Primary Health Care Centres (broadford) Limited V. Prabhuling Ravangave+sheila Anne Turville+dr Alan William Humphrey+highland Health Board
| Jurisdiction | Scotland |
| Judge | Lord Glennie |
| Neutral Citation | [2008] CSOH 14 |
| Court | Court of Session |
| Docket Number | CA56/06 |
| Published date | 29 January 2008 |
| Date | 29 January 2008 |
| Year | 2008 |
| OUTER HOUSE, COURT OF SESSION [2008] CSOH 14 | |
| CA56/06 | OPINION OF LORD GLENNIE in the cause PRIMARY HEALTH CARE CENTRES (BROADFORD) LIMITED Pursuers; against PRABHULING RAVANGAVE First Defender; and SHEILA ANNE TURVILLE Second Defender; and DR ALAN WILLIAM HUMPHREY First Third Party: and HIGHLAND HEALTH BOARD Second Third Party: ________________ |
Pursuers: MacColl; Shepherd & Wedderburn
First Defender: Brodies
Second Defender: Party
First Third Party: Simpson & Marwick
Second Third Party: R.F. Macdonald
29 January 2008
[1] In this action the pursuers conclude, first, for declarator that the first and second defenders are jointly and severally liable for all the tenant's obligations arising under and in terms of the lease (hereafter "the Lease") of the Broadford Medical Centre, Broadford, Isle of Skye dated 25 November and 7 December 2000; and, secondly, for expenses. The Lease is between the pursuers as Landlord and Drs Humphrey and Ravangave (as the partners of and trustees for the firm of Broadford Medical Practice) as the Tenant. Drs Humphrey and Ravangave are respectively the first third party and the first defender in this action.
[2] The Medical Centre is owned by Dr Humphrey. It has been operated for some time as a surgery for general medical practitioners. In about the year 2000, and for some years previously, Dr Humphrey had practised from the Medical Centre as a general medical practitioner in partnership with Dr Ravangave. The partnership was known as the Broadford Medical Practice. In late 2000, Dr Humphrey leased the premises to the pursuers for a period of 99 years. They, in their turn, by the Lease, let the premises to Drs Humphrey and Ravangave as the then present partners of the partnership, together with their permitted successors and assignees. The Lease was for a period of 33 years from 16 November 2000.
[3] The second defender, Dr Turville, was not, as at the date of the Lease, a partner in the partnership. Clause 1.3 of the Lease (no. 24/1/2 of process), however, provided for what was to happen if there was to be a change in the partnership. So far as material, that Clause reads as follows:
"1.3 ...
(j) if the Tenant consists of a firm or partnership the obligations of the Tenant shall be binding jointly and severally not only on all persons who are partners of the firm at the time that this Lease is executed but also on all persons who shall become partners of the firm at any time during the Term and their respective executors and representatives whomsoever as well as on the firm and its whole stock, funds, assets and estate without the necessity of discussing them in their order and such obligations shall subsist and remain in full force and effect notwithstanding any change or changes which may take place in the name of the firm or the constitution of the partnership whether by the assumption of a new partner or partners or by the retiral, death or outgoing for any other cause of any individual partner; Declaring that on the retiral, death or outgoing of any individual partner the Landlord shall (upon the written application of the outgoing or retiring partner or his or her executors) grant a discharge to such partner or his executors from such partner's joint and several liability in terms of this Lease provided that the number of continuing partners (including any new partners assumed in substitution of a deceased, retiring or outgoing partner) shall not fall below two and declaring that the remaining partner will use his reasonable endeavours to engage a replacement partner as soon as reasonably practicable after such retiral, death or outgoing; ..."
Clause 5.15.5 of the Lease provided that the tenant should neither assign the whole of the premises nor sublet part of the premises without the previous consent of the landlord "which shall not be unreasonably withheld".
[4] After the Lease was entered into, the partnership occupied the premises without incident for some time. From about the second payment onwards, rent under the Lease was paid direct to the pursuers by the National Health Service. Rent has been paid in this manner ever since.
[5] In November 2001 Dr Turville became a salaried partner in the partnership. She and the two existing partners, Drs Humphrey and Ravangave, entered into a Partnership Agreement dated 13 November 2001 ("the Partnership Agreement") (no. 24/1/3 of process) regulating the affairs of the partnership. In terms of clause 4.1 thereof, Dr Turville acknowledged that
"as a partner in the Practice she is liable along with the other partners for implementation of the obligations of the Practice in terms of [the Lease] even although she was not a party to it."
