(2) Ownership and Restrictions PDF

Preview

Summary

Lecture notes with some extra reading, Dr Andrew Simpson, Dr Douglas bain...

Description

Ownership 1. Generally the consideration of rights when: - When more than one legal or natural - to own, or exercise control over one property at once May happen three ways: 1) Co-Ownership – pro indiviso - The owning of property by undivided shares, between two or more proprietors 2) Common Interest - Separate ownership; unity by a shared interest, (by proximity to respectively owned property) 3) Tenement (Not examinable) Used to be the conflict of Common ownership and interest; now replaced by Tenements Scotland Act 2004

-

2. Ownership as Right i. Dominium: Ownership is the main real right, It is held by Stair the “main real right”, from which all others are derived from: - Owner can use, dispose enjoy his/her property – usus, fructus et abusus - Subject to law or paction (e.g. legal limits of immorality for example, and contract)

ii. Title Unititular: In Scots Law, ownership is can only be held by one title for any one thing at any one time… Nb. to be contrasted with England, notions of ‘beneficial interest’ or ‘equitable ownership’; an English common law doctrine - Reason that Scots Law diverge prominently in relation to property trusts and succession

Pro Indiviso Ownership – e.g. “undivided ownership” One title does not preclude anyone else to co-own - One may share a thing, under one title. More than one person may have property in the same item of heritable property as an undivided whole” as long as they are owning under a single title - e.g. a grouped set of proprietors may share title, but does not divide their interest in property – still own it as a whole each one of them Nb. is not a subordinate real right – it is a share in main real right dominium

3. Co-Ownership - or ownership pro indiviso, or undivided ownership Split into, 1) Common Ownership 2) Joint Ownership

i. Co-Ownership: Defined Banff Magistrates v Ruthin Castle 1944 - The pursuer had offered big mansion as a gift; expressly state it was conferred as joint property Held, Joint property cannot be created by express use of the words "joint property" - a legal situation, that of a trust must arise Further, defines Type of Ownership  Type of Property - Common Ownership  Common Property - Joint Ownership  Joint Property ii.

Common Ownership - Each owner has title, which on death passes by will/heir to whoever - The undivided share, and right in the property may be burdened by a separate acts - Can be disposed of  most Co-ownerships are common; as long as without a specific legal situation  There is a presumption that shares are equal in property; However, co-proprietors may agree that the size of contribution to acquire ownership does not reflect share – there is no legal requirement for this Gretton and Steven, 10.6 - may agree to split shares however and have it reflected in title deed.

Rules for Common Ownership - Agreements are most important, and most effective in management of co-owning… a) Rule of Unanimity Courts have sought to enforce Bells Principles, 1072 - in pro indiviso ownership the consent of all of the owners is “requisite in the management, alteration, or disposal of the subject”. Clydesdale Bank v Davidson 1998 - The case where one Co-owner was granted a lease by the other co-proprietor, albeit it held was not a lease but merely a contract Confirms, that “pro indiviso proprietors each have real right to occupy the property and the consent of them all was required for its management,

Silence is accepted as consent - if a third party is taciturn in objecting – e.g. doesn’t voice objection/silent  effectively consent Schaw v Black 1889 16 R

b) Rules of Repairs and Alteration - Generally requires everyone’s consent – e.g. Unanimity Rafique v Amin 1997 SLT 1385 - One co-proprietor wanted a fire escape, but also insertion of steel beams into the walls and ventilation work Held, Even where the proposed alteration was innocuous, alterations could not proceed without the consent of all co-proprietors Exceptions: 1) De minimis rule - if alteration is obviously trivial, no consent/unanimity is required Barkley v Scott 1893 - One of two co-owners of a lane connecting their two properties put up nameplate on gate Held, innocuous use of property to put up plate, thus allowed 2) Necessary Repairs Bell’s Prin 1075: “necessary operations in rebuilding, repairing, etc., are not to be stopped by the opposition of any of the joint owners” Rafique v Amin - Held, the fire- escape alteration was necessary and was allowed notwithstanding the other’s objection Deans v Woolfson 1922 sc 221 - Fire escape got destroyed, and although there was alternate escape routes, Held, coproprietor was allowed to rebuild in spite of other co-owners objection c) Possession and Use: Three Principles Each co-proprietor is entitled to use every inch of the property; co-proprietors may only make ordinary use of the property; no single co-proprietor may obtain excessive benefit from the subject at the expense of the others – per Reid, Property para 24. (i) Every Inch Ersike ii 6, 53 - Each Co-owner may make use if the whole property, - and there is no limit as to the number of owners - Use can be limited by enforceable agreement, e.g. contract, between co-proprietors to (i) (ii) (iii)

