Scottish Sheriff Court Decisions

SHERIFFDOM OF SOUTH STRATHCLYDE DUMFRIES AND GALLOWAY

AT HAMILTON

Case No: A863/10 JUDGEMENT

by

CHARLES NORMAN STODDART,

Temporary Sheriff Principal

in appeal in the cause

STRATHCLYDE BUSINESS PARK (MANAGEMENT) LTD,

Phoenix House, Phoenix Crescent, Strathclyde Business Park, Bellshill ML4 3NJ

Pursuers and Respondents

against

BAE SYSTEMS PENSION FUNDS TRUSTEES LTD., Warwick House, PO Box 87, Farnborough Aerospace Centre, Farnborough GU 14 6YU

Defenders and Appellants

For the Appellants: Mr C J Paterson, Advocate, instructed by Dundas &

Wilson CS, Edinburgh

For the Respondents: Mr J T Young, McGrigors LLP, Glasgow

HAMILTON 14 September 2010. The Sheriff Principal, having resumed consideration, ALLOWS the appeal, RECALLS the interlocutor of the Sheriff dated 21 June 2010; REMITS the cause to the Sheriff to proceed as accords: DIRECTS the Sheriff Clerk to fix an Options Hearing and a timetable for adjustment; FINDS the Pursuers and Respondents liable to the Defenders and Appellants in the expenses of the appeal and the hearing on 21 June 2010; CERTIFIES the appeal and said hearing as suitable for the employment of junior counsel.

NOTE:

Introduction

[1] This is an appeal against the grant of interim interdict following a hearing before the Sheriff on 21 June 2010. The Respondents are the Promoter of Strathclyde Business Park and have raised an action of declarator and interdict against one of the heritable proprietors of certain premises therein. They seek to enforce against those proprietors part of Clause 11 of a Deed of Declaration of Conditions registered on 29 July 1991 and listed in the Burdens Section of the relative Land Certificates. This Deed sets out certain real burdens covering premises throughout the Business Park. It is noteworthy that such registration took place many years before 28 November 2004, which was the "appointed day" when, in terms of the Abolition of Feudal Tenure etc (Scotland) Act 2000 ("the 2000 Act"), the whole system of land tenure in Scotland was transformed. It was conceded that the real burdens created by the Deed were now to be regarded as "community burdens" in terms of the Title Conditions (Scotland) Act 2003 ("the 2003 Act").

[2] The relevant part of Clause 11 is as follows:

"No proprietor shall be permitted, without obtaining the prior written consent of the Promoter (which consent shall not be unreasonably withheld or delayed) to erect upon the Site including any building thereon, any signs, logos, devices, advertisements, notices or others"

It is averred that certain signage has in fact been displayed on various premises by the Appellants without such prior consent and it is against the erection of signage that the Sheriff granted interim interdict. Grounds of Appeal have been lodged challenging this decision: it is now said that (contrary to the view of the Sheriff) there is no prima facie case and that the Sheriff erred in his assessment of where the balance of convenience lay. In order to deal with each of these grounds in turn, it is necessary to set out the relevant statutory provisions of both the 2000 and 2003 Acts.

Statutory provisions

[3] Section 73(2A) of the 2000 Act provides (in part and read short):

"73(2A) In construing, after the appointed day and in relation to a right enforceable on or after that day, a document..........which

(a)   sets out the terms of a real burden.......,

any provision of the document......to the effect that a person other than the person entitled to enforce the burden may waive compliance with, or mitigate or otherwise vary a condition of, the burden shall be disregarded."

[4] Section 1 of the 2003 Act introduces the concept of community burdens and provides definitions of the terms "burdened property" and "benefited property". Section 3(8) and (9) provide (in part):

"3(8) It shall not be competent-

(a) to make in the constitutive deed provision; or

(b) to import under section 6(1) of this Act terms which include provision,

to the effect that a person other than a holder of the burden may waive compliance with, or mitigate or otherwise vary, a condition of the burden.

(9) Subsection (8) .......is without prejudice to section 33(1) (a) of this

Act".

Section 8 provides (in part):

"8(1) A real burden is enforceable by any person who has both title and interest to enforce it.

(2) A person has such title if an owner of the benefited property...........

