snowie v museum hall

8/3/2019 Snowie v Museum Hall

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*971 Snowie v Museum Hall LLP

Outer House

6 August 2010

2010 S.L.T. 971

Lord Glennie

6 August 2010

[2010] CSOH 107

Heritable property Title conditions Deed of conditions preventing use of apartments withinflatted development for trade or business Deed further limiting use of apartments to use as privatehouses Whether restrictions unduly onerous or unusual.

Four members of a family, contracting as individuals, entered into missives for the purchase from thedefender of six apartments in a flatted development containing 15 apartments. Rule 2.4.2 of the deedof conditions provided that no trade, business or profession might be carried out in each apartment.Rule 2.4.9 provided that each apartment had to be used only as a private house and might not beused, even in an ancillary capacity, for any trade, business or profession. It was not in dispute that thedeed was not shown to the pursuers prior to registration. The pursuers contended that the said ruleswere unduly onerous and unusual conditions within the meaning of cl 8 of the missives, and thatthey were entitled to resile from the missives. They submitted that the rules restricted professionals,at whom the properties were marketed, from working from home, that it prevented the commercialletting of apartments or even the letting of a room within an apartment, and that the rules wererepugnant to the pursuers' rights of ownership and could not found a real or community burdencapable of enforcement. The defender, in turn, raised individual actions against each party seekingimplement of the missives and payment of the balance and purchase price.

Held, that although it was possible, applying the widest possible interpretation of the two rules, toconclude that they would catch home working and commercial letting, the rules had to be construed

sensibly having regard to the nature of the development in which ownership by professional personsworking from home on occasions, had to be contemplated; the restrictions, although unusual, werenot uncommon, the purpose of which was to prevent the residential amenity of the development beingspoilt by such work activity, and although it was not easy to define where the line should be drawn, itwould be easy to recognise cases falling either side of it; furthermore, the letting of an apartment toan individual or family was expressly permitted by cl 8 and the requirement that the apartment beused only as a private home did not prevent that, nor did rule 2.4.2 provide an obstacle as such lettingdid not involve the carrying out of a trade, business or profession within the said apartment (paras11-15 and 16); and pursuers' action dismissed , decree granted in favour of the defender in eachindividual action and case put out by order to determine expenses.

Opinion, that the rules, if prohibiting the letting of the apartments, would have been repugnant with theright of ownership and could not have been enforced by neighbouring owners as real or community

burdens but the defender would have had a right to enforce the burden as it had a direct contractualright founded on the missives (para 19).

Action

Malcolm Snowie and others raised proceedings seeking to resile from missives entered into for thepurchase of apartments from Museum Hall LLP. The defender, in turn, raised individual actionsagainst each party seeking implement of the missives and payment of the balance and purchaseprice.

The action came to debate before the Lord Ordinary (Glennie).

Earl of Zetland v Hislop (1881) 8 R 675.

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Moir's Trustees v M'Ewan (1880) 7 R 1141.

Wimpey Homes Holdings Ltd v Macari, Sheriff J F Wheatley, QC, 1985, unreported.

Textbooks referred to

Greens Practice Styles , Division C, Commercial Conveyancing (July 2001 and March 2008) .

Paisley and Cusine , Unreported Property Cases from the Sheriff Courts .

Reid , The Law of Property in Scotland , para 391 .

Rennie , Land Tenure in Scotland , para 5-14 .

On 6 August 2010 the Lord Ordinary dismissed the pursuers' action and granted decree in favour ofthe defender in each individual action and put outthe case by order to determine expenses.

LORD GLENNIE.

[1] Museum Hall is a flatted development containing 15 apartments. In 2007/2008, members of theSnowie family, each contracting as an individual, entered into missives for the purchase fromMuseum Hall LLP (Museum Hall) of six apartments. Euan and Gordon Snowie each purchased twoapartments, and Malcolm and Amanda each purchased one.

