Sheriff Appeal Court holds contractual right of pre-emption survived abolition of feudal system
An appeal by the executors of a late farmer’s estate against a sheriff’s decision that a right of pre-emption in the feu disposition of his farm had survived the abolition of feudal tenure has been refused by the Civil Division of the Sheriff Appeal Court.
Turcan Connell (Trustees) Ltd and Thomas Clark, the executors of the estate of the late George Clark, sought to establish that a right of pre-emption in favour of West Lothian Council had not survived the abolition of the feudal system in Scotland in 2004.
The appeal was heard by Sheriff Principal Murray, Sheriff Principal Pyle and Appeal Sheriff Fife. The appellants were represented by Walker QC and the respondent by Davie QC.
The feu disposition of the property, Westmuir Farm, was granted by the respondent’s statutory predecessor, Lothian Regional Council, in favour of the late Mr Clark in 1986. Clause 6 of the disposition reserved in favour of the feudal superior a right of pre-emption of the feu or any part of it should it be sold or transferred.
On 28 November 2004, the Abolition of Feudal Tenure etc. (Scotland) Act 2000 abolished the system of feudal land tenure. The respondent did not opt to register a Section 18A notice under the 2000 Act that would have allowed for the preservation of a personal real burden. Following the death of Mr Clark, his executors sought to sell Westmuir Farm to a third party, at which point the respondent sought to exercise the pre-emption right.
Following a proof, the sheriff found that the feu disposition created an enforceable, standalone, contractual obligation on the appellants to give the respondent notice of any intention to sell the feu or a specified part of the feu and enable the respondent to trigger a right of pre-emption in respect of the feu or a specified part thereof.
It was submitted for the appellants that the sheriff had erred in finding that the feu disposition created an enforceable contractual obligation. Properly construed and respecting the words used, the sheriff should have found that the contractual right formerly held by LRC was only habile to be exercised by LRC for as long as it was simultaneously the feudal superior, a status it had lost following abolition.
In the event that the disposition survived, it was also submitted that a letter sent by Turcan Connell to the respondent on 17 December 2015 that highlighted certain areas on the plan as marked for sale constituted a valid notice of the intention of the appellants to sell a specific part of the feu and triggered the right of pre-emption under Clause 6 of the feu disposition.
The respondent submitted that there was nothing in the deed that suggested that the right was restricted only to a feudal superior. The use of the term “superior” in Clause 6 was only a way of referring to a party to the agreement, and to confine it only to a feudal superior would be an overly restrictive interpretation of the contract. In respect of the letter, it was submitted it was manifestly defective, with the relevant areas said to be marked in red and brown virtually indistinguishable from each other.
Not intended to extinguish contractual rights
The opinion of the court was delivered by Sheriff Principal Murray. He began: “We find no error of law in the sheriff’s conclusion. We accept the sheriff’s analysis that a feu disposition is also a contractual document.”
Citing the writings of Professors Gretton and Reid on the subject, he said of the effect of the 2000 Act: “Section 54 makes it clear that feudal abolition will extinguish (subject to exceptions) all rights and obligations of a superior which are held simply by virtue of being the superior. It is not intended to extinguish contractual rights and obligations whether created in feudal deeds or otherwise.”
He continued: “Section 75 makes it clear that even after abolition a former superior will be able to enforce the terms of a feudal deed against the original vassal insofar as such terms are contractual.”
Sheriff Principal Murray concluded on this matter: “The words clearly create the right of pre-emption and there is nothing which supports the appellants’ argument that the use of the word ‘superior’ had the effect of limiting the capacity in which the right is to be exercised. There is nothing in the words used in the feu disposition or identified in the background knowledge of the parties which supports that interpretation. Business common sense does not suggest that the right of pre-emption was restricted to LRC in the capacity of superiors.”
Turning to whether the letter of 17 December 2015 constituted valid notice, he said: “We consider the letter to be manifestly defective. It makes reference to an area covered red and brown and we have no hesitation in accepting the sheriff’s analysis which conforms to our own examination of the plan annexed to the letter that there is no brown visible on the plan attached to the letter.”
He concluded: “There is no merit in the appellants’ contention that the reasonable recipient would conclude that the appellants’ desire was to sell everything coloured on the plan and nothing else or that the reasonable recipient should have responded on the basis that the letter of 17 December 2015 was valid and triggered the right of pre-emption.”
For these reasons, the appeal was refused.
© Scottish Legal News Ltd 2021