(A2086/05)

JUDGMENT OF

SHERIFF PRINCIPAL EDWARD F BOWEN QC

 

in the appeal

in the cause

 

Robert & Anne Holms

Pursuers and Appellants

 

against

 

ashford estates ltd

Defenders and Respondents

 

 

 

Act: Hawkes, Advocate, instructed by Shepherd & Wedderburn

Alt: Sandison, Advocate, instructed by DLA Piper Rudnick Gray Cary

 

EDINBURGH, 18 October 2006

 

The Sheriff Principal, having resumed consideration of the cause, refuses the appeal and adheres to the Sheriff's interlocutor complained of dated 14 February 2006: finds the defenders and appellants liable to the pursuers and respondents in the expenses occasioned by the appeal and remits the account thereof, when lodged, to the Auditor of Court to tax and to report thereon.

 

 

 

NOTE:

1. This is an action of damages for breach of warrandice. It proceeded to a proof following upon which the Sheriff made 21 findings-in-fact. None of these are challenged. These disclose the following set of circumstances which give rise to the pursuers' claim:

 

(a) The pursuers purchased from the defenders a flat at 24B Manor Place, Edinburgh. The Disposition of the subjects in their favour was registered on 21 June 1999. The flat is situated within a building developed by the defenders to contain five flats in total. To the rear of the subjects there is a car parking area with marked parking spaces to which access is gained from Manor Place by a lane known as Bishops Lane.

 

(b) The Disposition in favour of the pursuers conveyed (a) a car parking space outlined in red and marked 42 on the plan annexed to the Disposition and (b) a heritable and irredeemable servitude right of access for both pedestrian and vehicular traffic over Bishops Lane and the car parking area which was described in a related Deed of Conditions dated and registered on 27 November 1998.

 

(c) The Disposition in favour of the pursuers contained a grant of warrandice in standard terms.

 

(d) The plan annexed to the Disposition in favour of the pursuers showed three car parking spaces associated with the development of the flats. These are numbered 40, 41 and 42 respectively. It did not show any car parking space numbered 43 nor any hatched area associated with such a space. The plan annexed to the Deed of Conditions also showed car parking spaces 40, 41 and 42 but no hatched area or parking space 43.

 

(e) By Disposition in favour of Fenella Mary Mason, registered on 19 April 1999, the defenders disponed to Ms Mason the flat at 24(4) Manor Place, Edinburgh together with a car parking space number 43 shown on a plan annexed to that Disposition. That parking space lies at right angles to the pursuers' car parking space No 42 and is separated from it by a hatched area shown only on the plan annexed to the Disposition in Ms Mason's favour.

 

(f) The pursuers were never made aware that any car parking spaces other than spaces 40, 41 and 42 were to be disposed to any proprietor of the subjects developed by the defenders. They were not made aware that car parking space 43 was to be developed and when they viewed the subjects that space was obscured by a port-a-cabin and builders materials.

 

(g) It is not possible to park a car in space 42 if space 43 is occupied by a car.

 

(h) Between December 2003 and April 2004 the pursuers were unable to use space 42 because a locked bollard was in position on space 43.

 

2. The essence of the pursuers' case is to be found in the following averments in Article 3 of Condescendence. These state: "The defenders did not have title to space 43 at the time of their Disposition in favour of the pursuers as it had by then been disponed to Ms Mason. The defenders accordingly did not have title to the area of ground over which access is required for the exercise of the pursuers' servitude right of access. The pursuers' title is defective because of an inability to exercise that right of access. A third party, namely, Ms Mason has a competing title which is both unquestionable and challenges the pursuers' title. As a result the pursuers have been evicted from their car parking space and the defenders are in breach of the warrandice granted by them".

 

3. The defenders' response is to be found in Answer 3. It is in the following terms: "The disposition in favour of the pursuers correctly describes the subjects which the defenders had contracted to convey to the pursuers in terms of the Missives. The defenders by the granting of the Disposition have conveyed to the pursuers a valid and marketable title in respect of all subjects they had so contracted to convey in terms of the Missives. The pursuers' title is accordingly not defective. It is possible to drive in or out of space 42 even if space 43 is in use. Esto it is necessary to encroach upon space 43 to use space 42 (which is denied) the titles of the proprietors of all of the flats at 24 Manor Place, including those of the pursuers and Ms Mason, are burdened by the Deed of Conditions, which creates real burdens and conditions affecting those titles. Reference is made to section 32 of the Conveyancing (Scotland) 1874. In terms of Clause 15(e) of the Deed of Conditions, such proprietors, including the pursuers, have a servitude of "all necessary rights of access and egress to and from the car parking area for all necessary purposes". The pursuers are accordingly entitled to exercise that right of access and egress over space 43 should they require to do so". There follows a series of averments about the use of a padlock and bollards which are not material to the present issue. The averments proceed: "Ms Mason has not taken any steps to challenge the title of the pursuers to space 42 or the validity of their Servitude Right of access over the car parking area (including space 43)".

