Lands Tribunal for Scotland


Bussell and Others
City of Edinburgh Council

This is a claim for compensation in respect of subjects at Tollcross, Edinburgh. We heard debate on the respondents preliminary pleas on 1 May 1998. The claimants were represented by Mr G D Mitchell, Advocate, instructed by Messrs Campbell Smith & Co, Solicitors. The respondents were represented by Mr S L Stuart, Advocate. Following the debate, the claimants sought leave to make further submissions in respect of authorities which we had drawn to counsel's attention. A further diet was fixed for 6 August 1998. However it was eventually agreed that this be discharged and the matter was dealt with on the claimant's written submission.

The claimants, former partners in the now dissolved firm of Garden Huts, Tollcross present the claim as individuals and as the whole partners of the said firm, for compensation in respect of the acquisition by the respondents' predecessors as acquiring authority, of subjects at Lauriston Place, Tollcross, Edinburgh from which they formerly carried on business as manufacturers and suppliers of wooden garden products such as sheds, kennels and the like. Although the premises were subject to a compulsory purchase order made in 1990 and confirmed on 10 May 1994, the acquiring authority had previously been in negotiation for acquisition of them by consent. Missives were concluded on 24 January 1994.

The pleadings disclose that, after publication of the compulsory purchase order, the claimants became involved in a search for new premises. Between January 1991 and July 1993 the claimants received particulars of approximately 80 properties. They gave serious consideration to, or visited, approximately 15 of these. Details of their abortive investigations of four particular sites are set out in the pleadings. It is averred that, under increasing pressure to find an alternative site, they eventually obtained premises at Wallyford.

The averments continue: "The claimants proposed to transfer the existing manufacturing business at the subjects to the new premises. They also planned to use part of the new premises as a retail garden centre. However, in August 1993 a business study was carried out on behalf of the claimants. This showed that, standing the costs involved in purchasing and developing the new premises, combined with the staffing, management and other overheads which would be incurred in running the new premises, there were risks in continuing with the manufacturing business. The claimants concluded missives for the new premises in December 1993. At the time of concluding missives with the Acquiring Authority in January 1994, the claimants were still intent on using the new premises as a combined manufacturing operation and garden centre. It was not until April 1994 that the commercial realities of transferring the existing business to the new premises became obvious to the claimants. At this point they decided to abandon any idea of continuing the manufacturing business at the new premises and decided to concentrate instead on retail. In May 1993 Mrs Bussell had expressed a desire to retire from the firm. She retired on 7 February 1994. The firm was finally dissolved in May 1994 when William Bussell and Alan Bussell commenced trading from the new premises under the name of 'Strawberry Corner Garden Centre'. They carry on trade as a retail garden centre … The business which is carried on from the new premises is a different business from that carried on from the subjects. The business carried on from the subjects was, in effect, a joiners business which specialised in garden huts and furniture. There is no manufacturing of items at the new premises. A different range of products is sold from the new premises. Consequently, the custom or trade which the claimants enjoyed at the subjects has not followed them to the new premises. Accordingly, as a result of the acquisition of the subjects by the Acquiring Authority the business carried on by the firm from the subjects and all the good will therein has been extinguished".

The detail of the claims made is set out under two headings in the Schedule annexed to the claim. The first is a sum said to be claimed in terms of section 34 and 35(1)(b) of the Land Compensation (Scotland) Act 1973 and is said to be based on the average net profit of the firm between 1990 and 1993 multiplied by 3.5. The second head presented in terms of section 35(1)(a) of the Act or alternatively in terms of Clause 13 of the missive letter of 19 January 1994 sets out, under 33 separate heads, items of expense or outlay said to be involved in the change from Lauriston to Wallyford.

The claimants aver that they are entitled to be compensated for the extinguishment of the business carried on by the firm at Tollcross. They also aver: "Further the claimants incurred various costs and expenses in removing from the subjects". These are the items set out in the second head of the Schedule.

The respondents in answer aver, in essence, that the claimants' entitlement to compensation rests on the terms of the missives. It is not disputed that they are entitled to make claims under Clause 13 but it is contended that they have no entitlement to a disturbance payment in terms of sections 34 and 35 of the Act.

