OPINION

At.home Nationwide Limited v Catherine Morris and Others

Introduction and Summary

This is an application by a company which owns 9 flats in a retirement housing development for discharge of a title condition which required them, when selling this property, to satisfy and obtain the approval of the superior in relation to the use and occupation of the flats as retirement homes. The application is opposed by two other flat proprietors. There is of course no longer a feudal superior, and the applicants have added to their original application submissions to the effect that this title condition is no longer valid or in any event no longer enforceable. The respondents are not legally represented, and the Tribunal has had to decide the case on relatively limited legal submissions, although some quite general issues as to the meaning and effect of the recent legislative provisions are raised.

In summary, the Tribunal has decided that this title condition is no longer valid and enforceable by the respondents because there is no longer a superior who can carry out the procedure laid down in the burden. However, if we had held it valid and enforceable by the respondents, we would not have granted a discharge as it seemed to us that the provision had a valid continuing purpose and the applicants had not demonstrated that it was not possible in the particular circumstances to agree an appropriate alternative procedure.

Procedure

At.home Nationwide Limited, as proprietors of 9 flats in the retirement housing development at Wellmeadow Farm, Crookfur Road, Newton Mearns, Glasgow, applied under Section 90(1)(a)(i) of the Title Conditions (Scotland) Act 2003 (“the 2003 Act”) for discharge of a title condition contained within Clause 3(j) of a Deed of Conditions by I. B. Robertson (Estates) Limited and the Liquidator thereof registered in the Land Register on 2 December 1993, which clause is in the following terms:-

“(j) In the event of any Proprietor desiring to sell or otherwise dispose of his Flat or to make any change in the use or occupancy thereof he shall be bound to notify the Superiors of his intention. Such notification must be in writing sent by registered post or recorded delivery to the Factor on behalf of the Superiors. No Proprietor shall be entitled to sell or otherwise dispose of his Flat or to make any change in the use or occupancy thereof unless the Superiors are satisfied and have given their approval in writing to the Proprietor that on such sale or disposal or change the Flat will be used and occupied in accordance with the provisions contained in Sub-Clause (d) hereof. The Factor and the Superiors shall be obliged to discharge their duties in terms of this Sub-Clause expeditiously in order not to jeopardise such sale, disposal or change;”

Clause 3(d), which is not the subject of this application, provides a positive use requirement, essentially to use and occupy the flats as retirement homes, in the following terms:-

“(d) All the Flats shall be used and occupied in all time coming as retirement homes, that is to say, housing specifically designed for the elderly. None of the flats shall be used for any other purpose whatever nor sub-divided or used as a shop or workshop of any description or for the purpose of teaching music, singing or elocution or as a private school or for the carrying on of any profession, trade or business whatsoever. Each of the flats shall be used and occupied by not more than two persons each of whom shall be capable of leading an independent life and one of whom shall have attained the age of sixty years or be eligible to receive a Government Pension in respect of disablement provided always that the Superiors on cause shown may agree to relax this condition either wholly or partially for such period or periods and on such conditions as they may determine;”

The application is brought on the understanding that Clause 3(d) remains and would remain valid (presumably, now enforceable by any of the flat proprietors, with the provision in relation to relaxation by the Superior now disregarded: Abolition of Feudal Tenure (Scotland) etc. Act 2000 (“the 2000 Act”), Section 73(2A)). Essentially, the applicants contend that the flat proprietors’ interests are adequately protected by that provision.

The applicants are represented by Messrs Maclay Murray and Spens, Solicitors, Edinburgh. The application was initially opposed by 5 of the proprietors of the other 10 flats. The respondent Mrs Morris, a proprietor who is the daughter of the occupant of one of the flats, and the respondents Mr and Mrs McLaughlin, who apparently own and occupy another, have maintained their objections to the discharge. Neither is represented.

In the course of responding to the respondents’ objections, the applicants introduced submissions on the validity and/or enforceability of the title condition. The Tribunal allowed the applicants in effect to add an application under Section 90(1)(a)(ii). The respondents had the opportunity of making further submissions, but neither did so. The Tribunal decided to determine the application on the basis of written submissions and without a site inspection, because there was no dispute on the facts and the detailed physical circumstances were not relevant.

