OPINION

Lee Scott Davenport and Kay Elaine Davenport v Julian Hodge Bank Limited and Others

Introduction and Summary

[1] This is an application by the owners of a detached house to discharge or alternatively vary a title condition in a Deed of Conditions which prohibits changes in the external appearance of houses (including painting) without the consent of the developer as owner of the development site. The applicants have painted the exterior of their house blue. As the developer does not consent to this in terms of the condition, the applicants seek discharge or variation of the condition as it affects their property. The respondents in the application are the developer and two neighbours. There are divided views on this matter among owners on the estate.

[2] The development was originally built for senior air force personnel but was subsequently sold by the Ministry of Defence to a developer, who initially purchased all 18 houses and from whom the applicants purchased their house. The Deed of Conditions was executed by the developer. The developer retains ownership of two houses and thus retains control in relation to this condition, although the ability to enforce the condition now resides with all owners, who are both burdened and benefited proprietors.

[3] Each case has to be decided on its own particular facts and circumstances on a statutory test of reasonableness. In all the circumstances of this case we are not satisfied that it would be reasonable to grant the application and we have decided to refuse it.

The Issue

[4] The applicants, Lee Scott Davenport and Kay Elaine Davenport, own the house at 8 Kinloss Park, Kinloss Moray, being the subjects registered in the Land Register under Title Number MOR10433 (“the subjects”). A Deed of Conditions registered 5 May 2010 by Julian Hodge Bank Limited (“the deed of conditions”) provides inter alia:-

“(FIRST) … (c) No Proprietor of any dwellinghouse shall be entitled to paint, decorate or in any way alter the external appearance of any part of his dwellinghouse without the written consent of us or the written consent of our successors as aforesaid as proprietors of the development site.” (“the condition”)

The applicants applied under section 90(1)(a)(i) of the Title Conditions (Scotland) Act 2003 (“the Act”) for discharge of the condition, which failing variation by deleting “paint, decorate or” and inserting, “which consent shall not be unreasonably withheld or delayed”.

[5] Julian Hodge Bank Limited (“JHB”), the developer and still the owner of 15 and 18 Kinloss Park; Mr Morris, 11 Kinloss Park; and Mr and Mrs Wood, 12 Kinloss Park (“the respondents”), maintain opposition to the application. There was no dispute that each of the respondents was entitled to the benefit of the title condition. JHB were represented by Wink and Mackenzie, Solicitors, Elgin. None of the other parties was represented.

[6] Section 98 of the Act provides inter alia:-

“98. An application for the variation, discharge, renewal or preservation, of a title condition shall … be granted by the Lands Tribunal only if they are satisfied, having regard to the factors set out in section 100 of this Act, that –

(a) … it is reasonable to grant the application.”

Section 100 provides:-

“100. The factors mentioned in section 98 of this Act are-

(a) any change in circumstances since the title condition was created (including, without prejudice to that generality, any change in the character of the benefited property, of the burdened property or of the neighbourhood of the properties);

(b) the extent to which the condition-

(i) confers benefit on the benefited property; or

(ii) where there is no benefited property, confers benefit on the public;

(c) the extent to which the condition impedes enjoyment of the burdened property;

(d) if the condition is an obligation to do something, how –

(i) practicable; or

(ii) costly,

it is to comply with the condition;

(e) the length of time which has elapsed since the condition was created;

(f) the purpose of the title condition;

(g) whether in relation to the burdened property there is the consent, or deemed consent, of a planning authority, or the consent of some other regulatory authority, for a use which the condition prevents;

(h) whether the owner of the burdened property is willing to pay compensation;

(i) if the application is under section 90(1)(b)(ii) of this Act, the purpose for which the land is being acquired by the person proposing to register the conveyance; and

(j) any other factor which the Lands Tribunal consider to be material.

Procedure

[7] With the consent of all parties, the Tribunal decided, under Rule 26 of the Lands Tribunal for Scotland Rules 2003, to dispose of the application without an oral hearing on the basis of the parties’ written submissions, including some documentary productions and photographs and a site inspection. The Tribunal carried out an accompanied site inspection on 24 May 2011 attended by Mr Davenport and representatives of JHB.

Authorities referred to:-

None

The Facts

[8] On the basis of the documents produced, parties’ written submissions and our site inspection, we find the following facts proved or admitted.

