LAW & Ors (trustees of the JAL FISH LIMITED), AGAINST ROBERTSON CONSTRUCTION EASTERN LIMITED [2018] ScotCS CSIH

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	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> LAW & Ors (trustees of the JAL FISH LIMITED), AGAINST ROBERTSON CONSTRUCTION EASTERN LIMITED   [2018] ScotCS CSIH_24 (04 April 2018) URL: http://www.bailii.org/scot/cases/ScotCS/2018/[2018]_CSIH_24.html Cite as: 2018 SC 428, 2018 SLT 377, [2018] CSIH 24, 2018 GWD 11-142, [2018] ScotCS CSIH_24

(FIRST) JOHN ALLAN LAW and GILLIAN MARGARET LAW and LEGAL & GENERAL

ASSURANCE SOCIETY LIMITED as trustees of the JAL Fish Limited Small Self-

Administered Pension Scheme; (SECOND) J A L FISH LIMITED; (THIRD) GILLIAN

Pursuers and Reclaimers: Malone (sol adv); Brandon Malone & Company

[1] This reclaiming motion seeks to challenge the decision of the Lord Ordinary that an

obligation contained in missives for the sale of land did not amount to an “obligation

relating to land”, and therefore had prescribed, in terms of the Prescription and Limitation

[2] The relevant obligation is in the following terms (emphasis added):

“8.1 In exchange for payment of the Purchase Price, there will be delivered (a) a validly

executed Disposition of the Subjects in favour of the Purchaser… and (b) the duly

In terms of clause “(c) ‘the Purchase Price’ means…£475,000…” and “(g) ‘the Overage

Agreement’ means the overage agreement to be entered into between the parties the draft of

which is annexed and forms part III of the Schedule” to the missives. The same definition

applies to both the Subjects, as defined in the missives, and the Overage Property, as defined

[3] The Overage Agreement itself provided for the making of certain payments in favour

of the pursuers and reclaimers (“the reclaimers”) in the event of the grant of certain consents

or planning permission in respect of specified development of the land, and its onward sale.

The defenders and respondents (“the respondents”) would not, however, be obliged to seek

such consents or permission, or otherwise to make payment to the reclaimers in the event

that no steps were taken whatsoever towards development or sale of the land. Depending

on the nature of development of the land, payment of a fixed sum would fall to be made to

the reclaimers of £1.5million (“Overage Payment – Development A”) or £1million (“Overage

Payment – Development B”), in each case under deduction of the “Base Price” of £475,000,

equating to the Purchase Price payable under the original missives. The trigger for payment

in each case is the sale of the land, whether as mixed commercial and residential

developments as a whole, or upon disposal of the final plot of any solely residential

[4] The reclaimers seek to rely principally on the cases of Barratt Scotland Ltd v Keith 1993

SC 142 and Glasgow City Council v Morrison Developments Ltd 2003 SLT 263, and to

distinguish on its facts the case of Smith v Stuart 2010 SC 490. The respondents agree that

the relevant principles are to be derived from these authorities, but contend that the

Lord Ordinary was correct to consider that the case of Smith v Stuart (supra) was binding

[5] The reclaimers concede that, if the obligation does not relate to land, then it has

prescribed by virtue of section 6 of the 1973 Act, the action having been raised after expiry of

[6] The Lord Ordinary held ([2017] CSOH 70) that the relevant obligation was personal

and collateral, in the latter sense that it did not form part of the purchase price of the land in

question, as contractually defined (para [14]). The expression “any obligation relating to

land” was to be given its natural and ordinary meaning, was apt to cover a wide range of

obligations, not limited to real rights in land, but not covering obligations to which land was

only incidental: land must be the main object of the obligation (para [17], applying Barratt

[7] The relevant focus was the nature and main object of the particular obligation in

issue, rather than any counterpart obligation (para [23]; cf Glasgow City Council v Morrison

Developments Ltd at paras 9 – 10, 13 and 16; and Clydeport Properties Ltd v Shell UK Ltd 2007