 

4. It falls to be emphasised that the Sheriff rejected the suggestion that it was possible to drive into or out of space 42 if space 43 was in use. His conclusion in that respect is not challenged nor is his consequential finding-in-fact and law that the pursuers' servitude right of vehicular access and egress could not be exercised without unencumbered access over parking space 43. Part of finding-in-fact 2 is not challenged to the extent that it is accepted that Ms Mason has a title granted to her by the defenders prior to the pursuers' title which entitles her to use her property. The Sheriff went on to hold that Ms Mason's title gave her the right to prevent third parties including the pursuers encroaching on her property and in consequence the pursuers had been evicted from their parking space No 42 "in the sense necessary to establish a claim for breach of warrandice". He upheld the pursuers' claim and granted decree for 15,000 by way of damages, representing the difference between the price the pursuers paid for the flat with a parking space as against the price they would have paid for it without such a space.

 

5. The defenders' Note of Appeal is in comprehensive terms. It sets out that "the learned Sheriff erred in law in holding that the pursuers had, on the facts as found by him, established that they had suffered eviction from any part of the subjects disponed to them by the defenders, and that the defenders were thereby in breach of the warrandice contained in that Disposition". It proceeds to note that the terms of none of the relevant titles were in dispute and that: "the case advanced by the pursuers was that they had been evicted, not from any corporeal heritage conveyed to them, but rather from a servitude right of access granted to them by the defenders. The basis to that claim was that that servitude right of access, in order to be fully effective for vehicles, required to be exercised over an area of ground, ownership which had, by the time of the grant of the Disposition in favour of the pursuers, already been disponed by the defenders to a third party". The essence of the appeal is to be found in the paragraph following which is in these terms: "Had the Disposition in favour of the third party conveyed to that party a wholly unrestricted right of ownership of that area of ground, without any enforceable obligation to suffer access over it by the proprietors of the heritable property now owned by the pursuers, the pursuers' case might have been capable of being made out. However, the Disposition in favour of the third party...did not convey such an unrestricted right. It was expressly granted subject to the terms of the Deed of Conditions...recorded in the General Register of Sasines in terms of section 32 of the Conveyancing (Scotland) Act 1874. Clause 15(d) of the Deed of Conditions reserved to the defenders the power to grant rights of access and egress and other servitudes or wayleaves over any part of the car parking area. The "car parking area" included the said area of ground disponed to the third party and just such a servitude right of access over it was granted to them by the defenders. Further the Deed of Conditions by Clause 15(e) thereof, reserved "to the proprietors having an interest in the car parking area...all necessary rights of access and egress to and from the car parking area for all necessary purposes whenever reasonably required...". On the pursuers' case, which the Sheriff accepted, a right of access across that part of the car parking area conveyed to the third party was reasonably required by the pursuers for the necessary purpose of use of their land. In the foregoing circumstances the pursuers were not in a position to establish, and the Sheriff indeed did not hold that they had established, the existence of a competing title which would inevitably prevail at law in competition with the right conveyed to them and from which they claim to have been evicted. The Sheriff therefore erred in law in holding that eviction from that right in the sense required for a valid warrandice claim had been made out".

 

