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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Highland & Universal Properties Ltd v Safeway Properties Ltd [2000] ScotCS 28 (1 February 2000)
URL: http://www.bailii.org/scot/cases/ScotCS/2000/28.html
Cite as: [2000] 3 EGLR 110, [2000] ScotCS 28, 2000 SC 297
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FIRST DIVISION, INNER HOUSE, COURT OF SESSION
|
Lord President Lord Kirkwood Lord Kingarth |
05/18/98 OPINION OF THE LORD PRESIDENT in RECLAIMING MOTION in the cause HIGHLAND AND UNIVERSAL PROPERTIES LIMITED Pursuers and Respondents; against SAFEWAY PROPERTIES LIMITED Defenders and Reclaimers: _______ |
Act: Currie, Q.C., E.W. Robertson; Maclay Murray & Spens (Pursuers and Respondents)
Alt: Martin Q.C., Wolffe; Archibald Campbell & Harley, W.S. (Defenders and Reclaimers)
1 February 2000
I agree with the opinion of Lord Kingarth and merely add a few observations of my own in deference to the general arguments to which we listened.
In some respects those arguments were merely the latest round of a dispute which has endured for nearly a thousand years since the time when the Digest was discovered. Although, as Lord Hoffmann points out in Co-operative Insurance v. Argyll Stores Ltd. [1998] AC 1 at p. 11, there is a difference in the availability of the remedy of specific performance or implement between English law and certain Civil Law systems, that difference does not derive from any basic characteristic of Civil Law systems as such. After all, the paradigm of these systems, classical Roman law, operated with a formulary procedure, one of the distinguishing marks of which was that the decree against the defendant (condemnatio) was for a sum of money (pecuniaria). Modern research cannot account for the tenacious grip of this rule except as a characteristic which can only be understood in the light of the Roman attachment to tradition. There are signs that the position was somewhat different in Justinianic law. At all events, when mediaeval scholars came to examine the Digest texts on the question, they distinguished between obligations in which the debtor was bound to give (dare) something and those where he was bound to do (facere) something. Most jurists considered that the debtor was obliged to render precise performance of an obligation to give something, whereas a debtor was not obliged to render precise performance of an obligation to do something - he was only obliged to pay the creditor the value (interesse) of having the obligation performed.
The controversy was pursued in succeeding generations, but for Scots law the basic approach was settled by Stair Institutions 1.17.16. Stair says that, when a debtor has delayed, "it is in the creditor's option to pursue for performance, or for damage and interest" and goes on to explain:
"In obligations which are not in dando but in faciendo, the common opinion of the doctors is, that there can be no pursuit for performance, but only for interest; for before the delay there is no pursuit, and after, the creditor cannot pursue for performance, but for interest, l.13.in fine ff.de re judicata; but it seems more suitable to equity, that it should be in the creditor's option even after the delay, either to suit for performance or interest, as he pleaseth, if both be prestable."
Stair cites D.42.1.13.1, Celsus 6 digestorum, one of the passages which recurs in discussions of this topic. In it Celsus justifies a particular decision that judgment should be for a sum of money by saying that this is what happens "in all obligations of doing (faciendi)."
Even from the terms of the passage from Stair, it is apparent that our law could have adopted a different approach and pursued a different path. But in fact from his time onwards Scots law has recognised that, even where the obligation of the debtor is to do something, the basic rule is that the creditor has a choice of remedies: he may either seek specific implement of the obligation or damages. Taking its cue from the Roman-Dutch writers, South African law has been settled on not dissimilar lines: Benson v. S. A. Mutual Life Assurance Society 1986 (1) S.A. 776 (A).
The classic statement of our law is to be found in the speech of Lord Watson in Stewart v. Kennedy (1890) 17 R. (H.L.) 1 at pp. 9 - 10:
"I do not think that upon this matter any assistance can be derived from English decisions; because the laws of the two countries regard the right to specific performance from different standpoints. In England the only legal right arising from a breach of contract is a claim of damages; specific performance is not matter of legal right, but a purely equitable remedy, which the court can withhold when there are sufficient reasons of conscience or expediency against it. But in Scotland the breach of a contract for the sale of a specific subject such as landed estate gives the party aggrieved the legal right to sue for implement, and although he may elect to do so, he cannot be compelled to resort to the alternative of an action of damages, unless implement is shewn to be impossible, in which case loco facti subit damnum et interesse. Even where implement is possible, I do not doubt that the Court of Session has inherent power to refuse the legal remedy upon equitable grounds, although I know of no instance in which it has done so. It is quite conceivable that circumstances might occur which would make it inconvenient and unjust to enforce specific performance of contract of sale, but I do not think that any such case is presented in this appeal."
In the proceedings before us I did not understand counsel for the defenders to challenge this account in which Lord Watson is at pains to distinguish the basic difference of approach between Scots and English law on this point.
In Salaried Staff London Loan Co. Ltd. v. Swears and Wells 1985 SC 189 at p.193, the Lord President (Emslie) put the inherent power referred to by Lord Watson into the general context of the discretion of the court in exceptional circumstances to refuse a remedy to which a party would otherwise be entitled. In a familiar passage in Grahame v. Magistrates of Kirkcaldy (1882) 9 R (HL) 91 at pp. 91 - 92 Lord Watson says:
"It appears to me that a superior Court, having equitable jurisdiction, must also have a discretion, in certain exceptional cases, to withhold from parties applying for it that remedy to which, in ordinary circumstances, they would be entitled as a matter of course. In order to justify the exercise of such a discretionary power there must be some very cogent reason for depriving litigants of the ordinary means of enforcing their legal rights."
In White and Carter Councils v. McGregor 1962 SC (HL) 1 at p. 14 Lord Reid adopted the analysis of Lord Watson.
These passages affirm the existence of a discretion in the court, in exceptional cases, to deny to a party the remedy to which the party would otherwise be entitled. It is important to note, however, that the power is plainly regarded as being wholly exceptional and is to be invoked only where there is some "very cogent reason" for doing so. Secondly, the very cogent reason must be one which would make it "inconvenient and unjust" to grant specific implement. Finally, the power is analysed as being in the nature of a discretion. It must therefore be a discretion which the court exercises in order to prevent the party from whom performance would be required from suffering inconvenience and injustice. Since the exercise of the power is a matter of discretion, this court will be able to interfere with the Lord Ordinary's decision to grant or withhold specific implement only where he has erred in law or reached a decision which no reasonable Lord Ordinary could reach. Cf. Benson 1986 (1) S.A. at p. 781 H - 782 A per Hefer J.A.
