Batt Cables Plc V. Spencer Business Parks Ltd
| Jurisdiction | Scotland |
| Judge | Lord Hodge |
| Neutral Citation | [2010] CSOH 81 |
| Date | 01 July 2010 |
| Court | Court of Session |
| Docket Number | CA31/10 |
| Published date | 01 July 2010 |
| OUTER HOUSE, COURT OF SESSION [2010] CSOH 81 | |
| CA31/10 | OPINION OF LORD HODGE in the cause BATT CABLES PLC Pursuer; against SPENCER BUSINESS PARKS LTD Defender: ________________ |
Pursuer: Sandison QC; Brodies LLP
Defender: Moynihan QC and McBrearty; DLA Piper Scotland LLP
1 July 2010
[1] The pursuers, Batt Cables plc ("Batt") are the tenants of industrial premises at Unit A, Phase 1 Queen Anne Drive, Newbridge ("the premises"). The defenders, Spencer Business Parks Ltd ("SBP"), are their landlords. They are in dispute over whether Batt have validly exercised a break option under the lease of the premises.
[2] In order to achieve a resolution of the dispute at debate, parties agreed the provenance and receipt of documents and invited me to reach a decision on the documents and the pleadings. Batt moved for decree declaring that they had validly exercised their entitlement to terminate the lease and SBP moved to have the action dismissed on the ground that Batt's averments were irrelevant.
Factual background
[3] In 1996 Scarborough Development Company (Glasgow) Ltd and Batt entered into a lease of the premises from 4 August 1995 to 3 August 2020. The lease contained a break clause (clause 2.2) in the following terms:
"Notwithstanding the foregoing...either the Landlords or the Tenants shall be entitled to terminate this Lease on the tenth, fifteenth and twentieth anniversaries of the Date of Entry. The foregoing entitlements to terminate shall only be exercised in terms of this clause by serving written notice to this effect on the other party no less than six months prior to the relevant termination date (time being declared to be of the essence)."
The lease also contained a clause (clause 10) which related to the giving of notice:
"All notices which require to be given in terms of this lease shall be in writing and shall be deemed to be sufficiently given if sent by first class recorded delivery post addressed...in the case of the Landlords, to the Landlords (if a body corporate) at their Registered or Head Office...or (in either case) to such other address as the Landlords may have notified in writing, and any such notice shall be deemed to have been served forty eight hours after the date on which the same was posted (excluding weekends and public and statutory holidays). In proving service, it shall be sufficient to prove that the envelope containing the notice was duly addressed to the Landlords...in accordance with this Clause and posted to the place to which it was so addressed." (my emphasis).
Parties agreed that the only part of clause 10 which was mandatory was that the notice should be in writing. That did not add to the requirements of clause 2.2, which required written notice. The question therefore is whether Batt, in seeking to terminate the lease, served written notice on the other party as required by clause 2.2.
[4] On 8 May 2008 SBP acquired the Lochend Industrial Estate and became the landlords of the premises. On the same day, Dundas & Wilson CS LLP, as agents of the then landlords, wrote to Batt to intimate the assignation to SBP of the landlords' interest in the premises.
[5] On 30 May 2008 Spencer Holdings Plc ("SH"), an associated company of SBP, wrote to Batt in the following terms:
SPENCER Holdings PLC
Nexus House, Randles Road
Knowsley Business Park, Prescot
Merseyside
L34 9HX
T: 0151 545 2500 F: 0151 545 2534
info@spencerpropco.com www.spencerpropco.com
Batt Cables PLC
Unit A Lochend Industrial Estate
Queen Ann Drive
Newbridge
Edinburgh
Tenant Code: 05-109-1531 30 May 2008
Dear Sir or Madam,
UNIT A LOCHEND INDUSTRIAL ESTATE
We would like to welcome you as a new tenant of Spencer Business Parks Ltd and would like to take this opportunity to let you know about our company and the invoicing arrangements.
Lochend Industrial Estate was sold to Spencer Business Parks Ltd on the 8th May 2008 and will start to invoice you from your next invoice date of 28th May 2008.
Enclosed is a Direct Debit mandate for you to complete and return to us in time for the next payment due. Please could you ensure that you send the original back to us.
Currently we have in excess of 500 tenants and, as landlords, we take our responsibilities very seriously indeed. Rent Collecting is only part of our involvement with our tenants and our philosophy is that good relations are paramount. Our tenants are our customers and they know we are here to offer advice when needed and help in a variety of property-related matters.
In the event of you requiring advise or information, the below listed members of our team will be happy to assist-
Tenancy Issues - Rent Reviews, lease renewals, applications for landlords consent, occupation enquiries
Joe Dempsey BSc Hons MRICS - Tel: 0151 545 2512 - joed@spencerpropco.com
Estate services - Repairs, maintenance, site queries.
Andy Sharp - Tel: 0151 545 2509 - andys@spencerpropco.com
Accounts - Invoice and payment queries.