[9] Kinloss Park, Kinloss is a cul de sac development of 18 two-storey detached dwellings originally built about 1980 for officers serving at the nearby base of RAF Kinloss. The houses are numbered clockwise and located on either side of the road which has a turning circle at the southeast end. 1 Kinloss Park is located on the north east side of the road at its junction with the B9089 and 18 Kinloss Park lies on the south west side opposite numbers 2 and 3. Each house has a front and rear garden but numbers 1-12 have an additional area of wood beyond their rear garden. The houses appear uniform and have been built to broadly similar designs being two-storey houses with pitched roofs and with garages or out-buildings to the side, some of which are linked to the neighbouring property. There is a clearly discernible building line defined by the front gable of each house. The houses are uniformly aligned, following the shape of the turning circle. The front gardens are generally laid to grass with little landscaping and no physical boundaries. The road has not been adopted by the local authority. The subjects lie at the start of the turning circle and opposite No.13.

[10] The development was acquired by JHB with a view to selling the individual houses. They executed the Deed of Conditions which was registered on 5 May 2010. Clauses (First) to (Fifteenth) contain comprehensive community burdens typical of modern residential estate title conditions. Clause (Twelfth) contains detailed management provisions under which the developer is entitled to appoint an “Initial Property Manager” for up to 5 years; either the property manager or any of the proprietors is entitled to call meetings of all the proprietors; if quorate (at least 5 proprietors), at least 75% of those voting are entitled to take a variety of steps, including enforcing the deed’s provisions and varying or discharging the provisions. However, any such variation or discharge additionally requires the agreement of at least 75% of proprietors.

[11] JHB have now sold on all except two of the houses, retaining ownership of numbers 15 and 18. The appellants took entry to No 8 on 26 May 2010.

[12] The original exterior paint colour of the houses was magnolia. Some owners have repainted their house exteriors in magnolia whilst three have painted theirs white. The factors have indicated that they consider exteriors should be painted either magnolia (cream) or white.

[13] The applicants’ property has been painted a bright sky blue and is now a prominent and somewhat intrusive feature in an otherwise broadly uniform development. They commenced this painting on about 8 July 2010. On that day, Mrs Wood discussed with Mr Davenport whether there might be a problem under the title deeds about such painting.

[14] JHB did not consent to the applicants’ painting their house in a different colour. Allied Souter and Jaffrey Ltd, the property manager, wrote to the applicants on 10 August advising them of the terms of the condition and asking that the former exterior paint colour was restored. Meetings and correspondence, including correspondence from the property manager’s solicitors, ensued. The applicants raised issues about other breaches of conditions.

[15] In November 2010 the applicants invited all the residents to their house to discuss a number of issues arising from the terms of the Deed of Conditions including the colour of the exterior of their house. Around 12 residents attended. Six people said that the colour did not need to be changed, 5 that it did and 1 abstained.

[16] In response to this application, the residents at 1, 7, 9, 13 and 16 wrote to the Tribunal with pro-forma letters of support.

[17] Many of the garage doors and the front doors of the various houses have been painted in different colours. The wooden fencing around the gardens is predominately brown stained but other colours have also been used.

[18] Motor caravans and commercial vehicles have been parked on some of the drives of the houses, apparently contrary to an express prohibition in Clause (Eighth) of the deed of conditions. JHB conduct occasional business meetings at one of the houses still in their ownership. Some minor felling of trees and erection of fences in the woodland areas conveyed with some of the houses, has taken place.

Parties’ Submissions

[19] Apart from JHB, the parties were not legally represented and their various submissions were discursive and not clearly focused on the issues. They can be summarised as follows.

[20] The applicants complained that after they had invested heavily in purchasing paint and applying it, some five weeks elapsed before they received a letter from the factors seeking to enforce the burden. They claimed not to have been previously aware of the burden, and also pointed out that the deed of conditions had only been registered some time after they had paid a deposit on their house. They had organised a properly constituted owners’ meeting attended by 12 owners, 6 of whom had voted in favour of their house colour, 5 against, with 1 abstention; pro forma signed statements by the owners of Nos 7, 9, 13, 1 and 16 supported their application; and only 3 proprietors, not including any close neighbours, had lodged representations opposing. They pointed to what they described as other breaches of this and other conditions, relating to the holding of business meetings and the parking of commercial and other vehicles: it was unfair to enforce against only them. They referred to the obligation on owners to maintain houses in a good state of repair and external decoration: allowing their application would encourage owners to paint their houses and develop favourably the appearance of the estate. Painting their house was a benefit to both it and the area as a whole. They referred to the properties beginning to be changed from their appearance whilst in MOD ownership, a positive factor. There was no evidence that their painting had any adverse effect on the values of other houses. They had made various reasonable offers and suggestions to resolve the dispute. It would cost around £2,000 to restore the house to its original colour. There being no planning restriction in relation to the colour of these particular houses, there was deemed planning consent. Compensation was not applicable. In final submissions, the applicants questioned whether there was interest to enforce this burden against them; referred to the distance of objecting proprietors, contrasting this with the Act’s provisions for variation by adjacent property owners; and referred again to acquiescence, only one objector having raised an objection within 12 weeks.

