1. This is an application under section 90(1)(a)(i) of the Title Conditions (Scotland) Act 2003 (“the Act”) for variation of a title condition relating to the sale of alcohol from retail units forming part of a recent residential development. The condition is contained within the Deed of Conditions in respect of the erection and use of the development. The applicants claim that the condition has caused some difficulty in letting the units, particularly for use as a neighbourhood convenience store. The application was originally opposed by three of the residential proprietors, two of whom withdrew their opposition, leaving the respondent, a proprietor of a flat above the retail units, as the only remaining objector.
2. Having considered the evidence and submissions for the applicants and the respondent’s written objections, and also having visited the subjects and the surrounding area, the Tribunal has decided that it is reasonable to grant the application for variation of the title condition to the extent of permitting the sale of wines, spirits or other excisable liquors ancillary to use within Use Class 1 of the Town and Country Planning (Use Classes) (Scotland) Order 1997 (to which use the subjects of appeal are restricted under their own particular title), at one occupational unit not exceeding 1500 square feet at the subjects of appeal, not later than 8pm.
3. The title condition is contained in a Deed of Conditions by Cala Grandholm Limited dated 31 March 2003 and registered on 25 November 2004 under Title ABN20627, and is in the following terms:-
“… no shops or other buildings shall be erected on the Area of Ground for the sale of any wines or spirits or other excisable liquors …”
The applicants Matnic Limited are proprietors of Retail Units 1, 2 and 3, Crombie House, Grandholm Village, Bridge of Don, Aberdeen (“the subjects”) under Title Number ABN86684 which narrates the title condition in the Burdens Section.
4. The application is “for the variation of the title condition to make it clear that the ancillary sale of wines or spirits or other excisable liquors is permitted from the subjects.”
There is no application under Section 90(1)(a)(ii) of the Act. The issue, under section 98 of the Act, is whether the Tribunal are satisfied, having regard to the factors set out in Section 100 of the Act, that it is reasonable to grant the application.
5. Representations opposing the application were received from the respondent Charles Armstrong, a proprietor of a flat at 15 Crombie House, Grandholm Crescent, Bridge of Don, by letter dated 25 October 2008. The applicants responded to these objections (and others which were subsequently withdrawn). An oral hearing was arranged. The respondent indicated that he maintained his objections but did not propose to attend the hearing. At the hearing, the applicants were represented by Mr Drummond of Biggart Baillie, Solicitors, Edinburgh. In addition to documentary productions, he led in evidence Paul Young, a director of the applicant company, and Murray Bain BL, MRICS, surveyor, of Messrs J & E Shepherd, Aberdeen. The Tribunal made an unaccompanied site inspection and also looked at some nearby housing areas to which reference was made at the hearing as possibly assisting in consideration of the issue.
6. At the hearing, the Tribunal raised with the applicants the possibility of restricting the proposed variation by limiting the hours during which sales of alcohol might be permitted and/or limiting the order to only one or at least less than all three units. The applicants indicated a willingness to accept some such time limitation but not the limitation of the subjects.
7. Having considered the applicants’ evidence and submissions and the respondent’s representations, and also on the basis of their visit to the subjects, the Tribunal found the following facts established.
8. Grandholm Village is a modern mainly residential development of approximately 300 units around, and incorporating, historic mill buildings (the Grandholm, or Crombie, Mills) at Bridge of Don, Aberdeen, immediately to the north of the River Don. The mill lade and buildings form an attractive focal point. The converted old buildings include, as well as flats, a licensed restaurant and some office units, with a pedestrian area around the mill lade. Generally, the inner part of the housing development involves dense flat development on three levels around a crescent. The outer part includes houses, gardens and open spaces. As well as street parking, parking for the flats in the inner part is provided in an inner courtyard. Apart from the commercial units around the old mill and the subjects, there is one other row of approximately six office units on the ground floor of one of the new flat buildings. The development is accessible from Grandholm Drive to the north, and enclosed by the river to the south (although residents have private use of a bridge across the river).
9. The subjects comprise three retail units below 16 flats, including the respondent’s, in a new building, Crombie House, on a corner opposite the mill lade. The flats enter from the rear of the building. The subjects were built as two smaller units, 1 and 2, of slightly over 1,000 square feet each and a larger unit, 3, of slightly under 4,000 square feet.
