[1] This was an application for discharge of a title condition which was a restriction in a feu charter on alterations and further building. The applicants accepted that neighbouring proprietors were benefited, and the respondents were three neighbours. The application was granted to the extent of varying the title condition so as to permit the particular development to proceed. We refer to our Opinion dated 17 November 2006. The applicants seek the expenses of the application. Each of the respondents resists, or at least seeks modification of any award of expenses. There is also an opposed motion for certification of an expert witness, namely an experienced solicitor who gave evidence about certain residential property matters. In accordance with the Tribunal’s normal practice, the issue of expenses was considered on the basis of written submissions.
[2] Section 103(1) of the Title Conditions (Scotland) Act 2003 (“the 2003 Act”) provides as follows:-
“The Lands Tribunal may, in determining an application made under this Part of the Act, make such order as to expenses as they think fit but shall have regard, in particular, to the extent to which the application, or any opposition to the application, is successful.”
[3] The applicants’ submission draws attention to the terms of Section 103 and submits that the applicants had a considerable degree of success, since the application had been granted to the extent of permitting the applicants to proceed with the plans set out in their planning consent. They had had little choice but to proceed with an application for total discharge, because they had before making the application tried to speak to all the neighbouring proprietors. The Tribunal had acknowledged that there was an argument for total discharge. The three objectors had not responded to attempts to communicate about alteration proposals prior to the applicants’ purchase of the property. Only one had objected to the planning application, and in his case it was clear that an application merely to vary would not have achieved an unopposed application. The other two had neither signed nor returned the form which the applicants had circulated, so the applicants did not know what possible grounds of objection might be raised. The respondents had indicated at the hearing that variation was also not acceptable to them. The objection of the respondent Mrs Scott was directed not only at discharge but also at the applicants’ particular proposals. The respondent Mrs Heath also would not have agreed to the variation which was granted. Thus the objections in each case were clearly to the specific plans of the applicants, and no objector achieved any measure of success. The applicants had also attempted to interest the respondents in the idea of mediation. None of the objectors had been prepared to give reasonable consideration either before or after the application was lodged to the suggestion that matters be discussed. The evidence of Mr Clark had been necessary and used by the Tribunal in its assessment of the overall reasonableness of the application.
[4] None of the respondents was legally represented at the hearing of this application. The submissions of the respondent Mrs Scott in relation to expenses were, however, lodged by solicitors on her behalf. These accepted that Section 103(1) embodied the general rule that ‘expenses follow success’ but concentrated on the limited extent of the applicants’ success. This respondent’s concerns about the application had related only incidentally to the adverse impact of the applicants’ proposed development on her property. The Tribunal had recognised her interest in reserving rights to object to future applications. In relation to the parties’ conduct of the proceedings, this submission reviewed the sequence of events, there having been no suggestion in advance of the hearing of anything other than an application to discharge, and when that matter was raised at the hearing the applicants’ solicitor had confirmed that it was an application for discharge although also indicating that variation would be ‘acceptable’. This respondent had indicated that she would not oppose external changes which did not erode the ambiance and character of the neighbourhood. She had also not acted unreasonably in relation to the possibility of extra-judicial resolution of the issue. The assertion that the applicants had continued to attempt to open lines of communication was an overstatement. This respondent’s response to the proposal of mediation had been reasonable. Certification of Mr Clark was also opposed on the ground that the evidence he gave had not required his expertise. The Tribunal might also wish to consider the length of the hearing: although there were three respondents, by far the greater time had been taken up by the applicants’ case. In the event of a finding of expenses, this should not be on a joint and several basis.
[5] The respondent Mr Prior adopted the submissions on behalf of Mrs Scott and added some of his own. He sought to rebut the insinuation of unreasonableness on his part. He referred to the limited extent of the applicants’ initial attempt to consult him about their intentions. They had appeared to be asking him to sign away his right to object to any proposals they might make. Then, after receiving planning consent on particular proposals (to which he had objected) the applicants had applied for a complete discharge of the title condition. There had then been an approach from a mediation agency. Mr Prior understood title conditions to be a matter of legal statute that lay beyond the scope of private negotiations between neighbours, and in any event could see no realistic likelihood of progress at that late and advanced stage.
