Moor Row Limited Against Dwf Llp
| Jurisdiction | Scotland |
| Judge | Lady Wolffe |
| Neutral Citation | [2017] CSOH 63 |
| Court | Court of Session |
| Date | 07 April 2017 |
| Published date | 07 April 2017 |
| Docket Number | CA117/16 |
| Year | 2017 |
OUTER HOUSE, COURT OF SESSION
[2017] CSOH 63
CA117/16
OPINION OF LADY WOLFFE
In the cause
MOOR ROW LIMITED
Pursuer
against
DWF LLP
Defender
Pursuer: Sandison QC; Pinsent Masons LLP
Defender: Fairley QC; DWF LLP
7 April 2017
Introduction
[1] The pursuer and the defender were formerly landlord and tenant, respectively, under a sublease of certain commercial office premises comprising four floors of Dalmore House in Glasgow (“the Premises”), and which came to an end on 27 June 2016 (“the Lease”). Both parties are assignees of the original parties to the Lease, but nothing turns on this. The pursuer was, in turn, the tenant under a head-lease of the Premises (“the Head Lease”) and which came to an end on the same date as the Lease. A company known as Tarn Crag Limited (“Tarn”) were the successors to the landlord’s interest under the Head Lease. Tarn is averred to be an associate company of the pursuer, but the precise nature of that association is not disclosed in the pleadings.
[2] On 20 January 2016 the defender gave notice to terminate the Lease. By letter dated 10 February 2016 the pursuer served a schedule of dilapidations on the defender. A terminal schedule of dilapidations (including a corrected one) was subsequently served on the defender in August 2016. It is a matter of agreement that the defender carried out none of the dilapidation works identified. In this commercial action the pursuer seeks payment of (1) the sum of £906,294.35, which is said to be the cost of the dilapidation works, together with interest at the judicial rate; and (2) the sum of £4,600 representing the costs incurred in preparation of the schedule, together with “pactional” interest at the rate of 4% over the base rate of the Royal Bank of Scotland. The pleadings relative to this second conclusion referred to clause Seven of Part IV of the Schedule to the Lease. The original basis of the pursuer’s action was one of damages for breach of certain obligations said to be owed by the defender under the Lease. In adjustments added shortly before the debate, the pursuer added a case for indemnity by the defender of the obligations the pursuer owed to Tarn, as head landlord under the Head Lease.
[3] The defender resists the pursuer’s claims, essentially on the basis that it doubts whether there is any intention to carry out the repairs identified in the schedule of dilapidations. It avers that the Premises are being marketed for sale. At the debate before me, the defender challenged the relevancy of the pursuer’s pleadings and moved for dismissal either on the basis that the pursuer’s action was premature and incompetent (in terms of its first plea‑in‑law) or that it was irrelevant (the second plea‑in‑law). The pursuer did not move its preliminary plea.
[4] I begin by setting out the relevant terms of the Lease and Head Lease and certain passages of the pleadings.
The Head Lease
[5] In terms of clause Fourth the tenants of the Head Lease bound themselves to observe and perform the obligations set out in Part IV of the Schedule to the Head Lease, which includes clauses Eight and Nine of part IV of the schedule. For ease of reference later in this opinion, I have inserted roman numbering into clause Nine. These clauses are in the following terms:
“EIGHT TO LEAVE IN GOOD REPAIR
At the expiry or sooner termination of the foregoing Lease and subject to the Tenants carrying out, to the reasonable satisfaction of the Landlords, all restoration works properly called for by the Landlords in terms of Clause TWELVE of this Part of this Schedule quietly and without any warning away or other process of law notwithstanding any law or practice to the contrary to surrender to the Landlords the Leased Subjects together with subject to the foregoing all additions and improvements made thereto and all fixtures (other than trade or tenant’s fixtures affixed by the Tenants or any sub-tenant or other authorised occupier) in or upon the Leased Subjects or which during the currency of the foregoing Lease may have been affixed or fastened to or upon the same and that in such state and condition as shall in all respects be consistent with full and due performance by the Tenants of the obligations herein contained. Without prejudice to the foregoing generality, at their own cost and expense to repair and make good to the reasonable satisfaction of the Landlords all damage including damage to paint work caused by the removal of trade or tenant’s fixtures affixed to the Leased Subjects by the Tenants or any sub-tenant. (emphasis in italics added.)