Steph Caldwell - Tel: 0151 545 2526 - stephaniec@spencerpropco.com
We would to take this opportunity of wishing you every success in the future and trust our association will be a long and happy one.
Yours faithfully,
SIGNED
Philip Duckett BSC (Hons) FCCA
Finance Director.
[6] SBP enclosed with the letter a direct debit instruction in their favour which Batt completed. At around the same time Batt received and completed a form under the heading "Spencer Business Parks Ltd" in which they were invited to record their tenant details. They did so. They also received and completed a form, again headed SBP, giving occupation details for the purpose of industrial buildings allowance. Thereafter they received monthly invoices from SBP for rent and other charges and annual service charge budget certificates.
[7] On 29 January 2010, Mr Stephen Brown, the financial director of Batt, wrote a letter addressed to Joe Dempsey, SH, at SH's registered office at Nexus House, which was the same address as the registered office of SBP, in the following terms:
"Dear Sir,
Re: Unit A, Lochend Industrial Estate, Newbridge
In accordance with the terms of our lease, please accept this letter as notification that we will be exercising our right to terminate the lease on the fifteenth anniversary (4 August 2010) of the date of entry.
I trust that you will find the foregoing in order.
Yours faithfully
BATT CABLES plc"
The letter was sent by Royal Mail Special Delivery and was received and signed for by "A Dunn" on 1 February 2010. On 29 January 2010 Mr Brown also sent the letter by email to Mr Dempsey at his email address, JoeD@spencerpropco.com, and ascertained that the message had been read at 12.35 hours on that date.
[8] SBP took advice from their solicitors and on 4 February 2010, DLA Piper Scotland LLP ("DLA") wrote to Batt in the following terms:
"On behalf of and as instructed by our clients ...[i.e. SBP] ... we refer to the break notice served by you dated 29 January 2010 addressed to Spencer Holdings Plc ("the Notice"). In terms of the lease ("the Lease"), our said clients have right to the landlord's interest in the Lease. Considering that the Notice has been addressed to Spencer Holdings Plc, our clients consider the Notice to be incorrectly served and therefore invalid. It is our clients (sic) view that the Lease will continue in full force and effect notwithstanding service of the Notice."
[9] Brodies LLP replied by letter dated 18 February 2010, in which they stated that the only mandatory requirements of the Lease for break notices were that they were to be in writing and served on the landlord; there was no mandatory requirement that they be addressed to the landlord. With that the battle lines were drawn.
Other correspondence
[10] In the summons Batt found on various letters which SH sent to them between 2008 and 2010 which showed that employees of that company took an active part in administering the landlords' interest in relation to the premises. While I have come to the view that little turns on this correspondence, I summarise its terms in case the matter comes before another court.
[11] In a letter dated 13 June 2008, Jennie Anders, an assistant accountant, wrote to Batt on SH notepaper to provide information on the service charge budget on the industrial estate and stated that "we" only acquired the estate during the financial year of 2008-2009. She copied that letter to Joe Dempsey among others. On 25 March 2009, Stephen Barry, a surveyor, wrote to Batt on SH notepaper to advise of a visit to the industrial estate of a representative of The Capital Allowance Partnership LLP and signed the letter "for and on behalf of the Landlord". On 29 June 2009, Jennifer Anders, assistant accountant (presumably the same lady as the author of the letter of 13 June 2008), wrote to Batt on paper which bore a logo common to both SBP and SH, enclosing a service charge certificate "issued on behalf of SH." Again she copied the letter to Joe Dempsey.
[12] On 15 September 2009 SH re-registered as a private company. On 11 December 2009, Alexander Taylor wrote to Batt on SH notepaper referring to SH as having been a successful landlord since 1974 and referring to "our" portfolio brochure. He stated that it was a key element of "our" business to have a strong relationship with occupiers and offered a reward if Batt introduced a new tenant to one of "our" units. He attached an introduction form which was to be returned to him at Spencer Property Asset Management, at the address which was also the registered office of SBP and SH.
[13] On 25 February 2010 (which was after the sending of the break notice), Mr Paul Jackson, a director of SH, wrote on SH notepaper to Batt about the 2010 rating revaluation in England and Wales, referring to "our own rating consultants" and "our own Landlords' records". Finally, on 19 April 2010, Kayte Wallace-Hughes, the sales ledger manager of SH, wrote to Batt on SH notepaper sending them their insurance folio and an invoice...
To continue reading
Request your trial
-
Robert Prow And Others V. Argyll And Bute Council
...[2008] CSOH 12; Ben Cleuch Estates Ltd v Scottish Enterprise [2008] CSIH 1, 2008 SC 252; Batt Cables Plc v Spencer Business Parks Ltd [2010] CSOH 81, 2010 SLT 860; and Scottish Life Assurance Company v Agfa-Gevaert Ltd 1998 SC 171. With regard to the defect in the second letter, he referred......
-
Robert Prow And Others V. Argyll And Bute Council
...... Investment Co (supra) Lord Clyde at 780 as adopted in Batt Cables v Spencer Business Parks 2010 SLT 860, Lord Hodge, ......