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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Braes v The Keeper of the Registers of Scotland [2009] ScotCS CSOH_176 (30 December 2009)
URL: http://www.bailii.org/scot/cases/ScotCS/2009/2009CSOH176.html
Cite as: 2010 SCLR 202, [2009] ScotCS CSOH_176, [2009] CSOH 176, 2010 SLT 689, 2010 GWD 15-293

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OUTER HOUSE, COURT OF SESSION

[2009] CSOH 176

A764/06

OPINION OF M.G. THOMSON QC

(Sitting as Temporary Judge)

in the cause

JAMES BRAES

Pursuer;

against

THE KEEPER OF THE REGISTERS OF SCOTLAND

Defender:

­­­­­­­­­­­­­­­­­________________

Pursuer: Dewar QC; Gavin MacColl; Russel & Aitken LLP

Defender: Johnston QC; Sheldon; Office of the Solicitor to the Scottish Executive

30 December 2009

[1] In this action the pursuer, an individual, seeks various remedies against the Keeper of the Registers of Scotland ("the Keeper") arising from the alleged failure of the latter to enter details of an alleged right of pre-emption in the burdens section of title sheet FFE12758 in the Land Register of Scotland ("the Register"). The pursuer avers three bases for the remedies which he seeks. First, he maintains that correspondence between solicitors on his behalf and the Keeper concerning his claim contains an unequivocal, enforceable promise by the Keeper to indemnify him in respect of the losses which he claims to have suffered. Secondly, the pursuer claims that the Keeper is personally barred from asserting; (a) that the right of pre-emption was not a real right which should have been entered in the Register, and (b) that he is not liable to indemnify the pursuer for his losses and expenses. Thirdly, and alternatively, the pursuer avers that the Keeper owed him a common law duty of care in the performance of his duties under the Land Registration (Scotland) Act 1979 ("the 1979 Act"), which duty he breached, thereby entitling the pursuer to a remedy at common law. For reasons that will become apparent, the pursuer does not seek indemnification under section 12 of the 1979 Act.

[2] The case came before me on the Procedure Roll when the defender's plea of no title to sue and his general and specific relevancy pleas were debated. The pursuer sought a Proof Before Answer.

The Background Facts

[3] The background facts emerge from the pursuer's pleadings which incorporate by reference the terms of a number of significant documents. The starting point is a disposition ("the 1982 disposition") by the pursuer in favour of the National Coal Board ("the NCB") of subjects extending to 13.81 acres ("Parcel A"). In the 1982 disposition the pursuer is designed as "James Braes, Farmer, residing at Bordie Farm, Kincardine-on-Forth, heritable proprietor of the subjects hereinafter disponed". Parcel A is described as:

"ALL and WHOLE that area or piece of ground extending to [13.81 acres] or thereby forming part of the farm and lands of Crockmuirhall in the Parish of Tulliallan and County of Fife being the subjects shown delineated and outlined in red on the plan thereof annexed and signed as relative hereto: Together with......: Which subjects hereby disponed form part and portion of ALL and WHOLE the said farm and lands of Crockmuirhall in the said Parish and County being the subjects (under exceptions) described in and shown delineated and outlined in red on the plan thereof annexed and signed as relative to Disposition by the Trustees of James Todd Russell and the Trustee of Mrs. Helena White or Russell in favour of Mrs Margaret Helen Monteith Russell or Fisher [dated and recorded in April 1976]".

The pursuer had obtained title inter alia to Parcel A from the said Mrs Margaret Fisher by disposition ("the 1976 disposition") dated the day after that disposition in her favour.

[4] The 1982 disposition sets out various existing burdens and then sets out a new one:

"AND ALSO WITH AND UNDER the following right of pre-emption which is hereby created a real lien and burden upon and affecting the subjects hereinbefore disponed and is to be validly set out or referred to in all future deeds and documents of or relating to the said subjects or any part thereof under pain of nullity, namely: - my said disponees are prohibited from selling or otherwise disposing of the subjects hereinbefore disponed or any part of the said subjects (other than to Coal Industry Estates Limited or any other subsidiary company of my said disponees or to any body possessing powers of compulsory acquisition) without first having offered to sell the said subjects or said part of the said subjects to me or my first successor as proprietor of Bordie Farm, Kincardine, at a price equal to the current open market value of the subjects or part thereof as determined, failing agreement, by an arbiter appointed,.....declaring however that the said offer to sell shall only remain open for acceptance within twenty-one days of me or my foresaid receiving the same and will be subject to the following further conditions: (One) I or my successor as aforesaid shall accept the said subjects or such part thereof in the condition in which they may then be and will discharge my said disponees of any claim competent to me under statute or otherwise in respect of or as a result of the occupation and use of the said subjects or part thereof by my said disponees for the tipping of colliery waste material and/or other operations and any activities ancillary thereto and their restoration by my said disponees and the contractors, agents and representatives and I or my successor as aforesaid shall undertake not to make any claims for compensation under statute or otherwise arising in any way in respect of or as a result of such occupation and use of the said subjects or part thereof and shall free, relieve and indemnify my said disponees from all claims for compensation which may arise under statute or otherwise in any way in respect of or as a result of such occupation and use of the said subjects;.....(Three) The whole minerals will be reserved to my said disponees with power to work the same and adjoining minerals and to lower the surface without any responsibility for damage to the surface or buildings erected or to be erected thereon or any loss whatsoever subject however to the provisions of the Coal Mining (Subsidence) Act 1957 all as more fully narrated in the Mineral Reservation Clause set out in the Schedule annexed and signed as relative hereto, which clause will be incorporated in any conveyance by my said disponees in favour of me or my foresaids and will be created a real burden in favour of the minerals and any adjoining lands belonging to my said disponees; further declaring that the said right of pre-emption hereby created shall be available on one occasion only:".

[5] The mineral reservation clause was duly attached and contained detailed provisions. The essential part of the clause was in the following terms:

"THERE ARE EXCEPTED from said area of ground the whole mines, metals and minerals therein so far as not belonging to us with the whole rights, powers, privileges and pertinents effeiring thereto; AND THERE ARE RESERVED the whole mines, metals and minerals (including without prejudice to the said generality the whole coal, shale, blaes, fireclay and other clay, ironstone, freestone, limestone, slate, sand, gravel, stone and all petroleum) now or hereafter vested in or belonging to us or in which we have any interest within the said area of ground (all hereinafter referred to as "the minerals") with full power to us by ourselves and/or licensees, tenants, assignees, or others having our authority, to do everything necessary for the purposes of searching for, winning, working, cleaning, calcining, treating, manufacturing, storing, carrying away and disposing of the same and also minerals from adjoining or neighbouring lands (including without prejudice to said generality all rights competent to us under Section 15 of the Coal Act 1938) but so as not to enter upon the surface of the said area of ground: AND with power to us and our foresaids to lower the surface of the said area of ground and any building structure or works now or hereafter erected constructed or placed thereon or therein by the working of the minerals or of adjoining or neighbouring minerals, and that by any system or systems of working whether or not involving total excavation:...."

[6] In terms of the 1976 disposition Mrs Margaret Fisher conveyed to "James Braes, Farmer, Bordie Farm, Kincardine-on-Forth", "ALL and WHOLE that part of the farm and lands of Crockmuirhall in the Parish of Tulliallan and County of Fife described in and shown delineated and outlined in red on the plan thereof annexed and signed as relative to Disposition by the Trustees of James Todd Russell and the Trustees of Mrs Helena White or Russell in my favour [dated and recorded in April 1976]". This was the same plan and the same disposition as were later referred to in the 1982 disposition. The 1976 disposition contains no stated area of the subjects being conveyed. It is not apparent from the terms of the 1976 and 1982 dispositions that the subjects conveyed in 1982 by the pursuer were less than those conveyed to him in 1976, but that is what the pursuer avers. I shall accordingly refer to the balance of the land conveyed to the pursuer in 1976 remaining after the disposition granted by him in 1982 as "Parcel B".

[7] The pursuer avers that in 1982 he and his parents were in partnership together in the firm of H & J Braes ("the partnership"). At that time the partnership was the tenant of "other lands at Bordie Farm" ("Parcel C"). Parcel C was disponed to the partnership by the NCB in January 1986. That disposition ("the 1986 disposition") designed the partnership as "Farmers, carrying on business at Bordie Farm, Kincardine-on-Forth" and the pursuer as "Farmer, residing at Caverns Farm, Kincardine-on-Forth" and conveyed to the partners of the partnership as trustees therefor:

"ALL and WHOLE the lands and farm of Bordie in the Parish of Culross, the Dunfermline District and the Fife Region and in the County of Fife extending to [156.05 acres] or thereby including areas occupied by buildings and roads all as comprising the two areas of ground delineated and outlined in red on the plan annexed and executed as relative hereto;".

There is no plan attached to the copy of the 1986 disposition produced to the court.

[8] The pursuer avers that his parents both died prior to 2004 and that on their death he inherited Parcel C, so that by that time he owned both Parcels B and C. In addition, the pursuer avers that as at 1982 his father owned a further field ("Parcel D") located between Parcels A and B and Parcel C. By 2004 the pursuer had similarly inherited Parcel D. The 1976, 1982 and 1986 dispositions are all incorporated into the pursuer's pleadings.

[9] In 1996 the Scottish Coal Company Limited ("SCCL") executed a notice of title which narrated that in terms of a statutory Restructuring Scheme dated 29 December 1994 SCCL had acquired right to Parcel A. Thereafter SCCL conveyed Parcel A to the Scottish Coal (Deep Mine) Company Limited ("SCDM") by disposition dated 10 May 1998. Neither the transfer of Parcel A to SCCL nor the transfer to SCDM triggered the pre-emption clause. Both transfers were within the "subsidiary company" exception in the 1982 disposition. The pursuer avers that the notice of title led to the first registration of Parcel A in the Register under title number FFE12758. No right of pre-emption was entered in the burdens section of that title sheet. The Land Certificate for title number FFE12758 similarly did not disclose the existence of the claimed right of pre-emption.

[10] The pursuer avers that Parcel A was known as "Bordie Quarry" and by 1982 consisted of a substantial void in the ground. Parcel A had been acquired by the NCB to be used as a site for depositing the bi-products of mining operations and, in particular, colliery waste material from Longannet Mine. This general purpose was disclosed in the 1982 disposition. After the conveyance in 1982 the NCB and its successors proceeded to deposit a significant amount of colliery waste within the quarry void in Parcel A. The pursuer avers that that waste included inter alia, coal, aggregate and black blaes. He also avers that "the waste was of such a nature and volume that it acceded to the surface of [Parcel A] within the quarry void."

[11] In 2004 Parcel A was sold by SCDM to M & D Russell (Haulage) Limited ("M & DRH"). The pursuer avers that because of the omission of the right of pre-emption from title sheet FFE12758, the pre-emption was not triggered and the sale to M &DRH took place without Parcel A first having been offered for sale to the pursuer. The pursuer further avers that M & DRH proceeded to excavate and sell coal, aggregate and black blaes from Parcel A. The pursuer was aware that Parcel A was being advertised for sale by M & DRH but took no action in the belief that his right of pre-emption was protected and that Parcel A would be offered to him in terms thereof after the advertising process had achieved a successful bidder. There is no suggestion in the pursuer's averments of any bad faith on the part of the purchaser from M & DRH.

[12] The pursuer avers that when he became aware that Parcel A had been sold to M & DRH in the course of 2004 he instructed his solicitors to raise the issue of the omission of the right of pre-emption from title sheet FFE12758 with the Keeper. After some correspondence his solicitors received a letter dated 30 September 2004 from the Keeper's office. That letter stated:

"I refer to your letter of 17 September.

I am very sorry that the Keeper omitted the right of pre-emption from FFE12758. The right does not apply to disposals to Coal Industry Estates Limited or other subsidiary companies of the National Coal Board, but does apply to a disposal to any other party. The Keeper should therefore have shown the right of pre-emption in the Burdens Section of FFE12758 until he had the appropriate evidence to remove it.

In terms of Section 12 (1)(d) of the Land Registration (Scotland) Act 1979, your client is entitled to be indemnified by the Keeper for any loss he has suffered as a result of an error or omission in a Land Certificate. Any claim should be properly quantified and vouched for.

The subjects have now been purchased by M & D Russell (Haulage) Limited. In terms of Section 9 (3) of the 1979 Act, the Keeper can only rectify an inaccuracy in the register in limited circumstances if such rectification would prejudice a proprietor in possession. Section 9 (3)(ii) permits rectification where there is agreement by the parties concerned. If you wish, I will write to the agents for M & D Russell (Haulage) Limited to ask if they will permit the addition of the right of pre-emption in the Burdens Section of FFE12758. Of course, even if they agree, the right will not take affect until M & D Russell (Haulage) Limited come to dispose of the subjects."

[13] Correspondence between the Keeper and the pursuer's solicitors continued thereafter and the pursuer's solicitors received a letter dated 3 August 2005 from the Keeper's office in the following terms:

"I refer to your letter of 20 July 2005 and previous correspondence.

I am still awaiting a response from Messrs Jeffrey Aitken. I will, however, confirm that the Keeper will indemnify your client for any loss directly attributable to the omission of the right of pre-emption from the title sheet. The Keeper will also meet your reasonable legal costs to quantify any such loss. Should a determination of quantum be required in this case, I advise that the Keeper may instruct the District Valuer to carry out a valuation survey on his behalf.