Grant v Heriot 1906 8 F 647 - ca 50 co-proprietors because owned house surrounding square in Edinburgh Confirms the Lord Dundedin philosophical expression “everyone holds a metaphysical right in every minutest atom…”  NB. shares do not need to be equal – Denholm’s Trustees v Denholm

(ii)

Ordinary Use Only ordinary use it permitted Carmichael v Simpson 1932 SLT 16 - A man residing in a flat in tenement was not allowed to leave bathchair in common passage

-

(iii) Excessive Benefit When one proprietor uses the property at the expense of the others - e.g. may take exclusive possession of whole property without co-owners’ consent. Denholm’s Trustees v Denholm 1984 SLT 319 OH - a pro indiviso proprietor was made to to pay a sum in respect of ‘rent’ to his co-proprietors in respect of his natural possession of agricultural land held unlawfully and to the exclusion of his co-owners – he had no liability to pay d) Scope of Agreement i. Generally Co-owners may agree as to nature and extent of the use of the property held in common, and, as long as there is agreement, any use is possible, although, depending upon its terms, such an agreement may be terminable at will – e.g. disagreement  practically nonsensical - Agreement may qualify or disapply one or more of the common law principles. - Objector essentially has a veto Real conditions conditions binding upon real property arising out of the deeds by which that property is acquired, and, in the context of land, registered in a public register – are used regulate the management and use of common property. Statutory provisions also have a role to play - Such assertion and enforcement of statutory rights should be relatively unproblematic as Deeds of conditions should be clear and enforceable. - burdened and a benefitted property, has straightforward enforcement law. ii.

Dispute resolution

a) Generally, the two methods Price v Watson 1951 sc 359 Per Lord Keith, sets out two methods: 1) Appointment of judicial factor - e.g. some management 2) Terminating: Action of division and sale

b) Additional Judicial remedies Interdict Bailey Executors v Upper Crathes Fishing - Defending company, a co-proprietor of salmon fishing tried to issue shares to give “time sharing” rights in their company’s interest in the fishing land – held, Interdict was appropriate remedy in this dispute – and was used to stop them doing so Also, used in Carmichael v Smith 932 SLT sh ct: - interdict to stop the use beyond the “ordinary use” level – to stop bathchair from being left in stairwell Accounting of Profits “a co-owner who has maintained exclusive possession of common property without the consent of his fellow owners must account to them for the (ordinary) profits of the period of unlawful possession”Reid, para 24 fn. 24 Denholms Trustees v Denholm - The dispossessed man who co-owners tried to make pay rent (and failed) claimed successfully to have an accounting…

e) Binding Agreement e.g. Contracts can be made for the governing of use or management Clydesdale Bank v Davidson - Co-owners agreed to lease from one to another, giving effectively exclusive rights to one party, Held, Although a pro indiviso right cannot be burdened by a real right of lease to the other coowner – contracts can be made Pro Indiviso legally enforceable acts – e.g. Juristic Acts Two types: 1) One that only affects one co-owner - security, transfer to new owner etc. Subdivision - Co-owner has the right to divide his “share” in the property – and although the interest is divisible – the use of property is not as its under one title Menzies v Macdonald - Co-owners owned lake, got into dispute, one granted his share to hundred others Held, legally correct to do so Nb. Excessive benefit

2) Affecting whole property - One co-owner cannot constitute a real right which burdens and affects whole property Servitude - not competent for one owner to constitute servitude over whole property Grants v Heriots trustees - regarding co-owners of brown square in Edinburgh by property owners surrounding it - One tried to burden his share by servitude Held, he cannot constitute servitude – all have to do so or none Lease

- cannot grant lease to co-owner Clydesdale Bank v Davidson (or Serup v McCormack) - Relevant especially if one co-owner grants a security on his share – because if it gets repossessed to a bank through default, bank can force sale and if it’s a lease he may keep such lease Held, again, that cannot create lease between co-owners f)