Where our law has been settled along its existing lines for more than three hundred years, it is not for the courts to alter its basic approach - only the legislature could do that. We must simply apply the law as we find it. Moreover, given the settled nature of the law and the very different starting points of the English and Scots law on this point, it may well be that in particular situations the remedies available to parties under the two systems may vary. Under reference to what Lord President Hope said about the construction of rent review clauses in Visonhire Ltd. v. Britel Fund Trustees Ltd. 1991 S.L.T. 883 at p. 889 D, counsel for the defenders sought to persuade us that it would be undesirable if tenants were exposed to the remedy of specific implement of "keep-open" clauses in Scotland when they would not be exposed to a decree of specific performance of the same clause in England. I respectfully agree with the observations of the Lord President in Visionhire but can find nothing whatever in them which supports the reclaimers' submission on this wholly distinct point. It seems to me that in this respect the legal advisers of prospective developers and tenants will have little difficulty in identifying any relevant difference between the two systems and in handling any resulting problems in either system. The mere fact that the two systems may come to different results in particular cases is not in my view a sufficient reason for saying that this court should remould our law so as to reach the same result as would be reached under English law in a particular situation. There is, no doubt, room for a theoretical discussion about which approach is better in terms of legal policy. But the answer to that question must depend on economic and other factors upon which the courts could not easily adjudicate and which are best left to the legislature. For all we know, having looked at the matter from that wider perspective, Parliament and the Scottish Parliament might come to the conclusion that the position in Scots law was to be preferred.
As I have noted, in Stewart v. Kennedy Lord Watson affirms the existence of a discretion to refuse to grant specific implement in a particular case where it would be unjust or inconvenient for the creditor to enforce the obligation by specific implement. It is for a defender to satisfy the court that such grounds exist. In the present case, the Lord Ordinary's specific findings show that there is no basis for the court exercising such a discretion in this case. So, if the pursuers are otherwise entitled to the remedy of specific implement, the court has no discretion to refuse it.
The real issue is therefore whether, as the defenders contend, for various reasons the pursuers are not entitled to a decree of specific implement in this case - in other words that it is incompetent to grant specific implement. In support of their argument counsel drew on the observations of Lord Hoffmann in Co-operative Insurance. But Lord Hoffmann's speech provides no support for the view that it would be incompetent to grant specific implement here, since it proceeded on the basis that the remedy of specific performance was one which it would have been within the discretion of the court to grant or withhold. At first instance the judge had refused an order of specific performance and, by a majority, the Court of Appeal had reversed him and had granted the order. The question for the House was whether the Court of Appeal had been entitled to set aside the exercise of the judge's discretion ([1998] A.C. at p. 9 F). Their conclusion was that the reasons which the judge had given were proper and that the Court of Appeal should not have interfered ([1998] A.C. at p. 19 B). If relevant at all to the issue of competency, the decision in Co-operative Insurance would tend to support the view that specific implement is a competent remedy in this case.
In advancing their argument that it was not open to the court to grant specific implement in the present case, counsel for the defenders pointed out, correctly, that the creditor in a contractual obligation has no absolute right to the remedy. The books contain cases, and indeed categories of cases, where the courts have held that the creditor is restricted to a remedy in damages. We heard no argument about the basis upon which the remedy was originally refused in these cases - whether as a matter of the exercise of the court's discretion or for some other reason. I therefore express no view on the point, even though it might seem to be of some significance when the defenders ask us in effect to add keep-open clauses to the exceptions which have already been recognised. In resisting that suggestion counsel for the pursuers pointed out that in his textbook on Contract, p. 657 Gloag identifies the exceptional cases and categories of cases and that an obligation to keep a shop open for business is not to be found among them. For my part, I attach little importance to the absence of such obligations from Gloag's account which, after all, appeared seventy years ago. Doubtless, to pirate Lord Macmillan's words for yet another context, the categories of exceptions to specific implement are not closed. Keep-open clauses and their enforcement have come to prominence, in Scotland at least, only in recent years. If, therefore, one could identify sufficiently compelling reasons for holding that specific implement was an inappropriate remedy for the breach of such an obligation, I see no reason in principle why a further exception to the general rule should not be recognised.
In support of their argument that the court should not grant decree of specific implement in the present case, counsel for the defenders drew on the reasons given by the House of Lords in Co-operative Insurance for holding that the Court of Appeal had been wrong to interfere with the judge's exercise of his discretion to refuse specific performance. On one view at least, counsel were therefore drawing on arguments about the exercise of a discretion in English law to support the contention that, irrespective of any exercise of a discretion to withhold specific implement where it would be inconvenient and unjust to grant it in the particular case, the court should not grant specific implement of a keep-open clause. Putting that point on one side, I none the less recognise, of course, that points which the English courts take into account when considering whether, exceptionally, to grant specific performance may well be factors which would have a bearing on the decisions to be reached under our law and under other systems which share the same basic approach on this point. This may be one reason why, as Lord Hoffmann envisages, there may be less difference in practice than one might suppose between common law and civilian systems. But, of course, when weighing the various factors, we have to keep in mind the experience of the Scottish courts.
I comment simply on two inter-related factors which were relevant to the decision in Co-operative Insurance.
In the first place, Lord Hoffmann draws attention to the fact that the means of enforcing an order of specific performance is "the quasi-criminal procedure of punishment for contempt". He envisages ([1998] A.C. at p. 13 A) that, where an order for specific performance has been granted against a business,
"the defendant, who ex hypothesi did not think that it was in his economic interest to run the business at all, now has to make decisions under a sword of Damocles which may descend if the way the business is run does not conform to the terms of the order. This is, one might say, no way to run a business."