Prior to any valuation survey the Keeper will expect an affidavit from your client to confirm that he did intend to exercise the right of pre-emption at the time of the last sale in order to work the minerals within the quarry. We would also require evidence of how he intended to work the minerals and whether the current proprietors are doing so. We note from the last sale particulars that the subjects of sale were described as 'a former quarry...now partially filled with colliery spoil.' We also note that on the current version of the Ordnance Survey map it is marked as "disused".

I will revert to you again when I have had a response from Messrs Jeffrey Aitken.

Without prejudice."

[14] The pursuer proceeded to quantify his claim and in due course his solicitors submitted that quantification, which was in the sum of £1,389,860.30, by letter dated 9 May 2006 to the Keeper. The reply from the Keeper's office was by letter dated 19 July 2006 and was in the following terms:

"I refer to your letter of 9 May 2006 enclosing your client's quantification of claim in respect of the above.

As noted in previous correspondence, the Keeper accepts that the right of pre-emption in favour of Mr Braes should have been shown in the title sheet for FFE12758 and that its omission from that title constitutes an inaccuracy in the Register. In terms of Section 12 of the Land Registration (Scotland) Act 1979 an inaccuracy in the Register may give rise to a claim for any loss sustained as a result.

In order for Mr Braes to establish loss he needs to be able to demonstrate that had he had the opportunity to exercise his right of pre-emption he would have done so. Mr Braes has submitted an Affidavit stating that he would have exercised his right of pre-emption if he had been given the opportunity to do so. However, although the Keeper notes what Mr Braes has stated in the Affidavit he would be grateful if you could advise whether Mr Braes submitted an offer to buy the property when it was placed for sale on the open market. If he did not perhaps you could indicate why not. In either case please let me have a copy of any supporting documentary evidence that may exist.

I will give further consideration to the basis of your client's claim as soon as I have heard from you further."

The terms of those three letters dated 30 September 2004, 3 August 2005 and 19 July 2006 are all incorporated in the pursuer's pleadings. Thereafter the Keeper failed to indemnify the pursuer who raised the present action.

Statutory Provisions

[15] The 1979 Act provided in February 1996, the time of first registration of Parcel A, and in May 1998, when the title sheet was updated following the conveyance by SCCL to SCDM, inter alia:

"5. - (1) The Keeper shall complete registration -

(a) in respect of an interest in land which is not a heritable security, liferent or incorporeal heritable right -

(i) if the interest has not previously been registered, by making up a title sheet for it in the register in accordance with section 6 of this Act, or

(ii) if the interest has previously been registered, by making such amendment as is necessary to the title sheet of the interest;

....

and in each case by making such consequential amendments in the register as are necessary.

(2) Where the Keeper has completed registration under subsection (1)(a) above, he shall issue to the applicant a copy of the title sheet, authenticated by the seal of the register; and such copies shall be known as a land certificate.

.....

(4) A land certificate shall be accepted for all purposes as sufficient evidence of the contents of the title sheet of which the land certificate is a copy; ......

(5) Every land certificate and charge certificate shall contain a statement as to indemnity by the Keeper under Part II of this Act.

6. - (1) Subject to subsection (3) below, the Keeper shall make up and maintain a title sheet of an interest in land in the register by entering therein -

......

(e) any enforceable real right pertaining to the interest or subsisting real burden or condition affecting the interest;

......

(g) such other information as the Keeper thinks fit to enter in the register."

The 1979 Act now provides inter alia:

"9. - (1) Subject to subsection (3) below, the Keeper may, whether on being so requested or not, and shall, on being so ordered by the court or the Lands Tribunal for Scotland, rectify any inaccuracy in the register by inserting, amending or cancelling anything therein.

....

(3) Subject to subsection (3B) below, if rectification under subsection (1) above would prejudice a proprietor in possession -

(a) the Keeper may exercise his power to rectify only where -

(i) the purpose of the rectification is to note an overriding interest or to correct any information in the register relating to an overriding interest;

(ii) all persons whose interests in land are likely to be affected by the rectification have been informed by the Keeper of his intention to rectify and have consented in writing;

(iii) the inaccuracy has been caused wholly or substantially by the fraud or carelessness of the proprietor in possession; or

(iv) the rectification relates to a matter in respect of which indemnity has been excluded under section 12 (2) of this Act;

......

12. - (1) Subject to the provisions of this section, a person who suffers loss as a result of -

(a) a rectification of the register made under section 9 of this Act;

(b) the refusal or omission of the Keeper to make such a rectification;

(c) the loss or destruction of any document while lodged with the Keeper;

(d) an error or omission in any land or charge certificate or in any information given by the Keeper in writing or in such other manner as may be prescribed by rules made under section 27 of this Act,

shall be entitled to be indemnified by the Keeper in respect of that loss.

(2) Subject to section 14 of this Act, the Keeper may on registration in respect of an interest in land exclude, in whole or in part, any right to indemnity under this section in respect of anything appearing in, or omitted from, the title sheet of that interest.

(3) There shall be no entitlement to indemnity under this section in respect of loss where -

.......

(f) the loss arises in respect of an interest in mines and minerals and the title sheet of any interest in land which is or includes the surface land does not expressly disclose that the interest in mines and minerals is included in that interest in land;

......

13. - (1) Subject to any order by the Lands Tribunal for Scotland or the court for the payment of expenses in connection with any claim disposed of by the Lands Tribunal under section 25 of this Act or the court, the Keeper shall reimburse any expenditure reasonably and properly incurred by a person in pursuing a prima facie well-founded claim under section 12 of this Act, whether successful or not.

.....

24. There shall be defrayed out of money provided by Parliament all expenses incurred by the Keeper in consequence of the provisions of this Act.

Appeals

25. - (1) Subject to subsections (3) and (4) below, an appeal shall lie, on any question of fact or law arising from anything done or omitted to be done by the Keeper under this Act, to the Lands Tribunal for Scotland.

(2) Subject to subsections (3) and (4) below subsection (1) above is without prejudice to any right of recourse under any enactment other than this Act or under any rule of law.

......

27.(1) The Secretary of State may, after consultation with the Lord President of the Court of Session, make rules -

(a) regulating the making up and keeping of the register...."

The Land Registration (Scotland) Rules 1980 were made under section 27(1) of the 1979 Act. Rule 7 provided in 1996 and 1998 inter alia:

"(1) The following matters shall be entered in the Burdens Section -

(a) particulars of any subsisting real burden, other than a real burden which falls to be entered in the Charges Section, and of any subsisting condition affecting the interest;"

The Lord Clerk Register (Scotland) Act 1879 provides inter alia:

"8. Provided that the Keeper of the General Register of Sasines and the General Register of Hornings, Inhibitions and Adjudications shall be relieved of all responsibility in respect of neglects, omissions, errors, or breaches of duty in the registration of writs in the said registers other than such as may in law attach to him in respect of neglects, omissions, errors, or breaches of duty in his own person or by his own default or direction."

The Registers of Scotland Executive Agency Trading Fund Order 1996 provided inter alia:

"2. - (1) As from 1st April 1996, for all the operations of the Department of the Registers of Scotland, now known as the Registers of Scotland Executive Agency, which operations are more particularly described in Schedule 1 to this Order, ("the funded operations"), there shall be established a trading fund to be known as the Registers of Scotland Executive Agency Trading Fund ("the fund").

(2) The fund shall be under the control and management of the Keeper of the Registers of Scotland."

Schedule 1 to that Order defined the funded operations thus:

"(1) The whole business of managing, maintaining and controlling the Scottish public registers relating to land and other registers, including the provision of information to the public from such registers, in accordance with the functions conferred upon the Keeper of the Registers of Scotland by the Public Registers and Records (Scotland) Act 1948 and the Land (Registration) Scotland Act 1979.

(2) Without prejudice to the foregoing, the performance by the Keeper and any other officers of the Registers of Scotland of any function conferred on them by law as at 1st April 1996.

(3) Operations incidental, conducive or otherwise ancillary to the foregoing."

The interpretation of the 1979 Act

[16] Important guidance as to the correct interpretation of the 1979 Act was given by the First Division in MRS Hamilton Limited v Keeper of the Registers of Scotland¸ 2000 SC 271. The opinion of Lord President Rodger contains a helpful exposition of the operation of the registration system under the 1979 Act. Two particular points arose for decision; whether rectification under section 9(1) was retrospective, and whether the indemnity provision under section 12(1)(d) was apt to cover an error or omission in the title sheet or entry relating to a heritable security which had led to a corresponding error or omission in the land or charge certificate or any copy thereof. The First Division held that except under section 9(3A), the Keeper had no power to rectify the Register with retrospective effect. Any rectification had effect only from the time when it was made. Accordingly the Keeper's obligation under section 12(1)(b) was to indemnify any interested party for the loss which that party had suffered after the Keeper omitted or refused to rectify the Register and as a result of that omission or refusal. With regard to the meaning of section 12(1)(d) the court held that it was designed to deal with the situation where, although the relevant title sheet or entry relating to a heritable security was accurate, the certificate or office copy contained an inaccuracy when judged against the title sheet in the Register. In that situation, a party relying on the land or charge certificate or on an office copy might indeed suffer loss and the Keeper would be bound to indemnify him for that loss, but it would be loss which was due to the error or omission in the certificate or office copy as opposed to loss due to error or omission in the Register.

[17] For present purposes two other points discussed in the opinions of the First Division are of interest. First, Lord President Rodger considered some of the history behind the 1979 Act and the intentions of Parliament with regard to the scope of the indemnity under section 12(1)(b). He stated (at 283 C-G):

"As is well known, the rectification and indemnity provisions in the Act were modelled to a considerable extent on secs 82 and 83 of the Land Registration Act 1925 which applied in England and Wales at the time. Even before 1979, the limits to the scope of the indemnity under the English Act had been recognised. In particular counsel for the Keeper referred to Working Paper No.45 of the Law Commission on Land Registration (1972). In para 96 the Commission pointed out that secs 82 and 83 did not appear to have envisaged that rectification might not in all cases be an adequate remedy and that in some cases compensation might be required in addition to rectification. If rectification would not provide full compensation in all cases, then equally an indemnity designed to make good loss suffered as a result of an omission or refusal to rectify might well not provide a full indemnity in all cases. Even though this effect of the equivalent English provisions was already known, Parliament chose to enact sec 12(1)(b) in terms which in substance reflect the terms of sec 83(2) of the English Act. We may suppose that Parliament intended that those suffering loss in similar circumstances in Scotland were to have a similar and not a greater right to an indemnity out of public funds. To interpret para (d) as giving a right to an indemnity which is not given by para (b) in these circumstances would be to subvert rather than to apply the legislation enacted by Parliament. If the indemnity provided under para (b) is thought to be inadequate, then, particularly in view of the possible expenditure implications, it is for the Scottish Parliament to amend the Act and not for this court to extend it by a "generous" interpretation."

Secondly, Lord Coulsfield considered the scope of indemnification under section 12 of the 1979 Act (at p.284 E-G):

"I should, however, say that I am not convinced that this decision takes the question of the proper approach to the assessment of an indemnity for loss under sec 12 very much further and that, in my view, that question remains open. The indemnity under sec 12 is an indemnity for loss and therefore it is necessary to look at the circumstances of each claimant and consider what actual loss that claimant has sustained. That loss is not, in my view, necessarily the same as the amount which might have been recovered if the burdens which are at the root of this case had remained enforceable or as any diminution in the market value of the property to which the benefit of these burdens was attached."

The pleadings

[18] The pursuer seeks declarator (1) that title sheet FFE12758 in the Register should have shown in its burdens section a right of pre-emption over Parcel A "in favour of the pursuer (and that from the date of creation of that title sheet until at least the registration of M & D Russell (Haulage) Limited as proprietor of the subjects contained therein"), and (2) that the Keeper is liable to indemnify the pursuer for "(a) any loss incurred by the pursuer and attributable to the defender's omission of a right of pre-emption in favour of the pursuer from title sheet FFE12758 and (b) the pursuer's reasonable legal costs in quantifying that loss." Alternatively the pursuer seeks declarator that the Keeper is liable to make reparation to him for the losses incurred by him and flowing from the Keeper's omission of a right of pre-emption "in favour of the pursuer" from title sheet FFE12758, including the pursuer's reasonable legal costs incurred in quantifying that loss. The pursuer further seeks decree for payment by the Keeper of the sum of £1,389,860.35 together with interests thereon.

[19] The pursuer avers that since the 1920's his family has farmed lands centring upon Bordie Farm, Kincardine-on-Forth and that

"In about 1982, the pursuer was the owner of two areas of land known previously as the farm and lands of Crockmuirhall, but which, for farming purposes, were used as and formed part of Bordie Farm."

The pursuer refers to the 1976 disposition by Mrs Margaret Fisher in his favour but, as has already been noted, that disposition contained reference only to one parcel of land, which must be assumed to be the sum of Parcels A and B. The pursuer also avers that Parcel D was farmed as part of Bordie Farm.

