Heritable Property – Registration of Title – Exclusion of Indemnity – Ground on edge of housing development – Conveyances of pro indiviso rights of common parts to individual house owners – Subsequent conveyance of ground to neighbouring developer – Whether open to challenge – Construction of provisions of deed of conditions in relation to ‘common parts’ and ‘open ground’ – ‘Green Belt’ clause – Land Registration (Scotland) Act 1979, Section 12(2)
Heritable Property – Registration of Title – Exclusion of Indemnity – Ground on edge of housing development – Conveyances of pro indiviso rights to individual house proprietors – Subsequent conveyance to another party in reliance on deed of conditions – Whether a non domino – Opinion reserved – Land Registration (Scotland) Act 1979, Section 12(2)
(Note: it is understood that this decision has been appealed on the basis of amending to introduce a submission, following the Tribunal’s subsequent opinion in PMP Plus Ltd v The Keeper, LTS/LR/2007/02, that the titles of the individual proprietors, in relation to pro indiviso rights over common parts, were, although registered, invalid)
In registering the appellants’ title to a development site (“Briarwood”), the Keeper took the view that title to one strip of ground (“the subjects”) was open to challenge by proprietors of houses in the adjoining development (“Beechwood”). He accordingly decided to exclude indemnity in relation to the subjects. This ground (which the planners had originally required to be used as a ‘buffer’ strip) had been part of the Beechwood site and as such had been the subject of provisions in the deed of conditions for that development. Pro indiviso rights to common parts of the Beechwood development had been conveyed to individual house purchasers. In an appeal against the Keeper’s decision, the appellants, whilst not challenging the validity in general of the conveyances to the individual proprietors, relied on the provisions in a clause (Clause Tenth) of the Beechwood deed of conditions entitling the developer to convey some or all of the ground to a ‘Green Belt’ company. Clause Tenth made detailed provision for that event, including a provision that other clauses in the deed, in relation to ownership of common parts (Clause Seventh), were disapplied in relation to such ground. The appellants argued that the subjects had therefore not been within the common parts conveyed pro indiviso to the Beechwood proprietors. The Keeper argued that the appeal turned crucially on the extent of the registered titles of the Beechwood proprietors and on the correct construction of the deed of conditions.
Held, upholding the Keeper’s view that the disposition of the subjects was open to challenge, (1) the deed of conditions had a clear and natural meaning. Under Clause Seventh, common areas were to be owned pro indiviso by the individual proprietors except to the extent that they were transferred to someone else with a view to the transferee maintaining them. Clause Tenth provided detailed alternative maintenance and payment arrangements in the event of such a transfer to a ‘Green Belt’ company. Clause Tenth (5), dis-applying the rest of the deed to such areas, was one of a number of provisions within Clause Tenth which applied only in the event of such a transfer and could not be relied on to support any transfer of open ground to anyone else. There was no mention at all of such an option. ‘Open ground’ in Clause Tenth was only ground which was conveyed to Green Belt. The appellants’ construction produced unacceptable inconsistency between the two clauses in relation to treatment of areas of ground not conveyed to individual proprietors, and would mean that any common area within the development could be sold to some other party without any obligation to maintain. No implication was required, but if this was wrong, implication of a condition precedent for the operation of the provisions of Clause Tenth was necessary to give business effect to the clause.
(2) The Tribunal reserved its opinion on the position if, after one or more individual conveyances, the developer had sought to transfer to Green Belt under Clause Tenth, which might appear to allow for this possibility. The Keeper’s argument that as soon as there was a conveyance to an individual house owner it was no longer possible for the developer to convey common parts to anyone else appeared to have some force, but also to produce some practical difficulty as the ‘Green Belt’ option would then only last for a very short period of time. However, on the basis of the submissions made, it was unnecessary to decide this point.
Hunter v Fox 1964 SC (HL) 95
Melanesian Mission Trust Board v Australian Mutual Provident Society 1997 2 EGLR 128 (Privy Council)
Howgate Shopping Centre Limited v Catercraft Services Ltd 2004 SLT 231 (Lord Macfadyen)
McBryde, Law of Contract in Scotland, 2007, 3rd Edition, 8 – 30-32
See full decision: LTS/LR/2007/01 (Opinion) and LTS/LR/2007/01 (Final Note)