In or about October 1994 Mr and Mrs Nicol made application to Shetland Islands Council to purchase the subjects tenanted by them at the Old Schoolhouse, Levenwick, Shetland (the “subjects") under the provisions of the Housing (Scotland) Act 1987. (Hereinafter references to the “Act" and to sections are references to this Act or sections of it). They received no formal reply. However there was communication between their solicitor and the council which made it clear that there was no dispute as to entitlement to buy. There was no apparent dispute as to price or as to the discount to which they were entitled. It did, however, appear that the council's own internal investigation had given rise to some doubt as to the state of their title to the subjects and that this was the main cause of delay.
In the result, however, the landlords did not serve either a timeous offer to sell or a notice of refusal. When the landlords eventually made a formal offer by letter of 12 February 1999 the tenants took exception to the terms of it. They decided that it would be appropriate to have the matter resolved by application to the Tribunal under section 71 of the Act.
When the application and answers were considered by Tribunal staff it appeared that as there was no dispute that the landlords had not responded timeously to the application, the Tribunal would if requested require to take over from the landlords and issue an appropriate order: Fullerton v Monklands District Council 1983 SLT (Lands Tr) 15. However it was recognised that it was the terms and conditions of the offer which had given rise to difficulty. It appeared that the issues were genuine and in no sense attributable to any deliberate lack of co-operation by the landlords. They were likely to raise difficult questions. The Tribunal accordingly required to consider what procedure should be adopted to allow these issues to be identified and resolved. Section 65 makes provision for the tenant to object to any condition in an offer to sell. This would allow formal challenge to any conditions put forward in an offer at the instance of the Tribunal. As there was no statutory opportunity for a landlord to object to conditions proposed by the Tribunal it was thought appropriate to make an offer which would reflect the apparent wishes of the landlords. This would give the tenants an opportunity to set out their objections in proper form and for the landlord to respond.
The Tribunal accordingly issued an offer on behalf of the landlord in terms of section 71(2)(a). Although we attempted to follow our normal style of offer, it was adapted to include the disputed conditions. The tenants duly requested variation of these conditions and a period for answers and adjustment was allowed. Unfortunately, the written pleadings did not in fact succeed in giving a sharp focus to the issues in dispute. A diet of hearing set down for August 2000 was discharged by the Tribunal on the motion of the applicants and on the understanding that parties had resolved outstanding issues. It transpired however, that their agreement was, in some way, dependent on being able to settle the terms of a reference to a professor of conveyancing for an expert opinion. They were unable to reach agreement as to precisely which matters were to be submitted.
The Tribunal sat at Lerwick on 9, 10 and 11 October. We visited the subjects on both 9 and 11 October. At the hearing the tenants were represented by Mr David R Carruthers, Solicitor, Lerwick who led evidence from Mrs Nicol and from Mrs Alison Carruthers, a partner in his firm of Carruthers & Co. The landlords were represented by Mr Paul Sutherland, a solicitor employed by them, who led evidence from Mr David Halcrow Johnson, Senior Technical Officer, Shetland Islands Council and from Mr Kenneth John Allan, MICES, Land Surveyor, also employed by Shetland Islands Council. At the end of the hearing it was agreed that certain new matters would be dealt with by way of written submission. Following a reminder by letter from the Tribunal dated 24 November, the applicants made submissions by letters of 12 December 2000 and 11 January 2001. The respondents’ submissions were made by letters of 7 December, 15 December and 18 January.
The subjects are part of buildings formerly occupied as a school and schoolhouse. The buildings are situated on open hillside to the east of the main road from Sumburgh to Lerwick. The former school is now a community centre. The old schoolhouse, tenanted by the applicants, includes a walled garden, lying to the south of the house. Access to the subjects from the road is over ground owned by a third party and then over the former playground. The applicants occupied part of the former playground area as parking ground. Further detail of the layout of the buildings can be found in our discussion of “Title” below.
At the start of proceedings, we understood that the following matters (numbered by reference to the pleadings) remained alive for consideration although agreement had been reached in respect of certain aspects of them.
1. Access and Price: The offer of the Tribunal included the following condition: "2. The Council will use its best endeavours to acquire for the Purchasers a right of access to the subjects over the area shown by single hatching on plan 2 annexed and signed as relative to Schedule 1 and a title or right of parking private vehicles on the area cross hatched and marked 'parking' on said plan". The applicants proposed variations of this to delete the words "use its best endeavours to acquire for" and substitute "validly grant to" and further to insert between "private" and "vehicles" the words "and service".
By the date of the hearing, the landlords had acquired a title which would allow them to implement the condition as varied and, indeed, to grant title to the parking space. Mr Sutherland said that the variations could be agreed but contended that the price should be increased by £500 to reflect the extra land to be conveyed.
2. Exhibition of writs: The offer also included a condition in the following terms: "13. In exchange for the price the Council will deliver a duly executed Disposition in favour of the purchasers and will exhibit or deliver a valid and marketable title together with …. [there followed details of searches and reports]". The applicants requested variation to insert after the word "title" the following: "for the prescriptive period at the purchasers' agents normal place of business (with principals of writs) to the whole subjects of sale". We had understood this to have been agreed before the hearing but we heard repeated reference to it in evidence and submissions and treat it as a live issue, as discussed below.
3. Title: The applicants contended that the offer should be varied by the insertion of certain additional clauses. The first of these ran as follows: "18. Evidence will be exhibited prior to entry that the Crofting (Scotland) Acts do not affect any part of the subjects which cannot be shown to have been disponed to the Council, or their predecessors as Education Authority in a valid marketable title prior to 1886". In support of this proposed change they narrated that the validity of the title of the respondents to the whole subjects was in question.
4. Sewerage: The applicants contended that the offer should be varied by addition of a further condition in the following terms: "19. The seller shall prior to entry exhibit evidence to the purchaser of (a) validly constituted pedestrian and vehicular servitude rights of access to the subjects from the A970 public road which leads from Lerwick to Sumburgh (b) valid constituted servitude rights to a private sewerage system or alternatively evidence disclosing that the property is connected to a public sewerage system and that there is no outstanding liability for such connection; if the sewerage system is not a public system appropriate evidence will be exhibited that its installation and use complies with EC environmental regulations and that the onus of liability therefore (sic) is shared equitably with all others using the same (so as to take account of the extent of such usage), and (c) evidence that the subjects are connected to the mains water supply." - Part of this variation fell within the scope of head 1 above and, as we shall see, the parties’ positions in relation to the second part were changed by evidence becoming available in course of the hearing.
5. Agreement had been reached in respect of exhibition of certificates for alteration works and, although some reference was made to this in course of opening and closing submission we did not understand that any issue remained for determination by the Tribunal.
6. It was also agreed that the landlord would continue to be responsible for all obligations as landlord until settlement. This agreement had a bearing on head 8, below.
7. Reinstatement: Clause 10 of the Schedule proposed by the Tribunal provided for insurance after completion of sale and for the proceeds of the insurance policy to be used in re-instatement of the subjects. The tenants proposed the following addition: "All buildings insurance risk shall remain with the landlords at their expense until the price has been paid on the date of entry. In the event of damage to or destruction of the property prior to such date the landlord shall be obliged to reinstate before the price is payable". The dispute related only to the proposed obligation of reinstatement.
8. Maintenance: Condition 14 as proposed by the Tribunal was in the following terms: "You shall accept the subjects in their present condition". The tenants proposed a variation by deletion of "their present condition" and substitution of "in no less a condition as at the date of application by the tenants to purchase". This was resisted as unnecessary having regard to the agreement at head 6, above.
The main issue at the hearing related to the question of title and the proposed requirement that evidence be exhibited showing that the Crofting (Scotland) Acts do not affect any part of the subjects. It is convenient to deal first with the other comparatively minor items which were in dispute.
Mr Carruthers sought inclusion of an express provision in relation to access. The fact that the landlords were now in a position to implement such an obligation did not remove the need for it. In reply, Mr Sutherland made clear the intention of the landlords to convey, as part of the subjects, the parking area over which there had been informal parking rights. He contended that this addition required an uplift in the price of £500 and he invited us to make that change. He recognised that this was not covered in the present pleadings.
We are satisfied that the tenancy included the rights of access in question. As this had been a contentious issue we consider it appropriate that the missives now include a positive obligation to provide a right to access and a right to park in what had been a designated parking area for the subjects. We deal below with the question of price.
Mrs Carruthers gave evidence as to normal practice in relation to exhibition of titles. Although she did not purport to give evidence in an expert capacity, her views of proper practice are entitled to considerable weight. She had experience as a conveyancer over some 30 years including experience in three large Scottish firms. She thought a seller would make available to the purchaser's solicitors, in their office, the original or extracts covering a prescriptive period and copies of deeds falling outwith that period. There was clearly a need to see the original of the main title deed and to have an opportunity to study it. She said the council had a policy which was contrary to this. The council would simply send photocopies and a search. She was aware that many agents accepted this but for some purposes copies were quite inadequate. She certainly had wished to see the original in this case. In particular she had wished to consider the writing on the plan. The importance of this request was, she said, plainly demonstrated in the present case by the fact that the copy writ which had, eventually, been exhibited was only a hand drawn copy and, in respect of the plan, was not an accurate copy of the original. The shape of the rectangle coloured on the copy was much more elongated than the original which she had only seen at the beginning of the hearing.