Unquestionably, there are indeed happier circumstances in which to run a business, but it must also be recalled that the decree simply requires the party in question to perform the commercial obligation which it deliberately undertook in a formal contract, presumably for good reasons. Moreover, ex hypothesi it is an obligation which the party can perform. So far as the penal aspects are concerned, I am not, of course, familiar with the position in England against which Lord Hoffmann made his comments. In Scotland, at least, it appears that no penal consequences would follow on a failure to comply with the terms of a decree of specific implement unless it were shown that the failure had been in deliberate defiance of the order of the court - although, of course, as Lord McCluskey points out in Retail Parks Investments v. Royal Bank P.L.C. 1996 SC 227 at p. 240, the breach of a court order is itself a very serious matter, quite independently of any penalties which might be imposed. That is why, before the court grants decree of specific implement, it must be satisfied that the decree is sufficiently precise. If, despite this, real doubt still remains as to the content of the relevant obligation or as to what the decree requires the party to do, these factors are likely to be relevant when the court has to consider whether any breach of the order was deliberate and so merits punishment. For the rest, I merely record that experience of decrees of this kind in Scotland in recent years does not suggest that defenders have in practice had difficulty in obtempering them. Nor have these decrees led in Scotland to the kind of heavy and expensive litigation which the House of Lords feared would follow in England.
Lord Hoffmann also lays considerable emphasis on the argument that an order of specific performance of an obligation to carry on a business would require the continued superintendence of the court. As he explains ([1998] A.C. at p. 12 F), referring to applications being made to the court to hold that a breach had been established,
"It is the possibility of the court having to give an indefinite series of such rulings in order to ensure the execution of the order which has been regarded as undesirable."
Again, the experience in similar cases in Scotland does not suggest that applications of this kind have been frequent or that they have consumed an undue amount of court time. Of course, difficulty may be experienced with a particular form of wording which may require to be adjusted. But that can also happen in the case of an interdict. Provided that the decree is sufficiently precise, there appears to be no special reason why defenders and their advisers should have difficulty in complying with decrees of this kind. Proceedings for breach should be the exception rather than the rule. I note that, although for many years the English courts had given considerable weight to the argument about constant superintendence, Burn Murdoch, Interdict, p. 167 did not regard it as a factor which had been formulated as a ground for refusing decree of specific implement in Scotland.
We heard no argument about the operation of Section 45(2) of the Court of Session Act 1988 under which the court may order the specific performance of any statutory duty. I should be surprised, however, if in that context the court would give weight to a submission that it should not enforce compliance with a statutory provision because it might have to deal with subsequent proceedings alleging that the respondent had failed to comply with an order to perform some positive obligation imposed by Parliament.
Of course, it is implicit in all that I have said that the court must be able to formulate a decree which tells the defender, sufficiently clearly, what he must do. Counsel for the defenders emphasised the words of Lord President Cooper in Munro v. Liquidator of Balnagowan Estates Co. 1949 SC 49 at p. 55:
"It is impossible for us with propriety to pronounce any decree ad factum praestandum which is not absolutely precise in every particular, both as to time and as to place, and we are not yet in a position to give such particularity to any order in this case."
Counsel suggested that, in the case of an obligation of this kind to carry on a business, the court could not pronounce a decree which was "absolutely precise in every particular". In my view Lord Cooper's words must be read in the context of the case which he was considering. Although the court had determined that the pursuer had the property in certain felled timber, it remained unclear how the pursuer was to obtain possession of the timber, since the original deadline for removing it had long since passed. In those circumstances, the court was unable to pronounce a decree of delivery - because it could not at that stage determine when and where the timber should be delivered. For that reason Lord Cooper held that the court could not formulate a decree which would be "absolutely precise" in the particulars of the time and place of any delivery.
Previously, in Fleming & Ferguson v. Paisley Magistrates 1948 S.C. 547 at p. 557, Lord President Cooper had observed:
"This Court will not pronounce a decree ad factum praestandum except in terms of such precision as will leave the defenders in no doubt as to the exact obligation to be discharged by them...."
In attempting to see what this approach means in practice, I note that in Church Commissioners for England v. Abbey National P.L.C. 1994 SC 651 at p. 666 E Lord Clyde said of interdicts and decrees of specific implement
"Both are forms of remedy, insofar as it is appropriate to use that word, which may be available in the context of contractual obligations. In each case the order must be precise because the sanction for breach of the order is open to punishment as a contempt of the authority of the court."
I respectfully agree with his Lordship that similar standards of precision are required in the two types of decrees. For that reason I find it helpful to recall the terms of the interdicts which the House of Lords pronounced in Fleming v. Hislop (1886) 13 R. (H.L.) 43 at pp. 49 - 50 and which the Second Division pronounced in Webster v. Lord Advocate 1985 SC 173 at p. 187. A decree of specific implement in the terms proposed by Lord Kingarth appears to me to be in substance no less precise than the interdicts in those cases, the first of which is cited as a precedent for practitioners in Burn Murdoch on Interdict, p. 511.
FIRST DIVISION, INNER HOUSE, COURT OF SESSION
|
Lord President Lord Kirkwood Lord Kingarth |
05/18/98 OPINION OF LORD KIRKWOOD in RECLAIMING MOTION in the cause HIGHLAND AND UNIVERSAL PROPERTIES LIMITED Pursuers and Respondents; against SAFEWAY PROPERTIES LIMITED Defenders and Reclaimers: _______ |
Act: Currie, Q.C., E.W. Robertson; Maclay Murray & Spens (Pursuers and Respondents)
Alt: Martin Q.C., Wolffe; Archibald Campbell & Harley, W.S. (Defenders and Reclaimers)
1 February 2000
I am in full agreement with the opinion of Lord Kingarth, and with the observations made by your Lordship in the chair, and there is nothing I can usefully add.
FIRST DIVISION, INNER HOUSE, COURT OF SESSION
|
Lord President Lord Kirkwood Lord Kingarth |
05/18/98 OPINION OF LORD KINGARTH in RECLAIMING MOTION in the cause HIGHLAND AND UNIVERSAL PROPERTIES LIMITED Pursuers and Respondents; against SAFEWAY PROPERTIES LIMITED Defenders and Reclaimers: _______ |
Act: Currie, Q.C., E.W. Robertson; Maclay Murray & Spens (Pursuers and Respondents)
Alt: Martin Q.C., Wolffe; Archibald Campbell & Harley, W.S. (Defenders and Reclaimers)
1 February 2000
By interlocutor dated 12 January 1998 the Lord Ordinary, after proof, inter alia found and declared that:
"in terms of the Sub-lease between Rank City Wall Limited and the defenders, under their previous name of Allied Suppliers (Properties) Limited, dated 28 August and 15 October 1979, the defenders are bound to keep the Store Number 1, Westside Plaza, Edinburgh open for retail trade in any such goods as are from time to time sold in a high class retail store throughout the normal hours of business until the earliest of (a) 24 March 2009, (b) the irritancy or other lawful termination of the Lease, or (c) the lawful assignation of the Lease by the defenders, provided the store has not been rendered unfit for occupation by reason of damage or destruction by fire or other risk in full of the second conclusion of the summons as now amended".
