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OUTER HOUSE, COURT OF SESSION
[2021] CSOH 30
CA59/20
OPINION (No 2) OF LADY WOLFFE
In the cause
GRANTON CENTRAL DEVELOPMENTS LIMITED
Pursuer
against
CITY OF EDINBURGH COUNCIL
Defender
Pursuer: Campbell QC; Turcan Connell
Defender: Burnet QC; CMS Cameron McKenna Nabarro Olswang LLP
19 March 2021
Introduction
The first opinion and the proper construction of clause 5 of the Agreement
[1]
This is the second opinion in this commercial action. It addresses the question of the
pursuer's title to sue and which was the subject matter of the second debate.
[2]
The first opinion, issued to parties on 19 February 2021 following their debate on
11 and 12 February 2021 ("the first opinion" and the "first debate", respectively), dealt with
the proper construction of clause 5 of a section 75 agreement ("the Agreement") entered into
in June 2003 between the defender as the planning authority ("the Council") and Forth Ports
2
plc ("Forth") as the then-owner of the land forming part of a development site at Granton
Harbour in Edinburgh ("the development" or "the site" as the context requires).
The background
[3]
The background to the Agreement, its terms and the prior dealings with the land in
question are set out more fully in the first opinion. I summarise the background below, in
order to provide the essential context of the parties' submissions on title to sue.
The grant of planning permission and the parties to the Agreement
[4]
The Council is the planning authority. It was the counterparty to the Agreement
entered into with Forth in June 2003. Shortly after the Agreement was entered into, the
Council granted outline planning permission ("the outline planning permission") for the
Development on 23 June 2004, which included provision for a tram line along a specified
tram line route ("the TLR"). As noted below, in exercise of its powers as the planning
authority under section 195 of the Town and Country Planning (Scotland) Act 1997 ("the
1997 Act"), it acquired the TLR from Alpha by virtue of a general vesting declaration ("the
GVD") on 6 May 2016.
The core issue on the merits: the pursuer's reliance on clause 5.4 of the Agreement
[5]
The pursuer asserts that it is entitled to a reconveyance of the TLR from the Council.
It relied on clause 5.4 of the Agreement. The Council resists this. It asserts that the
pursuer's case is irrelevant, on a variety of bases. After the first debate, I rejected the
pursuer's construction of clause 5.4. My reasoning is set out at paras [29] to [39] of the first
3
opinion. In light of that decision, the defender's second plea in law (to the relevancy of the
pursuer's case on the merits) falls to be upheld.
[6]
For present purposes it suffices to note that I determined that clause 5.4 (which
imposed an obligation on the Council to "reconvey" the TLR to Forth) applied only if there
had been an initial conveyance by Forth to the Council under clause 5.2; that the effect of
the GVD was to extinguish certain interests or rights in respect of the TLR; and that, in any
event, the obligation in clause 5.4 was imposed on Forth alone (in contrast to other
obligations the Agreement imposed on Forth "and its successors").
The dealings with the TLR
[7]
There are a number of dealings with the Land, including one or more break-off
dispositions. It suffices to note those concerning the TLR:
1)
11 June 2014: A conveyance by Forth (who was the heritable proprietor of the
Land at the time the Agreement was entered into) in favour of the pursuer on
11 June 2014;
2)
11 June 2014: A conveyance from the pursuer to Alpha (whose title was
registered on 18 June 2014). The pursuer retained some of the land acquired from
Forth, but the land it retained did not include the TLR;
3)
11 June 2014: The grant of a long lease by Alpha in favour of the pursuer (whose
title under the long lease was registered on 25 June 2014); and
4)
6 May 2016: The Council's making of a GVD, vesting title to the TLR in it, and
the subsequent registration of the GVD in the Land Register on 26 August 2016.
4
The limited duration of the period for which the pursuer had title as owner to the TLR
[8]
In consequence of the dealings just noted, the pursuer was the heritable proprietor of
the TLR only on 11 June 2014. It was not clear at either the first or the second debates
whether the pursuer ever registered its title in the Land Register (and thereby obtained a
real right to the TLR), and thereby acquired a real right inter alia to the TLR. Alpha acquired
the TLR (and other land) from the pursuer on 11 June 2014. From that date, until the GVD
on 6 May 2016, Alpha was the heritable proprietor of inter alia the TLR. It was the heritable
proprietor of the TLR at the time title thereto was compulsorily acquired by the Council by
virtue of the GVD. Furthermore, no right or real burden (or similar land obligation)
affecting the TLR was preserved from the extinctive effect of the GVD in respect of those
types of rights. The pursuer's interest during that same period was as a tenant under the
long lease.
[9]
Consequent on the GVD, the Council paid £299,000 to Alpha for its interest as the
heritable proprietor of the TLR compulsorily acquired by the GVD, and it paid £99,550 to the
pursuer in respect of its interest as tenant under a long lease of the land comprised in the
TLR thus taken.
Comment on the sources of title and interest not available to the pursuer
[10]
In light of the foregoing, it should be noted that the pursuer did not have heritable
title to the TLR either at the time the Agreement was entered into or at the time the Council
compulsorily acquired title to the TLR by virtue of the GVD. At most, the pursuer was only
an intermediate successor to Forth, either as heritable proprietor to the TLR (assuming its
title was registered) or, if its title was never registered in the Land Register, as the dispone
under a disposition with certain contractual or personal rights in respect of inter alia the TLR
5
as against the disponer. Alpha was the heritable proprietor of the TLR at the time title
thereto was compulsorily acquired by the Council by virtue of the GVD. At the time of the
GVD the pursuer's title to the TLR was only that of a tenant under a long lease and for
which it received compensation.
[11]
In relation to the Agreement, the pursuer was not a party to the Agreement. It does
not rely on any jus quaesitum tertio derived from the Agreement in its favour. Nor has it
succeeded to the rights of Forth under the Agreement by an assignation of any right in its
favour by Forth.