SLT 547 at 551D – E). It would not necessarily follow from the fact that a counterpart

obligation related to land that the obligation in question would also possess that character

[8] Even if the case of Smith v Stuart were not formally binding upon him, the

Lord Ordinary considered that there was no justification for declining to follow the

authoritative guidance contained therein, which appeared to be consistent with that set out

[9] In summary, the reclaimers maintained three broad propositions in the course of

submissions. First, that the core obligations of a transaction in which an interest in land is

created or transferred (which was described as a “land transaction”) would all be obligations

relating to land within the meaning of the 1973 Act. Secondly, that the relevant obligation in

the present case, which was expressly conceded to be a mere obligation to enter into the

overage agreement, was one of the core obligations in, and part of the object of, missives of

sale of land, and therefore amounted to an obligation relating to land. Thirdly, that the

[10] The reclaimers readily conceded that, for the purposes of the 1973 Act, it was

necessary to examine the nature of the particular obligation sought to be enforced (Barratt

(supra), LJC (Ross) at 153G). The relevant obligation in the present case was the obligation to

enter into the overage agreement, rather than any of the obligations contained in the overage

agreement itself. Nonetheless, it was relevant to consider the context in which that

obligation arose, whereby it was an obligation relating to land by virtue of being “a core

obligation in a contract which has as its subject matter the creation of rights or interests in

land”, such as missives of sale of land (Barratt (supra), Lord Kirkwood at 159D; Glasgow City

Council v Morrison Developments at para 13). Where the obligation arose in that context, as a

core rather than incidental obligation of a land transaction, it would amount to an obligation

relating to land. The scope of the core obligations was to be ascertained according to the

terms of the particular contract before the court. However, where the obligation in question

formed part of the consideration in a land transaction, it was of necessity a core obligation of

that transaction, and therefore an obligation relating to land. In the present case, the

obligation to enter into the overage agreement was said to be “one of the core obligations on

which the parties have contracted”. It was “a counterpart obligation (along with the cash

price) to the grant of a disposition in favour of the purchaser” and therefore amounted to an

[11] The reclaimers would have been entitled to refuse to convey the land upon the

respondents’ failure to enter into the overage agreement upon settlement. The terms of the

contract were certain, and there was an obligation on both parties to enter into it. Thus, the

obligation was not merely incidental to the transaction, or one that could be enforced only

after completion of the sale, such as a collateral warranty. The relevant clause 8.1 was not

happily worded, but it had been a matter of concession before the Lord Ordinary that the

clause ought to have expressed an exchange of the disposition on the one hand, for the

purchase price and overage agreement on the other. Those were the core obligations of the

contract; they encapsulated “the deal” or operative part of the missives. The overage

agreement clearly favoured the reclaimers, as sellers, to the extent of a financial advantage of

upwards of £1 million; such a continuing liability was of no benefit to the respondents. To

the extent that it did not properly reflect where the benefit lay, therefore, the clause was

acknowledged to be “wrongly worded”. Properly construed, however, the overage

agreement was logically part of the consideration to be received in exchange for conveyance

of the land, regardless of who might deliver it to whom: it was part of the “price” in the

natural and broad sense of the word, notwithstanding that it did not fall within the

contractual definition of the “Purchase Price” provided by the missives. This argument was

acknowledged to be the sole fundamental point underlying the reclaimers’ position. It could

be viewed as an aspect of the general mutuality of obligations, rather than the correlativity

of rights and obligations in the narrow sense addressed by section 15(2) of the 1973 Act. It

could not be correct that an obligation to deliver a disposition subsisted, whilst the

corresponding obligation to make payment prescribed; to hold otherwise would be

destructive of the mutuality principle, and could lead to injustice. Thus, counterpart

obligations at the core of a land transaction were to be treated as obligations relating to land.