He further ordained the defenders:
" to keep open the Store Number 1, Westside Plaza, Edinburgh for retail trade in any such goods as are from time to time sold in a high class retail store throughout the normal hours of business until the earliest of (a) 24 March 2009, (b) the irritancy or other lawful termination of the Lease, or (c) the lawful assignation of the Lease by the defenders, provided the store has not been rendered unfit for occupation by reason of damage or destruction by fire or other risk, in full of the third conclusion of the summons as now amended".
In this reclaiming motion no issue is taken by the defenders and appellants with the Lord Ordinary's findings in fact which describe the underlying background to the dispute. For present purposes it is enough to record the main elements of those findings.
The pursuers and respondents are, and have been since February 1994, landlords of a shopping centre in Edinburgh formerly known as Wester Hailes Shopping Centre and now (since October 1996) known as Westside Plaza. In 1974 the defenders became tenants of Store Number 1, the largest unit in the Centre, occupying two levels at its south end. Thereafter the defenders operated a supermarket business, latterly under the name Presto, from the premises.
In 1979 a formal Sub-lease (dated 28 August and 15 October of that year), regulating the terms of the defenders' occupation, was entered into between the defenders and the pursuers' predecessors in title. The date of entry, notwithstanding the date of the Sub-lease, was 25 March 1974. The date of expiry was 24 March 2009.
CLAUSE THIRD of the Sub-lease provides:
"The Lessee hereby undertakes the following obligations in favour of the Lessor namely:
...
12. (a) The Lessee undertakes that at all times during the term it will (i) keep the premises open for the trade specified in subclause 13(a) herein throughout normal hours of business (ii) use its best endeavours to promote and extend the said trade (iii) maintain at all times an attractive display and (iv) keep the shop for trading and for no other purpose.
(b)...
13. (a) Not at any time during the term to use or permit the premises to be used for any illegal immoral noisome noxious dangerous or offensive trade manufacture business or purpose whatsoever nor for the carrying on of anything which shall or may be a nuisance damage annoyance disturbance or inconvenience to the neighbourhood or to the public local or any other authorities or to the Head Lessor, the Lessor or to the tenants or owners or occupiers of adjoining or adjacent premises or which in the opinion of the Lessor shall or may in any way be injurious to the same or be detrimental to the amenity of the development nor set up or permit to be set up in any part of the premises any steam gas oil electric hot air or other engine machine or mechanical contrivance (other than usual shop equipment) nor overload any of the floors or walls or ceilings of the premises or the gas electricity or water supplies or drains connecting therewith nor commit any wilful or voluntary waste or destruction nor deposit any refuse in or upon the premises or any part of the development nor without prejudice to the foregoing generality allow any sale by auction to be held on the premises or any part of the development or permit the premises to be used as a shooting gallery an amusement arcade or a club or operate or permit the operation of pintables therein or reside or sleep or permit anyone to reside or sleep therein or use or suffer or permit the premises to be used otherwise than for the retail sale of all goods which may from time to time be sold in a high class retail store including the sale of wines, beers and spirits and the operation of part of the premises for café and restaurant purposes".
In terms of CLAUSE FIFTH (1) the lessor undertook and agreed inter alia to
"(c) provide during the ordinary hours of business which for the purposes of
this Sub-lease are agreed between the Lessor and the Lessee as meaning the hours between 08.30 and 18.30 each day from Monday to Saturday inclusive the services and others...with power to the Lessor to vary the said hours each day and the said days each week where such variation or variations shall appear to it necessary or desirable".
By virtue of certain Minutes of Agreement entered into in 1984 it was agreed that the defenders could confine their operations to the upper floors of the unit. For a number of reasons trading throughout the development was, over the years, not as successful as had been anticipated. The centre fell into a degree of decline in trade, appearance and image. These trends were well established by the late 1980s. Remedial action however began in the early 1990s. In particular in 1990 the Scottish Office established the Wester Hailes Partnership to tackle the problems of urban deprivation. This led to the investment of significant sums of public money in Wester Hailes, including in the wider facilities associated with the shopping centre. From about 9 February 1994 onwards the pursuers and their managing agents introduced certain improved security measures. During the summer of 1994 they and the local authority started a major refurbishment and development programme, involving significant expenditure by the pursuers. The defenders and their predecessors themselves had invested significant sums in refurbishing and upgrading the Presto store in 1985 to 1986 and again in 1991 to 1992.
In 1995, however, the defenders, for commercial reasons, decided that they no longer wished to trade from the premises. In particular, the view was taken that the operation did not fit the "Safeway 2000" programme in which it was decided that all retail trading should be concentrated under the Safeway label; that Presto stores, which were considered by management to be suitable for the purpose, were to be re-badged as Safeway and that the remaining stores were to be closed by March 1998. On 10 May 1995 the defenders announced in the public press that they intended to close the store. Without intimation to the pursuers they proceeded to implement that decision. At the time the parties were in active negotiations relating to a proposal that the pursuers resume possession of the lower level market hall area of the store. In response the pursuers raised the present action and by interim orders pronounced in May and June 1995 the defenders were ordained ad interim to keep the premises open for trade.
In the course of the litigation, by Minute of Variation dated 13 and 24 February 1997, the defenders' right to sublet the premises (with consent of the landlords) was extended to a right (again with the landlords' consent) to sublet parts of the premises. Clause 4 of the Minute provided "Save as hereby varied, the terms of the Lease are confirmed in all respects". In the course of the proof evidence was led that for a period prior to 1995 the defenders had closed off an area of about 10% of the upper floor. Evidence was led as to the hours which the store had operated from the 1970s. The evidence was that latterly most unit shops opened between 9 a.m. and 5.30 p.m. six days each week. The defenders opened at 8.30 a.m. and closed at 6 p.m. except on Thursdays and Fridays when the closing time was 8 p.m. The centre opened to accommodate Presto's requirements.
