OUTER HOUSE, COURT OF SESSION

 

[2006] CSOH 56

 

A781/04

 

 

 

 

 

 

 

 

 

 

 

OPINION OF LORD REED

 

in the cause

 

HANOVER (SCOTLAND) HOUSING ASSOCIATION LIMITED AND OTHERS

 

Pursuers;

 

against

 

JOHN REID AND MARGARET REID

 

Defenders:

 

 

________________

 

 

 

Pursuers: E.W. Robertson; Morisons

Defenders: Johnston, Q.C.; Burness

 

6 April 2006

 

Introduction

[1] This case has a long history. The present action is the latest round in a dispute between the first pursuers, who are the former managers of a sheltered housing complex, and some of the proprietors of the houses contained in that complex, which has been going on more or less continuously since the 1980s. The complex consists of 36 dwelling houses, a guest suite and garages. Thirty-five of the houses are owned and occupied by elderly residents, including the defenders. The remaining house is occupied by a warden. Until 28 November 2004, when the Abolition of Feudal Tenure etc. (Scotland) Act 2000 ("the 2000 Act") came into force, the first pursuers were the feudal superiors of each of the proprietors. They were also (and remain) the owners of the warden's house and the guest suite. The title to each of the 35 owner-occupied houses incorporated a deed of conditions, executed in 1987 and registered in the Lands Register, which created rights and obligations as between the first pursuers, as superiors, and the proprietors of the houses, as their vassals. It may be (although as this point was not discussed before me in detail, I express no concluded view upon it) that the deed of conditions also created rights and obligations as between the individual proprietors. The deed of conditions provided for the employment by the superiors of a warden, and also of a factor. It also provided for a Property Council, to which (in broad terms) both the superiors and the individual proprietors were to belong.

[2] In the event, the first pursuers, as the superiors, appointed themselves as the factor. A dispute soon arose between the first pursuers and some of the individual proprietors when the first pursuers raised their charges, in respect of their services as factor, without prior consultation. Some of the proprietors, including the defenders, responded by withholding payment of charges from 1 November 1989. The first pursuers sued the defenders for payment. In 1993 it was agreed that the dispute (which had extended to other aspects of the relationship between the superiors and the proprietors) should be submitted to arbitration, in terms of an arbitration provision contained in the deed of conditions, and the action was then sisted pending the outcome of the arbitration.

[3] In Part I of his decree-arbitral, issued in November 1996, the arbiter directed that the defenders had to pay the outstanding charges, which he found had been withheld purely as a means towards resolving the underlying problem; which he identified, in Part V of his award, as being the lack of consultation. In relation to the latter, the arbiter began by discussing in Part II of his award the relationships existing between the first pursuers and the individual proprietors, which he summarised as follows:

"At the present time it is clear that Hanover (Scotland) Housing Association Ltd is working on the assumptions and under the culture of providers of tenanted accommodation and not as providers of services to proprietors who are in reality their employers."

 

[4] In Part III of his award, the arbiter found that there was a conflict of interest where the superiors acted as factor, and directed that the offices of superior and factor should not be held by one organisation. The arbiter further directed that the first pursuers should transfer the office of factor to an independent third party within a period of 14 days following the meeting of the Property Council to be held in terms of Part VI of his award.

[5] In Part IV of his award, the arbiter considered the status and function of the Property Council. He rejected the first pursuers' argument that to "democratise" the Property Council would defeat the whole purpose of sheltered housing. He identified what he described as "key issues" which should be open for debate "between the proprietors, through the Property Council" and the factor and the superiors. The first key issue was:

"1. The appointment of the Factor - subject to the Superior being satisfied that the proposed Factor is technically and professionally competent to manage Sheltered Housing. Any dispute being open to arbitration."

 

The arbiter continued:

"I direct that consultation should take place at Property Council Meetings amongst the parties in relation to Key Issues as defined above."