10. The developers, Cala Grandholm Limited (“Cala”), executed the Deed of Conditions in relation to the whole area of the development. This was in a generally standard form and included building and use restrictions. Clause (Third), which includes the title condition, provides as follows:-
“Each Flat or Dwellinghouse is to be used and occupied solely as a private flat or dwellinghouse (and any ground effeiring thereto shall be used as a garden and for no other purpose whatever) and shall not be sub-divided nor occupied by more than one family at a time and the Flat or Dwellinghouse shall not be used for the carrying on therein of any trade, business or profession or for the selling of any goods or wares of any sort whether or not such use may be deemed incidental or natural to the ordinary residential use of the Flat or Dwellinghouse or whether any person occupying the same may have contractual right to use the same for or in connection with or arising out of any trade, business or profession notwithstanding any rule of law to the contrary; no shops or other buildings shall be erected on the Area of Ground for the sale of any wines or spirits or other excisable liquors nor for the making or manufacturing of any goods for sale; no board, card, plate or advertising notice of any kind shall be placed on the subjects without the written consent of the Developers, for so long as they retain title to any part of the Area of ground, and thereafter of the Factor; no power boats …”, etc.
The title condition has been taken as prohibiting any use of any unit of the development, including commercial units, for the sale of alcohol. There was no evidence of the circumstances in which the licensed restaurant was permitted but that is now an established use.
11. The development was apparently completed in 2006, at which time there was a hope to let the subjects to a supermarket, Somerfields (who might sub-let one or both of the smaller units). That fell through, apparently because Somerfields stopped expanding around this time. It is not known whether the title condition influenced or would have influenced their decision not to proceed. The applicants, a property investment company, purchased the subjects from the developers in 2006. Their title to the subjects contains a further particular use restriction, as follows:-
“The Disponed Property shall be used in all time coming only as retail units in terms of Use Class 1 of the Town and Country Planning (Use Classes) (Scotland) Order 1997 and such other uses ancillary thereto and for no other purpose whatsoever without the prior written consent of the Disponer and their successors in title to the Retained Property.”
Class 1 of the 1997 Order lists a number of retail uses, including the retail sale of goods other than hot food. Use “included in and ordinarily incidental to any use in a class” is, in terms of Para 3(3) of the order, not precluded.
12. The applicants’ efforts and those of their agents, Messrs Shepherds, to let the subjects since they acquired them in 2006 have resulted only in Unit 2 and a small part of Unit 3, each around 1300 square feet, being let, one as a hairdresser and the other as a beauty salon. Thus Unit 1, around 1200 square feet, and the larger part of Unit 3, around 2500 square feet, remain unlet. The location of the subjects, within the development and off the main road, would not normally attract passing retail trade. Use of a larger unit as a supermarket appears unlikely. The other use at which ‘off-sales’ of alcohol would be permissible under the lease would be as a local “convenience” store. Firm interest has been expressed in Unit 1 for such use. It is unlikely that a tenant will take a lease for such use without ‘off-sales’ of alcohol, even on the basis of a reduction in the level of rent asked. A provisional off-sales alcohol licence was previously obtained but has lapsed. There are a number of other possible retail uses, not involving the sale of alcohol, of both the smaller and the larger units, but several expressions of interest have ‘dried up’.
13. Bridge of Don contains a large amount of modern housing. Two large supermarkets serve larger areas of housing and tend to preclude viable small retail units. There are examples of slightly larger neighbourhood shops, one in use as a supermarket with an alcohol licence and another as a recently opened café/delicatessen/gift shop which currently does not have a licence. Each of these, however, is located in a larger housing area and on a through road to attract passing trade.
14. Intimation of the application was given by recorded delivery notice to each of the 300 or so proprietors at Grandholm Village. The notice, as well as advising as to procedure, etc., indicated (as was stated in the application) that the applicants intended “to let part of the subjects as a licensed grocer/supermarket and require ancillary sale of wines or spirits or other excisable liquors to be permitted.” Three objections (two subsequently withdrawn) from residents in the vicinity of the subjects were received. The developers, Cala, who apparently still own land at the development site (although all likely development has been completed) indicated that they had no objection to the proposed use of the subjects as a supermarket with ancillary alcohol sales.
15. In their written submissions, the applicants suggested that supermarket/licensed grocer use was contemplated by the developers, ancillary sale of alcohol being permitted under the applicants’ particular title. The purpose and intention of the title condition was not to prevent such use, but to protect amenity by preventing development including a public house or ‘off-license’, neither of which would be permitted if the application were granted. Arguably, the title condition did not in fact prohibit ancillary alcohol sale, i.e. the application was simply to put matters beyond doubt. There was a prospective tenant for such use. A supermarket/convenience store was not objected to and would benefit the local community, but in reality would be precluded if it could not sell alcohol. The principle of granting a liquor licence had been established at the restaurant. In relation to amenity, neither the planning permission nor the title conditions prevented late hours opening. Reliance could be placed on the licensing regime controlling anti-social behaviour. The balance between amenity considerations and restriction of proper commercial use had to be considered.
