Lands Tribunal for Scotland

NOTE
(Expenses)

Aberdeen Endowments Trust (Applicants)
v
Charles William Whyte (Respondent)
and
The Keeper of the Registers of Scotland (The Keeper)

Application under section 82 of the Land Registration etc. (Scotland) Act 2012 in respect of

Birkenhills Farm
Area of ground lying to the west of the road leading from Turriff to Fyvie

Title Number ABN104971

Introduction

[1] The applicants have sought leave to withdraw from the proceedings in terms of rule 22 of the Lands Tribunal for Scotland Rules 2003. They submit that there should be no award of expenses due or by either principal party. The respondent seeks an award of expenses from the applicant, and sanction for the employment of counsel. The Keeper does not oppose the applicants’ motion to withdraw the application on a no expenses due to or by basis.

Background facts and circumstances

[2] The present application seeks a finding that the land register is inaccurate in terms of s.82 of the Land Registration etc (Scotland) Act 2012 (“the 2012 Act”) in that certain burdens were incorrectly removed from the title sheet by the Keeper in May 2016. The respondent is the current owner of the subjects. The applicants (also referred to here as “the Trust”) own adjoining land and are, or would be, the benefited proprietor in respect of the burdens.

[3] The subjects are described as a “gathering area” for water within a tenanted farm. In 1955 the Trust conveyed the subjects to the local water authority as part of a scheme to gather and pipe water to nearby housing. The relevant disposition created real burdens to the general effect of prohibiting building, entitling the Trust and their tenants to cultivate the area free of charge for agricultural purposes, and to give a supply of water from the gathering area to a nearby field trough. The position would appear to have been somewhat unusual in that a situation was created whereby the tenant of a non-owner (i.e. the Trust) had free agricultural use of the subjects. We do not set out the text of the burdens in full.

[4] In 2013 the current respondent Mr Whyte made an application to the Tribunal for discharge of the title conditions under section 90(1)(a)(i) of the Title Conditions (Scotland) Act 2003 (“the 2003 Act”). This had been opposed by the Trust. Mr Whyte had purchased the subjects in October 2011 and submitted that the subjects were redundant for the original purpose on account of an upgrade to mains water supply. He also submitted that the condition whereby a tenant of a landlord who does not own the land occupied is repugnant with his, Mr Whyte’s, ownership. Amongst other things the Trust submitted that fencing around the subjects would disrupt the existing tenancy and access to the farm to a significant extent. Mr Whyte offered to relocate the water trough, but the Trust responded saying they had no interest in its being located elsewhere.

[5] The Tribunal, in a decision dated 15 April 2014, refused Mr Whyte’s application. They took the view that the original purpose of the conditions was to protect the agricultural use of the land by the surrounding landowner, that this purpose could still be fulfilled and thus the basis for the title conditions had not changed. Nevertheless the Tribunal decided to continue the application for a specific period to enable the then applicant, if so advised, to seek to amend the application so as to include an application under section 90(1)(a)(ii) of the 2003 Act. This was in order to make the argument (under the correct subsection) that the title conditions were invalid as repugnant to ownership. The Tribunal expressed no view on this matter and, as it transpired, Mr Whyte did not seek to amend the application. The application was accordingly refused.

[6] In April 2016 Mr Whyte’s solicitors sought the Keeper to rectify an alleged manifest inaccuracy in the land register. This was done by means of a “notification of inaccuracy” “ILR” form provided to the Keeper seeking to make her aware of the inaccuracy in terms of s.80 of the 2012 Act. The form stated that there was no longer a water-gathering area on the subjects and that the field trough and pipe referred to in the title conditions had been removed. It was also stated that the said area was no longer cultivated by the benefited proprietor. There does not appear to have been separate supporting evidence as to what was said on the form. The form was not intimated to the Trust. The Keeper accepted the information as implying abandonment and extinction of the rights in the title conditions and proceeded with the rectification by deleting the title conditions. The Keeper states that she relied on Mr Whyte’s solicitors’ duty of care not to have misrepresented the situation.

[7] It would appear that the Trust first became aware in December 2018 that the title sheet had thus been amended, without reference to them. The Trust thereupon made the present application to the Tribunal under s.82 of the 2012 Act seeking rectification by means of reintroducing the title conditions into the relevant title. The application states that water continues to be gathered in the area with the water feed to a field trough which is still in place and in use, and that the ground is still cultivated by the Trust’s tenants. The applicants accordingly contradict the statements given on behalf of Mr Whyte by his solicitors in the 2016 notification of inaccuracy to the Keeper. In Mr Whyte’s answers it is submitted that the Trust had “ceased to maintain a field trough and connecting pipe in a satisfactory condition” which was a resolutive condition in terms of the title conditions and which had not been adhered to. He also submits that the conditions were repugnant to his ownership of the subjects with the result that one of the relevant burdens was invalid.

[8] The Keeper accepts there is a factual dispute but she is unable to adjudicate on the matter. The applicants point out that there is an inconsistency in the respondent’s narrative as between the rectification statement to the Keeper and his present answers. In response to a query from the Tribunal, the respondent says that at the time of the application for rectification the agents believed the field trough had been removed, but that further investigation established it is still on the land but in a poor state. Had the proceedings continued the respondent would have relied upon the state of the trough.

[9] In the present application the Trust sought for the matter to be disposed of on the basis of written submissions. In terms of rule 26 this procedure requires the consent of all parties. The present respondent does not consent to written submission procedure and instead wishes a preliminary hearing on a number of issues of competency and title and interest. He also seeks a separate hearing on the question of the validity of the real burden in issue, all before dealing with the merits of Keeper’s reasons for the rectification in 2016. This position has led to the Trust’s request to withdraw their application having regard, amongst other things, to future costs and in particular the inevitability of one or more oral hearings.

