Primary Health Care Centres (broadford) Limited V. P. Ravangave And Others
| Jurisdiction | Scotland |
| Judge | Lord Hodge |
| Neutral Citation | [2009] CSOH 46 |
| Court | Court of Session |
| Docket Number | CA21/08 |
| Published date | 26 March 2009 |
| Date | 26 March 2009 |
| Year | 2009 |
| OUTER HOUSE, COURT OF SESSION [2009] CSOH 46 | |
| CA21/08 | OPINION OF LORD HODGE in the cause PRIMARY HEALTH CARE CENTRES (BROADFORD) LIMITED Pursuers; against (1) PRABHULING RAVANGAVE, (2) SHEILA ANN TURVILLE and (3) ALAN WILLIAM HUMPHREY Defenders: ________________ |
Pursuers: Munro; Shepherd & Wedderburn LLP
First Defender: Sandison; Brodies LLP
Second Defender: Beynon; Balfour + Manson LLP
26 March 2009
[1] This is an action by the pursuers, who are the landlords of heritable property in Broadford, Isle of Skye, known as the Broadford Medical Centre ("the subjects"), against the defenders, who are general medical practitioners and who were formerly partners in a partnership known as the Broadford Medical Practice. The pursuers seek declarator that the defenders are jointly and severally liable for all of the tenant's obligations under the lease of the subjects.
[2] This is the second action which the pursuers have raised against Dr Ravangave and Dr Turville seeking declarator that they are bound by the terms of the lease of the subjects. The first action resulted in decree of absolvitor. In this action Dr Ravangave and Dr Turville have pleaded res judicata. The debate which I have heard was on the scope of that defence and its application to this case. At a procedural hearing on 19 January 2009, eight days before the debate, counsel for Dr Humphrey intimated to the court that he did not contest the declarator. I was not asked to make any order in relation to Dr Humphrey beyond allowing him to withdraw his defences.
Factual background
(i) The lease and the changing structure of primary health provision
[3] Dr Humphrey owns the subjects. He practised as a general medical practitioner in partnership with Dr Ravangave and the subjects were their surgery. In about 2000 Dr Humphrey leased the subjects to the pursuers. They in turn, by lease dated 25 November and 7 December 2000, let the subjects to Dr Humphrey and Dr Ravangave as the partners of and trustees for the partnership, and their permitted successors and assignees. The lease was for a period of thirty-three years from 16 November 2000. Clause 1.3(j) of the lease provided that the obligations of the tenant would be binding jointly and severally not only on the persons who were partners of the firm when the lease was entered into but also on all persons who in future became partners of the firm. It also provided that those obligations would subsist notwithstanding any changes in the constitution of the partnership by the assumption of new partners or the retiral, death or withdrawal of any partner. That clause further provided that the pursuers would grant a discharge from joint and several liability under the lease to a partner who withdrew from the continuing partnership. That discharge could be obtained on the written application of that partner or his or her executors so long as there remained a partnership of two or more persons. I observe that the persons liable under the lease were not only the individuals who were partners in the original partnership as tenant but also the individuals who were or became bound by the terms of the lease by virtue of their status as partners. This was provided for in clause 1.3(j) and not simply as a result of the operation of the law of partnership.
[4] On 19 November 2001 Dr Turville joined the partnership as a partner. The defenders entered into a partnership agreement dated 13 November 2001. In clause 4.1 of that agreement Dr Turville acknowledged that she was liable along with the other partners to implement the obligations of the partnership under the lease. By clause 6.4 she obtained an indemnity from the other partners in respect of any liability of the partnership which was not covered by insurance.
[5] The pursuers in this action aver that the partnership ended on or about 30 September 2002 and the defenders admit that averment. The dissolution of the partnership arose out of a change in the way in which the National Health Service provided the services of general medical practitioners to the public. Until 30 September 2002 the General Medical Services Scheme provided such services in Broadford through the partnership. On and after 1 October 2002 the Personal Medical Services Scheme engaged the defenders as salaried employees of the Highland Primary Care NHS Trust ("the NHS Trust"). As a result, the pursuers aver, the partnership was dissolved but the defenders remained jointly and severally liable for the tenants' obligations arising under the lease.