(3) A person has such interest if-

(a) in the circumstances of any case, failure to comply with the real burden is resulting in, or will result in, material detriment to the value or enjoyment of the person's ownership of, or right in, the benefited property............"

Section 25 defines the expression "community burdens" by reference to real burdens imposed under a common scheme on two or more units, each of which is, in relation to some or all of those burdens, both a benefited property and a burdened property.

Section 26 provides inter alia that community burdens may make provision as respects the appointment by the owners of a manager and matters related thereto, including his powers and duties; section 27 is concerned with the effect on individual units in a community of a statement in a constitutive deed that real burdens are to be community burdens; while section 28 (which is declared to be subject to any provision made by community burdens) allows the owners of a majority of units in a community to appoint a manager and to confer on that manager the right to exercise certain powers, including, by virtue of section 28(2)(b), the power to enforce community burdens. Section 33(1) provides (broadly) for a community burden to be waived by the registration of a deed of variation against each affected unit, granted by neighbouring proprietors.

Ground 1: no prima facie case

[5] In respect of this ground, I heard argument under two main headings: first, whether the Respondents had title to sue and second, whether the relevant part of Clause 11 could be invoked by them at all. Further, (although this was not focussed in any ground of appeal) I permitted parties to present brief submissions on whether the Respondents had an interest to sue, since that issue shades into questions of title.

(i) Title to sue

Arguments for Appellants

[6] Counsel for the Appellants submitted that although the Sheriff had decided that the Respondents had averred sufficient for a stateable position in relation to title to sue under both sections 8 and 28 of the 2003 Act, this was not so. Counsel recognised at the outset that at this early stage in the proceedings the "seeming cogency" of the need for interim interdict was more important than the absolute relevancy of the case: Burn Murdoch, Interdict page 128, quoted with approval in Deane v Lothian Regional Council 1986 SLT 22 at 24. But in the present case, not even the minimal standard of averment required had been met. Counsel referred me to Article 4 of Condescendence which had been amended in the course of the hearing before the Sheriff and which amendment had been allowed (according to Counsel) without the Sheriff giving him an opportunity to be heard on the matter. It was originally averred:

"The Pursuer was appointed under Clause 1 of the Deed of Conditions as the Promoter of Strathclyde Business Park. The Pursuer's role is to manage Strathclyde Business Park for the benefit of all the proprietors."

But by the amendment the following words were added (read short):

"The Pursuer has title to sue the Defenders under the Deed of Conditions by virtue of the operation of section 8(1) and 28 of the Title Conditions (Scotland) Act 2003. Esto the Pursuer does not have title (in terms of said sections), which is denied, the Pursuer has title as agent acting for and authorised on behalf of HF (Managed Offices) Limited who is the owner of a benefited property in terms of section 8(2) of the (2003 Act)"

These averments, said Counsel, were not only unusual and confusing, but had resulted in incompetency.

[8] Counsel submitted that the amended averments made it clear that the Respondents were suing in the alternative. Unlike HF (Managed Offices) Limited who were the owners of premises in the Business Park and did have title to sue under section 8(2), the Respondents were not owners at all but purported to sue either as Promoter of the Park or as the agent for HF (Managed Offices) Limited. It was said that section 8(1) and (2) gave the Respondents title to sue, but those subsections referred to owners and made no mention of promoters. There was accordingly no title under section 8. As for section 28, that dealt with the appointment of a manager and the exercise of certain powers. Although in his Note the Sheriff purported to deal with this, he had omitted the reasoning for his conclusion that section 28 gave the Respondents title. While it was averred that the role of the Promoter was to manage the Business Park, the Deed of Conditions in fact said nothing about the role of the Promoter. Further, the Deed provided that the Promoter could appoint Managing Agents, but this had never been done. The 2003 Act dealt with the matter of enforcement, but there had never been a meeting of proprietors to appoint a manager under section 28, nor were there any averments that the Promoter had n fact been appointed as manager. The Sheriff stated at page 13 of his Note that the Pursuers (the now-Respondents) had set out a right to enforce community burdens as if specifically appointed as managing agents ("a task they perform in fact") but this was to use a process of implication. One could not read things into the 2003 Act. Section 49 of the 2003 Act abolished the rule of law that land might be the benefited property in relation to a real burden by implication and provided that a real burden should not, on or after the appointed day, be enforceable by virtue of such rule. For these reasons, section 28 did not provide the Respondents with title to sue.