Submissions

[10] The respondent points out that he has incurred significant cost in defending the present application. The present application had been made without prior notice by the applicants to the respondent. The applicants were seeking reinstatement of removed burdens which would render the respondent’s rights of ownership illusory. The respondent had no alternative but to employ a solicitor and counsel to defend the application. The applicants had delayed in moving matters forward following the respondent’s request for an oral hearing.

[11] The applicants point out that the respondent had not given notice to the trustees that he would be applying to the Keeper to have the burdens removed from the title. This was despite his having been in touch with the trustees at various times in the past regarding the title position. The trustees only found out about the rectification procedure by a coincidence and felt forced to take action. The Keeper had confirmed that she would not revisit the decision so the matter could only be dealt with by the Tribunal. Moreover the respondent had introduced the validity argument into the Tribunal proceedings. This was a separate issue which had not featured in the respondent’s application for rectification to the Keeper.

[12] In response the respondent points out that in terms of s.80 of the 2012 Act there was no obligation upon the respondent to intimate to the Trust the notification of inaccuracy given to the Keeper. Section 80(4)(b) provides for the Keeper to give notice of the rectification once it had been completed and the respondent should not be penalised because it would appear that no intimation had been given by the Keeper either before or after the rectification. It was relevant for the respondent to raise the validity issue of the burdens since the applicants had applied to the Tribunal to reinstate the burdens.

Discussion

[13] The general rule is that expenses follow success. The respondent has been successful in that the applicants seek to withdraw from the proceedings, and the Tribunal are, of course, amenable to the withdrawal. We normally have to consider which party has caused the expense of the process, and parties can be taken to have considered their positions prior to raising or defending the present proceedings. So we cannot avoid a starting position that the general rule should apply.

[14] Having said that we have some sympathy for the applicants. They had successfully resisted a recent application for discharge of the conditions made in 2013. It would have been natural for them to expect any subsequent application to have the conditions removed or extinguished to be intimated upon them. What they have found is that the title conditions have been removed from the land register without their knowledge, resulting in a reversal of onus; i.e. it is now for them to show why the burdens should be reinstated. The respondent has been somewhat fortunate in that the Keeper’s procedures have not been particularly robust in seeking to ascertain the factual position, especially given that his factual position has altered somewhat between his statement to the Keeper alleging inaccuracy and his answers to the Tribunal proceedings.

[15] On reading the 2012 Act we can find nothing in s.80 which actually requires a party seeking rectification, or the Keeper, to intimate the “notification of inaccuracy” upon an interested party such as the present applicants. As s.80 deals with the situation where the Keeper becomes aware of a manifest inaccuracy in a title sheet, Parliament perhaps thought that the fact an inaccuracy was to all intents and purposes “obvious” it would not be necessary to intimate the notification to other parties. The problem lies in cases such as the present where the alleged “manifest inaccuracy” is fact sensitive, and in terms of the relevant “notification of inaccuracy” “ILR” form to the Keeper, only one party’s version of the facts will be supplied to the Keeper. No separate evidence of background facts (photographs, affidavits etc.) appears to be required in terms of the form. No separate supporting evidence was sought by the Keeper’s staff in dealing with the present case. If for example the form required background information as to the existence of any current dispute, or a history of prior proceedings, the Keeper would no doubt take a more circumspect approach before concluding that an alleged inaccuracy was “manifest.” If the form had required mention of the existence of previous Tribunal proceedings, it could have been found that various competing submissions had been made showing that the Trust had no intention of abandoning their rights. In this event we sense that the procedures and outcome before the Keeper could well have been different. But in short, there was nothing in the Keeper’s procedures to mark the fact sensitive nature of the issue, which might have alerted her to the need to consider more detailed background evidence or to ascertain the views of an interested party.

[16] As it is, there was no statutory requirement upon the present respondent to intimate to the applicants their “notification of inaccuracy” to the Keeper. However we have concern that the factual statements made by the respondent through his agents to the Keeper are contradicted by the Trust. This includes the statement that the trough and pipe had been “removed.” This was one of the statements relied upon by the Keeper as implying abandonment of rights in the title conditions. The respondent now says that “the Trust had ceased to maintain the field trough and connecting pipe in a satisfactory condition.” This is capable of putting a different complexion on the matter, and is less consistent with the idea of a conscious abandonment of the equipment in question. Certainly as we read the pleadings the equipment is no longer said to be “removed.” We regret we can only describe the earlier statement as careless and potentially misleading in the context of behaviour prior to the raising of an action (MacPhail, Sheriff Court Practice, 3rd ed. Para. 19.11). This is against a background where it is no doubt known that the Keeper does not routinely or necessarily intimate “notifications of inaccuracy” to potential opponents who would be in a position to challenge factual statements. In such a situation it is only natural to expect the opponent to wish to set the record straight in a formal process. Given that the applicants have abandoned the case at a relatively early stage, and that given the history, the respondent’s resurrection of the validity argument may have been somewhat unexpected, we think justice overall requires us to make no award of expenses.

[17] We would have agreed that the respondent was still entitled to present the validity argument as a defence to the present rectification proceedings. We have no view as to whether that argument would have succeeded, but in the context of s.82 proceedings, it appears that it is an argument which he would have been entitled to make. The question would have been whether one of the relevant title conditions was invalid on account of repugnancy to ownership. We accept that the law in this area is complex and would have required research, thus meriting the instruction of counsel. But for our above finding, we would have been prepared to sanction the employment of junior counsel.

Decision

[18] In these circumstances shall allow the applicants to withdraw from the proceedings. The application is dismissed. We find no expenses due to or by any party.