OPINION

Rubislaw Quarry Aberdeen Limited (Applicants)
v
(First) Hill Of Rubislaw (Q Seven) Limited
(Second) Barry Stuart Clarkson
(Third) Paul Michael Clarkson
(Fourth) Stuart Andrew Clarkson
(Fifth) Alan Massie
(Respondents)

Introduction

[1] The applicants seek the variation of a title condition in order to permit the construction and operation of a granite heritage centre at Rubislaw Quarry, Aberdeen. The relevant deed of declaration of conditions was registered on 19 March 2003 and was intended to regulate the redevelopment of the quarry subjects. The applicants own the central quarry subjects (“the CQS”) as defined by the deed. The first respondents own the northern quarry subjects (“the NQS”) as defined and the second, third, fourth and fifth respondents own various flats which are included within the southern quarry subjects (“the SQS”) also as defined. The CQS are the burdened property and the NQS and SQS are the benefited property. The respondents oppose the application for variation. The application is made in terms of section 90(1)(a)(i) of the Title Conditions (Scotland) Act 2003.

Procedure

[2] We held a site visit on 30 October 2017 and a hearing in Edinburgh between 6 and 10 November 2017. The applicants were represented by Mr Eric Robertson, Advocate, instructed by Messrs Peterkins, Aberdeen. The respondents were represented by Mr David Thomson QC, instructed by Messrs Burness Paull LLP, Edinburgh and Aberdeen.

Witnesses

[3] The applicants called Mr Hugh Black, who is one of the directors of the applicants. They also called Mr Steven Barker, architect, of Halliday Fraser Munro, Architects, Aberdeen; Mhairi Donaghy of EKOS Limited, Economic and Social Development Consultants; Mr Ian Mitchell FRICS of Beedie Mitchell, Quantity Surveyors; Councillor Marie Boulton, Convener of Aberdeen City Council’s Planning Committee (via video link); and Dr William Latimer, FCIEEM of Northern Ecological Services, Aberdeenshire. The applicants also led the evidence of Mrs Sandra Whyte via a witness statement. Mrs Whyte is also a director of the applicants. Her late husband Mr Sandy Whyte had purchased the shares in the applicants with Mr Black. The respondents led Mr Stewart Davidson. Mr Davidson is a property developer and his company Rubislaw Land Company Limited (“RLC”) had been one of the parties to the deed of conditions. He is currently a consultant for the owners of the NQS to assist in obtaining a further planning permission for the site. The respondents also led Mr Bill Paterson FRICS, quantity surveyor of MacLeod & Aitken Limited and Mr Gordon Macdonald FRICS of Allied Surveyors Scotland.

[4] At the commencement of the hearing the respondents objected to the evidence of four of the applicants’ witnesses. It was submitted, under reference to Kennedy v Cordia (Services) LLP and Toth v Jarman that the witnesses were giving evidence as skilled witnesses but were not independent witnesses. We heard their evidence under reservation. The respondents’ final position was that they maintained their objection only regarding certain passages of the evidence of Mr Barker and Ms Donaghy.

[5] The respondents also produced an affidavit of Mr Ian Nicol, one of the proprietors of flats at Queens Road which included a petition signed by 19 owners of flats at Queen’s Road and Queen’s Avenue North objecting to the “amendment” of the deed of conditions.

Statutory provisions

The Title Conditions (Scotland) Act 2003 (“the 2003 Act”) provides as follows:

“90. Powers of Lands Tribunal as respects title conditions

(1) Subject to sections … 98 … of this Act …, the Lands Tribunal may by order, on the application of–

(a) an owner of a burdened property or any other person against whom a title condition (or purported title condition) is enforceable (or bears to be enforceable)–

(i) discharge it, or vary it, in relation to that property; …

98. Granting other applications for variation, discharge, renewal or preservation of title condition

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; …

100. Factors to which the Lands Tribunal are to have regard in determining applications etc.

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.”

Authorities

Tailors of Aberdeen v Coutts (1837) 2 Sh & McL 609
Frame v Cameron &c (1864) 3 M. 290
Murray’s Trs v Trs of St Margaret’s Convent (1906) 8 F. 1109
Murray’s Trs v Trs of St Margaret’s Convent 1907 S.C. (H.L.) 8
Anderson v Dickie 1915 S.C. (H.L.) 79
Hunter v Fox 1964 S.C. (H.L.) 95
Main v Lord Doune and others 1972 S.L.T. (Lands Tr) 14
Bolton v Aberdeen Corporation 1972 S.L.T (Lands Tr) 26
Cameron v Stirling 1988 S.L.T (Lands Tr) 18
Lothian Regional Council v Rennie 1991 S.C. 212
Stoddart v Glendinning 1993 S.L.T. (Lands Tr) 12
Caledonia North Sea Ltd v British Telecommunications plc 2002 S.C. (HL) 117
Daly v Bryce, 28 April 2006, LTS/TC/2005/15
George Wimpey East Scotland Ltd v Fleming 2006 S.L.T. (Lands Tr) 2
Ord v Mashford 2006 S.L.T (Lands Tr) 15
Church of Scotland General Trustees v McLaren 2006 S.L.T. (Lands Tr) 27
Smith v Prior and others, 17 November 2006, LTS/TC/2006/06
Smith v Elrick and another, 20 November 2006, LTS/TC/2006/14
Toth v Jarman [2006] C.P. Rep 44
McGregor v Collins-Taylor, 14 May 2009, LTS/TC/2007/32
McPherson and another v Mackie 2007 S.C.L.R. 351
Smith and another as Trs v Lawrence and others, 31 October 2008, LTS/TC/2008/18
Ferguson v Gunby and Nelson, 15 April 2015, LTS/TC/2014/30
Kennedy v Cordia (Services) LLP 2016 SC (UKSC) 59.

Deed of Conditions

[6] The 2003 deed of declaration of conditions is lengthy and deals with a number of issues between a number of parties going beyond the present dispute. Insofar as relevant it dealt with issues between the owners of the NQS, the SQS and the CQS. At that time the NQS and the CQS belonged to RLC. The SQS belonged to two of the current respondents, namely Stuart Clarkson and Alan Massie (referred to as “CM” in the deed) and to Barratt Construction Limited (referred to “BC” in the deed). The three areas comprise the “Quarry Subjects” as forming Rubislaw Quarry and 10 Queens Avenue, Aberdeen all delineated and hatched in a supplementary plan 2. The NQS are shown as a perimeter area at the north of the quarry, which run for approximately 210m along the perimeter up to some 40m in depth. It also includes a further narrow strip along the western perimeter of the quarry adjacent to Hill of Rubislaw Road on one side, and the CQS on the other. The SQS lie along the south east perimeter of the quarry and are accessed by Queen’s Avenue and Queen’s Road. The SQS subjects run for about 180m along the perimeter up to about 75m in depth. The CQS comprise the actual solum of the excavated quarry, now filled with water, and includes a perimeter area along the south and west of the quarry, including an area adjacent to Queen’s Road. The CQS extend to approximately 7.3 acres. The deed of conditions provides as follows:-

“PRESERVATION OF AMENITY OF QUARRY SUBJECTS ETC 8.

In order to preserve the amenity of the quarry subjects whilst regulating the development of the northern quarry subjects and the southern quarry subjects, the northern quarry proprietors, the central quarry proprietors and the southern quarry proprietors hereby agree that the following conditions will apply:-

DEVELOPMENT OF CENTRAL QUARRY SUBJECTS 8.2

With the exception of

(a) …

(e) the drainage of surface water from the northern quarry subjects and/or the southern quarry subjects to the central quarry subjects …;

the central quarry proprietors shall not develop or seek to develop any part of the central quarry subjects, and in order to preserve the amenity of the quarry subjects generally shall not permit or allow any other occupation or use of the central quarry subjects for any purpose other than as a designated quarry site, green belt or amenity ground in its existing and/or natural condition, including without prejudice to the foregoing generality any use of the central quarry subjects for tipping or for depositing or storing of any other commercial or industrial substance or material which shall be strictly prohibited …”

[7] The applicants propose a variation to the condition, highlighted as follows:-

“8.2 The central quarry proprietors shall not develop or seek to develop any part of the central quarry subjects other than for the construction and operation of a heritage centre with associated access, parking and engineering works, which development may include safe walkways to a viewing platform, a safe staircase to permit inspection of lower quarry levels and the use of floating scientific, educational and environmental pods on the water surface within the quarry, or as a designated quarry site, greenbelt or amenity ground, and in order to preserve the amenity of the quarry subjects generally shall not permit or allow any other occupation or use of the central quarry subjects for any purpose other than as a designated quarry site, greenbelt or amenity ground in its existing and/or natural condition, including without prejudice to the foregoing generality any use of the central quarry subjects and shall not permit or allow use of the central quarry subjects for tipping or depositing or storing of any other commercial or industrial substance or material which shall be strictly prohibited.”