 

The arbiter further directed:

"that the decisions made at or authorised by a properly constituted Property Council Meeting will be binding upon each of the Proprietors and upon [the first pursuers]".

[6] In Part VI of his award, the arbiter directed that the first pursuers should within 28 days propose that a number of specified variations be made to the deed of conditions, and that those proposals should be considered at a meeting of the Property Council within a period of three months thereafter.

[7] In Part VII of his award, the arbiter was critical of the way in which service charges had been levied, namely on the basis of estimates of future expenditure. He observed that substantial surpluses had accumulated. He decided that at the end of the current accounting period or upon transfer of the factorage, whichever was the sooner, the basis of the charges should be changed from an estimated future budget to actual historical expenditure.

[8] Following the issue of the decree arbitral, the first pursuers put forward the proposed variations to the deed of conditions. They were approved by the Property Council at a meeting held in March 1997. The first pursuers then took objection to certain of the proposed variations, and brought proceedings against the arbiter and the present defenders for judicial review of the arbiter's award. Those proceedings were dismissed in 2002. In his Opinion, reported at 2002 SCLR 144, Lord Wheatley concluded that the first pursuers' arguments were "in their entirety... without substance". A supplementary deed of conditions, containing the specified variations, and incorporating both the arbiter's award and Lord Wheatley's Opinion, was then executed in June 2002.

[9] Notwithstanding the terms of the arbiter's award, the first pursuers continued to act as the factor. It appears that a number of proprietors, including the defenders, withheld payment of the charges which were levied. In November 2002 a sub-committee of the Property Council (according to the pursuers' pleadings, with which I am concerned for present purposes: the defenders' pleadings maintain that the meeting was of the Property Council itself) voted unanimously in favour of the appointment of Grant & Wilson Ltd as factor. The first pursuers did not however make that appointment. On 15 April 2003 they wrote to the proprietors, notifying them that it was intended to seek tenders from a selection of factors, and that "consultation is to take place with the Property Council".

[10] On 20 June 2003 the first pursuers again wrote to the proprietors, stating that tenders had been received from Grant & Wilson Ltd and also from the second pursuers. The tenders were summarised. According to the summary, Grant & Wilson's annual charge was about 6,000 greater than the second pursuers'. It is apparent from the letter that that figure was erroneous: the correct figure was about 2,000. The letter also stated that the tenderers had been told by the first pursuers that they would be expected to recover all outstanding arrears. Grant & Wilson Ltd had indicated that they would be unwilling to collect arrears which had arisen prior to their appointment. The second pursuers, on the other hand, were willing to collect any sums outstanding. The letter also stated:

"To assist in the process of selection, we are seeking your views on the prospective appointment and ask you to write to us with your comments. Please let us have your written comments by Thursday 31 July 2003.

In order to facilitate the consultation process, the Association has made the necessary arrangements to hold a meeting at Hanover Close, 33 Sinclair Drive, Glasgow on Wednesday 16 July 2003, at 10.30am, at which any issues can be raised and discussed."

 

According to the defenders' pleadings, most of the proprietors then sent a joint letter to the first pursuers, dated 12 July 2003, "confirming" the decision taken by the Property Council (as it was described) on 21 November 2002, that Grant & Wilson Ltd was the preferred factor. That averment is however denied by the pursuers, and must be disregarded for present purposes.

[11] A meeting was held on 16 July 2003, as had been indicated in the letter of 20 June 2003. Five proprietors attended. The first pursuers' minute of the meeting, which is incorporated into the pursuers' pleadings, does not record the appointment of any chairman. The meeting appears to have taken the form of the five "residents" (as they were described) being welcomed and addressed by representatives of the first pursuers, who then answered points raised by residents. The minute of the meeting was sent to all proprietors on 4 August 2003. The first pursuers later offered the proprietors the opportunity to have a meeting chaired by Gordon Jackson, QC, MSP. That offer was declined.