She gave evidence that in a private sale the seller would exhibit original titles or extract copies. The purchaser's solicitors would then be able to send out to his client photocopies to allow the client to check plans and burdens. In order to prepare written notes on the title the purchaser's solicitor would expect to have the titles to study at leisure in his or her own office. The council practice, however, was simply to send copies and to invite the purchasers to satisfy themselves.
Mrs Carruthers somewhat reluctantly accepted that she was aware that original deeds would be available for inspection on request. She had been told in the past that she could go to inspect documents in the council offices but had not been told this in relation to the present case. She did not know that this was regarded by the council as their policy.
Mr Carruthers submitted that although original deeds had now been exhibited, there remained an issue of principle. The selling landlord ought to be compelled to make deeds available for examination in the purchaser's solicitors office. It was, he said, essential to see this from the perspective of a conveyancer and not that of a court lawyer. Conveyancers expect to do their real work in their own offices. They need time to examine documents properly.
Mr Sutherland made no formal response on this issue. Titles had eventually been exhibited and the matter was no longer in issue. His cross-examination had been to the effect that Mrs Carruthers was aware that titles could be examined at the respondents’ premises. It would be unreasonable for the respondents as public authority landlords to require to exhibit titles in every sale.
We accept the latter contention. As the issue has been resolved in the present case, we shall make no change to the conditions of offer. For a variety of reasons, practice in private sales is not determinative of proper procedure in statutory sales. However, we think that public authority landlords should be careful not to allow a general policy to blind them to the genuine needs of parties in particular cases. Where a genuine difficulty has been recognised in relation to an aspect of title, exhibition of title at the office of the purchasers’ solicitors may be entirely appropriate. In the present case when the plan was crucial to the dispute, we consider that it was quite inappropriate to rely on a copy. A rigid policy of never allowing deeds to go to the purchasers' solicitors may cause more trouble than it saves. As the issue has been resolved in the present case, we shall make no change to the conditions of offer.
We heard evidence from Mrs Nicol as to the reasons for their need for some form of certificate to show that they were now connected to the main system. We heard that, some two years ago, the system had been by septic tank. It was their understanding that they had in fact been connected to the main sewer at the time the adjacent community hall was connected. There was never any doubt that they had always had a functioning system. However, their bills for community charge showed "nil" as the charge for sewerage. They had never had any form of official confirmation that this connection had been made. It appeared from cross-examination of Mrs Nicol that the respondents had understood Mr Nicol to have had a demonstration of the satisfactory working of the new system. However there was nothing to contradict Mrs Nicol’s response that this demonstration had related to a repair of the septic tank after an occasion when it had been unable to cope with the output of the Community Hall.
Mr Johnson gave evidence that he had arranged for the house to be connected to the main sewer when the adjacent hall was connected. He had had various communings with the contractor. He understood the work to have been completed but could give no evidence of written confirmation either in the hands of the landlords or having been given to the tenants.
Mrs Carruthers gave some evidence as to the need for a seller to have some form of evidence to satisfy a potential purchaser who might reasonably raise questions over the matter, particularly in light of the community charge bills. If the system used a septic tank she would wish to be satisfied that relevant rights of drainage were available.
In course of the hearing a messenger arrived bearing a piece of paper which appeared to provide confirmation from North of Scotland Water Authority that the subjects were now connected to the main sewerage system. We understood this letter to be accepted as sufficient for the tenants' purpose and Mr Carruthers made no formal submissions in relation to the proposed variation dealing with this matter. We did not, however, understand him to depart from the contention that the offer should contain an obligation dealing with adequacy of sewerage facilities on the lines spoken to by his partner.
Mr Sutherland said that in relation to matters such as connection to the sewerage system, the landlords’ objection was that, as a matter of principle, there should be no obligation to provide such evidence. It could be expensive for a local authority to have any such obligation. This issue was dealt with in Evans v Scottish Homes 1995 (LTS/TR/1994/16), at pages 20 to 39 and in particular at page 24. Accordingly this variation was inappropriate and should be rejected.
We are satisfied that there is now no doubt that the subjects are in fact connected to the public system. In the circumstances the variation proposed is now unnecessary. Nor is it necessary for the purposes of the present case to add to the general discussion of this issue found in the decision of the Tribunal in Evans v Scottish Homes.
The seventh issue related to the risk of destruction of the property. It had been agreed that the buildings insurance risk should remain with the landlords at their expense until the date of entry. However the landlord did not accept an obligation to reinstate in the event of destruction. Their contention, put shortly, was that their duty was to re-house the tenant. The tenants’ submissions were based, to some extent on examination of separate provisions by which they were to be bound to reinstate in the event of accidental destruction after settlement.
Mrs Carruthers accepted that there had been a general practice of taking a purchaser bound to rebuild. However, she said that as superiors' interests had decreased sellers tended to have less of an interest in the subjects after sale and the need for such a condition had diminished. She accepted that on a council estate SIC would have a legitimate interest to make sure there was reinstatement of any building. However there was no point in such an obligation in the present case. She pointed out that there was no similar obligation in relation to the school now used as community hall. It was part of the same building. It was illogical to find her clients as purchasers of one part bound when the adjacent proprietor was not. In fairness this unusual burden on the purchaser should be taken into account when considering whether the landlord should be taken bound to rebuild if there was damage before the sale.
She accepted that the proposed variation, No. 7, was not something she had ever seen in missives in the form suggested. She was referred by Mr Sutherland to Cusine and Rennie, Missives at 4.16 (It may be noted that the second edition at 4.25 and 4.26 is in substantially similar terms) She considered that although the proposal would be unusual in a private sale it had to be remembered that this was a right to buy with a tenant in possession of the subjects at the moment. The applicants wished to buy their home, not some other property.
In re-examination she expressed her concern that if there was no obligation to reinstate, the tenant might be rehoused and might lose the right to buy the second house at a discount because they had already exercised the right in respect of the first house. There was, also, a problem in relation to a purchaser's insurers. From a practical point of view, the standard type of clause as shown in Cusine, supra, leaves the purchaser at risk. Their proposal was simply an attempt to deal with this. Rebuilding was much more expensive than acquisition of a similar dwellinghouse.
Mr Carruthers submitted that the requirement that the landlord rebuild if the premises were destroyed was entirely special to the circumstances of the present case. It would be preferable to have the rebuilding requirement removed both in the context of risk to the landlord before completion and in the burden imposed on the tenant thereafter. However he recognised that this latter point had not been challenged in the pleadings. He submitted that it was necessary to have a rebuilding requirement on the landlord because the tenant might be rehoused and might lose his right to purchase at a discount. This, he said, arose because of the provisions of section 62(3A). In any event, the subjects were unique. They were not part of a housing estate. The tenant wished to buy this particular house. The standard form of missives for house purchase allowed either party to resile if subjects were damaged. However in a right to buy case only the purchaser should be able to resile. The seller will always have an insurable interest, the buyer has no interest unless the seller cannot resile. If the property was insured the seller could easily rebuild even if this was to cost much more than the current market value of the house. In Evans v Scottish Homes, supra, at page 38) there was a reference to a casus omissus. There could be loss of the effective right to buy if there was no subject to buy. He also made reference to Clark, cit infra, saying that in that case the Tribunal applied a test of reasonableness and added a condition to missives to avoid risk of further dispute.
Mr Sutherland contended that the proposal that the seller be obliged to reinstate in the event of damage before completion was unreasonable and was not normal practice. He referred to Cusine and Rennie paragraph 4.26. It was normal for both parties to have a right to resile. Destruction wipes the slate clean. It would be particularly hard for a housing authority to be committed to rebuilding which might be three times the value of the subjects. Their statutory duty was to rehouse. Section 62(3A) which limits the right to discount on a second purchase could not be read as limiting the right to discount in the circumstances. There would have been no first purchase if the sale did not take place.
We have not found this to be an entirely straightforward point. It is clear that the normal practice in private sales does not form a reliable test for sales under the Act. Whether or not a condition is found in a private sale depends on prevailing commercial factors. These are lacking in sales under the Act where there is no market place. The tenant has a right to buy and the authority is obliged to sell.
Mrs Carruthers made the point that this was a special case. The subjects were not typical of public sector housing. However, we can find no justification for this approach. The landlord’s obligation cannot depend on whether the tenant perceives the house to be especially appropriate. Any tenant may have special reasons for seeking to buy the house in which they live. In his submissions, Mr Carruthers also referred to this as a special case but we understood his emphasis to be on the other conditions of the contract and in particular the obligation on the purchasers to reinstate in the event of destruction after settlement. We did not find helpful the various references to authority. In particular although we accept the dicta in Evans (page 37-38) to the effect that the tenants’ rights as tenants are not lost until settlement, we did not find the reference to the issue of casus omissus (at page 38) to be of assistance. Mr Carruthers also made reference to Clark. We took that to be a reference to Clark and others v Shetland Islands Council LTS/TR/1981/599 but found nothing in that case to bear directly on this issue. Equally we consider that although there is practical force in Mr Sutherland’s submissions as to the extra cost of re-building, we think this could be avoided by insurance and we were given no adequate explanation of the reasons for the landlord’s acceptance of the obligation to insure and challenge to the obligation to reinstate.
