Highland Council (formerly Ross and Cromarty District Council) v Patience and Others
| Jurisdiction | Scotland |
| Judgment Date | 03 March 1995 |
| Docket Number | No 44 |
| Date | 03 March 1995 |
| Court | Court of Session (Inner House - Second Division) |
SECOND DIVISION
Lord Marnoch
Heritable property and conveyancing—Landlord and tenant—Housing—Public sector housing—Pre-emption clause in title of local authority—Whether superior entitled to exercise right of pre-emption so as to exclude right to purchase dwellinghouse—Housing (Scotland) Act 1987 (cap 26), sec 611
Secure tenants had the right to purchase their local authority house in terms of sec 61 (1) of the Housing (Scotland) Act 1987. In the authority's heritable title there was a pre-emption clause in favour of their feudal superior the terms of which stated that “the feuars shall not sell or dispone the feu or any part thereof … to any person … until the same shall nave been offered to the superiors”. The question was raised whether that clause prevented the authority from proceeding with the statutory sale to the tenants. The authority accordingly sought declarator that the feudal superiors were not entitled to exercise that right so as to prevent such a sale. The Lord Ordinary (Marnoch) refused declarator and dismissed the action.
The pursuers reclaimed.
Held (aff judgment of Lord Marnoch) (Lord Murraydiss) (1) that secs 61 and 63 defined the scope of the right to purchase conferred upon a secure tenant and, if Parliament had intended that a clause of pre-emption should cease to apply when a statutory sale to a secure tenant was taking place, then Parliament would have so provided and in view of the fact that it was necessary for the application of the section that the landlord be the heritable proprietor of the subject Parliament's intention must have been to recognise that the landlord would be subject to any obligations and conditions contained in the feu rights; (2) that a secure tenant did not have an absolute right to have subjects sold to him and had to take the property subject to any burdens in the title; and (3) that sec 61 did not deal with a situation in which any heritable interest in the house had been retained by a superior on conveyance of his feu
and could have no application to the authority's ownership of the house as heritable proprietors unless and until the feudal superior's interest to prohibit a sale had been discharged or waived and there was no justification for construing sec 61 so as to deprive the superior of that right; and reclaiming motion refused.Opinion (per Lord Murray diss) that the purpose of Part III of the 1987 Act was to give the secure tenant full ownership of the house which he tenanted including the right to sell it and a tenant's statutory right to purchase was completely irreconcilable with a pre-emptive restriction on the seller's title to sell and the generality with which the right to purchase was conferred, together with the generality and precision of the inclusions, were sufficient to rule out, by irresistible inference, an intention on the part of Parliament to deprive a tenant of the right to purchase on such an arbitrary footing so that, by irresistible inference, a superior's right of pre-emption was extinguished in those circumstances.
Opinion (per the Lord Justice-Clerk (Ross) and Lord Morison) that any conditions of sale included in the offer to sell in terms of sec 64 of the 1987 Act were intended to regulate a sale and did not include conditions upon the fulfilment upon which a sale would take place so that the landlord's own title had to be such as to enable him to comply with the obligation to grant a good and marketable title and any condition that a sale was subject to the superior's right of pre-emption not being exercised or the right being waived could not be included in the offer.
Authorities considered.
Dicta in Henderson v City of Glasgow District Council 1994 SLT 263 disapproved.
Ross And Cromarty District Council brought an action seeking declarator that Broadland Properties Estates Limited, their feudal superiors in terms of a feu charter, were not entitled to exercise a right of pre-emption contained in that charter so as to prevent the pursuers from proceeding with a sale under Part III of the Housing (Scotland) Act 1987 of 44 Ormonde Terrace, Avoch to John Patience and Mrs Rebecca Reid Patience, their tenants. The tenants were called as first and second defenders in the action. The superiors were called as third defenders.
The cause called on procedure roll before the Lord Ordinary (Marnoch) on the parties' preliminary pleas.
At advising, on 9 June 1994, the Lord Ordinary dismissed the action.
The pursuers reclaimed.
