Possfund Custodial Trustee Ltd v Kwik-Fit Properties Ltd
| Jurisdiction | Scotland |
| Judge | Lord Reed,Lord Wheatley,Lord Mackay of Drumadoon |
| Neutral Citation | [2008] CSIH 65 |
| Date | 05 December 2008 |
| Docket Number | CA121/07 |
| Published date | 05 December 2008 |
| Year | 2008 |
| Court | Court of Session (Inner House) |
| EXTRA DIVISION, INNER HOUSE, COURT OF SESSION | |
| Lord Wheatley Lord Reed Lord Mackay of Drumadoon | [2008] CSIH 65 CA121/07 OPINION OF THE COURT delivered by LORD REED in causa POSSFUND CUSTODIAL TRUSTEE LIMITED Pursuers and Respondents against KWIK-FIT PROPERTIES LIMITED Defenders and Reclaimers _______ |
Pursuer and Respondents: McColl; Tods Murray LLP
Defender and Reclaimers: Lake; Anderson Strathern LLP
5 December 2008
Introduction
[1] This case is concerned with the construction of a commercial lease. The question is whether a right of inspection conferred by the lease upon the landlords entitles them to carry out investigations in order to ascertain whether soil pollution may have occurred.
[2] The pursuers are the present landlords, and the defenders are the tenants, of commercial premises in Edinburgh, in terms of a lease entered into in 1993 between the defenders and Nissan UK Ltd. The premises were at one time a garage, and contain underground storage tanks which were formerly used for the storage of fuel. That use however came to an end at or before the grant of the lease. Since then, the premises have been used by the defenders as a centre for the supply and fitting of tyres, exhausts and similar products and the carrying out of MOT testing. The lease is for a term of 25 years from 25 May 1993.
[3] In 2007 the landlord's interest was acquired by the pursuers. Shortly after they had taken entry, their solicitors wrote to the defenders:
"We hereby give you notice on behalf of the Landlords of their intention to exercise their rights under clause 3.11 of the Lease to enter upon the Property generally to examine the state of repair and condition thereof and in particular to have their professional advisors carry out environmental investigations.
The Landlords' representatives Delta Simons will require access to the property on the 6/7 November 2007 to carry out initial checks and thereafter will be attending the property from 13 to 16 November to carry out the investigations."
[4] The defenders were subsequently provided with a method statement by Delta Simons, the environmental consultants instructed on behalf of the pursuers. It stated that the purpose of the proposed investigation was to assess the significance of any potential environmental liability associated with any soil and ground water contamination which might be present. The investigation would involve several stages. It would be necessary first to carry out a service avoidance exercise and ground penetrating radar survey, in order to identify the exact location of the underground storage tanks, other sub-surface structures and live services. This would take up to two days to complete. Drilling works would then be carried out. These would involve drilling five shallow boreholes, to a depth of approximately 6 metres beneath the surface, in order to collect groundwater samples from shallow perched groundwater likely to be present within made ground or shallow deposits. Four of these boreholes would be drilled around the underground storage tanks, in the eastern part of the forecourt of the premises. The fifth of the shallow boreholes would be drilled in the western part of the forecourt. There would in addition be a single deep borehole to a depth of approximately 30 metres beneath the surface, in order to collect groundwater samples from the major aquifer within the underlying sandstone. The drilling works would take up to four days to complete. Each borehole would be installed as a 50 millimetre diameter land gas and groundwater monitoring well finished with a traffic strength cover, flush with the surface. Approximately fifteen soil samples would be collected at various depths and submitted to a laboratory for chemical analysis. Groundwater samples would also be collected and analysed, and land gas concentrations would be monitored. The monitoring would begin at least two days after the completion of the drilling works. A skip would be provided to collect waste arising from the drilling. A representative of Delta Simons would be present for about four days to oversee the drilling works, record observations and collect samples. Cones, barriers and signs would be used to cordon off the areas of the works.
[5] Through their solicitors, the defenders indicated that, although they had no objection to inspections under clause 3.11 of the lease (quoted below), they were not agreeable to the proposed environmental investigations. In view of the defenders' refusal, the pursuers commenced the present proceedings, concluding for declarator that the defenders are obliged to permit them to enter the premises
"in order to view the state of repair and condition thereof and, in particular, to drill five shallow boreholes and a single deep rotary borehole within the Premises in order to inspect and examine the condition of the solum of the Premises."
In their pleadings, the pursuers explain that, having purchased the premises, they wish to ascertain their condition, and in particular to ascertain whether there has been any contamination of the solum from the underground tanks or from any other source; and they maintain that clause 3.11 of the lease entitles them to carry out the proposed investigations.
[6] The case proceeded to debate on the question whether works of the general character proposed were in principle permitted by the lease, leaving for later resolution, if necessary, issues relating to the details of the works and the extent to which any disturbance of the defenders' operations might be minimised. The Lord Ordinary resolved the question debated in favour of the pursuers.
The lease
[7] As we have mentioned, the lease of the premises is for a period of 25 years from 25 May 1993. The premises leased are defined by clause 1.2.5 as
"the subjects described in Part I of the Schedule and each and every part thereof together with the pertinents thereof ....".
Part I of the Schedule refers to the "area of ground" described in a 1925 feu charter "together with the buildings and erections on those subjects". In terms of clause 2, the premises are let to the tenant "under reservation of the exceptions and reservations referred to in the Schedule Part III". Those reservations include, in paragraph 2, the landlord's right
"to enter and remain upon the Premises with all necessary tools, appliances and materials for the purposes of repairing, altering or rebuilding any adjoining or contiguous premises belonging to the Landlord.... Provided always that the Landlord shall ensure that the exercise of such rights... shall be carried out in such a manner as to cause the least practicable disturbance to the Tenant ... and the Landlord shall...
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