The defenders' decision to close the store caused loss of customer confidence. It jeopardised trade in the Centre as a whole. The Presto operation was of critical importance to the pursuers as investors. At the time they became landlords the defenders held about half of the space in the Centre and provided slightly over a quarter of the rent. It was the fundamental anchor operation, and was thought to be central to the commercial success of the redeveloped centre from the viewpoint of the other tenants. There was evidence that the other tenants paid higher service charges than would have been paid on a pro rata basis and effectively subsidised the defenders because of the importance they attached to the store. Cessation of trade by Presto would be very damaging. It was not established that the defenders would be worse off if they were compelled to continue trading than if they were not.
Before the Lord Ordinary the primary argument of the defenders was that upon a proper construction of CLAUSE THIRD 12(a) - read in the light of subclause 13(a) - the obligations therein imposed were so unspecific as to render the clause void from uncertainty and in any event were insufficiently specific to form the basis of a decree for specific implement. The defenders' position in relation to any more general question as to the competency of positive orders in similar circumstances was expressly reserved. They further argued that the court should in any event, in the circumstances of this case, and in the exercise of the court's discretion, refuse enforcement by specific implement. This argument was firmly rejected by the Lord Ordinary. Dealing with it he said:
"The remaining issue in respect of the second and third conclusions was whether the court should relieve the defenders of implement in the exercise of an equitable dispensing power. I consider that the equities in this case overwhelmingly favour the pursuers, Highland and Universal. The defenders failed to show that they would be worse off financially if they were compelled to keep the store open than they would be if they were permitted to close it while remaining tenants. The pursuers have invested heavily in the centre, and their investment would be jeopardised if the defenders withdrew leaving the store empty. I was not satisfied that damages could not be quantified if that remedy were eventually to be sought. But the difficulties of quantification would be great, and compensation might not be possible for all the indirect consequences of breach. It would be particularly inequitable to deny the pursuers a remedy at this stage in the process of reinvestment in the centre. The defenders cannot rely on past failures of the pursuers' predecessors in the circumstances. It is clear that they did not consider withdrawing on such a basis, and indeed that their decision was taken when they knew that refurbishment was to proceed, and when they were negotiating the contract ultimately reflected in the 1997 deeds. Nothing in the circumstances suggests that the defenders should be relieved of the obligation."
Before this court the defenders argued in addition - prior to consideration of the specific difficulties said to arise from the particular wording of the clause in question - that it was not competent for the court to pronounce an order for specific implement to enforce a contractual obligation of the general nature in question; alternatively for related underlying reasons, the court should almost invariably, in exercise of its discretion, refuse to grant such orders. These arguments raise primary questions extending beyond the particular terms of the present Lease, and it is perhaps convenient to deal with them at the outset.
Counsel for the defenders argued in particular that as a matter of Scots law it was not competent for a court to grant decree ordaining a party to carry on business over a period of time. What was incompetent was an order requiring a party to carry on business from moment to moment over a period, as opposed to an order requiring a certain result to be achieved or one requiring specific acts to be performed from time to time. Alternatively, for reasons generally applicable to such orders, in the exercise of the court's discretion, the court should almost always refuse to make such orders. These submissions, it was argued, to a degree overlapped. What was or was not competent necessarily involved practical consideration of circumstances. Reference was made to Maclaren Court of Session Practice at page 387, Coutts v. Coutts (1861) 4 M. 802 and Church Commissioners for England v. Abbey National plc 1994 SC 651, (in particular Lord Clyde at page 670). Consideration of the practical consequences of orders of the type described, in particular the difficulties for defenders in knowing at all times how to comply, had, at least recently, led the courts in Scotland to recognise that such orders should not be granted. Reference was made in particular to the decision of the Extra Division in Grosvenor Developments (Scotland) plc v. Argyll Stores Limited 1987 S.L.T. 738 and to the opinions of Lord Kincraig at page 741, Lord Allanbridge at 743 and Lord Jauncey at pages 744 to 745. Reference was further made to the Outer House decisions in Postel Properties Limited v. Miller & Santhouse plc 1993 S.L.T. 353 and Overgate Centre Limited v. William Low Supermarkets Limited 1995 S.L.T. 1181. Although an Extra Division had pronounced an order of the type in question in Retail Parks Investments Limited v. The Royal Bank of Scotland plc 1996 SC 227, the competence of such orders had in that case been accepted by the defenders; equally they had not invited the court to refuse the orders in the exercise of their discretion. The matter had not been fully argued in Church Commissioners for England v. Abbey National plc. Reference was further made to Hendry v. Marshall (1878) 5 R. 687. The incompetence of orders for specific implement in the circumstances described could be said to be based on the principle that the court would not enforce performance of an obligation which would be an undue restraint on personal liberty. Reference was made to Gloag on Contract at page 657. Further, the considerations said to underlie the rule of incompetence (and which should almost invariably control the exercise of the court's discretion) were those stressed recently by the House of Lords in the English case of Co-operative Insurance Society Limited v. Argyll Stores (Holdings) Limited 1998 AC 1. It was clear from that case that the settled practice of the English courts not to grant such orders rested on a number of important considerations - in particular the need for constant supervision by the court, the difficulties of formulating an order with sufficient precision to enable defendants to know how to comply and the prospect that the burden imposed upon the defendants would be significantly greater than any advantage to the plaintiffs, potentially placing plaintiffs in an unjust bargaining position. Though the starting point in English law was different, there was no reason why consideration of the same practical questions in Scotland should not lead to the same result. It was undesirable, in a matter of this kind, that the enforcement of such provisions should be materially different between the two jurisdictions. Reference was made to Visionhire Limited v. Britel Fund Trustees Limited 1991 S.L.T. 883 and to the opinion of the Lord President (Hope) at page 889D. For the court t
Counsel for the pursuers in response argued that in appropriate cases it was plainly competent for the courts in Scotland to pronounce orders for specific implement ordaining a party to carry on business over a period of time. In Scotland, unlike in England, a party to a contract had a right to enforce it by specific implement. Reference was made to Grahame v. Magistrates of Kirkcaldy (1881) 9 R. (H.L.) 91 and Stewart v. Kennedy. In England by contrast a decree of specific performance was a discretionary remedy, regarded traditionally as exceptional as opposed to common law damages to which a successful plaintiff was entitled as of right (Co-operative Insurance v. Argyll Stores Limited at pages 9 and 11). In Scotland the right was subject to well known exceptions, but these, described in Gloag on Contract at page 657 and following, did not include obligations of the kind referred to by the defenders. No authority for the supposed rule of incompetence was referred to prior to Grosvenor Developments (Scotland) plc v. Argyll Stores. Expressions of view in that case were obiter and were, on a proper construction, confined to the facts of that case. As to that the views were prompted by a construction of the clause in question which was more restrictive than was necessary. The court should not support the expressions of view by the Lord Ordinary in Postel Property Limited v. Miller & Santhouse plc or Overgate Centre Limited v. William Low Supermarkets Limited - which appeared to be derived from Grosvenor Developments (Scotland) plc. By contrast the views of all the judges in Retail Parks Investments Limited supported the notion that in appropriate circumstances a decree for specific implement of the nature in issue would be competent. Further the clear view of the judges in the five judge case of Church Commissioners for England was that interim orders could be made to enforce such contractual obligations pending the final grant of an order for specific implement. Since that case interim orders had regularly and frequently been pronounced by the court over a period of some five years, and no practical difficulties had been experienced. An example was the order pronounced by the Lord Ordinary in Retail Parks Investments Limited 1995 S.L.T. 1156. Clear views in favour of the competence of orders of the kind in question were expressed by the Lord Ordinary in Co-operative Wholesale Society Limited v. Saxone Limited 1997 S.L.T. 1052 and Co-operative Insurance Society Limited v. Halfords Limited 1998 S.C. 212. Whereas the court in Scotland had a residual discretion to refuse to make such orders, the question only arose in circumstances where the order in question was otherwise competent, and the discretion would only be exercised if there was a cogent reason to do so, generally if to order specific performance would be productive of injustice - in particular where there was gross disproportion between the penalty for the defender and any advantage to the pursuer. Reference was made to Grahame, Salaried Staff London Loan Company Limited, Co-operative Insurance Society Limited v. Halfords Limited and Gloag on Contract at pages 655 and 660. In the light of the findings of fact made by the Lord Ordinary in this case it was not arguable that he had erred in refusing to exercise his discretion in favour of the defenders.