Clause 113 of the missives is in the following terms:

"13. The Purchaser will as soon as reasonably practicable following settlement meet the Seller (sic) reasonable and proper legal fees in connection with the sale of the subjects to the Purchaser up to a maximum of One thousand Pounds (£1,000) exclusive of VAT and outlays, which shall also be met by the Purchaser. The Seller shall also be entitled to submit claims to the Purchaser's Department of Economic Development & Estates for the reasonable and proper expenses incurred by her and William Herbert Bussell and Alan David Bussell trading as the firm of Garden Huts Tollcross as a direct result of the sale of these subjects with regard to advertising, Architects fees, Surveyors fees, removal costs and all other costs so incurred including legal fees in connection with the purchase of alternative subjects by the Seller or the said firm of Garden Huts Tollcross declaring that these claims shall be dealt with by the Purchaser as if they were disturbance claims made in terms of section 12(6) of the Land Compensation (Scotland) Act 1963 and shall be settled as soon as reasonably practicable following their submission. These costs will require to be accompanied by appropriate vouchers confirming the costs incurred by the Seller."

The relevant provisions of the Land Compensation (Scotland) Act 1973 provide as follows:-

"34. - (1) Where a person is displaced from any land in consequence of -

(a) the acquisition of the land by an authority possessing compulsory purchase powers:

he shall, subject to the provisions of this section, be entitled to receive a payment (hereinafter referred to as a "disturbance payment") from the acquiring authority …

(2) A person shall not be entitled to a disturbance payment -

(a) in any case, unless he is in lawful possession of the land from which he is displaced;

(b) in a case within subsection (1)(a) above, unless either -

(i) he has no interest in the land for the acquisition or extinguishment of which he is (or if the acquisition or extinguishment were compulsory would be) entitled to compensation under any other enactment;

35. - (1) The amount of a disturbance payment shall be equal to -

(a) the reasonable expenses of the person entitled to the payment in removing from the land from which he is displaced; and

(b) if he was carrying on a trade or business on that land, the loss he will sustain by reason of the disturbance of that trade or business consequent upon his having to quit the land …"

Respondents' submission

The respondents first submission was that Mrs Bussell, as owner of the subjects, had no title to claim under sections 34 and 35 because she was excluded by the provisions of section 34(2)(b)(i). She would have been entitled to make a claim under another enactment, namely, the Land Compensation (Scotland) Act 1963. Mr Stuart made it clear that he took this simply as a formal preliminary point.

His main submission was that all questions of compensation fell to be regulated by the missives. The plain intention was to regulate these matters expressly. Clause 13 provided a comprehensive provision for making claims for various costs and expenses incurred or to be incurred by the firm as a result of the sale. The reference to section 12(6) of the 1963 Act applied strictly to Mrs Bussell, only as a proprietor. However the intention clearly was to provide expressly for the character of expenses admissible. The intention was that they should be tested in the same way as they would have been tested had they fallen under statutory provisions.

He accepted that Clause 13 would cover the same general type of expenses as a claim under section 35(1)(a) but observed that the provisions were not identical. A proof before answer would be needed to determine which items of head 2 of the Schedule fell under Clause 13. Evans v Glasgow District Council 1978 SLT (Lands Tr) 5 demonstrated the proper approach to such claims. This might be more restricted than the tests of remoteness set out in Harvey v Crawley Development Corp. 1957 1 All E.R. 504.

Clause 13 provided only for expenses. This was the measure of the parties' agreement. The agreement could have made provision for disturbance of trade but it did not. It did not purport to cover the type of claim which might have been made under section 35(1)(b). However it was the parties' agreement. He submitted that the claimants could not now seek to widen the claim by reference to section 35 when they had agreed to regulate it under Clause 13. There would be no point in setting out detailed terms in missives if parties could later submit wider claims. He referred to the facts that interim payment had already been made under Clause 13 and that the claimants had referred to Clause 13 in the pleadings, as showing that the parties plainly did see it as a binding agreement. Clause 13 governed compensation in this case. Accordingly head 1 of the Schedule (the section 35(1)(b) claim) should not be remitted to probation. Head 2 would require to be assessed by reference to Clause 13 after a proof before answer.

The second main submission, in the alternative, was that if Clause 13 did not exclude all claims under sections 34 and 35, the pleadings were, in any event, irrelevant because the two heads of claim were presented as cumulative when they were in fact mutually inconsistent. There could not, he argued, be a claim for total extinction and for cost of setting up elsewhere. He accepted the possibility of a claim which was for total loss and for wasted expense in trying to set up a replacement. That, however, was not averred. Here the two heads were plainly mutually exclusive. The matter fell squarely within the ratio of the decision in Prestwick Hotels Ltd v Glasgow Corporation 1975 SC 105.