16. In his oral submission, Mr Drummond drew attention to the curious position of the title condition within the deed: it would not be out of place in a solely residential development. Speculating as to its purpose, it may have been accidental. The licensed restaurant, including takeaway, represented a breach of the condition, apparently without objection. Mr Drummond questioned the extent to which benefited proprietors would be prejudiced by the variation sought, and pointed to the low level of objection. As to setting a precedent, the horse had bolted. Such residential development, with small local retail provision, would normally involve off-sales of alcohol. This would be unlikely to attract an undesirable presence from other areas. Assessment of any noise nuisance had been taken care of in the original planning conditions. This sort of proposed use might have been intended, so that it was a matter which was likely to arise early in the life of the title condition. It was significant that Cala did not object. There was deemed planning consent and a licence was likely to be granted. Mr Drummond reviewed the factors in Section 100 of the Act in line with these submissions.
17. In relation to the possible restrictions suggested by the Tribunal, Mr Drummond confirmed Mr Young’s evidence that the applicants could accept some limitation of hours, but reiterated that they sought variation to cover the whole of the subjects: there had been interest beyond Unit 1; the title condition would last for many years and should not be too restrictive; and licensing for some unacceptable use was not very likely.
18. The respondent’s written representations were succinct and his grounds of opposition can simply be recorded in full:-
“The proposed development is contrary to the original conditions which were in place when we purchased our flat. These conditions were material in our decision to purchase and gave an assurance of relative lack of noise outside normal business hours.
“There are already sufficient provision for the sale of wines and spirits at the nearby Tesco which is a 6 minutes’ drive or 20 minutes’ walk away in one direction and similar facilities on Great Northern Road and Scotstown Road, again about 4/6 minutes’ drive away in the other direction.
“The proposal will inevitably cause litter problems. It is directly outside the mill lade, and with the best will in the world, litter will be dropped and will be blown into the water, from where its removal is very difficult. There is already a litter problem here.
“Parking is sufficient only for residents (1.8 spaces per house) in the evening. The parking allocation will be adequate for customers of retail developments and residents during the day, but not if retail use were to extend into the evening.
“A wine and spirits outlet will attract a youth element into a predominantly residential area: there are already occasional problems with teenagers causing low level vandalism and I have observed the police in attendance.
“The proposal will set a precedent and will lead to other similarly unsuitable applications which will be difficult to resist and will lead to a severe deterioration in the quality of life for residents in the Grandholm Village.”
19. This title condition is a slightly curiously worded expression of a continuing use restriction, and, as Mr Drummond pointed out, it is to be found in the middle of provisions which are primarily about use of the flats and houses. However, the applicants have (no doubt appropriately) not invoked the jurisdiction of either the court or the Tribunal to challenge the continuing validity or enforceability of the condition. They have proceeded on the basis of accepting that the condition can be taken, as it has been taken, as prohibiting the sale of alcohol anywhere in the development, including at retail units such as the subjects. In that situation, we do not consider that we can proceed on the basis either that the condition may in fact not prohibit ancillary sale of alcohol or indeed might simply have been accidentally applied to the non-residential parts of the development. We must take it as a condition or purported condition preventing such sale, although we can accept that it may have had as its main aim preventing the development of either a public house or an off-licence.
20. It is an important consideration that the application is not for a discharge of the provision. The applicants merely seek a relaxation so as to allow ancillary sale of alcohol. There is no suggestion that any of the subjects should be permitted to operate as either a public house or an off-licence. On the evidence, and remembering that the applicants’ own particular title limits them to Class 1 retail use (i.e. would preclude use as a public house, restaurant or hot-food takeaway), that means that the variation which the applicants are seeking might perhaps lead to use as a supermarket, although it looks as if supermarket operators are unlikely to consider this particular location; or, apparently much more likely, might well enable the subjects or part of them to be used as a smaller neighbourhood ‘convenience’ store. We have accepted that inability to sell alcohol would in practice make it unlikely that a tenant would take it on for such use although there was understandably no direct evidence and this cannot be known for certain. It is difficult to imagine other uses within Use Class 1 (i.e. permitted under the applicants’ particular title) to which the sale of alcohol could be described as ancillary. The practical effect of allowing the application would therefore appear to be to enable the subjects or part of them to be let as a small local convenience shop.