[12]
As noted at para [18] of the first opinion, on the morning of the second day of the
first debate the pursuer lodged (i) a Buy Back Agreement (dated June 2014) among Alpha,
the pursuer and its holding company ("the BBA"), (ii) a Minute of Variation of the BBA
(dated May 2018) ("the BBA Variation") and (iii) an Assignation among Alpha, the pursuer,
and its holding company (dated March and April 2018) ("the Assignation"), and which
collectively I refer to as "the additional documents". In neither its amended pleadings nor in
its supplementary note of argument does the pursuer identify any specific provision of the
additional documents as conferring title to sue on it. While the additional documents were
produced for the second debate, the pursuer's Senior Counsel, Mr Campbell did not in the
course of his oral submissions at the second debate identify or found on any specific
provision of any of the additional documents. The defender's Senior Counsel, Mr Burnet,
noted that the Assignation related solely to the redirection of the sums paid by the Council
as compensation arising from its compulsory acquisition of the TLR. Mr Campbell did not
dispute that as a proper characterisation of the terms or import of the Assignation.
6
The pursuer's minute of amendment
[13]
As explained at para [41] of the first opinion, the pursuer sought leave to amend on
the second morning of the first debate. The pursuer's pleadings were allowed to be
amended in certain respects, but insofar as the pursuer's minute of amendment sought to
alter its averments of title to sue, it was simply allowed to be received, with the defender
being given seven days to lodge answers. The question of the pursuer's title to sue was held
over to a second debate, on 4 March 2021 ("the second debate").
[14]
The remaining parts of the pursuer's minute of amendment, insofar as not given
effect to at the first debate, were as follows (being the words in italics):
1)
In its averment in article 3 anent being successor to Forth under the Agreement, it
changed the definite to the indefinite article:
"
The Agreement is produced. The pursuer is a successor in title to Forth in
respect of the Tram Line Route, all as hereinafter described."
2)
It added a new article 8A:
"8A.
By means of a Buy Back Agreement dated 9 and 11 and registered 19 June 2014,
and an Assignation dated 9 March and 6 April 2018, among Alpha, Granton Holdings
Ltd and the Pursuer, those parties agreed that the Pursuer or its nominee would have the
right to buy back from Alpha certain of the properties subject to the Pursuer's lease. By
means of a Minute of Variation of the Buy Back Agreement dated 6 and 17 April and
registered 21 May 2018, those parties agreed to bestow upon the Pursuer the right to
nominate the recipient of any compensation payment received following the General
Vesting Declaration. Those agreements are produced. The payments of compensation
referred to in Article 3 were made to the Pursuer's nominee, namely Granton Holdings
Ltd. The Assignation of 6 April 2018 identifies the plots which were subject to buy backs,
but which were reduced in area owing to the effect of the GVD. The plots are first
identified in the Assignation by reference to a letter of the alphabet, and then labelled by
that letter 'ex GVD.' So as to show that distinction. The plot at 51 West Harbour Road
has been bought back; all other plots including plots B, C and D are held under the
Pursuer's long lease from Alpha and are subject to long leases in favour of third parties.
The Pursuer has secured from the defender Deeds of Servitude over road ends for other
plots that have been bought back because all rights of access over those sections of the road
were extinguished by the GVD. Plot I has been bought back. Plot I is owned by the
Pursuer's nominee Granton Holdings Limited, but under exception of the land taken by
the GVD. "
7
3)
It added a new article 17A:
"17A. The Pursuer has masterminded, controlled, financed and managed the
Granton Harbour Estate development since it acquired the subjects within the
Granton Harbour Estate from Forth. It has controlled and managed all development
and planning, the obtaining of finance, permissions, Reserved Matters and AMC
applications, Building Warrants, disposals of property and all related matters. In
implement of Forth's 2003 OPP it has acted as owner of the site. It controls all its
subsidiaries. On Granton Harbour Estate there is built or is being built more than
700 housing units, one third of which are affordable. The defender's policy
requirement is for just 15% of housing to be in that category. The Agreement itself
was registered so as to enable the 2003 OPP and the terms and conditions within the
Agreement to be accessible, and to be enforceable if required under the guiding hand
of the Pursuer. The diversification of ownerships and land tenure is irrelevant to the
question of the effect of cl. 5.4, which has not been eradicated by the GVD, nor
amended, varied or extinguished by consent of the parties to it, or the Pursuer itself.
The defender itself has followed the Agreement in respect of the granting or refusal of
Reserved Matters or matters requiring additional permissions, for example in respect
of the requirements for the supply of affordable or other housing, retail premises,
infrastructure, and other forms of development. Properly understood, the parties to
the Agreement recognised the context for development within the Granton Harbour
Estate, the substitution of the Pursuer for Forth, and the pre-eminent position of the
Pursuer in that regard. Accordingly, any term of the Agreement requiring to be
implemented would be implemented at the behest of the Pursuer, it being in control
of the entire development process."
[15]
On the morning of the second debate, Mr Burnet noted that the pursuer had
abandoned any contention that it had some form of real or heritable right. He also observed
that he did not understand the pursuer's new position and, indeed, he queried whether the
pursuer's minute of amendment cured the deficiencies in its pleadings on the question of
title to sue. After sundry discussion, and essentially on the grounds of expediency (and
discussion of the efficacy of the amendment would be more fully addressed in the debate),
the pursuer's pleadings were amended. The expenses of that process were reserved.
8
The second debate
[16]
In advance of the second debate, the parties produce supplementary notes of
argument. Given the discussion just noted, it was agreed that Mr Campbell would begin
the debate. I set out parties submissions (oral and written) on title to sue.
The pursuer's supplementary note of argument
[17]
Lest I do any injustice to his argument by summarising it, I set out the text of
Mr Campbell's supplementary note of argument (omitting paragraphs dealing with
procedural matters or background which is not in dispute or is otherwise noted in this
opinion), and reflecting amendments to the text made in his oral submissions:
"BACKGROUND FACTS
5
The background facts are reiterated here, so far as relevant to the question now
under review.
6
This Commercial Action concerns the correct construction of a clause in a s.75
agreement signed by the pursuers' predecessor Forth Ports plc (Forth) in 2003
(the Agreement) alongside an Outline grant of Planning Permission (the
2003 OPP) permitting and regulating part of an extensive range of housing
and other built development at Granton Waterfront, Edinburgh.
7
To be properly understood [...] the Agreement read as a whole. Ascertainment
of the pursuer's title to sue is a question of construction of the contract as a
whole, not a mere incident of title.
8
The pursuers contend (1) that they are successors to Forth and stand in place of
Forth in the Agreement, and (2) that clause 5 is a free standing suite of
obligations concerning the TLR, being a small part only of the land covered by
the Agreement. The obligations it creates are private law contractual obligations,
not `planning obligations' as that term is normally understood. They do not
regulate development.