The second head of the Schedule could fall within Clause 13. It was not his position that items were necessarily excluded because the business was different. The different nature did not affect the principle although he did point to the express reference in Clause 13 to Garden Huts Tollcross as being a possible complication in the present case. That aspect would, he accepted, require to be dealt with after proof. However, he submitted that if a claim was open under reference to section 35, the claimant required to choose. He could not have both heads. He accepted that this might be a matter which would require to be resolved by proof before answer to determine which was the appropriate head but his primary submission was that this was a matter for the claimants to determine at the outset.

Claimants submission

Mr Mitchell dealt first with the position of Mrs Bussell. She was properly to be understood as making the present claim as a partner in the firm, not as heritable proprietor. The partnership occupied the subjects of consent with no written lease. As such they had no sufficient interest to have a right to a Notice to Treat and accordingly, no claim under section 12 of the 1963 Act; Smith and Waverley Tailoring Company v Edinburgh District Council (no. 2) 1977 SLT (Lands Tr) 29. Accordingly as a partner she did have a claim under section 34 of the 1973 Act.

His second submission dealt with the status of the missives. They had been entered at a stage when both parties expected that the business would move lock, stock and barrel. It was understandable that the respondents were surprised by the claim for extinction of the business. However there had been a real change of circumstances. At the time of the missives it was expected that the claim would be for expenses alone. In April 1994, however, the claimants had, in his terms, "suddenly decided that the business was not viable". He submitted that there would have to be a proof to determine this change.

Counsel went on to say that there was nothing in the missives to prevent a claim under sections 34 and 35. Before this could be excluded something on the lines of personal bar or waiver would be required. There was no suggestion of this. He emphasised that his submission turned on the real change of circumstances after the missives. However he said that this was really to explain the parties' actings. Even if there had been no "change of heart" and they had simply discovered that they were not able to trade so well so that there was a loss of profits, there would be nothing to prevent a claim under section 34 and section 35. The missives, he said, could not be expected to cover every situation.

Counsel said that at the heart of his submission was the proposition that a party must be entitled to have recourse to the benefits of a public general statute. In other words, that it was not possible to contract out. In any event, where there was an unforeseeable change of circumstances, it had to be possible to have recourse to the Act unless there was an issue of personal bar. In any event, if it was possible to contract out of an Act this could have been done expressly. Had this been done he accepted that his argument would have been more difficult. The missives here bind the parties to a certain type of expense but do not exclude other claims if the claimants find things going against them. Given the purpose of the compulsory purchase order, if it was subsequently discovered that the missives did not provide for unexpected circumstances, recourse could be had to the Act.

In relation to the proposition that parties could not, by contract, exclude benefits given to them by a public general statute, the Tribunal drew attention to the cases of Johnson and Another v Moreton 1980 AC 37, Kennedy v Johnstone 1956 SC 39, and MacFarlane v Falfield Investments Limited 1998 SLT 145, as examples of cases containing dicta which might suggest that the proposition was too widely expressed. In a further written submission on this issue, the claimants repeated the submission that it was necessary to have express provisions before a party could be taken to have "contracted out" by waiving rights given by statute. There was nothing in the missives which could have led the claimants to understand that they were limiting themselves to relocation expenses. It was further submitted that the effect of "contracting out" in this case would be to re-introduce the mischief addressed by sections 34 and 35 of the 1973 Act. Parliament could not have intended to permit this. Reference was made to Johnson and Another v Moreton, supra, at 68E and 69F-H.

Finally, in submission before us, Mr Mitchell argued that the two heads in the Schedule were not inconsistent. Section 35 was wide enough to cover both. The provisions were conjunctive. The provisions were introduced to compensate parties who could not claim rights as owners. They could not recover the cost of heritage. They had a claim for damage to business and the cost of a move to another site. Prestwick Hotels Ltd supra, could be distinguished because it involved different heads of loss and different claims from the present. That was a case of owner-occupiers. they received the full value of the heritage and the business, all assessed as the equivalent of full loss of a going concern. Plainly, how they re-invested was a matter entirely for them. However the present claimants were simply occupiers. They lost their business and incurred expense of finding a new place to work. There was no over-compensation.


In reply Mr Stuart said that a contention based simply on a change of circumstances after missives was irrelevant. A party could not change missives simply on a change of heart. It was important to remember that, at the outset, parties could seek their statutory remedies or could agree. In this case they had intended to regulate their affairs by agreement. There was no reason why they should not do so.

