Warren James (jewellers) Limited V. Overgate Gp Limited
| Jurisdiction | Scotland |
| Judge | Lord Glennie |
| Neutral Citation | [2010] CSOH 57 |
| Court | Court of Session |
| Published date | 30 April 2010 |
| Year | 2010 |
| Date | 30 April 2010 |
| Docket Number | CA166/09 |
| OUTER HOUSE, COURT OF SESSION [2010] CSOH 57 | |
| CA166/09 | OPINION OF LORD GLENNIE in the cause WARREN JAMES (JEWELLERS) LIMITED Pursuers; against OVERGATE GP LIMITED Defenders: ________________ |
Pursuers: Davis; Archibald Campbell & Harley WS
Defenders: MacKenzie, solicitor advocate; Pinsent Masons
30 April 2010
[1] The pursuers carry on business as retailers of jewellery and ancillary items. By a lease dated 25 November and 18 December 2000, they leased from the defenders for a period of 15 years a unit (Unit L31) at the Overgate Shopping Centre, Dundee ("the premises") from which to carry on their business. They commenced trading from the premises on 10 November 2000. At the time of negotiating the lease, two other units within the Overgate Centre had been let to jewellery retailers. Clause 4.3 of the lease provided:
"Exclusivity - For so long as [the pursuers] is the Tenant under this Lease, not in respect of any first letting (which means the first time the Landlord let the Lettable Unit in question and not in respect of any subsequent lettings) of any Lettable Unit to lease any such Lettable Unit (other than the Premises and two other Lettable Units only) with its Permitted Use having specified as its principal trade or business the retail sale of jewellery."
The pursuers complain that, in breach of their obligations under clause 4.3, in 2001 the defenders let another unit at the Centre (Unit U5) to Ortak Jewellery Limited ("Ortak"), who are also retailers of jewellery and other items. Ortak commenced trading there from that time. The pursuers claim damages representing the fall in turnover and loss of profit from then until September 2009, when the action commenced, and further sums in respect of future losses to the end of the lease. They commenced proceedings against the defenders in early December 2009. The defenders contend that the claim has prescribed. Their first plea-in-law is to that effect. That issue was argued before me at debate.
[2] The defenders relied on s.6(1) of the Prescription and Limitation (Scotland) Act 1973 ("the Act"), which provides that (unless there has been a relevant acknowledgement) an obligation to which the section applies is extinguished if it has subsisted for a continuous period of five years without any relevant claim having been made in relation to it In terms of Schedule 1 para.1(g), that section applies to an obligation arising from a beach of contract and thus to the pursuers' claim. The pursuers argued that the obligation under clause 4.3 was an "obligation relating to land", within para.2(e) of Schedule 1, and therefore not subject to the short negative prescription under s.6. In the alternative, they argued that the obligation was a continuing obligation which subsists for so long as the pursuers remain tenants under the lease; and, by the same token, the breach was a continuing breach for the purpose of s.11(2) of the Act, with the result that the obligation has not prescribed. Their third argument was that even if that part of the claim dating back more than five years before the commencement of the action had prescribed, the claim for damages arising out of the continuance of the Ortak lease from that time forward was unaffected.
[3] I consider first the question whether the obligation in question is an "obligation relating to land". It is clear from the authorities that that expression is not confined to real rights or burdens. It also covers personal obligations under contracts dealing with land and interests in land, unless, possibly, where the land or interest in land is merely incidental to an obligation arising under a contract, such as a contract for services: see Barratt Scotland Ltd. v. Keith 1993 SC 142, per Lord Penrose at p.148D-E, per the Lord Justice Clerk (Ross) at p.154A-C, per Lord McCluskey at p.158B-C and per Lord Kirkwood at p.159 E-F, Glasgow City Council v. Morrison Developments Ltd. 2003 SLT 263...
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