Appeal By Sheltered Housing Management Limited V. Bon Accord Bonding Company Limited
| Jurisdiction | Scotland |
| Judge | Lord Marnoch,Lord Eassie,Lord Wheatley |
| Neutral Citation | [2010] CSIH 42 |
| Court | Court of Session |
| Published date | 18 May 2010 |
| Year | 2010 |
| Docket Number | XA108/08 |
| Date | 18 May 2010 |
| EXTRA DIVISION, INNER HOUSE, COURT OF SESSION | |
| Lord Eassie Lord Wheatley Lord Marnoch | [2010] CSIH 42 XA108/08 OPINION OF THE COURT delivered by LORD EASSIE in Appeal by SHELTERED HOUSING MANAGEMENT LIMITED Appellants; against BON ACCORD BONDING COMPANY LIMITED Respondents: ____________ |
Act: A Clark, Q.C., McBrearty; Balfour + Manson LLP (for Drever & Heddle, Solicitors, Caithness)
Alt: J J Mitchell, Q.C., McKenzie; Paull & Williamsons
18 May 2010
Introductory
[1] This is an appeal under section 11(7)(b) of the Tribunals and Inquires Act 1992 against an order made on 9 June 2008 by the Lands Tribunal for Scotland under section 90(1)(c) of the Title Conditions (Scotland) Act 2003 (asp 9) - "the 2003 Act".
[2] The order relates to subjects known as Dunmail Manor in Cults, Aberdeen. Dunmail Manor was constructed in or around 1986 by the then owner of the land, Esson Properties Ltd - "Esson" - as a sheltered housing development. It comprised inter alia a number of flats or apartments - "the sheltered flats" - intended as sheltered housing for the elderly but also a flat or apartment for a warden, an office, guest rooms and a garage. In due course each of the sheltered flats was sold and feued to the purchaser in question by means of a feu disposition granted by Esson.
[3] Prior to feuing off the sheltered flats, Esson executed on 26 September 1986 a Deed of Conditions - "the 1986 Deed of Conditions" - which was recorded in the Sasine Register on 20 November 1986. The feu dispositions were subject to the 1986 Deed of Conditions. The recitals in the 1986 Deed of Conditions included the following:
"FURTHER CONSIDERING that we are about to feu off the individual sheltered flats into which the said development has been divided and that we are about the execute Feu Dispositions in favour of the Feuars (as hereunder defined); FURTHER CONSIDERING that it our intention when the Development is completed and all the sheltered flats are feued off to convey any remaining parts of the Development and the Superiority of the Development to Sheltered Housing Management Limited incorporated under the Companies Acts and having their Registered Office at Thirteen Ward Road, Dundee so that they shall administer and manage the Development (we and our said successors being hereinafter referred to as 'the Superiors'); AND CONSIDERING that we intend to enter into a contract with the said Sheltered Housing Management Limited to administer and manage the Development on our behalf until such time as the said Superiority and others are conveyed to the said Sheltered Housing Management Limited;"
The standard missive whereby Esson sold the sheltered flats contained, in condition 11(e), this provision:
"(e) It is understtod (sic) that on the sale of the last flat in the Development the Superiority together with the ownership of the warden's flat, offices and the guest room shall be transferred from our clients to Sheltered Housing Management Limited or such nominees. The Management of the Development will be under control of the said Sheltered Housing Management Limited or other Housing Association registered under the Industrial and Provident Societies Act enforced (sic) from time to time with which the said Sheltered Housing Management Limited may amalgamate or from time to time be associated."
[4] In accordance with the terms of those recitals in the 1986 Deed of Conditions, Esson, by a disposition dated 6 June 2003, conveyed to Sheltered Housing Management Limited, who are the appellants in this appeal, their interests as superiors of the sheltered flats which had been feued off, and also the dominium utile of those parts of the development which had not been feued off, including in particular the warden's flat and office, the guest rooms, the garage, a potting shed, and certain store rooms.
