Waydale Limited V. Dhl Holdings (uk) Limited (no.2)
| Jurisdiction | Scotland |
| Judge | Lord Hamilton |
| Docket Number | CA20/98 |
| Date | 20 November 2000 |
| Court | Court of Session |
| Published date | 20 November 2000 |
| OUTER HOUSE, COURT OF SESSION | |
| CA20/98
| OPINION OF LORD HAMILTON in the cause WAYDALE LIMITED Pursuers; against DHL HOLDINGS (UK) LIMITED (No.2) Defenders: ________________ |
Pursuers: Emslie, Q.C., Clarke; Paull & Williamsons
Defenders: Sir Crispin Agnew of Lochnaw, Robertson; Bennett & Robertson
20 November 2000
The background
[1]In 1987 the Scottish Development Agency ("the SDA") was the heritable proprietor of various subjects, including Block Six, with the buildings thereon and the plant and equipment installed therein, ("the premises") at an industrial estate at Bothwellpark, Uddingston. By the Enterprise and New Towns (Scotland) Act 1990 the SDA was dissolved and its whole property, rights and liabilities (including the premises) vested in Scottish Enterprise. By section 22(2) of that Act the property, rights and liabilities so transferred included property, rights and liabilities whether or not capable of being transferred or assigned by the SDA. Subsequently Scottish Enterprise by feu disposition conveyed property, including the premises, to the pursuers, that transfer of interest being registered in the Land Register on 6 April 1993. The property so conveyed was subject to the lease of the premises hereinafter referred to.
[2]In 1987 Elan International Limited ("Elan") was the tenant of the SDA in respect of other subjects, namely, Block 2, Netherton Industrial Estate, Motherwell. In the early months of 1987 Elan and the SDA were in negotiation relative to the acquisition by the former from the latter of a leasehold interest in the premises. In anticipation of such a bargain, the defenders who were the parent company of Elan, executed on an unspecified date early in that year a guarantee of the prospective obligations of their subsidiary. Negotiations between Elan and the SDA, which were conducted by legal representatives on both sides, proceeded, the SDA writing to Elan's Scottish solicitors on 5 May 1987 enclosing (1) a formal missive of let of the premises, (2) a form of lease and (3) a further form of guarantee, the last for execution by the defenders. That offer of lease was formally accepted on behalf of Elan by its solicitors' missive dated 7 May 1987.
[3]The missives thus concluded provided for the lease by Elan from the SDA of the premises from Whitsunday 1987 to Whitsunday 2007 at a stipulated rent which the SDA was entitled to review at Whitsunday in each of the years 1992, 1997 and 2002. Elan was obliged under the missives when requested to do so to enter into a formal lease in conformity with the form of lease. A concessionary rent was payable during the first two years of the lease, but the concession was subject to detailed claw-back provisions concerned with the continuation of business at the premises and the achievement and maintenance of certain employment forecasts. Elan was taken bound to remove from the subjects at Netherton Industrial Estate. The bargain constituted by the missives was declared to be conditional upon Elan's obligations being guaranteed by the defenders in terms of the form of guarantee.
[4]Elan took entry to the premises under the missives with effect from Whitsunday 1987. On 5 July 1987 the defenders executed the form of guarantee. It was transmitted to the SDA on or about 21 July 1987. A formal lease in terms of the form of lease was executed by the SDA and Elan in 1990.
[5]Among other provisions the lease provided for the payment of rent and for the refunding to the landlords by the tenants of certain insurance premiums to be met primo loco by the landlords. It also imposed on the tenants certain repairing obligations "all to the sight and satisfaction of the landlords". In or about March 1994 Elan went into liquidation. The pursuers aver that since then Elan has failed to pay rent and insurance premiums due by it and has failed to keep and maintain the premises in accordance with the relative repairing obligations. The pursuers now seek to recover from the defenders various sums, including sums claimed in respect of dilapidations, allegedly due by Elan under the lease or by reason of breach of it. Although both guarantees, which were in identical terms, are referred to in the pleadings, it is the later executed of them which is now founded on.