In my view the defenders' argument as to the incompetence of such orders falls to be rejected.
In Scotland there is no doubt that - unlike the position in England - a party to a contractual obligation is, in general, entitled to enforce that obligation by decree for specific implement as a matter of right (subject to a residual discretion in the court to refuse such an order, as later discussed). In Stewart v. Kennedy Lord Herschell at page 5 said that it had been argued that:
"the court ought not to grant specific implement, but to leave the respondent to his action for damages. It would be very hard, it was urged, in such a case to compel the appellant to sell, inasmuch as the effect might be so very different to that which he anticipated. He might have to part with the estate and suffer a considerable loss of income. I think this point was an afterthought. I can find no trace of it in the pleas in law for the defender. It was probably the result of a study of the English cases relating to decrees for specific performance. I do not think it would be of any advantage to devote time to an analysis of the English decisions, or to inquire whether a Court of equity in England would require a decree for specific performance under the circumstances which are alleged to exist in the present case. For I think if that proposition could be established it would afford no guide to the conclusion which ought to be arrived at where a decree of specific implement is sought in the Courts of Scotland. Specific performance was not a remedy to which a party was entitled at common law in England. To obtain it he was compelled to resort to the separate jurisdiction of the Court of Chancery, which at times refused its assistance, even where a legal right was established, leaving the party who invoked it to his ordinary legal remedies. In Scotland, on the contrary, specific implement is one of the ordinary remedies to which a party to a contract is entitled where the other party to it refuses to implement the obligation he has undertaken".
Lord Watson at page 9 said:
"I do not think that upon this matter any assistance can be derived from the English decisions; because the laws of the two countries regard the right to specific performance from different standpoints. In England the only legal right arising from a breach of contract is a claim of damages; specific performance is not a matter of legal right, but a purely equitable remedy, which the Court can withhold when there are sufficient reasons of conscience or expediency against it. But in Scotland the breach of a contract for the sale of a specific subject such as landed estate gives the party aggrieved the legal right to sue for implement, and although he may elect to do so, he cannot be compelled to resort to the alternative of an action of damages unless implement is shown to be impossible...".
Lord Macnaughten was to a similar effect at page 11.
To that general rule well-known exceptions exist, as set out in Gloag on Contract at page 657. Whereas there it is stressed that an action for specific performance may fail not only from the impossibility of performance but from the nature of the obligation it is proposed to enforce, as to the latter it is said:
"So far as any general statement of principle is possible, it may be said that the court will not give decree of specific implement where the enforced performance of an obligation would be an undue restraint on personal liberty".
Reference is then made to cases relating to contracts to enter into partnership and to perform personal services etc. Obligations of the kind in question in the present case seem far removed from these situations. There is no suggestion that there is an exception relating to obligations to carry on business over a period of time.
Whereas it is possible that matters may since have developed, the weight of recent Scots authority would appear to be firmly against the defenders' contentions. The ratio of the decision in Grosvenor Developments (Scotland) plc was that it was not competent to enforce a positive obligation by way of interdict. The observations of the members of the court in relation to enforcement by specific implement were plainly obiter. Further, it seems clear that they were observations as to what was thought to be a lack of precision in the particular terms of the obligation in question. It is not obvious that they were seeking to found upon, far less to state for the first time, any general rule of incompetence. The court in Retail Parks Investments plainly did not read the obiter comments of the judges in Grosvenor Developments (Scotland) plc as proceeding upon any such general rule, and in that case - notwithstanding that a specific plea to the competence of an order for specific implement was not taken by the defenders - fully endorsed the notion that in appropriate circumstances such an order could be granted in respect of an obligation upon a party to carry on business over a period of time. Further, and perhaps more significant, in the five judge case of Church Commissioners for England (where the ratio of Grosvenor Developments (Scotland) plc was upheld) the members of the court expressed the clear view that interim orders could be made to enforce continuing obligations of the kind in question. The court was concerned to stress that, although a positive obligation could not competently be enforced ad interim by means of interdict, the party to whom the obligation was owed was not without a remedy. I refer in particular to the observations of the Lord President (Hope) at pages 660 to 661. It is inconceivable that the members of the court would have made these observations if they had thought that, as a matter of general law, it was not competent to enforce by specific implement obligations of the nature under discussion. Since that decision, orders of specific implement ad interim of the nature in issue have frequently been granted in the Court of Session, in Retail Parks and in numerous unreported decisions. The pursuers are, I consider, right to emphasise not only that this has frequently been done, but that it has apparently not given rise to any obvious difficulties of enforcement. Clear views in favour of the competence of orders of the kind in question have been expressed in Co-operative Insurance Society Limited v. Halfords Limited and in Co-operative Wholesale Society Limited v. Saxone Limited. By contrast, in so far as general views were expressed by the Lord Ordinary in Postel Properties Limited, these were, it seems, founded upon the view that the judges in Grosvenor Developments (Scotland) plc were referring to a general rule and that that case could not be distinguished. The views of the Lord Ordinary in Overgate Centre Limited were, it seems, to a degree influenced by English authority to which he was referred. Looking further back, the case of Hendry v. Marshall, upon which the defenders placed some reliance, was on the face of it a special case in which it was sought to enforce the whole obligations arising under a lease.