The pursuer makes no positive averment as to the ownership of "Bordie Farm" at the time of the 1982 disposition. He avers that at that time the partnership was the tenant of "other lands at Bordie Farm". The Keeper avers in answer 3 that at the time of the 1982 disposition the pursuer was not the proprietor of Bordie Farm which at that time was owned by the grantees of the 1982 disposition, namely the NCB. That averment is met by a blanket denial by the pursuer. In article 4 of condescendence the pursuer explains with regard to the right of pre-emption contained in the 1982 disposition:

"This right of pre-emption was included in the 1982 Disposition as the pursuer was aware that the material deposited in the Subjects [Parcel A] by the NCB could include materials of value."

He goes on to aver:

"The benefited property (or dominant tenement) in respect of the right of pre-emption was the balance of the pursuer's Lands at Bordie."

The expression "the pursuer's Lands at Bordie" is used by the pursuer in his pleadings to describe the land conveyed to him by the 1976 disposition, namely Parcels A and B. The averment therefore identifies Parcel B as the dominant tenement. The pursuer's answer to the Standard mineral reservation clause to be contained in any disposition following on the exercise of the right of pre-emption is also stated in article 4 of condescendence:

"Explained and averred that the 'Standard Mineral Reservations Clause' would only have reserved to the party granting the Disposition unworked minerals which were naturally occurring and situated within the strata underlying the solum of the Subjects [Parcel A] at the time of that Disposition. Such a reservation would not cover colliery waste brought from other locations and deposited onto the Subjects."

[20] With regard to events after the sale of Parcel A by SCDM to M & DRH, the pursuer avers:

"M & DRH are now excavating and selling coal, aggregate and black blaes from the Subjects [Parcel A]. These all form part of the colliery waste brought from other locations and deposited onto the Subjects. There is a ready market for these items in the local area. That market stems, in part, from a number of civil engineering projects including roads construction and a proposed new Kincardine road bridge."

In article 8 of condescendence the pursuer pleads his case based on promise. "The defender's letter of 3 August , 2005 constituted an enforceable promise by the defender to the pursuer that he would indemnify the pursuer for (a) any loss directly attributable to the omission of the right of pre-emption from title sheet FFE12758 and (b) the pursuer's reasonable legal costs in quantifying that loss. The pursuer called upon the defender to obtemper that obligation, but the defender has refused to do so. The pursuer has quantified his loss directly attributable to the omission of the right of pre-emption at £1,378,592.20; reference is made to Article XI of Condescendence. He has also incurred professional costs of £11,268.15 in advancing his claim; reference is again made to Article XI. After the pursuer provided the defender with details of the quantification of his loss (and details of the fees incurred in quantifying that loss), the defender began to deny that he was obliged to obtemper the obligations undertaken in terms of the letter of 3rd August, 2005. He continues to maintain that position. In these circumstances the pursuer is under the necessity of seeking decree of declarator and decree for payment as first and third concluded for."

The pursuer's personal bar case is set out in article 9 of condescendence.

"Separatim, the defender is now personally barred from denying that Title Sheet FFE12758 should have shown a right of pre-emption in favour of the pursuer over the Subjects and also from denying that he is bound to indemnify the pursuer for (a) any loss directly attributable to the omission of the right of pre-emption from Title Sheet FFE12758 and (b) the pursuer's reasonable legal costs in quantifying that loss. The defender made a clear representation in relation to his obligation to indemnify in the letter of 3rd August, 2005. The pursuer subsequently acted to his prejudice in reliance upon that representation by instructing professional investigations into the quantification of his losses, all at a cost to him of £11,268.15; the pursuer would not have conducted those investigations and spent those monies but for the defender's representation. Further, the defender made a clear representation that Title Sheet FFE12758 should have contained a right of pre-emption in favour of the pursuer in his letter of 19th July, 2006. Again, the pursuer relied upon this representation to his prejudice. He instructed his Solicitors (and incurred costs to them) to continue negotiations with the defender on the basis of this representation. Notwithstanding that he is personally barred from doing so, the defender now denies that the Title Sheet should have contained the right of pre-emption or that he is obliged to provide any indemnity to the pursuer. For these reasons also, the pursuer is under the necessity of seeking decree of declarator and decree of payment as first and third concluded for."

[21] The pursuer's common law case of fault is contained in article 10 of condescendence.

"Separatim, and in any event, by omitting the right of pre-emption from Title Sheet FFE12758, the defender, as he has accepted in correspondence, has breached the duties owed by him to the pursuer. As well as statutory duties owed to the pursuer, the defender owed and has breached a common law duty of care to the pursuer. It was the duty of the defender to take reasonable care, in making up and maintaining the Land Register of Scotland, to avoid causing the loss to others by introducing inaccuracies and omissions into the Land Register. In the discharge of that duty, the defender was obliged to see to it that when he made up Title Sheet FFE12758, it contained the right of pre-emption in favour of the pursuer. The defender was aware (or, at least, should have been aware) of the existence of the right of pre-emption in favour of the pursuer, as the 1996 Notice of Title expressly preserved the burdens contained in the 1982 Disposition. Accordingly, he knew, or should have known, that his failure to include the right of pre-emption in Title Sheet FFE12758 would (or, at least, would be likely) to prejudice the pursuer and cause him loss and damage. The defender, as he has also acknowledged, is liable to indemnify the pursuer for all losses incurred by the pursuer as a result of this failure, together with his reasonable legal costs incurred in the quantification of that loss. In these circumstances, the defender is liable to make reparation to the pursuer for the losses incurred by the pursuer as a result of the defender's breach of duty, and decree of declarator should be pronounced as second concluded for."

The pursuer goes on to aver in explanation that his loss has been caused by the Keeper's omission from the Register of the right of pre-emption, and its absence from the title to Parcel A at the time of the sale by SCDM to M & DRH.

"Even had the defender 'rectified' the Land Register so as to include the right of pre-emption in Title Sheet FFE12758, this would not have had retroactive effect, would not have given the pursuer Title to the Subjects (as he would have had, had the right of pre-emption been on the Land Register at the time of the proposed sale by SCDM to M & DRH) and would not have enabled him to work the colliery waste situated within the Subjects and, thereafter, develop the Subjects."

[22] In article 11 of condescendence the pursuer avers the loss and damage which he has suffered "as a result of the defenders failure". He acknowledges that if he had exercised the right of pre-emption it would have cost him £40,793, being the purchase price of £40,000 actually paid by M & DRH together with conveyancing fees of £705 and recording dues of £88. The pursuer then avers that having purchased the subjects he would then have "extracted substances of value from the colliery waste deposited on the Subjects (as the present owners are doing)." He would have achieved a profit of £947,635.20 on the excavation of those substances. Following the excavation, he would have used the excavated quarry as a landfill site and would have generated a further profit of £321,750 from that use. Following the completion of that infilling, the subjects would then have had a residual value of £150,000. On that basis the pursuer avers that his direct loss from the Keeper's failure to include the right of pre-emption in the title sheet was £1,378,592.20 and that he has suffered a further loss of £11,268.15 being the professional costs incurred by him in quantifying and advancing his claim against the Keeper. I shall refer to the former figure as heads 1 to 3 of the pursuer's claim and the latter figure as head 4 of the pursuer's claim. The total of those two figures is £1,389,860.35, the sum third concluded for. The pursuer further explains that none of the substances which the pursuer would have worked from Parcel A, and which have as a matter of fact been worked by M & DRH, would have been covered by the standard mineral reservation clause contained in the schedule to the 1982 disposition.

[23] The pursuer's first three pleas-in-law echo the cases pled in articles 8, 9 and 10 of condescendence. The Keeper pleads inter alia:

"1. The pursuer having no title to sue, the action should be dismissed.

2. The pursuer's averments being irrelevant, et separatism lacking specification, the action should be dismissed.

3. The pursuer's averments being irrelevant et separatism lacking in specification, decree should not be granted as first concluded for.

4. Separatim, the pursuer's averments regarding profit from the extraction of minerals and from the use of the Subjects as a landfill site being irrelevant et separatim lacking in specification should not be admitted to probation.

5. Separatim, the pursuer's averments anent promise being irrelevant et separatim lacking in specification, should not be admitted to probation.

6. Separatim the pursuer's averments anent personal bar being irrelevant et separatim lacking in specification, should not be admitted to probation.

7. Separatim, the pursuer's averments anent duty of care being irrelevant et separatim lacking in specification, should not be admitted to probation.

8. The pursuer's claim for re-imbursement of expenses being incompetent, his averments in that regard should not be admitted to probation."

Submissions for the Keeper

[24] Counsel for the Keeper mounted an extensive challenge to the pursuer's pleadings. They set out the relevant provisions of the 1979 Act and submitted that it constituted a comprehensive scheme for the operation of the system of Land Registration in Scotland. The Keeper's powers and duties were wholly contained within the 1979 Act and the remedies available against him in respect of registered interests in land were governed by the terms of the Act. Against the background of this statutory framework, they submitted that the pursuer's only remedy lay under section 12 (1)(b) of the 1979 Act. That remedy was in respect of an omission by the Keeper and to rectify the Register following upon the refusal by M & DRH to consent to such rectification under section 9 of the 1979 Act. Since the pursuer failed to quantify a claim as at that date, which was agreed to be about 20 July 2005, it was submitted that the pursuer had failed to aver the only relevant claim open to him.

[25] As it was accepted by counsel for the pursuer that the pleadings did not attempt to formulate a claim under section 12(1)(b) of the 1979 Act, the challenge on behalf of the Keeper moved on to more detailed criticisms of the pursuer's pleadings and of the three main branches of his argument.

[26] The first two grounds of challenge by the Keeper were closely related. It was submitted that the pursuer had not relevantly averred his title to enforce the right of pre-emption and that that right was purely personal in nature. It was said to have no praedial character. There was insufficient specification of the dominant tenement. It did not constitute a real burden and accordingly did not constitute a heritable right which the Keeper was obliged to register in terms of section 6 of the 1979 Act.

[27] In support of the challenge to the pursuer's title to sue, counsel for the Keeper advanced three submissions. First, in terms of the 1982 disposition, any right of pre-emption was only available to the pursuer in respect of Parcel A in the pursuer's capacity as sole proprietor of Bordie Farm, Kincardine. Since the pursuer had failed to aver relevantly that he was the proprietor of Bordie Farm either in 1982 or 2004, he had no title to sue. Secondly, since the pursuer pled that the colliery waste which had been dumped by the NCB within the quarry void in Parcel A and which included coal, aggregate and black blaes, acceded to the surface of the subjects within the quarry void, that material constituted as a matter of law minerals within the meaning of the mineral reservation clause. Accordingly, ownership of that material, if heritable as averred by the pursuer, would not have passed to the pursuer if he had been in a position to exercise the right of pre-emption. In these circumstances the pursuer again had no title to sue in respect of the claimed losses. Thirdly, if those materials had not acceded to Parcel A, they would have constituted moveable property and would not have formed part of the subjects to which the pre-emption clause applied. Again, the pursuer would have had no title to sue.

[28] Counsel then moved on to the closely related topic of whether a valid real right of pre-emption had been created in the 1982 disposition or whether the right was merely personal to the pursuer. Reference was made to the Stair Memorial Encyclopaedia, Vol 18, paras 386-397 and 578-582 and to Halliday on Conveyancing Law and Practice, Second Edition, paras 32.71 to 32.72. Paragraph 386 of the former identifies five principle elements which are necessary for the constitution of a real burden:

"(1) There must be a dominant and a servient tenement. A real burden is an obligation imposed on the owner of the servient tenement for the benefit of the owner of the dominant tenement;

(2) The burden must be contained in full either in a conveyance of the servient tenement or in a statutory deed of conditions;

(3) The burden must be registered in the Register of Sasines or the Land Register;

(4) There are additional requirements as to the form in which the burden must be written; and

(5) There are additional requirements as to the content of the burden."

Counsel for the Keeper concentrated on the first and fourth of these five elements.

[29] They submitted that the dominant and servient tenements must be clearly identified, that the burden must be precisely drawn, that it will be interpreted contra proferentem and that there must be clear statement of intention that the burden should run with the land. It was said that none of these requirements was met in the present case. In developing these submissions counsel drew attention to the apparent inconsistency between the description of the land disponed in the 1982 disposition (Parcel A) as forming part of the farm and lands of Crockmuirhall, whereas the burden of pre-emption bore to be in favour of the pursuer or his first successor as proprietor of Bordie Farm. There was no connection between the two farms. Furthermore, this provision of the 1982 disposition fell to be interpreted contra proferentem. Although it purported to be a real burden on Parcel A, its operation on the creditor side was, unlike a real burden, restricted to the pursuer and only his first successor as proprietor of Bordie Farm. By contrast, the debtor obligation appeared to run indefinitely with the servient tenement, Parcel A. In any event the reference to the "proprietor of Bordie Farm" was too vague. It was not apt to cover what the pursuer offered to prove namely, at its highest, that he was proprietor of part of Bordie Farm.

[30] Senior counsel for the Keeper addressed the effect of the decision in J.A. Mactaggart & Co v Harrower (1906) 8F 1101, where it was held in the case of a real burden constituted in a disposition where no dominant tenement was identified and where there was no indication in the disposition that the disponer retained other adjacent land, that nevertheless it would be implied that the burden was a real burden for the benefit of the land retained by the disponer. Counsel submitted that such an implication only arose in the absence of express provision in the disposition. In the present case the 1982 disposition contained an express identification of the dominant tenement, namely Bordie Farm. Since that express provision had failed, there was no scope for a rule of implication.