[9] As for the esto case that the Respondents were suing as agents for HF (Managed Offices) Limited and as authorised by them, it was not just peculiar to sue in two different capacities, it was incompetent; there had been no attempt to clarify the matter. It was not clear to whom the Appellants would be answerable. In Macphail, Sheriff Court Practice, (3^rd. ed 2006) at para.9.56 it was said that the word "esto" was employed when introducing an alternative case, either in the statement of facts or the pleas-in- law. But even the esto position took the Respondents nowhere; while HF (Managed Offices) Limited clearly could sue (because they were owners) the Respondents could not sue as a result of the purported authorisation by that company. The letter of authority relied upon (No. 5/1/8 of Process) made no mention of authorising the Respondents to act as their agents, in contrast to what was said in the amended averment in Article 4 of Condescendence. All that the letter said was that the Respondents were authorised

".....to represent our interests and enforce the terms of Clause 11 of the Deed of Conditions against any other owner of property within Strathclyde Business Park who has failed to comply with its obligations under such Clause."

No contractual arrangement had been entered into between them; the Respondents as agents had no legal right to sue the Appellants. There was no suggestion that the Respondents were acting in a representative capacity, nor were they mandatories of anyone. The Respondents had proceeded on the wrong footing; they had no title under the 2003 Act; the amendment to Article 4 had made matters worse, not better; and the incompetency of all of this meant that there was no prima facie case of title to sue.

Arguments for Respondents

[10] For the Respondents, Mr Young reminded me at the outset that the hearing before the Sheriff was not a debate on the relevancy of the pleadings and submitted that none of the Appellants' propositions were of sufficient strength to undermine the Respondents' case. There was no suggestion that the Respondents had breached Clause 11 and no suggestion of unreasonable delay. His basic argument was that the right of the Promoter under the 2003 Act to enforce Clause 11 arose by implication. It was of paramount importance that the real burdens set out in the Deed were now to be regarded as community burdens.

[11] Mr Young then took me through the general background to the 2003 Act and commented on some features of the new law as they applied to the present case. Although the term "community burdens" was defined in section 25 in terms of burdens imposed under a common scheme on two or more units, each of which was, in relation to some or all of those burdens, both a benefited property and a burdened property, the term "common scheme" was not defined. Accordingly the inference to be drawn in construing the latter term was that there must be the same or a similar burden applying to two or more units: see Rennie, Land Tenure in Scotland (2004) para.6.03; Scottish Law Commission Report on Real Burdens (Scot. Law Com. No.181), para.7.13. The proprietors of all units in the Business Park were benefited properties since the Deed was registered before the appointed day and was worded so that the existence of a common scheme was to be implied: see section 52(1) of the 2003 Act, read along with section 25(1). The community burdens in this case provided for proper management of the Business Park, including the delegation to a manager of certain powers; what was envisaged that initially Managing Agents would be appointed by the Promoter, who would have power to terminate that appointment and appoint new agents. The rights of all the proprietors would thus be amply protected.

[12] Mr Young stressed that there was only one Pursuer in the action, suing with what he described as two separate (my emphasis) titles. The Promoters had both direct title to sue and an esto position; there was nothing incompetent in pleading an esto case. The direct title was as Manager of the Business Park and it arose by implication under section 28. The import of that section was to allow the owners of a majority of the units to appoint a manager and to allow powers of enforcement to be conferred on him in the situation where no such provision was made by community burdens in terms of section 26. In the present case, on the appointed day the burdens in the Deed of Conditions became community burdens but since they did not, in terms of section 26, make provision for the owners of the units in the community to delegate powers of enforcement, it was open to the majority of the owners under section 28 to do so by implication. There was no provision setting out any formal mechanism for delegation: indeed, the Scottish Law Commission made no formal recommendation in this regard: see para. 7.43 of its Report. Accordingly, said Mr Young, even although there had never been any meeting of owners to appoint a manager and formally to confer powers on him and even although no Managing Agent had been appointed by the Promoter in terms of the Deed of Conditions, the owners had impliedly delegated the power to enforce Clause 11 to the Promoter, being the present Respondents. They thus had a direct title to sue.