[12] This was also a critical distinction from the circumstances pertaining in Smith v

Stuart, where the unilateral undertaking was merely to enter into a contract, the terms of

which had not been agreed, at some future undefined point, regarding the terms upon

which payment might be made if certain events came to pass in respect of the land. Such an

undertaking did not concern the creation of an interest in land, nor would the proposed

contract, if entered, have done so; it existed in isolation. The obligation not existing within a

land transaction, whether unilateral or bilateral in form, it could not amount to an obligation

[13] In the present case, whilst the obligation may not, in isolation, amount to an

obligation relating to land, it was properly to be regarded as such since it arose as a counter-

prestation to the delivery of a disposition. It was not merely “collateral”, as the Lord

Ordinary had determined. In these circumstances, the ratio of Smith v Stuart (LJC (Ross) at

paras 12 and 13) did not apply. The “underlying obligation”, which in each case regulated

the future payment of a portion of the proceeds of sale in the event of certain specified

circumstances arising, was the same at a superficial level only. In the present case, any sums

due in terms of the overage agreement were, in reality, an additional element of the price

under the original missives. Having regard to the bilateral nature of the parties’ obligations,

and the extent to which they were counter-prestations, the Lord Ordinary ought to have

treated the obligation to enter into the overage agreement as an obligation relating to land.

[14] In reply, the respondents conceded that, whilst in strict terms of the missives, the

obligation was on the reclaimers (as sellers) to deliver a signed copy of the overage

agreement to the respondents (as purchasers), there was an implied obligation on the

respondents to enter into the overage agreement. Nonetheless, the Lord Ordinary had been

correct that it amounted to a mere personal and collateral obligation.

[15] It was necessary to demonstrate that the particular obligation in question created an

interest in land, and was not merely an incidental matter within an overall contract relating

to land (Barratt (supra), LJC (Ross) at 148D, 153 and 154C – D, Lord McCluskey at 157I and

158B – C, and Lord Kirkwood at 158F – G). To be an “obligation relating to land” the

obligations required to have land as its main object. In the present case, the particular

obligation sought to be enforced was the obligation to enter into the overage agreement.

The obligation under the overage agreement itself was a mere obligation to pay an amount

of money. An agreement to regulate the basis upon which the proceeds of a relevant future

sale of land would be paid as between the parties, in the uncertain event that any of

specified circumstances came to pass, did not oblige one party to confer on the other any

right or interest in the land itself (Smith v Stuart) and did not have land as its main object.

As a consequence, the particular obligation was not an obligation relating to land.

[16] The reclaimers took matters too far insofar as they submitted that a core obligation of

a lease or contract for the sale of land would qualify per se as an obligation relating to land.

It was not sufficient that the contract related to the creation or transfer of rights or interests

in land in general: the particular obligation had to be so related. A core obligation could not

simply be anything that was said to be part of a reciprocal obligation, such as reciprocal to

payment of the purchase price, in order automatically to constitute an obligation relating to

land. If that were correct, any obligation could be so converted, contrary to the tests set out

[17] Whilst it was accepted that the overage agreement was to be entered as part of the

overall deal between the parties, the terms of the relevant clause 8.1 dealt with the

mechanics of exchange only. The respondents had been obliged to enter into the overage

agreement, such that each party would retain a copy of it, but the relevant clause did not

show that to be a core obligation in the manner suggested by the reclaimers.

[18] The execution and delivery of the overage agreement did not form part of the

contractually defined price payable, and paid in full, in respect of the land. It was a separate

obligation under the missives, albeit that the underlying “potential obligation” was to make

payment following upon future sale of the land. Accordingly, the Lord Ordinary had been

correct to hold that the obligation did not form part of the price in the wider sense

contended by the reclaimers. The overage agreement did not even purport to create or

transfer an interest in land. Nor did it preserve any such interests, such as a right in security

over the subjects or real burden in favour of the reclaimers, pending further development

and sale, either of which would have amounted to an obligation relating to land on the basis

[19] The decision in Glasgow City Council v Morrison Developments Ltd was to be treated

with some caution, as the Lord Ordinary had done, at least insofar as it depended upon the

particular terms of the lease at issue. Specifically, in order for the lease to take effect, the

tenant first had to build and then occupy the premises. The creation of the tenant’s interest

in land was predicated upon the construction of the buildings. It was in that particular

context that the court had concluded that it was an obligation relating to land. In the present

case, there was merely an agreement in relation to future payment, which could not be said

to have land as its main object. In that regard, the decision in Smith v Stuart was the most

relevant case cited to the court, and an authoritative decision of the Inner House.