Getting Out: Termination of Co-ownership

a) “An absolute right “ - has to be as a necessary counterpoint to the rule of unanimity - Bailey v Upper Crathes Fishing Exceptions: - even though described as absolute, there are times when it will be qualified or denied Such as when it’s a couple, where one owner is sequestrated – then court may delay forced sale by 3 years, but mainly two  When one has contracted out of the right – Bailey v Crathes Fishing  When “property is a thing of common and indispensable use (such as a staircase” – Bell Prin 1082 b) The Action: Division or Sale Division - Physical division of the property, so each owner becomes 100% - Done to extent of shares – so if someone only owns 25% share – he will get a third of the other co-owner Sale - Sale will be done as unit, and proceeds split When one must sell not divide The presumption is that Division shall happen, as it is equitable, (consider if one person insists on sale or division…) However, sale happens if division is not reasonably practicable Thom v Macbeth 1875 3 R 161 - Division of estate was not physically impossible – but in respect of the many rights and interests held in it, such division would ruin value  Forced sale better

Buy Out

- Can obviously arrange sale between co-owner If both want to buy out each other or disagree about being bought out Can either Go to auction, where co-owners are only allowed to partake Bailey v Crathes Fishing Modern Law on buying out Collins v Sweeney 2013 GWD 11-230 - Sale is absolute right, and cannot be denied; however, cannot force sale to other co-owner – sale is to open market

iii. Joint Ownership The exception, not the norm of co-ownership - Cannot be burdened - On death passes to other owners (often other trustees)  Trusts or unincorporated associations - Created by declaration of trust, and some constitutive deed (constitutional rules of a club for example)  No right to insist on division or sale  Management per club rules or deed of trust Rationale for joint property as a distinct Class Paraphrased, Lord Justice-Clerk Cooper appears: - particular relationship between persons that results in the various incidents that characterise joint property, these including accrescence and the disapplication of the rule nemo in communione invitus detineri potest (interpreted strictly in the sense of the rule facilitating division). - The relationship mooted by Lord Justice-Clerk Cooper is an ‘independent’ one, meaning that it is distinct from the mere accident of co-ownership, and it is an exceptional one (‘…the persons who alone...’), which may arise by virtue of some trust, contractual or quasicontractual bond. - ‘trust’ is clear. We can all understand trust. But what is the contractual or quasi-contractual bond? This sounds awfy like ‘with a bound s/he was free’ law-making…

iv. Common interest (not examinable) This is a species of right peculiar to Scotland which exists where owners of subjects owned in separate portions are united by a common interest resulting from proximity, whereby ownership of each is restricted in the interest of the orders.  The law of common interest has two aspects: positive and negative  Other proprietors may object to operations on one proprietor's property and may call on that proprietor to keep his/ her property in repair in the interests of all. (Positive)  From the point of view of the proprietor affected, it imposes a limitation on his right to use his property as s/he sees fit. (Negative) You should have a general understanding of how the law of common interest operates in practice. Note that it may be, and is commonly, overridden by express provision in the title deeds. You should be aware of the consequences of the distinction between co-ownership and common interest.

Ownership and Restrictions 1. The Right Generally as May be Restricted Erskine, at Institute, II.1.1, - describes ownership (which he calls “property”) as - “the sovereign or primary real right… which is the right of using and disposing of a subject as our own, except in so far as we are restrained by law or paction.” Broken into 1) The Right of Ownership of Property gives right to using and disposing of a subject - Further, enjoyment and fruits of subject 2) Recognition of Ownership restriction, by “paction” or by “law” The restrictions we look at are: Statutory:  Land Reform (Scotland) Act 2003  Common Law restraints: Nuisance etc.

2. Ownership as a Right Protected - ownership is a right which gives exclusive right to lawful owner of property to use and enjoy his/her property without interference i.

-

An Absolute Right “right is in its nature absolute and is irrespective of damage caused by the trespass; and that proprietorship extends inter coelum et infernos” – Brown v Lee Construction

Brown v Lee Construction 1977 SLT Notes 61: - Crane set-up for construction was used, against lack of permission to do so, by being swung over a private landowners garden - Petitioner argued an absolute right to property, and sought interdict to stop crane use, irrespective of whether damage was caused to him or not - D argued it was not permanent enough of a trespass Held - any intrusion whether transient or not suffice - Use of interedict appropriate, to protect the absolute right, extending from heaven to hell

ii.

