Robert Prow And Others V. Argyll And Bute Council
| Jurisdiction | Scotland |
| Judge | Lord Justice Clerk,Lord Clarke,Lady Dorrian |
| Neutral Citation | [2013] CSIH 23 |
| Court | Court of Session |
| Year | 2013 |
| Date | 19 February 2013 |
| Docket Number | CA141/11 |
| Published date | 28 March 2013 |
| SECOND DIVISION, INNER HOUSE, COURT OF SESSION | |
| Lord Justice Clerk Lord Clarke Lady Dorrian | [2013] CSIH 23 CA141/11 OPINION OF THE COURT delivered by LORD CARLOWAY, the LORD JUSTICE CLERK in the reclaiming motion R M PROW (MOTORS) LIMITED DIRECTORS PENSION FUND TRUSTEES Pursuers and Respondents; against ARGYLL & BUTE COUNCIL Defenders and Reclaimers: _______________ |
Act: McClelland; Davidson Chalmers LLP
Alt: D Thomson; Brodies LLP
19 February 2013
Introduction
[1] In the course of a commercial action for payment of an increased sum in rent, the defenders, as tenants of the subjects at 64A John Street, Helensburgh, challenged the validity of a rent review, instituted by the pursuers as landlords, which purported to create the increase in terms of the lease between the parties. The lease ran from 1 October 2000 until 31 March 2020. In terms of Clause 25, the rent was subject to review at the instance of the pursuers on 1 October in each of the years 2005, 2010 and 2015, each of those dates being defined in the lease as "the relevant term".
[2] Clause 25(a) provided that:-
"The [pursuers] shall give to the [defenders] three months written notice prior to the relevant term of their intention to exercise their right to require a review of the rent. Such notice shall specify the rent which the [pursuers] propose as the fair market rent at the relevant term... The rent payable from the relevant term shall be such sum as (i) shall have been specified in the said notice or (ii) shall be agreed between the parties within three months of the date of receipt by the [defenders] of the said notice... or (iii) shall be determined (at the election of the [defenders], such election to be made by counter-notice in writing given by the [defenders] to the [pursuers] within three months of the date of receipt of the said notice) by the independent surveyor aftermentioned, subject to the terms aftermentioned".
Clause 25(c) continued:-
"In the event of the [pursuers] having failed to give due notice in terms of [Clause Twenty-fifth (a)] of their intention to exercise their right to require a review of rent at any relevant term or if the rent is not reviewed at the relevant term for any other reason they shall be entitled to require such a review as at the Twenty eighth day of any month following the relevant term by giving to the [defenders] three months written notice prior to such term and the foregoing provisions of this Clause shall mutatis mutandis apply to such review provided (i) that the review of rent in terms of this provision shall have regard to the level of fair market rents current at the relevant term and not at the succeeding term and (ii) any increase in rent resulting from such review shall have effect from the relevant term and not from the succeeding term."
[3] The pursuers issued a letter to the defenders dated 19 July 2010 purporting to be a notice of rent review as follows:-
"Dear Sirs,
Rent Review: 1st November 2010, 64a John Street, Helensburgh
Landlord - R M Prow (Motors) Limited Directors Pension Fund
Tenant - Argyll & Bute Council
I act on the instructions of the Landlord in connection with a rent review originally scheduled under the terms of the lease as at 1st October 2010 at the above location. The original Landlords were as stated above, now Proven Properties [Scotland] Ltd.
In terms of the lease contract ... between the Landlord R M Prow (Motors) Limited Directors Pension Fund and Tenant Argyll & Bute Council, ... Clause 25th, there is provision for the annual rent to be reviewed at 1st October 2010. The lease requires 3 months written notice to be given in advance of the rent review date however no notice was issued at the relevant time. Accordingly, as provided for in terms of said lease, the landlord wishes to have the rent review occur on the 1st November 2010 and you are hereby notified of the landlords intention to review the rent in accordance with these lease provisions at 1st November 2010.
You are hereby given notice that the landlord specifies that the fair market rent as at 1st November 2010 shall be the annual sum of £58,000 exclusive ...
Yours sincerely
Signed as agent for and on behalf of the landlord".
[4] This purported notice contained several errors, notably that: (i) the landlords were "now" Proven Properties [Scotland] Ltd; (ii) the rent review was to occur on 1 November 2010, thereby giving less than the required three months notice; and (iii) the fair market rent was stated as at 1 November 2010 instead of the relevant term (1 October 2010).
[5] Having noticed these errors, the pursuers issued a further letter dated 24 August 2010 in the following terms:-
"Dear Sirs
Rent Review: 28 November 2010, 64a John Street, Helensburgh
Landlord - R. M. Prow (Motors) Limited Directors Pension Fund
Tenant - Argyll and Bute Council
I refer to the Lease between the Trustees for R. M. Prow (Motors) Limited Directors Pension Fund and you, Argyll and Bute Council ... of the subjects 64a John Street, Helensburgh ("the Property").
It has come to my attention that the notice that I sent you on 19 July 2010 in connection with the rent review for the Property under the Lease should have been notice to the 28th of a month and my notice referred to 1st November.
Accordingly, I hereby give you notice on behalf of the Landlord, that the Landlord requires a review of the rent under the Lease as at 28 November 2010.
As the review has regard to the level of rents at the relevant term (which is 1 October...
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