6. In support of his grounds of appeal Counsel for the defenders and appellants commenced his submissions by accepting Professor Halliday's statement as to the meaning of warrandice which is set out in paragraph 4.29 on his work Conveyancing Law and Practice in Scotland Vol 1 (2nd Ed): "Warrandice in its absolute form is a personal obligation by the granter of the deed that the deed and the right thereby granted shall be effectual to the grantee and if the grantee suffers loss or damage by reason of reduction of the deed, or eviction, total or partial from any property conveyed by the deed of the granter or his predecessor in title, or any defect in the title of the granter to the property conveyed by the deed, the granter will make good that loss or damage". Counsel further accepted, as set out by the Sheriff in paragraph 37 of his Note that eviction within the context of warrandice has a meaning that goes beyond actual physical removal. This had been made clear in the case of Clark v Lindale Homes Ltd 1994 SC 210, a case in which the pursuers' flat had been erected partially on ground to which the builders, and granters of the relevant Disposition, had no title. This came to light when the pursuer sold the flat. The defect in title was remedied and the flat resold. The pursuer then raised the action, contending that she had in effect suffered eviction from part of the subjects although the third party having competing title to the subjects had not taken any action to enforce his rights. The action was dismissed upon the basis that although eviction did not mean physical removal it did involve the emergence of a real or threatened burden of the property which had to come from a competing title holder, that title itself being beyond doubt, and as there were no averments indicative of loss arising from such a challenge the action was irrelevant. Counsel observed that the present case differed from Clark. In Clark there was an undoubted defect in title but no factual challenge from the person with competing rights. Here, whilst there might be said to be a factual challenge there was no defect in title. Thus whilst the Sheriff had held that there had been a challenge by a neighbouring proprietor the real question was whether any such challenge arose as a matter of right. Counsel observed, particularly having regard to the observations by Lord President Hope at page 216B in Clark that there were three ways in which the present pursuers could found a case based on breach of warrandice. These were (1) the existence of a judicial decree or determination that a competing title "trumped" theirs; (2) by a judicial admission by the defenders that there was a defect in the pursuers' title whereby Ms Mason was entitled to exclude them from using the servitude right of access or (3) by the pursuers demonstrating that Ms Mason's right to prevent them using the servitude right of access was unquestionable, beyond doubt, or such that it would inevitably prevail. He submitted that the pursuers did not come close to meeting any of these requirements and contended that it was open to the pursuers to challenge Ms Mason by reference to paragraphs 15(d) and (e) of the Deed of Conditions.

 

7. Counsel proceeded to examine the significance of the position of the proprietor of a servient tenement. A servient proprietor was entitled to carry out all physical acts which did not interfere with the proper exercise of a positive servitude (see Cusine and Paisley, Servitudes and Rights of Way paragraph 12.21). Ms Mason could use her parking space transiently, or park a motor cycle on it, or do anything else which did not interfere with the pursuers' right of access. For the pursuers to demonstrate simply that they required to cross Ms Mason's space to gain access to their own fell short of showing that anything Ms Mason did to prevent that was done "as of right". Counsel referred to Mutch v Mavisbank Properties Ltd 2002 SLT Sheriff Court 91 a case decided by me as Sheriff Principal of Glasgow and Strathkelvin, wherein I stressed (at page 94D) the need for there to be "an unquestionable right" of a neighbouring proprietor to object to the use of a right of access in order to give rise for a claim for breach of warrandice. Warrandice was, in its very nature, an obligation to indemnify when such an "unquestionable challenge" arose. It may be that there was a substantial argument between the pursuers and Ms Mason, but what was it that would favour her? Even if the pursuers could show that Ms Manson would probably succeed against them that would not do. They had to show that it was beyond question that she would succeed.

 

8. The Sheriff, counsel contended, had fallen into error in failing to appreciate that aspect of the case. It was the opposite to the situation in Clark, where there was a defect in title but no challenge by the pursuer having an undeniable right. In paragraph 38 of his Note the Sheriff made the following observations: "Were actual physical eviction to be required, and I think it is not, then it would occur when Ms Mason takes steps to exercise her right resulting in the pursuers being unable to use their property. She can do this by physically preventing the pursuers from using their car parking space. She has for a period of time already done so. At the very least her acquiescence, and I think it was more than that, the bollard protecting car parking space 43 was locked against the pursuers. For that period of time there was a physical restriction against the pursuers using their own space. It was no doubt the realisation that doing so provided the pursuers with an argument, that it was removed on the commencement of these proceedings. Even with the padlock removed one cannot but observe that it could be replaced at any time. The threat from the proprietor of 23/4 Manor Place remains alive". These observations show that the Sheriff had focussed attention on what Ms Mason had done but had not addressed the issue of whether she had any right to do it. Examination of that issue showed that the pursuers could not demonstrate an undeniable right on the part of Ms Mason and in consequence their claim for breach of warrandice fell to be dismissed.