-



-



-

Nb. Trespass not recognised as a crime, but it follows legal significance as a type of interference with property – whether it caused damage or not Causing Damage: liability for damages caused by trespass is not strict – fault (culpa) must be proved in Defendant Harvie v Turner 1910 32 sh ct rep 267 Trespass in Law That it would exist in Scots Law would suggest that a man that trespasses against will of owner of land could not be removed…”a loose and inaccurate” claim

Wood v North British Railway Company (1899) 2 F 1 - Lord Trayner commented that “[t]he notion, often expressed, that there is no such thing as trespass in the law of Scotland, and that if a man is, contrary to the desire of the proprietor, on private property he cannot be removed, seems to me to be a loose and inaccurate one”. - a cabman in a railway station had finished business; refused to leave, and persisted in refusing to leave, - He became a trespasser, and the railway servants are at common law entitled to remove him by force if necessary 

-

Self-Help Remedy for Trespass Owner can take steps to remove unlawful trespassers – but extreme care must be exercised or else it will be unlawful; may constitute assault etc. Trespasser must be asked to leave, and only if she does not do so, may force be used (to an absolute minimum)

Bell v Shand 1870 7 SLR 267 - 15year old poacher was pulled some distance “by the scruff” of the neck by the Landowner - Held, justified

iii. Extension of Ownership Right When owning land it extends its boundaries: Inter Coelum Et Infernos - it extends between heaven and centre of earth - To a ceiling of 100 kilometres Statutory exception Limited by for example Civil Aviation Act 1982 s76(1) - no action may lie in trespass…when aircraft flies above property, as in circumstances is reasonable…

iv.

Separate Tenements If heaven to hell obvs. not practicable – consider flat above and below you Division of Tenements, - a section of the land or a right to do something on the land - Capable of being owned separately,

-

Conventional Separate Tenement - arise by the express separation of one section of land from remainder, which is expressly conveyed

 Below Ground: Loosely limited below ground - Shelters, tunnels etc. may be created indefinitely, yet - Minerals are main example 

-

Above Ground: Very limited, especially in regards to acceded property pipes and trees which have acceded and become heritable property may not be separate tenements

Compugraphics International v Nikolic 2011 sc 744 - Pipes leading from factory held acceded to neighbouring land, and could not be held to be heritable separate tenements – they were in the landowner’s ownership Legal Separate Tenements Historically, all land was owned by the Crown Regiala Minora - important rights, they could only be expressly granted, either to the landowner or a separate person – but it was never included in the conveyance of the land itself automatically Main Legal Separate Tenements: 1) The right to fish for salmon - Conveyance of a section of river will give the right to fish there for any fish, except salmon (unless this is so expressly conveyed as well) - Right to fish the salmon may be held by another separate owner – Stair ii, 3, 69 2) Mussel and Oyster Gathering - Reid, Property Para 320-330 3) Mines of Gold and Silver Royal Mines Act 1424 – again must be grant of the land by Crown However, Mines and Metals Act 1592: - if such minerals found on landowners land, one can obtain separate grant – but must pay one 10th of all metal mined to Crown 4) Petroleum and Natural Gas Petroleum Act 1998 Sc3 Para 3 5) Coal However, this is not a legal separate tenement by way of regalia minora, it is vested as a separate tenement by way of Coal Industry Act 1994, s7(3) Nb. Responds to infringement of the right as any other ownership – e.g. the exclusivity, heaven and hell boundary, etc.

3. Restrictions of Ownership i. Statutory Consider the Town and Country Planning (Scotland) Acts, the Occupiers Liability (Scotland) Act 1960 and the Land Reform (Scotland) Act 2003 LR(S) 2003 Act s.1(1): “Everyone has the statutory rights established by This Part One of Act S 1(2), those rights are defined as: - (a) the right to be on land, (for purposes set out in subsection (3) - (b) the right to cross land” Reasons for being on Land: S 1(3): a) for recreational purposes; b) to carry out a relevant educational activity; or c) For carrying out activity, whether commercially or for profit, which could be exercised anyway - e.g. mountain guide – one could go hiking without restriction when not working Excluded Land: Section 6 Buildings, schools grounds, caravans, tents, sports fields, land which grows crops - access ...