PHG Developments Scot Ltd v Lothian Amusements Ltd
| Jurisdiction | Scotland |
| Judge | Lord Tyre |
| Judgment Date | 12 February 2021 |
| Neutral Citation | [2021] CSIH 12 |
| Docket Number | No 15 |
| Court | Court of Session (Inner House) |
[2021] CSIH 12
First Division
Lord Tyre
Bank of Ireland (Governor and Company of the) v Bass Brewers Ltd 2000 GWD 20-786
Bank of Scotland v Brunswick Developments (1987) Ltd (No 2) 1997 SC 226; 1998 SLT 439; 1997 SCLR 498
Bank of Scotland v Graham's Tr 1992 SC 79; 1993 SLT 252; 1992 SCLR 306
Colebrook's Conveyances (Re) [1972] 1 WLR 1397; [1973] 1 All ER 132; (1972) 24 P & CR 249; 116 SJ 784
Co-operative Wholesale Society Ltd v Ravenseft Properties Ltd (No 3) 2003 SCLR 509; 2003 GWD 11-324
Craddock Bros Ltd v Hunt [1923] 2 Ch 136
Hudson v St John 1977 SC 255; 1978 SLT 88
Jamieson v Jamieson 1952 SC (HL) 44; 1952 SLT 257; [1952] AC 525; [1952] 1 All ER 875; [1952] 1 TLR 833; 116 JP 226
Lothian Amusements Ltd v Kiln's Development Ltd [2019] CSOH 51; 2019 GWD 23-354
New Towns (Commission for the) v Cooper (Great Britain) Ltd [1995] Ch 259; [1995] 2 WLR 677; [1995] 2 All ER 929; (1996) 72 P & CR 270; [1995] 2 EGLR 113; [1995] EG 30 (CS); 139 SJLB 87; [1995] NPC 34; 69 P & CR D40; The Times, 3 March 1995; The Independent, 15 March 1995
Nickson v Commissioners for HM Revenue and Customs [2016] CSOH 119; 2017 SC 50; 2016 SLT 1039
Norwich Union Life Insurance Society v Tanap Investments VK Ltd (in liquidation) (No 3) 2000 SC 515; 2000 SLT 819; 2000 SCLR 1034
Nunn v Nunn 1997 SLT 182
Patersons of Greenoakhill Ltd v Biffa Waste Services Ltd [2013] CSOH 18; 2013 SLT 729
Richards v Pharmacia Ltd, c/o Pfizer Ltd [2018] CSIH 31; 2018 SLT 492
Sheltered Housing Management Ltd v Cairns 2003 SLT 578; 2002 Hous LR 126
Gretton, GL, and Reid, KGC, Conveyancing (5th ed, W Green, Edinburgh, 2018), para 21.05
Scottish Law Commission, Obligations: Report on rectification of contractual and other documents (Scot Law Com no 79, July 1983), paras 3.6–3.10, 7.1 (Online: https://www.scotlawcom.gov.uk/files/2612/7989/7470/rep79.pdf (17 March 2021))
Scottish Law Commission, Report on Land Registration (Scot Law Com no 222, February 2010), vol 1, para 29.26 (Online: https://www.scotlawcom.gov.uk/files/1112/7979/8376/rep222v1.pdf (17 March 2021))
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Heritable property and conveyancing — Rectification — Rectification sought of deed of conditions which would affect rights of third-party proprietors — Effect of grant of rectification — Whether competent to seek rectification of deed of conditions without consent of third-party proprietors — Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (cap 73), sec 8
PHG Developments Scot ltd (in liquidation) petitioned the Court of Session for rectification of a deed of conditions granted by it over a development in terms of sec 8(1)(b) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985. Lothian Amusements Ltd was called as respondent and lodged answers. The petition called before the Lord Ordinary (Tyre). At advising, on 9 June 2020, the Lord Ordinary allowed a proof before answer and put the case out by order for discussion of further procedure. The respondent reclaimed.
Section 8 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (cap 73) provides, in part, “(1) … where the court is satisfied … that– (a) a document intended to express or to give effect to an agreement fails to express accurately the common intention of the parties to the agreement at the date when it was made; or (b) a document intended to create, transfer, vary or renounce a right, not being a document falling within paragraph (a) …, fails to express accurately the intention of the grantor of the document at the date when it was executed, it may order the document to be rectified in any manner that it may specify in order to give effect to that intention. (2) For the purposes of subsection (1) …, the court shall be entitled to have regard to all relevant evidence, whether written or oral. (3) … in ordering the rectification of a document … the court may … after calling all parties who appear to it to have an interest, order the rectification of any other document intended for any of the purposes mentioned in paragraph (a) or (b) of subsection (1) … which is defectively expressed by reason of the defect in the original document. (3A) If a document is registered in the Land Register of Scotland in favour of a person acting in good faith then, unless the person consents to rectification of the document, it is not competent to order its rectification under subsection (3) … . (4) … a document ordered to be rectified under this section shall have effect as if it had always been so rectified.”