[6] The defenders continued to use the subjects as a surgery. The pursuers were for some time unconcerned about the defenders' liability under the lease because the rent was being paid and the pursuers were negotiating with the NHS Trust for them to take over the tenants' interest in the lease. On 1 April 2004 the NHS Trust was replaced by Highland Health Board ("the Health Board"). Until then the Common Services Agency of the NHS in Scotland paid the rent for the subjects; thereafter it was paid by the Health Board. The pursuers aver that the payment of the rent in that manner was the result of obligations which the NHS Trust and then the Health Board undertook to meet the rental payments due on premises occupied by general medical practitioners. I was informed that negotiations between the pursuers and the Health Board had not resulted in the Health Board taking over the lease because their internal financial rules did not permit them to do so. Nonetheless, the Health Board continue to pay the rent.
[7] Against this background the pursuers seek declarator that the defenders are jointly and severally liable for all of the tenant's obligations under and in terms of the lease. Their claim in the action is that, because the partnership was dissolved on 30 September 2002 and as none of the defenders obtained a discharge from their liability under the lease, the defenders' liability as individuals continues.
(ii) The earlier action
[8] The pursuers raised an action in August 2006 against Dr Ravangave and Dr Turville. They averred that the partnership ended in April 2004 when Dr Ravangave resigned and that he and Dr Turville remained liable under the lease thereafter. They did not sue Dr Humphrey who, they averred, had retired from medical practice on 31 March 2003. Dr Humphrey asserted at that time that he had retired from a continuing partnership and that the pursuers had granted him a discharge under clause 1.3(j) of the lease. I was informed that the pursuers did not accept the assertion that they had agreed to discharge him; they took the position that, while he had made a written application for discharge, they had not granted one. In view of that understanding of the facts, it is strange that the pursuers in the earlier action sued only Dr Ravangave and Dr Turville and that they averred that Dr Humphrey had been discharged from his obligations under the lease after he retired from the partnership on 31 March 2003. This approach by the pursuers, which Mrs Munro did not explain, set in motion a procedural chain of events which brought about the difficulty which they now face.
[9] In the earlier action the pursuers sought declarator that Dr Ravangave and Dr Turville were jointly and severally liable for all the tenant's obligations arising under and in terms of the lease. Their plea in law on the merits was: "the first and second defenders being liable for the tenant's obligations under and in terms of the lease, the pursuers are entitled to decree of declarator". This is substantially the same plea in law as the pursuers' plea in law on the merits in the present action.
[10] Dr Ravangave and Dr Turville averred in the earlier action that the partnership had been dissolved on 1 October 2002 when they ceased to be self-employed medical practitioners. They denied that Dr Humphrey had been discharged from his obligations under the lease. Dr Turville asserted that she was entitled to be indemnified by Dr Ravangave and Dr Humphrey under clause 6.4 of the partnership agreement. She brought Dr Humphrey into the action as a third party on the bases (i) that he was jointly and severally liable under the lease and (ii) that he was bound to indemnify her. The pursuers did not adopt her first case against Dr Humphrey as a fall-back. The action was further complicated as Dr Ravangave brought in the Health Board as a second third party. He sought relief from his obligations under the lease from the Health Board as the statutory successors of the NHS Trust who, he averred, had failed to perform their obligation to take over the lease. Dr Turville also pleaded that she was not liable to the pursuers as the pursuers had created an informal tenancy of the subjects in favour of the Health Board.
[11] The earlier action descended into what Mrs Munro described as "a procedural quagmire" for the pursuers when the parties agreed to a restricted proof which was confined to the pursuers' claims against Dr Ravangave and Dr Turville and left over for later determination, among other things, Dr Turville's claim against Dr Humphrey. As a result, Dr Humphrey was not represented at the proof hearing. He gave evidence as a witness. Dr Ravangave also did not attend the proof hearing as he had intimated to the court that he did not oppose the pursuers' conclusion that he was jointly and severally liable with Dr Turville. He also abandoned his claim against the Health Board, who were released from the action. The pursuers went to proof only against Dr Turville, who represented herself at the hearing.
[12] Lord Glennie heard the proof and in an opinion dated 29 January 2008 found that the partnership had come to an end on 30 September 2002. As a result the pursuers failed to prove the averments upon which they relied to support their claim for declarator. Lord Glennie held that the pursuers were not entitled to found on evidence which supported a factual case which...
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