[2] So far as material, the missives are in virtually identical terms. This action is concerned with theproper construction of cl 8 thereof, and the conditions contained in the deed of conditions referred to

therein. In the case of all but one of the missives, cl 8 provides as follows: The title to be granted tothe Subjects will take the form of a Disposition by the Sellers which shall contain such conditions asthe Sellers think appropriate for the Development and the preservation thereof and which shallincorporate the prior conditions of title and the conditions *972 contained in any deed of conditionsrelating to the Development which shall contain no unduly onerous or unusual conditions . The deedof conditions shall contain the allowance for the occupation of at least one dog, one cat and fish. Thedeed of conditions shall contain no prohibition to the right to lease the Subjects provided it is not tomore than one family unit (emphasis added). In the case of the missives pertaining to the purchaseof an apartment known as plot 11, cl 8 was slightly different, in that immediately after the words initalics and there was inserted the following sentence: The Purchaser shall be entitled to see the saiddeed of conditions prior to registration. It is not suggested that, in the circumstances of this case, thatadditional sentence makes any difference to the result.

[3] The deed of conditions for the apartments was registered on 7 December 2009. It is not in disputethat it was not shown to any of the Snowies prior to registration.

[4] Clause 2 of the deed of conditions contains a number of rules. Of particular importance in thiscase are rules 2.4.2 and 2.4.9, which provide as follows:

Rule 2.4.2

No trade, business or profession may be carried out in the apartment (including the sale, making ormanufacture of any beer, wine or liquors).

Rule 2.4.9

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Each apartment must be used as a private house only, and may not be used, even in an ancillarycapacity, for any trade, business or profession.

In terms of rule 2.1.1, the rules are imposed on the development as (a) community burdens, inwhich the development is the community, which are enforceable by the owners of the units within thedevelopment, and (b) real burdens in favour of any unit of which the developer (Museum Hall) is the

owner.[5] Sections 25 and 54(1) of the Title Conditions (Scotland) Act 2003 make it clear that burdens of thetype contained in cl 2 of the deed of conditions are community burdens within the meaning of theAct. Section 27 of the Act provides that such community burdens are mutual and reciprocal betweenthe owners of the various units within the property and may be enforced by the owner of one unit asagainst the owner of another.

[6] The Snowies contend that rules 2.4.2 and 2.4.9 of the deed of conditions are unduly onerous andunusual conditions, entitling them, as purchasers, to resile from the missives. They have commencedsix actions in the commercial court in which, in respect of each of the six apartments, they seekdeclarator to that effect and claim repayment of the deposit paid by them. The relevant actions by theSnowies are as follows: CA 44/10 Euan Snowie v Museum Hall ; CA 45/10 Euan Snowie v MuseumHall ; CA 46/10 Gordon Snowie v Museum Hall ; CA 47/10 Gordon Snowie v Museum Hall ; CA 48/10

Malcolm Snowie v Museum Hall ; CA 49/10 Amanda Snowie v Museum Hall . The Snowies' positionis disputed by Museum Hall, though they accept that if those rules did constitute unduly onerous andunusual conditions then the Snowies are entitled to resile and recover their deposits. For their part,Museum Hall have commenced four actions against the individual members of the Snowie family forimplement of the missives and payment of the balance of the purchase price in respect of each of thesix apartments, together with interest thereon. The actions by Museum Hall (which were alltransferred into the commercial court at the time of the hearing so that they could be considered atthe same time as the Snowie actions) are as follows: A 201/10 Museum Hall v Amanda Snowie ; A202/10 Museum Hall v Malcolm Snowie ; A 203/10 Museum Hall v Gordon Snowie ; A 204/10Museum Hall v Euan Snowie . The Snowies accept that if their argument that the rules constituteunduly onerous and unusual conditions is unsuccessful, then they are liable to pay the balance of thepurchase price for each apartment. There is no real dispute about the sums due on this basis.

[7] All the actions therefore turn on the same point of construction. Parties were agreed that thematter could be disposed of at debate. It happened that the debate was conducted by reference tothe pleadings and productions in action CA 48/10, in which this opinion is issued, but this opinion ineffect deals with all 10 actions.

[8] Although the debate was opened by counsel for Museum Hall, it is convenient to refer first to thebasis upon which it was contended, for the Snowies, that the restrictions were unduly onerous andunusual.