[21] The representations on behalf of JHB were relatively formal. The deed of conditions had been exhibited twice to the applicants’ solicitors in the purchase transaction. They understood that neighbouring proprietors had advised the applicants on the day they started painting that they would require consent. The factors and then their solicitors had corresponded with the applicants making clear that the condition was to be insisted upon. There had been no material change of circumstances in the very short period since the title condition was created. There was no benefit in the applicants’ house being painted a vibrant colour, completely out of character with the remainder of the development. Enforcing the condition would not discourage other owners from painting. There was no deemed consent by the planning authority.

[22] In his representations, Mr Morris regretted the polarisation of owners, between those intending to adhere to the deeds and those having no intention of following them. He referred to a concern about owners felling trees or developing in the woodland areas. This had become “a test case aimed at breaking the deeds.” At least a few years settling in should be allowed. “Small, subtle signs of individualism”, for example some red trim such as his own front door, could be encouraged but painting an entire house blue was far outside that remit. Authority to make judgments about the character of the street lay with the title deeds, which stopped one individual dictating his own views. Mr Morris asserted that although there were only three objectors to the application, a silent majority opposed.

[23] In their representations, Mr and Mrs Wood gave an account of the conversation between Mrs Wood and the applicant Mr Davenport on the day he started painting. Those who had consented were owners who had breached their own title deeds and supported anyone else doing so. Conduct by JHB of business meetings involving a few people should not be seen as a problem.

Tribunal’s Consideration

[24] The legislation requires us to have regard to the factors listed in Section 100 of the Act, in so far as relevant, and then to reach an overall view as to whether we are satisfied that this application (in either its principal form, to delete the clause in question, or in the alternative form set out by the applicants in their application) is reasonable. The applicants do not contest the respondents’ entitlement to the benefit of the title condition, and have not sought a determination as to its enforceability in the circumstances, although they do in their closing submission make references, in effect, to three other provisions of the Act, viz. Section 8(3)(a) (the test of interest to enforce), Section 16 (acquiescence) and (we think) Section 35 (variation and discharge of community burdens by owners of adjacent units).

[25] Before considering the statutory factors and the other provisions referred to by the applicants, we start with some general observations.

[26] The applicants say that they were not advised by their solicitors of the existence of this title condition. Whether or not that is the case, we cannot be influenced, in one direction or the other, either by the applicants’ ignorance of the condition or by the fact that they have proceeded to paint their house in breach of it. Owners are taken to know the terms of the titles which they have accepted or have been accepted on their behalf. If the deed of conditions executed after the applicants concluded missives to purchase their house caused any problems, the fact remains that the title was taken subject to the conditions. They cannot gain any advantage, in a question of this kind with other owners, from ignorance of the conditions or from their prior breach of the title condition. Applications are sometimes made by owners who, for whatever reason, have proceeded in breach of conditions. Such applications have to be treated as if the breach had not occurred and the action in question is merely a proposal. Conversely, any criticism of the owner for proceeding in breach would be irrelevant.

[27] We must approach our determination of the issue objectively. We are not arbiters or judges of matters of colour. It is not a question of whether the particular colour selected by the applicants is appropriate. Whatever the exact colour, it seems to us to be beyond argument that the applicants are seeking to alter the external appearance of their house in a substantial way. All that we require to decide is whether in the circumstances of this case it is reasonable to relax this title condition to enable the applicants to alter the external appearance of their house by painting it a different colour.

[28] Looking at matters objectively, we see a clear difference between the applicants’ proposal and steps taken by other proprietors, such as replacing magnolia with white or painting doors or sills a different colour, all apparently accepted by the property managers and the owners in general. These may literally be covered by the same provision, so that if they were taken without first obtaining formal consent they might seem to amount to breaches, but we do not find them comparable and we are not at all surprised if they are not in practice seen as breaches. The change proposed by the applicants (whether or not reasonable) is of a different order altogether.

