Logan v Irons [2023] SAC (Civ) 9
This matter, brought before the Sheriff Appeal Court (“SAC”), involved a dispute between neighbouring property owners in Dunbog, Fife. Stuart Logan owned the property known as ‘The Auld Kirk’ and sought a declarator that his property benefitted from servitudes of aqueduct (the right to convey water across the land) and access over the neighbouring property of ‘Beauty’s Land’, which was owned by Andrew Irons.
Background
In 1987, a servitude right of access and aqueduct was created in favour of The Auld Kirk over Beauty’s Land. At that point in time, Logan owned The Auld Kirk, and Beauty’s Land was owned by Legal and General (Pension Management) Assurance Society Limited.
Years later, in 1993 and 1994, The Auld Kirk and Beauty’s Land were both disponed to Irons. At this point in time, Irons now owned both the benefitted and burdened properties.
In 2003, Irons and his wife granted a standard security in favour of Household Mortgage Corporation over The Auld Kirk.
In 2007, the Household Mortgage Corporation disponed The Auld Kirk to a third party, acting under power granted in the standard security. One month later, Beauty’s Land was disponed to a third party by Irons.
Ten years later, Logan re-purchased The Auld Kirk and in 2019, Irons re-purchased Beauty’s land. Logan then sought to enforce the servitude rights originally granted to The Auld Kirk in 1987, which he argued had not been extinguished when the properties came into joint ownership, but instead had been suspended and came to be revived when the titles separated again in 2007.
Legal Issues
The case explored two central issues:
- Whether a servitude right, constituted by express grant, was extinguished by confusion when the pursuers and defenders’ properties came into joint ownership, or whether the servitude right was only suspended at that time, not completely extinguished, and were revived when the two properties separated years later.
- If the servitude did not revive when titles separated, was a servitude created by implied grant when the heritable creditor disponed the property years later and did the heritable creditor, when exercising their right to sell under the standard security granted, have the right or title to grant any servitude over the subjects.
Extinguished or Suspended
The doctrine of confusion provides that servitudes are extinguished when the same person becomes the owner of both the dominant (benefitted) and servient (burdened) properties and once a servitude has extinguished, it does not revive by a subsequent separation of the properties. Logan, the pursuer, argued that there are exceptions to this general rule and put forward the example of Donaldson’s Trustees v Forbes, in which the servient (burdened) and dominant (benefitted) properties were held by the same proprietor, but in different capacities. Here, the Inner House of the Court of Session held that, where there is only a separation of interest, then confusion does not operate, and the servitudes are not extinguished.
The SAC rejected this argument and noted that the exception to the general rule applied only in limited circumstances, which did not apply here. The SAC found that the following is the correct statement of law.That if there is one owner within the same capacity then the servitude extinguishes by confusion. However, extinction does not take place when ownership passes to the same person acting in different capacities, in which case the servitude to come back into existence if and when the properties separate again.
Applying this to the facts of this case, it was held that the general rule applies here, and the servitudes were extinguished.by confusion when the properties came into the same ownership.
Implied grant of servitude by the heritable creditor
When a standard security was granted over The Auld Kirk, this provided the Household Mortgage Corporation with the right of sale in certain circumstances. Upon calling up their standard security, the Household Mortgage Corporation disponed the property to a third party, which separated the ownership of The Auld Kirk and Beauty’s Land.
The court questioned whether Household Mortgage Corporation had any lesser right to convey, by virtue of the fact that they were disponing the land by statutory power of sale granted to them in the standard security and not through selling the property which they own in their own right. If so, are they precluded from conveying a servitude right that did not previously exist, having regard to the doctrine of nemo dat quod non habet (“one cannot give what they do not have”)?
In considering this question, the SAC noted that the heritable creditor has a contractual right to convey to a purchaser the property with parts and pertinent. The heritable creditor is also under a statutory obligation to take all reasonable steps to ensure that the subjects are sold at the best price, which could reasonably be obtained. The SAC concluded, that under the right circumstances, the right of sale in the standard security may involve the heritable creditor disponing an implied right of servitude over the defenders’ retained subjects.
A servitude is created by implication when two properties are owned by the same owner and where one part is used in a way that is necessary for the convenient and comfortable enjoyment of the other. On the division of those properties, a servitude will be created by implication if the requirements of use and necessity are met.
In this case, the servitude was expressly granted and was in use when the properties were split. The septic tank (in relation to which the right of aqueduct was granted) was installed by the defender himself and was in use prior to and at the point of division of the properties. The servitude itself is one of necessity for the convenient and comfortable enjoyment of the pursuer’s property, therefore, the necessary requirements were held to have been met in this case. Accordingly, it was held that the servitudes were created by implication when Auld Kirk was sold by the mortgage lender in 2007.
The SAC, therefore, concluded on behalf of Logan and found that the servitudes of access and aqueduct subsisted.
This decision is instructive in providing a helpful summary of the principle of confusion and the circumstances in which it will operate. It was also confirmed that the fact that land is sold by heritable creditor in possession exercising their power of sale does not preclude the creation of implied rights of servitude. These principles should be borne in mind by those who are involved in the buying and selling of land, especially in circumstances where those people also own/retain another related piece of land.
For any enquiries, please do not hesitate to contact a member of our specialist Property Dispute Resolution and Litigation team or get in touch directly with Stephanie Hepburn or Ross Simpson.
This article was co-authored by, Lynsey White, Trainee in our property dispute resolution and litigation team