We should record that in the course of considering our decision it seemed to us that regardless of the merits there might be a solution by varying Clause 3(j) so as to allocate to the factor the role previously played by the superior in its operation.

The Deed of Conditions, although set in a context of feudal tenure, is in a relatively modern form and in fact involves a reasonably clear management structure. As well as the superior, there is provision for a factor and a ‘Property Council’, and each (including at places ‘the superiors through the factor’) has allotted roles in relation to various types of decision which arise under the common scheme. When we put our suggestion to the parties, the respondent Mrs Morris had no objection, subject to written confirmation from the current factors that they would be prepared to carry out the necessary procedures. The respondents Mr and Mrs McLaughlin did not respond. The applicants indicated that this suggestion was not acceptable, for three reasons. Firstly, they had missives of sale which were suspensively conditional upon the discharge of this title condition and the purchasers were not prepared to accept the proposal. Secondly, it was not certain that a factor would be appointed for all time coming. Thirdly, it was said that the factor, as an appointee of all the residents, was in a different position from the superior, who was independent of them, and there could therefore be a conflict of interest which would never affect a superior. The existence of the conditional missives highlights the burden on the burdened proprietor in this case, but it does not seem to us that either of the other reasons carries any weight. The real burdens are perpetual in their nature, and if any circumstances arose in which there were a need to reconsider the appointment of a factor, then a whole number of management arrangements would need to be reconsidered: it is difficult to see the addition of this one as posing any particular additional problem. As to conflict of interest, the Deed of Conditions already included provisions involving the factor in potential conflicts, and indeed in places has him acting on behalf of the superior and in places acting on behalf of the proprietors or some or one of them. At meetings of the Property Council, the Factor was allowed under Clause 12 to represent both the superior and individual proprietors. This seems to us to be just the sort of administrative matter which could appropriately be carried out by the factor, to whom the initial notification is to be given under the existing provision and who we would have expected in practice to act on behalf of the superior in following through the procedure. The whole point of the recent provisions is recognition that the persons with the real interest under a common scheme are the co-proprietors so that everything the factor does is really on their behalf.

Standing the applicants’ position, however, the Tribunal must decide the application on its merits, starting with consideration of the applicants’ submissions in relation to validity and enforceability.

The Law

The Abolition of Feudal Tenure (Scotland) etc. Act 2000 (“the 2000 Act”) has abolished feudal tenure, and the law relating to title conditions and in particular real burdens has been extensively re-formulated in the Title Conditions (Scotland) Act 2003 (“the 2003 Act”), each with effect from 28 November 2004. The relevant provisions can be outlined as follows:-

(i) Real burdens enforceable by and only by feudal superiors were abolished (2000 Act, S. 17), subject to a number of provisions, including Sections 52 to 54 of the 2003 Act. These provisions provided new implied rights of enforcement of certain real burdens, including feudal burdens, imposed before November 2004. Section 52 replaced and re-stated the previous common law in relation to the implied right of co-proprietors to enforce feudal burdens imposed under a common scheme (ius quaesitum tertio), provided there was no express or implied provision to the contrary. Section 53 establishes another implied right to enforce burdens imposed under a common scheme, in relation to groups of “related properties” and differing from Section 53 in respect that this right applies regardless of any provision to the contrary in the deed. Section 54 makes further, specific, provision for enforcement of burdens imposed under a common scheme on units in a sheltered or retirement housing development, again regardless of any provision to the contrary in the deed. Each of these sections can apply where deeds were registered before 28 November 2004.

(ii) Burdens covered by these provisions will almost always satisfy the definition, in Section 25 of the 2003 Act, of ‘community burdens’. As a result, the provisions of Part 2 of that Act, including particular procedures for discharge and variation (which may include imposition of new burdens), will normally apply. In addition, the Tribunal’s general jurisdiction, under Part 9 of the Act, to discharge or vary (but not impose, unless the owner of the burdened property consents), under Part 9 of the Act, is available, and the Tribunal also has a new jurisdiction to determine any question as to the validity, applicability or enforceability of a real burden. The applicants apply under these latter provisions. Section 98 provides that an application for discharge, if it is opposed, is only to be granted if the Tribunal are satisfied, having regard to a list of factors which is set out in Section 100, that it is reasonable to grant it.