[13] As for the esto title, it was simply because the Respondents had no explicit power to act as manager that they had sought the authorisation of an owner to proceed with the action. Enforcement of a real burden could be delegated to a factor or other manager who could sue in his own name; there was no incompetency in this. Mr Young referred me to Park v Mood 1919 1 SLT 170 where a general power of attorney had been conferred to manage the affairs of the granter, including the power to raise court proceedings. Section 8 of the 2003 Act did not oust the common law. Scots law had long recognised the contracts of mandate and agency; the main distinction between them related to the question of remuneration. Indeed, Gloag, Contracts, stated at page 220 that there was no general incompetency in a party to a contract suing by a mandatory. Title to sue as factors had been upheld in Whyte v Maxwell (1850) 12 D.945. There was nothing in principle wrong with what the Respondents had done; it was quite clear that it was competent for a manager to take an authorisation from a single benefited owner to enforce a real burden. The authorisation in this case was wide enough to give the Respondents title to sue.

Appellants' Reply

[14] In response, Counsel for the Appellants submitted that the Respondents were not entitled to use the terms "Promoter" and "Manager" interchangeably. What the Deed envisaged was that a Managing Agent might be appointed by the Promoter but the Promoter in this case had not done that and had simply decided to manage. Although at para. 4.15 of its Report the Scottish Law Commission had observed that since each member of a community had an independent title to enforce a burden, it would be sufficient for a manager to obtain the authority of a single owner, there was no authority for this and it was not clear how authority was to be given. Park v Mood (op.cit.) was distinguishable because the action in that case had not run in the name of the attorneys but in the name of the granters of the power. No contracts either of factory or mandatory were in issue in the present case and no statement of principle emerged from Whyte v Maxwell (op.cit.); that case could was not be prayed in aid of the proposition that anyone could be nominated to sue.

Decision on title to sue

[15] It is obvious that the amended averments in Article 4 of condescendence are unusual. I agree that they are also confusing, particularly because at one point in his final submission, Mr Young suggested that a further amendment might be necessary to use the word seperatim rather than the word esto to introduce the alternative (or perhaps separate) case. But whether the amended averments are incompetent is another matter. It is not at all uncommon to find alternative cases of liability pled in actions where alternative ground of fault are relied on and it is not unusual to find several separate Pursuers suing in the course of one action for their separate interests. However I was not referred to any cases where an alternative (or separate) title to sue has been averred. In this situation there must be some doubt about the competency of how the Respondents have proceeded, although I do not think there can be any doubt about to whom the Appellants are answerable: there is only one Pursuer in this case: the Respondents. But I cannot say that, simply because of the way that the averments have been pleaded, there is no prima facie case on title.

[16] Turning then to the substance of the two positions adopted by the Respondents I do not agree with the Sheriff that their position on title under section 8 and 28 is stateable. On the contrary, I do not think that on that basis they appear to have reasonable prospects of establishing the right to interdict which they seek. While Mr Young made a valiant attempt to persuade me that the Sheriff was correct to hold that his clients had such a direct title by implication in terms of section 28, I do not think that can be maintained. Section 8 gives owners (and certain others in categories not relevant to the present case) a direct title. The Respondents are not owners. As for section 28, Mr Young conceded that the Deed of Conditions makes provision for the appointment of a manager but none has ever been appointed, nor has a meeting of owners ever been held in order to appoint a manager under section 28. Accordingly Mr Young was forced to suggest that the Promoter had a right to manage the Business Park and to enforce the conditions in the Deed, all by virtue of a process of implied delegation by the owners. No doubt it is appropriate in practical terms for someone to have management functions and enforcement powers for the general good of all members of a common scheme and section 28(4) allows for delegation of powers (including the power of enforcement) to a manager appointed in the constitutive deed under section 26(1)(d) as well as a manager appointed by a majority of owners. But here, because no such appointment has been made by virtue of the Deed of Conditions, the fallback provision is express appointment by a majority of owners and delegation under section 28. I do not think that one can read into section 28 a power of appointment by implication in a situation where the Deed provides for express appointment but where none has been made. If appointment of a manager by the owners cannot occur by implication, neither can the exercise by him of management powers. The Respondents have not set out any averments to support their bald proposition that their role is to manage the Business Park; even at this early stage where the pleadings are undeveloped, I think that specific averments are required since title to sue is so fundamental. In these circumstances I do not think that the Respondents have a prima facie case under this part of their argument and that the Sheriff was wrong to conclude that they have.