[...]
IMPLEMENTATION
10. Both the Agreement and the 2003 OPP have been honoured and acted upon by
each of the parties in a range of ways since 2003, so as to implement development
on the site or sites making up the Granton Harbour Estate. The pursuer has acted
as, and been recognised in every respect by the defender as, the successor to
Forth since it acquired the Granton Harbour Estate in 2014.
9
11. In relation to clause 5.2 of the Agreement, which ex facie [permits] the transfer of
the Tram Line Route (TLR) to CEC at no cost to the defender, by choice that
provision was not activated by the defender over a period of about 13 years.
Rather, on 5 May 2016, the defender published a General Vesting Declaration to
secure transfer of the TLR to itself. That transfer took the form of a statutory
conveyance. That method carries with it the duty upon the acquiring authority
to compensate the transferor of land for such an acquisition. Agreed
compensation was in due course paid by the defender to the pursuer and its
funder, known as `Alpha'. Money paid to Alpha was paid the pursuer.
12. Clause 5.4 of the Agreement ex facie permits the conditional transfer - the
`reconveyance' -- of the TLR to the original transferor. The conditions were, first,
that no obligation to `reconvey' could arise until after 1
st
January 2020, which is
the deadline date agreed when the Agreement was signed in 2003. The TLR
appeared in the 2003 Masterplan which highlighted the forthcoming tram works.
Had the works begun, the obligation would not have arisen. Secondly, the
parties agreed at the same time that the reconveyance was to be at no cost to the
pursers, who stand in the agreement a successors to Forth.
13. Although the defender asserts in pleading (Ans. 18) that tram works had begun
by 1 January 2020, that averment is denied. No evidence of such works has been
adduced. The pursuer is clear that there have been no tram works.
14. The defender elected ex proprio motu to use the compulsory purchase process to
acquire the TLR. It did so on the day before the Edinburgh (Tram One) Act
expired. It was not required to use that process, since clause 5.2 in the
Agreement provided it with a clear `no cost' option to acquire the land.
Nevertheless, it elected to do so, and accordingly came under a duty to pay
compensation. The pursuer did not contest the CPO, presented as a fait accompli.
The defender ignored its own rights in terms of the Agreement.
15. The obligation contained in cl. 5.2 remains extant and available to the contracting
party's successor, i.e. the pursuer. The term of the contract has not been varied
nor extinguished.
16. In the light of those facts, the pursuer asserts that properly construed, the
contract bestows upon it a title to sue, otherwise `proper standing' to bring these
proceedings.
[...]
TITLE TO SUE UNDER THE AGREEMENT
18. The pursuer has a registered interest in Granton Harbour and surrounding land
known as the Granton Harbour Estate, having acquired the same from Forth in
2014. The defender has registered interests in, and the use of, neighbouring land,
including the TLR, and is also the Planning Authority.
19. The Agreement is dated 19 and 20 June 2003 and was registered in the Land
Register of Scotland under title No MID29481 on 4 July 2003. It runs with the
land. It has regulated, and continues to regulate a range of development matters
including housing, affordable housing, travel, access, transport, cycle routes,
urban realm improvements, schools, Granton Harbour, a proposed Marina and
10
Hotel, infrastructure contribution, the Tram Depot and the Edinburgh Tram Line
Route (TLR). It is referred to for its full terms.
[...]
AUTHORITIES TITLE TO SUE AND STANDING
27. A pursuer must demonstrate not merely some formal title or interest in or to the
subject matter of the action, but also that it has standing; see D & J Nicol v Dundee
Harbour Trustees 1915 SC (HL) 7 and Axa General Insurance v Lord Advocate,
28. Taking those cases in turn, it is submitted that D & J Nicol v Dundee Harbour
Trustees 1915 SC (HL) 7, Ld Dunedin at 17 in fact supports the pursuer's case. His
Lordship would not `attempt a general pronouncement as to when there is title and
when there is not. ` He used the word `title' meaning a lawful entitlement to raise
an action. The case is highly fact specific, and fell in favour of the would-be
pursuers because they were `members of the constituency erected by the Act of
Parliament to elect Trustees and...are also persons for whose benefit the harbour is kept
up...' (He said) `I cannot doubt that they have a title to prevent an ultra vires act of the
appellants. which affects the property under their care.....they have an interest in the
administration of a fund to which they have contributed.' So it is obvious that the
absence of a direct heritable title was in the end no barrier to a title to sue.
29. In the present case, it may easily be stated that the pursuer is a member of a class
of persons for whose benefit as successors to and purchasers from Forth these
arrangements have been erected. Lord Dunedin was exploring these issues at a
time when perhaps actual title issues were more important than they are now.
The right to sue or to intervene today may be granted, for example, to charities
with an interest in the subject matter of the case (as with unit pricing for alcohol,
right-to-life cases, or as may occur in environmental cases with pressure groups
such as Friends of the Earth, Greenpeace, or ad hoc groups of objectors opposed
to a particular development.
30. The scope and range of Lord Reed's seminal opinion in Axa General Insurance v
Lord Advocate, [2011] JSC 46, per Lord Hope at § 62, Lord Reed at §§170-171 make it
clear that a liberal and open approach to the Courts is to be encouraged.
31. Axa General allows that a rights-based approach is incompatible with the
performance of the Courts' function of preserving the rule of law. Lord Reed was
speaking in a public law context; and the oddity of the present action is that the
private law contractual provision with which we are concerned is enshrined
within a public law agreement, referable to planning obligations and the
implement of planning permission.
32. Emphasising the purposive approach set out in Rainy Sky, Arnold v Brittain and
Wood v Capita, the zenith of modern Scots Law reasoning on the proper manner of
construction is to be found in Lord Drummond Young's careful reasoning in
Ashtead Properties v Granton Central, which is of recent date.
33. It is clear and may now confidently be submitted that after perhaps centuries of
Scottish EXclusivity, the tide has turned 180 degrees towards INclusivity. As
Lord Hodge said in Wood, in the construction of contracts, textualism and
11
contextualism are not mutually exclusive. That approach places the pursue
firmly in the driving seat in this case.
34. The pursuer as existing leaseholder of neighbouring land is directly affected by
the terms of the Agreement, as well as by the compulsory purchase of the land
comprising the TLR. To repeat; the Agreement is of course registered against
those parts of its title which were not subject to the GVD.