Background facts and circumstances

[8] Rubislaw Quarry is located at the Hill of Rubislaw and has been worked since 1740. An estimated 6m tonnes of granite have been extracted giving Aberdeen the name of the granite city. The granite was also exported worldwide. The quarry closed in 1971. It is over 140m deep and at its widest the hole is 120m in diameter. It is said to be the largest manmade hole in Europe.

[9] Since the closure of the quarry, the hole has steadily filled up with water. There is no prospect of the quarry being returned to its former use. In the 1980s land to the north of the NQS was developed as large offices for the oil industry. These comprise Seafield House, Marathon House, Rubislaw House and Royfold House. In the 1990s RLC worked towards obtaining planning permission for residential developments on the NQS and SQS. By 2001 RCL had sold the SQS to the fourth and fifth respondents who then sold part of those subjects to Barratt Construction Limited. The deed of conditions entered into in 2003 was intended to supersede two earlier deeds of conditions of 1988 and 2000. Part of the aim was to keep the CQS as an amenity area for the benefit of the developments on the northern and southern areas.

[10] Outline planning permission was granted in 2001 for the development of offices and flats at the NQS. During 2002 various planning permissions were also granted for residential developments on the SQS. RLC sold the NQS to Scotia Homes Limited for residential development in 2005.

[11] The residential developments on the SQS have been built and sold. These include four flats at 1-4 Queens Avenue at the north portion of the SQS. They are part of a gated area. Each of these flats belongs to one of each of the individual respondents. These flats overlook the CQS area. There are two further blocks of flats at 150 and 152 Queens Avenue. These are set back from the quarry. One of these flats belongs to the fourth respondent. There are three further blocks of flats, namely Rubislaw Mansions at 158, 160 and 162 Queens Road at the south portion of the SQS. Each block comprises eight flats. They all overlook the CQS area. Two of these flats belong to the fourth respondent.

[12] The NQS have the benefit of a planning permission for 108 executive flats including underground car parking. This development was proposed by Scotia Homes Ltd but did not proceed. It is likely one factor was the difficult nature of the site and the topography of the surrounding land which would be expensive to develop. This can be inferred from the fact that the sale price of those subjects at £1.7m in 2005 and subsequently at £3.4m in, we think, 2008, was well below the cost of development land elsewhere in the city and at inferior locations. A subsequent proposal for 107,000 square feet of open plan offices was also granted planning permission on the NQS. This also has not been developed and is now very unlikely given the large surplus of office accommodation in Aberdeen. The current owners of the NQS are the first respondents. They are pursuing plans to build around 280 flats on the site but have not yet made a formal application for planning permission. A recent iteration of the proposal shows a building of many storeys high including two high towers, which was intended to comprise flats for rent. Most of these flats would overlook the quarry.

[13] There is no public access to any of the quarry subjects. There is a high perimeter fence for obvious safety reasons. In fact there is no formal access of any kind to the CQS. (Mr Black was told by the sellers “you will have to cut a hole in the fence and close it after you.”) Nor is there any significant public view of the CQS. Despite being located within a busy part of the city, there is a sense of tranquillity at the location. All the perimeter areas comprise trees and vegetation, although this is more limited at the SQS where there are the flats.

[14] In 2010 Mr Davidson decided to sell the CQS. There was a certain amount of media interest, given the unusual and historic nature of the property. It was advertised on the basis that although there was a deed of conditions restricting development, “there may be an opportunity for imaginative developers/architects to produce a scheme that may be acceptable or alternatively tourist or leisure uses may be considered suitable.” The site was then owned by another of Mr Davidson’s companies, namely Bixen Limited. The company whose only asset included the site was duly bought by Mr Black and an old friend, the late Mr Sandy Whyte. They successfully offered to buy the company for £50,000 and the company’s shares were duly transferred to them. The company are the present applicants whose name has been changed as designed above.

[15] Messrs Black and Whyte had not initially envisaged developing the CQS site. However, it soon became apparent that there was a significant public interest with the site being in local hands for the possibility of steps being taken in some way to open the quarry to the public. In essence they had on their hands a famous landmark which was hidden from the public. They received phone calls from members of the public supporting the idea that local people had bought the quarry. They were contacted by international architects’ firms offering ideas on how to develop the site. They even received an informal offer from the former owner to buy it back. They started to meet influential people in the city, including councillors, one of whom had been campaigning for a granite museum in the city. They organised a dive to the 1937 shelf of the quarry by following down a remaining Blondin cable some 120 feet below the surface. Subsequently an underwater survey was carried out. They started presenting to school children and public groups on the subject of the quarry. They spoke to a sell-out audience at a “Granite Festival” in the Cowdray Hall. Sadly, Mr Whyte died of cancer in 2015. Mr Black estimated that between them, and by 2017, they had made presentations to over 60 groups.

[16] In 2012 and 2013 Messrs Black and Whyte took steps to reduce the water level by about 6 metres. They had been contacted by the city council who had received concerns from residents of Rubislaw Mansions as to the rising water level. They installed electricity and a submersible pump which pumped water to the West Burn of Rubislaw. This took five or six months to carry out, and was done at their expense.

[17] Messrs Black and Whyte wished to proceed with some form of scheme to allow the public access to the site. They engaged a local architects’ practice, Messrs Halliday Fraser Munro. Initially the discussions involved a simple scheme to allow public access through a pedestrian entrance to walk down to an open viewpoint close to the quarry’s edge. The plan involved an unmanned and unsupervised area. This proved difficult to design from the perspective of safety.

[18] The architects proceeded to draw up a much bolder design which involved a granite heritage centre overlooking the edge of the quarry. This design obtained planning permission in December 2015. The applicants’ proposal involves developing that part of the CQS alongside Queens Road and adjacent to Rubislaw Mansions, at the south and south-west of the quarry. It involves construction of a building which would extend over the edge of the quarry, with large overlooking windows and a window set in the floor, thus allowing viewers to look down to the quarry below. There would be some 48m of frontage overlooking the quarry. The Queens Road façade would be an impressive granite-faced structure. There would be vehicular and pedestrian access from Queens Road in which the former would lead to an underground carpark. The building would essentially comprise four main sections, namely a permanent exhibition space, a temporary exhibition space, a cafeteria area and an area comprising two conference suites. There would be associated teaching rooms, storage, toilets and kitchens. The total floor area including circulation areas would extend to 958 square metres.

[19] A city council document entitled the “Strategic Infrastructure Plan” indicated that the council supported the principle of establishing a granite museum at Rubislaw Quarry. Mr Black produced about 40 letters and emails of support for the project from members of the public and various organisations.

[20] The planning process was not entirely straightforward. At one point the planners indicated that they were minded to refuse the application. The difficulty was that the proposal involved the loss of some 86 trees on the footprint of the proposed building, some of which were established beech trees along the banked perimeter of the site adjacent to Queens Road. There is a tree preservation order effective within the site. The planners considered this to be part of an important gateway to the west of the city and sought to prevent the loss of those trees.

[21] A compromise was put forward in the form of mitigation. At the south-west and west of the site, the quarry shelves less steeply than other parts of the site which are, to large degree, cliff face. The proposal would drain the water level by some 40-50m to expose the south and western shelves perhaps down as far as the 1937 shelf. The water level would be maintained at a certain depth thus allowing the generation, and to some extent, regeneration of plants and trees. The proposal involved the use of indigenous species being planted on the shelved areas. These would be more likely to work in the anticipated environment and might include the use of growing mats to support long term vegetation. It can be seen that the water level has steadily risen over the years so as to cover a number of trees at the south and west shelves which have since died. With the proposal this process could be reversed by the planting of new trees and the maintenance of the constant water level.