[12] The first pursuers subsequently appointed the second pursuers as factor, with effect from 1 November 2003. It appears that a number of proprietors continued to withhold payment of charges, on the basis that the second pursuers had not been appointed in accordance with the deed of conditions (as varied): in particular, because the Property Council had not been consulted. The present defenders in addition brought proceedings in the Sheriff Court, in which interim interdict was sought to prevent the second pursuers from acting as factor. At a meeting of the Property Council held on 19 December 2003, a large majority of proprietors voted in favour of the appointment of Grant & Wilson Ltd. It appears from the minute (which, as in the case of all documents produced, other than the minute of the meeting held on 21 November 2002, it was agreed the court should take into account) that it was made clear by proprietors at the meeting that the second pursuers' appointment was unlikely to continue after the entry into force of the 2000 Act, on 28 November 2004.

[13] On 26 November 2004, as I was informed, the pursuers commenced the present proceedings against the defenders. I was informed that there are 19 similar cases against other proprietors. The nature of the proceedings is discussed below. On 28 November 2004 the 2000 Act came into force. The first pursuers then ceased to be superiors. On 30 November 2004, as I was informed, the second pursuers' appointment as factors was terminated by the proprietors under section 64 of the Title Conditions (Scotland) Act 2003, which also came into force on 28 November 2004. Grant & Wilson Ltd were then appointed instead.

 

The present proceedings
[14] The pursuers seek the payment of three amounts: 3,348, 1,195 and 706.51. I shall forbear to comment on the appropriateness of suing for these sums in the Court of Session. The 3,348 and 1,195 are averred to have been the subject of a demand issued to the defenders in January 2004: that is relevant because the right to sue for payment, under clause NINTH (f) of the deed of conditions (discussed below), arises when a sum has remained unpaid for a period of 60 days after a demand has been issued. It was however accepted on behalf of the pursuers that the 1,195 represented interest accrued to 31 October 2004. That sum cannot therefore have been the subject of a demand in January 2004. Counsel sought leave to amend the pursuers' pleadings in that regard, if the pursuers were successful on the main points argued, as discussed below. I note in that regard that the pleadings had been amended at the commencement of the hearing before me, at the instance of the pursuers, following an amendment procedure which began in June 2005.

[15] The 3,348, I was informed by counsel for the pursuers, represents the defenders' one thirty-fifth share of the charges made by the first pursuers, in respect of their services as factor, for the period from 1 December 1999 to 31 October 2003. The 1,195, I was informed, represents the accrued interest on outstanding charges for the period to 31 October 2004. The 706.51 represents what is averred to be the defenders' share of common charges levied by the second pursuers for the period from 1 November 2003 to 30 November 2004. The pursuers' averments about the make-up of this sum are difficult to understand. It is averred that the second pursuers demanded payment of 55.99 per month on the basis of an estimate of anticipated expenditure (notwithstanding Part VII of the arbiter's award) and that the defenders did not pay those amounts. The 706.51 is not however related to those amounts, but (according to the second pursuers' account, which is incorporated into the pursuers' pleadings) is a one thirty-fifth share of specified amounts in respect of a variety of matters, such as insurance, cleaning and gardening. It is also averred that the sum payable on 25 November 2004 (on the eve of the commencement of the action) was 524.12. I also note that neither the 524.12 nor the 706.51 could have been the subject of a demand which had remained unpaid for 60 days when the action was commenced: indeed, if the 706.51 represents charges for the period to 30 November 2004, it would not appear to have been due on 26 November 2004, when the action was commenced. In relation to these matters also, counsel for the pursuers sought leave to amend, if the pursuers were successful on the main points.

[16] The pursuers seek decree for payment of the sums of 3,348 and 1,195 under clause NINTH (f) of the deed of conditions (as varied), which is discussed below. Decree is sought in favour of the second pursuers, or alternatively "in favour of the first pursuers as principals". It is averred in the pursuers' pleadings that, in the event that the second pursuers were to recover those sums, they "will upon receipt remit this to the first pursuers who have provided the services for which payment is due in the period to 31st October 2003". From the use of the word "principals", it would appear that the second pursuers are considered to be entitled to recover those sums as the agents of the first pursuers, and that the first pursuers can in any event recover the sums themselves "as principals".