[29] This brings us to refer to the deed of conditions. It is perhaps a problem with modern estate deeds of conditions, which establish regimes of community burdens, that they can sometimes be expressed so comprehensively as literally to cover almost anything. What is striking, however, about this deed of conditions is that it contains clear ancillary burdens in the form of management provisions. These include specific provisions for owners to vary or discharge the deed’s provisions, but only if at least 75% of owners agree. Other steps can be taken by a 75% majority of owners voting at a quorate owners’ meeting. To their credit, the applicants organised such a meeting, and there is nothing to suggest that this was not a duly convened, quorate meeting under Clause 12.4. However, while the applicants appear to have obtained a bare majority of owners who voted at that meeting, they did not obtain either of these 75% majorities. More than 25% – 5 out of 18 – apparently voted against. This means that, for this application to succeed, we must be satsified that it is reasonable to override the relevant and specific management provisions of the deed of conditions. However, we appreciate that we have jurisdiction to override such provisions and must do so if, applying the test of reasonableness, we consider it reasonable to do so.

[30] Our consideration of the factors listed in Section 100 is as follows.

[31] There have in our view been no significant changes of circumstances since the title condition was created (Factor (a)). The applicants point to the properties beginning to be changed, but, as we have said, these are in our view very minor matters, consistent with maintaining the external appearance of the properties: we do not consider they go any distance towards supporting the reasonableness of the applicants’ proposal. Other alleged breaches referred to – the holding of business meetings, parking of some types of vehicles, matters relating to woodland areas within some owners’ properties – also do not seem to us to amount to changes in circumstances in any way material to the question whether altering the external appearance of a house by painting it a substantially different colour from the rest is reasonable. We can accept the possibility that there might in some community situations be such widespread departure, usually after some substantial period of time, from title conditions as to make another departure reasonable, but we do not accept that such a stage has been reached at this estate.

[32] Accepting that it there is no evidence of any reduction in the values of other houses as a result of the applicants’ breach of this condition, we do consider that the condition confers some benefit on the benefited properties, i.e. the properties of the objectors here (Factor (b)(i)). That benefit lies in the maintenance of the external appearance of the houses unless the owners agree in terms of the conditions to remove or change the condition. A deed of conditions with clear provisions in relation to the requirements for removal or variation of its terms provides an element of order, certainty and clarity on which owners can rely. Specifically, protection against owners with individual tastes painting their houses distinctive colours with the potential to disturb the overall appearance and amenity of the estate, while no doubt rather less significant than protection against some other forms of development, does appear to us to be of some value. Factor (b)(ii) is not applicable.

[33] The applicants obviously – and we can accept sincerely – consider that this condition impedes their enjoyment of their property by restricting (not prohibiting – the condition allows them to seek written consent) alteration of the external appearance of their property (Factor (c)). They find the colour attractive and see it as positive change at the estate. They are frustrated at not being able to proceed with something that they see as positive or at least not harmful to anyone else. Objectively, however, we can find little real disadvantage to the applicants in the requirement to maintain the visual appearance of their house by adhering to the basic colour scheme. The applicants refer to discouragement of owners’ fulfilment of their obligations under Clause 7 to maintain the houses in a good state of repair and external decoration, but that obligation is quite separate and clear: Clause 1(c) does not in our view stand in the way of owners’ fulfilment of their obligations under Clause 7. The applicants have referred to protection from the elements and a cleaner, fresher appearance, but we do not see Clause 1(c) as having any bearing on these matters.

[34] This condition is not an obligation to do anything, so Factor (d) has no application.

[35] Even now, several months after this application was lodged, this condition is just over one year old (Factor (e)). There may in some cases be circumstances making this reasonable, but in this case the applicants simply wish out of this condition immediately after it was created.

[36] The purpose of the title condition can be an important factor, sometimes in fact considered first by the Tribunal (Factor (f)). If the purpose can be discerned, assuming it to be a reasonable purpose, is it still relevant? Can it still be fulfilled? In their application, the applicants made no reference to the purpose of the condition, and we have struggled to find any such reference in any later submission. In fairness, the respondents also have not referred to this, at least not expressly, but the onus is on the applicants to satisfy us. The purpose appears to us clear, viz. to maintain a uniform external appearance of the houses in the estate. This appears to us a reasonable and normal purpose in a property community such as this, and it remains relevant and capable of fulfilment. Some owners may not agree with this purpose, but the deed provides a mechanism for altering it with the agreement of a substantial majority. The applicants did make a point about a need for uniformity when the estate was owned by the Ministry of Defence, for occupation by RAF officers, the suggestion being that such uniformity was no longer appropriate. That may seem a reasonable approach, and might have been relevant had this condition been created in the context of the Ministry’s ownership, but this condition was specifically created in 2010 as part of the establishment of the current ownership structure.

