Heritable Property – Title Conditions – Feudal Burdens – Conversion – Economic Development Burdens – Sites comprising land assembled and cleared for industrial buildings – Use restrictions in standard form – Whether ‘economic development burdens’ – whether imposed for purpose of promoting economic development – Whether permissible to look at surrounding circumstances – Onus – Whether sufficient evidence to infer that burdens in negative and very common form were in fact imposed for the purpose of promoting economic development – Abolition of Feudal Tenure, Etc (Scotland) Act 2000, Sections 18B, 44

Heritable Property – Title Conditions – Interest to Enforce – Converted Feudal Burdens – Personal Real Burdens – Economic Development Burdens – Use restrictions – Issue of development under active consideration by burden holder in its capacity as planning authority – Whether statutory presumption of interest rebuttable – Abolition of Feudal Tenure Etc (Scotland) Act 2000, Sections 18B, 47 – Title Conditions (Scotland) Act 2003, Section 90(i)(a)(ii)

Teague Developments Ltd v City of Edinburgh Council
27 February 2008
LTS/AFT44/2007/02 and LTS/TC/2007/41

The applicants owned a substantial development site, within which two areas had been the subject of feudal burdens restricting their use. The respondents, as superiors, had purported to convert these burdens into continuing burdens as ‘economic development burdens’, under section 18B of the Abolition of Feudal Tenure, Etc (Scotland) Act 2000. The applicants challenged the validity of this conversion, arguing that the burdens were not economic development burdens; and also invoked the jurisdiction under Section 90(i)(a)(ii) of the 2003 Act to challenge the respondents’ interest to enforce. The applicants also applied under Section 90(1)(a)(i) for discharge, but that aspect was to be considered later, if necessary.

These burdens had been imposed in feu dispositions in 1987 and 1990, with partial waivers in 1991. The subjects had been acquired and cleared for industrial development by Edinburgh District Council in the 1980’s, pursuant to a project, in which the regional council and the Scottish Development Agency were also involved, for the regeneration of the Leith area of Edinburgh. More generally, the councils over the years had disposed of property or land in a variety of circumstances, imposing use restrictions similar to the present burdens, restricting use to the proposed use by the purchaser or acquirer. This would often fulfil a land management, or a public accountability, purpose, but sometimes the purpose was the promotion of economic development in some form. The land had by now again been cleared and further development of the area was under active consideration by the respondents and others. The current proposed local plan envisaged mixed use, predominantly residential. The applicants had applied for planning permission for predominantly residential development.

Section 18B of the 2000 Act provided for conversion by prospective notice, of ‘economic development burdens’, i.e. burdens “imposed for the purpose of promoting economic development and . . . enforceable by the Scottish Ministers or a local authority.” The applicants argued that there was an absence of information about the purpose for which these burdens had been created. There had to be clear expression in the deed itself. The burdens were in their terms restrictive. If this was wrong, and it was permissible to look at the surrounding circumstances, there was no or at least insufficient evidence to establish the purpose. There was no direct evidence, and no contemporaneous documentary material in relation to these particular burdens. It was apparent that the purpose had been to preserve industrial development, not promote economic development. It was necessary to establish that this was the purpose of the burden as a whole, but in any event the evidence had not established that it was even one of the purposes. For the respondents, it was argued that the provision only required the establishment of a material purpose. Promoting economic development was a responsibility of the local authority, and economic development could be achieved by imposing a burden of this kind, as a mere transitory obligation to build might not go far enough. Section 44(3) envisaged the possibility of considering the purpose on the basis of evidence.

In relation to interest to enforce, the applicants submitted that Section 18(3)(b) simply created a rebuttable presumption, consistent with common law, which involved a need for the burdened proprietor to show a change of circumstances. Some of the factors listed in Section 100 of the 2003 Act were relevant, and there might be a need for evidence. There was now a planning process seeking to characterize the area as one of mixed use. It was apparent that there could be no interest in enforcing an economic development burden. The respondents argued that the presumption was irrebuttable, and referred to their statutory empowerment to promote economic development. Even if it was rebuttable, the argument that the existence of the planning authority removed the respondent’s interest to enforce was untenable: the respondents clearly had an interest in the economic development of their area.