21. We accepted Mr Young and Mr Bain as honest and realistic witnesses. Their evidence mainly related to the extent of impediment which the condition provides. Clearly, the condition is not a bar to many retail uses, and two parts of the subjects, perhaps around one third of the space, have in fact been let. It must be possible that other tenants would in due course be found without the condition being relaxed. The witnesses frankly said that they were unable to assess the relative likelihood of that. However, the fact is that over a period of three years, including some time before the present severe downturn in the property market, most of the subjects have remained unlet. Further, the strongest interest in the subjects (apart from the parts actually let) has come from food retailers. In these circumstances, we think that the condition, although not by any means fatal, does represent quite a significant burden on the applicants’ investment.
22. We do regard the short period since the condition was created as significant: on the basis on which we must take this condition, the respondent is entitled to say, as he does, that he and his wife purchased their property recently, with a condition prohibiting the sale of alcohol from the premises below them in place. The applicants purchased recently and must be taken to have known about the condition. A consideration, however, which is on the other side of the balance of reasonableness, is the very low level of opposition to the application. There is no evidence in explanation of that. We certainly appreciate that many proprietors may simply be apathetic rather than in favour, or may simply not wish to become involved in proceedings such as this. However, it also seems possible that many proprietors might see benefit in a local foodstore and do not object to its selling alcohol. We note in particular that there are 16 flats above the subjects, as well as other flats in the immediate vicinity whose amenity might be considered threatened, but there were only 3 objectors and only one from a flat owner above the subjects. We do not, however, regard the developers’ non-objection as of any significance in this case.
23. Our specific consideration of the factors listed in section 100 of the Act, in so far as we have not already touched on these, is as follows. Firstly, we do not consider that there has been any significant change of circumstances since March 2003 (Factor (a)). The only change to which the applicants can point is the development of the licensed restaurant which, as the particulars produced show, in fact also does takeaway food (although the title condition would not prevent the latter). It is not in fact completely clear when this development was allowed. It rather looks to us as if such a facility was always planned and may have been permitted by the developer in the earlier stages of the development (as Clause (Thirty-First) of the Deed of Conditions would have allowed). Whether that is right or not, we see a considerable difference between a licensed restaurant and ‘off-sales’ of alcohol. It is understandable that a proprietor might be more concerned about the effect of off-sales on the amenity of the neighbourhood.
24. Factor (b), the extent to which the condition benefits the benefited, i.e. the respondent’s, property, is central to the issue. It is to be balanced against Factor (c), the extent of the burden on the applicants’ property, but any substantial benefit to the benefited property is important even if the condition represents a heavy burden on the applicants, particularly where the condition was created very recently. We would accept that protection against the development of, say, a public house would be a very substantial benefit, but that is not what the applicants are applying for. The respondent raises issues about noise, litter, parking and vandalism or anti-social behaviour. These are all legitimate concerns which we must consider as a matter of degree. We noted the particular litter issue of items finding their way into the mill lade. We can also accept, although we were not present in the evening, that parking pressure will be at its highest then and that there is at present some degree of low level anti-social behaviour. However, each of these problems (apart from noise) is said to be already present, perhaps not to a serious degree, and we doubt whether they would be substantially added to. On the basis that the convenience shop would not attract passing trade, we would have thought that most, if not all, users would come on foot. We do not consider that there would be any substantial noise issue, particularly if the shop does not stay open too late in the evening. As far as behaviour of a youth element is concerned, we doubt whether a convenience store selling alcohol would add to this problem. It seems to us that development of a small convenience shop would not cause or add to amenity problems in any substantial way. We appreciate that such a shop would attract increased footfall, but that is true of any retail use and we do not think that it would have any serious effect on amenity. There are already a number of commercial premises in the neighbourhood as well as a large number of flats. The low level of objection tends slightly to confirm this view as to the extent of the benefit.
25. Still in relation to this factor, we do consider that if, contrary to our impression, relaxation of the condition led to the opening of a small supermarket, that might be more of a threat to the amenity. It might put more pressure on parking, and the sale of cheap alcohol might be more likely. We also appreciate that the later in the evening any such shop opened, the more likelihood there would be of disturbance of the amenity. Although there is no restriction in relation to retail opening hours at the subjects, the convenience store contemplated might well open in at least the early evening and concern about alcohol might increase through the evening. It was for these reasons that we raised with the applicants the possibility of some restriction of their application. The benefits of protection against a supermarket selling alcohol, and against sale of alcohol later in the evening, appear to us significantly stronger than the benefit of protection against a small convenience store selling alcohol during the day and in the earlier part of the evening.
