(This decision has been appealed to the Court of Session)

Heritable Property – Title Conditions – Definition – Use conditions in registered lease – Use and ‘keep open’ clauses – Whether ‘title conditions’ – ‘condition which relates to the land’ – Held, definition satisfied – Title Conditions (Scotland) Act 2003, Section 122(1)

Heritable Property – Title Conditions – Discharge or Variation – Relevancy of averments – Averments relating to factors personal to applicants – Marketability or value of interest in lease – ‘Enjoyment’ – Preliminary pleas repelled – Title Conditions (Scotland) Act 2003, Sections 98, 100

Co-Operative Group Limited v Propinvest Asset Management & Ors
17 September 2010

Tenants under a registered lease of a department store in a shopping centre applied for discharge, or alternatively variation, of certain conditions in the lease as to permitted use, use restrictions, obligations to ‘keep open’, etc. They had withdrawn from the department store business, were incurring substantial expense in complying with the conditions and wished to dispose of their interest in the lease.

At a preliminary hearing, the respondents contended that the Tribunal did not have jurisdiction because the conditions in question were not ‘title conditions’ as defined in Section 122(1) of the 2003 Act. It was argued that the conditions did not ‘relate to the land’ as required in terms of the definition. The tribunal rejected this argument, considering that use conditions in a lease were analogous to real burdens and fitted naturally with a test of ‘relating to land’: the lease, like a disposition, conferred a right over land, qualified by the stipulation as to use.

The respondents also sought deletion as irrelevant of averments about changes in the applicants’ business leading to loss as a result of being required to obtemper the conditions. The Tribunal did not consider it possible to exclude enquiry into the position of the applicants as members of the class of tenants involved in the department store sector, as part of the objective test, and were not prepared to delete the averments at this stage.

The respondents further objected to averments about the effect of the conditions on marketability or value of the leased subjects, as not relevant to ‘enjoyment’ under Section 100(c). The Tribunal rejected that argument also, considering it to be unsupported by authority and to run against the established view as to how property can be ‘enjoyed’.

Authorities referred to:-

Aberdeen Varieties Limited v James F. Donald (Aberdeen Cinemas) Limited 1939 SC 788
Bolton v Aberdeen Corporation 1972 SLT (Lands Tr) 26
McQuiban v Eagle Star Insurance Company 1972 SLT (Lands Tr) 39
Co-operative Wholesale Society v Ushers Brewery 1975 SLT (Lands Tr) 9
George T. Fraser Limited v Aberdeen Harbour Board 1985 SC 127; 1985 SLT 384
Caledonian Associated Properties Ltd v East Kilbride Development Corporation (1985) 49 P & C R 410
British Steel plc v Kaye 1991 SLT (Lands Tr) 7
East Kilbride Development Corporation v NorwichUnionLTS/LO/1993/34, 29.3.1995
Davie v G. S. Brown Construction Ltd LTS/LO/1996/41, 20.6.1997
Ord v Mashford 2006 SLT (Lands Tr) 15
Church of Scotland General Trustees v McLaren 2006 SLT (Lands Tr) 27
McPherson v Fraser 2007 SCLR 351

See full decision:  LTS/TC/2009/09