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Scottish Court of Session Decisions
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Cite as:  ScotCS 229
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OUTER HOUSE, COURT OF SESSION
OPINION OF LORD JOHNSTON
in the cause
INVERNESS SEAFIELD DEVELOPMENT COMPANY LIMITED
D. C. S. MACKINTOSH
Pursuers: Howie; Paull & Williamsons
Defender: R. Thomson; Shepherd & Wedderburn, W.S.
30 September 1999
In this action the pursuers seek a decree of adjudication in respect of a parcel of land forming one of three sets of subjects embraced by Missives between the pursuers' predecessor in title and the defender dated 28 April and 5 May 1992. The case called before me on procedure roll in respect of preliminary pleas instructed by both parties, the pursuers seeking dismissal of the defences and decree de plano, the defender seeking dismissal of the action on grounds of irrelevancy with a subsidiary position that there should be a limited proof.
The scheme of the principal Missive dated 28 April 1992 related, as I have indicated, to three parcels of land whereby the first parcel, known as "the first subjects", was being purchased out-right with the purchasers taking options on the two other parcels, namely "the second subjects" and "the third subjects". Attached to the Missive was a plan delineating the first subjects in red, the second subjects in green and the third subjects in blue.
The pursuers' title to sue depends upon an assignation taken by them in their favour from the purchasers and no matter turns on this point.
On 16 October 1997 the pursuers' solicitors intimated by letter to the defender their exercise of the option accorded to it in the clause of the Missive relevant to the option concerned with the third subjects, to the extent of an area of 12.87 hectares of the whole 50 acres ("the option area"). The present dispute arises out the exercise of that option and arises in the following way.
As will be observed from the plan the third subjects marked blue have a natural lateral divide which I was informed was partly a ditch and partly a line of trees and the area in respect of which the option was sought to be exercised was the upper or more northern part above that delineating point. On the defender's averments while the whole parcel of the third subjects was still in his ownership access was gained by him for agricultural purposes by a gate adjoining what I would describe as the main road in the north-east corner of the area. However, as can be seen from the plan the whole subjects were divided by a road or track running north-south down to Ashton Farm and it is averred that access could also be gained to the option area by proceeding down that track and then turning left along another track to a gate at the edge of the field, very close to the delineating point. It was accepted that the solum of the Ashton Farm track so far as required for that access was not conveyed at any time to the purchasers and remains the property of the defender. However, the ensuing track leading to the field is within the option area. Unless the defender can use that access to the remaining part of the third subjects which still belongs to him ("the retained area") that area will become land-locked, since the main road access is obviously denied to him by reason of the apportioned parcel being no longer his property.
In that state of affairs the defender contends that the effect of exercising the option and isolating the retained area, is that a servitude right of access granted, or at least obtained by reservation in the original contract by implication, in favour of the defender along the track leading from the Ashton Farm track to the retained area comes into operation.
Consequent upon the exercise of the option, when the pursuers demanded the necessary Disposition to complete the conveyance the response of the defender, through his agents, was to submit a Disposition which expressly grants him the servitude right he contends for in respect of the relevant track to the retained area. He does not, of course, need it for the relevant part of the Ashton Farm road, which in any event was not included in the conveyance. The entitlement to state that right in the Disposition, it is claimed, is his right arising from the original contract. By exerting it in the Disposition he is accordingly doing no more than stating the existence of that right and the pursuers are not entitled to demand conveyance of the land without recognition of that particular right. Faced with an action of adjudication, accordingly, the defender resists that on the basis that he is not in breach of contract justifying such a remedy, by reason of his entitlement to the access in question. The pursuers' position is that in terms of the contract they are entitled to a disposition of the ground comprising the option area without reference to any servitude right, whatever may the ultimate position with regard to the existence of such a right.
While some criticism was made by counsel for the pursuers in respect of some of the defender's pleadings, in substance, the issue is as I have set it out and requires to be determined as much by general principles as on the particular facts of this case.