[9] In developing the argument for the Snowies, counsel submitted that, on their proper construction,rules 2.4.2 and 2.4.9 were highly restrictive. Rule 2.4.2 struck at any trade, business or professionbeing carried out in the apartment in any manner. Rule 2.4.9 provided that each apartment must beused only as a private house and could not be used for any trade, business or profession, even in anancillary capacity . Those restrictions were very widely drawn. Despite the last sentence of cl 8, they

contained a prohibition on the right to lease the subjects, since a commercial letting of the apartment,or even the letting of a room within the apartment, would constitute a trade or business and thereforefall foul of the rules. In any event, such a prohibition would be repugnant to the concept of ownership(see per Lord Young in Earl of Zetland v Hislop at (1881) 8 R, p 681 , and also in Moir's Trs v M'Ewanat (1880) 7 R, p 1145 ), and therefore, ex hypothesi , unduly onerous and unusual. So also, an artistwho painted within the apartment would be carrying on his business there, especially if his agentcalled from time to time to discuss his rates, or a would be purchaser came to look at his portfolio. Aprofessional man or woman working substantially from home, or even occasionally taking work home*973 from the office, would also contravene these restrictions. Even if a court might ultimatelyconstrue the rules more restrictively, the mischief was that, as drawn, they gave rise to a risk that theowner of another apartment might try to enforce them to the letter, and might seek (and possiblyobtain) interdict or other relief, putting the Snowies to undue worry and expense. The restrictions hadto be viewed in their proper context. The apartments were on the market at a relatively high price.They were clearly aimed at a market which included professional and business people. In thatcontext, a restriction on working from home was unduly onerous and oppressive. There was no

justification for it where the activity itself caused no harm to others or detriment to the value of the

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development or the other apartments within it. In this regard, counsel for the pursuer referred to s 8 ofthe Title Conditions (Scotland) Act 2003 (in the Act), in terms of which it was made clear that anowner of a benefited property had no interest to enforce a real burden unless the failure to complywith it resulted, or would result, in material detriment to the value or enjoyment of his ownership of thebenefited property. He submitted that this assisted in identifying what restrictions were permissibleand what were unduly onerous and oppressive.

[10] For Museum Hall, counsel submitted that the two rules complained of, far from being unusual orunduly onerous, in fact conformed to a standard and commonly used style. He referred to GreensPractice Styles , Division C, Commercial Conveyancing, in the versions issued in July 2001 andMarch 2008. The July 2001 document contained a style for a deed of conditions relating to Flats andhouses mixed Superiority reserved. Condition (FOURTH) in that style provided that: The house orflat is to be used and occupied as a private dwellinghouse and shall not be sub-divided or occupiedby more than one family at a time; no part of any Feu, including any house or flat shall be used for thecarrying on therein of any trade, business or profession , whether or not such use may be deemedincidental or natural to the ordinary residential use of the house or flat or whether any personoccupying the same may have a contractual right to use the same for or in connection with or arisingout of any trade, business or profession notwithstanding any rule of law to the contrary . In theMarch 2008 style, which is a deed of tenement burdens, cl 7 sets out Restrictions on Use etc.Clause 7.1 provides that: Each Unit shall be used exclusively as [e.g. a private dwellinghouse] and

for no other purpose whatever . Clause 7.3 provides as follows: No Owner or occupier of any Unitmay: (A) carry on upon the Unit, or garden or other ground or Garage pertaining to such Unit or in anypart of the Tenement, [any trade, business, manufacture or profession ], whether or not suchtrade, business, manufacture or profession, or selling of goods, is incidental to the ordinary[residential] use of the relevant property . The square brackets are used to show that the style isadaptable to different circumstances, but it clearly envisages that it may be used to import restrictionson the use of a private dwellinghouse and, in that context, to prohibit the carrying on in or around thehouse any trade, business or profession, even if that trade business or profession is incidental to theordinary residential use of the property. Although the wording used in these provisions taken fromGreens Practice Styles clearly differs from that in the missives which are presently before the court,their effect would appear to be broadly similar; and the fact that they appear in a standard referencework suggests that they are not regarded as unusual or unduly onerous. In any event, counsel for thepursuer submitted that there was no specific prohibition of letting in the deed of conditions, since, in a