(iii) Part 1 of the 2003 Act sets out general rules on various aspects of real burdens, and Section 73 of the 2000 Act makes provision for the interpretation of feudal terminology in relation to real burdens with continuing effect. Section 73(2) and Section 73(2A) make provision in relation to references to superiors and persons other than the person entitled to enforce the burden.

Submissions: Validity and Enforceability

The applicants first submit that a possible interpretation of Clause 3(j) is that it was enforceable only by the Superior, “in which case it was extinguished in its entirety on the appointed day.” Alternatively, the clause might be argued to be a community burden for the benefit of all the proprietors in the development, but Section 52(2) makes clear that a right of enforcement cannot be inferred where the burden contains a provision inconsistent with it: the discretion conferred on the superior was such a provision. The respondents therefore had no title to enforce. Alternatively, if that also was wrong, the clause was in any event no longer capable of enforcement. There being no superior to grant consent, the operation of the clause was frustrated. Section 73 of the 2000 Act provided no support for interpreting ‘superior’ to mean “other members of the community”. In any event, such an interpretation would render the clause much more burdensome than originally intended. Such an interpretation would be an obstacle to disposal and therefore repugnant with ownership of the property. Section 3(6) of the 2003 Act rendered a burden which was repugnant with ownership invalid.

As indicated above, the respondents have not taken the opportunity to make any submissions on this part of the application.

Submissions: Merits

On the basis that the condition was valid and the respondents were benefited proprietors, the applicants made succinct submissions under reference to Sections 98 and 100 of the 2003 Act. In relation to the factors set out in Section 100, the applicants refer to (a) (change in circumstances), pointing out that there is no longer a feudal superior who can give approval under the clause; to (b) (extent of benefit to benefited property), arguing that while the title does confer a benefit on the benefited proprietors in ensuring that the burdened property can only be used for the permitted purposes, the same benefit was achieved under Clause 3(d); to (c) (extent to which condition impedes enjoyment of the burdened property), pointing out that the condition impedes the right of the owner to freely dispose of his property without the consent of all the owners within the community; to (d) (practicality of complying with a positive obligation), pointing out the impracticality of obtaining the consent of all the proprietors, which would cause delay and potentially prevent a proposed sale, resulting in increased expense; to (e) (age of title condition – in this case, 13 years); to (f) (purpose of condition), arguing again that the purpose was to prevent use other than as a retirement home and that that matter was covered under Clause 3(d). The applicants stressed that there would still be an effective remedy in the case of any use not in accordance with Clause 3(d). The chances of such a breach were in any event very small, because solicitors would advise purchasers about the effect of that clause. There might also be difficulty in obtaining loan finance.

The respondent Mrs Morris agreed that it might be cumbersome to have to obtain consent from all the owners for a sale, but considered that to be an absolute necessity. Without it there would be no way of enforcing the condition. If it only became apparent after a purchaser took entry that the new occupier was not complying with Clause 3(d), it would be extremely difficult to remedy the situation and that could set a precedent. The respondent’s mother would not wish to be living amongst young people, possibly families with young children. She also pointed out that factor (g) (whether there was planning, etc. consent) had not been addressed.

The respondents Mr and Mrs McLaughlin focused their objections on the undesirability of having the development catering for younger persons.