35. Forth signed the Agreement as heritable proprietor on 19 and 20 June 2003. The
2003 OPP was issued to Forth by the defender on 23 June 2003. Inter alia the
Agreement and the 2003 OPP permit and regulate development on the entire
Granton Harbour Estate, including the leasehold land.
36. Section 75(3) of the 1997 Act (as enacted) stipulated that after registration in the
Land Register, obligations (contained in a s. 75 Agreement) may be enforceable
against persons deriving title to the land from whom the agreement was entered into. It
is submitted that the pursuer fell into that category when the GVD was granted.
It retains rights in `the land', though as a long lease holder, not as heritable
proprietor. It is submitted that that makes no difference. There is nothing
intrinsically objectionable in seeking a conveyance to the pursuer qua long
leaseholder.
37. The `obligations' in this reference are the obligations within the Agreement, to the
benefit of which the pursuers are entitled by virtue of their succession to Forth,
unless that entitlement has been excluded ex contractu, which it is not. It was not
excluded by the terms of the GVD, nor by any ancillary contractual provision.
Notwithstanding the exclusion of the Agreement from the Burdens Clause in the
GVD Registration, it is submitted that clearly the pursuer retained its contractual
rights under the Agreement, since it is the direct successor to Forth, as described.
Put another way, they do not fly off simply because of a conveyance to its funder.
Accordingly, the obligation in clause 5.4 is operative to enable return of the land
to its former owner, absent any tram works by 1 January 2020."
Pursuer's submissions at the second debate
[18]
In his oral submissions, Mr Campbell made the following points or responded to
questions from the Court:
1)
No specific provision from any of the additional documents was preyed in aid of
the pursuer's amended pleadings or in its submissions on its title to sue. In
relation to the import of the additional documents, the arrangement whereby
Alpha was owner of the land was, in essence, to give it the protection of
ownership rather than to rely on a standard security vis a vis its debtor, the
pursuer. Once development of a phase was nearing completion and ready for
12
release to the retail market, then Alpha would reconvey that part of the site to the
pursuer;
2)
The new article 17A was inserted to rebut the Council's "textual" analysis of
clause 5.4 and the omission of reference in that clause to the "successors" to
Forth. In his submission, the reality was that the Council had dealt with the
pursuer "as the controlling mastermind", whom he also described as "being in
the driver's seat", of the development. The Council and the pursuer had acted
upon the Agreement. It was not open to the Council now to say that some part of
the Agreement did not apply to the pursuer. The whole of the Agreement was
transmissible to the pursuer;
3)
The pursuer had bought the land from Forth and developed it. The corollary of
the Council's position was that the Agreement ceased to be effective upon the
sale of the land in 2014. That was not the case. The Agreement had never been
declared to be of no force and effect by the parties. The Council appeared to be
"cherry-picking" parts of the Agreement and ignoring others because the pursuer
was not the heritable proprietor of the TLR; and
4)
It remained the case that the pursuer did not rely on an assignation in its favour
of any right under clause 5.4. Nor did it invoke any doctrine of jus quaesitum
tertio.
[19]
In respect of the cases, D & J Nicol v Dundee Harbour Trs 1915 SC (HL) 7 ("D & J
Nicol"), Mr Campbell submitted that this was fact-dependant. In any event, that case had to
be read subject to AXA General Insurance Company Ltd v Lord Advocate [2011] UKSC 46,
of 170 in the opinion of Lord Reed in AXA, which read:
13
"What is to be regarded as sufficient interest to justify a particular applicant's
bringing a particular application before the court, and thus conferring standing,
depends therefore upon context, and in particular upon what will best serve the
purposes of judicial review in that context."
In Mr Campbell's submission AXA opened the door and all that the pursuer required to
show was that it had an interest. He did not accept the proposition that this articulated the
test in public law cases or that a different test of title and interest applied in respect of the
vindication of private rights.
[20]
In summarising the pursuer's position on title to sue, Mr Campbell identified five
points:
1)
The pursuer is the successor in title as long-lease holders from Forth as heritable
proprietors;
2)
The pursuer has title under a long lease from its funder, Alpha;
3)
The pursuer is the "controlling mind" of all of the development;
4)
There was nothing intrinsically objectionable to a tenant under a long lease, such
as the pursuer, operating clause 5.4. The pursuer did not need to be a heritable
proprietor in order to benefit from clause 5.4; and
5)
Clause 5.4 had not been extinguished. It remained prestable after 1 January 2021.
In response to a question from the Court, that if the pursuer was relying in some general
sense on being one of "the successors" to Forth under the Agreement (which is reflected in
the change in article 3 to the indefinite article: see para [14(1)], above), what would the
correct position be if there were competing applications, from Forth or Alpha, to secure the
reconveyance of the TLR under clause 5.4? As I understood Mr Campbell's answer, it
would not be Forth, but it could be either Alpha or the pursuer, but it would depend on the
14
relationship as disclosed in the documents as between the funder, Alpha, and its principal,
the pursuer. Once Alpha divested itself, it no longer had an interest.
The defender's note of argument quoad title to sue
[21]
The Council's note of argument for the first debate addressed the pursuer's title and
interest. So far as relevant to the defender's challenge to the pursuer's title to sue, the
defender's note of argument was as follows:
"Title and Interest
4. A pursuer requires to establish that it has some legal relation which gives it a
right which the defender has either infringed or denied and some benefit arising
from asserting the right (D&J Nicol v Dundee Harbour Trs 1915 SC (HL) 7 (at p12)).
Third parties who are not a party to a contract do not generally acquire rights or
duties under it.
[...]
On its own pleadings the Pursuer is bound to fail
Title and Interest
8.
The Agreement which the Pursuer relies upon was entered into by the Defender
and Forth Ports plc (`Forth'). The Pursuer was not a party to the Agreement. The
Agreement does not purport to bind the successors in title of the parties to the
Agreement.
9.
At the time the Agreement was entered into section 75 of the 1997 Act was in
force in its original terms. It did not include the provisions referred to by the
Pursuer in article 2 of Condescendence. It provided that a planning authority
could enforce the terms of a Section 75 Agreement against successors in title to
the party entering into the agreement, if it was registered in the land register, but
it did not explicitly provide that an obligation entered into by the planning
authority in favour of the then owner would be transferred to their successors in
title. Section 75(3) and 75(4) provided that `(3) An agreement made under this
section with any person interested in land may, if the agreement has been recorded in the
appropriate Register of Sasines or, as the case may be, registered in the Land Register of
Scotland, be enforceable at the instance of the planning authority against persons
deriving title to the land from the person with whom the agreement was entered into.