The Partnership Agreement made it clear that Dr Turville had no interest in the capital of the practice and was to receive no share of the profit beyond her salary. By clause 6.4 of the Partnership Agreement, Drs Humphrey and Ravangave indemnified Dr Turville against any claims which might be made against the practice, other than those covered by insurance. It is clear that Dr Turville took legal advice as to the effect of the Partnership Agreement before she signed it.
[6] On about 1 October 2002, the provision of medical services at Broadford moved from the General Medical Services ("GMS") scheme to the Personal Medical Services ("PMS") scheme. As from that time, Drs Humphrey, Ravangave and Turville received a salary from the NHS for their services. Following upon the move to PMS, negotiations took place between the pursuers and the Highland Primary Care National Health Service Trust ("the Primary Care Trust"), the predecessors of the Highland Health Board ("the Health Board"). The Health Board is the second third party in this action. The negotiations were with a view to the Health Board taking an assignation of the Lease. Those negotiations never resulted in a written assignation, nor in any express oral agreement between the parties whereby the Lease was assigned. The Health Board was not permitted in terms of its internal financial rules to take on an assignation of the Lease.
[7] Dr Humphrey retired from practice as a doctor on about 31 March 2003. Dr Ravangave is now in practice elsewhere, having ceased to practise as a doctor from Broadford in about April 2004. Dr Turville continues to practice as a doctor in Broadford.
[8] By the end of the evidence the above facts were not, I think, in dispute. In any event, I find them to be proved.
The parties' pleaded cases
[9] The pursuers aver that on ceasing practice on about 31 March 2003, Dr Humphrey retired from the partnership; and they agreed to discharge him from his obligations under the Lease in terms of clause 1.3(j) thereof. They contend that the partnership continued with Drs Ravangave and Turville as partners; and that, pursuant to clause 1.3(j) of the Lease, Drs Ravangave and Turville continued to be liable for all of the tenant's obligations under and in terms of the Lease. They go on to say, though it is not strictly relevant to their claim against Dr Turville, that the partnership dissolved when Dr Ravangave resigned in about April 2004. They aver that in terms of clause 1.3(j) Dr Ravangave was not entitled to and did not receive a discharge of his obligations under and in terms of the Lease upon his resignation. Nor, obviously, did Dr Turville.
[10] Dr Turville's pleaded case, by contrast, is that the partnership was dissolved on or about 30 September 2002, when all three partners became salaried employees of the Primary Care Trust and no longer practised as self-employed medical practitioners. She goes on to aver that the Lease was, in effect, taken over by the Primary Care Trust and that an informal tenancy was created between the pursuers and the Primary Care Trust. The same lines of defence were pled also by the first defender, Dr Ravangave.
[11] In addition to setting out defences to the action, Dr Turville has convened Dr Humphrey as a third party. She contends that if she is liable to the pursuers, then Drs Ravangave and Humphrey are also liable to them on a joint and several basis. This claim is reflected in her fifth plea-in law. She also claims against Drs Ravangave and Humphrey on the basis of the indemnity provision in the Partnership Agreement, a claim reflected in her sixth plea-in-law. Dr Ravangave for his part claims over against the Health Board, as the statutory successor to the Primary Care Trust, on the basis that if he remains liable under the Lease, it is because the Primary Care Trust was in breach of its undertaking to take over the Lease and thereby relieve him of his obligations thereunder.
Procedural matters
[12] In June 2007, after the usual incidental procedure, a proof before answer was fixed for 20 November 2007 and a number of days following. The proof was to cover all issues arising between all parties, including the third party proceedings. At a By Order hearing on 8 November, however, the court was told that Dr Ravangave, would not be opposing the pursuers' first conclusion (for him to be found jointly and severally liable with Dr Turville) and intended to abandon his plea directed against the Health Board. He therefore did not intend to make any submissions at proof. This meant that the Health Board would not be taking part in the proof (in the event, at the start of the proof I pronounced an interlocutor in terms of a Joint Minute assoilzing the Health Board from the claims directed against it). It also meant that Dr Ravangave's role (if any) at the proof would be passive. After further discussion, it was decided, with the agreement of all parties, that the proof should be split so that it would only deal with issues as between the pursuers and the defenders, Drs Ravangave and Turville. The order made, in paragraph 4 of the interlocutor of 8 November 2007 was, so far as material, to the following effect:
"... restricts the proof before answer [previously allowed] to...
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Primary Healthcare Centres (broadfoot) Limited V. Dr Alan Humphrey+dr Prabhulung Ravangave+dr Sheila Turville
...Humphrey gave evidence at the proof but did not otherwise take part in the proceedings. Lord Glennie heard the proof and in his opinion ([2008] CSOH 14) found that the partnership had come to an end on 30 September 2002. He held that the landlords were not entitled to found on evidence that......