[37] Factor (g) can be taken as favouring the applicants: whether or not there is technically ‘deemed consent’, the fact is that, as a matter of public planning regulation, the applicants are not prohibited from painting their house another colour. Their proposal is not considered unreasonable in the public interest. In most cases, however, the public planning position is of limited relevance in considering what is reasonable in the context of the private title conditions.

[38] We agree with the applicants that the question of willingness to pay compensation is of no relevance in this case (Factor (h)).

[39] Factor (i) is not applicable.

[40] While we have touched on some of these matters already, we should consider a number of matters which the applicants consider to be material to the reasonableness of this application (Factor (j)).

[41] They suggest that there was acquiescence in their painting of their house, and refer to their investment of time and money in that. There is, in our view, nothing in this. As we have said, applicants should not derive any assistance from steps taken in breach of the condition. We in any event do not consider that they have made out any case of acquiescence, whether technically under Section 16 of the Act or in any more general consideration of reasonableness. We do not see how section 16(1)(c)(i) could be applied in a case where objection was formally taken approximately 5 weeks after the applicants started the offending activity. The exact terms of a conversation between Mr Davenport and Mrs Wood on the day the applicants started painting are disputed, and there is no evidence of actual objection by any other proprietor any earlier than this, but the factors’ objection appears to us clearly to negative acquiescence.

[42] The applicants question whether interest to enforce this burden can be established. We recognise that although the test under Section 8(3)(a) of the Act has not formally been placed in issue in this case, in practice, if that test were not satisfied, the benefited proprietors would derive little benefit from protection at least from the applicants’ particular proposal. There is no direct evidence either way as to whether there is any effect on value as a result of the applicants’ failure to comply with the condition. In our view, however, there can be at least a reasonable apprehension as to that. There is therefore some uncertainty about this.

[43] The applicants have referred to owners starting to bring about changes which will improve the appearance of the estate from its somewhat stark appearance under MOD ownership, but their proposal to paint their house a clearly different colour seems to us to be the sort of change which reasonably requires a general level of consent. One could imagine all the proprietors, or at least almost all the proprietors, agreeing to depart from uniformity of house colours, but that has not happened here.

[44] The applicants refer to the extent of support for their position and also the low level of opposition. We accept that these are factors to be considered. We have, of course, already referred to Clause (Twelfth) of the deed of conditions. A further particular point taken was that the immediate neighbours on either side not only do not object, but support the proposal. Given the alignments of the houses, we are not surprised that objection comes more from owners opposite, who can see the house from the front of their properties, than from owners on either side. In relation to the applicants’ suggestion, under reference to (we think) Section 35 of the Act, that owners within 4 metres have consented, firstly, it appears to us that when Section 125 is applied the owners of Nos 11 or 12, or at least one of them, might count as ‘adjacent owners’; and secondly, in any event, even formalised consent under that provision would be subject to applications to the Tribunal by other proprietors under Section 37 and 90(1)(c) to preserve the community burden.

[45] Finally, we do not consider that the applicants’ references to other types of breaches of conditions helps their case on reasonableness. We can understand the applicants’ feeling of unfairness, particularly in relation to breaches of the condition dealing with parking, but it seems to us that such other matters should be viewed on their own merits. If there are perceived problems, for example, with parking unsightly vehicles, holding business meetings or felling trees, these should be looked at separately: even if some other breach is established, it does not make this proposal reasonable. We have made only very limited findings on such allegations.

[46] Drawing all these considerations together, we are not satisified that it is reasonable to grant this application. Although the matter of house colour may not seem of fundamental importance and it is not clear that other owners would be held to have interest to enforce, the applicants are seeking to undermine the clear purpose of this title condition very shortly after it was created, when, as it seems to us, the extent of the burden it creates for them is very slight and there is at least some benefit to other owners. There is no material change of circumstances. The condition has a clear, valid purpose. We are unimpressed by the applicants’ arguments of acquiescence and their previous ignorance of the condition. We do not ignore the fact that there is some support from other owners for the applicants’ position, but it does not seem to us reasonable in the circumstances of this case to depart from the provision in the deed of conditions requiring a sufficient majority of owners to change a condition of this sort, particularly when the evidence is that that clear majority cannot be achieved.

[47] For these reasons, we have refused this application. We have been considering the applicants’ primary case for removal of the condition, but we do not consider that their alternative formulation is in any better position. This would simply bring the issue back to the reasonableness of the proposal to paint the house a markedly different colour, or, worse, would leave matters unresolved.

[48] Any issue which arises about expenses can be disposed of, in accordance with our usual practice, on the basis of written submissions.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 23 June 2011

Neil M Tainsh – Clerk to the Tribunal