Timeshare interests in salmon fishings

In recent years the Land Register has extended into counties with rivers having valuable salmon fishing interests.  Whilst the right to fish for salmon is a legal separate tenement which may competently be registered in the Land Register, a difficult has been encountered with applications for registration of interests based on documentation which seeks to link pro indiviso ownership with timeshare use.

This documentation has typically taken the form of a Disposition purporting to grant a pro indiviso share in the ownership of the right to fish which is hedged by conditions – either within the body of the Disposition or incorporated by reference to a Deed of Conditions – which seek to give the grantee exclusive use of either all or part of the fishings for a certain week or weeks of the year whilst forbidding any use in every other week.

After detailed consideration the Keeper’s view is that such applications cannot be classed as an interest in land within the definition at Section 28 of the Land Registration (Scotland) Act 1979 and thus cannot be registered in the Land Register.

The arguments involved are complex and there is an unfortunate lack of authority directly in point.  However, the major factors involved in bringing the Keeper to this conclusion are as follows:-

1. In totality the documentation attempts to create a heritable right of timeshare use.  The Keeper’s view is that no such real right exists in Scots law.  The creation of a new species of real right would appear to require legislation.

2. It appears well established that each pro indiviso proprietor of common property is entitled to use the common subjects at any time, but never to the exclusion of his co-proprietors.  This is at odds with a scheme intended to confer exclusive timeshare use.  This it appears contradictory to mix common ownership with timeshare provisions.

3. The House of Lords decision in Clydesdale Bank v Davidson was concerned with leasing of common property and so is not direct authority however it does appear to apply by analogy.  It was held that co-proprietors of common property could not grant the real right of lease to one of their own number.  Whilst the co-owners were entitled to enter into personal agreements regarding occupation, they could not bind their successors in title to such agreements.

4. It is also difficult to reconcile a scheme which contemplates long term or perpetual timeshare use with the pro indiviso owners’ ultimate remedy of division and sale.  Grant v Heriot’s Trustees is authority for the proposition that a co-proprietor cannot bind his singular successors to not pursue division and sale.  The Inner House returned to a similar issue in the recent salmon fishings case Upper Crathes Fishings v Bailey’s Executors where the Court considered that an instant co-proprietor may contact out of his own right to division and sale.  In the latter case the Court did not consider successors in title.  Together these two Inner House decisions square with the approach taken by the House of Lords in the Clydesdale Bank case.

Those firms who have been proceeding with transactions of this nature in the belief that registration would take place have taken issue with the Keeper’s decision not to register such applications.

Solicitor firms have raised a secondary contention.  Views have been expressed that the burdens which seek to underpin the arrangements are of such a nature that they cannot be seen as valid real burdens primarily because they seek to impose restrictions that are inconsistent with the nature of the property conveyed.  That is, you cannot grant somebody the right to use all of a property all of the time and then seek to prevent him or her doing so for 51 weeks out of 52.  it has, therefore, been suggested that the burdens can be safely treated as never having been properly created and all that remains is a perfectly valid unfettered pro indiviso share which can be registered.

The Keeper understands this view and has the utmost respect for those who have advanced it.  However, there is no authority which is directly in point and there remains the prospect, however remote, that a Court might hold the burdens as valid.  This would bring the argument full circle back to the question of whether or not what was being conveyed was a pro indiviso share or, by virtue of the restrictive nature of the burdens, a timeshare.

Suggestions that the Keeper could register the pro indiviso shares and include the burdens, but exclude indemnity on the grounds that he did not believe the burdens to be enforceable, fall foul of Section 6(1)(e) of the 1979 Act in virtue of which the Keeper is instructed to enter only subsisting burdens.   There would be a fundamental inconsistency in inserting a burden and excluding indemnity because it had not been properly constituted.

Given the uncertainty in this matter the responsible course for the Keeper is to join in judicial resolution of the uncertain point of law.  If any application for registration is refused by the Keeper there is a right of appeal to the Lands Tribunal under Section 25 of the 1979 Act and it is open to any applicant who disagrees with the Keeper to pursue that course.  As the issue is one in which the facts are not in contention but the law is in doubt a suitably representative example of the Keeper’s refusal to register a pro indiviso/timeshare interest could, by agreement, be brought direct to the Inner House by special case.  This appears to the Keeper a positive way forward.

The Keeper wishes this issue resolved in a way which will provide clarity for the future.  Until such a resolution, solicitors dealing with salmon fishings should consult the Keeper’s Pre-Registration Enquiries Section before making applications for registration or submitting deeds for recording in the Sasine Register.  If the Keeper is not prepared to accept the interest for registration in the Land Register then consistency now demands it should not be recorded in the Sasine Register either.

Test case imminent

The Keeper’s note correctly states that there is an alternative view to his own.  In point of fact opinions have been obtained from two Professors of Conveyancing which both state, in essence, that the restrictions on use of property incorporated directly or by reference into a Disposition of a pro indiviso share of salmon fishings (but also other property) even if not effective themselves, do not detract from the conveyance of the pro indiviso share itself.  Authority is quoted for this.  The Dispositions are therefore effective to convey the pro indiviso share.  It follows that such Dispositions should induce registration in the Land Register and are capable of recording in the Register of Sasines.  If the Keeper is correct the Dispositions which have been recorded in the Register of Sasines over the 15 years or so of such schemes’ existence have not validly conveyed a heritable interest in the subjects to which they refer and accordingly the last valid infeftment lies usually with the promoter of the timeshare scheme.  The number of such recorded Dispositions must run well into four figures.

The Keeper’s attitude on the subsidiary question of registration of real burdens is not wholly logical.  It ignores the fact that by virtue of entering a burden on the title sheet of registered property he is not guaranteeing enforceability of it (Section 12 (3)(g) of the 1979 Act)  and the worst that could happen to him if a registered title condition were found to be real is that he would be ordered to remove the condition from the title sheet.  There is evidence of the Keeper rejecting documents creating title conditions where pro indiviso interests are involved, even although these have no relation to any timeshare scheme.

I am aware of at lease a dozen timeshare schemes set up on the basis of pro indiviso ownership.  Some of them have a membership list running into hundreds.  There can be few solicitors involved in rural practice who have not at some time or another acted for the purchaser of an interest in such a scheme either directly from the promoter or in a subsequent sale.  The Keeper’s position strikes at the fundamental basis of these schemes and is bound to affect the marketability of interest sin them.  It is in the interests of all those involved, both solicitors and clients, that the position be resolved as quickly as possible.  It is evident that only a ruling from the court will change the Keeper’s attitude.

Following a meeting with representatives of the Keeper at which the views of both sides were canvassed, I was asked by the solicitors present to co-ordinate the bringing of a test case against the Keeper to resolve the position.  It was agreed that the appropriate way of funding such a test case would be to approach the timeshare owners through the managers of the various schemes.  I have already written to all those managers of whom I know to ask if the owners would subscribe £1,000 per scheme to fund such a case.  I should be grateful if all solicitors who have been involved in purchasing interests in such schemes could let me know of the managers of the schemes in which their clients are involved so that I may be sure that I have not missed anybody.  My contact details are as follows:-

Malcolm G Strang Steel WS, Turcan Connell WS, Saltire Court, 20 Castle Terrace, Edinburgh EH1 2EF

Tel:  0131 228 8111  Fax:  0131 228 8118

E-Mail: mgss@turcanconnell.com

The Opinions of the Professors  which have been obtained give good ground for belief that a test case will be successful in establishing that Dispositions in the form objected to by the Keeper do transfer an interest in land.