(4) No such agreement shall at any time be enforceable against a third party who has in
good faith and for value acquired right (whether completed by infeftment or not) to the
land prior to the agreement being recorded or registered or against any person deriving
title from such third party.' The terms of the Agreement do not state that any
15
obligations owed by the Defender to Forth in terms of Clause 5 of the Agreement
would pass to Forth's successors in title.
10.
In accordance with its own pleadings the Pursuer's title as at 11 June 2014 was
limited to the area covered by MID153783. The Pursuer's ownership of the whole
of MID153783 was limited to, at most, the single day, 11 June 2014. From 11 June
2014 to 5 April 2016 heritable title to the tram line route was in the ownership of
Alpha. As at 11 June 2014 Alpha became the owner of land including the tram
line route under title number MID153786. After 11 June 2014 the Pursuer avers
its interest in the tram line route was as the tenant under a long lease.
11.
The Pursuer did not convey the tram line route land to the Defender. It is a
matter of agreement in parties' pleadings that the Defender acquired title to the
tram line route on 6 May 2016 as the result of the terms of the GVD made in
exercise of its powers conferred by section 195 of the 1997 Act and the
authorisation given to it by the Edinburgh Tram (Line One) Act 2006 (`the
Tram Act'). It was acquired by the Defender from Alpha as a result of the GVD.
Even if the terms of Clause 5.4 applied (which is denied), Clause 5.4 obliges the
defender to `re-convey' the tram line route land to Forth. Even if the terms of
Clause 5.4 of the Agreement passed to Forth's successors in title (which is denied)
it could not sensibly be retained by a successor in title who had divested
themselves of title to another third party within a day. Even if the terms of
Clause 5.4 applied, they could only apply to the party in which title to the tram
line route land was vested immediately prior to its transfer to the Defender. The
obligation in Clause 5.4 was to `re-convey' the tram line route land. The heritable
proprietor of the tram line route land from whom the Defender took title was
Alpha. The
Pursuer ceased to be the heritable proprietor of the tram line route
on 11 June 2014. The Pursuer has no remaining interest in the Agreement in
relation to the tram line route as a result of a conveyance by it of land including
the tram line route to Alpha on 11 June 2014.
The Pursuer has no right title or
interest in raising and action seeking a conveyance of the tram line route land to
it rather than Forth or Alpha."
[22]
In its supplementary note of argument the Council advanced the further arguments:
"Supplementary Arguments in relation to Title and Interest to Sue
4. In addition to the submissions already made in relation to title and interest to sue
the Defender makes the following points.
5.
As recognised in the draft Opinion of the Court, during the course of
submissions, the Pursuer's position changed significantly. It no longer argues
that its right to seek the remedies that it seeks arises from having the benefit of a
real right in rem available to be enforced by a successor in title to Forth created by
the registration of the Agreement. On the contrary, it now argues that the terms
of Clause 5.4 of the Agreement are inapposite in a Section 75 agreement and only
created personal contractual rights. It therefore relies solely on an alleged
inference that the rights under Clause 5.4 of the Agreement were intended by the
contracting parties to transfer from the contracting party Forth to a successor in
title to Forth and that the Pursuer is such a successor.
16
6.
As the Lord Ordinary has observed in paragraph [21] of her draft Opinion,
because the Agreement has been registered, obligations in the Agreement will be
enforceable as a matter of law (by virtue of section 75(3)) by the planning
authority against any person deriving title to the land from Forth. That is to be
contrasted with the position that contractual obligations impose personal
obligations which are, in the absence of assignation or the application of the
doctrine of jus quaesitum tertio, generally binding only on the contracting parties.
In the current case the Pursuer now relies on such contractual obligations which
impose personal obligations in a situation where there has been no assignation of
Forth's rights under the contract to the Pursuer. There is also no proper basis to
infer the doctrine of jus quaesitum tertio comes to the aid of this Pursuer in the
circumstances.
7.
As previously submitted in a private law action such as the present, the pursuer
requires to establish that it has some legal relation which gives it a right which
the defender has either infringed or denied and some benefit arising from
asserting the right (D&J Nicol v Dundee Harbour Trs 1915 SC (HL) 7 (at p12-13)).
The public law the test for engagement of the supervisory jurisdiction of the
court set down in AXA General Insurance Company Ltd v The Lord Advocate
1
does
not apply in a situation where the pursuer is seeking to enforce a personal
contractual right.
8.
While similar considerations to those in AXA were considered sufficient to base
a competent private declaratory action in the Hill of Rubislaw (Q Seven) Limited v
Rubislaw Quarry Aberdeen Limited
2
case previously referred to. That case can be
distinguished from the current situation. In the Hill of Rubislaw case the pursuer
was seeking declarators in relation to the meaning and extent of restrictions on
the use of land and whether or not they amounted to real burdens. At
paragraph [1] of the Opinion of the Court it is noted that the contract included a
provision that the benefit of the terms of the contract would `transmit to the
respective successors of the property interests held by the parties to the agreement'. It
would therefore benefit and bind whoever the relevant landowners were. The
pursuer had a concluded contract to become a landowner and the issue was
really only one of timing - whether the petitioner's case was premature and he
had to complete title before raising it and seeking to clarify whether there would
be a real burden on his property. The decision in relation to title and interest
turned predominantly on the fact that it was a declaratory action. At
paragraph [30] Lord Malcom observed that `... in general, a third party cannot
enforce or sue under a contract. In most cases a summons is aimed at such a remedy, but
the purpose of a declaratory action is different. The present pursuers are not attempting
to enforce any provision in the contract. They are not vindicating a remedy thereunder...
The pursuers are simply asking the court to determine and declare the proper meaning
and effect of the agreement.' The current case is the opposite. The pursuer is
seeking to enforce a provision of a contract to which it is not a party. It is seeking
a declarator that the contract to which it is not a party contains an obligation
1
2
[2013] CSOH 131 at paragraph 35
17
requiring action in its favour and seeking a remedy of transfer of heritable
property to it and it alone.
9.