[31] Counsel accepted that on the authority of Anderson v Dickie 1915 SC (HL) 79, it was competent to have regard to extrinsic evidence to identify the extent of Bordie Farm. Such evidence would be of no assistance in the present case because of the inconsistency on the face of the disposition between Crockmuirhall Farm and Bordie Farm. That inconsistency was inherent in the disposition and could not be cured by extrinsic evidence. Since the right of pre-emption had not been constituted as a valid real burden, there had never been any obligation on the Keeper to enter it in the title sheet.

[32] Counsel for the Keeper then submitted that even if the right of pre-emption had been validly created as a real burden, ownership of the minerals contained within the colliery waste in the quarry void would not have passed to the pursuer even if he had exercised the right of pre-emption. The materials which had been deposited by the NCB in the quarry void were minerals in terms of the Standard mineral reservation clause which would have required to have been inserted in any disposition to the pursuer. Reference was made to Rennie on Minerals and the Law of Scotland, paras 2.11 - 2.13 and to the dictionary definition of "aggregate". Counsel also addressed the precise terms of the reservation clause and submitted that those terms were consistent with their interpretation of it. The clause referred specifically to minerals "now or hereafter vested in or belonging to us or in which we have any interest within the said area of ground". The phrase "now or hereafter" was said to be apt to include future minerals which might be deposited on the land and which might thereafter accede to it. The word "within" was said to be a reference to the geographical surface area as opposed to bearing any meaning of below the surface. The mere fact that colliery waste had been deposited into a quarry hole did not render the waste "within" the subjects because once the excavation had taken place, the bottom of the quarry void became the new surface of the land.

[33] If, contrary to the pursuer's averments, the colliery waste did not accede to the land of Parcel A, it would have remained moveable and would not have been carried by the pre-emption clause.

[34] Counsel for the Keeper developed their submission that the Keeper's whole powers and duties were contained within the 1979 Act. The remedies against him are accordingly governed by the terms of that Act. The principal remedy was indemnity under section 12 and that remedy was available only in the circumstances set out in that section. In terms of section 12 (1)(b) the indemnity covered only losses arising after a refusal or omission to rectify the Register and not in respect of inaccuracies within the Register. The deemed refusal to rectify the Register would have occurred in July 2005 when M & DRH indicated that they would not consent to rectification. The pursuer had made no attempt to quantify his claim on that basis and accordingly his claim was irrelevant. If the pursuer had a claim under section 12 (1)(b) it would have been in respect of the difference in the value of the dominant tenement with and without the right of pre-emption as at July 2005. Reference was made to MRS Hamilton Limited v The Keeper of the Registers of Scotland at pp.277, 279, 280 and 282 and to Kaur v Singh (No. 2) 2000 SLT 1323 at 1325-1329. It was submitted that, in light of the "without fault" nature of the remedy under section 12 of the 1979 Act, the legislature had not intended to compensate any interested party for any consequential and/or economic loss suffered as a result of an error or omission by the Keeper for any inaccuracy in the Register. The indemnity related to any diminution in the value of an interest in land resulting from difficulties with the title.

[35] Counsel drew attention to the terms of section 12 (3)(f) of the 1979 Act and submitted that even if the minerals in the colliery waste were not caught by the mineral reservation clause, the pursuer would not have been entitled to indemnification under section 12 (1) because of this particular exclusion of indemnification contained in subsection (3). Section 12 (3)(f) protects the Keeper against any indemnification claim where the title sheet does not expressly disclose that the interest in mines and minerals is included in that interest in land. In the present case the title sheet for Parcel A did not expressly disclose that any interest in minerals was included in that interest. Accordingly the present claim amounted to an attempt to circumvent the terms of section 12 (3)(f).

[36] Counsel for the Keeper moved next to challenge the pursuer's case based on a common law duty of care. Under reference to X v Bedfordshire County Council [1995] 2 AC 633, Harris v Evans [1998] 1 WLR 1285, Rowley v Secretary of State for Work and Pensions [2007] 1 WLR 2861, White v Jones [1995] 2 WLR 187, Ministry for Housing v Sharp [1970] 2 QB 223, Caparo Industries Ltd v Dickman [1990] 2 AC 605 and Simmons v British Steel Plc 2004 SC (HL) 94, counsel submitted first that the terms of the 1979 Act did not disclose any legislative intention to confer a private right of action on members of any particular limited class in respect of the acts or omissions of the Keeper in relation to such interests. The terms of the Act did not support the imposition on the Keeper of any common law duty of care towards the pursuer. The imposition of such a duty would be inconsistent with, or would discourage, the due performance of the Keeper's statutory duties. The remedies available to the pursuer were those set out in the 1979 Act namely an appeal to the Lands Tribunal under section 25, rectification under section 9 and payment of indemnity and expenses under sections 12 and 13. Counsel emphasised the comprehensive nature of the provisions contained in the 1979 Act and submitted that that pointed towards the intention of the legislature to exclude common law liability. Counsel for the Keeper then addressed the tests necessary for a successful economic loss claim. Rowley v Secretary of State for Work and Pensions considered three different bases for establishing liability for economic loss; (a) a voluntary assumption of responsibility, (b) an application of the "incremental test" or (c) an application of the threefold Caparo test. Counsel for the Keeper submitted that there was no basis for liability under any of these three considerations.

[37] The pursuer had not relevantly averred an assumption of responsibility basis for his common law claim as that basis was explained in the speeches in the House of Lords in White v Jones. The pursuer had similarly failed to make relevant averments for liability for economic loss based on the three branches of the Caparo test. The pursuer had not averred the foreseeability of the type of loss, namely loss of profits, which he now claimed. Furthermore, in the present case it would not be fair just and reasonable to impose a duty of care on the Keeper. The existence of a common law duty of care would, it was submitted, upset the balance created by the 1979 Act. That balance involved the duties of the Keeper, the rights of users of the Register and the public budget.

[38] Counsel for the Keeper considered the Court of Appeal decision in Ministry of Housing and Local Government v Sharp. In that case a negligent search carried out by a clerk led to a certificate being granted by the local Land Charges Registrar which omitted any reference to a compensation notice which had been entered on the Land Charges Register. The Minister of Housing and Local Government, in whose favour the Notice of Compensation had been registered, was unable to secure repayment of the compensation to which the notice related and sought to recover his loss from the Registrar and the local authority who employed the negligent clerk. The Minister claimed that the Registrar was in breach of his statutory duty to search the Register and issue a certificate setting forth the result of that search, and that the employers of the clerk who had negligently carried out the search were vicariously liable for his negligence. The claim against the employers of the clerk succeeded. Counsel for the Keeper submitted that although that appeared to be an analogous decision, the statutory provisions under which the negligent search had been carried out by the clerk did not contain any remedy or right to compensation of any sort, unlike the provisions of the 1979 Act. It was further submitted that in light of the modern law as found in White v Jones and Rowley v Secretary of State for Work and Pensions, the decision in the Sharp case had to be treated with considerable caution. Senior counsel for the Keeper went so far as to submit that the decision in Sharp should now be regarded as wrong.

[39] Counsel for the Keeper went on to make two further points about the pleading of this head of the pursuer's case. Even if there had been a duty of care incumbent on the Keeper, the pursuer had failed relevantly to plead that it had been breached. The pursuer's present pleadings, it was submitted, amounted to no more than averments of a statutory duty, breach of which did not automatically give rise to a common law remedy. Negligence had to be averred and proved. The pursuer had given no particulars of the negligence alleged. There was a similar omission in the pursuer's pleadings with regard to forseeability of loss. The right conferred by the clause of pre-emption was the purchase of Parcel A at the open market value current at the time of the first sale to which the right of pre-emption was capable of applying. The pursuer did not aver any facts or circumstances such as to justify the inference that consequential loss in respect of the sale of the colliery waste, such as was sought by the pursuer, was reasonably in the contemplation of the Keeper at the time of first registration. In view of the mineral reservation clause, it was not at all obvious that title to the minerals within the colliery waste would have passed to the pursuer under the clause of pre-emption. There was certainly no averment of forseeability that the site might be redeveloped in any particular or profitable way. In the event of liability, the Keeper would not have been liable for consequences of the kind which were not reasonably foreseeable. In the absence of averment, heads 1 to 3 of the pursuer's claim all fail that test. Reference was made to Simmons v British Steel Plc. In closing this chapter of the argument, senior counsel submitted that weight should not be placed on section 8 of the Lord Clerk Register (Scotland) Act 1879.

[40] Counsel turned next to the pursuer's case based on promise. Under reference to McBryde on The Law of Contract in Scotland, second edition, chapter 2, counsel for the Keeper submitted that the pursuer had failed to aver facts and circumstances such as to give rise to an enforceable promise. The statements relied upon by the pursuer amounted only to statements of intent or legal opinion. Such statements could not form the basis of an obligation to make payment of any particular sum. In any event the statements relied upon were insufficiently specific to give rise to a binding obligation to pay such a sum. The statements relied upon by the pursuer were made on behalf of a public authority. The Keeper's power to incur obligations was limited by the terms of the 1979 Act. He had no power to incur an unlimited obligation to pay an unspecified sum. He had no power to incur an obligation to pay for consequential loss such as that sought by the pursuer. He had no power to undertake to make a payment in respect of a right which he was under no obligation to register in the Land Register. It was further submitted that in the context of the correspondence the reference to "the Keeper will indemnify your client" was no more than a reference to the terms of section 12 (1)(b) of the 1979 Act. The reference in the earlier letter of 30 September 2004 to indemnification under section 12 (1)(d) was plainly an error of law. Indemnification, it was submitted, was a term of art. Both of these letters were part of a continuing process. Quantification had not been agreed. Counsel referred to Stair's distinction of three acts of will, namely desire, resolution and engagement (Stair, I, x, 2.). The letter of 3 August 2005 showed possibly desire and perhaps resolution but definitely not engagement.

[41] Counsel for the Keeper made the further point that the Keeper could not be held to an ultra vires promise. Reference was made to Fayed v IRC 2004 SC 745. Since the Keeper had no power to indemnify the pursuer in any way other than under section 12 (1) of the 1979 Act, he had no power to make a promise of open ended indemnification of the kind claimed by the pursuer.

[42] Senior counsel for the Keeper considered the situation of the Keeper having made a promise which he need never have made. Payment under such a promise would immediately raise the issue of vires. If a payment was made by the Keeper in such circumstances it would be a payment under error of law and it was submitted he would be entitled to recover the sum paid under the condictio indebiti. Reference was made to Morgan Guaranty Trust Company of New York v Lothian Regional Council, 1995 SC 151.

[43] Counsel for the Keeper submitted that the statement within the letter of 3 August 2005 which was said to be a promise to pay by the Keeper to the pursuer could not be relied upon for the purposes of the present action because that letter bore to have been written "without prejudice". The effect of that phrase was explained by Lord Sutherland in Daks Simpson Group Plc v Kuiper 1994 SLT 689 at 692 B-E:

"The general principle underlying the rule is that if offers, suggestions, concessions or whatever are made for the purposes of negotiating a settlement, these cannot be converted into admissions of fact. ......If, however, someone makes a clear and unequivocal admission or statement of fact, it is difficult to see what rights or pleas could be attached to such a statement or admission other perhaps than to deny the truth of the admission which was made. I see no objection in principle to a clear admission being used in subsequent proceedings, even though the communication in which it appears is stated to be without prejudice."

Counsel submitted that the correspondence in the present case, of which the letter of 3 August 2005 formed part, was just such correspondence for the purpose of negotiating a settlement and accordingly that the claimed promise could not be converted into an admission of fact. If the use of the phrase "without prejudice" did not have the effect contended for, and if the letter of 3 August 2005 did contain an enforceable promise, then the issue of vires would re-emerge. It was explained by senior counsel for the Keeper that his only power to indemnify was under section 12, that the Registers of Scotland Executive Agency Trading Fund Order 1996 was no longer in force, that the Keeper was provided with a fund to run his operations under the 1979 Act and that any indemnification payment under section 12 was met out of that fund.

[44] Counsel submitted that in any event it was inappropriate to analyse the actions of a public authority in terms of private law obligations. The pursuer made no averments as to the reasonableness or otherwise of the Keeper's actions, nor did he make any averments as to his own legitimate expectations. Reference was made to the decision of the House of Lords in R (Reprotech (Pebsham) Limited) v East Sussex County Council [2003] 1 WLR 348. That case involved certain representations which had been made by a planning officer and a resolution by a planning sub-committee with regard to whether an application for planning permission was required, but no formal determination of the question had been made by the planning authority in terms of section 64 of the Town and Country Planning Act 1990. It was argued that by the actings of the planning officer and the resolution of the sub-committee the planning authority was personally barred from maintaining that planning permission was required when those previous actings had been to the effect that it was not. The leading speech was delivered by Lord Hoffmann. He held that neither the representations by the planning officers nor the resolution of the sub-committee could provide the foundation for a personal bar argument. He then stated:

"33 In any case, I think that it is unhelpful to introduce private law concepts of estoppel into planning law. As Lord Scarman pointed out in Newbury District Council v Secretary of State for the Environment [1981] AC 578, 616, estoppels bind individuals on the ground that it would be unconscionable for them to deny what they have represented or agreed. But these concepts of private law should not be extended into "the public law of planning control, which binds everyone". (see also Dyson J in R v Leicester City Council¸ Ex p Powergen UK Limited [2000] JPL 629, 637.)