[17] The pursuers similarly seek decree for payment of the sum of 706.51 to the second pursuers, or alternatively to the first pursuers "as principals". In relation to this sum, there is no averment that it would be remitted to the first pursuers; and the entity acting as factor during the period to which that sum relates was the second pursuers, not the first pursuers.

[18] As a further alternative, the first pursuers seek the payment of all three sums on the basis of unjustified enrichment. It is averred that there was no intention of donation on the part of the first pursuers towards the defenders "in incurring the expenditure and making the arrangements which are charged in the common charges for the two periods", i.e. for the period when the first pursuers acted as factors, and for the subsequent period when the second pursuers acted as factors. In the course of the hearing, counsel for the pursuers acknowledged that such a claim had to proceed on a quantum lucratus basis, which had not been pleaded. He also acknowledged that there was a lack of explanation as to the basis of the claim. There was, for example, no explanation of the basis on which the first pursuers could claim to have incurred the expenditure or made the arrangements to which the sum of 706.51 related: that sum was in respect of the period when the second pursuers, not the first pursuers, acted as factors. Counsel informed me that, as he understood the position, the second pursuers had been paid in full by the first pursuers, under an "arrangement"; but the nature of the arrangement was unclear. Equally, counsel acknowledged that, at first sight, if the only bar to recovery by the second pursuers, under clause NINTH (f) of the deed of conditions, was that they had not been validly appointed as factors, then it might be that a validly appointed factor could instead recover the amounts involved. Counsel said however that there was a "practical" difficulty, because the present factors (Grant & Wilson Ltd) were unwilling to collect the arrears in question. How this affected the legal position was unclear. Counsel also suggested that it might no longer be possible for the first pursuers to enforce the deed of conditions so as to recover the sums in question, as a consequence of the 2000 and 2003 Acts. He was however unable to indicate which provisions had that effect, or indeed which provisions might be relevant. In relation to all these matters also, counsel sought leave to amend, if the pursuers were successful on the main points argued.

 

The submissions for the defenders
1. The second pursuers' title to sue

[19] On behalf of the defenders, it was submitted that the action (apart from the claim of unjustified enrichment) proceeded on the basis of clause NINTH (f) of the deed of conditions (as varied), which provided:

"In the event of any monthly instalment or other sum due and payable in terms of this Deed by any proprietor remaining unpaid for a period of sixty days after a demand for payment thereof has been issued by the Factor the Factor shall sue for and recover the same in his own name on behalf of the Superiors and of the remaining proprietors. If payment is not received by the Factor of the amount of any such instalment or other sum and of the expenses as awarded by the Court of obtaining a decree for payment therefore within twenty one days after the date of the decree for payment... the amount of such instalment or other sum and expenses shall be paid by the remaining proprietors jointly to the Factor, each such proprietor contributing in proportion to his appropriate share of the original costs and the remaining proprietors will be entitled to demand enforcement of the said decree against the defaulting proprietor."

 

In terms of clause NINTH (f), it was the factor, and no-one else, who was entitled to pursue proprietors for recovery of any sums due. The expression "proprietors", as used in clause NINTH (f), was defined by clause FIRST (16), and did not include the superiors.

[20] Clause THIRTEENTH (a) (as varied) made provision for the appointment of a factor:

"The factor shall be appointed and his appointment may be reviewed or terminated by the Superiors, following consultation with the Property Council."

 

The words in bold were inserted by clause FIFTEENTH of the supplementary deed of conditions, in order to give effect to the arbiter's award.