Accordingly, it had not been open to the Lord Ordinary to decline to follow it, and he had

been correct to conclude that the obligation in the present case was not an obligation relating

[20] Schedule 1, para 2(e) of the Prescription and Limitation (Scotland) Act 1973 excludes

from those obligations subject to the short negative prescriptive period “any obligation

relating to land”, which expressly includes obligations to recognise a servitude and certain

statutory obligations upon the Keeper of the Registers of Scotland, but is otherwise

undefined. The short question that arises, therefore, is what amounts to an “obligation

[21] At the outset, it may be pertinent to note that, in the context of considering “whether

the scope of the category ‘obligation relating to land’ ought to be revisited”, the Scottish Law

Commission has observed that “its boundaries are now not significantly in doubt”

(Discussion Paper on Prescription (SLC DP No. 160, February 2016, para 2.58, citing Glasgow

City Council v Morrison Developments Ltd; Johnston, Prescription at paras 6.55 – 6.62). That

being so, the Commission has indicated that it is “reluctant to make proposals for change in

[22] On a plain reading, the object of the statutory provision is the substance of the

particular obligation founded upon, rather than the character of the surrounding deed or

contract within which it may be found. Whilst the latter may be said to relate to land in a

generalised sense and, to that extent, will inevitably contain one or more obligations relating

to land, that conclusion does not, of itself, assist in the identification of any particular

obligation as one relating to land. A deed or contract may relate generally to land, but a

[22] Of course, the meaning and effect of a particular obligation will be construed, in the

customary manner, according to the whole terms of the surrounding deed or contract. In

that sense, it will be legitimate to have regard to the wider context in order to consider

whether, properly construed, the particular obligation is an obligation relating to land.

Nonetheless, the proper focus is the nature of the relationship between the particular

obligation and land (‘any obligation relating to land’), which must be sufficiently strong to

ensure that the statutory distinction of a category of ‘obligations relating to land’ is a

[23] In Barratt Scotland v Keith, the Second Division held (LJC (Ross) at 153H, emphasis

added) that “having regard to the natural and ordinary meaning of words, an obligation to

deliver a disposition of heritable subjects is an obligation relating to land. It matters not that

the obligation is a personal obligation and that no real right is involved.” That the

disposition itself gave rise to an obligation relating to land was sufficient, in that case, to

confer a similar character upon the antecedent obligation to deliver the disposition (cf “an

obligation arising out of a breach of an obligation relating to land is not the same thing as an

obligation relating to land”: Clydeport Properties Ltd v Shell UK Ltd at 551H citing Lord

Advocate v Shipbreaking Industries Ltd 1991 SLT 838 at 840J-K). Thus, to say that there is “no

real right…involved” (Barratt (supra), LJC (Ross) at 153H) is only true in the sense that such a

right may not arise directly or immediately from the obligation in question: hence, the

obligation to deliver a disposition of land, rather than the obligation to dispone the land or

the disposition itself, is nonetheless an obligation relating to land. In that case the particular

obligation is crucial to the transfer of real rights in land, brought about in terms of the

[24] In Barratt (supra), the court does not appear to have contemplated any obligations

relating to land otherwise than in the sense of those necessarily contributing to the creation

or transfer of rights or interests in land. Whilst not purporting to define the scope of

“obligations relating to land”, however, the court endorsed (LJC (Ross) at 154A-C) the views

of the Lord Ordinary to the effect that “certain obligations in which land was dealt with only

incidentally were not ‘obligations relating to land’.” As it was put by the Lord Ordinary in

“With the exception of cases in which land is dealt with incidentally only, contractual

and other forms of obligation, such as unilateral gratuitous promise, to create rights

and interests in land, or to convey land or interests in land, are in my opinion typical