In the current situation the dicta in D&J Nicol v Dundee Harbour Trs is still relevant
in relation to establishing title and interest to sue in private law actions (for
example Anderson v Wilson 2019 SC 271 (at para 33)). There is no relevant legal
relationship between the parties.
10.
The Agreement which the Pursuer relies upon was entered into by the Defender
and Forth Ports plc (`Forth'). The Pursuer was not a party to the Agreement. The
Agreement does not purport to transfer the benefit of obligations under the
Agreement to the successors in title to Forth. The terms of the Agreement do not
state that any obligations owed by the Defender to Forth in terms of Clause 5.4 of
the Agreement would pass to Forth's successors in title. By contrast, elsewhere
in the Agreement specific consideration is given to rights that will be transferable
to successors in title to Forth.
11.
In any event the Pursuer on its own averments is not the relevant successor in
title to Forth. It has amended its averments in article 3 of Condescendence to
clarify that it is `a' rather than `the' successor in title to Forth. In article 5 of
Condescendence it has amended its averments to in a manner that suggests
it now relies on its current leasehold title rather than its former heritable title
to base its title and interest to sue. In its amended version of article
Condescendence 18 the Pursuer avers that `properly understood clause 5.4
requires the reversal of [the transfer of the TLR by Alpha to the Defender by the
GVD] by means of a re-conveyance to the successor to Forth.' That demonstrates
its position is confused and misconceived. `A' successor in title who (even if they
have taken registered title and obtained a real right for a period of time (which in
this case has not been demonstrated by the Pursuer)) but has then transferred
title to a new owner is not `the' successor in title who would be entitled to any
obligations owed to the successors under the contract. After 11 June 2014 the
Pursuer avers its interest in the tram line route was as the tenant under a long
lease that does not give it sufficient title to sue under the contract even on its own
interpretation of the right of successors to the benefit of the contract. On its own
averments `the' successor in title to Forth is Alpha. The Pursuer has no right title
or interest in raising and action seeking a conveyance of the tram line route land
to it rather than Forth or Alpha.
Provisional Arguments in relation to the Pursuer's proposed amendments
12.
Even if the Pursuer is permitted to amend its pleadings as proposed in its Minute
of Amendment, it will not have established any proper title and interest to sue
under the Agreement. The Pursuer fails to explain on what proper basis it
contends that the arrangements referred to in the agreements its seeks to
introduce into article 8A of Condescendence give it a right to enforce any terms
of the Agreement against the Defender. The agreements referred to do not assign
any interest Alpha may have inherited from Forth in the Agreement to the
Pursuer, let alone any title to sue under it. The Pursuer avers that the Buy Back
Agreement gives the Pursuer a right to buy back from Alpha certain properties.
That is a private contractual agreement between Alpha and the Pursuer. It has
18
no effect on the rights and obligations under the Agreement. It cannot give the
Pursuer a title to sue.
13.
The 2018 Assignation does not assign any interest or title to sue Alpha has under
the Agreement to the Pursuer. On the contrary the 2018 Assignation assigns
Alpha's rights to compensation under the GVD to the Pursuer. That is consistent
with Alpha and the Pursuer recognizing that the Pursuer would be unable to
exercise any buy-back option in relation to the GVD Land after the land had
vested in the Defender. It suggests that in lieu of the buy-back option in relation
to the GVD Land, Alpha agreed to allow the Pursuer to claim the compensation
from the compulsory purchase. That indicates that the Pursuer sought some
form of recompense from Alpha or Alpha's inability to be able to perform the
contract between it and the Pursuer. The Pursuer accepts that the Defender paid
the full amount of compensation as assessed by the District Valuer to the Pursuer
for the acquisition of both the Pursuer's interest as tenant and Alpha's interest as
heritable proprietor in terms of the Tram Act. That calls into doubt whether,
even on the Pursuer's interpretation of the contract Alpha would be obliged to
allow the Pursuer to buy-back the GVD Land if it was returned to Alpha as a
result of the Defender's obligations under Clause 5.4 and certainly does not give
the Pursuer the right to rely on the Agreement to seek a court order to transfer
the land directly to it. Any remedy the Pursuer might have should therefore lie
between it and Alpha as that is the party with which it has a contractual
relationship.
14.
The averments that the Pursuer proposes to introduce into a new article 17A of
Condescendence are largely irrelevant and, in any event to do not establish that
the Pursuer has title and interest to sue. At best, the Pursuer confuses the
concept of interest in achieving an outcome with the concept of having a legal
title to sue under a contract to which it is not a party. The assertions that it has
`acted as owner of the site' and that the `diversification of ownerships and land tenure is
irrelevant to the question of the effect of Clause 5.4' are of no assistance to the
Pursuer. The Court is concerned with the legal rights flowing from the contract
and who is entitled to enforce them.
15.
Further, the averments that `the parties to the Agreement recognized the context of the
development within the Granton Harbour Estate, the substitution of the Pursuer for
Forth and the pre-eminent position of the Pursuer in that regard' are unspecified and
unjustified assertions for which no basis is offered. In any event, on its own
averments the Pursuer's involvement in ownership or lease of any part of the
development site commenced in 2014 some 11 years after the original parties
entered into the Agreement. They do not assist or alter any interpretation of the
actual words used in the Agreement in relation to the parties' intentions as to
who would benefit from its terms."
The Council's oral submissions
[23]
In light of the Court's decision in the first opinion, Mr Burnet moved for the
Council's second plea in law to be upheld. The second debate was confined to the pursuer's
19
title to sue and he moved the Court to sustain the Council's first plea in law that the pursuer
had no title to sue.
[24]
He noted that the pursuer now appeared to rely on clause 5 of the Agreement as
creating a personal right in its favour and that it reiterated its reliance on clause 5.4 as a
"successor" to Forth, notwithstanding the terms of clause 5.4. It remained the case that the
pursuer required to establish a proper basis in order to assert that it has rights which had
fallen to Forth under the Agreement. However, the pursuer had not established that it had
title to sue under the Agreement, a document to which it was not a party. It appeared that
the pursuer now relied on an interest as a lease holder or on some de facto controlling
interest. None of these demonstrated the requisite title and interest.
[25]
In respect of the pursuer's reading of AXA, as setting down a test for title to sue in
private law, he invited the Court to reject that reading. As was clear from paras [167]
to [170] of AXA, this was all directed to the test for standing in public law and it was
inapposite in a private law context.