NINE TO PERMIT LANDLORDS TO ENTER AND TO REPAIR ON NOTICE
[i] To permit the Landlords or their surveyors or agents or in accordance with his provision such workmen as may be authorised by them respectively, with all necessary appliances, at all reasonably convenient hours in the daytime on reasonable prior notice to the Tenants except in case of emergency to enter the Leased Subjects and take a plan of and examine the state of repair and condition of the same and subject to the remaining provisions of this Lease to carry out insurance valuations and for all other necessary and proper purposes and to make inventories of the fixtures and fittings to be surrendered subject always to the provisions of Clause TWELVE of this part of the Schedule [ii] at the expiry of the foregoing Lease and within three calendar months or such longer or shorter period as shall be reasonable in the circumstances after notice in writing to the Tenants of all defects and wants of reparation or breaches by the Tenants of their obligations under the terms of the Lease properly found on such examination shall have been given to the Tenants or left at the Leased Subjects, to repair reinstate and make good the same according to such notice and the provisions in that behalf hereinbefore contained and [iii] in case the Tenants shall make default in so doing it shall be lawful for workmen or others to be employed by the Landlords to enter upon the Leased Subjects, with all necessary appliances, and repair, reinstate, make good and restore the same in like manner as had been properly required in accordance with the terms of this Lease of the Tenants and [iv] all expenses including Surveyors’ fees properly incurred thereby shall within fourteen days of demand be paid by the Tenants to the Landlords with interest thereon at the rate and on the basis chargeable on unpaid rent by virtue of Part III of this Schedule from the date of demand until paid and [v] in the event of the Tenants not paying such expenses within three months from the date of demand, this shall constitute a material breach of the foregoing Lease.” (emphasis added, in italics and bold font.)
[6] For completeness, I note that the Head Lease precluded reference inter alia to the headings used in the Head Lease as they were “inserted for convenience of reference and are deemed not to form part of these presents nor shall they affect the construction thereof”: clause Seventeenth. Neither party drew attention to a like provision in the Lease.
The Lease
[7] The Lease made express reference to the Head Lease (in Definitions (a)) and it followed a similar format to the Head Lease, in that by clause Fifth the tenant bound itself to observe and perform the obligations set out in Part IV of the Schedule to the Lease. In this action, the pursuer founds on clauses Six (repair obligation) and Thirty‑one (indemnity). A repair obligation is also set out in clause Six of Part IV of the Schedule, and to which the defender made reference. Again, for ease of reference later in this opinion, I have inserted roman numbering in clause Seven. These clauses are in the following terms:
“SIX TO LEAVE IN GOOD REPAIR
At the expiry or sooner termination of the foregoing Sub-Lease and subject to the Sub-Tenants carrying out, to the reasonable satisfaction of the Mid-Landlords in terms of Clause TEN of this Part of this Schedule quietly and without any warning away or other process of law notwithstanding any law or practice to the contrary to surrender to the Mid‑Landlords the Premises together with subject to the foregoing all additions and improvements made thereto and all fixtures (other than trade or tenant’s fixtures affixed by the Sub-Tenants or any sub-undertenant or other authorised occupier) in or upon the Premises or which during the currency of the foregoing Sub-Lease may have been affixed or fastened to or upon the same and that in such state and condition as shall in all respects be consistent with full and due performance by the Sub-Tenants of the obligations herein contained. Without prejudice to the foregoing generality, at their own cost and expense to repair and make good to the reasonable satisfaction of the Mid-Landlords all damage including damage to paint work caused by the removal of trade or tenant’s fixtures affixed to the Premises by the Sub-Tenants or any sub-undertenant. [Emphasis added.]
SEVEN TO PERMIT LANDLORDS TO ENTER AND TO REPAIR ON NOTICE
[i] To permit the Landlords and the Mid-Landlords or their respective surveyors or agents or in accordance with this provision such workmen as may be authorised by them respectively, with all necessary appliances, at all reasonably convenient hours in the daytime on reasonable prior notice to the Sub-Tenants except in case of emergency to enter the Premises and take a plan of and examine the state of repair and condition of the same and, subject to the provisions of this Sub-Lease, to carry out insurance valuations and for all other necessary and proper purposes and to take inventories of the fixtures and fittings to be surrendered, subject always to the provisions of Clause TEN of this Part of the Schedule, [ii] at the expiry of the foregoing Sub-Lease and within three calendar months or such longer or shorter period as shall be reasonable in the circumstances after notice in writing to the Sub-Tenants of all...
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