[21] Clause FIFTEENTH of the deed of conditions (as varied) made provision in relation to the Property Council:

"(a) The Property Council shall comprise the Superiors, the Association (or other proprietor of the Warden's accommodation and the Guest Suite) and the proprietors of all the Dwellinghouses provided always that when more than one person is included in the term 'proprietor' only one of such persons may be a member of the Property Council.

(b) Subject as aftermentioned, the Property Council shall have power:-

(i) to instruct the Factor to have executed any works of repair or maintenance and any renewals, and also any improvements, of the Common Parts or any part thereof and of the Warden's accommodation and the Guest Suite,

(ii) to make any regulations which may be considered necessary or desirable for the preservation, use, cleaning or enjoyment of the common Parts or any part thereof and of the Warden's accommodation, and the Guest Suite and

(iii) to carry out the duties and functions assigned to it in accordance with the provisions of this Deed;

(c) A meeting of the Property Council (hereinafter called the Regular Meeting) shall be convened by the Factor to be held in November in each year. The Factor shall also convene a special meeting of the Property Council or any sub-committee established by the Property Council to be held at such reasonably convenient time and place as the Factor shall determine either on his own initiative or upon receipt of a requisition signed by or on behalf of the Superiors or by Ten or more proprietors of Dwellinghouses. Notice of the time and place of any meeting of the Property Council shall be given in writing by the Factor to the Superiors, to the Association or other proprietor of the Warden's accommodation and the Guest Suite and to all the proprietors of Dwellinghouses... not less than fourteen days prior to the date of the meeting.

(d) At any meeting of the Property Council

...

(iii) the Superiors or the Factor on their behalf and the proprietors of not less than one third in number of the Dwellinghouses present in person or represented by a mandatory shall be a quorum,

(iv) the chairman of the meeting shall be appointed by those present and entitled to vote

...

(e) Subject to the proviso to sub-clause (b) of this Clause, [sic: the proviso was deleted by the supplementary deed of conditions] all decisions and regulations regularly made at any such Meeting shall be binding upon the Superior, the Association (or other proprietor of the Warden's accommodation and the Guest Suite) and upon each and all of the proprietors whether or not present in person or represented at such meeting and whether or not consenters thereto unless the Association (or other proprietor of the Warden's accommodation and the Guest Suite) or any of the proprietors shall within thirty days of the making of any such decision or regulation refer the matter to arbitration in accordance with Clause SIXTEENTH of this Deed."

 

[22] Counsel submitted that the second pursuers had no title to sue as factor, since they had not been appointed "following consultation with the Property Council", as required by clause THIRTEENTH. The various letters sent by the first pursuers to the individual proprietors did not amount to consultation of the Property Council. No meeting of the Property Council had been requisitioned by the first pursuers, as envisaged by clause FIFTEENTH (c). The meeting held on 16 July 2003 had not been a meeting of the Property Council: it had not been quorate, in accordance with clause FIFTEENTH (d)(iii), and no chairman had been appointed in accordance with clause FIFTEENTH (d)(iv). There was a difference between consulting the Property Council, convened in accordance with clause FIFTEENTH, and writing to people who were entitled to be members of the Property Council.

 

2. The first pursuers' title and interest to sue under the deed of conditions
[23] The claim to payment (other than on the basis of unjustified enrichment) proceeded on the basis of clause NINTH (f). In terms of that clause, it was the factor who was entitled to pursue proprietors for recovery of sums due. The first pursuers were not the factor, and accordingly had no title to pursue the present action. Moreover, they had no interest in any sums recovered under that clause. It was the remaining proprietors who were entitled to require the factor to enforce a decree against a defaulting proprietor, and who were required to make up any shortfall by way of payment to the factor.

 

3. Unjustified enrichment

[24] In addition to criticising the first pursuers' failure to quantify this aspect of their claim on the basis of quantum lucratus, counsel for the defenders submitted that the claim on the basis of unjustified enrichment was irrelevant in principle. The relationship between the first pursuers and the defenders was governed by the deed of conditions. The parties had agreed, in the deed of conditions, the basis on which charges could properly be levied. If the first pursuers ignored the procedures laid down in the deed of conditions, they had only themselves to blame: it was not equitable to allow them to recover, in recompense, a sum which their breach of the deed of conditions prevented them from recovering under that deed. Reference was made to Dollar Land (Cumbernauld) Ltd v CIN Properties Ltd 1998 SC (HL) 90, although it was acknowledged that the circumstances of that case were somewhat different.