[26]
In respect of the five factors Mr Campbell invoked at the end of his submissions, the
pursuer's interest as the tenant under a long lease was not the relevant interest as
"successor" to Forth and it did not thereby inherit any of the rights Forth enjoyed as owner.
The relevant interest of the pursuer at the time of the GVD was as a tenant. The effect of the
GVD was to extinguish the pursuer's rights to the TLR as tenant under a long lease and for
which it was paid compensation. The interest as tenant under a long lease does not revive,
even if the TLR fell to be re-conveyed by the Council to the owner from whom the TLR had
been compulsorily acquired (ie Alpha).
[27]
To characterise the pursuer as being "the controlling mind" or having de facto
"control" of the site was of no relevance to the Agreement. The pursuer required to bring
20
itself into some legal relationship under the Agreement. It had failed to do so. Having
regard to the pursuer's substitution of the indefinite article, so that it was no more than "a"
successor to Forth, even if that were correct, the pursuer had to show that it was successor as
owner to the TLR land. This was because the GVD had effected a transfer from Alpha to the
Council and therefore any reconveyance in reversal of that, under clause 5.4 of the
Agreement, had to be back to Alpha. It remained the case that there was simply no
explanation of how the pursuer was a successor to one of the contracting parties (ie Forth)
under the Agreement.
[28]
In testing the question of title in a private law context, Mr Burnet turned to Eagle
Lodge Limited v Keir and Cawder Estates Limited 1964 SC 30 ("Eagle Lodge"). In Eagle Lodge the
pursuer was the tenant of heritable property. The feu disposition granted by the feudal
superior to the tenant's landlord, as owner of the dominium utile, contained a restriction on
building without the superior's consent. The tenant raised an action against the feudal
superior for declarator that the tenant was entitled to construct a building without the
superior's consent. The First Division of the Inner House upheld the superior's plea that the
tenant had no title to sue. Under references to observations to that effect by Lord President
Clyde (at pages 36, 37 to 38), Lord Sorn (at pages 42, 43, 44 to 45) and Lord Guthrie (at 46
and 47), Mr Burnet submitted that the facts in that case were analogous to the facts in the
instant case. By a parity of reasoning, if by virtue of being the tenant under a long lease of
the TLR the pursuer retained some residual right, it would require to ask Alpha as owner
(and analogous to the tenant's landlord in Eagle Lodge) to sue. If there was any failure, the
pursuer's remedy was against Alpha, not the Council. It remained the case that the only
way the pursuer could enjoy rights under clause 5.4 would have been by an assignation in
21
its favour (assuming that clause 5.4 created the kind of right that the pursuer seeks to
enforce).
[29]
Looking at clause 2.1 of the Assignation, this simply involved a re-allocation of the
monies paid as compensation following the GVD. It had no effect on the Agreement. In any
event, Alpha supplanted the pursuer as successor to Forth as owner of the TLR. There was
nothing in the additional documentation to support the contention that somehow the
pursuer could step into Alpha's shoes, assuming that it had become a successor to Forth
under clause 5.4. The Council's first plea, of no title to sue, should be upheld.
Discussion
[30]
I have no hesitation in preferring the submissions of the Council and I will uphold its
first plea in law, that the pursuer has no title to sue, for the following reasons. I consider
first the pursuer's reliance on AXA before turning to address the factors relied on by the
pursuer.
The test for title to sue apposite to an ordinary action to enforce a private law right
The pursuer's reliance on AXA
[31]
Mr Campbell referred only to para [170] in AXA, for the observations that standing
should not be rights-based and that what is "sufficient interest" will depend on context. He
sought to rely on these observations to justify the pursuer's action to enforce clause 5.4 of the
Agreement. With respect to Mr Campbell, this is a misreading of this passage and one that
ignores its context and what the Supreme Court in AXA actually decided. A close reader of
para [170] would note the references to "judicial review" and would understand that
Lord Reed was discussing standing in that context, ie in the sphere of public law
22
applications to the Court's supervisory jurisdiction. This is clear beyond peradventure if
para [170] is placed in the context of Lord Reed's fuller discussion in AXA.
[32]
Lord Reed began his discussion of the issues in AXA from para [159] (under the
rubric "Discussion"), and did do by contrasting public law applications to the supervisory
jurisdiction (that is, by judicial review) with ordinary actions:
"Putting it broadly, in an ordinary action in private law the pursuer is seeking to
vindicate his rights against the defender. The right on which the action is founded
constitutes his title to sue." (Emphasis added.)
After tracing the emergence and development in Scots law and procedure of public law
applications by judicial review, and describing the nature and implications of the difference
between private and public law applications (from paragraphs 160 to 165), Lord Reed
returned to the question of title to sue in private law cases. After quoting Lord Dunedin's
dictum in D & J Nicol (at paragraph 165), Lord Reed observed (at paragraph 166 and at
paragraph 169, respectively):
"... his observations are valuable as a guide to title and interest to bring an ordinary
action in private law. For the reasons I have explained, they are inapposite in the
context of applications to the supervisory jurisdiction." (Emphasis added.)
[...]
"
The approach to standing which was stated by Lord Dunedin in D & J Nicol v
Dundee Harbour Trs is appropriate to proceedings where the function of the courts
is to protect legal rights: in that context, only those who maintain that their legal
rights require protection have a good reason to use the procedures established in
order for the courts to perform that function.
" (Emphasis added.)
From the words I have highlighted, it could not be clearer that in Scots law different tests for
title to sue apply to ordinary actions (to vindicate a private law right) and to public law
applications for judicial review, and that the narrower rights-based test for the former was
inapposite for public law applications to the Court's supervisory jurisdiction. Lord Reed's
23
further observations in paras [169] and [170] provide the reasons for the distinction between
the two tests.
[33]
While AXA enlarged the concept of locus standi in public law cases, it must be
stressed that it did not do so for private cases. In AXA the Supreme Court endorsed the
long-established test for private law cases articulated in D & J Nicol. In my view, the
pursuer's attempt to read across from AXA into a case involving the enforcement of a
private law right (clause 5.4 under the Agreement) constitutes an impermissible inversion of
AXA. The effect of the pursuer's approach would be wholly to obliterate the distinction
between private and public law tests of title to bring actions, and which the Supreme Court
in AXA was careful to preserve. The pursuer's approach conflates the public law test of
standing as articulated in AXA with that in D & J Nicol, and it seeks to apply the AXA test in
a case involving private rights (ie the rights under the Agreement). In my view, nothing in
the reasoning of the Court in AXA, which was concerned to decouple questions of locus
standi in public law cases from the constraints of a private law test (but to preserve the test in
D & J Nicol in its application to ordinary private law actions), supports the pursuer's
approach.
