Geoffrey (tailor) Highland Crafts Limited V. G.l. Attractions Limited
| Jurisdiction | Scotland |
| Judge | Sheriff G.W.M. Liddle |
| Court | Sheriff Court |
| Date | 06 January 2010 |
| Docket Number | A5517/07 |
| Published date | 12 January 2010 |
SHERIFFDOM OF LOTHIAN AND BORDERS AT EDINBURGH
| A5517/07 | JUDGMENT of SHERIFF G.W.M. LIDDLE, Sheriff of Lothian and Borders at Edinburgh in causa GEOFFREY (TAILOR) HIGHLAND CRAFTS LIMITED Pursuers; against G.L. ATTRACTIONS LIMITED Defenders: __________ |
Act: McLean;
Alt: Gillies;
Edinburgh, 6 January, 2010
The sheriff, having resumed consideration of the cause:-
Finds in fact that:-
1. The pursuers are Geoffrey (Tailor) Highland Crafts Limited, a company incorporated under the Companies Act and having their registered office at 57-59 High Street, Edinburgh. The present directors of the pursuers are Geoffrey Nicholsby and Mrs Lorna Marion Nicholsby, both having been appointed on 25 November 1988. The present secretary of the pursuers is Geoffrey Nicholsby.
2. The defenders are G.L. Attractions Limited, a company incorporated under the Companies Acts. The defenders previously had their registered office at 555 Castlehill, Royal Mile, Edinburgh. They now have their registered office at 232-242 High Street, Kirkcaldy. The defenders still have a place of business at 555 Castlehill, Royal Mile, Edinburgh. The defenders were incorporated on 20 July 1993. William Duncan, Geoffrey Nicholsby and Lorna Marion Nicholsby had an interest. Geoffrey Nicholsby and Lorna Marion Nicholsby were directors. An agreement was entered into whereby Geoffrey Nicholsby and Lorna Marion Nicholsby disposed of their interest to William Duncan and gave up directorships. The pursuers received inter alia leases over parts of the subjects at 555 Castlehill, Royal Mile, Edinburgh, amounting to about 75% of the entire subjects. William Duncan continued to trade in his own right from other retained parts of the subjects as well as letting out other small parts to others.
3. The pursuers are now the tenants, and the defenders are the landlords, of the leased subjects forming part of 555 Castlehill, Royal Mile, Edinburgh. The entire subjects are also known as the Old Town Weaving Centre. The leased subjects are described in Schedule, Part II to Leases 1,2 and 3 (as hereinafter referred to). The entire subjects used to be a reservoir. They were converted for retail use in the 1990s. When the entire subjects were a reservoir they consisted of a large void with a walkway at ground level round the perimeter. In carrying out the conversion for retail use, the subjects were put on four levels. Three of the levels are below ground level. Levels 1 (the sub-sub-basement) and 2 (the sub-basement) cover the whole footprint of the building. Levels 3 (the basement) and 4 (the ground level) do not cover the whole footprint of the building. Levels 3 and 4 have, in effect, a large void in the middle through which, at certain points, can be seen Level 2. Level 1 is a working mill.
4. The pursuers have three leases over the subjects. The leases were prepared by Messrs. Tods Murray WS on behalf of the pursuers and by Messrs, W & Burness on behalf of the defenders. All three leases were signed together on 7 November 1997. They were signed on behalf of the pursuers by Geoffrey Nicholsby and Lorna Marion Niclolsby. They were also signed on behalf of the defenders by Geoffrey Nicholsby and Lorna Marion Nicholsby. At the times of negotiation and signing of the leases Mr Nicholsby was a controlling mind of the pursuers and both Mr Nicholsby and Mr Duncan were controlling minds of the defenders. The only signatory to the leases to give evidence in relation to what was in the minds of the pursuers and defenders at the time of signing the leases was Mr Nicholsby.
5. Lease 1 is a lease of the retail unit on Level 4 (5/1 of Process). Number 5/1 of Process is a copy. Parties agreed it could be treated as a principal. It was executed on 7 November 1997. The subjects occupied by the pursuers by virtue of Lease 1 are set out in Schedule, Part 1 to Lease 1 on page 17. Those subjects are shown outlined in red on drawing number 9301.L204, which is produced along with Lease 1.
