Ross and Cromarty District Council v. Patience

A statutory right-to-buy scheme for secure public-sector tenants overrides a third party’s contractual right of pre-emption where that right would obstruct the compulsory sale. The words “notwithstanding anything contained in any agreement” in section 61(1) of the Housing (Scotland) Act 1987 extend to an agreement involving either the landlord or tenant if its substance contracts out of the statutory right.

Independently, a title condition prohibiting a voluntary sale or disposition does not ordinarily apply to a compulsory statutory acquisition. A condition imposed under section 64 must be consistent with the statutory sale. It cannot require consent from a third party outside the statutory scheme or preserve that party’s pre-emption.

A local authority held a dwelling house under a feu charter containing a clause requiring it to offer the property to its feudal superiors before selling or disponing it. The secure tenants invoked their statutory right to purchase under the Housing (Scotland) Act 1987. The Lord Ordinary and a majority of the Second Division held that Parliament had not abrogated the superiors’ right of pre-emption.

After the Second Division’s decision, the superiors gratuitously waived their rights over the particular house. The House nevertheless held the appeal competent because similar title conditions affected other secure tenancies and raised a live question of practical importance. An amicus curiae was appointed after the superiors declined to argue the merits.

The issues were whether the clause covered a compulsory statutory sale and, if so, whether the statutory right to buy prevailed over it.

1. Appeal allowed unanimously. Lord Clyde delivered the leading speech. Lord Goff of Chieveley, Lord Griffiths, Lord Mustill and Lord Steyn agreed with his reasons.

2. Per Lord Clyde, the pre-emption clause did not apply to the statutory acquisition. “Sale” bore its ordinary meaning of a voluntary contract, while “dispone” referred to a voluntary conveyance, whether by sale or gift. The statutory transaction was compulsory rather than consensual: a qualifying tenant possessed the right to acquire, and the landlord was obliged to sell and convey. Construction at the feu charter’s date in 1939, together with the irritancy securing the clause, reinforced that conclusion. The form of conveyance by sub-feu nevertheless fell within “dispone”.

3. Per Lord Clyde, independently, the comprehensive scheme of the Housing (Scotland) Act 1987 left no room for a superior to exercise pre-emption against a qualifying secure tenant. Parliament intended every public-sector tenant satisfying the prescribed conditions to enjoy an unobstructed right to buy. Sections 61 and 84A defined when that right could be exercised. Sections 63, 66, 66A–66C and 74 made completion of the statutory process mandatory for the landlord.

4. Section 61(1), which operates notwithstanding anything contained in any agreement, was not confined to agreements between landlord and tenant. Per Lord Clyde, it covered an agreement involving either of them where the agreement’s substance would contract out of the obligation to sell or the right to purchase. A feu charter established a continuing contractual relationship and therefore fell within that language. Section 75 supported the conclusion that the legislation created an effective bar against contracting out.

5. A condition under section 64 had to be consistent with the statutory sale taking place. It could not preserve the superior’s pre-emption or require consent from a third party outside the statutory scheme. Section 64(4) also prevented the introduction of a pre-emption condition into the offer to sell.

6. The waiver did not render the proceedings incompetent. A substantial, recurring question remained concerning other secure tenancies, and the declaratory action was a proper vehicle for resolving it. The appellants were entitled to the declarator sought, amended to recognise that the feu disposition had already been granted to the tenants.

1. House of Lords: Allowed the local authority’s appeal unanimously and held it entitled to the declarator sought, subject to amendment recognising the completed feu disposition.

2. Second Division of the Court of Session: A majority held that Parliament had not intended to abrogate the feudal superior’s right of pre-emption. After that decision, the superiors waived their rights over the particular dwelling house.

3. Lord Ordinary: Held that the statutory scheme did not supersede the right of pre-emption.