[22] The possibility of a refusal of planning permission received a negative reaction from the local press. The council had assembled a review panel which included prominent architects and which supported the proposal. The decision granting permission was ultimately made by a planning officer since there were only a handful of objections. The associated report concludes that although there were significant adverse impacts, these were outweighed by potential tourism, educational and economic benefits. The planning conditions require the agreement with the planning authority for detailed schemes in respect of the planting on the exposed ledges, the maintaining of constant water levels and other matters.

Further evidence

[23] We now turn to passages where the evidence was more controversial. Halliday Fraser Munro provided a memo discussing the 16 planning conditions to which the permission was subject. In Mr Barker’s opinion, none of these gave rise to undue difficulty. There was also produced a memo from the city’s roads engineer who had no objection to the application.

[24] Dr Latimer had investigated the site and had reported for the planning application. The site was designated as a non-statutory local site for nature conservation (LNCS) for its woodland cover and open water in an urban setting. In his opinion much of the existing woodland was of poor quality. The beech trees around the perimeter of the site suffered from erosion at the roots and did not have a long life expectancy. Other trees at the south and west including sycamore and birch were being gradually submerged by the rising water. In his opinion the lowering of the water level presented a significant opportunity for habitat gain. He had done a calculation whereby the woodland which would be lost to the construction footprint of 2,430 sq m would be matched by woodland planting on exposed shelf to the extent of 2,500 sq m. Some 35,300 sq m of quarry walls would be exposed for natural colonisation so that cliff flora and fauna could become established, including nesting ledges for birds and, in particular, peregrine falcons. This would more than match the loss of open water which would remain a habitat for wildfowl. He accepted that the lowering of the water levels would produce, at the cliffs around the rest of the site, i.e. at the NQS and the SQS, a somewhat bleak visual outlook. There would however be a greening effect from natural vegetation seeding, which in his view would take place over five to ten years. On the other hand at the exposed ledge at the south and west, two to three year old tree whips were proposed which would give an immediate sense of green cover.

[25] Dr Latimer’s views can be contrasted with the written views of the reporting officer to the planning application. The officer considered that the loss of 86 trees would have a significant and substantial adverse impact on the tree cover and character of the south-western edge of the quarry, to the detriment of the amenity and appearance of Queens Road and the habitat and ecology of the quarry. He stated that the woodland alongside Queens Road is a prominent and important landscape feature as a gateway to the city. He was also unconvinced on the feasibility of establishing woodland on granite bedrock on what was considered to be a fine unstructured sediment derived soil.

[26] Ms Donaghy had prepared the EKOS report for the planning process, which had been updated. Essentially she had sought to identify likely economic impacts and benefits which would arise from the development. The report was expressly not a market appraisal or report on deliverability of the development. She was asked to assume 75,000 visitors per annum by year 5. She estimated that the project would involve 20-25 full-time equivalent staff. Aberdeen has relatively few tourist attractions for a major city and the north east generally was losing out to other parts of Scotland. She produced “GVA” or gross value added figures, which we understand is a method for measuring economic performance which measures the income generated by businesses after the subtraction of certain costs. She estimated net additional annual wages and salaries of £370,000 being created and additional GVA of £730,000 being generated at the Aberdeen city and shire region as direct operational impacts Additionally she predicted off-site impacts such as between £190,000 and £310,000 GVA at the Aberdeen city and shire region. She predicted further beneficial long term and wider impacts. The report also highlighted various business related, environmental and social benefits of the project. It would help much needed growth in tourism. Amongst other things it could provide a meeting place for local residents and conference facilities for businesses. It could provide interactive teaching facilities about the role of granite in Aberdeen. In conclusion she saw the proposed heritage centre as having only positive economic and social benefits and did not envisage any situation where it would have negative impacts on existing visitor attractions.

[27] Ms Donaghy’s evidence was subject to various criticisms, in particular, the fact that the volume of day visitors and tourists of 75,000 was not a figure which she had calculated, but had merely been given to her. However, she considered that the figure was achievable, in her experience. It was also suggested that the report did not contain enough reasoning to be of value.

[28] A report by Anderson, Anderson & Brown LLP, Chartered Accountants, (“AAB”) was used in the planning process and was also produced. This indicated that the nearby Gordon Highlanders Museum attracted some 26,000 visitors in 2009. The Aberdeen Maritime Museum attracted 76,000 visitors that year. The report went on to project certain income and expenditure figures in the first three years of operation of the project.

[29] The AAB report also estimated the set up expenditure for the heritage centre to be some £6.5m. Of this the building construction was costed at £4.4m excluding professional fees. Mr Mitchell spoke to his estimate of the £4.4m costing as at May 2016. He conceded that it would be necessary to add some 5% to the cost for updating, then another 3-5% for the risk of inflation prior to the contract being signed off. There would require to be approximately 10% professional fees associated with the construction process. We infer that the costs in terms of the AAB report (excluding professional fees already taken into account) would update to approximately £6.7m.

[30] On the other hand Mr Paterson’s opposing construction cost figure, prior to the addition of fees, was of the order of £6.5m. A significant amount of the difference was due to the cost of a piled wall alongside Queens Road with the piles extending to 15m in depth or to bedrock. Mr Paterson was familiar with the NQS and thought piling would be necessary. On the other hand Mr Mitchell had been involved with the SQS site including, we understood, the construction of the adjacent Rubislaw Mansions. He did not think it would be necessary to quarry into the rock to any significant extent in order to take the site down to formation level, so that piles would be unnecessary. Neither party has, however, carried out investigative ground works on the site. There were other differences in that Mr Paterson considered that more excavations would be required over a larger area and thus higher costs. He also assumed there would be higher main contractor’s preliminaries, overheads and profit and higher contingencies and inflation allowance. Mr Paterson’s total construction cost including fees and allowances for risks and inflation amounted to approximately £8m. Applying the same arithmetic in the AAB report to the other expenditures mentioned therein, the total capital expenditure on the respondents’ figures would amount to about £9.4m.

[31] It was accepted by the applicants that some form of grant and/or crowd funding would be required in order to finance the project. Mr Barker explained that one of the now retired partners of Halliday Fraser Munro, namely, Mr Bob Reid, had had informal discussions with the Heritage Lottery Fund concerning the project. Mr Reid is a former head of planning at Aberdeen City Council and planning director of Halliday Fraser Munro, and former convener of the RTPI Scotland. The representative of the Heritage Lottery Fund indicated that the fund did not receive many applications from the north east of Scotland and was positive about the applicants’ making an application for funding. Councillor Boulton was also enthusiastic about the project. It was important for city tourism and leisure, post the oil boom. She was aware of many imaginative uses for the Heritage Centre including for the staging of theatre celebrating the history of granite, and was also conscious of an international angle. She had been bombarded with support for the proposal, particularly when there had been a possibility that the council might refuse planning permission. She had received 40 emails in one day supporting the project, or at least criticising the council were it not to do so. She was aware that two of her colleagues had had a similar experience. She was keen to allocate funding for the project although that would be a decision for the relevant committee once an application had been made. There was the common good fund in addition to the general finance budget. Mr Black had had discussions both with the National Lottery Fund and the City Council regarding possible grants. He could not make any formal application until the legal impediment of the deed of conditions had been dealt with. The discussions he had had were supportive. He understood that the Heritage Lottery Fund might award up to £2m.

[32] Finally we turn to the valuation evidence of Mr Macdonald for the respondents. Mr Macdonald considered that there would be a negative impact caused by the applicants’ development upon the value of the NQS and the SQS. This was due to the loss of the “lake view” at a unique site and the imposition of a “bleak” outlook for a significant number of years caused by the development and lowering of water levels.

[33] Regarding the NQS he considered that residential use as opposed to office use was more likely to be implemented at the current time, bearing in mind the quite prolonged recession which Aberdeen has been going through since the drop in oil price in 2015. In his opinion any developer commencing development on the NQS in the knowledge of the proposed heritage centre, in clear view of the new flats, would require to make design and cost adjustments to take account of the negative impact. He came to a diminution in value figure of £350,000, which figure he accepted was to a degree subjective and capable of relatively wide variation. This depended upon adjustment to any one of the many assumptions he had made in order to arrive at this figure. We understood that his figure was a residual value calculation for development land, based upon the 108 flat proposal which has planning permission. Unfortunately he did not set out his workings or assumptions for calculating this figure, which we understood involved the projected cost and sale of the completed development. However he did say in answer to questions from the Tribunal that the notional reduction in price of each flat was less than 5% in all cases, depending on which style of flat was involved, and that the developers’ profit implying an assessment of risk was assumed at 27½%. In cross-examination he answered a question to the effect that if the rentals of the recently proposed NQS flats were unaffected by the heritage centre, then the underlying value of the land would be unaffected.