6. Lease 2 is a lease of Level 2 (the sub-basement) and parts of Levels 3 and 4 (5/2 of Process). Number 5/2 of Process is a copy. It was executed on 7 November 1997. Parties agreed it could be treated as a true copy. The subjects occupied by the pursuers. By virtue of Lease 2 are set out in Schedule, Part 1 to Lease 2 on page 17. Those subjects are shown outlined in red on drawing numbers 9301.L202 (showing the area on Level 2 which is subject to Lease 2), 9301.L203 (showing the area on Level 3 which is subject to Lease 2) and 9301.L204 (showing the area on Level 4 which is subject to Lease 2) Those plans are referred to respectively as plan numbers 1, 2 and 3.
7. Lease 3 is a lease of Level 1. It was executed on 7 November 1997. The subjects occupied by the pursuers by virtue of Lease 3 are set out in Schedule, Pat 1 to Lease 3 on page 17. Those subjects are shown outlined in red on drawing number 9301.L201.
8. Prior to the three leases mentioned above being set up, Mr Geoffrey Nicholsby, Mrs Lorna Nicholsby (his wife) and William Duncan had a mutual interest in the defenders. The leases were entered into for commercial reasons. Previously, occupation of the shop on Level 4 and the mill beneath had been relatively informal with occupation regulated by a one page lease. The new leases formalised occupation of that area and the other areas which the pursuers were to occupy. The leases were set up on a commercial basis with rent reviews and other normal commercial clauses. It was envisaged that there might be some point in the future at which the leases might be assigned. The leases made provision for assignation.
9. The pursuers trade in Scottish giftware produce from the shop on Level 4, from part of Level 3 and from the whole of Level 2. Level 1 is a working mill. At present customers come into the building from the street through an entrance foyer and generally go through the pursuers' shop on that level (Level 4). Customers then proceed through fire doors ( D 407 on drawing 9301.L204) past the 'Control Office' (R 405 on said drawing) and along the walkway in a clockwise direction taking stairs down to lower levels. There is nothing legally to stop the pursuers altering the pattern of circulation and asking customers to circulate in an anti-clockwise direction. At present that is not convenient for the pursuers.
10. William Duncan transferred his interest in the defender company to those presently running the defender company (the Gold brothers) in about May 2007.
11. At the time Lease 1 was entered into in 1997 the controlling minds of the pursuers and defenders were aware that two other leases between the parties were also to be entered into in respect of other parts of the building. All three leases were signed at the same time. The parties were also aware that those three leases were for the same length of time and on substantially the same terms. They were aware that the 'Control Office' would effectively be "landlocked" because, in the absence of a reserved right, the landlords would have no automatic right of access across either the shop or the walkway on Level 4, both of which were to be let to the pursuers. They put their minds to addressing that issue.
12. After the leases were executed the defenders (landlords) were to retain and still retained management functions in relation to the building because certain parts of the building were not under the control of the tenants. Further, the landlords had certain responsibilities in relation to the building and also required to ensure that the tenants adhered to their own responsibilities. When the defenders granted the pursuers the three leases they reserved to themselves the 'Control Office' at the rear of the subjects on Level 4. In discussion with Mr Nicholsby, Mr Duncan indicated that he wanted to retain this as his office. That reservation was made in Lease 1. The 'Control Office' is referred to in Lease 1 as "The Landlords' administrative office". In each drawing relating to the leases it is referred to as the "Control Office". It is one and the same.
13. The 'Control Office' is rectangular in shape with a length of approximately 4 metres and a length of approximately 2.4 metres. It overhangs the void. It has two windows which overlook the void, one on the south wall and one on the east wall. It has a door that opens onto the walkway on Level 4 and a window which overlooks the walkway on Level 4. The west and north walls are internal walls. From the entrance to the building it can be accessed directly by passing through the pursuers' shop on Level 4 or, indirectly, by the walkway. It cannot be accessed without passing through subjects let to the pursuers.
14. The 'Control Office' had certain characteristics by virtue of which it was the most suitable part of the building from which to conduct administrative matters. In particular:
(i) it was the only location in the building from which it was possible to observe what was happening on all levels;
(ii) it had been fitted out with equipment such as CCTV and a sound system able to reach all parts of the building;
(iii) it is in a relatively obscure location within the building;
(iv) it is compact, thus lending itself to office as opposed to retail purposes;
(v) it had been used as an administrative/control office for some months prior to execution of the leases in November 1997 such that its value for that purpose was evident.
15. In around November 2006 the then managing director of the defenders, William Duncan, began to trade from the 'Control Office'. In preparation for this he had, unbeknown to the pursuers, undertaken a very basic re-fit of the 'Control Office'. As soon as the pursuers discovered that Mr Duncan had commenced trading from the 'Control Office', they challenged him. When challenged, he said his purpose in trading was to get rid of excess stock. Trading from the 'Control Office' took place for, at most, a few weeks and possibly only hours. Shortly after...
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