The intention of the Act is to enable the tenant to purchase the home he occupies. However, the fact of substantial destruction may be thought to remove the force of that underlying purpose. It was not disputed that, in the event of such destruction, the landlords’ obligation was to re-house: in other words, to provide the tenant with a new home. We are satisfied that the attempt to buy the first home would not stand in the way of a right to buy the new home at full discount. Section 62 (3A) provides for a deduction from the discount of “an amount equal to any previous discount - - - received by the appropriate person on any previous purchase of a house - - -”. We see no reason to treat an allowance of discount, solely for the purposes of a calculation of the sum due on settlement, as being equivalent to actual receipt of discount within the meaning of that section. Where there has been no settlement there is nothing properly equivalent to receipt. Further, we do not consider that where a sale has been aborted by destruction of the subjects, it can be said to be a “purchase” within the meaning of that provision. Accordingly, if the primary purpose of the Act is to give tenants a right to purchase the home they occupy, that right can be made effective by permitting purchase of the new home.
However, we have come to the view that there are features of this case which support the tenants’ proposed variation. Although we do not find the tenants' special desire to acquire these particular subjects to be persuasive, we do accept that regard can be had to the condition that the tenants as purchasers will be obliged to apply the proceeds of insurance to re-building. Although that condition appears formally in an offer by the Tribunal, that offer simply reflected the proposal by the landlords in their offer of 12 February 1999. It must be assumed that this was seen to be a reasonably necessary condition. No doubt it was conceived with the interests of the adjacent proprietors in mind. The landlords’ interest in the matter is not self-evident. Nevertheless, if there is a justification for a long term obligation of reinstatement, it seems reasonable to impose a similar obligation on the landlords in the short term.
Further, we have regard to the landlords' acceptance of an obligation to insure. We think it implicit in the provision for “all buildings insurance risk” that what is contemplated is reinstatement of the buildings. We heard no contrary submission and no clear exposition of the implication of acceptance of an obligation to effect such insurance compared to acceptance of an obligation to reinstate. As worded, the obligation proposed by the tenant would impose a direct obligation to reinstate as opposed to the obligation to apply the proceeds of insurance for this purpose. The practical significance of this distinction might be important in certain contexts. It is not clear what importance it has in the present case.
The landlords' challenge on this issue was one of principle and we heard no submissions directed at the actual terms of the condition proposed by the tenants. Although Mr Carruthers himself expressed some reservation about the wording, no alternative was proposed. In the circumstances, we simply accept the tenants' contention that such a condition be incorporated in the offer and express no view as to its precise effect.
The final issue as it appeared in the written pleadings and in the exposition before us was the contention that there should be included a condition which would compel the landlord to maintain the subjects in the condition they were in at the date of the application to purchase. It was not disputed that the landlords had had a policy of ceasing routine maintenance after an application to purchase. However this policy had changed. Although the extent of work currently required might be in dispute they contended that there was no need for any additional condition.
Mr Johnson gave evidence of the policy in relation to repairs where an application to purchase had been received. There had been a policy of carrying out very limited repairs after such an application. However he said the policy was now to keep to the normal cycle of repair. He was able to give detail of a list of what he referred to as day to day repairs. However he accepted that this showed that there had been no outside paintwork since 1992. He confirmed that, had the normal maintenance cycle been adhered to, such paintwork would have been done in 1995 and again in 1998. This evidence supported the evidence of Mrs Nicol, which we accept on this matter. It is clear that since the application to purchase only repair work of an emergency nature has been carried out. There has been a lack of routine maintenance. Putting it shortly, it is clear that for the landlords to implement their current obligation under the missives of let there is, at least, a current requirement for full external repainting and inspection to determine what else requires to be done.
Mr Carruthers stressed that on the evidence it was clear that the landlords had failed to implement their maintenance obligations because of the right to buy procedures. It was accordingly necessary to have something in the missives to deal with this matter. It was within the scope of the Tribunal to make provision to deal with this: Evans page 47; Clark, supra.
Mr Sutherland argued that there was no need for specific provision about the condition of the building. The matter was already covered by the landlords’ agreement to a variation to provide that both landlord and tenant would be bound by their whole obligations under the letting arrangement until the price is paid. Liability to maintain fully was now accepted.
We are satisfied that the respondents are currently in breach of their maintenance obligations as landlords. It was not disputed that the policy had been to cease routine maintenance when a tenant applied to buy. Although we heard evidence of certain repairs being carried out over the last few years, we accept Mrs Nicol’s evidence that these were of the nature of “acute” repairs. Routine exterior painting has not been attended to and is now required. The landlords are under obligation at present to maintain. We have not been persuaded that there is a need for any additional obligation. On the face of it, the matter is resolved by the agreed variation referred to under head 6 above which makes it clear that the respondents' obligations persist until settlement. The tenants can, if necessary, take steps under the missives of let to compel performance.
Mr Carruthers made an opening submission on the matter of title. His main proposition was that in the context of the statutory right to purchase, the missives ought to make clear that all matters necessary to give the tenant a good and marketable title and to allow him to enjoy, as owner, what he enjoyed as tenant, will be attended to by the landlord. Any costs which the landlord should properly incur in this respect should not be passed on to the tenant. This required careful attention to detail in the missives. The tenant ought to be able to accept the landlords offer without qualification.
The only dispute over title which was set forth explicitly in the pleadings related to the question of crofters' rights. Mr Carruthers accepted that under the Crofters Acts this issue would, in fact, turn on possession. The objection based on title was, accordingly, misconceived in that context. However, we heard a substantial body of evidence and submission dealing with the question of title. It was apparent that the parties recognised that the validity and marketability of the title was a separate substantive issue between them.
This question requires consideration of the detail of the writs founded on and of the nature of the possession of the subjects. The substantive submissions of the parties were directed at the legal implications of the titles and we propose to deal with the matter by setting out the detail of the various writs referred to, followed by the submissions of parties. We then make certain findings bearing on the physical characteristics of the subjects and on possession, referring where appropriate to the evidence and submissions, before turning to consider the proper conclusions to be reached.
Our consideration of the issue of title in general and of the detail of the writs in particular was greatly assisted by the evidence of Mrs Carruthers. She described the difficulties she perceived in relation to the particular title in this case and expressed her views on the matter. She described the difficulties encountered in obtaining sight of the title. They had been seeking copies of the original 1880 deed, referred to below, which was the foundation writ. They had eventually obtained a hand copy. She pointed out the difference between that copy and the original and, in particular, the obvious difference in the shape of rectangles shown on each plan as representing the land conveyed. She observed that the sellers had no heritable title at present. There had been talk of recording a notice of title. It was assumed that they would now proceed by means of deduction of title. What was clear was that title depended on the 1880 deed.
We turn to consider the terms of that deed, the foundation writ, which is a Disposition of 7 October 1880 by the School Board of the United Parishes of Dunrossness, Sandwick and Cunningsburgh disponing the subjects as described therein to themselves in trust [for the purposes of the Education (Scotland) Act 1872] to be applied as a site for a public school. The narrative clause sets out the procedures leading to acquisition of the site described as "a quarter of an acre or thereby in the scattald or Commonty of Levenwick" and the procedures whereby the parties entitled to rights of property or servitude in or over the Commonty agreed to the extinction of all rights of property or servitude or other rights over the site. A condition of the agreement was that the Board would enclose the site "with a sufficient stone wall". This agreement was reached in 1876. The dispositive, burdens and entry clauses are in the following terms:
“Therefore in virtue of the powers conferred upon us by the ninety eighth section of the foresaid Lands Clauses Consolidation Act we do hereby dispone to and in favour of ourselves in trust for the purposes of "the Education (Scotland) Act 1872" and to be applied as a site for a Public School within the meaning of the said last mentioned act in the Parish of Dunrossness Sandwick and Cunningsburgh for a playground for the scholars and for a residence for the Teachers or Teacher in the said School and for no other purpose whatever All and Whole that plot or area of ground lying in the Commonty of Levenwick adjacent to the town or room of Levenwick extending one quarter of an area or thereby imperial measure as the same was formerely marked off on the ground by William Laurence Vatchley, Dunrossness and Joseph Irvine, Kirkasetter, Tingwall and as the same is delineated and coloured blue on a sketch or plan annexed and docqueted and signed as relative hereto which piece of ground lies within the Parish of Dunrossness and County of Orkney and Zetland But alway with and under the real lieu (sic) and burden of enclosing the same with a sufficient stone dyke and maintaining the same in good repair thereafter at our own proper expense. With entry at the term of Whitsunday Eighteen hundred and seventy six notwithstanding the date hereof.”
The plan itself is annotated with the words "this is the sketch or plan referred to in the foregoing Disposition". The plan shows a north point. The road is indicated by two parallel lines running north and south. The hill dyke is indicated firstly by a short curved line to the west of the road terminating at a gate which is shown at right angles across the road. The line of the dyke is then shown as running north on the east of the road from the gate, parallel and close to the road, before turning at right angles to run in a straight line east. It then turns to run in a straight line north, the change in direction being shown as a curved corner. The land conveyed is shown on the plan as a square block, coloured in blue, lying in the area between the road and the dyke. In other words, it appears on the plan as entirely surrounded by scattald. The words "bare ground" appear between the blue square and the road and between the blue square and the said straight line of dyke running north. On the plan there is no point of contact between the area shown in blue and either the road or the hill dyke. There are signs of writing largely obscured by the colouring material in the square. (This writing was thought to include a reference to “Site of Levenwick Public School” but it became apparent that nothing turned on this.) To the south of the dyke the word "Boolie" appears.