34 There is of course an analogy between a private law estoppel and public law concept of legitimate expectation created by a public authority, the denial of which may amount to an abuse of power; see R v North and East Devon Health Authority, Ex p Coughlan [2001] QB 213. But it is no more than an analogy because remedies against public authorities also have to take into account the interests of the general public which the authority exists to promote. Public law can also take into account the hierarchy of individual rights which exist under the Human Rights Act 1998, so that, for example, the individual's right to a home is accorded a high degree of protection (see Coughlan's case, at pp.254-255) while ordinary property rights are in general far more limited by considerations of public interest: see R (Alconbury Developments Ltd) v Secretary of State for the Environment, Transport and the Regions [2001] 2 WLR 1389.

35 It is true that in early cases such as the Wells case [1967] 1 WLR 1000 and Lever Finance Ltd v Westminster (City) London Borough Council [1971] 1 QB 222, Lord Denning MR used the language of estoppel in relation to planning law. At that time the public law concepts of abuse of power and legitimate expectation were very undeveloped and no doubt the analogy of estoppel seemed useful. In the Western Fish case [1981] 2 All ER 204 the Court of Appeal tried its best to reconcile these invocations of estoppel with the general principle that a public authority cannot be stopped from exercising a statutory discretion or performing a public duty. But the results did not give universal satisfaction: see the comments of Dyson J in the Powergen case [2000] JPL 629, 638. It seems to me that in this area, public law has already absorbed whatever is useful from the moral values which underlie the private law concept of estoppel and the time has come for it to stand upon its own two feet."

Reference was also made to Fayed v RIC 2004 SC 745 at paras 72-76, 79 and 80.

[45] Counsel for the Keeper referred to Reid and Blackie on Personal Bar, paras 2.15 to 2.18 and 5.07 to 5.25, and to Advice Centre for Mortgages v McNicoll 2006 SLT 591 at 595 H-L. Counsel referred to the classic metaphor of personal bar acting in Scotland as a shield rather than as a sword. Personal bar cannot be used to create a right. In any event, the statements relied upon by the pursuer were said to amount only to statements of intent or legal opinion which could not form the basis of an obligation to make payment of any particular sum. Those statements relied upon were insufficiently specific to give rise to a binding obligation to pay any such sum. The definition of personal bar contained in Gatty vMaclaine 1921 SC(HL) 1 at 7 related only to representations as to a certain state of facts.

[46] Finally, counsel for the Keeper made submissions in relation to the pursuer's expenses head of claim. It was submitted that because the pursuer had failed to aver a prima facie well founded claim under section 12 of the 1979 Act, he was not entitled to payment of expenses under section 13 (1) of that Act. It was then argued that the pursuer had not exhausted his statutory rights against the Keeper in respect of his claim for professional costs and expenses. He had not brought an appeal to the Lands Tribunal under section 25 (1) of the 1979 Act nor had he sought to judicially review the Keeper's decision in relation to payment of these expenses. Under reference to the decision in Keeper of the Registers of Scotland v MRS Hamilton Ltd 1999 SC 116, counsel submitted that section 13 of the 1979 Act did not expand on or add to the power of the court to award expenses. Nonetheless and until the pursuer made an application for reimbursement of expenses from the Keeper, the court could not make any award of reimbursement of expenses. Accordingly, it was submitted, the pursuer's claim for reimbursement of expenses was incompetent.

Submissions for the Pursuer

[47] Counsel for the pursuer began by summarising the pursuer's position on record. The 1982 disposition created a valid real right of pre-emption over Parcel A in favour of Parcel B as the dominant tenement. At the time of the sale by SCDM to M & DRH the pursuer was the person who should have been able to enforce the right of pre-emption. Following the pursuer intimating his claim in relation to the failure to enter the pursuer's right of pre-emption in the burdens section of the title sheet for Parcel A, the Keeper acknowledged that position and accepted that he should have registered the right of pre-emption but had erroneously failed to do so. The Keeper promised to indemnify the pursuer for the losses and expenses that he suffered as a result of the Keeper's acknowledged failure. The Keeper did not act ultra vires in making such a promise, but had the power to agree such a payment. The Keeper then sought to renege on that promise, making the present action necessary. In the present action the pursuer sought to enforce the Keeper's promise. It was not an attempt to seek statutory indemnity under section 12 of the 1979 Act.

[48] The pursuer then had two subsidiary arguments; personal bar and breach by the Keeper of a common law duty of care. The personal bar argument was to the effect that the Keeper, by his actings, and in particular by the terms of the letters written on his behalf, was personally barred from asserting (a) that the right of pre-emption was not a real right which should have been registered in the Land Register; and (b) that he was not liable to indemnify the pursuer for his losses and expenses. Again, this argument was not based on any claim for statutory indemnity under section 12 of the 1979 Act.

[49] The final strand of the pursuer's case was that in any event the Keeper owed to the pursuer a common law duty of care which he had breached by failing to register the right of pre-emption in the Register. The scheme of the 1979 Act was not such as to exclude all other methods of redress against the Keeper, as was apparent from the terms of the Act and in particular sections 12 and 25 thereof. Because rectification under section 9 was impossible and in any event would have provided no effective remedy for the pursuer, there was a significant lacuna in the scheme of the 1979 Act. There was no effective remedy afforded to a party prejudiced by the actions of the Keeper which resulted in a right of pre-emption becoming unenforceable. It was accepted on behalf of the pursuer that there would have to have been a valid right of pre-emption enforceable by the pursuer at the time of the sale to M & RDH for the duty to have been breached, but the pursuer had made averments offering to prove that that was the case. It was also accepted that the pursuer required to establish that, for the major part of the loss claimed to be recoverable, the materials of value excavated by M & RDH (a) were heritable, and (b) would not have been reserved by the mineral reservation clause which should have been imposed in any sale under the pre-emption. Again, the pursuer had made averments in terms of which he offered to prove that that was the case. The imposition of such a duty would be consistent with closely analogous authority and would, in any event, be fair, just and reasonable. There was no valid issue which could be taken by the Keeper at Procedure Roll in relation to the nature of the losses which the pursuer sought to recover.

[50] Before addressing the detailed charges mounted on behalf of the Keeper, counsel for the pursuer reminded the court of the high test which would have to be met if the action was to be dismissed. The Keeper would have to demonstrate that the action must necessarily fail even if all the pursuer's averments were proved. (Jamieson v Jamieson 1952 SC (HL) 44). Since the Keeper was unable to demonstrate inevitable failure of any of the three strands of the pursuer's case, a proof before answer should be allowed with all pleas standing.

[51] Counsel for the pursuer considered the title to sue point alongside the Keeper's challenge to whether the right of pre-emption in the 1982 disposition constituted a real burden on Parcel A. Counsel relied heavily on the decision in J.A Mactaggart & Co v Harrower to the effect that where no dominant tenement is identified in a real burden contained in a disposition, it will be implied that the dominant tenement is the land remaining in the ownership of the disponer. The pursuer averred that the dominant tenement, Parcel B, and Parcel A had in 1982 been "known previously as the farm and lands of Crockmuirhall" but "for farming purposes were used as and formed part of Bordie Farm". It was submitted, that extrinsic evidence would be admissible to explain the reference in the 1982 disposition to the pursuer or his first successor "as proprietor of Bordie Farm". Reference was made to Anderson v Dickie. It was accepted by senior counsel for the pursuer that the wording within the 1982 disposition would have been more accurate if the reference had been to the pursuer or his first successor as proprietor of part of Bordie Farm. It was submitted, however, that because of the rule in J.A. Mactaggart & Co v Harrower, which would have resolved the position if nothing had been said, the pursuer should not be prejudiced by the mere omission of the words "part of" from the 1982 disposition. There was, it was submitted, no reason for the pursuer's right of pre-emption not to be treated as a real burden. It did not matter that, on the creditor side, the duration of the real burden was limited to the ownership of the dominant tenement by the pursuer and his first successor. The clause in the 1982 disposition contained a clear statement of intent to create a real burden and that was what had happened. Since the right of pre-emption was a real burden, there was no question as to the pursuer's title to sue.

[52] Counsel considered and rejected the submission made on behalf of the Keeper concerning the effect of the mineral reservation clause which would have had to have been inserted in any disposition granted as a result of the pre-emption clause. "Within the said area of ground" meant below the surface of the land rather than within the surface boundary of the subjects. In the context of minerals, that was the obvious meaning. If the Keeper's interpretation was correct, it was suggested that a limestone house with a slate roof would be caught by the mineral reservation clause and that was plainly not the case. The reference to minerals "now or hereafter vested in or belonging to" the NCB was a reference to present and future statutory provisions rather than an indication of foresight of colliery waste being deposited on the surface of the land. Counsel also drew attention to the provision in the mineral reservation clause which permitted winning and working minerals "but so as not to enter upon the surface of the said area of ground". That effectively prohibited open cast mining, would have prevented the NCB from exploiting the colliery waste if it had been caught by the mineral reservation clause, and pointed again to the mineral reservation clause reserving only minerals lying beneath the surface of the land. Counsel referred to various authorities including Rennie on Minerals and the Law of Scotland at paras 2.11 to 2.13, the definition of "aggregate" in the Shorter English Dictionary, sixth edition at page 42, and Magistrates of Glasgow v Farie (1888) 15R (HL) 94. These authorities all supported the view that evidence would be required before the meaning of the reservation clause could be established. Since the pursuer offered to prove that the colliery waste had become heritable by accession, it was unnecessary at this stage to consider what the position would be if that material was moveable.

[53] With regard to the terms of section 12 (1)(b) of the 1979 Act, counsel for the pursuer maintained that it provided no remedy for the pursuer. They submitted that the terms of this pre-emption clause was such that the Register could only have been rectified under section 9 of the 1979 Act before the sale by SCDM to M & DRH. That was the only sale which could have triggered the pre-emption clause. After that sale, the opportunity to exercise the right of pre-emption was irrevocably lost. The consequence was that by the time that the matter was drawn to the attention of the Keeper and by July 2005 it was impossible to rectify the Register so that it could not be said in terms of section 12 (1)(b) that the Keeper had refused or omitted to rectify. By that time it was an impossibility. This, it was submitted, was a significant lacuna in the 1979 Act which left the pursuer without a statutory remedy. That in turn illustrated the fact that the 1979 Act was not comprehensive as submitted by counsel for the Keeper. It was a matter of agreement that no other provision in section 12 (1) of the 1979 Act would have afforded the pursuer a remedy. Counsel drew attention to the terms of section 25 (2) of the 1979 Act and submitted that that provision was recognition of the fact that the terms of the 1979 Act were not comprehensive and that there might be remedies outwith the terms of that Act at common law. It was for these reasons that the pursuer did not advance a claim under section 12 of the 1979 Act and accordingly there was no requirement to attempt to value the pursuer's claim as at July 2005.

[54] Counsel for the pursuer submitted that the Keeper's reliance on the exclusion contained in section 12 (3) (f) of the 1979 Act was similarly misconceived in that that provision only excluded liability to indemnify under that section. Since the pursuer's claims in the present action were not based on a claimed liability under section 12, that exclusion was to no effect.

[55] Counsel for the pursuer turned next to the attack which had been made on the pursuer's common law case. They considered the authorities and in particular Caparo Industries Plc v Dickman , X v Bedfordshire County Council, Harris v Evans, Rowley v Secretary of State for Work and Pensions, Burnett v Grampian Fire and Rescue Services 2007 SLT 61 and The Ministry of Housing v Sharp. They submitted that the following propositions were vouched by these cases:

(1) Whether or not a common law duty will exist in relation to the discharge of statutory functions falls to be determined by the application of the tripartite test in Caparo Industries Plc v Dickman.

(2) Accordingly, the pursuer requires to prove

(a) that the damage was reasonably foreseeable,

(b) that the relationship between the pursuer and the Keeper was sufficiently proximate, and

(c) that it would be fair, just and reasonable to impose such a duty.

(3) In addressing the third part of the test, it is necessary to consider whether the terms of the statute in question preclude the existence of any duty of care (or would otherwise make it unfair to impose a duty of care).

(4) The question of whether the statute precludes the common law duty will be a matter to be determined on a construction of the statute.

(5) While not conclusive, the existence of comprehensive remedies within the statute to deal with wrongful performance of the statutory functions will point away from it being fair to impose a common law duty of care. Conversely, the absence of such comprehensive remedies will tend towards the existence of a common law duty of care.

(6) If the imposition of a duty would have the effect of discouraging the proper discharge of the statutory duties, this will point away from the imposition of a duty.

It was submitted that in the present case these principles pointed towards the appropriateness of imposing a common law duty of care on the Keeper to take reasonable care not to omit matters from the title sheet which should have been there, and in particular to enter the right of pre-emption as a real burden on the title to Parcel A.