Mr Thomson, who appeared for the defender, opened the debate upon the general proposition that normally servitude rights such as access can only be granted by express grant or, if necessary, by express reservation since a grantor "cannot derogate from his grant". There was, however, an exception to this proposition in relation to access rights in the case of servitudes of necessity without which either the property being disposed or adjacent property not being disponed would be inaccessible or useless. He referred to Bell's Principles at paragraph 992. He carried the reference to authority forward by reference to Murray v Medley 1973 S.L.T.(Sh.Ct.) 75 and an older authority namely Union Heritable Securities Co Ltd v Mathie 1886 13 R. 670. He submitted that when such an implication was being effected it became part of the agreement between the contracting parties to the conveyance and it was thus legitimate to include it in any subsequent conveyance relating to the same property so as to make that implied right express. He referred to Professor Halliday's Conveyancing, volume 2 chapter 35 at page 373. This position, he submitted, was supported by the case of McLaren v The Glasgow Union Railway Co 5 R. 1042 which case, he submitted, would have had the result of an implied right being incorporated expressly in the subsequent conveyance if that implied right had been established in the particular situation. The essence of the position was necessity rather than merely reasonable enjoyment of the property in question and a clearer case as such could not be found than the present where the retained area part was landlocked and was inaccessible to the defender save along the track over which he claims the right of access. If a question arose, it was submitted, given the quite legitimate absence of admissions from the pursuers on the pleading as to the factual state on the ground in relation to historical access case, as to the issue of necessity, such should be submitted to proof, albeit under deletion of the pursuers' averments at 13A-B and 15A-B which would remove from any further inquiry or argument the issues to whether or not such a servitude, if acquired, was part of the agreement between the parties.
Mr Howie, appearing for the pursuers, submitted that if the servitude right contended for by the defender was valid it had to be found within the walls of the original contract which dictated the rights and obligations of both parties (Houldsworth v Gordon Cumming 1910 S.C.(H.L.) 49). With regard to implications of terms into contracts generally he referred to Irwin v Liverpool City Council 1977 A.C. 239 and particularly in the speech of Lord Wilberforce at page 253 and Rockcliffe Estates plc v Co-operative Wholesale Society 1994 S.L.T. 592 which indicate he submitted, the extent, or rather the limited extent, to which a court would imply terms into a contract with regard to reasonable conduct. In any event, to imply a term into a contract other than by operation of law, or by reference to custom and usage, required it to be established that the term in question on any view would have been in the contract if the parties had contemplated it, in other words to rectify a mutual omission. In the present case, he submitted, by reference to the terms of the contract there were a number of clauses which indicated that, the parties had considered the issue of servitude (clause 1.1.4) and access (clause 7.3), and further, that the general stipulation that the land certificate to be issued in relation to the third part of the option to be exercised was to disclose no entry, deed or diligence prejudicial to the pursuers' interest (clause 24.3.3 (c.f. 24.2.3)). There was, therefore, he submitted no omission in the present case but rather deliberate intention not to deal with the issue of access. He went on to submit that in any event the nature of the access sought was prejudicial to his client's interests and something that he should not be bound to accept within the terms of the original contract which simply stipulated for an option to be exercised and the land to be distributed. The matter could not be controlled by any question of implied terms.
Before seeking to determine this issue I will observe that the position adopted on behalf of the pursuers would have the result, if decree of adjudication is granted as sought, of leaving the issue of the servitude still to be determined presumably by some further action for declarator at the instance of the defender if no agreement can be reached. I consider this to be a most unsatisfactory state of affairs to be avoided if possible. Secondly, also by way of initial observation, Mr Howie sought on one view to construe the defender's pleadings with regard to the issue of access as not making it clear that the access over which the right was being contended had ever been used at all, but I do not accept that construction of the pleading. I would construe the defender's pleadings at page 18 to the effect that, while the main access that he had used was from the main road, the other access existed and had been used and was now obviously the only one which could be used physically, or in any event, on a far less burdensome basis to that of allowing the defender to cross the parcel of land which was the subject of the option.