It has to be said further that the defenders' search for the principle said to underlie the supposed rule of incompetence in the speech of Lord Hoffman in Co-operative Insurance v. Argyll Stores Limited seems misconceived. It is not simply that there is a fundamental difference of approach to remedies in this connection as between England and Scotland. In addition Lord Hoffman cited the various considerations to explain the settled practice of the courts in England - in the exercise of discretion - never to grant mandatory injunctions requiring persons to carry on business. They were not said to support any rule of incompetence, even in that jurisdiction. The effect of the defenders' argument would - perversely - be that the courts of Scotland were even stricter, despite the fact that those seeking such orders could argue from a much stronger starting point.
Equally I am not persuaded that it can be said that the courts in Scotland should almost invariably exercise their discretion to refuse to grant orders for specific implement ordaining a party to carry on business over a period of time. Again the starting point must be the basic general right of a party to a contract in Scotland to enforce a contractual obligation by means of specific implement. While it seems clear from authority that the court has a discretion to refuse such orders, it is equally clear that the discretion falls to be exercised only in exceptional circumstances, where, although the order would otherwise be competent, there exist very cogent reasons to refuse it and, in particular, where to grant it would be inconvenient and unjust, or cause exceptional hardship. The power has rarely, it seems, been used, and then only, it would appear, in cases where to enforce the obligation would be to impose a burden upon the defender grossly disproportionate to any advantage to the pursuer. In the case of Moore, the court (and in particular Lord Shand) indicated that they would not have been prepared to grant specific implement to enforce an obligation undertaken by a party to form part of a street on land which was not his own where the land could only be obtained on terms altogether extravagant and unreasonable. In Grahame Lord Watson, at page 91, said
"It appears to me that a superior Court, having equitable jurisdiction, must also have a discretion, in certain exceptional cases, to withhold from parties applying for it that remedy to which, in ordinary circumstances, they would be entitled as a matter of course. In order to justify the exercise of such a discretionary power there must be some very cogent reason for depriving litigants of the ordinary means of enforcing their legal rights. There are, so far as I know, only three decided cases, in which the Court of Session, there being no facts sufficient to raise a plea in bar of the action, have nevertheless denied to the pursuer the remedy to which, in strict law, he was entitled".
The three cases to which his Lordship referred were cases where the object of the action was to recover possession of property but where, on the face of it, if that had been ordered, this would have caused problems out of all proportion to any advantage to the pursuer, who could otherwise be compensated. Lord O'Hagan, at page 98, adopted the views of Lord Gifford in one of those three cases, Begg v. Jack (1875) 3 R 35 at p. 43, that
"There is an equitable power vested in the court in virtue of which, when exact restoration of things to their previous condition is either impossible or would be attended with unreasonable loss and expense quite disproportionate to the advantage it would give to the successful party, the court can award an equivalent".
In Stewart v. Kennedy, immediately after the passage previously quoted, Lord Watson said
"Even where implement is possible, I do not doubt that the Court of Session has inherent power to refuse the legal remedy upon equitable grounds, although I know of no instance in which it has done so. It is quite conceivable that circumstances might occur which would make it inconvenient and unjust to enforce specific performance of contract of sale, but I do not think that any such case is presented in this appeal. The fact that the construction of a term in the contract is attended with doubt and difficulty, evidenced it may be by the different meanings attributed to it by Courts or individual Judges, ought not in my opinion to prevent its receiving its full legal effect, according to the interpretation finally put upon it by a competent tribunal. The argument that in this case a decree for specific performance would necessarily impose upon the appellant the duty of performing a long series of personal acts under the supervision of the Court does not appear to me to have a solid basis in fact".
The last observation - limited as it was - is not, it seems to me helpful either way in the present case. In Salaried Staff London Loan Company Limited the Lord President (Emslie), after review of the authorities, said at page 196
"Thus it is not for a court to intervene to interpel a party to a contract from seeking implement of his contract merely because that court thinks that it would be unreasonable for the innocent party to select and enforce his chosen remedy, but it must appear that it would be both 'inconvenient and unjust' to permit that party to exercise his undoubted legal remedy. This view of the law was in terms repeated in the recent case of White and Carter (Councils) Limited v. McGregor 1962 SC (HL) 1 per Lord Reid at pages 12 and 14".
In Gloag on Contract at page 660 it is said
"In exceptional cases a decree ad factum praestandum may be refused, in circumstances where it would generally be competent, on the ground that the hardship to the defender involved in compliance would be out of all proportion to the benefit to be obtained by the pursuer".
It is true that in Co-operative Insurance Society Limited v. Argyll Stores (Holdings) Limited Lord Hoffman at page 903 said
"The principles upon which English judges exercise their discretion to grant specific performance are reasonably well settled and depend on a number of considerations, most of a practical nature, which are of very general application. I have made no investigation of civilian systems, but a priori I would expect that judges take much the same matters into account in deciding whether specific performance would be inappropriate in a particular case".
These observations are, of course, as Lord Penrose indicated in Co-operative Insurance Society Limited v. Halfords Limited, entitled to respectful consideration. One factor referred to specifically, however, was the need for constant supervision by the court - in the sense of the court having to give an indefinite series of rulings in applications made by the parties in order to ensure the execution of the order. In Scotland, however, any practical difficulties in policing compliance with an order of the type in question can be exaggerated. As Lord McCluskey indicated in Retail Parks Investments at page 241
"The possible difficulties for the debtor in the obligation in knowing what is required of him should be considered against the background of the enforcement procedures available if a breach of the order is alleged. Thus, if the pursuers were to allege a breach they would require to proceed by petition and complaint and, unless a breach were to be admitted, the court would then have to determine whether or not any breach of the order had occurred and, before imposing a penalty, would have to be satisfied that the defenders had acted or were acting in wilful disobedience of the court's order: these procedures would diminish the risk of a person's being punished for, or even found in breach of, a court order which turned out to be lacking in precision. Furthermore, if the court, after the matter has been brought to its attention in a petition and complaint, were to hold that the defenders had not complied with the order but that the non-compliance was not a wilful defying of the court's order, the court could, without proceeding to punishment, give the defenders a further opportunity to comply in the light of the court's pronouncement that the order has been breached by the defenders' previous acts or omissions. Accordingly there should be no insuperable difficulty in policing compliance with an order of the court pronounced in suitable terms".