The guarantee
[6]The title sheet of the guarantee in issue bears the following words -
"GUARANTEE
by
DHL HOLDINGS (UK) LIMITED
to
ELAN INTERNATIONAL LIMITED___________________________________________________
Subjects:Block 6
Bothwellpark Ind. Estate
___________________________________________________"
The terms of that guarantee are as follows -
"We, DHL Holdings (UK) LIMITED... hereby guarantee (a) the payment of the rent and all other sums due and owing or to become due or owing in terms of the Missives and Lease to follow thereon between the Scottish Development Agency, 120 Bothwell Street, Glasgow G2 7JP ("the Agency") and Elan International Limited incorporated under the Companies Acts and having their Registered Office at Park Lane, Castle Vale, Birmingham ("the tenants") relative to the site and factory premises known as and forming Block 6, Bothwellpark Industrial Estate, Uddingston, dated said Missives 5th May and subsequent date(s) all in the year Nineteen hundred and eighty seven (b) the performance of all other obligations incumbent upon the tenants in terms of the said Missives and Lease. In the event of the tenants failing to make payment of rent or of any of the sums of money referred to in the said Missives and Lease or failing to implement any of the other obligations incumbent on them in terms of the said Missives and Lease we shall, if requested in writing by the Agency to do, forthwith liquidate the amount due by the tenants and/or implement the outstanding obligations of said Missives and Lease. This guarantee will subsist in full force and effect notwithstanding that the Agency may have permitted the tenants to delay payment of rent or the implementation of any outstanding obligations incumbent upon them in terms of said Missives and Lease and we declare that the Agency may enter into any arrangement with the tenants in connection with the said Missives and Lease without in any way prejudicing their rights against us hereunder. This guarantee will subsist in full force and effect until we have implemented these presents to the satisfaction of the Agency...".
The issues and the relative procedural history
[7]The first conclusion of the summons in this action is in the following terms -
"For declarator that the pursuers are entitled to enforce the Guarantee executed by the defenders on 15 July 1987."
The remaining conclusions are for payment to the pursuers by the defenders of various sums allegedly due and unpaid by Elan.
[8]The defenders resist the whole remedies sought by the pursuers. The former's pleas include a general plea to the relevancy and specification of the pursuers' averments (plea 5) and two further pleas which, although seeking absolvitor, are essentially preliminary in nature. They are in the following terms -
"3. The Guarantees being incapable of assignation, the defenders should be assoilzied.
4. The pursuers having no title to sue and having no means of acquiring such title due to the nature of the guarantee, the defenders should be assoilzied."
The latter of those two pleas was used as the foundation for two arguments, first, that the guarantee relied on was not itself apt to confer any rights on the pursuers as succeeding landlords and, second, that, if the rights conferred on the SDA (and vested by force of statute in its successor Scottish Enterprise) were assignable (which was disputed), they had not been effectually assigned by certain instruments later executed by Scottish Enterprise.
[9]This action is the second between the present parties, the first having been dismissed by Lord Penrose on 21 December 1995, his Lordship having held, on the basis of the materials and arguments presented to him, that the guarantee was not assignable without the consent of the guarantor (the defenders); his Lordship also rejected a contention then advanced by the pursuers that the conveyance of the heritage to them had itself operated as an assignation of the guarantee in their favour. A reclaiming motion was marked against Lord Penrose's interlocutor. While the reclaiming motion was in dependence an assignation dated 16 April 1996 was granted by Scottish Enterprise in favour of the pursuers. The defenders having responded to a relative minute of amendment by the pursuers with the contention that an assignation granted after the raising of an action could not cure any defect in the pursuers' title to raise it, the pursuers abandoned their reclaiming motion which was, of consent, refused. Subsequent to that abandonment, but before the raising of this action, a further assignation was granted by Scottish Enterprise in favour of the pursuers; that assignation was dated 11 February 1998.
[10]The assignation dated 16 April 1996 provided -
"WE, SCOTTISH ENTERPRISE... IN CONSIDERATION of the sale by us to WAYDALE LIMITED... DO HEREBY ASSIGN and MAKE OVER to the said Waydale Limited and to their successors and assignees whomsoever with effect from Thirty-first March, Nineteen Hundred and Ninety Three notwithstanding the date or dates thereof, our whole right, title and interest in and to (FIRST) a Guarantee by DHL Holdings (UK) Limited in favour of The Scottish Development Agency dated an unspecified date in Nineteen Hundred and Eighty Seven; and (SECOND) a Guarantee by the said DHL Holdings (UK) Limited in favour of The Scottish Development Agency dated Fifteenth July Nineteen Hundred and Eighty Seven...".
The assignation dated 11 February 1998 was in the following terms -
"WE, SCOTTISH ENTERPRISE... CONSIDERING that we granted in favour of WAYDALE LIMITED... and their successors and assignees whomsoever an Assignation of our whole right, title and interest...
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