 

9. Counsel for the pursuers and respondents presented a helpful set of outline written submissions which are, in point of fact, in some detail. It is convenient to summarise these. He commenced by referring to Professor Halliday's definition of warrandice and founded on the words that "the right thereby granted shall be effectual to the grantee". The substance of the pursuers' contention was that the servitude right of access granted to them by the defenders was ineffectual because the right could not be exercised. On the subject of "eviction" it was accepted that the case fell to be contrasted with the typical breach of warrandice situation where a competing title holder asserted a better title to part of the property which was accepted as unquestionable or which prevailed in a judicial contest. In the present situation there was no judicial eviction in the narrow sense. The dispute lay in whether Ms Mason's legitimate exercise of her right to use space 43 and the consequent inability of the pursuers to use their space amounted to an eviction. Counsel referred to Palmer v Beck 1993 SLT 485 and to the observations of Lord Kirkwood in that case at page 488 to the effect that what constitutes a threat of eviction giving rise to a claim for breach of warrandice must depend on the circumstances of each individual case. Counsel further made reference to a number of passages in the opinion of Lord President Hope in Clark v Lindale Homes Ltd. At page 216B-D his Lordship observed that: "Eviction occurs when there is a loss to the buyer due to the fact that someone else has a competing title which is beyond doubt. This is a fact which can be demonstrated judicially, or by the seller's action admitting that there is such a defect, or by proof that the defect is unquestionable. On this approach it does not seem to me to matter, at least so far as the third alternative is concerned, whether the party in right of the competing title has yet taken steps to challenge the title which has been acquired by the purchaser. A defect in title may be so plain as to be unquestionable, and in the case of heritable property that can be demonstrated by reference to the public register". In this case the pursuers sought to rely upon the unquestionable defect in their title as a result of the right of Ms Mason by virtue of her competing title to use her space and thereby prevent access being taken over it. The pursuers have found it necessary to abandon part of their property, not because of a demand on it as such but because they could not use someone else's property to get to it. They had been faced with what was in effect a negative demand: "I will continue to use my property in such a way that you are prevented from using your property" rather than the usual positive: "I assert title to or a right over your property".

 

10. Further passages in the Opinion of Lord President Hope, in the Opinion of Lord Morrison in Clark, and the decision in Mutch v Mavisbank Properties Ltd made it clear that loss will be recoverable under a breach of warrandice claim if there is a defect in title which is unquestionable and which will provide a ground for actual eviction. The novelty in the present situation was that the pursuers were not faced with a third party claiming rights over part of their property leading to possible eviction; rather the converse was true. The third party was quite legitimately insisting on her own rights, derived from the same source but anterior to the pursuers in such a way that the pursuers were disabled from exercising their rights. The titles of both parties could not co-exist. Ms Mason could not exercise her property rights to use space 43 and, at the same time, allow the pursers to exercise their servitude right of access. Her property rights, derived from the defenders, were in conflict with, or in other words a challenge to, the pursuers. The practical consequence of this meant that there was an encumbrance or burden on the pursuers' property which meant that they had been evicted in a practical sense of the word from part of their property.

 

11. In turning to the nature of the servitude right itself, having regard to the Deed of Conditions and in particular Clauses 15(d) and 15(e) it was fair to say that, on the face of it, Ms Mason's title was restricted in the sense that her right of ownership is subject to at least one servitude right of access. But it could not have been envisaged that driving over a designated parking space would have to be done as a matter of course in order to gain access to another parking space. In other words it must have been unintended, both from a practical and a legal point of view, to deliberately give rise to a situation whereby a right of access and a right of co-ownership would invariably conflict. In both legal and practical terms the two could not co-exist.

 

12. Whilst the pursuers had been conveyed a servitude right of access it was not a right at all if it could not be exercised. The pursuers' submission proceeded to examine the respective rights and obligations of a dominant and servient proprietor in the context of a servitude such as the present. At the forefront the servient proprietor had the right to enjoy ownership of his property in full, subject to any reasonable limitations imposed by the existence of the servitude. The obligation on the dominant proprietor was to exercise the servitude civiliter, that is to say in a manner which is reasonable causing the minimum practical disturbance or inconvenience to the owner of the servient tenement. When one came to examine the practicalities of the situation, as the Sheriff had done, the only practical solution which enabled the pursuers to gain access to their parking space was a prohibition on the use of space 43 by all individuals at all times. Such a restriction would effectively amount to an unreasonable deprivation of the rights of ownership conferred by Ms Mason's title. It was accordingly clear that the only legal means by which the pursuers' right of access could be enforced was wholly unrealistic. Given that the whole point of the exercise was to determine whether, even in the absence of actual eviction "there was provided the ground for actual eviction and it is unquestionable" in any realistic and practical sense that test was satisfied. It was the test which had been applied by the Sheriff. He was entitled to make the second finding-in-fact and law: "Fenella Mason has a competing title, granted to her by the defenders prior to the pursuers' title, which entitles her to use her property and de facto to prevent third parties including the pursuers, encroaching on her property".