26. We have covered above Factor (c), the extent to which the condition impedes the enjoyment of the applicants’ property. Factor (d) has no application in this case. We have also referred to (e), which we consider an important factor particularly where we have not found any significant change of circumstances supporting the reasonableness of the application.
27. That brings us to Factor (f), the purpose of the condition. We reject the submission that it was accidental and there is no real continuing purpose. To the contrary, it seems clear enough to us that the condition was designed to create and protect amenity in a predominantly residential area, mainly by preventing any part of the estate from being developed as a public house or other alcohol-related business. Application of that purpose to the retail units seems clear. We note that although it appears in the body of a clause mainly related to use of the flats and houses, it sits alongside a prohibition of making or manufacturing goods for sale. This was presumably directed mainly at possible noise or smell intrusion, again an amenity purpose and again appropriately directed at the commercial units in the development.
28. In relation to Factor (g), we accept that there is deemed consent of the planning authority, on the basis that the planned development, which we can assume included the subjects as retail units, was approved, and that would carry consent to the ancillary use with which this application is concerned. There is not at present an alcohol licence, but it seems to us reasonable to expect an off-sales licence, perhaps with hours restrictions, to be granted. However, this factor does not carry very much weight in this case, because the deemed consent is not specifically directed at the sale of alcohol and we are here concerned with the private title condition.
29. Factor (g), willingness to pay compensation, has not been referred to and does not really have any bearing on this case.
30. Factor (i) has no application. Under Factor (j), firstly, as we have indicated, we consider the low level of objection, particularly among the flat proprietors above the subjects, is significant. Secondly, appreciating that issues of public demand may be relevant under this jurisdiction, we do not consider that the suggestion that there is already sufficient provision for the sale of alcohol at Tesco, Asda and Somerfields within relatively short driving or walking distance, has much relevance to the issue before us, which really relates to the respondent’s legitimate interest in the amenity of the immediate neighbourhood. Thirdly, we also in this case do not attach any weight to the ‘precedent’ argument. We are considering this case in its particular circumstances, with a view to deciding whether the application in relation to the particular subjects is reasonable. It is not evident that there are any other retail (as opposed to office) units whose owners could place reliance on the allowance of this application, and even if such other applications did come forward they would require to be considered in their own circumstances.
31. Weighing these factors up, we are not satisfied that the application as it stands, i.e. in respect of the whole of the subjects, is reasonable. The evidence suggests that the effect of the burden is presently to prevent one likely use, viz. use of Unit 1 as a neighbourhood convenience store. The application, however, would cover use of any or all of the subjects, including the large unit, for the ancillary sale of alcohol. That would leave the possibility in the future, of use of a very large unit, or possibly more than one unit, for the sale of alcohol, and it would also allow the sale of alcohol as late at night as the licensing authority might allow. We are not satisfied that the case has been made for relaxing the burden in respect of the whole subjects.
32. However, we take a different view if the application is restricted to one small occupational unit and if a reasonable hours limitation, say not later than 8pm, is imposed. The relaxation would then not apply to the large unit. In that case, while it would be wrong to suggest there would be no effect whatever on amenity, we feel confident that such effect would be minimal: the problems mentioned by the respondent – noise, litter, parking and anti-social behaviour – are already present to some degree and would not in our view be significantly aggravated in that limited situation. Viewed that way, factor (b) comes to have limited weight. We bear in mind that there is little if any significant change of circumstances, and also that this is a very recent condition. We also, however, take into account the burden on the applicants, apparently having a significant effect on the letting income which they are able to achieve. We are influenced, in a case where some 300 proprietors have the same right of objection as the respondent, by the low level of objection, although we must of course consider matters from the point of view of the respondent’s legitimate interests. We do not consider that any serious compromise of the scheme of governance of this primarily residential estate would flow from allowing this application to the limited extent suggested. On this basis, we are satisfied that the application is reasonable.
33. In these circumstances, we shall grant the application restricted so that the variation will only affect one occupational unit not exceeding 1500 square feet, net internal area, and alcohol will not be sold later than 8pm. This gives the applicants a degree of flexibility in relation to the actual unit at which the relaxation will apply. We would mention that we gave the applicants an opportunity to expand in correspondence on the form and extent of the variation, and considered their views on that.
34. Any issue which might arise in relation to expenses can be disposed of on written submissions in accordance with the Tribunal’s normal practice. However, it seems appropriate to draw the applicants’ attention, under reference to Section 103(1) of the Act, to the possible effect in relation to expenses of the fact that their application is not being allowed as granted, but only on a restricted basis: the respondent’s opposition has to that extent been successful.
Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 25 June 2009
Neil M Tainsh – Clerk to the Tribunal