He submitted that although there could be a claim for temporary loss of profit and also for expenses, a claim for complete loss was inconsistent with the latter. Further, it was unreasonable to suggest that an occupier could have greater rights in relation to a business than an owner-occupier Prestwick Hotels, supra, was directly in point.


Although the respondents took the preliminary point that, leaving aside argument on the missives, Mrs Bussell had no title under section 34 because of her right to claim under the 1963 Act, Mr Stuart did not reply to the submission that Mrs Bussell was to be understood simply as claiming in respect of her partnership loss and, in that capacity, that she would have been entitled to compensation under sections 34 and 35. We think it plain that, in the present proceedings, her claim is based on the partnership and we accept the submission that such a claim would not be excluded by section 34(2)(b).

Apart from that formal point, neither side took any point of title. Nothing turned upon an apparent dispute in the pleadings as to whether Mrs Bussell had owned the subjects in her own name or as executrix. It is also important to note that although the missives purport to be between Mrs Bussell, as executrix, on the one hand, and the former City of Edinburgh District Council, on the other, no point was taken either in the pleadings or at debate that the firm could not properly be regarded as a party to these missives. It may be observed that this approach is consistent with the terms of the claimants' solicitors letter of 7 February 1994, which referred to "the missives dated 19 and 24 January 1994 concluded between us on behalf of our clients Mrs Anne Bussell and the firm of Garden Huts, Tollcross and you on behalf of the City of Edinburgh". That letter no doubt represented the true understanding of the parties and explains why counsel, very properly, did not seek to argue that the firm as occupier was not bound by missives between the owner and the purchaser. (The missives themselves contain various provisions including Clause 13 which show that Mrs Bussell was treated, implicitly, as acting on behalf of the firm).

The substantive dispute related to the effect of Clause 13 of the missives. For reasons set out below, we reject two propositions which were said to be essential to the claimants' submission on this point, namely, that a claim could be open despite the missives on a change of circumstances and, that parties cannot contract our of right sunder a public general statute. Implicit in the reliance on these propositions was an acceptance that, as they stood, the missives did limit the potential claim to one for expenses to the exclusion of any claim for loss of business. However the claimants did argue that although the missives limited the types of expenses, they did not expressly exclude other claims. We accept the respondents' submissions that the missives, taken as a whole, plainly represent the intention of the parties to regulate the whole rights and obligations between them arising from the sale of the subjects and the need to move to other premises. It may be that neither side gave very clear thought to what, precisely, their rights would be if they did not reach agreement. However, where parties settle a potential dispute on inclusive terms, the fact that one or, indeed, both, may have overlooked or been unaware of a potential head of claim is in our view generally irrelevant. We heard nothing to persuade us that there was anything to take this case out of the general rule.

The claimants advanced no authority for the proposition that proof of an unexpected or even entirely unforeseen, change of circumstances will allow a party to go behind an agreement freely entered into. It was not suggested that performance of the contract had been frustrated in any way. It was not suggested that an agreement reached against the background of compulsory purchase prevented the agreement being treated as a normal contract. We would not have found such an argument persuasive. The compulsory purchase was not a threat but an undisputed intention. What required to be agreed was the detail of how parties were to give effect to the rights and obligations consequent thereon.

Similarly, no authority was advanced for the proposition that a party could not competently contract out of the benefit of a public general statute. We are entirely satisfied that this proposition is too wide. We accept that there are categories of provision in such Acts which preclude "contracting-out". A familiar example is afforded by the Agricultural Holdings (Scotland) Act 1991: see Johnson v Moreton, Kennedy v Johnstone and MacFarlane v Falfield Investments Ltd, supra.

It is unnecessary, in the present context, to attempt to formulate more precisely the test to be applied in a true question of "contracting out". We observe, however, that these three cases were looking at agreements which, expressly or impliedly, sought in advance to exclude the statutory provisions which would otherwise apply to regulate matters. That is quite different from a situation where parties have statutory rights arising on an event which has occurred and agree, expressly or impliedly, not to exercise these rights or to vary or limit them in some way. It is evident that parties are normally free to agree to compromise claims in respect of which they have statutory rights.

We see no reason in principle why parties should not be free to agree terms for acquisition of property in advance of formal procedures. This is routinely done. It seems to us to be in the public interest that, while Parliament provides a measure of entitlement and a machinery for determining that entitlement in the event of disagreement, the routine expectation should be that parties negotiate settlement and that effect be given to concluded negotiations.