commercial letting business, the business of letting is not typically carried on from the property whichis let. But even if that were wrong, and there were a specific prohibition on letting, that could not be areal burden. Such a prohibition would be repugnant to the Snowies' rights of ownership and thereforeunenforceable as a real burden: Moir's Trs v M'Ewan , and see also Rennie, Land Tenure in Scotland, at para 514, and Reid, The Law of Property in Scotland , at para 391. Accordingly, in so far as therules might, on a strict interpretation, be construed as prohibiting letting, they would be unenforceableto that extent, and could not justify the Snowies purported resiling from the missives. As to theargument that the restrictions in the rules might be held to prevent a businessman or a professionalman working from home, such a construction was untenable on the ordinary reading of the deed ofconditions. As illustrative of this part of his submissions, I was referred to a 1985 decision of Sheriff JF Wheatley, QC, as he then was, in Wimpey Homes Holdings Ltd v Macari , noted in UnreportedProperty Cases from the Sheriff Courts , edited by Professor Roderick R M Paisley and SheriffDouglas J Cusine.

[11] I begin by considering whether, as a matter of construction, the conditions imposed by rules 2.4.2and 2.4.9 are unduly onerous or unusual within the meaning of cl 8 of the missives. Rule 2.4.2prohibits the carrying out within the apartment of any trade, business or profession. It is, as counselfor the pursuer submitted, concerned with what happens inside the apartment. Rule 2.4.9 restricts theuse of the apartment to use as a private house and prohibits its use, even in an ancillary capacity forany trade, business or profession. It is not clear whether the word ancillary means ancillary to theuse of the house as a private house or ancillary to the trade, business or profession being exercisedelsewhere. It probably does not matter. As counsel for the pursuer submitted, rule 2.4.9 is concernedwith the use made of the apartment rather than what happens within it, although the two mightoverlap. Taking the two rules together, and applying the widest possible interpretation of therestriction imposed by those rules, it is, I suppose, just arguable that they would catch anycommercial letting of the apartments, and even the occasional use made of the apartment by abusinessman or professional working from home in the *974 evenings or weekends. But I am unable

to accept that this is the proper construction of those rules.

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[12] In Wimpey Homes Holdings Ltd v Macari , the pursuers sought to interdict the defenders, theowners of the property, from contravening a deed of conditions applying to all the proprietors ofhouses within the particular estate. The conditions, so far as relevant to the dispute, provided thateach house was to be used only as a private dwellinghouse and was not to be used for any trade,business or profession. The defenders operated an ice cream van. For a while they used their housefor the purposes of their trade by taking deliveries there of crisps and lemonade in bulk, but this

stopped when complaints were made by a neighbour and the defenders found alternative storagefacilities for their business. Thereafter, each evening on his return from work, the first defender parkedhis ice cream van under a car port erected next to the house; and each night he took into the housefor security purposes some 2,000 cigarettes and the day's takings from the ice cream van. Relyingupon the restrictions in the deed of conditions, the pursuers sought to interdict these activities. Theycontended that by taking the 2,000 or so cigarettes into the house each night for security purposes,the defenders were trading, or carrying out part of their business from their own home. No similarcomplaint was made about the removal into the house each night of the day's takings. In respect ofthat matter, Sheriff Wheatley said this: I find it impossible to hold that the defenders could bedescribed as trading or carrying on business from their home mainly because some cigarettes wereremoved from the van into the house for safekeeping. The defenders do not sell goods from theirhome, nor do they, since April 1985, receive stock there. The removal of cigarettes is merely aprudent measure, of minimal significance, which on the evidence I found to be not in any real sense

connected with the defenders' business. Such a situation can best be likened to taking a brief-case ofpapers home from work, something which on the evidence is not uncommon. I concluded that itwould be entirely unreasonable to interdict the defenders from removing the cigarettes as aforesaid.The second contention by the pursuers was that the defenders were in violation of the deed ofconditions by parking the ice cream van under their car port each night, but the pursuers did notargue that they were engaging in their business by so doing. I do not therefore need to touch on thisaspect.

[13] Although the precise clause and the facts are different from those with which I am concerned,Sheriff Wheatley's comments on the first complaint are nonetheless of some interest. The restrictionwas against the use of the home for any trade, business or profession. Sheriff Wheatley drew adistinction between, on the one hand, the removal of the cigarettes into the house, which was made aprudent measure, of minimal significance, and not in any real sense connected with the defenders'business and, on the other, selling goods from the house or receiving stock there. Further, heequated the use of the house in this way with someone taking a briefcase home from work. Clearly heregarded this occasional use of the home for work purposes as something which would not infringethe restriction in the deed of conditions. I share that view.