[34] Turning to the SQS, the Rubislaw Mansions flats, namely Nos 158, 160 and 162 Queens Road, all looked over the water of the quarry. He was able to produce numerous transactions which indicated that these executive flats may be valued between £300,000 and £315,000. He was able to find two comparisons, one of which was recent, in October 2015, at 122B Queens Road which did not have a view of the water. Although slightly smaller in size, it sold for £275,000. In his opinion it could be seen from this and another older comparable site that subjects without the tranquil lake view sold for something like 8-10% less than flats overlooking the water. Thus he believed a deduction of 5% of the value of the Queens Road, Rubislaw Mansions flats would be appropriate should the development proceed. Mr Macdonald did not, however, produce a detailed working for this figure.

[35] Turning to 1-4 Queens Avenue North, Mr Macdonald accepted that he had not inspected any of the four properties and had no files on which to consult. These were larger properties and he took the view that a reduction in value of 7.5% would be appropriate. He was aware that numbers 1 and 3 were ground floor flats. On reflection he conceded the diminution in value for these flats would be less than 7.5% in the event of the applicants’ development proceeding, but there would still be some negative impact in respect of some garden area, currently covered with trees and vegetation. It was subsequently ascertained that although the flats own land adjacent to the water, which could perhaps be described as garden or amenity area, access is impractical for the owners on account of the high fence fencing off the buildings from the remaining quarry perimeter.

[36] Mr Macdonald also sought to apply a commercial EBITDA valuation to the heritage centre, on the assumption that it was already built and achieving a turnover in the first three years as stated in the AAB report – i.e. on an “up and running” basis. In his view there was a range of values between £1.4m and £1.75m. Mr Macdonald did not, however, produce the calculation he had made, and in particular could not recall the multiplier which he had used.

[37] Mr Macdonald was clear that if the deed of conditions theoretically allowed a reduction in the quarry water levels, but still did not permit the development of the heritage centre, he would not have assumed a diminution in value. There would be no practical reason for the owner of the CQS to reduce water levels without the heritage centre being in existence; in any current valuation he would therefore assume the water levels would be retained without revealing the “cliff face” which would occur should the quarry be drained.

Applicants’ submissions

[38] The applicants submitted that it was reasonable to grant the application in terms of section 98(a) of the 2003 Act. Under reference to Ord v Mashford the Tribunal exercises a discretion weighing a variety of issues of fact as the basis for a conclusion as to whether or not it is reasonable to grant the application. Counsel also accepted that the Tribunal has made it plain in previous decisions that recourse to previous decisions is seldom of assistance given that circumstances differ widely from case to case. Reference was, however, made to Macpherson & Another v Mackie in which potential development value of a site was relevant in terms of assessing the weight of the burden. Reference was also made to McGregor v Collins-Taylor in which the Tribunal stated it was no longer their practice to make an order expressed by reference to the terms of a planning consent, but rather to identify the essential conditions so that they could appear explicitly in the title. It was accepted, under reference to familiar lines of authority, that the language of title conditions should be clear. If there was any difficulty as to the form of a Tribunal order, he suggested there be further procedure.

[39] Turning to the deed of conditions counsel submitted that the purpose of clause 8.2 was to make sure that the distinctive character of the central quarry subjects operates “to preserve the amenity of the quarry subjects generally”. In other words it was not only the NQS or SQS whose amenities were to be preserved, but also the amenity of the CQS. The expression “preserve” should be applied in a realistic way to the facts; “preservation” may involve taking pro-active steps where things may have disappeared or changed irretrievably.

[40] Turning to factor (a) it was apparent that the Chevron building immediately to the north of the NQS had been constructed since 2003. Although that building had been in prospect in 2003, what had been a low single storey storage building was now replaced by a three storey building, which also had a larger footprint. Development proposals for the NQS had changed over time. The natural environment had changed in that there had been deterioration in the state of trees and erosion of soil. Water levels had risen significantly since 2003. It could be seen from a 2004 photograph that more granite cliffs were evident at that time. It was fallacious to think that “amenity” amounted in 2003 to a “lakeside location”. There was no provision in the deed of conditions which spelt this out. In 2003 Mr Davidson had accepted that the views at that time were “down” to the water. The words “existing and/or natural condition” in the deed of conditions referred to the position existing at 2003 – i.e. a lower water level than at present. The word “natural” could be contrasted with “artificial” and reflected the fact that the quarry is a natural feature. Some meaning should be given to the words “designated quarry site” in the deed of conditions. It was notable that the words “green belt or amenity ground” did not connotate water. The quarry subjects as defined in 2003 were not intrinsically a lake or, as it were, a gradually filling area of water. It was clear that there was run-off water into the quarry from new built developments, which could not be said to leave the quarry in its “natural” state.

[41] The evidence was not very clear as to the extent of the rise in water. Reference was made to a technical report for Scotia Homes in June 2007. This mentioned that the water level was approximately 45m from the top of NQS rim.

[42] Turning to factor (b) it was emphasised that the deed of conditions expressly prohibited tipping and depositing and storage of industrial and commercial substances. The views of the benefited proprietors were already impinged upon by various developments. In other locations, trees and other obstructions would obscure views of the water. The benefited properties at the SQS would only have oblique views of the Heritage Centre. Tree regeneration had taken place, screening the flats 1-4 Queens Avenue North. The further planting described by Dr Latimer would have a screening effect regarding the development areas. Design features such as the underground car parking and access being hidden would result in no negative impact from the access. It was pointed out that the Aberdeen City and Shire Design Review Panel had commended the modern and dramatic design.

[43] It was submitted under factor (c) that the existence of the title condition impeded enjoyment of the burdened property since it prevented the construction of the Heritage Centre for which planning permission had been granted. The surface water from neighbouring subjects draining into the quarry interfered with the reasonable comfort of the applicants and presented an environmental challenge which could be more effectively met by progressing the heritage centre which implied the reduction in water levels to a consistent level. It was submitted that the applicants could not be taken down to accept deteriorating condition of trees and environment. Emphasis was also made of the fact that the sales particulars which Mr Davidson himself had approved, had indicated that there may be opportunity for imaginative developers and architects to produce a suitable scheme. This inducement to purchase could also be regarded as coming under factor (j).

[44] In terms of factor (e) it was submitted that a period of some 13 years was not significant. The history of the site showed that there were changes to previous deeds of conditions within much shorter periods.

[45] In terms of factor (f) it was submitted that the purpose of the title condition should be seen in the context of the wording of the deed. As previously submitted there was no stipulation about the creation or maintenance of a lake.

[46] Under factor (g) it was submitted that neither the existing residential nor office permissions for the NQS had been implemented. The owners were re-detailing a scheme of flats for rent. On the other hand the applicants had a permission which had been granted and which, subject to variation of the condition, they intended and were able to develop.

[47] The applicants did not offer compensation in terms of factor (h). The heritage centre would not cause any difficulty to the owners of the NQS or SQS. The reason why the NQS had not been developed was on account of the economic recession. Given the environmental mitigation which was proposed by the applicants, the respondents had not demonstrated that the amenity of the quarry subjects as a whole would be damaged.

[48] Moreover as far as the NQS were concerned, Mr Macdonald had assumed the building of a scheme of flats for sale where in fact the present scheme was for the construction of flats for rent, and Mr Macdonald had accepted that the heritage centre would not reduce flat rents. Moreover, Mr Macdonald’s methodology and calculations had not been revealed. He did not appear to have information about water levels and correlations between any impact upon values.

[49] Turning to factor (j) it was submitted that this was a catch-all factor. Emphasis was made to the public nature of the venture. The site was unique and lent itself to the story of quarrying for granite in Aberdeen, as exported around the world. This would generate tourist revenue and support the local economy. The Heritage Centre had a considerable educational value. It had captured the imagination of a wide range of people including local residents, Visit Scotland and Visit Aberdeen. The strategic infrastructure plan made the development a priority for the council.