[17] As for the esto case that the Respondents were authorised to sue as agents acting for and authorised by HM (Managed Offices) Limited, I agree with Counsel for the Appellants that the letter of authorisation No.5/1/8 of Process makes no mention of agency at all and that the letter cannot be construed as creating the relationship of agent and principal. There is no warrant for appeal to the concept of agency in the amended Article 4 of Condescendence. But as the foundation for title to sue, I think the letter of authorisation is wide enough to provide the Respondents with a stateable case. While I agree that Park v Mood (op.cit) is distinguishable, I can see nothing immediately wrong in principle with an owner authorising a third party to represent their interests and enforce the terms of Clause 11 against any other owner. This is of course a quite separate issue from whether Clause 11 can be invoked at all by the Promoter.

(b) Can Clause 11 be invoked?

Arguments for Appellants

[18] Here the question was whether the provision in the burden upon which the Respondents sought to rely and in respect of which declarator was sought required to be disregarded. Clause 11 prevented the erection of signage and the Promoter was the party who could waive the prohibition if application was made to him for prior written consent. Counsel referred me to section 3(8) of the 2003 which rendered incompetent any provision in a constitutive deed to effect that any person other than a holder of the burden might waive compliance with, mitigate or otherwise vary a condition of the burden. The term "holder" referred to the person who had right to the title condition and in this case all proprietors were such persons. But it was section 73 (2A) of the 2000 Act which was crucial in the present case: it provided that in construing after the appointed day and in relation to a right enforceable after that day a provision of a document which set out the terms of a real burden, there required to be disregarded any provision to the effect that a person other than the person entitled to enforce the burden might waive, mitigate or otherwise vary a condition of the burden. The effect of these provisions was that the provision in Clause 11 of the Deed regarding the obtaining of prior written consent from the Promoter to the erection of signage required to be disregarded. Here, the Sheriff had made no mention of this in his Note, although he had been referred to section 73(2A) at the hearing before him.

[19] Counsel then referred me to the opinions of three Professors of Conveyancing on the matter of the proper interpretation and effect of these sections. Professor McDonald, Conveyancing Manual (7^th ed) dealt with the matter at paras. 15.34 and 19.108. It was clear that in this case because the burdens in the Deed were created before the appointed day, section 3(8) did not apply. By contrast, at para. 19.108 the author expressed the view that section 73(2A) was wide ranging and applied to burdens created both before and after the appointed day. Professor Reid, The Abolition of Feudal Tenure in Scotland (2003) dealt at para.7.18 with the interpretation of burdens and observed that in relation to those created before the appointed day which survived as community burdens after that date (as in the present case) enforcement rights after that date did not continue to be conferred on the former feudal superior, a term which now required to be disregarded. As Professor Reid stated:

"It is a sound principle of the new law of real burdens that only a holder of the burden is empowered to waive compliance".

Professor Rennie, Land Tenure in Scotland (2004) discusses at para.5.15 the topic of "Waiver and Discharge by a Third Party" and suggests that the waiver provisions in the 2003 Act applied to pre-appointed day burdens as they became community burdens after the appointed day, thus allowing (in certain circumstances) other community members to waive the burden. But in relation to a third party, section 73(2A) of the 2000 Act was the operative section in the matter. In this case, said Counsel, we were dealing with a third party (the Promoter of the Business Park) who was not an owner and accordingly any waiver of the burden in Clause 11 by him was required to be disregarded by virtue of section 73(2A).

[20] In summary, Counsel submitted:

(i) section 3(8) of the 2003 Act only applied to community burdens created after the appointed day, whereas section 73(2A) of the 2000 Act was not so restrictive and applied to all burdens;

(ii) although it was not clear whether a pre-appointed day community burden would permit a discharge or variation by a neighbouring proprietor, that was not the issue here; but

(iii) what was clear was that a third party (a non-owner) was not entitled to waive a community burden.

For these reasons the Respondents had no reasonable prospect being granted the declarator craved in this case, nor the related interdict. Section 73(2A) struck at the heart of the Respondents' case.

Arguments for Respondents

[21] Mr Young submitted that even if the Appellants' arguments were correct there was still a prima facie case. There were no decided cases on this point and, at best, what the Appellants had submitted might provide them with a defence. The Sheriff had not erred in his treatment of Clause 11 and was correct to mention the issue of waiver only in the passing. There were three reasons for this submission.