A developer owned a development site in Edinburgh. Kiln's Development Ltd, a company associated with the developer, concluded missives with a neighbouring proprietor to convey 18 car parking spaces in the site's car park, together with a right of access to the neighbouring proprietor. The developer subsequently registered a deed of conditions over the development site. The deed of conditions gave the owners of the apartments in the development the right to park in any of the site's car parking spaces, including those to be conveyed to the neighbouring proprietor. It provided for the apartment owners to have a right of common property in the eastern wall of the car park (through a doorway in which the neighbouring proprietor's access to the car park was to be taken).
The developer brought a petition for rectification in terms of sec 8(1)(b) of the 1985 Act. The developer sought rectification of the deed of conditions to allow the car parking spaces to be conveyed and access to be taken to the car park through a doorway in the boundary wall. The petition was served on the apartment owners and the neighbouring proprietor. None of the apartment owners lodged answers. The neighbouring proprietor lodged answers in opposition to the petition. The developer averred that it had intended that the apartment owners would not have rights over the 18 car parking spaces; that the doorway in the wall would not be a common part of the development; that the deed of conditions would not prevent the obligations contained in the missives from being fulfilled; and that it would remain possible to convey the car parking spaces together with a right of access to the neighbouring proprietor. The developer averred that it was not necessary to seek rectification of the dispositions of individual apartments at the development or to obtain the consent of the apartment owners in terms of sec 8(3A). The petition came before the Lord Ordinary for a debate.
The Lord Ordinary held that: (1) the petition was concerned with a unilateral deed and thus was correctly brought under sec 8(1)(b); (2) the apartment owners did not require to consent to rectification; and (3) the developer's averments of intention were suitable for enquiry. The neighbouring proprietor reclaimed.
The neighbouring proprietor contended that: (1) real rights held by the apartment owners could not be defeated or altered merely by proving that the deed of conditions had not expressed the developer's intentions accurately, with rectification instead required in terms of sec 8(1)(a) or sec 8(3) and (3A); (2) the developer's averments of primary fact did not adequately set out grounds upon which it might be proved that the deed of condition failed to express the developer's intention; (3) certain further averments of the developer lacked specification; and (4) the developer had failed to make averments in support of the exercise of the court's discretion in its favour beyond a bare assertion of error.
Held that: (1) the developer had pled a relevant and specific case, having identified a document which it averred failed to express accurately its intentions at the time it was executed (paras 1, 5, 59); (2) the effect of sec 8(4) of the 1985 Act was that, if rectified, the deed of conditions would have effect as if it had always been in its rectified terms and thus references to the deed of conditions in other documents such as split-off dispositions would be to the deed as rectified, with the result that neither the consent of the apartment owners in terms of sec 8(3A) nor rectification under sec 8(1)(a) was required (paras 2, 8, 60–66); (3) there was nothing in the remaining pleading points insisted in by the neighbouring proprietor (paras 1, 5, 71); and reclaiming motion refused.
Observed (per Lord Malcolm) that the unusual features of the case created uncertainties in fitting it into the framework of sec 8 of the 1985 Act, but given the service of the petition on the apartment owners, it would be reasonable to proceed on the basis of implied consent on their part, although in the event of rectification being granted, the absence of rectification of their dispositions might yet cause difficulties for the developer (para 8).
The cause called before the First Division, comprising the Lord President (Carloway), Lord Malcolm and Lord Pentland, for a hearing on the summar roll, on 5 January 2021.
At advising, on 12 February 2021—
Lord President (Carloway)— [1] I agree with the opinion of Lord Pentland, to whom I am grateful for setting out the background, relevant legislation and the submissions of the parties. The reclaiming motion should be refused.
[2] The deed of conditions is a unilateral one which was executed by PHG Developments Scot Ltd. It may have had in mind the terms of the car park missives between Kiln's Development Ltd and Lothian Amusements Ltd, but it was not a document which implemented any prior agreement in terms of sec 8(1)(a) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (cap 73). It falls to be regarded as a document intended to create rights under sec 8(1)(b). The court may therefore order its...
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