Cases referred to:
Banff and Buchan District Council v Earl of Seafield's Estate 1988 SLT (Lands Tr) 21
Colonial Sugar Refining Co Ltd v Melbourne Trust CommissionersELR [1927] AC 343
Cooper's Exrs v City of Edinburgh District CouncilSC1991 SC (HL) 5
Glasgow District Council, City of v Doyle 1993 SLT 604
Henderson v City of Glasgow District Council 1994 SLT 263
Keay v Renfrew District Council 1982 SLT (Lands Tr) 33
Kirkness v John Hudson & Co LtdELR [1955] AC 696MacDonald v Strathclyde Regional Council 1990 SLT (Lands Tr) 10
Macdonald (Lord) v FinlaysonUNK (1884) 12 R 228
Marten v Flight Refuelling LtdELR [1962] Ch 115
Naylor v City of Glasgow District Council Lands Tribunal for Scotland, 12 January 1983, unreported
Walker v Strathclyde Regional Council 1990 SLT (Lands Tr) 17
Westminster Bank v Minister of Housing and Local GovernmentELR [1971] AC 508
Textbook referred to:
Halliday, Conveyancing Law and Practice, vol II, para 17–77
reclaiming motion called before the Second Division, comprising the Lord Justice-Clerk (Ross), Lord Murray and Lord Morison, for a hearing.
At advising, on 3 March 1995—
LORD JUSTICE-CLERK (Ross)—The issue raised in this reclaiming motion is whether the existence in the feu charter of a right of pre-emption in favour of the superiors prevents the pursuers from proceeding with a statutory sale of the house at 44 Ormonde Terrace, Avoch, to the first and second defenders under the provisions of sec 61 and following sections of the Housing (Scotland) Act 1987. In the action the pursuers seek declarator that the third defenders, who are the feudal superiors, are not entitled to exercise a right of pre-emption so as to prevent a sale by them to the first and second defenders under the provisions of the Act of 1987. As the Lord Ordinary points out, it is averred by the pursuers that the first defender is the secure tenant of 44 Ormonde Terrace, Avoch, and that he has a right to purchase that house at a price fixed under sec 62 of the Act of 1987. It is matter of admission that the third defenders are the feudal superiors of the subjects, and that the relevant feu charter contains a right of pre-emption which is in the following terms: “The feuars shall not sell or dispone the feu or any part thereof or any of the buildings thereon to any person or persons whomsoever until the same shall have been offered to the superiors at a price to be fixed by Arbitration.”
Before the Lord Ordinary it was maintained on the pursuers' behalf that a person who has the secure tenancy of a house falling within the requirements of sec 61 of the Act of 1987 is given an unqualified right to purchase that house on the favourable terms set out in sec 62, and that, in the face of the clear language and social purpose or policy of the legislation, any conditions in the title which stand in the way of that purchase, including in this case the right of pre-emption, must be held to be of no effect.
The Lord Ordinary described the propositions put forward on behalf of the pursuers as bold propositions. Subsequently he summed the matter up as follows: “In the result, I am of the opinion that the only real choice lies between, on the one hand, holding that all third party rights inconsistent with the statutory sale are superseded by the legislation and, on the other hand, holding that the legislation only takes effect where no such rights exist.”
The Lord Ordinary stated that he did not find the choice to be an easy one, but at the end of the day he concluded that Parliament could not have intended to abrogate third party rights such as the right of pre-emption, and he accordingly sustained the third defenders' plea to the relevancy and dismissed the action. Against that interlocutor of the Lord Ordinary the pursuers have reclaimed.
In view of what the Lord Ordinary says in his opinion, it appears that the submissions made to this court were somewhat different from those which the Lord Ordinary understood were being made to him. Before this court, the pursuers' submissions fell under three heads—(1) the primary submission was that on a proper construction of Pt III of the Act of 1987 the first and second defenders had a right to purchase, and that that right is not excluded by the terms of the right of pre-emption; (2) counsel for the pursuers further submitted that although in terms of sec 64(l)(c) conditions might be inserted in an offer to sell, it was not possible to include as a condition a reference to the existence of the right of pre-emption since that would be inimical to the absolute entitlement of the first and second defenders to purchase the subjects; (3) counsel for the pursuers also maintained that the right of pre-emption contained in cl 4 of the feu charter addressed voluntary transactions only on the part of the feuar, and accordingly did not strike at a sale which the pursuers were bound to carry out such as a statutory sale under the provisions of Pt III of the Act of 1987.
Counsel for the third defenders, on the other hand, maintained that the Lord Ordinary had arrived at a correct decision. Counsel maintained that on a proper construction of the Act of 1987 it was implicit that there could be something in a third party agreement which might exclude the secure tenant's right to purchase. In other words, he contended that there was nothing in the statute to indicate that third party rights were...
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Highland Council (formerly Ross and Cromarty District Council) v Patience and Others
...out. Opinion reserved on whether the preemption clause was void for uncertainty and unenforceable. (In the Court of Session, 3 March 1995–1995 SC 382) Ross and Cromarty District Council brought an action seeking declarator that Broadland Property Estates Ltd, their feudal superiors, in term......