Tribunal’s Consideration: Validity and Enforceability

The applicants’ submissions appear at first sight to overlook the clear intention in the legislation of allowing other proprietors in certain communities to enforce formerly feudal real burdens, subject of course to the rights of burdened proprietors to seek discharge or variation in one of the various available ways. If, as may well be correct, the burden was originally only enforceable by the superior, it does not necessarily follow that this burden was extinguished in its entirety on 28 November 2004. The provisions of the new legislation have to be considered. It is correct that Section 52(2) provides that there is no new implied enforcement right if the original deed expressly or by implication excluded that. That is not, however, the situation under Sections 53 and 54. It seems clear that if the conditions for application of those sections are satisfied, there can be new enforcement rights whatever the deed originally provided in relation to enforcement. Co-proprietors may indeed now be benefited proprietors although they were not previously. There is no doubt that the flats in this retirement housing development are related properties under a common scheme, so that Section 53 could apply; and Section 54 expressly applies to real burdens imposed under a common scheme on all the units in a retirement housing development (or on all the units except a unit, such as a warden’s flat, used in some special way). The intention and scheme of the legislation is that in such cases there can be wider enforcement rights, by parties such as neighbours who have a real interest in the enforcement of real burdens, but that there are a number of possible ways, including applications to the Tribunal’s jurisdiction, of securing discharge or variation.

The matter is not, however, as simple as that. The applicants argue that the operation of the clause is frustrated by the fact that there is no longer a superior to grant consent under Clause 3(j) to a sale. The Tribunal accepts that if the change which has occurred renders the provision defective then there cannot be a valid burden to be enforced. The co-proprietors might now, under Sections 53 and 54, have power to compel certification by the specified person that the purchaser will comply with Clause 3(d), but if that person, the superior, no longer exists, and the reference to him cannot be taken as a reference to anyone else, this is impossible. The question is whether there is anything in the legislation which, in relation to this burden, fills this gap caused by the abolition of the feudal superior.

Section 73(2) of the 2000 Act provides that on and after 28 November 2004, in a document executed before that date:-

“any reference … to a superior shall, where that reference requires to be construed in relation to a real burden which a person is entitled, by virtue of section 18, 18A, 18B, 18C, 19, 20, 28, 28A or 60 of this Act or section 56 of the Title Conditions (Scotland) Act 2003 (facility burdens and service burdens) … to enforce on and after that day, be construed as a reference to that person.”

This cures the problem in some cases, but applies only in certain situations, of which this is not one. Clause 3(j) is not either a facility burden or a service burden (Section 122 of the 2003 Act).

Section 73 (2A) provides:-

“In construing, after the appointed day and in relation to a right enforceable on or after that day, a document … which-

(a) sets out the terms of a real burden; and

(b) is not a document or entry to the effect that a person other than the person entitled to enforce the burden may waive compliance with, or mitigate or otherwise vary a condition of, the burden shall be disregarded.”

It seems slightly circular to ask whether Section 73(2A) can cover this situation, so as to make Clause 3(j) valid, when Section 73(2A) takes enforceability as its starting point. However, it would seem that it may only be possible to defeat the argument that the burden has become impossible to enforce and therefore invalid by resort to this provision.

The Tribunal has already had cases in which there has been a prohibition on a certain use or action without the superior’s consent. Typically, a proprietor who previously held under a superior, with a real burden prohibiting any extension or alteration except with the consent of the superior, seeks to extend or alter. If there is a common scheme and related properties, section 53 may apply even where there was no previous right of co-proprietors to enforce. In that situation it seems to be accepted that Section 73(2A) has the effect of simply excising the reference to the superior’s consent, leaving a prohibition, enforceable at least by neighbours who can show an interest. In effect, the consent of these co-proprietors, and not the former superior, is required. It may be mentioned that this seems also to be the understanding of learned commentators, for example Steven and Wortley, 2006 JLSS at page 50. Clause 3(d), the substantive obligation to use these flats as retirement homes, would appear to be such a clause, because it had a proviso allowing some relaxation by the superior on cause shown.

Clause 3(j), however, is a different type of provision. It is not so much a prohibition which the superior could waive by consenting, as a certification or satisfaction procedure to be complied with in advance of a sale, with the aim of ensuring compliance with the substantial burden in Clause 3(d). It could be described as a condition which makes provision for management or administration for a purpose ancillary to those of an affirmative or a negative burden, i.e. the provisions of Clause 2(d). Section 2(3) of the 2003 Act categorises such burdens as ‘ancillary burdens’ and confirms that they may be real burdens, and Section 2(5) directs that in making such categorisations the effect of the provision, rather than the way in which it is expressed, must be considered.