Has the pursuer demonstrated title and interest?
[34]
As Mr Campbell suggested in his submissions, although the dictums in D & J Nicol is
well-known, it may be useful to be reminded of its terms. In that case, Lord Dunedin said:
"
By the law of Scotland a litigant, and in particular a pursuer, must always qualify
title and interest. Though the phrase `title to sue' has been a heading under which
cases have been collected from at least the time of Morison's Dictionary and Brown's
Synopsis, I am not aware that anyone of authority has risked a definition of what
constitutes title to sue. I am not disposed to do so, but I think it may fairly be said
that for a person to have such title he must be a party (using the word in its widest
24
sense) to some legal relation which gives him some right which the person against
whom he raises the action either infringes or denies.
" (Emphasis added.)
In AXA, Lord Reed paraphrased this (at para [159]) as "the pursuer is seeking to vindicate
his rights against the defender. The right on which the action is founded constitutes his
title to sue." (Emphasis added.) I propose to follow this approach when addressing the
factors that the pursuer invokes to establish its title and interest to enforce clause 5.4 against
the Council.
[35]
In light of the dicta just noted, has the pursuer demonstrated "some legal relation
which gives him some right" to enforce clause 5.4 against the Council? In my view, it
wholly fails to do so. In considering this branch of the pursuer's case I assume that
clause 5.4 is capable of being construed (i) as affording a free-standing right to seek
reconveyance of the TLR from the Council, notwithstanding that the Council did not
exercise the option in clause 5.2 to secure a transfer of title to the TLR at no cost but had
acquired title to the TLR outside the terms of the Agreement, and (ii) as available to a
"successor" to Forth, notwithstanding that those words do not appear in clause 5.4. Even on
those hypotheses, it remains the case that the pursuer was not a party to the Agreement and
that it has never acquired by assignation from Forth any right to stand in Forth's shoes, as
the assignee of the cedent's rights. (The want of an assignation by Forth of any right under
clause 5.4 might infer that there was nothing in clause 5.4 susceptible to assignation.) Nor
does the pursuer rely on any right conceived of in its favour under the Agreement
(notwithstanding that it was not a party to the Agreement) by application of the doctrine of
jus quaesitum tertio. I did not understand Mr Campbell to challenge Mr Burnet's analysis
that the Assignation was concerned with a very different matter, concerning the
25
re-allocation of the compensation payable as a consequence of the GVD, and was wholly
unconnected with the Agreement.
[36]
As noted at paras [20] and [21] of the first opinion, one of the consequences that
flows from the character of the Agreement as one made under section 75 of the 1997 Act is
that certain obligations were enforceable by the Council as planning authority against any
person deriving title to the land from Forth. It is to enable a planning authority to secure
compliance with the terms of the planning permission or the delivery of the particular
planning gains constituted in section 75 Agreements. In my view, that is the reason why the
Council "treated" the pursuer as bound by those parts of the Agreement which are
enforceable against the party implementing the planning permission. That is of no
consequence in respect of the kind of right embodied in clause 5.4, enforceable against the
Council, and which Mr Campbell was anxious to characterise as a wholly private right (and,
as such, out of place in a section 75 Agreement: see his submission at para [26], and the
Court's consideration of this argument at paras [38] to [39], of the first opinion).
[37]
Mr Campbell did not identify or rely on any term of the additional documents to
support the pursuer's case on its title to sue. This may not be surprising, given that Forth
were not, seemingly, a party to any of these deeds. While the additional documents might,
in the most general terms, indicate that title to the TLR remained with the pursuer's funder,
Alpha, no doubt for considered commercial or possibly tax reasons, that reinforces the point
that Mr Burnet made under reference to Eagle Lodge: even if Alpha were the "successor" to
Forth under clause 5.4, the pursuer remained at one remove from having any title to enforce
clause 5.4 as against the Council. Mr Campbell never engaged with the hard fact that
clause 5.4 concerns a reversal of title to or ownership of the TLR back into the hands of the
party from whom the Council acquired title. Nor did Mr Campbell explain why an
26
intermediate owner, such as the pursuer, would displace the right of the final owner (Alpha)
from whom the Council acquired the TLR by compulsory purchase, to trigger clause 5.4 (on
the hypotheses noted at para [35], above).
[38]
Turning to the pursuer's averments added by its amended case, in article 8A of its
Summons, these simply refer to the BBA or the BBA Variation. The averments in article 8A
do no more than narrate, in bare outline, a generalised power of the pursuer to buy back
"certain of the properties subject to the pursuer's lease", but these bear to be "ex GVD",
meaning under exclusion of the land taken by the GVD. In any event, on the pursuer's
amended case, this power appears to have been exercised only in relation to one plot. In my
view, the pursuer's averments in its amended case do not instruct any relevant case of title
to sue.
[39]
It remains the case that the relevant interest the pursuer had at the time of GVD was
as the tenant under a long lease. I accept Mr Burnet's submission that such an interest is not
relevant to the circumstances contemplated in clause 5.4 for reconveyance to Forth or its
successor as the heritable owner of the TLR.
[40]
At its highest, the pursuer's appeal was to an inchoate or impressionistic assertion
that it was `in the driving seat' or that it was `the controlling mind or hand' of the
development, and for which the additional documents provided colour. The pursuer's
conduct in implementing the planning permission, and the Council's dealings with it on that
basis, are entirely consistent with the qualities of a section 75 agreement, already noted.
More fundamentally, the pursuer failed to identify or provide anything to instruct the kind
of "
legal relation" desiderated by Lord Dunedin which gives it some righ
t to enforce
clause 5.4 of the Agreement against the Council.
27
Decision
[41]
For this reasons, I find that the pursuer's averments of title to sue are irrelevant. I
will uphold the Council's first plea of no title to sue. I will also give effect to my decision in
the first opinion, and uphold the Council's second plea in law to the relevancy of the
pursuer's case on the merits. I will reserve all question of expenses meantime.
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