[22] Firstly, the wording of Clause 11 did not immediately suggest that either sections 3(8) or 73(2A) applied to it. Although the Appellants claimed that it allowed the Promoter to waive or mitigate the burden regarding signage, it was not clear that it did in fact have that effect. If the clause had provided that a proprietor did not need any consent from the Promoter for the erection and display of signage, that would amount to an unequivocal waiver of the prohibition. Mr Young reminded me that we were at the prima facie stage and that the matter did not require to be scrutinised too closely.

[23] Secondly, Parliament clearly did not intend to strike down the terms of burden clauses in force before 28 November 2004. Clause 11 was not caught by section 3(8). It set out only part of a series of management functions which the Promoter was authorised to do; the terms "Promoter" and "Managing Agent" were used interchangeably in the Deed. The Promoter had the option to delegate his functions, but he need not do so and could carry out management functions himself. I was referred to Clause 4, 8, 11, 15 and 16 which set out some of these. Section 3(8) could not have rendered as unenforceable the power of a manager to enforce a community burden. The Respondents previously had been acting as managers and they continued in that capacity after the appointed day.

[24] Thirdly, to the extent that there was any tension between section 3(8) and 26 of the 2003 Act, it was not Parliament's intention to undermine the purpose of community burdens. The draft Bill upon which the 2003 Act was based did not include clauses which later became sections 3(8) and 73(2A). Community burdens were a special case; there was no mention of them when what became section 3(8) was inserted in the Bill (Scottish Parliament, Justice 1 Committee, Official Report, 10 December 2002, Col. 4359). There was logic in having a manager in a community, exercising management functions. It was important to have regard to the purpose of section 26, which was to allow community burden to provide for those functions. The waiver provisions discussed by Professor Rennie at para. 5.15 (supra) were not relevant where a community had delegated power to a manager; sections 3(8) and 73(2A) were not intended to prevent such delegation to enforce Clause 11. There was evident utility in this. Since there was no definitive case law on this, it could not be said that the Respondents were bound to fail. The Sheriff was right to hold that there was a prima facie case on whether Clause 11 could be invoked.

Appellants' reply

[25] In a brief word of reply, Counsel commended again the views of Professors McDonald, Reid and Rennie on the effect of sections 3(8) and 73(2A). In this case we were dealing with a pre- appointed day burden, so section 73(2A) applied. It was not for the Appellants to make a prima facie case. The Respondents' case was wholly confused and in that situation they were not entitled to ask the court for extraordinary powers.

Decision on Clause 11

[26] First, I am clear that the wording of Clause 11, properly construed, does include a specific power on the part of the Promoter (on prior written application being made to him) to waive the condition of the burden in relation to signage. I do not think there is any special rule of interpretation in this matter; the wording seems perfectly clear and on this matter I agree with the Sheriff. The Promoter will no doubt have to consider any such application on its merits but if he makes the decision to allow signage to be erected, he waiving it to the degree to which he consents. I reject the contrary argument on this point advanced by the Respondents.

[27] Next, on the point of whether the relative provision in Clause 11 requires to be disregarded, I agree with the view of Professor Rennie at para 5.15 (op.cit.) that section 3(8) of the 2003 Act applies to community burdens created after the appointed day and restricts, subject to section 33(1)(a), the class of persons who, in terms of a constitutive deed, may waive a condition of the burden. It seems to me that one of the purposes of section 73(2A) of the 2000 Act was to mirror the position adopted in section 3(8) in respect of burdens registered before the appointed day, albeit (i) section 73(2A) relates to the construction (after the appointed day and in relation to rights enforceable thereafter) of real burdens; and (ii) section 73 (2A) applies to burdens created both before and after that day. Further, it is clear to me that a third party who is not an owner (or someone otherwise having a right of enforcement under section 8 of the 2003 Act) is not entitled to waive the conditions of a burden created before the appointed day. That seems to me to flow clearly from section 73(2A) of the 2000 Act. In his Note towards the end of page 13, the Sheriff does not explore in any detail the provisions of section 3(8), beyond saying that the Respondents are empowered to enforce the clear wording of Clause 11; and he does not mention section 73(2A) at all.