[56] Counsel for the pursuer then considered in more detail the three branches of the test in Caparo. With regard to foreseeability, it was submitted that the present case was closely analogous to Ministry of Housing v Sharp. In that case a robust view had been taken as to foreseeability and the same approach should be adopted in the present case. It was, or should have been, plainly foreseeable to the Keeper that if he carelessly failed to include the right of pre-emption in the title sheet, this would deprive the pursuer of the opportunity to take ownership of the land. It flowed naturally from this that, having been deprived of the ownership of the land, the pursuer would also be deprived of the natural incidents of the land, including being able to make use of the land and work the land for his benefit and profit. That, it was submitted, was precisely what had happened. With regard to proximity, the Keeper would have been aware from the titles that the proprietor of the dominant tenement (Parcel B) was a person with a direct interest in the correct registration of the burdens over the land in question (Parcel A) and, further, that he was someone who would potentially suffer loss in the event that this was done negligently. That, it was submitted, was sufficient to meet the requirement of proximity.

[57] Counsel then addressed the third test in Caparo and submitted that it would be fair, just and reasonable to impose a duty in the present circumstances. Without such a duty, and without the Keeper's promise in the present case, the pursuer would have suffered substantial loss through no fault of his own. The language of the 1979 Act was not such that it would preclude the imposition of such a duty of care on the Keeper. Furthermore, the imposition of a common law duty of care would be reasonable because, not only would it not preclude or inhibit the Keeper in any way from discharging his statutory functions properly, but it would serve as an encouragement to the proper discharge of those functions. Junior counsel for the Keeper had been unable to point to any particular reason for the Keeper to be prejudiced by the imposition of such a duty of care. The remedies contained within the 1979 Act were plainly not comprehensive. The proper way to look at section 12, it was submitted, was as a mechanism for providing remedies on a no fault basis. If the circumstances specified in section 12 (1) were met, and if indemnity wasn't excluded under subsection (3) then a remedy was provided regardless of whose fault had caused the loss. There was no reason in principle or policy for the existence of such remedies to exclude a common law remedy if the person who had suffered loss, in this case the pursuer, was able to prove that his loss was suffered through the fault of the Keeper and if the tripartite tests in Caparo could be satisfied. Counsel found considerable support in the decision in Ministry of Housing v Sharp. The facts were said to be analogous and counsel disagreed with the suggestion that the decision in that case was in any way unreliable or required to be treated with care or caution in light of subsequent developments in the law in respect of liability in delict for economic loss. Rowley v Secretary of State for Work and Pensions did not substitute an assumption of responsibility test for the test in Caparo. It recognised that there were two or three different tests, any one of which might be relevant and appropriate in a particular case. In the present case it was the Caparo test which fell to be applied and each of its three branches was met. The need to meet the Caparo test meant that there was no risk of unlimited liability to an indeterminate class. The present action concerned one individual and at worst a very small category of potential claimants. Any such liability could be avoided by the Keeper and his staff taking reasonable care in the performance of the duties imposed on the Keeper by the 1979 Act.

[58] With regard to the promise branch of the pursuer's case, counsel referred to two specific sentences in the letter from the Keeper's office dated 3 August 2005

"I will, however, confirm that the Keeper will indemnify your client for any loss directly attributable to the omission of the right of pre-emption from the Title Sheet. The Keeper will also meet your reasonable legal costs to quantify any such loss."

Those sentences, it was submitted, met the definition of "promise" set out in paragraph 2-07 of McBryde on The Law of Contract in Scotland (Second edition) at page 18, namely:

"A declaration made to another person with respect to the future, stating that one will do, or refrain from, some specified act, or that one will give some specified thing."

It was further submitted that the two sentences in the letter of 3 August 2005 constituted an unequivocal present promise and could not fairly be construed as statements of future intention. Nor was there any issue of ultra vires. This promise, it was submitted, was a promise to settle the pursuer's claim not under the 1979 Act but at common law. The Keeper had power to deal with such a claim and, if appropriate, to settle it by virtue of his powers to do anything ancillary to his functions as Keeper under the 1979 Act. Reference was made to the terms of the Registers of Scotland Trading Fund Order 1996.

[59] Counsel for the pursuer submitted that the use of the expression "without prejudice" at the end of the letter of 3 August 2005 did not enable the Keeper to avoid his promise. Counsel cited three case: Ware v Edinburgh District Council 1976 SLT (Lands Tr) 21 at 24, Daks Simpson Group Plc v Kuiper, and Tomlin v Standard Telephone and Cables Limited [1969] 1 WLR 1378. These cases, it was submitted, vouched three propositions:

(1) The mere use of the words "without prejudice" did not provide any automatic cloak of confidentiality to any particular item of correspondence; The question was properly whether the correspondence, by its nature, attracted privilege.

(2) Where offers, suggestions or concessions were made for the purposes of negotiation, if they were made in a privileged context, they could not be used as evidence of matters of fact. However, clear an unequivocal admissions or statements of fact could be taken from such letters (even if expressly marked "without prejudice").

(3) Further, where dealing with a situation in which settlement had been reached, it was appropriate and relevant to refer to the without prejudice correspondence if it was necessary to enforce the agreement.

Counsel submitted that applying those principles to the present case, the pursuer was plainly entitled to make reference to the letter of 3 August 2005. Although that letter bore to be "without prejudice" that provided no bar to its use in and of itself. The pursuer wished to take from that letter a clear and unambiguous statement of fact by the Keeper. In any event, by raising the present proceedings the pursuer was simply trying to enforce the promise contained in that letter and was entitled to make reference to it.

[60] Senior counsel for the pursuer accepted that on the authority of Morgan Guaranty Trust Company of New York v Lothian Regional Council the condictio indebiti could enable money paid under error of law to be recovered, but he drew attention to the fact that it was an equitable remedy and to the fact that the Keeper was in charge of administering the title system and was the person probably best placed to know about that system.

[61] Counsel for the pursuer then addressed the argument based on the decision in R (Reprotech (Pebsham) Limited) v East Sussex County Council, to the effect that the pursuer was not entitled to analyse the actions of the Keeper in terms of private law obligations as the Keeper was a public authority. Counsel submitted that the considerations which lay at the heart of that case were not live in the present one. In the circumstances of the present case the Keeper was not entitled to avoid the consequences of personal bar simply because he was a public official. In Reprotech the Court sought to restrict the applicability of personal bar where dealing specifically with the area of planning law, or, more generally, with area of public policy application which would have a general binding impact on the public. That was not the situation in the present case. The question at issue here was whether the Keeper should pay a sum of money to the pursuer. That was an issue private to those two parties and dependent upon the particular facts of the case, no generally applicable matters arose. Accordingly, it was submitted, the general law applied and the Keeper could not avoid being barred from altering his position from what he had previously said simply because he held a public office and performed functions in the public interest.

[62] Counsel referred to the formulation of the doctrine of personal bar by Lord Chancellor Birkenhead in Gatty v Maclaine 1921 SC (HL) 1 at 7:

"Where A has by his word or conduct justified B in believing that a certain state of facts exists, and B has acted upon such belief to his prejudice, A is not permitted to affirm against B that a different state of facts existed at the same time."

It was submitted that the pursuer's averments in the present case fully met the requirements of that doctrine. The pursuer offered to prove that the Keeper, by his plain representations contained in the correspondence, and in particular in the letter of 3 August 2005, justified the pursuer in believing that (a) the right of pre-emption should have been shown on the title sheet at the time of the sale in 2004; and (b) indemnity would be paid to him for the losses that he suffered as a result of the pre-emption not being shown on the title sheet. The pursuer further offered to prove that he had acted in reliance upon those representations to his prejudice. In those circumstances the Keeper was not now entitled to affirm against the pursuer that the right of pre-emption should not have been shown and that the Keeper would not pay indemnity to the pursuer for his losses.

[63] In conclusion counsel for the pursuer submitted that the Keeper had failed to meet the Jamieson test in relation to any of the three parts of the pursuer's case and that accordingly the proper approach was to refuse the Keeper's motion for dismissal and to allow the parties a proof before answer with all pleas left standing.

Discussion

[64] The starting point is whether the right of pre-emption contained in the 1982 disposition constituted a real burden on Parcel A in favour of Parcel B or not. In my opinion it did not. For the constitution of a real burden there must be a dominant and a servient tenement. Where a real burden is created in a disposition, the dominant tenement will either be neighbouring land owned by the disponer or land owned by a third party. In the latter case such land would have to be clearly identified in the disposition. In the former case there is an exception to the normal rule that real burdens must be set out in full in the disposition with nothing left to implication. That exception is described in paragraph 397 of volume 18 of the Stair Memorial Encyclopaedia as "an unexpected exception". The source of the exception is the decision of the Inner House in J.A. Mactaggart & Co v Harrower. The facts of that case are similar to those of the present in that it was not apparent from the terms of the disposition, which contained the real burden, that the disponer owned any other adjacent land. The burden in question, however, was different. The burden was a building restriction on the servient tenement which benefited the amenity of the dominant tenement. The initial decision in the case was that of the Dean of Guild whose decision was unreservedly endorsed in the Second Division. The Dean of Guild approached the matter in the following manner:

"A well drawn conveyance - particularly a conveyance which does not bring about any feudal relationship between granter and grantee - would undoubtedly, after imposing the restriction, set forth or indicate the creditor area. But whether the law of real burden makes that a necessity is another matter. The law of Scotland, it is true, does not admit an indefinite burden upon land. But, so far as the Dean has found, that statement has hitherto been used only when the burdened area was in question, and the indefiniteness of the creditor area has not been the subject of judicial decision. Taking the matter on principle, the Dean does not think that the want of an express specification of the creditor area makes a real burden, otherwise well imposed, invalid. A real burden of the kind in question is praedial in its character; it is for the benefit of some lands or the owners thereof, as owners, and not as individuals; and, considering the nature of the grant under which the burden in question was imposed, it must be taken to have been imposed for the benefit of the lands remaining in the person of those who imposed it, or at all events, of so much of these remaining lands as might be injuriously affected by operations or buildings on the ground restricted."

[65] In my opinion it is significant that the Dean emphasised the praedial character of a real burden and the necessity for the assumption that it was imposed for the benefit of the lands remaining in the hands of the disponer or "so much of these remaining lands as might be injuriously affected by operations or buildings on the ground restricted." In other words, the Dean was only prepared to imply the identity of the dominant tenement where it was clear that the lands which formed the dominant tenement benefited from the real burden. In the case of a building restriction on a servient tenement for the benefit of the amenity of the dominant tenement, that praedial interest was obvious. The burden in the present case is, in my opinion, different.

[66] A clause of pre-emption creates an opportunity for the servient tenement to be joined together with the dominant tenement in the common ownership of the dominant proprietor. There must, in my opinion, be some benefit to the dominant tenement to satisfy the requirement of praedial interest. Such a conjoining of properties might improve the amenity of the dominant tenement. It might enable a commercial operation carried out on the dominant tenement, such as farming, to be carried out more efficiently or more profitably. There could be many reasons for the value of the dominant tenement to be enhanced by being in the same ownership as the servient tenement.

[67] There are, I think, two important distinctions between the type of building restriction which was considered in J.A. Mactaggart and a right of pre-emption. First, in the case of a building restriction the praedial interest of the dominant tenement may be, and probably often is, self evident, whereas that is not the case in relation to a right of pre-emption. Secondly, the terms of a building restriction, in common with the terms of most real burdens are apparent without needing to know the identity of the dominant tenement. The terms of most real burdens can be observed by the servient proprietor without knowledge of the identity of the party or parties entitled to enforce it. A burden of pre-emption, however, is different. It cannot be observed by the servient proprietor without knowledge of the identity of the proprietor to whom the offer to purchase has to be made. In my opinion the decision in J.A. Mactaggart & Co v Harrower is not authority for a departure from the rule which requires the terms of the burden itself to be contained in the disposition.

[68] Accordingly, if the 1982 disposition had not identified the dominant tenement, there would have been an obvious failure of the clause because there would have been no effective burden. On the demise of the pursuer, to whom would the offer to purchase be made? Such a fundamental failure of the clause could not, in my opinion, have been cured by reliance on the decision in J.A. Mactaggart & Co.

[69] That decision is, in any event, inapplicable to the present circumstances because it is a rule of implication which arises when the dominant tenement is not identified in a disposition. In the 1982 disposition there is an express statement of the person to whom the offer is to be made. That is the difficulty for the pursuer in that he does not aver that in 1982 he was the proprietor of Bordie Farm. He makes no averment as to the ownership of Bordie Farm. The Keeper avers that at that time Bordie Farm was owned by the NCB, but that averment is covered by a blanket denial by the pursuer. There is therefore an immediate failure of the clause clearly to define the nature and extent of the obligation. Perhaps, more accurately, it is a failure of the pursuer to aver title to enforce the obligation.

[70] Counsel for the pursuer suggested that the words "part of" might simply be inserted or implied so that the provision referred to the pursuer or his successor of part of Bordie Farm. That, in my opinion, would not assist the pursuer because it would still not be clear from the terms of the disposition of which part of Bordie Farm the pursuer's successor might be proprietor. At that point, if not before, the principle of construction contra proferentem will apply and the clause would fail to constitute a real burden. The reference in the 1982 disposition is to the lands being disponed, Parcel A, forming part of the farm and lands of Crockmuirhall in the Parish of Tulliallan whereas the reference in the pre-emption clause is to the pursuer or his first successor as proprietor of Bordie Farm, Kincardine. Strictly speaking, the first reference is to Parcel A and the second is to Parcel B, but if one looked outside the four corners of the 1982 disposition to see what other land in the vicinity the pursuer owned in 1982, one would immediately discover from the 1976 disposition that both Parcel A and Parcel B then formed part of the farm and lands of Crockmuirhall. Although the pursuer avers that in 1982 he was the owner of Parcels A and B which were "known previously as the farm and lands of Crockmuirhall", that averment is contradicted, at least in relation to Parcel A by the terms of the 1982 disposition. The other potential difficulty, which was founded on by counsel for the Keeper, was that the creditor side of the right of pre-emption is restricted to the pursuer and his first heritable successor. It was submitted that such a restriction prevented the clause from constituting a real burden. I am less confident that that is the case. I can see no reason in principle why the operation of a real burden, if validly constituted, should not be restricted in duration. If that is correct, there is no obvious reason why the duration should not be restricted in the manner envisaged in the clause in the 1982 disposition.