 

The submissions for the pursuers
1. The second pursuers' title to sue

[25] Counsel for the pursuers submitted that the Property Council had been consulted. Reference was made to R v Secretary of State for Social Services, ex parte Association of Metropolitan Authorities [1986] 1 WLR 1 and to R v British Coal Corporation ex parte Price [1994] IRLR 72. Clause FIFTEENTH (a) defined the Property Council as comprising "the Superiors, the Association... and the proprietors of all the Dwellinghouse". The first pursuers were the superiors and the association. By consulting the proprietors of the dwellinghouses (by writing to them and inviting their comments), the first pursuers ipso facto consulted the Property Council. The second pursuers had therefore been appointed following consultation with the Property Council, as required by clause THIRTEENTH (a).

[26] In any event, counsel submitted, any defect in the title of the second pursuers was cured by section 65 of the 2003 Act, which provides:

"Where, immediately before the appointed day [28 November 2004], any person is, by virtue of any real burden or purported real burden, ostensibly the manager of related properties that person shall be deemed to have been validly appointed as such".

 

This submission, which has no basis in the pursuers' pleadings, emerged in the course of an attempt by counsel, which was soon abandoned, to explain the nature of the obligation which the pursuers sought to enforce, and how it might be affected by the 2000 Act and the 2003 Act.

[27] In a brief reply, in relation to this chapter of the argument, counsel for the defenders submitted that since section 65 of the 2003 Act came into force on 28 November 2004, it did not retrospectively confer title and interest on the second pursuers to bring proceedings on 26 November 2004.

 

2. The first pursuers' title and interest to sue under the deed of conditions
[28] Counsel for the pursuers submitted that clause NINTH (f) provided a mechanism whereby the factor was entitled to sue as agents on behalf of the superiors and the remaining proprietors. The first pursuers were also entitled to sue directly, as principals.

 

3. Unjustified enrichment
[29] Counsel submitted that the Dollar Land case was distinguishable, since in that case the supposedly unjust result had been contracted for.

 

Discussion
[30] I had some difficulty understanding what the nature of the present proceedings was considered by the pursuers to be (I was told by counsel for the pursuers, for example, that the proceedings did not involve the enforcement of a real burden; but if they do not involve that, I am not clear as to what they do involve). It was also unfortunate that counsel for the pursuers was unable to explain the effect on these proceedings of the 2000 Act and the 2003 Act, particularly when reliance was placed on section 65 of the 2003 Act. I do not propose to embark upon an exploration of these issues without counsel's assistance, and will therefore confine my remarks to the issues on which I was addressed.

[31] It appears to me, first, that the second pursuers were not validly appointed as factor, since they were not appointed "following consultation with the Property Council", as required by clause THIRTEENTH (a). The sending of a letter to the individual proprietors cannot be regarded as consultation with the Property Council, for two reasons. First, not all proprietors can be members of the Property Council, since clause FIFTEENTH (a) provides that

"when more than one person is included in the term 'proprietor' only one of such persons may be a member of the Property Council".

 

In the case of the defenders, for example, only one of them can belong to the Property Council. The membership of the Property Council is therefore indeterminate at the time when a letter is sent to all proprietors: the Property Council only comes into being when it meets, and its membership is thereupon determined. The Property Council can therefore be consulted only when it meets. Secondly, the sending of a letter does not entail that the subject-matter will be considered by the Property Council, since, under clause FIFTEENTH (c), a meeting of the Property Council can be requisitioned only by the superiors or by "Ten or more proprietors of dwellinghouses".