[50] Turning to environmental matters, the rising water levels and soil erosion required intervention such as pumping and replanting, and these interventions would be put on a sustainable footing by the development. Trees were dead due to rising water levels and other trees particularly along the top of the bank at Queens Road suffered from erosion and had limited lifespan. The lowering of the water levels would allow recolonization of the currently flooded shores of the quarry by native species of birds and animals in woodland and scrub, by planting and from natural regeneration. The process of reclaiming the land would offset the limited loss of woodland for the site footprint. Although Dr Latimer had indicated that exposing the quarry surface would cause a “somewhat bleak” outlook for a time this was but a temporary situation. It could be seen from old photographs the amount of vegetation which was in existence, for example, in 2004.

[51] Finally, turning to the respondents’ challenge to the evidence of applicants’ professional witnesses, it was submitted there was no substance to the objection. Counsel also criticised Mr Davidson’s evidence in his reluctance to confirm detail.

Respondents’ submissions

[52] The respondents made a preliminary submission to the effect that the application was incompetent. It was submitted that the proposed variations to the title condition would introduce a number of unacceptably vague terms such as “heritage centre with associated access, parking and engineering works”; “safe walkways”; “safe staircase”; and “floating scientific educational and environmental pods”. There was oddly no reference to “granite”. Lack of clarity in the variation was a matter of concern to the respondents, since there would be a presumption in favour of freedom which would work against the respondents. Reference was made to Taylors of Aberdeen v Coutts; Anderson v Dickie; Hunter v Fox; and Frame v Cameron.

[53] Turning to the substantive question, the respondents submitted that the title condition did require the CQS to be kept in an undeveloped state which was the import of the words “… existing and/or natural condition”. In 2003 there was a “lake” which was known to have gradually rising water levels. The quarry was defined as:-

“Those parts of the quarry subjects comprising the water filled area shown on supplementary plan 2 and those parts of the quarry subjects which, due to the existence of or proximity to cliffs, rocks, deep water or precipitous gradients or otherwise are hazardous or dangerous to safely allow unrestricted access by members of the public.”

This definition was consistent with the fact that in 2003 the quarry was substantially filled with water and had the same essential character and appearance as it does now, namely, as a lake or loch or reservoir. It was also submitted in terms of section 14 of the 2003 Act, that ordinary principles of construction could be deployed for the deed of conditions, namely, with reference to the surrounding circumstances as they existed at the time of its execution.

[54] Emphasis was made of the fact that at the time of the execution of the deed of conditions, the quarry was substantially filled with water, with gradually rising levels and that the condition was part of a deliberate scheme which had as its aim, the development of the NQS and the SQS, with the CQS to be left as undeveloped amenity subjects. Mr Davidson’s evidence on this point was unchallenged.

[55] Since there was no prospect of the quarry being put back to its former use, a reference “a designated quarry site” should be read pro non scripto.

[56] It was submitted that the expression “existing and/or natural condition” of the CQS referred to both a condition which existed in 2003 and exists today, namely, the substantially water filled quarry surrounded by woodland. It was submitted that there was no tension between this construction and the need, from time to time, to reduce water levels purely to prevent flooding; it was submitted that a failure to do so would be in breach of duties owed by a proprietor of such subjects at common law and would also result in the SQS not being used for the amenity of other parts of the quarry subjects.

[57] It was pointed out that no case had been made by the applicants that the title condition engaged factor (d) – the applicants were not complaining that the title condition was requiring them to do anything.

[58] Turning to the Tribunal’s approach, reference was made to George Wimpey East Scotland Limited v Fleming; Ord v Mashford; and Church of Scotland General Trustees v McLaren. It was accepted that each case is likely to turn on its own facts, with the result that reliance on prior authorities may be of limited assistance. The respondents also drew attention to the importance of the site visit.

[59] Under head (a) the respondents pointed out that the Tribunal had noted in Ord v Mashford that change would be of little weight unless it can be shown to be relevant to the obligation. The question was whether any change in circumstances was relevant. It was submitted that the Chevron office development was not relevant, not least since it did not affect the amenity of the quarry subjects generally. It was submitted that the rising water levels could not be a relevant change of circumstances. This was on the view that in 2003 the CQS were already substantially filled with water, with rising water levels which remained the case today. The rise in water levels was simply therefore a continuation of known circumstances. On the other hand the loss of certain trees on account of rising water levels was not relevant to the purpose of the title condition which concerned the maintenance of the CQS as an undeveloped area. It follows that there was no change of circumstances to support the application.

[60] Turning to factor (b) it was submitted that the title condition plainly conferred benefit to the benefited properties. The CQS presented as a tranquil lake and woodland area. The variation would lead to the loss of the existing “natural” lake and woodland area, and cause financial loss to the proprietors of the benefited properties on account of diminution in value to those properties. Transforming the area into a major tourist attraction would be detrimental to the benefited properties.

[61] In terms of factor (c) reference was made to various cases in which the Tribunal had placed emphasis upon what might be regarded as the ordinary, normal or typical use of the burdened property. These cases were mainly Lord Doune and Others and Stoddart v Glendinning which, of course, related to applications under the now repealed Conveyancing and Feudal Reform (Scotland) Act 1970. However, more recently in McPherson and Another v Mackie the Tribunal (before being overturned) had stated:-

“… It seems to us also to be relevant that the conditions do not in any way at all impede the ordinary, normal use of this house or diminish its value as a house or garden. To the contrary, they underpin that value. This is not a case in which, for example, a house or garden has become too large or in some other way unattractive or uneconomic in modern conditions …”.

[62] In this sense the title condition did not impede any “normal or ordinary” use of the CQS. Mr Black of the applicants did not have anything particular in mind other than the fact of owning the former quarry at the time when he bought it, i.e. simply owning it as part of Aberdeen’s heritage and boating on the water.

[63] It was further submitted that the Tribunal was not concerned with any public interest in a general sense, but with private property rights of parties. It was also pointed out that the applicants had accepted that the quarry was required to accept drainage from the SQS and NQS and could not therefore complain if this was the cause of the rising water levels.

[64] Turning to factor (e) the respondents adopted the words of the Tribunal in Smith and Another as Trustees v Lawrence and Others

“This is not a title condition … for a different era, and can still achieve its purpose.”

The title condition was one of recent creation and emphasis was made on the fact that the purpose of the title condition remained wholly relevant and achievable.

[65] Turning to factor (f) it could be seen, in the first place, that the purpose of the title condition was not to attempt to address any public interest. On the contrary it was imposed to address questions of private amenity between the proprietors as part of a scheme in which the CQS were not to be developed upon, but instead to be maintained as an amenity area for the benefit of the areas which were to be developed, namely the NQS and the SQS.

[66] It was pointed out that a feature of the title condition using the phrase “…without prejudice to the foregoing generality” meant that nothing in the provisions of the clause following could be used to cut down or exclude any matter that would fall within the provision before that phrase: Caledonia North Sea Limited v British Telecommunications at p131. The true measure of the title condition could not therefore be limited to words appearing after “without prejudice” – i.e. the prevention of tipping etc.

[67] To vary the condition would be to upset the essence of the bargain which was struck when the title condition was imposed in 2003. It would transform the nature of the property which had been acquired for £50,000 and the relationship between it and the NQS and SQS.

[68] In terms of Factor (g) the respondents submitted under reference to Daly v Bryce and Cameron v Stirling that compliance with the planning permission was rarely a significant factor. Under reference to McPherson and Another v Mackie it was wrong to assert that the consideration which is given in the planning process to issues, for example, of amenity is conclusive in relation to the amenity afforded by private title condition. Here the respondents were aggrieved by the planning authority’s decision to grant planning permission which was notwithstanding that the proposal breached a number of planning policies. The question whether the proposed Heritage Centre was to be regarded as being in the public interest might be relevant to the planning regime, but was not relevant to the present application.

[69] Under factor (h) the applicant had made it clear that they were not willing to pay compensation. The loss caused by the effective removal of the existing “lake/loch” would cause the respondents financial loss. Since compensation was not being offered by the applicants, it was not necessary for the Tribunal to make any specific finding as to the amount of loss. Rather, the matter should be approached more generally. Mr Macdonald’s evidence established that there would be a material adverse effect upon the NQS and the SQS.

