Amenity area maintenance burden did not create ‘monopoly’, Sheriff Appeal Court rules
A property management company has successfully challenged a sheriff’s decision that a burden requiring homeowners in a housing scheme to contribute to the costs of maintaining open ground in the estate owned by the maintenance company was void because it created a “monopoly”.
The Sheriff Appeal Court ruled that the sheriff erred in law in concluding that a clause in the deed of conditions was invalid as it had the effect of creating a monopoly, which contravened section 3(7) of the Title Conditions (Scotland) Act 2003.
The court allowed the appeal by Greenbelt Group Ltd against a decision of the sheriff at Dundee, who found for the defenders Mr and Mrs Walsh, and Mr and Mrs Harrison in two actions by Greenbelt to recover the defenders’ respective shares of the costs of maintaining the amenity areas of the Ardler Development in Dundee.
Sheriff Principal Iain Abercrombie QC, sitting with Sheriff Principal Marysia Lewis and Sheriff Principal Craig Turnbull, heard that the burden in question was contained in a deed of conditions, clause thirteenth of which bound Greenbelt and their successors in title to the open ground to manage and maintain that ground as landscaped open spaces, and obliged heritable proprietors such as the defenders to pay a pro rata share of the maintenance costs incurred by Greenbelt.
Having heard evidence and submissions, the sheriff assoilzied the defenders after ruling that clause thirteenth was invalid as it had the effect of creating a monopoly, which was not permitted by section 3(7) of the 2003 Act.
The sheriff preferred the reasoning of the minority to that of the majority in the Lands Tribunal for Scotland decision in Marriott and another v Greenbelt (2015), on the basis that the burden provided for a particular person, namely Greenbelt, to be the supplier of the maintenance services and manager in relation to the open ground, which was “expressly prohibited” by section 3(7)(a) and (b) and “therefore invalid”.
In any event, the sheriff added that the burden had the effect of creating a monopoly for the provision of services by Greenbelt for which the defenders and others had to pay.
However, the sheriff rejected a further contention that the burden was void for uncertainty.
It was valid so far as referring to areas marked on a plan, but void in so far as it permitted further unspecified areas to be designated as open ground.
The defenders Mr and Mrs Harrison appealed on this point, arguing that the sheriff had erred.
The appeal sheriffs ruled in favour of Greenbelt on both questions, having observed that, as in Marriott, the ownership of land was “inherently monopolistic”.
Delivering the opinion of the court, Sheriff Principal Turnbull said: “The ‘monopoly’ complained of in the present cases exists by virtue of the appellant’s ownership of the open ground; it was not created by clause thirteenth of the deed of conditions.
“Clause thirteenth of the deed of conditions burdened the respondents with an obligation to pay their respective shares of the cost of maintenance of the open ground, no more. That is apparent if one considers the position were clause thirteenth not to apply.
“The appellant would still be responsible for the maintenance of the open ground, although they would not be obliged to carry out any work. The respondents would still have no say in the maintenance of the open ground, although they would not be obliged to pay the cost (if any) of that.
“Viewed in that way, it is apparent that clause thirteenth of the deed of conditions does not create a monopoly.”
On the second question, Greenbelt argued that the sheriff was correct in reaching the conclusion that the real burden was valid only insofar as it referred to the open ground delineated on the plan attached to the deed of conditions, while Mr & Mrs Harrison argued that the burden did not meet the requirements of section 4(2) of the 2003 Act; and that it was uncertain for the same reasons given in Marriot & another.
However, the court held that the sheriff reasoning was “beyond reproach”.
Sheriff Principal Turnbull concluded: “We are not persuaded by Mr & Mrs Harrison’s argument that the sheriff erred. The real burden is not uncertain insofar as it relates to the open ground, being that shown on the plan attached to the deed of conditions.
“In our view it meets the requirements of section 4(2) of the 2003 Act. The factual position in the present cases is readily distinguishable from that which pertained in Marriot & another.”