[32] This conclusion appears to me to follow from the terms of clause FIFTEENTH. If I had been in any doubt about the matter, that doubt would have been resolved by reference to the arbiter's award, which is incorporated into the supplementary deed of conditions, and therefore has to be read along with its provisions. The award provided, in particular, that "consultation should take place at Property Council Meetings amongst the parties in relation to Key Issues as defined above", and defined "Key Issues" as including the appointment of the factor.

[33] I am not persuaded, by the arguments presented to me, that section 65 of the 2003 Act affects this conclusion. I hesitate to express any view upon the construction or effect of the provision, given the perfunctory nature of counsel's submissions upon it. I was not, for example, referred to its background in clause 55 of the draft Bill annexed to the Scottish Law Commission's Report No.181, Real Burdens (October 2000), or to paragraph 2.40 of that report; nor was there any attempt to explain what the purpose of the provision might be; or to consider what might be meant by the word "ostensibly", and in particular whether, in circumstances such as those of the present case, where the validity of the factor's appointment is in dispute before the appointed day, that person can be said to be "ostensibly" the manager. Nor was there any discussion of the law relating to the temporal application of statutory provisions (of which there is an interesting discussion in Lord Rodger of Earlsferry's 2004 Blackstone Lecture, published at [2005] 121 LQR 57). In the circumstances, I shall not embark on an elaborate discussion. It is sufficient to say that it is only exceptionally that legislation can be passed, compatibly with Convention rights (and therefore within the powers of the Scottish Parliament), which interferes with ongoing proceedings: National & Provincial Building Society v United Kingdom [1998] 25 EHRR 127; A v Scottish Ministers [2001] UKPC D5, 2002 SC (PC) 63. If, in the present case, the second pursuers were not validly appointed, it follows that they had no title to sue when these proceedings were commenced; and, in the absence of statutory intervention, that absence of title could not subsequently be made good (Symington v Campbell (1894) 21 R 434). Statutory intervention, retrospectively conferring a title to sue, would contravene the general principle against interference with ongoing proceedings, unless it had some compelling justification. None has been suggested in the present case.

[34] I am equally unpersuaded that the first pursuers are entitled to sue for payment under the deed of conditions. The obligation to pay service charges is created by the deed of conditions. In clause NINTH (f), the deed of conditions provides the procedure which is to be followed in order to enforce payment:

"In the event of any... sum due and payable in terms of this Deed by any proprietor remaining unpaid for a period of sixty days after a demand for payment thereof has been issued by the Factor the Factor shall sue for and recover the same in his own name on behalf of the Superiors and of the remaining proprietors."

 

One implication of my conclusion that the second pursuers were not validly appointed as factor is that the demand for payment on which the present proceedings are based was not "issued by the Factor": on the pursuers' averments, and in the light of the foregoing conclusion, the event in which the factor could sue (i.e. a sum remaining unpaid for 60 days after a demand had been issued by the factor) has therefore not yet come to pass. Moreover, under the deed of conditions it is the factor, appointed after consultation with the Property Council, which is entitled (and, indeed, bound) to conduct proceedings in its own name for the recovery of unpaid sums. There is nothing in the deed of conditions which confers on the superiors the right to conduct such proceedings. The submission that, since duly appointed factors act "on behalf of the Superiors and of the remaining proprietors", the superiors are therefore entitled to sue for payment themselves, in the absence of any duly appointed factor, and in the face of an express provision under which such proceedings are to be taken by the factor, was not supported by reference to any authority, or by any explanation.

[35] The case based on unjustified enrichment appears to me to be equally unpersuasive. The relationship of the parties is regulated by the deed of conditions. If the first pursuers have failed to comply with the conditions governing the recovery of payments under the deed of conditions, that failure cannot be "cured", or the requirements of the deed of conditions set at naught, by recourse to the concept of unjust enrichment.

[36] In the circumstances, I shall sustain the defenders' preliminary pleas and dismiss the action.