The plan has no scale. However Mr Allan was able to say that by comparison with the relative positions of the road and the dyke the square marked in blue would appear to be some three times larger than a quarter acre site such as was referred to in the text of the deed.
By comparison with the ordnance survey map of 1878, it appears that the line of the dyke shown on plan was intended to be indicative rather than truly representational. That map shows the dyke to the west of the road in a quite different position to the plan. The line of the dyke to the east is shown starting at an angle to the road and curving gently to the east. It then shows a distinct right angled corner where the dyke finally turns to run north and shows that last section as tending to describe a slow curve towards the east. That right angled corner is also shown as the junction with another dyke running from it to the south. The alignment of dykes at that point is quite distinctive. The map of 1878 reflects the current alignment at the junction, visible on site and spoken to by Mr Allan.
Mrs Carruthers said that as an experienced conveyancer she would interpret this Disposition as making it clear that none of the boundaries touched the dyke or the road. To identify the precise area conveyed further information would be required. She did not accept that any inference could be drawn from the fact that the ground had clearly been marked out initially and that the buildings had been erected within a comparatively short time. In her view, there was nothing to justify an inference that the builders would have had regard to the area marked off. It was enough to say that on the face of the title the subjects did not run with Boolie croft and they now appeared to do so. From a site visit she considered that the title description did not match the position of the subjects.
Asked by Mr Carruthers whether the fact that the description being marked out on the ground meant that this was technically a "bounding title" she expressed herself as doubtful. She thought it arguable that a title marked out in this way was a good bounding title although there was now no evidence of what that boundary was. She had made enquiries to see if any direct evidence still existed of what had been marked out but had had no reply from the council.
Mrs Carruthers thought it appropriate to examine other titles to see how the neighbouring titles had been expressed. She examined the feu charter of 1911 showing the plot of ground for enlargement of the school at the north side. This title did not resolve her doubts in relation to the south end.
The Feu Charter of 1911 showed the additional land as bounded to the south by the buildings and enclosed grounds of Levenwick Public School. We note that the plan attached to that deed purports to show the existing school buildings and the surrounding wall. Mr Allan pointed out that the plan attached to the 1911 writ did not coincide with the 1900 Ordnance Survey map nor with the situation on the ground today. The east west dimension was too short. He gave evidence that the area shown in the 1900 map measured one quarter acre and that the wall and buildings, there shown, appeared to correspond to the present wall and relevant buildings. It may also be observed that the Feu Charter plan did not purport to show any adjacent hill dyke. The south wall was shown simply as part of the boundary of the school. The 1900 ordnance survey map appears to show that wall forming part of the boundary of the Boolie croft; in other words, to be part of the hill dyke as it stood at that date.
The next deed referred to was a disposition by the Trustees of the Symbister Estate in favour of James Johnson recorded on 21 May 1924. This was a conveyance of the adjacent Boolie croft which lay to the south of the original scattald. We did not see the original of this disposition. Copies of the first page and black and white copies of the plan were produced. It is apparent that the plan was roughly drawn by hand. The descriptions are hand written.
That deed described one boundary to the north east in precise terms by reference to certain tenanted subjects and went on to say that the subjects conveyed were bounded "on all other sides by the Scattald belonging to the Symbister Estate all as delineated and contained within the border coloured red on the Plan annexed". Mrs Carruthers contended that this was a very precise description and showed that at that time the area to the north of the Boolie croft was regarded as scattald. However, the plan can in fact be seen to show a small rectangular shape immediately to the north of the ground referred to as Boolie. We shall refer to it as a rectangle although the evidence of Mr Allan confirmed that the south edge was curved at one end. This rectangle appears to lie in much the same position as the present garden. Mr Allan was able to confirm that within the limitations of the plan the size of the rectangle corresponded with the size of the enclosed garden as it is at present. Another smaller rectangle is shown immediately to the north of the larger rectangle. This would match the position of the school. However, he observed that the line of the dyke forming the boundary of Boolie to the north followed the curve shown on the 1878 Ordnance survey map. It was not consistent with the 1900 map. Indeed it showed the south edge of the rectangle as following a gentle curve at its west end as if following the line of the original hill dyke.
As the larger rectangular shape appears to be immediately to the north of the boundary and, by the standards of accuracy of the plan generally, to correspond quite closely to the position of the school garden it would, in our view, be perverse to regard the plan as intended to show anything other than the school garden at that point. This is supported by the consideration that the rectangles appear on the photocopy marked with a small cross. Immediately adjacent on the plan, and clearly intended as legend, the word "school" appears followed by a small cross. Above that is the word "scattald" followed by a larger cross. At the foot of the plan the word "scattald" appears to be followed by a small cross. There are various crosses round the boundary of the Boolie croft. We do not know whether, in the original, the crosses were in colour. One cross, outside the boundary, is labelled "position of my house". It is apparent that the plan was adequate as a description of Boolie croft. The disposition reveals no conflict of title. We are satisfied that the plan was not intended to show either of the rectangles as scattald. Mrs Carruthers did not in terms dispute this but contended that the deed as a whole showed that this area was, in 1924, “regarded as scattald” because of the terms of the description.
Mrs Carruthers had sent a copy of the 1880 deed, with her comments, to the respondents and had repeatedly asked for information to clarify the title. The response, she said, had consistently been that the landlords thought they had a title to all that they possessed but, in any event, that the tenant would get a title to all they had. If they did not have a title they could not give any more than this. She had understood the solicitors acting for the landlords to concede that there was no title to the area of the garden, in other words to accept that there ought to have been a gap between the subjects conveyed in 1880 and the dyke. However, their position had not been consistent throughout. The argument about prescription had only recently been advanced. She really was not sure what their position was. There was no serious challenge to her evidence that the position of the council had varied from time to time and that solicitors had, in the past, taken refuge in the proposition that although there was a problem the council would give a good title to all that they themselves had title. Mr Sutherland simply pointed out that he was the seventh solicitor to act for the council in relation to this transaction.
Mrs Carruthers herself had no doubt that the title was not a marketable one because of the questions raised. It was not sufficient to consider simply the position of the present clients. She would have to consider what would happen if they came to sell the subjects. She would have to consider her role if acting for a potential lender. She would not be happy to certify the title based on the 1880 deed as valid for a lender's purposes. In any event, in her view, the threat that it might be part of the scattald would be enough to make it not marketable in a crofting county. It was not absolutely clear that the subjects had been possessed as part of the school in 1880.
In cross-examination she was pressed on the subject of what was a marketable title. Asked to refer to the passage in Halliday, Conveyancing Law and Practice, Second Edition, 36.02 dealing with the requirements of a title recorded in the Register of Sasines, she said that although it was a well known textbook, many agents would not accept it as entirely accurate. She did not accept the passage as relevant or satisfactory in the present case. She did not accept that it was normal to have regard only to deeds relating to the particular property. That would be normal if the deeds matched the subjects of sale on the ground and the evidence of possession. Other titles could not be excluded as a relevant source of information. She did not accept that a warrandice clause was relevant to consideration of the question of a good valid and marketable title. It was not the same as a direct obligation of indemnity. It might be satisfactory if the clients could prescribe on a new plan.
In submission, Mr Carruthers made it clear that the tenants’ position was simply that it was necessary to clarify this issue. If the Tribunal determined that a title based on the 1880 Disposition was a valid title, well and good. An authoritative declaration would cure the defect. However the tenants could not be expected to take the risk of accepting the doubtful title without such a finding.
The main problem was the doubt about the title and the related risk of challenge under the crofting legislation. It had appeared from the Answers that the landlords’ position was that they did not require to give a title to more than they themselves held qua heritable proprietor. However this could not stand in light of the decision in Higgins v North Lanarkshire Council (LTS/TR/1998/13 – 30 May 2000) and Ross and Cromarty District Council v Patience 1997 SC (HL) 46. Any argument based on lack of title should have been taken as a basis of refusal to sell. However the time for this had passed: East of Scotland Water Authority v Livingstone 1999 SC 65.
He submitted that even if a defect in the title had been cured by prescriptive possession, that would leave the problem of the crofting interest. There was no evidence of any formal resumption after 1886 when the Crofters Holdings (Scotland) Act of that year came into effect. Prescription, in his submission, could not have given a good title for 40 years, in other words, until about 1920. There was no evidence of any formal step being taken thereafter. He did not accept that an inference could be drawn that the schoolhouse was completed at the same time as the school. There was nothing in the records to show this one way or another. If anything the absence of any mention of the schoolhouse in the minutes suggested that it had not been built at that time.
Mr Carruthers submitted that this was a bounding title on the basis that the land disponed had been precisely marked out by pegged boundary at the outset. It was irrelevant, he submitted, that the position of these pegged markers could not now be ascertained. A bounding title is always a bounding title even if it is impossible to see what the boundary is. If this title does not fall to be construed as a bounding title, then a larger area could be acquired. He agreed that the subjects appeared to fit the area described but they did not fit the whole description which required a gap between the subjects and the wall.
