Ross and Cromarty District Council v. Patience

The House of Lords held that a pre-emption clause in a 1939 feu charter did not prevent a secure tenant from exercising the statutory right to purchase under the Housing (Scotland) Act 1987. The court construed the words "sell" and "dispone" in the pre-emption clause as referring to voluntary transactions and concluded the statutory procedure for a tenant's purchase is mandatory rather than consensual. The court relied on the comprehensive nature and purpose of the 1987 Act, in particular section 61 and related provisions (sections 63, 64, 66 and 81A and Schedule 6A), and the opening words of section 61(1) starting "Notwithstanding anything contained in any agreement...", to hold that third-party pre-emption rights are overridden where they impede the statutory right to buy.

The appellants (formerly Ross and Cromarty District Council, now Highland Council) sought a declarator that a pre-emption clause appearing in a 1939 feu charter did not prevent secure tenants from acquiring their houses under the Housing (Scotland) Act 1987. The dispute arose after tenants sought to exercise their statutory right to purchase and the feudal superiors (third defenders) had initially relied on the pre-emption clause; that issue was rendered academic in respect of the particular house when the superiors granted a gratuitous waiver, though other similar tenancies remained affected.

The case came on appeal from the Second Division of the Court of Session where the majority had held that Parliament had not intended to abrogate pre-emption clauses. Before the House, the appellants argued both (a) that the 1939 clause did not extend to the statutory procedure for sale because the clause applies to voluntary "sale" or "dispone", and (b) that in any event the Housing (Scotland) Act 1987 had the effect of overriding such third-party rights.

The House examined: (i) the proper construction of the feu charter clause; (ii) whether the statutory purchase procedure under the 1987 Act leaves any room for a third party pre-emption; and (iii) whether the opening words of section 61(1) could be read to override existing contractual burdens such as a feu pre-emption. The court concluded the clause was directed at voluntary dispositions and did not cover the compulsory statutory process; more importantly, the court held that the comprehensive statutory scheme, and the "Notwithstanding anything contained in any agreement" wording of section 61(1), showed Parliament intended the tenant's right to buy to prevail over impediments such as pre-emption. The court rejected proposals to accommodate a superior's right by inserting a condition into the statutory offer to sell, finding the statutory conditions under section 64 must be consistent with the sale and could not make the sale contingent on third-party consents outside the statutory scheme.

The House therefore allowed the appeal and granted the declarator sought by the council (with a minor amendment to recognise the feu disposition had been granted to the first and second defenders). The decision emphasised the mandatory and comprehensive nature of the 1987 Act's purchase procedure for secure tenants.

Appeal allowed. The House held that the pre-emption clause in the 1939 feu charter did not apply to the statutory process by which a secure tenant acquires his dwelling under the Housing (Scotland) Act 1987 and, in any event, the comprehensive statutory scheme (notably section 61(1) and related provisions) overrides third-party pre-emption rights that would impede the tenant's right to purchase.

Appeal from the Second Division of the Court of Session (Scotland), where the majority had held that a superior's pre-emption could prevent the statutory sale. The House of Lords allowed the appeal ([1996] UKHL 7). After the Second Division decision the feudal superiors waived their rights in respect of the particular tenancy and an amicus curiae was appointed for the House of Lords hearing.