[5] On 28 November 2004 the Abolition of Feudal Tenure (Scotland) Act 2000 came fully into force with the consequence that the superiority or dominium directum held by the appellants in the sheltered flats ceased to exist and was extinguished. On the same date the 2003 Act came fully into force. Section 33 of the 2003 Act, put very shortly, provides for the variation or discharge of what are termed in that Act "community burdens". Availing herself of the procedures for achieving such variation or discharge by majority vote, a proprietor of one of the sheltered flats - a Miss Margaret Forbes Jack - served upon the other proprietors and the appellants on 9 September 2005 a "community consultation notice" in terms of section 55(2) of the 2003 Act intimating a proposal to vary all of the community burdens in the 1986 Deed of Conditions by replacing that Deed of Conditions with a new, proposed Deed of Conditions annexed to the notice - "the proposed Deed of Conditions". A majority, but not all, of the proprietors of the sheltered flats executed the proposed Deed of Conditions. Intimation was thereafter given by Miss Jack in terms of section 34(1) of the 2003 Act of her proposal to register the proposed Deed of Conditions in the Land Registry. Miss Jack has since died, and her place as respondent in these proceedings has been taken by another proprietor, the present respondents in consequence of procedural steps which it is unnecessary for us to describe.
[6] The appellants did not execute the proposed Deed of Conditions. On receipt of the intimation under section 34(1) of the 2003 Act to which we have just referred they duly made application to the Lands Tribunal in terms of section 37(1) of the 2003 Act for an order, put shortly, for the preservation, unvaried, of the existing conditions contained in the 1986 Deed of Conditions. The appellants were unsuccessful before the Lands Tribunal in securing the preservation, unvaried, of the 1986 Deed of Conditions. On 9 June 2008 the Lands Tribunal made the order which is the subject of this appeal. In it the Lands Tribunal refused the appellants' application for preservation unvaried of the 1986 Deed of Conditions and proceeded[1] to vary "the said community burdens in the [1986] Deed of Conditions ... by deleting them in their entirety and substituting in lieu thereof the provisions of clauses 1 to 11 of the proposed deed", which the Lands Tribunal then set forth ad longum in its order. So, put shortly, what the Lands Tribunal did was to replace the 1986 Deed of Conditions with the new proposed Deed of Conditions advanced by Miss Jack. We therefore turn to the terms of the respective deeds of conditions.
The Deeds of Conditions
[7] We shall summarise successively the principle features of the respective Deeds of Conditions so far as pertinent to the dispute between the parties.
[8] Taking first the 1986 Deed of Conditions, clauses (FIRST) and (SECOND) impose a number of user restrictions on all of the sheltered flats. It is not necessary to catalogue those restrictions, but, by way of example, the (former) feuars are prohibited from carrying on any trade or from keeping livestock other than one cat or one dog. There is also a condition that a sheltered flat be occupied only by a person or persons over the age of 55 years, unless otherwise allowed by the superiors in their sole discretion. Clause (THIRD) deals with the common parts of the development, in which each feuar holds a right of common property. Clause (FOURTH) is concerned with the use of the amenity ground, in which each feuar holds a right of common property. Clause (FIFTH) makes provision for the feuars' right of free ish and entry to the flats and to the common property. Clause (SIXTH) burdens each of the sheltered flats with liability for maintaining the main fabric of the development, including the common parts, and also the warden's flat and office, guest rooms and stores, all to the satisfaction of the superiors; and the clause allocates the costs of meeting that liability equally among the 43 sheltered flats. Clause (SIXTH) further provides that:
"The obligations of maintenance and repairs specified in this Clause shall be discharged by the feuars paying a monthly service charge referred to in Clause (NINTH) hereafter".
[9] Clause (NINTH) of the 1986 Deed of Conditions opens thus:
"Notwithstanding the provisions of Clause (SIXTH) above the Superiors shall be exclusively responsible for the management, maintenance and administration of the Development (other than the interiors of the sheltered flats which shall be the sole responsibility of the occupiers thereof) and this responsibility shall include, but shall not be limited to, the following:- ...".
There then follows a list of various matters which it is not necessary for us to catalogue or rehearse in detail. They include such matters as the maintenance and repair of the structure and external parts of the development, the maintenance of the amenity ground, insurance of the building and the appointment of a warden. The clause then goes on to provide for payment by each of the feuars of a monthly service charge to the superiors set in the Deed of Conditions at £48.92, but reviewable by the superiors at any time on giving one month's prior notice to the feuars.
[10] We turn now to the proposed Deed of Conditions. As the Land Tribunal notes, many of the provisions of the proposed Deed of Conditions repeat essentially the user and maintenance burdens of the 1986 Deed of Conditions. For present purposes, the significant departures or variations from the 1986 Deed of Conditions are those which relate to the dominium utile eventually conveyed to the appellants by Esson. That dominium (now allodial) is brought into the scope of the proposed Deed of Conditions by its definition of "Residual Property" and its other provisions relating to that property. "Residual Property" is defined in clause 1.1.10 of the proposed Deed of Conditions as meaning:
"... the Development under exception of the Flats and including, but without prejudice to the generality, the House Manager's...
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