Mr Sutherland said that the landlords now accepted an obligation to give a good title to all the subjects as occupied by the applicants. However, what was available was adequate to do so. Although there was a possibility of markings on a small wall on the north east showing that this wall had been changed at some stage, there was no suggestion that the relevant boundaries had changed. If there had been possession for over 10 years based on a deed sufficient to include the whole area possessed, that was sufficient in terms of section 1 of the Prescription and Limitation (Scotland) Act 1973. The only question was whether the terms of the 1880 Disposition were "habile to include" the whole garden ground. He contended that they were. What was meant by this expression was discussed in Halliday, supra, volume 2 at 262-264 and also at page 401; in Gordon Scottish Land Law, (2nd Edition) at 343 and also at page 53. The relevant case law was, he said, conveniently summarised in Suttie v Baird, supra. He founded in particular on passages at page 136 D-F and 138 E-F.
There was nothing in the present title to limit possession. No boundaries could be identified from the plan. The only possible limit was that the subjects as conveyed were not bounded by the hill dyke. However this is a purely negative feature. It is not something which sets up a restrictive title. There was clear evidence that the dyke had in fact been moved. He next turned to the question of whether the words of description in the deed took precedence over the plan. This was a question of construction, Gordon, supra, page 55, para 4.08. The tendency was for words to prevail over a plan. A "sketch" was, if anything, entitled to less weight than a plan.
Mr Sutherland stressed various points of detail in relation to the present titles to which we have given consideration in our above analysis. It was, he said, a proper inference that the building was on the marked area. That would necessarily obliterate the marks. He submitted that the proper inference was that the walls were built on the marked line but, if not, we were left with a general location and not a bounding title. There was nothing in the description to exclude any part of what has been possessed. Suttie, at page 136 A-C made it clear that there was a great deal of leeway in these matters. He looked at the positive correspondence between the present subjects and the title. The subjects are indeed one-quarter acre. They have the same boundaries today as in 1900 and the same measurement and shape. The main material relied on to challenge the title was from titles which were not part of the progress of titles. These were, in his submission irrelevant and, in any event, misleading.
The issue in relation to crofting was not a matter of title but of occupation. If the subjects were used as part of the schoolhouse before 1886 that was sufficient to take them out of occupation by crofters at that time. The evidence of the minutes showed that Levenwick school buildings were complete and “ready for occupancy” well before 1886. In any event, the proper inference was that the subjects were erected on the area pegged off. The fact that such area had been marked off for building purposes was sufficient to take it out of the scattald. The formalities in 1907, when crofters gave up rights in the scattald to the north, showed that they were aware of their rights and the inference is that they knew that they had no outstanding rights at that time.
In response to Mr Sutherland, Mr Carruthers added a variety of points of detail which we have endeavoured to take into our account in consideration of the evidence bearing directly on the title. He submitted that in Suttie v Baird, the passage taken from Lord Moncrieff in Reid v McColl (1879) 6 R 640, had made it clear that the bounding element related to affairs at the time of the original deed. In Suttie there had been evidence of an obvious gap in the boundary because a garage referred to as part of the description of the boundary had not, in fact, been built. In the present case it was known from the terms of the Disposition that the boundary was marked off. Further he submitted that it was proper to look at all available titles to see what light they cast. Burns Conveyancing Practice (4th Edition) page 326 provided an example.
The applicants became tenants of the Old School House in 1994. It was common ground that the subjects let consisted of the schoolhouse, the present walled garden; a right to park on an area of ground immediately adjacent to the gate into the garden; and a right of pedestrian and vehicular access from the main road to the said parking area. It may be observed that no point was taken as to whether the south wall of the garden, in whole or in part, was included in the subjects let. On the view we take of the whole matter this is not a point of significance but it may be that inability to give a title to the boundary wall would not be a breach of the landlords’ obligations under the Act.
It is not disputed that school buildings were erected in or about 1880 and that the school buildings ultimately included the school house and its walled garden. We are satisfied that the ordnance survey map of 1900 shows the position of the school house and its garden ground substantially as they stand today. Mr Allan gave evidence to that effect and the point was not seriously disputed although some questions over the details of his measurements were raised in cross-examination. The school itself formed the north part of the school buildings. It was extended to the north sometime after 1900 and no trace remains of what appears in 1900 as sections of the north boundary of the site. Although the school buildings have been extended certain parts of the north facing walls of the former school buildings, as they now stand, appear in the position of the north most boundary of the site at that time and to be consistent with the position of buildings shown on the said map.
There is no dispute that the school buildings and grounds were occupied continuously and peaceably by the respondents or their predecessors in title from when they were constructed until the school itself was sold to the Trustees for Levenwick Village Club in 1983. The former school is now used as a community hall.
We are satisfied, on balance of probabilities, that the tenanted subjects consisting of the school house and walled garden formed part of the school buildings when they were completed in or about 1882. In absence of any competing evidence we think this a reasonable inference to be drawn from the terms of the disposition showing entry to the site in 1876 and from the narrative in the dispositive clause that the site was to be applied for a public school, for a playground, and for a “residence for the teachers”. There is nothing to suggest that the work was delayed. Although no trace of the buildings appears on the 1878 ordnance map, the date of survey would have been somewhat earlier and the map, therefore, has no bearing on the matter. The timing is supported by the copy minutes produced. A minute of meeting of the school board dated 7 February 1882 contained the following entry: "The Clerk reported having received notice from Wm. Thomson that Levenwick School Buildings were now ready for occupancy and also having received notice from Chas. W Aitken that Cunningsburgh School Buildings were also ready for occupancy and that certificates (A) for above schools had been duly forwarded by Mr Brand and Building Grants claimed". A further entry recorded the agreement of a teacher to take the position at Levenwick. A subsequent minute of 15 March 1882 recorded an order to the contractor to "furnish and build in the grates" at Levenwick. There was a record of an order of 'some furniture for Levenwick'. Finally, the minute of 6 June 1882 recorded the opening of the new Levenwick School and the introduction of the teacher to the parents, guardians and children. That minute recorded that the Clerk was instructed to have mantelpieces erected at Levenwick.
We are satisfied that it is a reasonable inference from this material is that the schoolhouse was completed with the school. It is apparent from the plans that it was an integral part of the school buildings. We heard nothing to suggest that the school might have been completed at any stage before the schoolhouse. We heard no evidence of the internal arrangements. For completeness it may be added that it is obvious now that one room of the schoolhouse projects into the school area. We heard no evidence of the detail of this nor that this was an original feature. However, there was equally no evidence that the school could have been completed as a separate unit before the schoolhouse and our inspection satisfied us that it would have been extremely unlikely. The school had a teacher. The teacher would require a house. The obvious inference is that the house and school were constructed together and there is nothing to cast doubt on this.
It is, of course, the garden ground which is in dispute. There is no direct evidence that the garden was enclosed when the schoolhouse was completed. There is, however, no evidence to the contrary. The buildings were eventually surrounded by a stone wall. We are satisfied that the map of 1900 demonstrates the wall around the garden in its present position. The disposition of 1880 narrated that the school board had accepted an obligation of enclosing the ground with a sufficient stone wall as part of an arrangement whereby the existing shareholders in the grazings gave up their rights. It is narrated that this agreement was a result of a meeting held on 17 July 1876. It is a matter of reasonable inference that the requirement for a boundary wall was connected with purposes of stock control. If the wall required to be built there would be no justification for delay in its construction. At a practical level, construction of the boundary wall prior to construction of the school buildings would assist building operations by keeping animals out but we accept that little can be taken from this. The more telling factor is the absence of any reason for delay. Even allowing for normal construction delay, we think that if the buildings themselves were completed in or about 1882 it is a reasonable inference that the necessary wall was in position before 1886. Even if the wall was not completed, it is clear that the total area conveyed demonstrates that the ground to be used as garden was in contemplation from the outset. We accept the evidence of Mr Allan that the relevant part of the site, as constructed by 1900 and, of course, including the garden, measured to reasonable tolerances, could be shown to be one-quarter acre in extent. This was, of course, the area conveyed by the disposition. We consider it a reasonable inference that the garden area was earmarked and recognised as having been taken out of common grazings at the date of entry.
We are further satisfied on the balance of probabilities that the buildings and the school house garden were constructed on the site which had been marked off for the purpose. This is referred to in the disposition. There is no evidence to suggest that the site which had been marked for the purpose was not in fact used. Although it can be no more than an inference, we consider it appropriate to infer that the building work, including construction of the boundary walls, was in accordance with the site as marked. It is plain from the terms of the disposition itself and from the minutes of the period, that the work was being supervised. There is a meticulous record of the recognition of the rights of the users of the scattald. As noted above, the evidence of Mr Allan was that the area occupied in 1900 measured close to one-quarter acre in extent. This was the area conveyed by the disposition. The way the matter is referred to in the disposition is also consistent with this conclusion. Entry to the site was taken in 1876. By 1880 the area is described as “formerly marked off”. The marking must have been superseded. Had it been superseded by completed buildings then, no doubt, reference would have been made to these buildings. However, an inference can be drawn that the area of building works was accepted as fitting the marking.
We are also satisfied that the dyke as shown on the 1878 map is no longer in existence where it ran to the south of the tenanted subjects. The south wall of the subjects has now become part of the boundary. In other words, we are satisfied that the bulk of the south wall of the subjects lies some distance to the north of the dyke which was in existence at the date of the disposition. Having regard to the scale of the relevant maps and plans it is impossible to say whether or not the whole of that wall now lies to the north of the line of the dyke. It is possible that the south east corner of the wall is situated on or about the line of the original dyke. There might, however, be a gap of up to one metre between that corner and the line of that dyke.
