Lowe v Quayle Munro Ltd
| Jurisdiction | Scotland |
| Judgment Date | 13 February 1997 |
| Date | 13 February 1997 |
| Docket Number | No 47 |
| Court | Court of Session (Outer House) |
OUTER HOUSE
Lord Penrose
Landlord and tenant—Lease—Tenant's obligation—Tenant obliged to keep subjects let in good and substantial repair and maintained to the satisfaction of the landlords—Tenant obliged to reimburse landlord's costs “properly incurred” in maintaining, repairing and where necessary renewing the exterior and structure of subjects let—Landlord instructing extensive works on premises—Whether tenant obliged to reimburse landlord for expenditure incurred
Words and phrases—“Properly incurred”
An individual let certain office premises to a company. In terms of cl 3 of the lease the tenants were obliged: “To accept the leased subjects in their present condition and at their own cost and expense to repair and keep in good and substantial repair and maintained … in every respect all to the satisfaction of the Landlords and to replace or renew or rebuild whenever necessary the leased subjects and all additions thereto … and parts, pertinents and others therein or thereon all to the satisfaction of the Landlords and that regardless of the age or state of dilapidation of the buildings or others for the time being comprised in the leased subjects and irrespective of any latent or inherent defects therein”. Clause 7(b) obliged the tenant,inter alia: “To pay and reimburse to the Landlords on demand Forty per centum of the costs properly incurred by the Landlords in maintaining, repairing and when necessary renewing the exterior and structure of the building.”
The landlord instructed extensive works on the subjects let at the termination of the lease and brought an action against the tenants for payment of damages or expenditure for which she claimed they were liable in terms of the lease.
Held (1) that cl 3 was designed to cover extraordinary repairs according to conventional Scottish tests, the tenants' obligations being triggered by identification of a state of fact within the scope of the obligation, irrespective of the history of that state of fact and, in particular, irrespective of whether the landlord had excluded the existence of the fact or the cause of the state of fact at the commencement of the lease; (2) that the disregard of age, dilapidation and latent and inherent defects demonstrated that the distinction between ordinary and extraordinary repairs was not relevant to the pursuer's claims and the pursuer was not required to aver and adduce evidence that the works were required because the tenant had omitted to maintain the premises in their original condition and that the cause of the works had thus emerged during the term of lease; (3) that the landlord must act reasonably in considering whether such works were carried out to his or her satisfaction and that cl 3 did not to provide the landlord with a blank cheque to recover the costs of any works which might conceivably be brought within the scope of one of the heads of the tenant's obligation; (4) that, properly construed, cl 3 meant that (a) there was a continuing obligation to keep the premises maintained; (b) an obligation to repair arose where there was a state of disrepair; (c) while the obligation to keep in good and substantial repair might include renewal, the specification of renewal along with replacement and rebuilding in the third chapter excluded that interpretation; and replacement, renewal and rebuilding required proof of necessity if the landlord was to recover; and (d) recoverability was conditional on the works which fell within the tenant's obligations having been carried out to the reasonable satisfaction of the landlord; (5) that expenditure “properly incurred” in terms of cl 7(b) did not mean that the reasonableness of the landlord's conduct was irrelevant, provided only that there was no impropriety in what she did and that the reasonableness of the expenditure was a matter for proof; but (5) that although the expression“parts, pertinents and others” in cl 3 was comprehensive in its application to heritage, it could not support a claim for damages quantified by reference to the cost to the landlord of introducing moveables such as carpeting to the premises; and averments relating to carpets and other floor coverings excluded from probation; and proof before answer allowed.
Helen M Lowe brought an action against Quayle Munro Limited, the averments of which appear sufficiently from the opinion of the Lord Ordinary (Penrose).
The cause called before the Lord Ordinary on parties' preliminary pleas in law.
Cases referred to:
Beddoe, In re [1893] 1 Ch 547
Gordon District Council v. Wimpey Homes Holdings Ltd (No 2) 1989 SLT 142
House of Fraser plc v. Prudential Assurance Co Ltd1993 SLT 519 [affd 1994 SLT 463]
Lothian v. Jenolite LtdSC 1969 SC 111
Napier v. FerrierUNK (1847) 9 D 1354
Rockcliffe Estates plc v. Cooperative Wholesale Society Ltd 1994 SLT 592
Shepherd (G M) Ltd v. North West Securities Ltd 1991 SLT 499
Taylor Woodrow Property Co Ltd v. Strathclyde Regional Council 1996 GWD 7–397
Turner's Trustees v. SteelUNK (1900) 2 F 363
At advising, on 13 February 1997, the Lord Ordinary excluded from probation averments relative to the pursuer's claim for carpets and other floor coverings and quoad ultra allowed a proof before answer.
LORD PENROSE'S Opinion—Miss Lowe owns office premises situated at numbers 41 and 42 Charlotte Square, Edinburgh. Quayle Munro Ltd were tenants of number 42 from about 1984. The parties entered into an agreement to extend the subjects occupied by Quayle Munro Ltd into the second floor of number 41. A new lease was executed on 29 and 30 June 1993 of the extended subjects, with entry at 15 May 1991. In the new lease number 42 was identified as the main premises and the rooms occupied in number 41 as the additional premises. Number 41 was serviced by an internal stairway which gave access to all of the upper floors from the ground floor, including the additional premises. The principal access to the additional rooms was through a doorway opened up in the party wall between numbers 41 and 42. The duration of the new lease was five years, with provision for breaks. Quayle Munro Ltd exercised their break option and the lease was terminated at 15 May 1994.
Miss Lowe instructed extensive works on numbers 41 and 42 at the termination of the lease. In this action she seeks payment of five sums, as damages or as expenditure which Quayle Munro Ltd are liable to reimburse. The parties are in dispute on a number of issues of fact, including the nature of the expenditure incurred. There are wide differences between them on issues of interpretation of the lease, however, which must be resolved if the factual dispute is to be focused.
The tenants' obligations relied on by Miss Lowe are set out in part III of the schedule to the lease and I refer to the clauses of that part of the schedule without further specification in the remainder of this opinion.
The first conclusion of the summons, for the principal sum of £80,806.02, is claimed as damages. Clause 8 of part III obliged the tenants, at the expiry of the lease, to reinstate the premises to reverse any permitted alterations; if required, to close the opening between numbers 41 and 42 and otherwise complete the separation of the main and additional premises; and generally to leave the leased premises: “in such state and...
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