[70] Turning to factor (j) the respondents resubmitted certain earlier points under this head. In addition they indicated that there was no proper evidence before the Tribunal that the proposed heritage centre would in fact ever proceed. There was no objective evidence to show that the proposed heritage centre was likely to receive enough capital in order to meet the estimated costs of between £7m and £10m. It was submitted that Mr Black was unsupported in his assertion that he could not raise funds until the present application was dealt with. The evidence which was submitted in terms of the AABand EKOS reports was not evidence as to viability and the costs evidence demonstrated that the cost was grossly disproportionate to any resultant value of the property. The Tribunal therefore had to proceed on the basis that there was no reasonable likelihood of the heritage centre ever being built. In these circumstances it would be wrong to allow the variation of the title condition.

[71] Finally, counsel renewed his objection towards certain parts of the evidence of Mr Barker and Ms Donaghy. Mr Barker, although an expert witness, was not independent. He clearly wholeheartedly supported the project. In his witness statement he had praised the merits of the proposed heritage centre and had deprecated the merits of the proposed residential development on the NQS. These were not independent and impartial opinions and should not be admitted.

[72] Turning to the evidence of Ms Donaghy, it was submitted that her report had failed to provide any reasoning for her conclusions and one was left with her bare ipse dixit which was submitted to be worthless. Reference was made to passages in Kennedy v Cordia (Services) LLP at paragraphs 41-52, which applied to experts giving factual as well as opinion evidence.

Discussion by Tribunal

Admissibility of expert evidence

[73] We deal firstly with the respondents’ challenge to the admissibility of certain evidence from Mr Barker and Ms Donaghy. Mr Barker had an interest in the applicants’ project proceeding, in the sense that if it progressed there would be an assumption that he or his firm would continue in the role of project architect. Therefore, although he was an expert, he was not truly “independent.” However, it is important to understand what his role actually was in the Tribunal proceedings. Essentially this was to provide a description of the project – a project which he and his firm had largely designed – and to narrate the planning history with which he had also been closely involved. So his evidence about these matters could not seriously be described as a report influenced as to formal content by the exigencies of litigation as might fall foul of the principles set out in Kennedy v Cordia. His involvement in the case came from the perspective of the design and planning process, not a contemplated litigation. It would be quite unrealistic to expect applicants to the Tribunal to be required to instruct “independent experts” simply to speak to such factual matters, which can be addressed more knowledgeably and economically by the acting consultant. The respondents accepted the logic of this by narrowing their objection only to certain parts of Mr Barker’s evidence, namely, where he praised the merits of the proposed heritage centre and deprecated the merits of the proposed residential development on the northern quarry subjects.

[74] We are of course aware that Mr Barker firmly supports the project and we have assessed his evidence in that light. But having reread Mr Barker’s evidence, we are unable to find the sort of words of praise for his clients’ proposal as might be expected to be found in the conclusion of a report from an “independent” expert or as might call into question Mr Barker’s impartiality of evidence. Inasmuch as there is praise by Mr Barker, this is merely implicit in the demonstrably imaginative design of the heritage centre itself, and his reference to the positive support which the project received from the council’s expert design panel. Nor do we read his evidence as containing some form of detailed attack on the NQS residential proposals. He merely draws to our attention the fact that the proposed heritage centre building is a fraction of the size of the NQS flat proposals which will be below the existing tree line whereas the NQS building will be above the tree line. We find this to be a helpful statement, which is demonstrably correct, and does not appear to contain any inherent risk of bias. We considered his evidence to be given in a fair and professional way. We see no reason to exclude it.

[75] Turning to the evidence of Ms Donaghy of EKOS, we do not think it was established that she was not independent in the sense that she might gain future work in the event that there was a favourable outcome of the case. In any event, as we understood it, the criticism was that her report did not provide the necessary reasoning to establish the conclusions. We do not consider this to be a fair criticism of her report. It should be borne in mind that the report was not intended as a viability study or a report commissioned for the purposes of litigation. It was prepared for the planning process in order to help the planning authority visualise the wider gains which the project could bring to Aberdeen and the shire. It was subjected to scrutiny by the planning officers, as appears from the documents before us. The report provided a basis for the council taking the view that those wider benefits outweighed certain environmental losses. As the planning outcome is relevant to our considerations below, so too is the report.

[76] It is true that the report does not contain the sort of detailed workings which we would expect from an expert report addressing immediate issues for the Tribunal. However, it does contain appropriate source references, mainly in the form of statistical reports. The heart of the issue appears to lie in the mention of a “target” figure of 75,000 granite museum visitors per annum by year 5. This was not a figure which Ms Donaghy had herself produced, but was a figure she had been provided with for the purpose of her report. However, she stated in evidence that the figure was achievable in her opinion, and this was based upon her own extensive experience and having regard to certain demographic isochrones around the site. The relevant population figures and analysis are stated on pp7-8 of the report. We consider that Ms Donaghy was well qualified to make the comment she made. If the figure of 75,000 visitors per annum is achievable, we have no difficulty with her following conclusions, at least in general terms, that there are likely to be wider benefits to the local economy, as well as social and educational benefits all as discussed in her report.

[77] We now turn to the substantive matters. There was no dispute that the NQS and SQS were benefited properties, and that the respondents had proprietary interests in these properties.

The Factors - Factor (f)

[78] Turning to the relevant factors under section 100, we think it is appropriate to start with factor (f), namely the purpose of the title condition. In terms of the deed, the condition was “in order to preserve the amenity of the quarry subjects whilst regulating the development of the NQS and the SQS.” So the words contemplated both amenity and future development. The later words are:

“… shall not develop … any part of the CQS, and in order to preserve the amenity of the quarry subjects generally shall not permit or allow any other occupation or use of the CQS for any purpose other than as a designated quarry site, green belt or amenity ground in its existing and/or natural condition”

Here the words “existing and/or natural condition” are somewhat problematic in the context of rising water levels both in 2003 and at present. However we see the clause as a form of “construction and use” clause; i.e. the first part of the clause seeks to prevent “development” – i.e. construction generally ; while the second part prevents certain “use” which in context includes any use not amenity related. The problematic wording comes in the second part of the clause. But it is apparent from the first part that it seeks to prevent development, so reading the clause as a whole any form of built development would be to change the site from its “existing and/or natural condition.” So it is clear that the construction of the heritage centre would contravene the clause.

[79] As a matter of logic, it seems to us that the preservation of amenity was designed to be predominantly in the interests of the NQS and the SQS for the future development and use of the NQS and SQS. This is consistent with Mr Davidson’s view, which was not seriously challenged, that the title condition was to preserve the amenity of the NQS and SQS by retaining the CQS as an undeveloped area. This is reinforced by certain other facts. For example it can be seen that the CQS have no formal access at all, and the deed of conditions envisaged perimeter enclosures (condition 2.1 et seq). Thus significant and active use of the CQS in their own right was not seriously contemplated at the time of the deed. Also it can be inferred that the flats which had been permitted on the SQS by 2003 were all designed to look over the “protected” CQS area. We also accept Mr Davidson’s evidence that all plans for the NQS have made a significant feature of the amenity, and we infer that this would have been the case for the permissions in place for the NQS as at 2003. In these circumstances we are satisfied that the purpose of condition 8.2 predominantly involved the protection of the visual amenity provided by the CQS for the benefit of the NQS and the SQS.

Factor (a)

[80] One of the circumstances prevailing in 2003 was that there was an intention by the landowners to develop the NQS and the SQS, which were then undeveloped. We understood the SQS now to have been fully developed. Mr Davidson spoke to both residential and office planning permissions being in place by 2003 for the NQS. Although the evidence of details and dates were somewhat confused, it does appear that subsequent sales of the NQS were for development value. Accordingly there has been no change in circumstances in that the NQS are still development land and the current owners have plans to develop them. We consider this lack of change of circumstances to be significant in relation to factor (f) because the purpose of the title condition remains relevant, namely to protect the amenity for the future development of the NQS as well as the current amenity of the SQS.

[81] The most notable change in physical circumstances since 2003 is the continuing rise in water levels. We did not obtain a particularly scientific estimate as to the extent of the rise. A technical document before us indicates that in 2007 the water level was some 45m below the surface of the NQS. The NQS is generally the highest point of the quarry. Mr Barker estimated that the level is now about 20m from the overhang of the NQS, thus implying the water level has risen about 25m since 2007. Thus we infer the level has risen by a somewhat larger margin since 2003.