We can readily see that making such ancillary, or administrative, obligations enforceable by co-proprietors could make the position very difficult indeed for the burdened proprietor, particularly where it is not the sort of matter of which it could be said that only immediate neighbours had an interest to enforce. This case does seem to illustrate this problem. However, we cannot on the basis of either the applicants’ submissions or our own look at the new provisions find any reason to interpret Sections 53 and 54 as not applicable to ancillary burdens like this. The applicants submit that, interpreted so as to benefit and be enforceable by co-proprietors, this clause would become much more burdensome; or it would be an obstacle to disposal and therefore repugnant with ownership. The first objection could be maintained in relation to any community burden, for example, a use or building restriction formerly enforceable only by superiors and now enforceable by co-proprietors with an interest to enforce, but that is just what Parliament has provided. The latter objection raises issues under Section 3(6) of the 2003 Act, which provides as follows:-

“3(6) A real burden must not be contrary to public policy as for example an unreasonable restraint of trade and must not be repugnant with ownership (nor must it be illegal).”

These possible objections might seem more in point. In the Tribunal’s view, however, Clause 3(j) is neither in restraint of trade nor repugnant with ownership. It is merely an administrative provision, not designed to restrain sales (except in so far as the sales would be for use in contravention of Clause 3(d), a type of restraint of which the Parliament has expressly approved – see Section 54(5)(c)). It may now create a problem, but that is one of practicality not substantial restraint.

The Parliament has given special status to community burdens, particularly at sheltered or retirement housing developments. The 2003 Act does contain a number of provisions expressly excluding certain burdens which might otherwise be regarded as community burdens from these new enforcement provisions, but the applicants have not referred to, and we have not been able to find, any which could refer to ancillary burdens such as Clause 3(j). It is provided that if an obligation is constituted both as a ‘nameable type’, e.g. a community burden and as a ‘real burden which is not of that nameable type’ the obligation is to be taken as two distinct real burdens: Section 62(1). Section 62(2) provides as follows:-

“(2) The owner of a benefited property which is a unit of a community shall not be entitled to enforce that obligation against the community constituted other than as a community burden or as a burden mentioned in Section 1(3) of this Act.”

Section 62 may not apply directly, but it does seem to confirm a Parliamentary intention that ancillary burdens in common schemes should remain effective. Further, there are provisions in Part 2 of the 2003 Act, in relation to enforcement of community burdens and resolution of disputes relating to community burdens (see Sections 28 and 26). Far from excluding ancillary burdens in common schemes, the legislation seems to us to have attempted to make them easier to apply.

The difficulty, however, remains that there is no superior to carry out the certification procedure. So it seems necessary to turn back to Section 73(2A) and ask whether it applies to this clause. We note that the particular part of the provision which the applicants seek to discharge is the prohibition against disposing of the property without satisfying the superior, i.e. the owner is prohibited from carrying through the disposal without the superior’s approval based on such satisfaction having been given. That might seem to be a provision “to the effect that” the (now former) superior (who is no longer entitled to enforce the burden) “may waive compliance with, or mitigate, or otherwise vary a condition of, the burden.” On balance, however, we have reached the view, looking at the true character and effect of this particular burden, that Clause 3(j) is not a consent provision to which Section 73(2A) applies.

We have not found this an easy question, and have reached our view with a degree of hesitation having regard to the importance which the legislation clearly gives to community burdens: when the burden, as it were, passes the Act’s other tests, it might seem strange that it falls down just because there is no longer a superior. Further, we note in this particular case that this is a burden imposed recently and in quite modern form, apart from the feudal clothing. Although only ancillary, it must have been considered a worthwhile administrative provision, and of course holding it now unenforceable means depriving the co-proprietors of its benefit.