‘obligations relating to land’. The sum of these examples would not adequately

Thus, the “typical” cases of creation or transfer of land or interests in land, whether directly

or indirectly, are examples of a potentially wider category. A further example may be the

extinction or variation of such rights or interests, at least in the case of subordinate real

rights such as a real burden on a tenant’s rights under a lease. In any event, a meaningful

distinction requires to be drawn in respect of those obligations falling beyond the scope of

the “typical” cases, yet still relating sufficiently closely to land in order to amount to

‘obligations relating to land’ for the purposes of paragraph 2(e) of schedule 1 to the 1973 Act.

[25] Plainly, something more than “some connection with land” (see, eg, Barratt,

Lord McCluskey at 157I) is required. What is envisaged, as it has been characterised

subsequently, is that “the land must be the main object of the obligation” (Smith v Stuart

2010 SC 490 (LJC (Gill) at para [10]), citing Johnston, Prescription and Limitation, para 6.60 as

[26] In the intervening period, between the consistent decisions of the Second Division in

Barratt and Smith v Stuart, the courts have sought at first instance to apply the distinction

between obligations relating to land and those dealing with land only incidentally, as

derived from Barratt. To an extent, however, those decisions (for example, Glasgow City

Council v Morrison Developments Ltd and Clydeport Properties Ltd v Shell UK Ltd) may have

obscured the critical focus on the particular obligation to be enforced, at least as a matter of

expression if not substance, before the position was subsequently clarified in Smith v Stuart.

[27] In Glasgow City Council v Morrison Developments Ltd, the court approached the issue

according to whether a particular obligation could be said to form one of “the central or core

obligations” of a contract relating to land (Lord Eassie at para [13]):

“It is in my view clear from the decision in [Barratt] that the phrase ‘obligations

relating to land’ is not confined to real rights and their correlative obligations but

extends to personal obligations arising under contracts which have as their subject

the creation of rights or interests in land or the transfer of the existing rights or

interests in land. Accordingly, while under a contract of lease there may possibly be

incidental or ancillary obligations which might not come within the expression

‘obligations relating to land’, the central or core obligations, such as the grant of the

tenant’s interest and the reddendum must fall within the scope of that term.”

As in Barratt, therefore, the focus remains on the creation or transfer of rights or interests in

land. However, it is of some importance to emphasise that, properly construed, the relevant

question is not whether the particular obligation is “incidental or ancillary” to the contract in

which it appears, but whether it deals only incidentally with the land: the same answer may

or may not be produced in either case. Likewise, to ask whether the particular obligation is

amongst “the central or core obligations” of a contract relating to land, or “correlative” of a

right thereunder, may shift the focus unduly from the relevant relationship between the

particular obligation and the land. Such an analysis may be problematic, in particular, as

tending to suggest that the character of the particular obligation in question is dependent

upon the core purpose of the contract, or the mutuality of obligations thereunder. A

particular obligation may not be a “core obligation” of the deed or contract relating to land,

of which it happens to form a part; nonetheless, it may amount to an obligation relating to

land because it otherwise has land as its main object. Conversely, a particular obligation

may be a “core obligation” of such a deed or contract, yet it may not have land as its main

object and therefore may not amount to an obligation relating to land. In other words, it is

conceivable as a matter of principle that the basis upon which the surrounding deed or

contract relates generally or principally to land may differ from the basis upon which any

particular obligation therein may also be deemed to relate to land.