[82] The respondents argued that as the water level rise was “continuing” in 2003, and as it was a known circumstance it did not constitute a change of circumstance. While we understand the point being made, we think it is more realistic to treat the rise as a changed circumstance. There was no suggestion of any known study which suggested that the water level would indeed continue to rise. On the other hand Mr Black was aware of the existence of an engineer’s report in possession of the council, perhaps some 30-40 years old, which suggested that the water levels would find a natural height on account of fissures in the rock. Suffice to say this report was not produced and there is no evidence to suggest that its import, if we have correctly described it, was widely known. But we do not think it would have been easy in 2003 for anyone to make an assumption that the water levels were bound to continue to rise indefinitely.

[83] The rising water levels have had both positive and negative effects which we shall discuss in more detail under headings below. Inasmuch as there has been a positive effect upon the amenity of the benefited properties, which can be said to have been maintained by the existence of the condition, this change of circumstances has demonstrated the continuing relevance of the purpose of the condition.

[84] The applicants submitted that the construction of the current Chevron building to the north of the NQS amounted to a change of circumstances. Whether or not the Chevron building can be described as being in the “neighbourhood” of the benefited or burdened properties, we do not think this is a significant change in circumstances. It replaced a lower industrial type building. While the new building is visible along the skyline of the NQS, it does not have a particular impact upon the setting of the quarry subjects since there are other large offices along the NQS skyline already. It has not changed the character of the area.

Factor (b)

[85] The CQS in their present state consist of the quarry filled with water and trees and vegetation particularly at the south and west perimeter. The water levels have now reached a few feet below the ground floor patios of Rubislaw Mansions. Those flats have been designed to take account of the view across the water; the ground floor flats have rear patios and the first, second and third floors have overlooking balconies. The double upper flats numbers 2 and 4 Queens Avenue North each have small balconies and each has a turret style window and others designed to look across the water. It is not unfair to describe the present state of the CQS as providing a lakeside setting with an atmosphere of tranquillity.

[86] We have also accepted Mr Davidson’s evidence that all designs for buildings at the NQS have made a significant feature out of the amenity. A picture of a 285 flat proposal, being a recent design iteration we understood was no longer being proceeded with, showed most or all of the flats with views across the water. Nevertheless the water is plainly a visual feature being used to support the proposals and is no doubt likely to be used again.

[87] We accept that the deed of conditions says nothing expressly about water levels, and that a certain amount of construction would be required in order to seek for it to do so. However, we accept Mr Macdonald’s position that while the condition remained in place prohibiting development on the CQS, there would be no reason for the owner to spend money in draining the quarry. Mr Black had estimated that the cost of lowering water levels by 40m would be in the order of £25,000. We think this is probably a conservative estimate, since his experience only extended to pumping in a relatively dry spell outwith winter. However on any figure we would accept Mr Macdonald’s view that it would not be reasonable to assume a negative impact upon the NQS or SQS while the lowering of water levels was only a theoretical possibility. So in preventing development on the CQS, with the practical consequence of there being no incentive to drain the water, we accept that the deed of conditions does confer benefit on the amenity of the benefited property. One of the results of the rising water level discussed above is that it will have removed cliff faces thereby enabling a view “across” water and thus improved the “lakeside” feature.

[88] The extent of the benefit can be considered by assuming the consequences should the variation being sought be granted. The construction of the heritage centre itself would involve the loss of 86 trees on the footprint of the new building. We do not consider that this would have much impact upon the flats at the SQS which would only have oblique views, albeit that the flats at the western side of Rubislaw Mansions would be more affected. The loss of the trees would be more significant for views from the NQS but, again, in our opinion this is not the main issue.

[89] What is significant is the potential lowering of the water levels by some 40-50m. It is clear that this will be a level below the 2003 level, although we do not have a very accurate estimate by how much. The figures suggest perhaps 10 – 20m below. With the exception of the south and west part of the quarry subjects, views would be exposed of the cliff faces whereas at present those views are of water surrounded by trees. We would adopt Dr Latimer’s description that the views would be somewhat bleak for a period. Quite how long the views would remain such until there was a significant greening effect is a matter of opinion. As we have indicated, Dr Latimer thought the cliff faces would undergo a greening effect within five or ten years through natural seeding of vegetation. We are conscious this view was contradicted by the reporting planning officer whom we infer would have had access to relevant expertise. We are also conscious that the lodged photographs taken at different times in the history of the quarry show a good deal of vegetation upon the quarry cliffs, but it is likely that the vegetation will have taken years, if not many decades, to have become established. Accordingly we believe that a certain amount of caution is required before predicting timescales for the greening effect. Moreover, as Mr Davidson commented, the view would no longer be across water but down to water which of itself would be something of a negative impact. For example, we can envisage that views from high flats on the NQS overlooking the quarry with reduced water levels may well appear somewhat precipitous.

[90] At this point it is, however, necessary to consider the applicants’ proposal as a whole, which includes planting trees and vegetation along the south and west shelving and the consequential increase in nature habitat. It is fair to say that this can be viewed as an improvement on the present current situation in which a number of trees have died after being partially submerged. The current outlook involving partially submerged trees here can be best described as slightly odd. However, looking at it from the perspective of amenity views from the SQS and NQS, we think a dominant feature of reduced water levels would still be the exposure of the cliffs elsewhere around the quarry, not restricted to the proposed planted ledges at the south and west areas. This part of the proposal should be viewed essentially as general mitigation, born in the planning process. There did not appear to have been any specific mitigation studies as to how views from the NQS and SQS might be affected or could be ameliorated for the purpose of the current proceedings, and we did not understand Mr Barker to attempt to discuss this in any sort of detail. So overall we conclude there would still be a negative impact by the proposals upon the benefited subjects.

[91] It is likely that that in the event of the NQS being developed by the construction of a large block of flats, there will be some impact upon the visual amenity of the SQS. The SQS flats will then look across the water to a large building on the skyline, and some of the current view of the green area along the perimeter of the NQS will be lost. However, that does not render the remaining “lakeside” setting for the SQS any less significant in our opinion. To put it another way, if the cliff faces reappeared on account of draining the quarry, the construction of the flats would amount to something of a cumulative negative impact.

[92] In gauging the value of the existing “lakeside” views, we now consider Mr Macdonald’s report. This report was rightly criticised for lack of transparency since in various respects Mr Macdonald has not stated his assumptions or set out his calculations. We doubt his report complies with the RICS professional statement and guidance note for expert witnesses in Scotland. Nevertheless, Mr Macdonald has identified a recent comparable to vouch a differential between flats with a lakeside setting and flats without, roughly of the order of 5% in value. Intuitively, as we said at the hearing, we would agree that a diminution in value in broad terms of this degree is likely to be the case. We would consider that but for the title condition the applicants’ development could cause such a diminution in value to all the Rubislaw Mansions flats and the double upper flats numbers 2 and 4 of Queens Avenue North. The ground level flats 1 and 3 did not have ready access to views across the water so we doubt there would be a significant impact there.

[93] We agree that it is difficult to place an accurate diminution of value figure upon the NQS with any degree of accuracy, particularly in the absence of a detailed development scheme. In this we agree with Mr Macdonald. However, as a broad differential of some 5% has been established for the sale value of the SQS flats, we do not think it can be said that the impact upon the NQS sales potential would be negligible. In order to carry out a residual value calculation for development land, it would be necessary to know the likely development costs which, we understood, are likely to be well above average at this location as well as to estimate sale proceeds. These assumptions would be of a broad nature. Void periods and sales rate would need to be assumed and would also be somewhat uncertain. But in a residual appraisal, with a reduction in assumed sale prices, all other factors being constant, there will of course be a reduction in site value.