[6] The respondent Mrs Heath’s submission was lodged by her son who had appeared on her behalf at the Tribunal hearing. He emphasised that her objection had been considered substantial and not in any way trivial, frivolous or vexatious. Objectors who had acted in good faith should not be penalised, considering that it was in the applicants’ interest to obtain variation of the real burdens in their title. The applicants had bought their house with the clear intention of extending its accommodation and increasing its value. The Tribunal had accepted that the planned extension would reduce light to Mrs Heath’s property. The legislation abolishing the feudal system had resulted in cases having to be resolved by the mechanism of objection by neighbours who would be adversely affected by development proposals. Mrs Heath had been unable to view the planning application. The applicants had tried to get her to waive her rights, and their development was at the expense of her amenity. She had not received any indication that she might be liable in costs. The legislation was complex, making the instruction of experienced lawyers on all sides necessary. The applicants would benefit from the increased value of their property at Mrs Heath’s expense and should pay costs. Mrs Heath was an elderly woman who should not be forced to have to enter into complex hearings as a result of property developers wanting to develop adjacent properties.
Donnelly & Regan v Mullen and Ors, LTS/TC/2005/01, 1.9.2006
West Coast Property Developments Limited v Clarke and Others, LTS/TC/2005/21, 6.10.2006
[7] Neighbouring owners who unsuccessfully oppose discharge or alteration of title conditions from which they are entitled to benefit can be in a difficult position in relation to expenses. The Tribunal formerly recognised that as they started from a position of entitlement, they should not normally be found liable if their opposition was unsuccessful unless there was something unreasonable in their position. As we explained in more detail in West Coast Property Developments Limited v Clarke and Others, Section 103(1) of the Act now requires us to follow the different approach, more normal in litigation, that “expenses follow success”, so that once benefited proprietors lodge answers they become at risk of liability for the applicants’ expenses if their opposition is unsuccessful. We do, however, require to consider the circumstances of each case and are to consider the extent to which an application, or the opposition to it, has succeeded; and we can also consider questions about the parties’ conduct of the proceedings. The Tribunal will look closely at any suggestion that the applicants may in the conduct of their case in one way or another have caused expense.
[8] It is not unusual for applicants to seek a complete discharge, rather than a partial variation of a title condition. The Tribunal quite often, although allowing the application, decides only to vary the condition to permit the particular proposed development, leaving the condition otherwise standing. The applicants have then obviously not succeeded totally and the respondents have had some degree of success, but the particular circumstances have to be considered before deciding how that should be reflected in relation to expenses. The case may have taken a very similar course, and the opposition taken much the same form, had the application only been to vary, because the opposition was primarily to the particular proposal. The application for discharge may not really have been pressed as a separate matter. The applicants may or may not have done anything to indicate before the hearing that they would accept variation. Similarly, the respondents may or may not have shown any willingness to consider a variation.
[9] In the present case, we recognise that keeping the condition in place, so that it might play a part in consideration of any future development, is of some importance. The respondent Mrs Scott in particular sought to emphasise that. The applicants did nothing, at least in advance of the hearing, to indicate any willingness to accept variation, and at the hearing argued for discharge, although also indicating that they would be content with a variation which would enable them to proceed with their proposals. However, we are quite unconvinced by any suggestion that any of the respondents would have agreed to the variation sought. All were opposed to the particular proposal. Mrs Scott put her opposition in a slightly different form, emphasising the general matter of preserving the amenity of the neighbourhood rather than her own individual amenity, but she was clearly opposed to the particular proposals.
[10] Questions about both sides’ conduct in relation to the possibility of reaching agreement have been raised. It seems to us that both sides are slightly open to criticism in this area, although we could not say with any confidence that different conduct on either side would have avoided the expense of the hearing.
[11] The applicants tried to get all their neighbours to sign a document, in advance of seeing the plans for their proposed extension, agreeing not to use their entitlement under the title condition to block plans to alter or extend the property. This may have been well meant but it was indeed tantamount to asking for total discharge and we are not at all surprised that those who would be particularly affected by alteration or extension were not prepared to agree without seeing any plans. The applicants suggest that the respondents did nothing to indicate why or to what extent they were opposing, and two of them did not oppose the planning application. Yet the applicants did nothing in advance of the application to the Tribunal to seek the neighbours’ consent to their particular proposals or communicate with them with a view to seeing whether any agreement could be reached.
[12] It is not possible to lay down guidelines, and we recognise that these situations are not always easy. However, we would have thought that in this case, where three immediate neighbours had not indicated that they were prepared to give up their rights under the title conditions, the applicants might have thought it appropriate once they had firmed up on their plans to make these available to these neighbours. Burdened proprietors in this situation, having received advice that their neighbours have or probably have the benefit of the title condition, should realise that getting planning permission is not the only permission they require. The issues in relation to the title condition are not the same as in the planning process and it will often be appropriate and desirable for there to be some form of discussion of the proposals with the benefited proprietors before lodging an application to the Tribunal.