[28] Moreover, and in any event, it must be emphasised that the “correlativity” of

obligations, in the general sense of mutuality in a contractual context, is not the appropriate

touchstone for the purposes of identifying whether any particular obligation relates to land

(cf 1973 Act, s 15). It will be of little relevance to consider the mutuality of obligations in any

given circumstance, beyond the narrow concern as to whether implement of the particular

obligation in question is necessary, directly or indirectly, to the creation or transfer of rights

[29] When understood in that context, the decision in Glasgow City Council v Morrison

Developments Ltd is merely indicative of the fact that it will often be sufficient, in practical

terms, to determine whether an obligation ‘relates to land’ according to whether it forms a

core part of a contract creating or transferring rights or interests in land: viz. the “typical”

case of obligations relating to land conceived of in Barratt. In such cases, it is tolerably clear

that the particular obligation will be critical, whether directly or indirectly, to the creation or

transfer of rights or interests in land (as discussed in Barratt), in which case the land will

inevitably be the main object of the obligation (Smith v Stuart). Thus, in Glasgow City Council

v Morrison Developments Ltd, the court was particularly concerned with those obligations that

were essential to the creation of the tenant’s subordinate interest in land. According to the

highly unusual terms of the particular lease before the court, it was crucial to the very

existence of the lease that the tenant was obliged to construct the subjects of let, and to make

payment of the grassum, as direct counterparts of the grant of the tenant’s interest in the

land. Those obligations were entirely correlative and interdependent to that end, and on

that basis amounted to obligations relating to land. In that particular factual context, the

court’s reliance on correlativity ought to be understood as merely demonstrative of the

essential nature of the tenant’s obligations to the creation of his interest in the land. The

general mutuality of obligations under the lease was otherwise irrelevant and, on a fair

reading, the court ought not to be taken to have decided anything to the contrary.

[30] A similar approach was adopted in Clydeport Properties Ltd v Shell UK Ltd, where the

court considered whether the particular obligations in question formed “an intrinsic part of

the lease or, to use the expression in Glasgow City Council v Morrison Developments Ltd,

correlative with the grant of the interest in the land.” Yet again, therefore, the fact that an

obligation is demonstrably intrinsic or correlative to the grant of such an interest in land is of

some significance, insofar as it may be indicative of the correlative obligation, itself, relating

to land. Such an analysis must be recognised, however, as a shorthand method of

identifying the relevant relationship between the particular obligation and land. The

purpose is not to consider the intrinsic parts of the lease, in the sense of merely identifying

the material or substantial aspects of such a contract: a test of materiality is inevitably far

broader in scope, and would seriously undermine the meaningful distinction of a category

of particular obligations ‘relating to land’ from those obligations subject to the effects of

short negative prescription (cf eg 1973 Act, sch 1, para 1(g): “any obligation arising from…a

[31] In Clydeport, the court was satisfied that land could not be said to be “only

incidental” to the obligations in question, apparently having regard to the fact that the

obligations were contained within a contract creating or transferring rights or interests in

land (ie a lease), and that they fell upon the tenant by virtue of their interest in the land. It

may be difficult, otherwise, to discern the basis upon which to distinguish the obligations in

that case from any other obligations to carry out “repairs to heritable fixtures” where land is

“merely the environment” within which the works are to be carried out, which would not

ordinarily amount to obligations relating to land (cf Barratt (supra), LJC (Ross) at 154A – C,

cited in Clydeport at 551B; see, also, Cumbernauld Housing Partnership v Davies 2015 SC 532,

Opinion of the Court delivered by Lord Brodie at para [17]: “a construction of the 1973 Act

which has the result that what are essentially tradesmen’s bills do not prescribe before the

passage of 20 years seems extravagant”). Be that as it may, the decision in Clydeport

proceeded upon the basis of significant concessions made by counsel, and ought not to be

taken to establish any general principle to the effect that materiality to such a contract is

sufficient to establish that a particular obligation therein relates to land, or otherwise to

[32] In the present case, returning to the context of missives for the sale of land, the

reclaimers seek to rely upon the three constituent elements of clause 8.1, namely (i) payment

of the purchase price; (ii) delivery of the executed disposition; and (iii) delivery of the

executed overage agreement, as amounting to the core “deal” between the parties. In

essence, the analysis commended to us by the reclaimers was that it would be sufficient to

consider the substance of that transaction, as a land transaction in the round, in order to

determine that those (three) “core” or “non-incidental” obligations, including the particular

obligation to deliver the executed overage agreement, were obligations relating to land.