[94] The applicants submit that Mr Macdonald accepted that the impact of the heritage centre would be unlikely to affect rental values for the NQS proposed flats, and that the most recent proposal was to build flats for rent rather than sale. As we noted him however, we do not think he actually said or meant this. All we think he agreed to was a hypothetical truism put to him, i.e. if rental values were unaffected then underlying land values would also be unaffected. We would be surprised for a surveyor to concede that if properties were rendered less attractive thus diminishing sales potential, it would nevertheless be unlikely for there to be a diminished rental potential. In any event, even if we have misunderstood his evidence on this point, we do not think it is right that we should assume that there would always be an intention to let rather than sell. The hypothetical buyer of the site might intend the flats to be sold, to be rented, or to have a mix of uses. He would not want his options to be unduly restricted. We do not think that any assumed diminution in value should be restricted to the most recent subjective intentions of the current owners. So we conclude that, but for the development being prevented by the title condition, there would be a significant, but unquantified, negative impact upon the value of the NQS.

Factor (c)

[95] We accept there is nothing in the language of factor (c) which prevents us from considering the development potential of the burdened property, and in the light of McPherson v Mackie not to do so would risk taking an unduly restrictive approach. Also, where the proposed new use of the burdened property involves members of the public, we do not find anything in the section which requires us to exclude such use. We therefore disagree with the respondents’ submissions on these points. The Tribunal in Ord v Mashford postulated under (c) the possibility of public uses upon the burdened property (p25), and the Inner House in McPherson v Mackie at para [23] took account of an incidental public benefit in potentially allowing an application. We are nevertheless conscious that the deed of conditions is part of an arrangement, individually negotiated between relevant landowners in 2003, and that the price paid for the CQS land must be assumed to have reflected the existence of the restriction, which serves to temper the weight to be given under this head.

[96] We consider that the proposal for a granite heritage centre is a bold and imaginative use for a unique site. If the proposal were to succeed, we accept there would be wider public benefits for Aberdeen and the north east, in terms of Ms Donaghy’s evidence as we have discussed above. We are prepared to give weight to this factor in favour of the applicants.

[97] It is apparent that apart from the restriction in the deed of conditions, the major impediment to the creation of the heritage centre is its capital cost. On the basis of the AAB report, and updating the construction costs in the light of Mr Mitchell’s evidence, the costs are not likely to be less than £6.7m. On the basis of Mr Paterson’s figures, the costs could be as high as £9.4m. The difference can most readily be explained by Mr Paterson taking a somewhat pessimistic assumption, but no doubt prudent at this stage absent ground investigations, regarding the need for piling for a large section of wall adjacent to Queen’s Road. Also we felt he took a more pessimistic, but again arguably a prudent assumption, as to the use of national as opposed to local main contractors, more likely to charge higher overheads and similar. We cannot describe the gulf between the quantity surveyors as suggesting that either of them has taken an unreasonable position, since cost assumptions are bound to vary widely at an early stage in the project. Mr Macdonald indicated that on certain assumptions, the commercial value of the completed property would be of the order of between £1.4 and £1.75m. While we do not necessarily endorse Mr Macdonald’s figures we do agree with his general conclusion, namely, that there is a funding gap of a large proportion of the likely cost, in the absence of a very considerable amount of grant assistance.

[98] We accept Mr Black’s evidence that it would be premature to apply for grants without first succeeding in removal of the legal impediment. The evidence does not allow us to assess how likely it would be that grant applications would succeed in bridging the funding gap. We accept that the project has a wide degree of public support, and includes the support of a number of influential citizens of Aberdeen. On the other hand the potential shortfall is very large. All we can say at this stage is that the prospects of funding the development are uncertain. So the burden of the condition prevents a development whose prospects are uncertain.

Factor (e)

[99] We are inclined to the view that the period of 14 years is relatively short when seen in context. The deed of conditions was intended to regulate the development of the NQS, and the NQS remains undeveloped. The owners have also had the misfortune for Aberdeen to be subject to an extended property recession for part of this period.

Factor (g)

[100] The proposed heritage centre has planning permission, and indeed has the support of the planning authority in terms of its published strategic investment plan. This document appears to have been a material consideration in the planning process. We have already noted that the planning authority was persuaded that the environmental impacts were contrary to certain policies, but this was outweighed by wider potential tourism, educational and economic benefits.

[101] As we have indicated in other cases, the granting of planning permission under this factor establishes that the proposal is acceptable in the public interest. We note in Ord v Mashford the Tribunal thought that absent special circumstances, the fact of planning permission would not to be given particular weight. However, in the present case we consider the circumstances to be such as to go further than that. It is intended that the public would use the site. The wider social, tourism, educational and economic benefits of the project were spoken to by Ms Donaghy in the EKOS report, discussed above, and this plainly influenced the planning decision. We think we can take into account that, subject to the caveat of uncertainty mentioned above, the proposal potentially has a wider public benefit. Even if this conclusion is not strictly relevant to factors (c) or (g), then in our view it would be relevant under factor (j).

Factor (h)

[102] As the Tribunal said in Ord v Mashford it is not clear what role willingness to pay compensation is expected to play in the overall assessment. There the Tribunal thought it may be assumed in every case that an applicant is prepared to pay such compensation as may be determined by the Tribunal. However, the present case is somewhat unusual in that the applicants in their pleadings and submissions expressly do not offer compensation, without hint of concession. On the face of it, there would appear to be little point in making a variation subject to compensation, since the relevant direction can only be made where the applicant consents: cf section 90(9). We are also conscious that although we have considered under (b) that the proposal if permitted would have an impact upon value in broad terms, this would be difficult to quantify as regards the NQS development land. As it transpires, however, we feel nothing turns upon this factor.

Factor (j)

[103] As we have discussed above, we think weight should be given to the potential wider public benefits of the applicants’ proposal in the form of increased social, tourism, educational and economic benefits which the proposal would bring to the area.

[104] A final matter we mention at this stage is the fact that the proposal, in terms of its planning permission, would bring about some mechanism for the maintaining of the water levels at the quarry at a consent level. We heard evidence that there had been some concern as to the potential flooding of property on account of rising water levels, and the applicants had been prevailed upon to take steps to reduce those levels. Although the respondents made a brief submission to the effect that the applicants had a legal duty to avoid the CQS flooding to other areas, this was not gone into in detail and we offer no conclusion on the point. The correct legal position does not appear to be demonstrably clear. Therefore there is an argument which we took the applicants to maintain that by granting the variation there would be a benefit in avoiding the current uncertainty and potential flood risk. However, on reflection we do not think too much can be made of this point. We do not think the prevention of flooding in the future necessarily requires to be resolved only by reference to the deed of conditions. The local authority is a flood prevention authority and has statutory powers, e.g. under the Flood Risk Management (Scotland) Act 2009. The ability to drain the quarry by a few metres has been demonstrated. We have no doubt that the local authority would look to its powers if water levels reached a danger level should the issue of responsibility for drainage come to an impasse.

Conclusions

[105] We conclude that the amenity related purpose (f) of the title condition remains relevant and underlines the benefit (b) which the title condition confers upon the NQS and SQS. The present “lakeside setting” benefits brought to the NQS and SQS on account of the condition are significant. The fact that there has not been a change in circumstances (a) in the character of the NQS – i.e. they remain development land – highlights the continuing relevance of the purpose (f). That is because any developer of the NQS will still wish to take advantage of the amenity afforded by the CQS. In a similar context the period of time since creation of the burden under (e) is relatively short. The change of circumstances (a) in the water level has rather improved the visual amenity of the benefited properties over time, thus increasing the existing benefit under (b). This again supports the relevance of factor (f) which is amenity related. It seems to us that these factors combine to make a strong case for maintaining the status quo and for not rearranging parties’ rights under the deed. The extent to which the condition prevents the bold and imaginative heritage centre project under factor (c), and the public benefits which this might bring in terms of factors (c), (g) and partly (j) are significant and we duly give them weight. However, as we have discussed, we require to take account of the fact that the recent sale of the CQS was a freely entered into transaction involving the existence of a previously negotiated deed of conditions. Also, the prospects for the project are uncertain, and this necessarily reduces the weight we can give to those factors. On balance we do not think these factors outweigh the factors in favour of retaining the status quo. We do not therefore think it would be reasonable to vary the condition.

[106] In these circumstances it is unnecessary for us to consider the applicants’ competency arguments, or to seek to assess issues about compensation.

Decision

[107] We shall refuse the application. We have reserved all questions of expenses, which may be dealt with in writing.


Certified a true copy of the statement of reasons for the decision of the Lands Tribunal for Scotland intimated to parties on 5 January 2018

Neil M Tainsh – Clerk to the Tribunal