[14] It is, I think, also of importance to note that restrictions or prohibitions against the carrying on of atrade, profession or business, even if only incidental to the use of the house as a dwelling home, areclearly not uncommon, otherwise they would not have featured for 10 years (and possibly muchlonger) in a standard volume of styles. Counsel for the pursuer objected that there might well be otherstyles showing that such restrictions were by no means common; but the extracts from GreensPractice Styles were referred to in counsel for the defender's note of arguments lodged more than aweek before the debate and had themselves been lodged in process, and there had been plenty oftime before the debate to have unearthed and put forward alternative styles which did not containsuch restrictions if such existed. It was not seriously contended that there should be a proof on this

question, and in the absence of any alternative style or text having been shown to me to suggestotherwise, I am prepared to accept that restrictions of this kind are, even if not common, at least notuncommon. The restriction in Wimpey Homes Holdings Ltd v Macari was to a similar effect and isfurther evidence that such restrictions are not unusual. It seems to me that this goes some way toshowing that they are also not regarded as being unduly onerous.

[15] These considerations lead me to the conclusion that the restrictions in the rules contained in cl 2of the deed of conditions, and indeed similar restrictions in other deeds, must be given a sensibleconstruction having regard to the nature of the scheme or development to which they relate and thepurpose for which they must be taken to have been included. As counsel for the pursuer himselfpointed out, the nature of this particular development is such that it must be contemplated that someof the apartments will be owned by business or professional people working for some of the time fromhome. As his own arguments demonstrated, it would be remarkable if the provisions of rules 2.4.2and 2.4.9 were intended preclude this. By the same token, so it seems to me, it would be remarkableif they were to be so construed. In the note of Wimpey Homes Holdings Ltd v Macari , it is said thatthe deed of conditions is designed to maintain the amenity of the housing scheme. It is not clear

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whether this is based on anything said by Sheriff Wheatley or is a comment made by the editors. Buteven if it is the latter, it is a comment which is entitled to respect having regard to the experience ofthe editors in this field. Further, it makes obvious sense. The purpose of restrictions of this sort is toprevent the residential amenity of the development being spoiled. The residential amenity of adevelopment is not spoiled by the fact that one or more of the owners of the apartments within itbrings work home from the office. It may ultimately be a matter of degree. I do not *975 need to

decide whether it would be permissible, standing the terms of rules 2.4.2 and 2.4.9, for an owner ofone of the apartments to carry on his business substantially or entirely from home, provided that hedid not display any advertising and did not receive either deliveries or customers or clients. It isdifficult to conceive that the artist who paints from home would be acting in breach of the deed ofconditions, even if from time to time he was visited by his agent, a gallery owner or a potential buyer.So too, an advocate or solicitor who worked from home for most of the time, travelling only to attendcourt or meet clients, would not, in my opinion, be acting in breach of the restrictions. In both thesecases, their activities would have no impact on the amenity of the residential development. On theother hand, an estate agent who set up business in his own apartment, displaying advertising fromthe windows and perhaps from outside the main entrance door, and receiving prospective purchasersor tenants on a regular basis throughout the day, would very likely be found to be in breach.Numerous examples can be given falling either side of the line, and as the debate continued theexamples offered became more varied, colourful and farfetched. It is not easy to define were the line

is to be drawn, but I suspect that in most cases, like the elephant of which lawyers are so fond, it willbe easy to recognise cases falling either side of it. In respect of the prohibition on the carrying on of atrade, business or profession, therefore, the restrictions, interpreted in a manner which I have soughtto indicate, are, in my view, neither unusual nor unduly onerous.