Specifically, it was argued that, in substance if not in form, the obligation to deliver the

executed overage agreement was to be deemed a part of the consideration in return for

which the land was transferred: in its broadest sense, the land was sold in return for a cash

price together with the separate payment obligations contained within the overage

[33] Whilst it is readily conceivable that the overage agreement formed a material part of

those arrangements, that is not the relevant question before us. The task is for this court to

consider, not the general nature of the whole transaction, as reflected in the contractual

terms, but the nature of the particular obligation sought to be enforced. The fundamental

flaw underlying the reclaimers’ approach has been to assume that the character of the

contract, as embodying a “land transaction”, and the identification of an obligation as one of

the central features of that transaction, will be sufficient and determinative of the obligation

relating to land. Such an approach adopts the wrong starting point, namely an analysis of

the contract as a whole, rather than the particular obligation. Moreover, it encourages a

focus on the wrong relationship, namely that between the obligation and the wider features

of the contract, rather than the obligation and the land itself. Neither of these matters will be

determinative of the issue before us. Thus, in the present circumstances, the assumed

equivalence of a central feature of the whole transaction between the parties, and an

[34] The reclaimers recognised that the contractual clause 8.1 relied upon by them does

not achieve what the parties may have intended: namely, that the delivery of a duly

executed overage agreement was to form a part of the consideration to be made over in

exchange for conveyance of the land. Nonetheless, it is that admittedly failed intention

upon which the reclaimers seek to rely, and to which the court is encouraged to give effect,

as the only basis upon which it is contended that the particular obligation is an obligation

“relating to land”. No doubt for these reasons, the reclaimers sought to emphasise in the

course of submissions that the relevant obligation was that falling upon the respondents to

enter into the overage agreement, whereas the obligation to deliver the executed deed would

appear, at least on the face of the relevant clause, to fall upon the reclaimers themselves,

[35] For the avoidance of doubt, the court does not consider that anything material turns

on the distinction between an obligation to enter the overage agreement, and the obligation

to deliver a duly executed overage agreement, as at the date of entry. As in Barratt (supra),

however, whether it is analysed on the basis of the obligation to deliver or execute the

overage agreement, or having regard to the payment obligations arising from the overage

agreement itself, it is not an obligation of which land is the main object. In the present case,

albeit that the parties may have intended otherwise, the delivery of the duly executed

overage agreement did not form part of the contractually defined purchase price in respect

of the land; nor did it otherwise amount to a direct counterpart, by way of consideration, in

exchange for delivery of the disposition, on a plain reading of the particular clause founded

[36] Whilst the court notes the reclaimers’ assertion as to the true substance and intended

effect of the transaction, and the substantial benefit of the overage agreement being in their

favour, it is conceivable that the respondents enjoyed some practical benefit from such an

arrangement, by which any development potential of the land was not accounted for in the

purchase price payable immediately upon settlement, but deferred, potentially indefinitely.

In any event, the fact remains that, beyond any questions of consideration or relative benefit,

there is no other basis upon which this court is invited to conclude that the particular

obligation relied upon by the reclaimers, in the specific terms placed before us, amounts to

an obligation relating to land. Specifically, it is not contended that the obligation to execute

or deliver the overage agreement, in isolation, amounts to an obligation relating to land.

Nor is the overage agreement founded upon as a ‘land transaction’ of itself, such that it may

be said to contain obligations relating to land, or to confer a similar character upon any

[37] For all of the foregoing reasons, the court considers that the Lord Ordinary correctly

identified and applied the relevant legal principles in the particular circumstances of this

case. The outcome, in the present case and others of this type, must be recognised as highly

fact-specific, depending upon the terms of the particular obligation before the court. That

being so, the Lord Ordinary cannot be criticised for having regard to what was fairly

characterised as the ‘authoritative guidance’ of the Inner House in its application of well-

established general principle in the similar case of Smith v Stuart albeit that the factual

context in that case was not “on all fours” with the present case. The reclaiming motion is

Scottish Court of Session Decisions