[13] On the other hand, the applicants did subsequently offer the possibility of mediation. An unreasonable failure to consider alternative dispute resolution might be relevant to expenses, particularly where it is the successful party seeking expenses who unreasonably rejected an approach to mediate. The possibility of discussing possible agreement or resolution of the dispute, including if necessary using an alternative dispute resolution procedure such as mediation, is referred to in the Tribunal’s guidance letter which accompanies the order fixing the hearing date. The respondents, as well as the applicants, each received such a letter on 5 June 2006. The applicants sought to pursue this possibility, and an appropriate letter was written by the mediation organisation to the respondents. This received an almost entirely negative response. Such responses as there are on this question reveal an unfortunate failure to appreciate the possible appropriateness of this form of negotiation. For example, Mr Prior suggests that he declined the possibility because he “understood title conditions to be a matter of legal statute that lay beyond the scope of private negotiations between neighbours.” Neighbours who have the benefit of title conditions must realise that for many years now (since 1970) the burdened proprietor has been able to apply for them to be relaxed if it is reasonable to do so, and it is obviously therefore appropriate if possible to discuss and talk such matters through with a view to agreement. However, that rather brings consideration back to the fact that the applicants did not at an earlier stage seek to discuss their actual proposals directly with the affected neighbours. By the time this matter was raised with the respondents, the applicants’ proposals were very firm, and although we do think the respondents might have given more consideration to the possibility of mediation which could well have helped even in that situation, we do not think that their failure to do so can be characterised as unreasonable conduct which has contributed to the applicants’ expenses.
[14] One other matter raised in the submissions on behalf of Mrs Scott was the length of the hearing. It is argued that by far the greater part of the proceedings was taken up with presentation of the applicants’ case. We accept the premise that applicants who take an inordinate time in setting out their case might be penalised in expenses, and many such cases should be capable of being concluded within one day. Reviewing the course of this case, which lasted two days, we think that the applicants did not require to lodge such extensive productions about the extent of alterations and extensions elsewhere in the locality, but we do not think that this unduly lengthened the hearing. We do have a question mark about the necessity for Mr Clark’s evidence, at least in relation to variation. However, applicants, who have to explain their proposals and set out their case, often take up more time at the hearing. Overall, we consider that this case was presented in a competent and reasonable way.
[15] Weighing these various matters up, our conclusion is that the applicants were basically successful and should receive their expenses; but that that success was limited because they achieved variation and not the complete discharge which they sought. The applicants contend that their application for discharge was reasonable, and we agree, but it failed. We also do not characterise the respondents’ opposition as unreasonable, but it too failed on the main issue as to whether there should be a relaxation of the title condition so as to allow the applicants to proceed with their plans. In all the circumstances, we consider that the applicants should receive their expenses, modified to 60%, and that the respondents’ liability should be shared equally and on a several, rather than a joint and several, basis, i.e. each of the three respondents will be found liable to the extent of 20% of the applicants’ expenses. This liability, however, runs from the date of the first set of answers and does not include the costs of preparation and presentation of the application, for which expense the respondents cannot be held responsible.
[16] There remains the motion for certification of Mr Clark, a solicitor with very considerable experience in residential property matters and also in acting on behalf of feudal superiors. To the extent that his evidence related to the approach and practice of superiors (before, of course, superiorities were abolished) and therefore to the purpose of the title condition, which was perhaps the area where his particular skill and experience was most evident, this seems to us to have been mainly directed at the case for complete discharge, a case which we have rejected. As far as the more general part of his evidence is concerned, in which he gave objective views of the applicants’ plans on the basis of his experience, it is suggested that the evidence which he gave was not expert evidence. We would not put it that way, but we do question the necessity for it in an application of this kind to this specialist Tribunal. We can understand why parties may wish to arm themselves with such evidence but we have always to bear in mind whether it is fair and reasonable to hold the other side responsible for the expense of it when it really amounted to an opinion on the issue. We are in no way critical of Mr Clark’s evidence, but we do not think it is reasonably necessary to lead such evidence on the general issue in a straightforward case before a specialist Tribunal which will, as an important part of its consideration, itself visit the location. In these circumstances, we refuse this part of the applicants’ motion.
[17] We have accordingly decided as follows:-
Decision issued: 2 March 2007
Members: J N Wright, QC; I M Darling, FRICS
Case Ref: LTS/TC/2006/06
Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 2 March 2007.
Neil M Tainsh
Clerk to the Tribunal