[28] I have to say that I found the arguments for the respondents in relation to Clause 11 rather confusing. At the outset they submitted that the clause was ambiguous, but I have already explained why I disagree. Then they suggested that Clause 11 was not caught by section 3(8), a proposition with which I agree, but they failed to explain why it was not caught by section 73(2A), which was the real point made against them. Finally, founding on the undoubted power of owners to delegate management functions including powers of enforcement, they suggested that neither section 3(8) or 73(2A) were intended to prevent the exercise of that power by the Promoter. This flies in the face of the statutory language of each of these sections which, each in its own way, does restrict the rights of non-owners like the Promoter.

[29] For all these reasons I do not think there is a prima facie case on the crucial issue of whether the provisions in Clause 11 on which the Respondents seek to rely require to be disregarded. I think they do and in those circumstances that relevant part of Clause 11 (quoted supra) cannot be invoked by them.

(c) Interest to sue

Arguments for Appellants

[30] Counsel for the Appellants referred me to section 8(3) of the 2003 Act which provides for the persons who have an interest to sue. He told me that at the interim hearing before the Sheriff he had submitted that there were no averments setting out the interests of the Respondents and there were still none. The Sheriff had not mentioned this in his Note. Further, it was unclear what was the interest of HF (Managed Offices) Limited in relation to the proceedings. He stressed again that where such fundamentals were lacking, the Respondents could not ask the court for extraordinary powers.

Arguments for Respondents

[31] In response Mr Young confined himself to reference to the final sentence in para.4.21 of the Scottish Law Commission's Report on Real Burdens which states:

"In practice the person best placed to enforce for the community will often be a factor or manager who, by representing all of the owners, holds the accumulated interests to enforce of each."

According it was clear in the present case that the Respondents as managers would have the necessary interest.

Decision on interest to sue

[32] I have already decided that the Respondents have no prima facie case on title to sue under sections 8 and 28 of the 2003 Act, so whether they have an interest to sue is academic from the standpoint of enforcement rights. But I have also decided that their esto case on title (although unusual) is stateable and to that extent I have agreed with the Sheriff. The question then arises whether the authorisation by HF (Managed Offices) Ltd contained in their letter No.5/1/8 of Process that the Respondents may represent their interests in the matter of enforcement of Clause 11 against other owners is reflected in the pleadings. While Article 7 of Condescendence at least hints at the interests of the Respondents (without, be it noted, any reference to the matters set out in section 8(3) of the Act, such as "material detriment to the value or enjoyment of the person's ownership of the benefited property), there is nothing at all about the interest of HF (Managed Offices)Ltd. Once more I think this is a fundamental point; it is completely unclear whether their interest is one which is protected by section 8(3) . Nor can it be assumed that their interest coincides with any that the Respondents may have. The Sheriff (at p.13 of his Note) states that HF Managed Offices Ltd clearly has interest to enforce the condition, but that is not apparent from the pleadings. Accordingly there is no prima facie case under this heading.

Conclusion on Ground 1

[33] At this early stage in a case of this kind, a court must guard against going too far too fast. The pleadings have not been adjusted or closed and the legal issues are not without difficulty. The court must keep at the forefront of its mind the observations of the Second Division in WAC Ltd v Whillock 1989 SC 397 at 410:

"It is not desirable when considering whether or not to recall an interim interdict before there are proper pleadings before the court to arrive at definite conclusions upon legal issues of this kind. What a Lord Ordinary ought to do at this early stage is no more than determine whether on the information before him the petitioner appears to have reasonable prospects of establishing a right to interdict. The usual approach is to consider whether the Pursuers appear to have a prima facie case."

Here, the Sheriff has decided that there is indeed such a case, but in my view and looking at all the elements I have discussed, I do not think he was entitled to be so satisfied. I have expressed my doubts about the way in which the alternative (or separate) cases of title to sue have been pleaded. I am clear the Respondents have no title to sue under either section 8 or 28. Their esto case on title is stateable, but section 73(2A) of the 2000 Act is in my view fatal to their attempt to invoke Clause 11. Finally there are no averments at all on the interest to sue of HF (Managed Offices) Ltd. Overall, I do not think the Respondents have reasonable prospects of success.