We base this above finding on various factors. In the first place even a superficial comparison of the ordnance survey maps of 1878 and 1900 makes clear a change in the line of the dyke at the relevant place. The earlier line was curved throughout the relevant length. The 1900 dyke is shown straight at the south boundary of the subjects. On site, a line corresponding to the line of the original dyke can be discerned lying to the south of the garden wall. That wall is straight and appears to be parallel to the line of the house suggesting that it was constructed with reference to the building. There was no evidence to suggest that the remains of the dyke could be identified with sufficient clarity on site to show the precise point where the present wall and original dyke unite in the region of the south east corner of the garden.
Mr Allan had carried out a careful comparison of the relevant maps. He said that this required to be done in office conditions where he was able to use the assistance of enlargements and transparencies. He said that the copy maps produced were not to true scale. He described the problems of distortion which could arise with photo copies but was able to confirm that the copies appeared to show minimal distortion. It was apparent that he had carried out a careful investigation of the matter. He had attempted to orientate his maps by reference to buildings and other fixed points over a much wider area than the immediate subjects. He had carried out necessary measuring. His comparison satisfied him that the only point of contact between the subjects and the existing wall was the possible contact at the south east corner to which we have referred above. He could not exclude the possibility that there might have been a gap at that point.
Mr Allan was asked to carry out a similar exercise in court. He explained his difficulty in doing so because of problems of scale and distortion. He accepted that on a crude comparison of the small scale copies there appeared to be a conjunction of the south garden wall and the line of the original dyke at a point several metres to the west of the south east corner. He did not accept this as a valid way of assessing the relative positions.
Although it is apparent that the south garden wall has been incorporated into the boundary of Boolie at some stage, we are unable to say when this was done. The effect of the moving of the boundary is that part of the original scattald has been incorporated into Boolie croft. This may well have happened at about the time of construction of the school buildings, which, as discussed, we find to have been prior to 1886. However it is not essential for present purposes to determine when the hill dyke was moved. There may have been two walls for a time.
On the basis of these findings in fact it is possible to deal with the issue actually raised in the written pleadings, in other words, the issue of crofters' rights. We are aware of decisions of the Scottish Land Court which are understood to have the effect of determining that no amount of adverse possession will allow land to fall out of the control of the crofting legislation without formal resumption or decrofting order. This understanding was not challenged before us. We accept that it affects the marketability of a title. However it is clear that the protection given to crofters under the various crofting statutes runs from 25 June 1886 when the Crofters Holdings (Scotland) Act of that year came into force. Although the tenants' written submissions were based on the proposition that it was necessary to show a valid title to the subjects prior to 1886, it was agreed in course of the hearing that the status of the land as subject to crofting legislation is not affected by title. If the land was not in fact used or occupied as part of the common grazings at that date, any claim which might be made would require to be based on rights extant immediately prior to that date. It is not suggested that any such rights could still be enforceable. Accordingly any doubt as to marketability based on potential claims by crofters to exercise grazing rights over the garden can be seen to have been resolved by our findings.
We accept Mr Sutherland’s submission that the first question to be resolved in relation to the validity of the proposed title is whether the 1880 disposition is habile to include the subjects. The question is whether the language or description used is capable of fitting the possession. As it is put by Gordon, Scottish Land Law (2nd edition) pp 12-34: "All that is required is that the description should be habile to include what is claimed, or in other words, that what is claimed is capable of being included in the description given in the title relied on".
In considering whether a particular description is capable of covering the subjects possessed, “that construction must be adopted which is the widest of which the language admits” Brown v North British Railway Co. 1906 8F 534 at 542. Other dicta refer to the widest reasonable construction. This approach may be viewed as essentially the same as the question of whether the Disposition falls to be regarded as a bounding title. It is, however, important not to lose sight of the terminology of the statute. There is a possible risk of confusion arising from use of the term “bounding title” as if the title itself was entitled to special status. We noted that both Mr Carruthers and his partner tended to put the matter in terms of whether the deed was "entitled" to be regarded as a bounding title. In practical terms the only question is whether the description in the deed is such as necessarily to limit the ability of a possessor to vindicate ownership by prescription. There is no question of entitlement. There is no presumption in favour of the deed as such.
There is also an obvious danger in taking out of context dicta which stress the importance of a description by reference to a boundary without recognising that such boundary must remain identifiable. Mr Carruthers founded on a dictum of Lord Justice-Clerk Moncrieff in Reid v McColl supra,at page 90: “ A bounding title is one in which the property is identified by its boundaries as distinguished from one in which the identity and extent of the subject depends only on description”. The present title was, he said, in the former category. The land conveyed was identified by the boundaries as marked-off. However, Lord Moncrieff went on to discuss the matter in terms which leave no doubt of the importance he attached to the need to be able to identify the boundary. In a passage cited by Lord Hope in Suttie v Baird at page 136D-E, he said: “: "The true question is whether the boundaries are specified, and if they are, whether they can be identified. If these two concur, they will receive effect, and the proprietor cannot prescribe beyond them". The matter is put beyond doubt by his further observation: “A title will remain not the less a bounding title although every trace by which it was recognised has disappeared. A wall, a fence, a road, a building, even march stones, may long have been removed or destroyed, but as long as it is possible to prove their site, (our emphasis) they will be the limit of the property of which they have been described as the boundaries.” (Reid v Mc Coll p90) Indeed, Lord Hope put the question in Suttie as being "whether the western boundary can be identified with such precision that the title itself, and not the possession, is the measure of the pursuer's right": 136 E-F.
The matter was put more generally by Lord Salvesen in Troup v Aberdeen Heritable Securities Co 1916 SC 918 in a passage cited by Lord Hope at p135J-K. “ The boundary in this case is just the kind of boundary which is best defined by immemorial possession, and which admits of encroachments by either of the proprietors into his neighbours property provided such encroachments have been exclusively possessed for the prescriptive period. The test is whether the ground, as possessed, fits the description in the title on which possession has followed".
It may be thought that a case where the initial boundary was delineated by indicators which were, of their nature, purely temporary and intended to be superseded by a permanent wall is a classic example of intention to use possession as the permanent measure of the grant. It may be observed that in the present case a one quarter acre site was to be conveyed. There were no physical features of any sort necessarily identifying the area. There was certainly no positive attempt to fix its precise position by reference to any physical feature. It was simply a site for new buildings taken from bare ground. The area had to be marked off by two named persons. The marking played the same function as if the granter had simply pointed out the lines on which the boundary walls were to be built. It must have been assumed that, once erected, the boundary wall would, itself, provide the permanent measure.
In support of his submission that a bounding title exists even where the boundary cannot be identified Mr Carruthers made reference to Burns Conveyancing Practice (4th Edition) p 326 and the reference to head 4, of a list of ways in which a bounding title may be constituted. Head 4 is in the following terms: “4. An exception in A’s title of a part disponed to B , as that part is described in a specified deed, which latter deed refers to an annexed plan as delineating B’s boundary. A’s title is “bounded” in relation to B’s, though no one could know that by reading A’s title.” In this connection the author made reference, by footnote, to N.B. Railway v Hutton 1896 23 R 522.
On the face of it this passage does not bear directly on the issue before us. The observation that the bounding characteristic could not be known by reading A’s title is, no doubt, accurate if by “A’s title” is meant only the actual disposition in favour of A. However, in the example given the bounding characteristic would be apparent from study of the deeds specified in such disposition. We accept that where land conveyed is described as bounded by lands belonging to another that may or may not be a “bounding title” depending on the evidence available to establish the boundary of the neighbour’s land: Burns, cit supra, at head 3.
We heard no direct submission bearing on the relevance of the titles of adjoining property. Mrs Carruthers did not accept the passage from Halliday, supra, 36.02 as accurate in all circumstances. That passage made no reference to any need to consider the titles of adjacent subjects when assessing the validity of a proferred title. We have no difficulty in accepting that sources such as the titles of adjacent subjects may be relevant as adminicles of evidence bearing on issues of fact. They might be able to identify a boundary or provide evidence of possession. They might, of course, be relevant as having been expressly incorporated by reference. We hope that we have commented adequately on the titles referred to by Mrs Carruthers. We do not think that they provide any material assistance.
We are satisfied that there is no justification in principle or authority for treating the reference to an area as having been marked-off as creating a bounding title when it is clear not only that the lines marked-off cannot now be identified - except perhaps by reference to the walls as erected - but when the use of the word “formerly” means that the title itself is ambiguous as to whether they could be independently identified at the date of grant. We are, however, satisfied that the intention of the granter was to convey the ground “formerly marked off”. The evidence of possession is entirely consistent with that description. We consider that conclusion sufficient to deal with the main doubt raised in this case.
Another element of description in the deed is that the land conveyed is “in the Commonty of Levenwick and adjacent to the town or room of Levenwick”. We are satisfied that the subjects as possessed also meet that description. We do not accept the contention that the word “adjacent” falls to be limited to subjects which are near, but not in contact with, the boundary. We were not referred to any dictionary but note that in the New Shorter English Dictionary the definition is “Lying near (to), adjoining, contiguous (to)” and in the Chambers Dictionary 1993 it is “lying near or next (to)”. Similarly, we are satisfied that the subjects would properly be described as in the commonty if lying within the boundary even if built hard up against the dyke.
