'I've a £2m house but can't hold a dinner party'

WITH the title deeds to one of the capital's most salubrious boltholes, few people would begrudge Mike Gordon his right to show off his lovingly restored, William Playfair-designed Georgian town house.

This weekend, however, the benefits of owning such a grand property are less clear. "I'm the only man with a £2 million house who can't hold a dinner party," he told The Scotsman yesterday. In the end, his neighbours decided, Mr Gordon was simply too gregarious a host.

After a five-year legal battle, including a public inquiry that cost taxpayers some £100,000, he and his wife, Susan, have been ordered by the courts to stop renting out their home in the heart of the city's New Town for celebrity parties and corporate functions.

It is a ruling based around a legal grey area, and one that will be bemoaned in some well-placed Edinburgh social circles. Having acquired an almost reverential status in recent years, One Royal Circus has hosted the likes of an after-show party for a film premiere and the launch party for a new brand of gin. The roll-call of guests makes clear it is no common or garden property – Kirsty Wark, Tessa Jowell, David Walliams, Greg Dyke and Samantha Morton are the most publicised. The visitors' book reaps more. "Had a great night here," wrote JK Rowling, while the concise plaudit left by Ewan McGregor – who filmed large swaths of his film Solid Geometry in the property – reads, "A fabulous house".

Life in the spotlight was not to everyone's tastes, most notably the advocate who resides at No 3. In 2003, Sigdur Bennett, along with several neighbours, complained about the soirées to David Guest, then a local councillor, who asked the city council to investigate the way the Gordons were using their home.

Given the nature of his profession, Mr Bennett was not one to risk being underprepared, and he hired an agent from Grant & McMurtie, a firm of private investigators, who posed as a prospective guest at One Royal Circus. The transcript from their meeting shows Mr Gordon explaining that the house was available to let for short periods at £750 a day, because such matters had "to be couched in terms of planning laws".

Ultimately, the City of Edinburgh Council decided enough was enough, and in early 2005, served the Gordons with an "enforcement notice", reasoning that they had flouted planning rules by using their "class 9" house – an ordinary residence – as an "entertainment venue".

The Gordons refused to accept the notice, and appealed to the Scottish Government. In the subsequent public inquiry later that year, the reporter, David Russell, found in favour of the couple. But a further twist was to come, after Mr Bennett appealed against the decision of the public inquiry, which led to yet another U-turn at the Court of Session this week.

The court heard that the evidence of the private investigator's transcript was seemingly brushed over at the inquiry. "The result is that – whether arising from a misreading of it or not – significant parts of it which do, on any view, apparently relate to past and present use are not referred to at all at any point in the decision," Lord Kingarth wrote.

Now, One Royal Circus must again assume the anonymity synonymous with an ordinary family home.

The case has raised a thorny question: when do ordinary owners buck the rules of the planning authorities by running a business while living in their home? The Royal Town Planning Institute advises that such cases have to be "carefully assessed on a fact and degree basis in each case".

John Loudon, an Edinburgh solicitor and consultant for Lindsays, the city law firm, said: "The issues covered by the case at One Royal Circus are in a grey area. The moment when a residential property starts to be used as a commercial base is a question of interpretation.

"The text in the title deeds of a house or flat are vitally important in this area. Most deeds state specifically that a residential property can only be used for such, and cannot be used as a commercial enterprise. If someone that owns a house wants to run a business using that property, they will usually require planning consent for a change of use."

He added: "It comes down to common sense. Are you running a business or are you not? I suspect that most people who do this know they are running along a grey line."

A spokeswoman for the City of Edinburgh Council said: "A material change of use is judged on a case-by-case basis, but generally it involves the main use of a property changing from residential to commercial."

When asked to clarify the status of homeowners who both live in their property and use it commercially, she reiterated that each case would be dealt with individually, adding: "If someone holds a Tupperware party for one hour a year, they're making money, but we wouldn't consider that a material change of use."