[16] Nor am I persuaded by counsel for the pursuer's separate argument that the terms of rule 2.4.9would prevent the apartments being let. The letting of an apartment to an individual, or to a family foruse as a family unit, is expressly permitted by cl 8 of the missives. Rule 2.4.9, which stipulates thateach apartment must be used as a private house only, is not inconsistent with this. The latter part ofthat rule, which goes on to state and may not be used, even in an ancillary capacity, for any trade,business or profession must be read as supplemental to the requirement that the apartment be usedonly as a private house. There is nothing in this to prevent the apartment being let. In so far asreliance was also placed on rule 2.4.2, it seems to me that counsel for the defender is correct in hisanalysis that the letting of the apartment does not involve the carrying out of any trade, business orprofession within it. So this rule does not prevent the letting of the apartments either.

[17] Counsel for the pursuer argued that, whatever might be the true construction of rules 2.4.2 and2.4.9, they were drafted in such a way as to be likely to give rise to disputes, with complaints beingmade by anxious or meddlesome neighbours in reliance upon a literal interpretation of the prohibition.That may be so, though I have seen no evidence to support it. But even if it is so, it does not assistthe Snowies. Their complaint is that the rules in the deed of conditions import unduly onerous orunusual conditions. Whether that complaint is good or bad requires an investigation into whether therestrictions imposed by the rules are indeed unduly onerous or unusual. I have found that they arenot. There is therefore no breach of cl 8 of the missives. It matters not for this purpose whether, atsome future time, an anxious or meddlesome neighbour may wrongly construed the rules in a waywhich encourages him to complain about some use of the apartments by one or more of the Snowies.If the Snowies had wished to gain the benefit of a covenant against being harassed by an anxious or

meddlesome neighbour relying upon an over literal and wrong interpretation of the rules, they couldhave tried (though probably in vain) to have such a covenant included in the missives.

[18] For these reasons I am satisfied that the complaints put forward by the Snowies are irrelevantand that their averments in support thereof are irrelevant.

[19] I have reached this conclusion as a matter of construction of the relevant provisions both in themissives and in the deed of conditions. In those circumstances, I do not need to consider fully theargument put forward by counsel for the defender that, to the extent that the restrictions in the ruleswent further than was reasonable, they were repugnant to the Snowies' rights of ownership and couldnot found a real burden or a community burden capable of enforcement. I am not persuaded that arestriction on carrying on a trade, business or profession from the apartments, even if construed in abroader sense than that which I have adopted, would be repugnant to their rights of ownership.Accordingly, if the Snowies were to have succeeded on this point, this argument would not have

assisted Museum Hall. I am, however, persuaded that, if the rules in the deed of conditions couldproperly be construed as prohibiting the letting of the apartments, they would to that extent be

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repugnant to the Snowies' rights of ownership. There did not appear to be any dispute betweencounsel on this point. That would mean that the prohibition on letting could not be a real or communityburden and could not be enforced by the owners of other apartments in the development. But as atpresent advised, I do not see why the fact that the prohibition on letting could not operate as a realburden would affect the right of Museum Hall themselves to enforce it, if they were so minded, sincetheir right is a direct contractual right founded on the missives and the deed of covenants to be

registered thereafter, to which cl 8 of the missives gives effect. Of course, if Museum Hall were toseek to enforce it, they might be met by the argument, based upon the terms of cl 8 itself, but theywere not entitled to prohibit the lease of the subjects. I do not need to get into these arguments since Ihave decided the case on a different basis.

[20] For the reasons given above, therefore, I propose to dismiss each of the Snowie actions asirrelevant and grant decree in favour of Museum Hall *976 in each of their actions. I would assumethat, in these circumstances, the expenses of each action should be borne by the Snowies and,subject to any representation made to me, I would propose to include an order for expenses to thateffect in each interlocutor. Before pronouncing dispositive interlocutors, however, I should give theparties an opportunity to agree an updated version of the figures shown to me at the debate forinclusion in the relevant interlocutors; and to address me, should they so wish, on the question ofexpenses. I shall therefore put the case out to call by order on Wednesday, 11 August 2010 for thesematters to be finalised. If, in the meantime, parties notify my clerk that they have reached agreementon these two matters of quantification and expenses, there will be no need for any appearance onthat day.

Representation

Counsel for Pursuer, J Campbell , QC, Carruthers ; Solicitors, Andersons LLP Counsel forDefender, D Davidson ; Solicitors, Harper McLeod LLP .(c) W. Green & Son Limited

2011 Sweet & Maxwell

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snowie v museum hall

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