However, we are satisfied that this decision follows the discriminating intention revealed by the statutory provisions in relation to burdens previously enforceable by superiors. In particular, the inclusion of only facility burdens and service burdens, and not community burdens generally, in Section 73(2), seems to make the matter clear. Moreover, although it seems unfortunate to deprive the co-proprietors of this protection, it is very clear that to require sellers of flats in a property community to obtain the consent of every co-proprietor (or apply to the Tribunal) would also be highly unsatisfactory.

Exactly how widely Section 73(2A) can apply to ancillary burdens is a difficult question which may require further consideration with the benefit of fuller submissions. As we have mentioned already, we can see no good reason why responsibility for operating a certification procedure of this kind should not now pass to the factor. Again, however, it has to be noted that if such a change cannot be agreed unanimously or in accordance with the provisions of the existing deed, the 2003 Act may provide the means of restoring this procedure, although we hesitate to give a definitive view on the operation of those provisions, such as Sections 28 and 33, which are not in issue in this case.

Tribunal’s Consideration: Merits

We should now, in case we are mistaken on the above matter, record what we would have decided had we held that the condition was valid and enforceable by the applicants’ co-proprietors. We would have had to decide whether we were satisfied, having regard to the factors listed in section 100 of the 2003 Act, that it is reasonable to grant the application.

We have to look at the circumstances, where there are any, in relation to each factor listed in section 100, look at their relative strengths and then weigh them up as a whole. Although each case depends on its own circumstances, this particular application did not refer to any particular circumstances and the argument has been presented on a general basis. However, it did emerge, as mentioned above, that the applicants have conditional missives of sale which are threatened by the problem of this burden.

The Tribunal often looks first at the purpose of the title condition (Section 100(f)). The applicants contend that the purpose is to prevent use of any of the flats as other than retirement homes and that that purpose is covered by Clause 3(d). This does not seem to us to be completely accurate. Clause 3(j) has an identifiable separate purpose, albeit one which is supportive of and one might say ancillary to the substantive requirement to occupy as retirement housing. It has evidently been thought important enough not to leave enforcement of that requirement to ordinary legal remedies which undoubtedly would arise in the event of breach. The condition sets up a prior satisfaction procedure. It was no doubt recognised that ordinary remedies would in practice be difficult to enforce if occupation in breach of Clause 3(d) commenced.

Similarly, when considering the extent of benefit to the benefited proprietors, the applicants suggest that the same benefit is achieved under Clause 3(d), but we again disagree. The applicants’ submissions imply that this clause had no utility at all, but it did give other existing proprietors the comfort of knowing that this procedure required to be followed through. On the other hand, the respondent Mrs Morris’s reference to procedure under the clause as “an absolute necessity”, because otherwise “there is no way of enforcing this title condition”, is considerably overstated. The condition could be enforced, albeit with more practical difficulty. There also seems to us to be force in the point made by the applicants that in practice a purchaser would always be clearly advised of the substantive obligation and unlikely to breach it. The present applicants are proprietors of 9 flats, which they presumably let out as retirement homes, and there would be little to be gained by any purchasing investor in failing to ensure that tenants satisfied the requirement to occupy only as retirement homes. Moreover, the certification procedure, though desirable, would not seem to be foolproof or infallible.

So there was some benefit to the co-proprietors, but that can be overstated and it had to be weighed up against the burden on the applicants as burdened proprietors. As we have pointed out, and indeed the respondent Mrs Morris acknowledges, the satisfaction procedure, if it now required all the co-proprietors to be satisfied and positively to indicate their consent, was at least cumbersome and could be highly prejudicial to an owner attempting to sell. Delay, or, worse, unjustifiable refusal of consent might result in the loss of a sale. The applicants have not indicated whether or not they have actually sought the consent of their co-proprietors, but it is easy to envisage the difficulties which could arise. The applicants’ reference to Section 100(d), as to the practicality of complying with the positive part of the condition, is also pertinent here.

It is undoubtedly the case that there has been a very significant change in circumstances, viz. the statutory removal of the superior’s rights, since the title condition was created. It can be said with confidence that Clause 3(j) would not have been inserted, at least in its present form, had this change already occurred. As regards Section 100(e), the age of the condition, it is of course relatively recent, and we see no reason, apart from the involvement of the superior, to consider the condition in any way obsolete – if some form of prior satisfaction procedure was considered appropriate in 1993, it must still be so. However, age is a less important consideration than whether there is a continuing purpose which can still be fulfilled.