In my opinion, it is clear from the authorities that a servitude of access to land being conveyed or retained by the disponer can be obtained either by implied grant or reservation, if the test of necessity is met in respect of the land being conveyed away or not as the case may be. Although, obviously, implied grant differs from implied reservation, either option is, in my opinion, available in appropriate circumstances. Secondly, in my opinion, if such a right has been created, whether by reservation or grant, it must be deemed to be incorporated into the original contract between the parties and it cannot be free-standing. Thirdly, I accept the proposition that if such a right is incorporated into the original contract by implication the party benefited thereby has the right, in any subsequent conveyance, to make it express. I accept that Professor Halliday merely describes such an exercise as "wise" but it seems to me that if the right exists then it is capable of being expressly stated anywhere where it is relevant and such would obviously be relevant in a subsequent conveyance such as here.
In the circumstances it seems to me that the matter has to be determined by a construction of the original contract to see whether, as Mr Howie contends, such an implication is excluded or, alternatively, whether the contract is consistent with the existence of such an implication thus rendering it at least capable of it being included.
In my opinion there are a number of factors that favour the defender's position.
In the first place, and most importantly, the option clause in the Missive in relation to the third subjects, (clause 9) expressly extends it to all or "any part of" the third subjects. Thus partial disposal or apportionment was contemplated without any further specification. This seems to me to be reinforced, secondly, by the fact that it would have been perfectly possible to include the solum of the Ashton Farm track so far as belonging to the defender within the original contract whether as part of the first subjects or to be included in any subsequent option. By not so doing this suggests that the parties contemplated that the defender would use it for access at least in certain circumstances. Otherwise it would have no further purpose. Furthermore, the need for that access must only arise if there is going to be a partial disposition of the third subjects since if the whole of the parcel is disponed away the defender has no further use for the Ashton Farm track. Thus, I repeat, the parties must have contemplated a situation where he would have some use for it, and that could only arise as a means of gaining access to a part of the land no longer accessible by the other access across the field. That must in turn include the use of the other part of the track leading to the unapportioned part being a continuation of the access from the Ashton Farm road. A proof is therefore not necessary.
The final question, therefore, is whether or not the original contract excludes the conclusion that the servitude right can be implied by reservation.
In my opinion it does not. The references, in the various clauses, to servitude are rights conceived in favour of the purchasers (pursuers). It is noteworthy that in both clauses 24.2.3 and 24.3.3 there is an exception as follows "other than such as created by or against the purchaser". It is at least arguable that by exercising the option on a partial basis the pursuers have highlighted the need for access to the other part and upon one view of the matter could have been said to have created the burden. I would not go so far as asserting that as a matter of law because, in my view, the burden was created by implication when the contract was first completed in the sense that partial severance was contemplated without express reference to access to the remaining land comprising the remainder of the parcel, if such was effected. Viewing the matter objectively, it seems to me that if the parties had properly considered the consequences of a partial severance, such as has happened, they would have stipulated for protection of the defender's access to the remaining part which failure to do can be rectified by the implication by reservation of the right, a classic example of where implication of a term in a contract is required.
I do not attach any weight to the argument by counsel for the pursuers that the purchasers would not have accepted such an access because it was burdensome. It seems to me that they could not have reasonably resisted, save by withdrawing from the contract, a demand from the defender for a normal right of access, albeit to be used civiliter. I understand that in the proposed Disposition the access is said to be general in the sense of both vehicular and pedestrian, and expressly including agricultural use. Counsel is quite correct, in my opinion, to submit that this is a wide right permitting further uses than mere agricultural use but that seems to me to be the normal right that would attach to any access to any particular piece of land whether granted impliedly or expressly. Restrictions may be imposed expressly but if one is looking purely at the generality of an implied right of general access. I consider the law does not permit that any specific restrictions should be imposed save if necessary with regard to the basic implication. Such is not the case here.
For these reasons I consider that in proffering the Disposition in the terms he has, including the express reference to the servitude, the defender is acting within his legitimate position and in accordance within his rights under the original contract and is not therefore in breach of contract. The corollary of this is that, in my opinion, the pursuers have failed to instruct a relevant case of breach of contract which could entitle them to the remedy of adjudication. That is as far as I need to go for the disposal of this action since I would not regard it as appropriate within its framework to make any express finding or declaration that the servitude exists.
In these circumstances, since the remedy of adjudication depends upon relevant averments of breach of contract by the alleged defaulting party, I consider such has not been made out. Accordingly, I shall sustain the defender's first plea-in-law to the relevancy of the action and dismiss it.