Held, (1) the burdens qualified as ‘economic development burdens’. The submission that authorities in relation to the creation of feudal burdens should apply, so as to restrict consideration to the terms of the deeds, was rejected. The dispute was not whether the wording of a recorded deed was apt to impose a valid burden; rather, whether these burdens met the statutory criteria for survival beyond the feudal system. It was almost inconceivable that the situations for which conversion was provided by the modern legislation would be spelt out in the deed. The search was for the purpose at the time the deeds were entered into. To the extent that there was dispute of fact, the burden was on the respondents (Section 44(3)), and the negative form of the burden also put at least some persuasive onus on the respondents, but it was to be expected that steps taken to promote development might be strengthened by a use restriction to ensure that the land would in the future only be used in the same way. Promotion of industry was a form of promotion of economic development: the fact that the burden only promoted one form of economic development did not stop it from qualifying. Acceptance that there was at least one purpose, other than the promotion of economic development, for which burdens like this were extremely commonly created, made it harder to establish this purpose, but it did not require to be the sole purpose although it must have been a material or important purpose. Each burden was imposed in the context of purchasers acquiring cleared land for the purpose of their own development of industrial buildings. Despite the applicants’ criticisms of the quality of the respondents’ evidence, it included agreed documentary evidence; it was sufficient to establish that the Leith Project had to do with promoting economic development; the acquisition and clearance of the subjects was clearly established to have been a part of that project; and the involvement of SDA, including specifically in relation to this land, was a strong indication of a purpose of promoting economic development. In the absence of direct evidence as to the imposition of these particular burdens, which might commonly have been used for other purposes, the question came to be whether the inference could be drawn that they were imposed for the purpose of promoting economic development. This being the first development and use of the land following the clearance under the project, the Tribunal was prepared to draw that inference. The limited and somewhat general nature of the information provided in the notices of conversion (whose formal competency the applicants did not challenge) had at most underlined the need to enquire further, and that was what the Tribunal had sought to do. Looking at the analysis of the burdens into different parts, each of the separate burdens took its context from the main provision, and the Tribunal would not restrict the conversion notices so as to exclude these parts of the burdens clauses.

(2), rejecting the applicants’ submission that Section 18B(3)(b) provided for a rebuttable presumption of interest to enforce, it was not open to the applicants separately to challenge the respondents’ interest to enforce the burdens following their conversion into ‘economic development burdens’. Personal real burdens were burdens recognized despite lack of praedial interest of the holders. The new general test of interest to enforce did not apply (2003 Act, Section 8(6)). Reversion to the unsatisfactory common law in relation to interest was an unlikely interpretation. Parliament had established the interest by the particular requirements for each case of personal real burdens: in this case, the character of the holders (Scottish Ministers or a local authority) and the particular purpose for which the burden was imposed. The respondents’ reference to the statutory powers of local authorities assisted in explaining this particular form of personal real burden. The wording of Section 18B(3) might have been stronger to effect an irrebuttable presumption, but the actual wording did not require the Tribunal to hold that there could be inquiry into the holders’ interest. The extent of the interest was of course relevant in an application to discharge the burden: if the public authority was seen to have lttle or no real interest, discharge was likely. In practice, therefore, burdened proprietors who could demonstrate lack of interest had a recognised means of ridding themselves of the burden. There was no reason to accede to the applicants’ wish to reserve a right to lead evidence on this matter. The materials which were before the Tribunal did suggest readily understandable arguments about the extent of the respondents’ interest, and that seemed likely to be an important factor in the reasonableness of the application for discharge. That application should now proceed as soon as reasonably possible.

Authorities referred to:-

Earl of Zetland v Hislop (1882) 9 R (HL) 40
Anderson v Dickie 1915 SC (HL) 79
Murrayfield Ice Rink v S. R. U. 1972 SLT (Lands Tr) 20; 1973 SLT 99
Ord v Mashford 2006 SLT (Lands Tr) 15
Conveyancing and Feudal Reform (Scotland) Act 1970, S. 1(3)
Local Government (Scotland) Act 1973, Ss. 69, 83
Local Government and Planning (Scotland) Act 1982, S. 7
Local Government (Scotland) Act 1994, S. 171A
Reid, Abolition of Feudal Tenure in Scotland, 4.11-12
Rennie, Land Tenure in Scotland, 3-13

See full decision:  LTS/AFT44/2007/02 and LTS/TC/2007/41