We are in no doubt that a procedure under which one proprietor wishing to sell has to obtain the consent of possibly the proprietors of all the other flats needs to be changed. The more difficult question is whether we would be satisfied that it is reasonable to discharge this condition as regards the 9 flats owned by the applicants, thus in practice abandoning any vetting of potential occupiers as to whether their occupation complied with Clause 3(d). We are bound to say that we were concerned that the applicants did not indicate whether any effort had been made to introduce an alternative procedure. As we have mentioned, there is already in place a factor who has management functions which may sometimes involve a degree of regulation and adjudication. If an alternative procedure could not be introduced by consent, or by an application of the existing Deed of Conditions, Section 28 (together with Section 54(5)(a) in the case of retirement housing), or Section 33 of the 2003 Act, might assist by authorising the owners of at least two thirds of the units in the community to take certain steps in relation to community burdens.

It might have been suggested that the actual situation with regard to opposition to this application is indicative of more than a two-thirds majority in favour of discharge, in so far as the owners of 9 flats wish this, 5 did not oppose and of the 5 who did oppose 3 wrote withdrawing their applications in the following identical terms:-

“Having had it explained to us that the discharge will not affect the condition which states that residents at the subjects must be over the age of 60 or in receipt of a pension, we withdraw our objection to the application.”

However, that would not be conclusive, because if the applicants had, with the necessary two-thirds majority, used the Section 33 procedure to execute a discharge the present respondents could have applied to preserve the existing condition. They could then have argued that discharge (as opposed to variation of the procedure to be followed) was not in the best interests of the owners of all the units, looked at as a group: Section 98(b)(i).

We fully recognise, as a factor of some weight, the practical problem which faced the applicants. However, they were asking us to remove a condition which the Act has made enforceable by co-proprietors and which seems to us to have a continuing valid purpose, without putting anything in its place and without indicating any effort to put anything in its place despite the apparent possibilities of doing so. We have rejected the suggestion that this clause has no separate purpose or benefit. We do not detect any real criticism of the principle behind such a clause or any suggestion that some such procedure is in principle no longer appropriate. Appreciating fully the limited extent of the benefit to the respondents and the difficulties for the applicants, we would not have been satisfied that circumstances justifying such a step had been demonstrated in this case. We would therefore have refused the application to discharge.

However, recognising the difficulty which the applicants were in, we would have been prepared, in the alternative, to consider varying the burden so as to permit the particular transaction which is the subject of the applicants’ conditional contract to proceed. That would have been a possible course, which would leave the clause in place, merely relaxing it to so as to enable this sale to proceed. The purchasers would then still have been bound by Clause 3(d), and Clause 3(j) would apply to any future sales by them or any other proprietors unless or until either discharged or varied, preferably by agreement but possibly by resort to a statutory procedure. Although this would have had the unsatisfactory result of not curing the problem, that could also be said of outright refusal of this application.

Decision

However, we do not require to consider that possible disposal in view of our decision on validity. We shall grant the application to the extent of determining, in the exercise of our jurisdiction under Section 90(1)(a)(ii), that Clause 3(j) of the Deed of Conditions is no longer valid and enforceable.

Expenses

The applicants intimated that in the event of success they would seek an award of expenses. Appreciating that Section 103(1) requires us to give particular consideration to the extent of success of the application or the opposition, we do not consider that an award of expenses is appropriate in this particular case, for the following reasons:-

  1. This was a particularly novel, difficult and general question under the new legislation and, even on the basis that the respondents must be assumed to have taken appropriate advice about their position, we do not think it just that they should be found liable in expenses;
  2. the applicants gave no indication of any effort to resolve the problem prior to making this application; and
  3. the applicants’ arguments were in any event not all successful.

LTS/TC/2006/12

Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland given and intimated to parties on 11 December 2006.

Neil M Tainsh
Clerk to the Tribunal