[71] The pursuer offers to prove that in 1982, for farming purposes, both Parcels A and B "were used as and formed part of Bordie Farm". It would be legitimate to use extrinsic evidence to identify on the ground the "Bordie Farm" referred to in the 1982 disposition. If the pursuer succeeded in proving that averment, it would not, in my opinion, solve any of the problems which I have identified in the clause of pre-emption. Extrinsic evidence would not be competent for any, wider purpose. Furthermore, the pursuer makes no averment as to the praedial benefit to Parcel B of the burden of pre-emption imposed on Parcel A. That is a matter of law which is distinct from the question of whether the pursuer had the requisite interest to enforce any right of pre-emption at the time of the sale by SCDM to M & DRH in 2004. In the course of their submissions, counsel for the pursuer suggested that Parcels A and B had benefited Bordie Farm, Parcel C, but there is no express averment to that effect. The averment that Parcels A and B "for farming purposes, were used as and formed part of Bordie Farm", does not go as far as to aver that they benefited Bordie Farm. In any event, that is not the point. The issue is whether Parcel A benefited Parcel B.

[72] In Aberdeen Varieties Limited v James F Donald (Aberdeen Cinemas) Limited 1939 SC 788 the Second Division considered a burden imposed in the sale of a theatre in Aberdeen. The disponers owned two theatres in Aberdeen which were half a mile apart. The burden on the sale of the second theatre prevented its use for the staging of plays. The purpose of the burden was plainly to confer a commercial advantage on the theatre retained by the disponers. The matter came before the court as a special case, the question being whether the restriction constituted an effective real burden. Lord Justice Clerk Aitchison recognised that in addition to a particular question whether the restriction was sufficiently defined in the disposition to satisfy the requirement that the nature and extent of the burden must be clearly disclosed on the face of the title (at 798):

"there is a more general question, namely, whether the parties seeking to enforce the restriction have such an interest as the law will recognise as a proper patrimonial interest to enforce it."

The court held inter alia that, having regard in particular to the relative situations of the two theatres, the restriction was not a restriction for the protection of a patrimonial interest in property but was a provision for the illegal imposition of a perpetual commercial monopoly. There was an appeal to the House of Lords. The House recalled the interlocutor of the Second Division and dismissed the special case on the ground that the case did not disclose, and the parties did not admit, that the singular successors of the disponers had any patrimonial interest in the question raised. The point was an apparently technical but important one. The special case procedure only permitted questions of law to be decided on the basis of an agreed statement of facts. The interest to enforce the burden was a question of fact which, counsel in the case accepted in the House of Lords, had not been agreed in the special case. There are, I think, two significant passages in the speech of Lord Thankerton (1940 SC (HL) 52 at 55 ):

"Now, this is a case in which there is no privity of contract between the parties, and therefore it is essential that the appellants should aver and prove, or get admitted if it is a special case, their patrimonial interest. It is necessary that that admission should be made before any of the questions of law with regard to the validity of the real burden can be entered upon before the Court, because, if the appellants have no patrimonial interest, they have no title to raise the question and they have no right to be here at all."

And at page 56:

"Further, I think that the terms of the special case, which are by no means clear, are also reflected in at least two of the opinions in the Second Division; because it does seem to me (for we have had them read to us) that two of the opinions, at any rate, show some signs of confusion between two quite distinct questions. In referring to the possible view that this was purely a commercial bargain or a commercial interest which was being dealt with, it is important to bear in mind the distinction between that as bearing on the validity of the real burden, which is a pure question of law, and that question as bearing on the question of patrimonial interest. The two issues are quite distinct, but I confess that it seems to me that at least two of the opinions below do bear signs of confusion on these two questions."

[73] In that case the question was whether a singular successor of the original disponer could enforce the condition in question. It was in that context that Lord Thankerton considered it to be essential in a case other than a special case that the patrimonial interest of the parties seeking to enforce the burden should be averred and proved. That requirement may be subject to relaxation when the parties seeking to enforce a real burden are the original disponer and disponee, but the difficulty in the present case is that, not only does the pursuer not aver a patrimonial interest to enforce the right of pre-emption, but he expressly avers an apparently non-patrimonial interest for doing so which is reflected in his heads of claim 1 to 3. The pursuer avers:

"This right of pre-emption was included in the 1982 Disposition as the pursuer was aware that the material deposited in the Subjects by the NCB could include materials of value."

That averment appears to me to be a clear indication that the pursuer wished to derive personal profit by exercising the right of pre-emption rather than benefiting the dominant tenement. I conclude therefore that whether or not the necessary praedial interest was present to constitute an effective real burden in 1982, the pursuer's pleadings do not disclose the necessary patrimonial interest to enforce the claimed right of pre-emption at the time of the sale by SCDM to M & DRH in 2004.

[74] In the course of the debate, I was not referred to Aberdeen Varieties Limited v James F Donald (Aberdeen Cinemas) Limited or to paragraph 407 of Vol 18 of the Stair Memorial Encyclopaedia where the case is considered. In view of the potential importance of the interest to enforce issue, I put the case out By Order to enable counsel to address me on the matter. Senior counsel for the pursuer accepted that it was necessary for the pursuer to aver and prove interest to enforce the claimed right of pre-emption, but he submitted that that requirement was satisfied by the pursuer's pleadings.

[75] He submitted that very little was required to demonstrate the necessary interest to enforce, and he suggested that interest followed title "as night follows day". He adopted the formulation in section 8(3) of the Title Conditions (Scotland) Act 2003, which it was accepted did not apply to the present case, that a person has interest to enforce a real burden if failure to comply with the burden would result in "material detriment to the value or enjoyment of the person's ownership of, or right in, the benefited property". Counsel submitted at first that the pursuer had an interest in putting back together the whole farming lands consisting of Parcels A, B, C and D. When I drew his attention to the specific averment about the reason for the inclusion of the right of pre-emption being the pursuer's knowledge that the colliery waste could include materials of value, he changed tack and relied on the pursuer's averments that:

"The Subjects [Parcel A] formed part of the lands owned by the pursuer and used as part of Bordie Farm. Prior to 1982 the Subjects had been operated by the pursuer's family as a quarry (known as Bordie Quarry)."

He submitted that quarrying should be regarded as part of the farming enterprise.

[76] Senior counsel for the Keeper accepted the general proposition that where the dominant and the servient tenements were contiguous, as here, not very much was required to satisfy the need to aver and prove interest to enforce a real burden, but he submitted that the averments to which I have just referred together with the nature of heads 1 to 3 of the pursuer's claim and the pursuer's averred reason for including the pre-emption clause in the 1982 disposition were not sufficient to meet that requirement.

[77] I was not persuaded that the pursuer's averments satisfied the need to aver a patrimonial as opposed to a personal interest to enforce the claimed right of pre-emption. Counsel were unable to refer me to any authority on the particular point of what constitutes the necessary patrimonial interest to enforce a real right of pre-emption as distinct from the more common real burdens restricting the use of the servient tenement. If all that was required to satisfy the test was the opportunity to make a profit from ownership of the servient tenement, then whether the servient tenement was situated in the immediate vicinity of the dominant tenement or not, would seem to be of little significance. All that would be required would be two commercial activities, both carried on with a view to making a profit. That, in my opinion, is not what patrimonial interest means in this context. Even if heads of claim 1 to 3 were regarded as part of the pursuer's farming enterprise at Bordie Farm, the difficulty remains that it is only Parcel B which is the dominant tenement.

[78] If the right of pre-emption is not a real burden, it would not have been enforceable against SCDM, and the Keeper would not have been obliged to enter it on the title sheet. That does not, in my opinion, automatically mean that the pursuer has no title to sue. He has a title to sue in respect of the promise branch of his case because he was the recipient of that promise. As a matter of relevancy, however, the value of that promise is greatly reduced because it was a promise to indemnify the pursuer "for any loss directly attributable to the omission of the right of pre-emption from the Title Sheet". If the right of pre-emption was not a real burden, there was no such loss. The second branch of the promise, however, that the Keeper would meet the pursuer's reasonable legal costs to quantify such a loss is not necessarily affected in the same way. That promise may be enforceable by the pursuer even if the right of pre-emption proves ultimately not to have been a real burden. The same reasoning applies to the personal bar branch of the pursuer's case. The common law branch is, however, quite different. The pursuer's title in respect of that basis of claim is dependent upon his status as proprietor of the dominant tenement, on the right of pre-emption being a real burden and on the pursuer having the necessary interest to enforce it at the relevant time. In my opinion the pursuer fails on each of those points and accordingly has no title to sue in respect of his common law case.

[79] Before leaving the terms of the pre-emption clause, it is necessary to consider the arguments concerning the mineral reservation clause. That issue would only arise if I am wrong on the real burden and interest to enforce points. In that event I would have allowed a proof before answer. In my opinion the Keeper's argument on the interpretation of the mineral reservation clause is not sufficiently strong to meet the Jamieson test. At present I prefer counsel for the pursuer's interpretation of the relevant clues within that clause but the precise meaning of the words relating to the materials reserved could not be determined without inquiry.

[80] I turn now to the promise branch of the pursuer's case. This concerns head 4 of the pursuer's claim, but the other three heads of claim only if I am wrong in my conclusions on the real burden and interest to enforce points. The pursuer's promise argument depends upon the terms of the letter dated 3 August 2005. That, and two other letters have been incorporated into the pursuer's pleadings. Those letters were part of a longer correspondence between the Keeper's office and solicitors acting for the pursuer. Most, if not all of that correspondence was produced to the court but, other than those three letters, does not form part of the pleadings.

[81] I accept counsel for the pursuer's submission that, looked at in isolation, the letter of 3 August 2005 appears to contain two unequivocal promises by the Keeper. The first relates potentially to heads 1 to 3 of the pursuer's claim and the second to head 4. Again, looked at in isolation, I do not consider that those promises could reasonably be regarded simply as statements of future intention, nor as opinions of law. If those two sentences are properly to be regarded as unequivocal promises, they would not, in my opinion, be protected by the addition of the words "without prejudice" at the end of that letter. The two sentences in question in the letter of 3 August 2005 are potentially the type of unequivocal admission or statement of fact referred to by Lord Sutherland in the passage of his opinion in Daks Simpson Group Plc v Kuiper cited by counsel for the pursuer.

[82] I accept that the meaning properly to be attributed to the words used in the letter of 3 August 2005 may be coloured by the surrounding circumstances and in particular the terms of the preceding correspondence. It may be relevant to consider, for example, whether the claim made on behalf of the pursuer bore to be a claim under the 1979 Act or at common law. For this reason I would have allowed a proof before answer in respect of heads 1 to 3 of the pursuer's claim and I shall allow a proof before answer in relation to head 4. I accept that it would have been ultra vires of the Keeper to have promised to indemnify the pursuer for the full amount of heads 1to 3 of the pursuer's claim under section 12 (1)(b) of the 1979 Act, but I do not accept that it would have been ultra vires of the Keeper to promise to settle the pursuer's claim at common law and that may be the justification for the first of the two promises in the letter of 3 August 2005. Different considerations apply to the second promise which relates to head 4 of the pursuer's claim. In my opinion the Keeper may well have had the power to make that promise in terms of section 13 (1) of the 1979 Act. That subsection provides inter alia:

"the Keeper shall reimburse any expenditure reasonably and properly incurred by a person in pursuing a prima facie well-founded claim under section 12 of this Act, whether successful or not."

As at 3 August 2005 the Keeper did not know that the pursuer did not have a valid claim under section 12 (1)(b) of the 1979 Act in respect at least of part of the sums now claimed under heads 1 to 3 of his claim. Indeed it appears to be the position of the Keeper that he still believes that the pursuer has a claim under section 12 (1)(b) in respect of his loss crystallized as at July 2005. A view not shared by counsel for the pursuer. Nevertheless, in terms of section 13 (1) the Keeper had only to be satisfied that the pursuer's claim, which was unquantified in August 2005, was "prima facie well-founded". The fact that two counsel have submitted to this court that the right of pre-emption is indeed a real burden would tend to suggest that the Keeper could have been satisfied that the prima facie test was met. In any event, even if head 4 of the pursuer's claim is not covered by section 13 (1) of the 1979 Act, the Keeper would, in my opinion, have been entitled to make the second promise under his power to carry out acts ancillary to his statutory functions including dealing with common law claims against himself.