In any case, the Gordons are not the first owners of an upmarket residence to so rile their neighbours. Only last year, the actress Jane Seymour became embroiled in a dispute with the residents of a Bath hamlet over comings and goings at her Elizabethan manor house.

The former Bond girl, normally resident in Malibu, only lived at St Catherine's Court for about a quarter of the year but rented it out for private parties, weddings and corporate functions, for as much as £28,000 a week, to stars including Radiohead and Robbie Williams.

Seymour successfully applied for a 24-hour alcohol licence to cover the property, before fending off an appeal by her neighbours, with magistrates unconvinced by the argument that St Catherine's Court had become a public nuisance. Ultimately, though, planners discovered she had never been granted permission for the house's commercial use, and they set her a deadline to apply for a change of use. But the discord, it seemed, had taken its toll, and the 56-year-old sold up at the turn of the year.

For his part, Mr Gordon is adamant that the City of Edinburgh Council has never explained to him what he can – and cannot – do with his property, but he now believes he will be chastised for holding a dinner party in his own home. Under its status as a "class 9" house, the Gordons can still run One Royal Circus as a bed and breakfast, charging a minimum of £138 a night for a double room – and the property continues to be prominently advertised. Otherwise, he is waiting to see whether the Scottish Government will appeal against the Court of Session findings.

The owner is disappointed that the work and care he and his family put into the house – it is rated a five-star attraction by VisitScotland for its "exclusive rental use", a status held by only a handful of other properties, including 14th-century Duns Castle in the Borders and Dundas Castle near Edinburgh – has provoked acrimony.

No-one could have imagined what One Royal Circus was to become when the Gordons bought it in 1992. Previously a hotel, it had long lain derelict, and its interiors were in a dismal condition.

The family slowly but surely set about renovating it, living in the drawing room and washing their dishes in the bath because there was no kitchen. The revival of the house was an arduous process – the decorator spent three years on the interior – but eventually, the finishing touches, including white Frette Egyptian linens, a baby grand piano and a red velvet Edra couch, were put in place

For a property of such grandeur, it is surely the most lush B&B in Scotland.

'The council should have told me the rules'

Mike Gordon Owner of One Royal Circus

WE were going to sell One Royal Circus a few years ago, but decided against it. During the 2003 Edinburgh Festival, a newspaper asked if they could use it for a dinner party. We thought, "why not?" and called the council to make sure that was allowed. They said there was no problem.

The event was a great success, and we thought this could be a good idea, long term. I called the council again to ask about specific regulations that might apply, but they didn't tell us.

The next thing I knew, a private investigator was at my door. Now, I don't regret one thing I said to him. I was being honest, explaining the house could be rented in good faith. It's a £2m house and I have to pay the mortgage.

Not on one occasion has Sigdur Bennett, other neighbours, or the council visited One Royal Circus.

I've begged the council for guidelines, and implored them to come down – but nothing. It would have saved them £100,000 for the public inquiry if they'd told me what I could and couldn't do.

We did not want our house open to all-comers, and it wasn't. There were no midnight gigs by Fatboy Slim, and the impact on the amenity of the area is absolutely zero. There were 18 events in three years.

We'll continue to run the house as a bed and breakfast, as we're allowed to under planning laws, but I don't know what we can and can't do. Am I not allowed to have a dinner party in my own home now?


Class 9

A STIPULATION under the Town and Country Planning (Scotland) Act 1997, stating that properties such as One Royal Circus must be used as a house by not more than five residents, or as a bed-and-breakfast establishment or guesthouse, where not more than two bedrooms are used for that purpose.

Enforcement notice

Statutory device served on the Gordons in 2005 by the local council to force them to stop using the house for parties.

Material change of use

The basis of the council's argument, i.e. the property had changed "from dwelling house to entertainment venue".

Playfair

As in William, the architect of One Royal Circus, Royal Scottish Academy and the National Gallery on the Mound.