Mr Carruthers in submission placed his main emphasis on the proposition that a bounding title was entitled to be regarded as a bounding title even if it was clearly impossible to identify the boundary. We have rejected this proposition. However, the main perceived difficulty as set out in the written pleadings and in correspondence was that the plan appeared to show a definite gap between the subjects and the line of the hill dyke. We are satisfied that the apparent discrepancy between the subjects and the area of land conveyed as it appears in the plan, did give rise to a rational doubt as to the validity of any title based on the 1880 deed.
A private purchaser might have accepted the title on the basis that the risk of challenge was virtually non-existent and would eventually disappear after prescriptive possession on a new title identifying the subjects as they now stand. However, a lender might possibly take a more rigorous approach and we accept that a tenant exercising a statutory right is entitled to have reasonable doubts set at rest. We consider that the evidence as presented to us does now demonstrate that this particular doubt was more apparent than real and does not affect the validity of a title to the subjects based on the 1880 writ.
We are satisfied that the plan was intended to be demonstrative and not taxative as to the area conveyed. When looking at the plan in the context of the title as a whole it is important to have regard to the fact that the text purported to define the precise area by reference to the marking. We think that the purpose of the plan was to show the position on a wider scale. The land conveyed was within the commonty of Levenwick. We do not know the extent of the commonty but from the productions in the case it can be seen that it stretched to the south and west. It may well have covered many hundreds of acres. The plan appears to have been intended to achieve little more than to show that the school lay in that part of the commonty near the town of Levenwick and indicated by reference to the relative positions of road and dyke. If it was intended to do more, it failed to do so. No attempt was made to show the essential features of road and dyke accurately relative to each other. On the contrary, the line of the dyke appeared to be schematic only. The area indicated was not shown to scale but gave the impression of covering an area three times greater than the area as specified in the text.
However, although not intended to define precisely the land conveyed we consider that taken with the terms of the deed as a whole, the plan makes clear that the subjects conveyed lay within the commonty. Prescriptive possession would not suffice to acquire a title beyond the line of the hill dyke as it was in 1880. That was the boundary of the commonty. There is, of course, no suggestion that the subjects do extend beyond that line. Further, it can be said that there is no realistic basis of challenge from the relevant adjoining proprietor as we have seen the Boolie title which demonstrates an understanding that the subjects are to the north of that property.
There remains the question of the significance of the gap shown on the plan between the line of the dyke and the shaded area. The gap is shown as more than four times the width of the road. However the plan is not to scale. It is impossible to derive from the plan any positive indication of the location of the land conveyed. In particular there is nothing in the plan to define positively the line of the south boundary. It can be defined negatively by saying that it is north of the line of the hill dyke. This negative definition could, no doubt, be amplified to say that it is "an appreciable distance" north of the dyke. However that expression tells us nothing in terms of identification of the boundary itself. If we had to rely on the plan the only unambiguous definition for the purpose of identification of the boundary is that it can be said that it lies north of the dyke. Our findings above, accordingly, show that the ground as possessed can fit the whole description in the foundation writ. In other words, having had the benefit of a full proof, we are satisfied that the whole description derived from the 1880 foundation writ, is habile to include the land possessed. The respondents are, accordingly, in a position to give a valid title to it.
It must be recognised that on the issue of title we did not have a direct contradictor. Mr Carruthers made clear his position that he simply wished to have the doubts on title resolved one way or another. He was not seeking positively to demonstrate that there was a better competing title. However, the issues were explored in detail and we are satisfied that there is no risk of successful challenge to the title offered.
In course of submissions it became apparent that there was a potential dispute over the price. This was said to arise because the title to the parking area had not previously been included. Although Mr Carruthers made it clear that he did not accept the relevance of this issue in proceedings before us, our travelling arrangements placed constraints of time and we invited parties to deal with this matter by way of written submission. They agreed to do so. The respondents narrated that the market value stated in the Tribunal's offer of 17 September 1999 (namely, £38,500) was the value of the subjects excluding the carpark. They said that an additional valuation had been obtained from the District Valuer on the basis that the carparking area was included. This valuation was £39,000. It was submitted that the market value which required "to be determined in terms of section 62 of the 1987 Act" was the market value of the whole subjects being sold. If not, the Council would, in effect, be disposing of land for a consideration less than the best that could reasonably be obtained, contrary to section 74(2) of the Local Government (Scotland) Act 1973.
In response Mr Carruthers set out fully the applicants' position in relation to the car parking area. It had always been the understanding of the applicants that the subjects of sale were to include a servitude right of access with a right to use an area for parking. There was some dispute over the precise area which the applicants were prepared to accommodate. Their concern, however, had been to ensure their use of a parking area. It was said that nowhere prior to the hearing had it been indicated that there would be an outright sale. At the time the respondents were disputing that they could be bound contractually to acquire ownership. At no stage prior to the hearing had any addition to the purchase price been mentioned. In addition Mr Carruthers raised the question of the method of calculation of the additional £500. He had not seen the basis of valuation. The original price must, he said, have included a right to park. There was no justification for any nominal sum in the context of the value of right to buy. There was no evidence on the matter. He pointed out that whether or not the respondents chose for convenience to acquire the site outright was a matter for them. The tenants were seeking use of a parking area.
In reply the respondents contended that the proposal to grant title to the carparking area was not a new one. In support of this they made reference to their offer of 12 February 1999 and a covering letter. That offer had in fact used the figure of £39,000.
The contention that the price should now be adjusted presents various difficulties. Of fundamental importance in the present context is the fact that the Tribunal have proceeded throughout on the basis that the price was agreed. In the letter of 28 July 1999, referred to above, the apparent confusion over price was raised explicitly. It was proposed that the offer would be based on the value of £38,500. In response the respondents expressly accepted that the offer should be based on the value of £38,500. It is now clear that at that stage they were intending to give a title to the parking ground.
No good reason has been shown to set aside the apparent agreement of parties. But for this agreement the Tribunal would have put in hand arrangements to ascertain a price. The Tribunal would not have regarded itself as bound by the price assessed on the basis of instruction by the respondents. It must be borne in mind that the procedure which is now being followed is on the basis that the respondents have not timeously issued an offer to sell and that the Tribunal has required to stand in their shoes. Further as no proper notice of this dispute was given in time for evidence to be tested at hearing there remains an unresolved dispute as to the basis of assessment. We are not satisfied that the particular nature of the dispute over price was properly drawn to the attention of the applicants prior to the hearing. We accept that there was reference on 12 February 1999 to the possibility of a direct title being given in respect of the parking area. There was no mention of this as bearing on price. We consider that it is now quite inappropriate to reopen that issue. (It may also be observed for completeness that the Tribunal has no general jurisdiction to deal with disputes over price: Macleod v Ross and Cromarty District Council 1983 SLT (Lands Tr) 5. At the hearing Mr Carruthers positively resisted any attempt to open that question and no agreed remit on this point could have been inferred).
Because of the importance we attach to the agreement reached as between parties and the Tribunal, it is unnecessary for us to comment on the detail of the various contentions on this matter. We observe, however, that the District Valuer's revised figure proceeded on the basis of a narrative that the area was "to be …. surfaced with tar". There is no apparent need for this work. We do not know such practical details as how the cost of tarring would compare with the proposed increase in price, less discount, but that is not of direct relevance to the issue before us. The subjects have not been so surfaced. There is no evidence as to what significance, absence of a tarred surface would have on the valuation.
If the respondents do face a difficulty under the said section 74(2) it will be for them to consider whether it is necessary to convey the land. There is obviously little administrative sense in retaining the title but the option of simply giving the tenant appropriate rights over the ground can be considered.
At the conclusion of the hearing reference was also made to a dispute between the parties as to the proper meaning and effect of the statutory provisions allowing certain payments of rent to be set-off against the purchase price. Parties took advantage of the invitation to make written submissions to invite the Tribunal to deal with this. As a creature of statute, our jurisdiction is limited by the terms of the statutory jurisdiction entrusted to us. We were not referred to any provision giving us express jurisdiction to deal with this matter. It does not arise out of the present application. However the Tribunal has unlimited power to accept a reference to arbitrate under section 1(5) of the Lands Tribunal Act 1949. We are prepared to treat the agreement of parties as equivalent to a reference. We consider that, in the particular circumstances of this case, and in the absence of any request that this particular point be dealt with as a private arbitration, it is appropriate to deal with the matter as part of the present judgement. However, the decision on this issue will not be in any way binding as between other parties.
The circumstances in which the dispute arises can be put shortly. A Notice of Delay in terms of section 66A(1) was served on 11 August 1995. That section is set out below. It provides that where the landlord fails to serve an offer within one month of the date of the Notice the price requires to be reduced by the amount of rent paid by the tenant during the period commencing with the expiry of the one month period and ending with the date on which "the offer is served". It was contended for the respondents that the offer issued by the council on 12 February 1999 met the requirements of this section. It complied with the provisions of section 63(2). Although not issued within a two month period of the application to purchase, it was still capable of acceptance.
The offer issued by the Tribunal was dated 17 September 1999. Mr Carruthers pointed out that the respondents had conceded at the start of the hearing on 10 October 2000, that amendments to this offer were appropriate. He accordingly contended that abatement should continue at least until the latter date. However, his substantive submission was that the period of abatement should extend to at least one month after the date of the Tribunal's issue of its findings or longer if there then should be delay on the council's part in obtempering same.