[83] I approach the personal bar branch of the pursuer's claim on the same basis as I considered the promise branch. The pursuer avers that the Keeper is personally barred (1) from denying that the title sheet to Parcel A should have shown a right of pre-emption in his favour and (2) from denying that he is bound to indemnify the pursuer in effect in respect of the two promises contained in the letter of 3 August 2005. In my opinion the first head of personal bar relates to a statement of law which could not properly be the basis for personal bar. Although the Keeper would normally be a person professing expertise in relation to land registration issues, the representations with regard to whether the right of pre-emption was a real burden were made in the context of correspondence with the pursuer's solicitor at a time when it was apparent that the pursuer was in receipt of, and was relying upon independent legal advice. The second head of claim to personal bar appears to relate directly to the two promises claimed to be contained in the letter of 3 August 2005. If those are indeed promises, they are binding on the Keeper without recourse to personal bar. The matter, however, is not straightforward because the Keeper now maintains that some of the letters written on his behalf in the course of the correspondence with the pursuer's solicitors proceeded on the basis of an error of law. The reference in the letter of 30 September 2004 to the pursuer being entitled to indemnity under section 12 (1)(d) of the 1979 Act is a clear error of law. Where the Keeper now seeks to explain his actings by reference to such errors, considerations of equity may become relevant. In the course of submissions, reference was made to the decision in Morgan Guaranty Trust Company of New York v Lothian Regional Council where it was held by a full bench that money paid under an error of law might be recovered in an action of repetition under the condictio indebiti, the question of whether the court should order recovery being a matter of equity and the circumstances of each individual case. In that context I can see that the pursuer's actings in reliance on representations made by the Keeper under error of law might well be relevant and I would not be prepared to dismiss this branch of the pursuer's case at this stage. Again, I would have allowed a proof before answer in relation to heads 1 to 3 of the pursuer's claim and I shall allow proof before answer on this branch of the pursuer's case under head 4 of his claim. In light of my approach to this branch of the pursuer's case, it is not strictly speaking necessary to consider the Keeper's argument based on the Reprotech case. I accept that it represents the modern approach to public law issues where third party rights are concerned, such as in the realm of planning law. It appears to me, however, that the personal bar averred by the pursuer in the present case concerns the Keeper's direct actings with a claimant against him advancing a common law claim based on the Keeper's alleged negligence. The mere fact that the Keeper performs statutory functions under the 1979 Act in the public interest does not make his actions in respect of the pursuer's claim a matter of public law. I prefer the submissions made by counsel for the pursuer on this point.

[84] I turn next to the third and final branch of the pursuer's case, the claimed common law negligence of the Keeper. I start by considering the decision of the Court of Appeal in Ministry of Housing v Sharp and counsel for the Keeper's warnings about its reliability. It has to be approached with some care because of one or two potentially confusing aspects about it. The first defendant, Mr Sharp, was the Registrar. He was also "the Clerk" to the second defendants, the Hemel Hempstead Rural District Council. The negligent search in the Register of Local Land Charges was carried out by "a clerk" employed by the second defendants and the defective certificate following on the negligent search was signed by the Registrar. The negligent clerk was employed by the second defendants who were successfully sued as being vicariously liable for his actings. It is not immediately apparent why the Registrar, under whose direction and control presumably the employee of the second defendants carried out the negligent search, should not have been vicariously liable for his actings rather than the second defendants. This point was noticed by Salmon L.J. at p.277H, but not considered by him because the point was not raised in the Court of Appeal. The only case pled against the Registrar was based solely on breach of an absolute statutory obligation independent of negligence, and that case against him failed. It is also important to appreciate the point raised by counsel for the Keeper that the statutory provisions under which the Register of Local Land Charges in that case was kept, namely the Land Charges Act 1925, did not contain indemnity provisions corresponding to section 83 of the Land Registration Act 1925. Section 16 of the Land Charges Act 1925 entitles individuals to search any register or index kept under that Act. Section 17 deals with official searches carried out by the Registrar. Section 17 (5) creates a criminal offence if any officer, clerk or person employed in the registry commits, or is party or privy to, any act of fraud or collusion, or is wilfully negligent, in the making of or otherwise in relation to any certificate under that section. The only protective provisions are contained in section 17 (7) to (9):

"(7) Where a solicitor obtains a certificate of result of search under this section, he shall not be answerable in respect of any loss that may arise from error in the certificate.

(8) Where the solicitor is acting for trustees, executors, agents, or other persons in a fiduciary position, those persons shall also not be so answerable.

(9) Where such persons obtain such a certificate without a solicitor, they shall also be protected in like manner."

Those provisions were in force in that form when Sharp was decided in 1970. At that time, by contrast, section 83 (3) of the Land Registration Act 1925 provided inter alia:

"Where any person suffers loss.....by reason of an error in any official search, he shall be entitled to be indemnified under this Act."

Clearly the terms of section 12 (1)(d) of the 1979 Act resemble section 83 (3) of the Land Registration Act 1925, but not section 17 of the Land Charges Act 1925 with which Sharp was concerned.


[85] I reject the submission made by counsel for the Keeper to the effect that the authority of the Court of Appeal decision in Sharp has been weakened by the recent Court of Appeal decision in Rowley v Secretary of State for Work and Pensions. The leading judgment in that case was handed down by Dyson L.J. His "general approach" at paragraphs 47 to 50 was derived from the speech of Lord Bingham in Customs and Excise Cmrs v Barclays Bank Plc [2007] 1 AC 181 at paras 4-8. In that case, which had been decided only a year earlier, the case of Ministry of Housing v Sharp was referred to in four of the five speeches. In none of the five speeches was the soundness of the decision in Sharp doubted in any way. Sharp was referred to by Lord Bingham as one of "the leading authorities" and Lord Mance went so far as to state in terms (at para 110):

"I consider that Ministry of Housing and Local Government v Sharp was rightly decided."

Lord Rodger of Earlsferry treated the matter thus (at paragraph 52):

"Therefore it is not surprising that there are cases in the books - notably Ministry of Housing and Local Government v Sharp [1970] 2 QB 223, approved by Lord Slynn of Hadley in Spring v Guardian Assurance Plc [1995] 2 AC 296, 332F-G - which do not readily yield to analysis in terms of a voluntary assumption of responsibility, but where liability has none the less been held to exist. I see no reason to treat these cases as exceptions to some over-arching rule that there must be a voluntary assumption of responsibility before the law recognises a duty of care. Such a rule would inevitably lead to the concept of voluntary assumption of responsibility being stretched beyond its natural limits - which would in the long run undermine the very real value of the concept as a criterion of liability in the many cases where it is an appropriate guide. In any event, as the words which I have quoted from his speech in the Merrett Syndicates make clear, Lord Goff himself recognised that, although it may be decisive in many situations, the presence or absence of a voluntary assumption of responsibility does not necessarily provide the answer in all cases. Indeed in Hedley Byrne Lord Reid saw it as only one possible basis, the other being where the defendant has 'accepted a relationship with the inquirer which requires him to exercise such care as the circumstances require': [1964] AC 365, 486. So I would reject Mr Brindle's submission on this point."

Lord Rodger then proceeded to apply the Caparo test.


[86] I accept the submission by counsel for the pursuer that in the present case the tripartite test in Caparo is the appropriate one to apply. This apparently simple but in reality sophisticated test has enabled the law to be developed without realising the danger alluded to by counsel for the Keeper of opening the door to an indeterminate category of claimants.


[87] The first limb of the Caparo test is foreseeability. In my opinion, in the present context of a statutory scheme which includes certain remedies, the test of foreseeability means foreseeing loss of a kind not covered by the statutory scheme. In cases such as Rowley, the relevance of the particular statutory scheme has been considered as part of the fair, just and reasonable limb of the test, but it seems to me to arise naturally in the present case in the context of foreseeability. The point is also closely related to the remoteness of damages submission which was made by counsel for the Keeper and which was based on Simmons v British Steel Plc. The important point for present purposes was the first made by Lord Rodger of Earlsferry at para 67:

"These authorities suggest that, once liability is established, any question of the remoteness of damage is to be approached along the following lines which may, of course, be open to refinement and development.

(1) The starting point is that a defender is not liable for a consequence of a kind which is not reasonably foreseeable...." (my emphasis)

The question in the present case is whether the pursuer has relevantly averred foreseeability of loss of the kind suffered by the pursuer and which would not have been covered by the provisions in sections 12 and 13 of the 1979 Act. All that the pursuer avers in article 10 of condescendence is that the Keeper knew, or should have known, that his failure to include the right of pre-emption in the title sheet would, or, at least, would be likely to prejudice the pursuer and cause him loss and damage. In my opinion, the pursuer would need to aver both foreseeability of loss not covered by sections 12 and 13 of the 1979 Act and loss of the kind claimed, namely, principally loss of profits. It is far from obvious why the inability to exercise an option to purchase effectively at open market value under a clause of pre-emption should result in any loss other than the difference between that open market value and its special value to the owner of the dominant tenement. That special value reflecting the benefit to the dominant tenement of having both parcels of land in single ownership. In the present case, it is far from obvious why SCDM should have sold Parcel A for £40,000 when according to the pursuer it was worth well over £1 million, far less why the Keeper should have foreseen such an event. If one puts aside for the moment considerations of loss arising from the special value of Parcel A to the owner of Parcel B, one is left with the issue of why the open market value of Parcel A should not have reflected the profit which could be realised by anyone who owned it. The fact that the Keeper could have known from the terms of the 1982 disposition that the NCB intended to use the quarry void for the tipping of colliery waste, does not begin to address the issue of why the Keeper should have foreseen that any subsequent owner of Parcel A should have been prepared to part with it for very substantially less than its value.


[88] For the purposes of the first limb of the Caparo test, I accept that the pursuer could aver foreseeability of loss not covered by the scheme of the 1979 Act, but I do not consider his present averments to be apt to cover foreseeability of loss of the kind which he claims. I consider that the second limb of the Caparo test, namely proximity, causes the pursuer no difficulty. The relationship between the proprietor of a dominant tenement in respect of a real burden which should have been entered in the Register by the Keeper but was not is, in my opinion, one of sufficient proximity to satisfy this test. On balance I would have been prepared also to accept counsel for the pursuer's submission on the third limb of the Caparo test that it was potentially fair, just and reasonable to impose a common law duty of care on the Keeper in the particular circumstances of this case and if one assumes, for the purposes of this part of the argument, that the Keeper was negligent in not entering the right of pre-emption as a real burden in the title sheet. It would appear that most losses arising from the operation of the scheme would be compensated under sections 12 and 13 of the 1979 Act on a no fault basis. Where a loss occurred which would not have been covered by the scheme, and where the person suffering that loss is able to demonstrate that it was caused by negligence on the part of the Keeper, I can see no reason in principle why a common law duty of care should not exist. This is not a case where the imposition of such a duty would be likely to impede or deter the Keeper from the performance of his duties under the Act. The three limbs of the Caparo test would have to be met in any case. One can imagine reasons why, in a particular case it would not be fair, just and reasonable to impose such a duty of care. It would not be fair, for example, to seek to recover from the Keeper a loss of a type expressly excluded by section 12 (3) of the Act. Such an attempt to circumvent the scheme of the Act would plainly not be fair just and reasonable. In the present case that particular charge is levelled by counsel for the Keeper in respect of the exclusion under section 12 (3)(f). That provision is intended to protect the Keeper against indemnity claims where the title sheet does not expressly include the minerals but where they have in fact been excepted or reserved at some time in the past. This may be a valid criticism made on behalf of the Keeper and may result in the pursuer failing the third limb of the Caparo test, but it is not so clear that I would have held it to be the case without inquiry, especially as I would have allowed inquiry in respect of the meaning of the mineral reservation clause.


[89] I would, however, in any event have found that the pursuer was not entitled to a proof before answer on his averments of fault in article 10 of condescendence even if the three limbs of the Caparo test were satisfied. I accept counsel for the Keeper's criticism that the pursuer has not relevantly pled the specifics of the claimed negligence. The present averment appears to me to be little more than a statement of absolute liability for breach of statutory duty. The difficulty for the pursuer, in my opinion, is that ,whatever was said in subsequent correspondence, it was not self evidently negligent of the Keeper not to enter the right of pre-emption as a real burden in the title sheet. As I have already noted, opinions differ on whether this was a real burden or not. Two counsel in the present case have submitted to the court that the right of pre-emption did not constitute a real burden, whatever my view of the matter may be. There was ample scope, therefore, for the Keeper on legal advice and as a deliberate act not to enter the right of pre-emption as a real burden. In such circumstances it is incumbent on the pursuer to aver the facts and circumstances which it is claimed made that act a negligent one. In any event, for the reasons already considered, the pursuer has failed to aver foreseeability by the Keeper of loss of the kind now claimed. Accordingly, I would not have allowed a proof before answer on this branch of the pursuer's action even if I am wrong on the real burden and interest to enforce points.

Decision

In these circumstances I shall sustain the defender's first plea in law in so far as it relates to the pursuer's common law case in article 10 of condescendence, I shall sustain the defenders second plea in law except in so far as it relates to the pursuer's fourth head of claim and I shall allow a proof before answer restricted to the pursuer's fourth head of claim on the bases set out in articles 8 and 9 of condescendence.

Procedure

In the course of the By Order hearing senior counsel for the pursuer explained that as the pursuer's pleadings on the patrimonial interest to enforce point had not been the subject of specific challenge by counsel for the Keeper, he would wish an opportunity to consider amending his pleadings on this point. In these circumstances I shall put the case out By Order before pronouncing an interlocutor giving effect to the terms of this Opinion.


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