 

13. The assertion in the Note of Appeal that the Sheriff appeared to have erroneously considered that the mere existence of a de facto interference with some right granted to the pursuers resulted in the pursuers' eviction was misconceived. The Sheriff had reached a view on physical restriction but had expressly recognised that eviction within the context of breach of warrandice had a meaning that went beyond actual physical removal. He had correctly recognised that "the problem arises out of the competition between Ms Mason's propriety rights in relation to space 43 and the effect that has on the pursuers exercising their rights" and concluded that from the outset there had been eviction because Ms Mason has the right to use her property including the parking space.

 

14. In response to these submissions Counsel for the defenders maintained that the pursuers' position was that the Court could decide, in the absence of Ms Mason as a party, that it was unquestionably the case that the servitude right granted to the pursuers would be held to be unenforceable because the existence of it was repugnant to Ms Mason's very right of ownership in the ground. He contended that the Court would plainly not take such a view and again stressed that it was open to Ms Mason as servient proprietor to use her property for any purposes not inconsistent with the rights of servitude. "Repugnancy" required total exclusion of all rights of the servient proprietor for all purposes.

 

 

DECISION

 

15. As the pursuers and respondents accept this is in some respects an unusual type of warrandice claim. It is not a situation involving the conveying of an undeniably defective title, or a simple competition of titles. It is accordingly distinguishable from the cases of Clark v Lindale Homes and Palmer v Beck. What it does involve - as the Note of Appeal correctly identifies - is an allegation by the pursuers of the existence of a prior title from which rights flow in competition with the right conveyed to them. They claim that the consequence to them constitutes "eviction" in the wider sense in which that term is used. It does not appear to be disputed that a claim for damages for breach of warrandice can arise in such a situation. There seems to be no reason in principle why a purchaser of property with an accompanying right of access should not have a warrandice claim if it turns out that the right does not exist. The pursuers' position might be said to be that if there is such a right here, it is useless.

 

16. The defenders answer to the pursuers' case is to point to the Deed of Conditions, contending that Ms Mason's title is effectively burdened by the servitude which the pursuers seek to exercise. That contention is supported by the subsidiary argument that it is open to Ms Mason to use her property in any way which does not hinder the pursuers' right of access. As Counsel for the defenders put it "the servitude right is not repugnant to the right of ownership". If one accepted that view, he maintained the pursuers must fail because there was no "competing right which must inevitably prevail".

 

17. In my judgment that argument ignores the reality of the situation and fails to distinguish between a right of ownership, and rights which flow from ownership. The reality of the situation is that the pursuers have purchased a car parking space which cannot be used as such so long as Ms Mason or anyone who succeeds her in title, uses spaces 43 as a car parking space. The right of Ms Mason to use her space flows from title. It matters not that she or her successors may use this space for other purposes, or only transiently. If it is used for the purpose for which it is intended for one minute of the day, and that happens to be the moment when the pursuers themselves wish to park, the pursuers' right of access is worthless.

 

18. Whether or not the pursuers' right of access is worthless is predominantly a question of fact, and it is inevitable that the Sheriff had to consider in the first instance what physical steps Ms Mason had taken and what the effect of these were on the pursuers' servitude. But he did not, in my view, decide the case on the basis of what Ms Mason had done as opposed to what she was entitled to do because he acknowledged that "the problem arises out of the competition between Ms Mason's proprietary rights in relation to space 43 and the effect that has on the pursuers exercising their rights". Identification of that problem led the Sheriff to make find-in-fact and law 2 which is that: "Fenella Mason has a competing title, granted to her by the defenders prior to the pursuers' title, which entitles her to use her property and de facto to prevent third parties, including the pursuers encroaching upon her property". Whilst it might have been more appropriate to have specifically found that Ms Mason's use of her property effectively prohibited the pursuers from gaining access to theirs, that finding was in my judgment fundamentally correct.

 

19. As to the effect of the Deed of Conditions, notwithstanding the terms of Clauses 15(d) and (e) I fail to see how the defenders could create a servitude right of access over a car parking space to which title had been transferred if that right meant that the space could not be used for its predominant, and perhaps any, purpose. I accept the submission on behalf of the pursuers that imposition of the servitude upon Ms Mason would amount to eviction and would be regarded as unenforceable. In consequence it appears to me that any competition with Ms Mason and her successors in an attempt to enforce their servitude right the pursuers would be bound to fail.

 

20. For these reasons I consider that the pursuers were entitled to succeed on the basis identified by the Sheriff and the defenders' appeal accordingly fails.

 

(signed) EFB