Mr Sutherland supported his contention in the following terms: "No provision of the Act states that the abatement of the purchase price shall continue until an offer is issued by the Tribunal. Section 66A seems designed to encourage the Landlord to issue the offer by applying a financial penalty for not doing so. It would be inequitable to remove the Landlord's ability to implement its obligations to issue the offer and thus stop the penalty accruing". The submissions for the applicants on abatement were similarly brief. Mr Carruthers contended that as the Tribunal had [by its Order of 12 August 1999] made a finding that the landlords had "failed to serve an offer to sell in terms of the statutory requirements. In these circumstances section 66A applies to section 71. The council's own "offer" was out of time, no longer has any relevance and therefore does not prevent abatement of rent running". No further substantive submissions were made either in support of the proposition that as the landlords had conceded amendments to the Tribunal's offer, that offer was not an appropriate terminus or the proposition that the abatement should continue to at least one month after the date of the Tribunal's issue of its final findings. We have, of course, no difficulty in recognising the implicit submission that, as the tenant is entitled to ignore everything except the offer which the Tribunal ultimately holds to be appropriate, the issue of an Order specifying the approved conditions must be treated as service of an offer and, as the Council's "offer" is no longer relevant, the Tribunal's offer must be the effective one for the purposes of the section.
It is clear that this matter turns on a proper interpretation of the provisions of section 66A. The section is in the following terms:-
(1) Where a tenant who seeks to exercise a right to purchase a house under section 61 has served an application to purchase on the landlord and the landlord –
(a) not having served a notice of refusal, has failed to serve an offer to sell on the tenant within 2 months of the application or, where an amended offer to sell falls to be served on the tenant under subsection (3) of section 63, has failed to do so within the time limit specified in that subsection;
(b) having agreed to serve an amended offer to sell on the tenant in response to a request under section 65(1), has failed to do so within one month of the request;
(c) following an order by the Lands Tribunal to serve an amended offer to sell on the tenant under section 65(3), has failed to do so within 2 months of the date of the order;
(d) following a finding by the Lands Tribunal under section 68(4), has failed to serve an offer to sell within 2 months of the date of the finding; or
(e) following an order by the Lands Tribunal under section 71(2)(b), has failed to serve an offer or amended offer to sell within the time specified in the order,
the tenant may serve on the landlord a notice in writing requiring the landlord to serve on him, within one month of the date of the notice, the offer to sell or (as the case may be) the amended offer to sell which the landlord has failed to serve.
(2) Where the landlord fails to serve the offer to sell or the amended offer to sell within one month of the date of the notice in writing under subsection (1), the price fixed under section 62 shall be reduced by the amount of rent paid by the tenant during the period commencing with the date on which the one month period expired and ending with the date on which the offer is served.
It is instructive to compare the time limits of this section with those of section 63. That section, in subsection (2), provides that: "Where an application to purchase is served on a landlord …. it shall within 2 months after service of the application to purchase, serve on the tenant a notice [containing certain terms]". If the landlord does not do so, the tenant has right under section 71 to seek a finding that there has been a failure and, shortly put, to require the Tribunal to proceed to take over administration from the landlord. The Tribunal has held that if no offer has been made within the statutory period, it has no option but to take over from the landlord if the applicant insists: Fullerton, supra. In that case the offer was made only three days after expiry of the periods set out in [what is now section 63(2)]. It was argued that in any case where an offer had been made before the application to the Tribunal, the Tribunal should exercise its discretion by declining to take separate steps, leaving the tenant to accept the offer which was "on the table". The Tribunal held that the late offer could not be converted into a statutory offer. Accordingly a tenant could not be compelled to accept it. However the Tribunal has, repeatedly, made it clear that the tenant has an option to waive the time limits and accept any offer which is, indeed, on the table: Thomson v Stirling District Council 1985 SLT (Lands Tr) 4. In short, where a landlord makes an offer late, it remains a valid offer available for acceptance in the usual way. The provisions of section 71 can be seen to provide a remedy where a landlord wilfully delays or refuses to make an offer. The tenant is not obliged to invoke that section.
It is apparent that the timetable provided by section 66A(1)(a) is the same as that specified in section 63. In other words, the operative provisions of the former only come into effect when the landlords have failed to meet the timetable provided by the latter and, accordingly, at a stage at which any offer was held in Fullerton, supra, to be too late to be a "statutory offer". The use of that expression may be thought to give some support to the tenant's contention. However, it must be read in context. The provisions of section 66A were plainly not in the contemplation of the Tribunal. These provisions were added by the Leasehold Reform, Housing and Urban Development Act 1993 which came into effect on 27 September 1993. On the other hand, it is plain that section 66A not only contemplates, but positively provides for, an offer to be made by the landlords at a date which would necessarily be out of time for the purposes of section 63.
We are satisfied that the intention of section 66A is to provide an effective weapon in the hands of the tenant to prevent undue delay by a landlord. The practical problems of a tenant in seeking a remedy for administrative delay - as opposed to wilful non-compliance - under section 71 is that, inevitably, the operation of that section introduces substantial delay. The Tribunal has to allow the landlord an opportunity to respond to the application and, although we now seek to make the preliminary finding referred to in section 71(2)(a) at an early stage, we are seldom able immediately to take over the role of landlord and issue an offer in suitable terms. It is necessary to find out what type of offer should be made and to establish price and discount. Procedure under section 71 is, as we have indicated, valuable where a landlord is deliberately dragging his heels. It was, at one time, considered to provide a convenient means of allowing disputes as to entitlement to purchase to be resolved. It is now clear that it cannot be used for that latter purpose: East of Scotland Water v Livingstone, supra. It is not, in itself, an efficient means of avoiding delay.
Section 66A, on the other hand, provides a direct financial compulsitor. The weapon is put in to the hands of the tenant. The landlord is expressly empowered to respond. There is no reason to think that Parliament intended the landlord to lose the right to respond under section 66A simply because a tenant has also taken advantage of section 71. In short, we are not persuaded that an offer made after the period provided in section 63 is out of time and without relevance for the purposes of section 66A.
That conclusion is sufficient to deal with the arguments expressly advanced in this case. Although Mr Carruthers implicitly contended that the original offer by the Tribunal would not have been a relevant offer because the landlord later accepted that certain changes in the conditions be made, he did not attempt directly to controvert the landlords' submission that the offer of 12 February 1999 complied with the provisions of section 63(2). Having regard to the way in which this issue has arisen for determination by us, we are reluctant to embark on a detailed examination of the interplay of the various statutory provisions for challenge of the detailed content of an offer. It is sufficient, for present purposes, to say that we are satisfied that what is intended as a bona fide offer to sell does not cease to be a relevant offer for the purposes of section 66A merely because certain of its terms and conditions could demonstrably have been open to successful challenge. Where there has been a timeous offer, challenge to its provisions will open up a new line of procedure relative to the specific challenge but casting no doubt on the status of the document as an offer for the purposes of section 63. We consider that a similar approach requires to be taken to section 66A.
We can, of course, accept that not all documents which purport to be "offers" will fall to be treated as such for the purposes of either section 63 or section 66A. However we have no reason to hold that the formal letter of 12 February 1999, which is prima facie a bona fide offer for the purposes of the Act, should not receive effect as such in the application of section 66A. We accordingly deal with the issue put to us by finding that the rent paid from 12 September 1995 to 12 February 1999, inclusive, falls to be applied in reduction of the price.
It may be observed, that in a very broad sense, rent may be regarded as a fruit of the heritable asset in the same way as interest is the fruit of the capital. The provisions of section 66A allow the tenant the benefit of both. That is plainly the intention of Parliament and is, no doubt, appropriate throughout a period when the landlord is in default. We would be reluctant, without persuasive argument, to find that the Act fell to be construed in such a way as to give the landlord no power to bring that default to an end. The section cannot have been intended as a compulsitor on the Tribunal. There is nothing to suggest that the section contemplated only the date of the final offer acceptable to the tenant - which might be that of the landlord, the Tribunal, the Court of Session, or, indeed, the House of Lords. The Tribunal agreed to a variety of delays to suit the convenience of parties. There is, of course, no suggestion of any improper motivation in this case. On the contrary, we have no doubt whatever, that the tenants were anxious to have the whole matter concluded as soon as possible. However, we consider that an interpretation which might give a tenant an incentive to delay, should be avoided if possible.
Parties were agreed that the matter of expenses should be left over for further submission. As it is likely that parties will now be able to conclude this transaction without further involvement of the Tribunal we have allowed a period of two months for further submissions. This should give time for settlement and allow us to deal with expenses as the last stage.
It became clear in the course of the proceedings that a variety of assertions might be made in relation to the matter of expenses. It is important to ensure that conflicting assertions are presented to the Tribunal in a way which allows any points of conflict to be identified and resolved accurately and without undue difficulty. If any claim for expenses is to be based on detailed analysis of the history of communings between the parties, consideration should be given to setting out the relevant points in tabular form with details of the particular contention, relevant dates, and details of the response. It is, of course, impossible for us to prescribe any particular form of claim as we do not know what motions may be made. It will be important to bear in mind that the Tribunal is concerned only with the proper expenses of the judicial proceedings.