the subjects for the requisite period.

[55]      In describing the payment of £15 a week as “rent”, as Mrs McNaughton did to the pursuer, and as Mr McNaughton did to Mr Kitson, they were simply reflecting what, in their own mind, was the reality of the arrangement.  Mr McNaughton allowed the defenders to occupy number 2 in return for a weekly payment.  If the defenders had not been prepared to make a weekly payment, which, as the McNaughton’s knew, far exceeded a pro rata contribution to what they paid for insurance, and to agree to carry out any repairs and improvements at their own cost, they would not have been allowed to take possession of number 2.  Consequently, it is clear that the defenders occupied number 2 only because they had Mr McNaughton’s permission to do so.  If he had withdrawn permission, subject to the terms of the agreement between them, they would have had to move out.  In the circumstances, the defenders’ possession of number 2 was derived from Mr McNaughton’s right to possess number 2.  There was no other basis for their occupation.

[56]      Ms McKinley argued that the defenders’ occupation of number 2 did not acknowledge Mr McNaughton’s right of ownership because the defenders were clear in their evidence that they did not believe that he owned the property.  I accept that evidence.  In the passage from Johnston at paragraph 8.13 on which counsel relied, however, the author expresses the view that natural possession by one person amounts to civil possession in another, not only when the possession acknowledges the right of the civil possessor but, alternatively, when it is “derived from the right of the civil possessor”.  As I have already held, Mr McNaughton had a right to possess number 2 and the defenders’ occupation of it was derived from that right.

[57]      I am satisfied, therefore, that allowing the defenders to take, and remain in, occupation of number 2 was an act of possession by Mr McNaughton.  In these circumstances it is unnecessary to determine whether or not the arrangement whereby the defenders occupied number 2 satisfied the legal requirements for the constitution of a lease, properly so called.

[58]      In Hamilton, the Lord Justice-Clerk noted that the importance of the possession being open “is so that anyone with a competing title has an opportunity to challenge the possession.”  (Page 331H)  In this case, where the pursuer has to establish Mr McNaughton’s civil possession through the medium of the defenders’ physical possession, it is the physical possession of the defenders that must be open, peaceable and without any judicial interruption, because civil possession is derivative of natural possession.  I find it proved that the defenders’ possession met these requirements.

[59]      It is unnecessary for me to make any finding about whether the period between the death of Mr McNaughton’s mother, and the date on which the defenders moved into number 2, was possession by Mr McNaughton for the purposes of section 1(1) of the 1973 Act.  I accept the evidence of the second defender that the defenders moved into number 2 on 1 December 1992.  Consequently, the pursuer has established that Mr McNaughton possessed the relevant interest for a continuous period of 10 years from that date, openly, peaceably and without any judicial interruption.

Disposal
[60]      It follows that I will sustain the pursuer’s second and third pleas-in-law, repel the first, second, fourth, fifth and seventh pleas-in-law for the defenders, and grant decree of declarator in favour of the pursuer.  The defenders take issue with the pursuer’s conclusion for removal of the defenders from number 2.  Mr Cleland asked that, in the event that the pursuer succeeded in obtaining declarator, the case be put out by order for further discussion on the removal conclusion.  That will be done.  I shall reserve all questions of expenses.