Background
Arguments
Decision at first instance
Appeal decision
In the recent judicial review appeal of Guild v Angus Council [2020] CSIH 50, the Inner House considered the application of section 104 of the Community Empowerment (Scotland) Act 2015, which deals with consultation in respect of disposing and changing the use of common good property. The petition was for judicial review of the Council's decision to demolish a leisure centre which had been erected on common good land. The Court concluded that the leisure centre formed part of the common good, and demolishing the buildings amounted to a disposal and a change of use for the purposes of section 104.
Forfar Country Park forms part of the common good lands owned and managed by the Council. In the 1970s, the Council erected buildings on part of the Park, comprising the Lochside Leisure Centre. The buildings eventually developed defects and are no longer in use. The Council wished to demolish the buildings.
A petition for judicial review was brought by residents of Forfar seeking reduction of the Council's decision to demolish the leisure centre, and an interdict against the commencement of demolition. The residents were interested in purchasing the buildings from the Council and stated that there was public support for the retention of the buildings.
Section 104 of the Community Empowerment (Scotland) Act 2015 places a duty on local authorities: before taking any decision to dispose of, or change the use of, common good property, the local authority must publish details about the proposed disposal or change of use.
In their petition for judicial review, the residents submitted that the provisions of section 104 of the Act applied, and that the Council had failed to comply with these.
The Council argued that although the leisure centre stood on common good land, the buildings did not form part of the common good. Accordingly, the Council argued that section 104 of the Act did not apply because the Council was not considering disposing of common good property, nor was it changing the use of such property. The Council, however, accepted that if these submissions were not well founded, they had not complied with the provisions of section 104.
The residents were unsuccessful at first instance. The Lord Ordinary concluded that the Council was not disposing of common good property. For the Lord Ordinary, the common good property was the land, not the buildings. Therefore, demolition of the buildings would not result in the disposal of common good property.
The Lord Ordinary also concluded that the Council's decision to demolish the buildings would not result in a change of use for the purposes of section 104. The reasoning for this was that the common good land is presently used for leisure purposes, and this would remain the case after demolition.
The residents brought a reclaiming motion against the Lord Ordinary's refusal of their petition for judicial review.
The Court allowed the reclaiming motion and reduced the Council's decision. The Court stated that, when considering the proper construction of section 104, it was important to bear in mind the purpose of the legislation. The Court stated that the purpose of Part 8 of the Act, which deals with common good property, is concerned with "empowering communities". In particular, section 104 is concerned with involving the community and making such decisions more transparent by requiring publication and notification.
In deciding whether section 104 was engaged in this particular case, the Court considered three issues:
- Are the buildings of the leisure centre held by the respondents as part of the common good?
- If so, is demolition of those buildings encompassed within the term "disposal of any property"? and
- If the answer to (1) is yes, and the answer to (2) is no, does demolition of the buildings and returning the land to open parkland amount to changing the use to which the property is put?
- Are the buildings of the leisure centre held by the respondents as part of the common good?
The Court said yes. The Court concluded that this was consistent with the principles of accession and established case law. The fact that the Council did not intend to donate the building when the leisure centre was constructed was irrelevant. The Council argued that they owned the buildings and land "wearing different hats", and that their internal accounting procedures accounted for the buildings separately from the land. The Court stated that although this may be prudent accounting practice, it does not provide support for the Council's argument that the buildings do not form part of the common good. The Council's argument that there was a "notional tenancy" with the Council paying "notional rent" to the common good fund was also rejected. The Court foresaw the dangers of such an argument: if accepted, it would permit a local authority to let out land to itself, under a "notional tenancy", and allow it to erect buildings on the land, avoiding constraints relating to the alienation or appropriation of common good land.
- If so, is demolition of those buildings encompassed within the term 'disposing of any property'?
The Court said yes. The Court noted that disposing of property is a wide term which must be given a wide construction, particularly in a statue which is concerned with improving transparency and encouraging community participation in decisions. In this case, the demolition would have resulted in the inhabitants losing indoor sports facilities, toilet facilities and café facilities. The leisure centre would be gone, and the inhabitants would no longer enjoy the use of it; therefore, it would have been disposed of.
- If the answer to (1) is yes, and the answer to (2) is no, does demolition of the buildings and returning the land to open parkland amount to changing the use to which the property is put?
This issue did not arise due to the conclusions on the first two issues. However, the Court's view was that this would have been a yes. The Court agreed with the Lord Ordinary's observation that this was a mixture of fact and law. The Court stated that reference to decisions in planning law are not helpful in this context. Rather, this issue needs to be approached "with the application of that dangerous commodity, common sense". The Court confirmed that the simple fact that the present and proposed use can both be described as "leisure purposes" or "leisure and recreation" does not mean that this is not a change of use. In this case, the proposal was to demolish the leisure centre- which contains indoor sporting, toilet and café facilities- and reinstate the ground beneath to extend the park. This amounted to a change of use.
The Act is relatively new, so this case provides some useful guidance. However, it is noteworthy that the Court stated the three issues above were considered to see if section 104 was engaged "in the circumstances of the present case", as opposed to attempting to put forward a general test. Nonetheless, the case confirmed that buildings accede to common good land to become common good property, and that demolition of such buildings will be interpreted as disposal. What is not as clear is what will amount to change of use, seeing as the basis of the decision was "common sense".
More broadly, the case provides useful guidance on how the statute is to be interpreted. The Court repeatedly stated that the purpose of the statute is to improve transparency and encourage community participation. Therefore, a broad interpretation will likely be used in favour of the community and the general public. This Act could be particularly relevant in the coming months and years as local authorities look for ways to deal with the challenges brought by COVID-19. Local authorities might look to redistribute their funds from certain areas to others. However, there could be buildings and structures erected on common good land, which will have now acceded to that land. Therefore, should the local authorities want to demolish or change the use of such land, they will need to comply with the Act. If in doubt as to whether the Act will apply, local authorities should err on the side of caution.
For further information on this topic please contact Ailsa Ritchie at CMS Cameron McKenna Nabarro Olswang LLP by telephone (+44 141 222 2200) or email ([email protected]). The CMS Cameron McKenna Nabarro Olswang LLP website can be accessed at cms.law?.
This update has been reproduced in its original format from Lexology – www.Lexology.com.
Article co-authored by Innocent Maramba.