We consider it clear that the agreement represented by the missives was intended to be the measure of the parties' rights in relation to the acquisition of the subjects and the displacement of the business. We do not think any distinction can be drawn between that and an agreement intended as the measure of their "whole rights" or one which was the "complete measure". Such terms are implicit.

It was not contended that there was any basis upon which it could be argued that the respondents ought to have realised that there was any reservation or outstanding head of claim. On the contrary, the whole submission of the claimants was to the effect that at the time missives were concluded no further claim was contemplated.

In our view it is enough that parties intended a complete settlement. It is unnecessary to examine all potential heads of claim, statutory or otherwise, to see whether they have been excluded. The intention to effect a complete settlement impliedly excludes any reservation of individual claims or heads of claim. It follows that claims under sections 34 and 35 are no longer open to the claimants.

If there had been no contract, the claimants would have had right to make an appropriate claim, or claims, under these sections. This would have included claims under both section 35(1)(a) and (b). Before turning to the parties' submissions on this matter it may be observed that, on the claimants averments of fact, it is not altogether easy to decern a basis for their claim measured by reference to extinguishment of the business. It may be noted that all that is said is that, "as a result of their assessment of the 'commercial realities' they decided to abandon any idea of continuing the manufacturing business". Since they no longer manufacture items and sell a different range of products the custom or trade which they formerly enjoyed did not follow them to the new premises. Further, their averments do not suggest that the dissolution of the partnership was attributable to the need to move. On the contrary it was due to Mrs Bussell's decision to retire taken at a stage before they faced up to the said "commercial realities". The remaining partners did in fact continue to carry on business. Where formerly they had done so from Tollcross, they now do so at Wallyford. They expressly claim the whole detailed outlays involved in the move to Wallyford and setting up business there. It might have been argued that the first head of claim was not only inconsistent with the second but was not, itself, supported by relevant averments.

However the respondents' argument was not based on examination of these detailed averments but simply on the proposition that the two claims were mutually inconsistent. Because of the two inconsistent heads of claim, the claim as a whole was said to be irrelevant. Mr Stuart resisted any suggestion that, on the pleadings, it might be possible to argue that one head could be seen as the "valid or correct" head and the other rejected as inconsistent with it. He said that there was no reason on the pleadings to choose one rather than the other. Therefore, both fell.

There is no doubt that claims such as those now presented may prove to be wholly inconsistent with each other. Prestwick Hotels Ltd, supra, is an example of a clear finding to that effect after proof. However we do not think that it would have been appropriate to reject the statutory claim on the basis of inconsistency without a proof to determine precisely the nature of the claim made on each head and the extent to which, at the end of the day, there truly was an inconsistency.

It is easy to say that a company which has been compensated in full for loss of one business cannot claim the expense of setting up a new one. That would be the equivalent of compensation in money for loss of one business together with provision of another. However there may be cases which fall in the middle. If, by incurring expense, a claimant is able to continue his business but with a drop in profit, attributable to inability to obtain wholly suitable replacement premises, the possibility of a claim under both heads arises. Another situation is indicated by the emphasis made by Lord President Emslie in Prestwick Hotels Ltd, supra, at the top of page 109 where he said: "It must be emphasised that no suggestion was made that any expense was incurred in discovering that the business could not be transferred elsewhere". Where a claimant has wasted expense trying to set up the old business before finding it impossible there may be a claim for this.

Similarly, although the circumstances were different, it appears that the Lord President would not have regarded the particular nature of the replacement business as relevant. If a claimant's business enterprise can be transferred from one set of premises to another the fact that the output of the business is different may not, in itself, be significant. We consider that these matters raise issues of fact and degree which cannot confidently be answered at debate.

With some hesitation, on the present pleadings, we would have been prepared to allow a proof before answer on the statutory claims in this case had we not reached the view that they were excluded by the agreement.

We were not addressed expressly on the terms of the respondents' pleas but it follows that we must sustain the second plea-in-law. This has the effect that the third, fourth and fifth pleas are superseded and that the claimants' first plea-in-law must be repelled. The simple course would then be to send the case to proof before answer in respect of the remaining pleas. However, our jurisdiction arises in respect of the statutory scheme for compensation. Having held that claim to be excluded, our jurisdiction appears to us to be at an end. We could deal with the remaining aspects of the claim by way of joint reference of consent under section 1(5) of the Lands Tribunal Act 1949. If the parties wish to follow this route we would allow the present proceedings to continue subject to an appropriate joint minute. If agreement cannot be reached we will, in due course, put the case out for a further hearing on procedure before pronouncing a final order.