[34] I accept that the interpretation of the relevant legislation is not without difficulty. But I am faced with a situation where the Sheriff unfortunately has not adequately explained the reason for his conclusion that section 28 applies; where he has not dealt with the core point raised by section 73(2A) and where the question of interest to sue has not really been addressed. In that situation these matters are at large for me and all are fundamental, even at this early stage.

Ground 2: the balance of convenience

Arguments for Appellants

[35] Counsel observed that there was little in the Sheriff's Note about how he had exercised his discretion on this matter. He explained that at the original hearing, he had submitted, on the basis of information he received immediately before then, that other proprietors had erected signs. Those proprietors were said to be subject to the conditions in the same Deed, but no action had been taken against them. Some of the signs were still in place. The Sheriff had then adjourned the hearing and allowed the Respondents an opportunity to check the position. Having made enquiries, Mr Young had returned to dispute the position made by the Appellants. Accordingly, there were two competing factual positions and so the Sheriff required to weigh other factors. He had come to the view that the signs at the premises were an "escalating problem", but there was no indication in his Note of how he had reached that conclusion; in any event, it did not sit easily with what was said earlier in the Note. On this matter therefore I could consider the matter de novo. In so doing, the strength of the prima facie case is a factor to be considered when assessing where the balance of convenience lay: Mulhern v Scottish Police Services Authority, Glasgow Sheriff Court, Sheriff Principal Taylor, 9 January 2009, unreported, at paras. 14, 15. In the present case I was entitled to conclude that the Respondents more likely to fail than not. It was for them to demonstrate a persuasive need since interdict was an extraordinary remedy. The Sheriff had erred in law on this matter.

Arguments for Respondents

[36] Mr Young submitted that although the Sheriff had not set out his reasons, he had noted the submissions which had been made. Unless what was said was manifestly unreasonable I should not go further. The Appellants had offered to take the signs down, so there was no inconvenience suffered. Any damages were unlikely to be quantifiable and therefore declarator was the appropriate remedy. The Sheriff had indicated that he was satisfied about the facts in dispute and the other factors; he did not prefer one version to the other. The Sheriff had balanced the detriment to amenity against the inconvenience being suffered by the Appellants and there was nothing unreasonable or improper in his decision. The restriction in Clause 11 only covered advertising material on buildings and its utility was limited. The same considerations would apply if I required to consider the whole matter of new. I also had a general discretion to take notice of material changes in circumstances; all the signs had now been removed.

Decision on Ground 2

[37] Since I have concluded that the Sheriff erred in holding that the Respondents had a prima facie case, it was not necessary for him to consider the balance of convenience. But if (contrary to my view) he was correct in his conclusion, then I think he should have regarded it was a very weak prima facie case and have factored that into his decision on balance of convenience. But his Note does not disclose that he did that, nor indeed any of his reasoning on why he favoured the Respondents on this issue; again the matter is at large for me.

[38] The averments in Article 7 of Condescendence set out the Respondents' case in this regard and I can well see that (taking those averments pro veritate) the desirability of the Business Park for its occupiers, its amenity and its investment value may all be imperilled if the prohibition on the erection of signage without prior consent is not maintained. Against that, the Appellants clearly wish to let their property and point to the financial impact and inconvenience of not being allowed to do so. The restrictions on signage are certainly not extensive. While there seems to have been some dispute before the Sheriff regarding signage said to have been erected in other parts of the Park, I am not clear how heavily (if at all) that weighed (or should weigh) in the balance. Neither party made any submissions to me about this matter and I propose to leave it out of account. For me, what firmly tips the balance in favour of the Appellants is the weakness of the prima facie case against them. I need not repeat all the criticisms I have already made; they are manifest.

Disposal

[39] For all of the above reasons, I have decided that the appeal should be allowed. I have therefore recalled the interlocutor complained of and remitted the cause to the Sheriff for further procedure. In this regard I have directed the Sheriff Clerk to fix an Options Hearing and a timetable for adjustment, a course of action which both parties before me agreed was appropriate.

Expenses

[40] I understood it to be also agreed that expenses should follow success, both in relation to the appeal and the earlier hearing. There was no opposition to the motion that in the event that the appeal was successful, both the appeal and the hearing should be certified as suitable for the employment of junior counsel. This was on the basis of the complexity of the cause to date. I agree that certification is appropriate for that reason and I have so ordered.