The history in Scotland since the decision in the case of Church Commissioners for England - since when orders, at least ad interim, have routinely been granted, - has not, it seems, given rise to any obvious difficulties in enforcement or supervision. Another factor referred to in the case of Co-operative Insurance v. Argyll Stores Limited was the difficulty of drawing an order, reflecting the terms of the obligation, with sufficient precision. In Scotland, however, if the particular order sought was one which passed what Lord McCluskey described as "the usual and familiar tests of precision, specification, definition and notice" (Retail Parks Investments at page 242) (and thus if the position was that the order sought was prima facie competent) it would be difficult to see how similar considerations would arise at the stage when the court's discretion was considered. In any event, contrary to the defenders' submissions in this case, many of the difficulties said to be inherent in the looseness of the language of such clauses would, on the face of it, still require to be confronted in any claim for damages where loss fell to be measured against the performance which could have been expected if there had been no breach. Reference, in Co-operative Insurance v. Argyll Stores Limited, was also made to the potential loss which a defendant might suffer through having to comply with the order (for example through having to run a business at a loss for an indefinite period) which might be far greater than any loss the plaintiff would suffer from the contract being broken - with the consequence that the plaintiff might be put in an unjust bargaining position. In Scotland it seems such a factor would indeed be taken into consideration in the exercise of the court's discretion but only if the evidence disclosed that it was present in the particular case. In the instant case, having regard to the facts found by the Lord Ordinary, it is not arguable, it seems to me, that he erred in declining to exercise his discretion not to grant the order sought.
Although in Visionhire Limited Lord President Hope said
"It seems to me that, as in the case of mercantile contracts generally, there are sound practical considerations for adopting a common approach to the construction of these clauses...". (the clauses in question being rent review clauses),
his further observation that
"There can of course be no compromise of the well established principles of Scots law such as those relating to the use of irritancies. As I said in H.M.V. Fields Properties v. Bracken Self Selection Fabrics...there are significant differences between the law of England and the law of Scotland relating to irritancies. Any investor in commercial property in this country must accept that these differences will continue to exist",
is not obviously helpful to the defenders. It recognises that there may be differences, as between Scotland and England, in relation to the enforcement of provisions in commercial contracts which depend upon different but well established principles.
Separate from these arguments of general application, the defenders argued, as they did before the Lord Ordinary, that for a number of reasons the terms of CLAUSE THIRD 12(a), as properly construed, were too unspecific to support the order for specific implement in the terms in which it was granted; indeed that the clause was void from uncertainty. It was clear that a decree of specific implement would only be granted if it could be framed with sufficient precision. Reference was made to Munro v. Liquidator of Balmagowan Estates Company 1949 SC 49 and in particular to the opinion of Lord President (Cooper) at page 55, where he said
"It is impossible for us with propriety to pronounce any decree ad factum praestandum which is not absolutely precise in every particular, both as to time and as to place...".
Reference was further made to Fleming & Ferguson v. Paisley Magistrates 1948 S.C. 547 and to Lord President Cooper at page 557 where it was said:
"This court will not pronounce a decree ad factum praestandum except in terms of such precision as will leave the defenders in no doubt as to the exact obligation to be discharged by them...The same principle of course applies to a declarator preliminary to a decree of specific performance".
In the first place the defenders argued that, as a matter of construction, CLAUSE THIRD 12(a) of the Lease - when read in conjunction with subclause 13(a) - required the defenders to keep the premises open for the sale of all goods of any kind which might from time to time be sold in a high class retail store. This, as the Lord Ordinary recognised, was so wide as to be meaningless. Secondly, and in any event, even if the clause fell to be construed, as it had by the Lord Ordinary, as requiring the defenders to keep the premises open for the sale of any goods which might from time to time be sold in a high class retail store, it was, for a number of reasons, too imprecise to found a decree for specific implement and the order made, which followed the language of the clause, should not have been granted. In particular, although there was some uncertainty about what was meant by keeping the premises open, particular stress was placed on two matters. The expression "high class retail store" was inherently uncertain. Evidence had been given - as recorded by the Lord Ordinary - by the pursuers' expert in which no single clear test fell to be applied. A number of factors might be relevant, not all of which applied at any time and which might differ from sector to sector of the retail trade. Reference was made to Patina Limited v. Lowe 1985 E.G.L.R. 540 where an assistant recorder had interpreted "high class furnished accommodation" in a lease as "better than average quality". The Court of Appeal indicated that a higher test might well have been applied. Reference was also made to Ropemaker Properties Limited v. Noonhaven Limited 1989 2 E.G.L.R. 50 where it was held, inter alia, that the tenants, willing to make prostitutes available to customers, were in a breach of a user covenant which prohibited the use of the premises otherwise than as "a high class restaurant/nightclub". Secondly, it was not clear what "normal hours of business" meant. By reference to what was it to be measured? It was important, in a provision such as this, to have clarity as to the hours during which the premises were to be kept open. Reference was made to Co-operative Insurance Society Limited v. Halfords Limited, where the Lord Ordinary had been unable to imply any clear term. The Lord Ordinary had construed the reference in this case to the defenders' hours for these premises, but it was difficult to see, on that approach, how the hours could be changed or what content there was for the provision at the start of the lease.
On behalf of the pursuers counsel argued that the defenders' initial approach to construction was wholly misconceived. They argued, as they had before the Lord Ordinary, that CLAUSE THIRD 13(a) did not require the tenant to sell all of the goods referred to; rather it prohibited the sale of anything else. As a matter of reasonable construction, transposed into the positive obligation contained in subclause 12(a) "all" became "any". This approach was consistent with a similar approach adopted by the Lord Ordinary in Co-operative Wholesale Society Limited v. Saxone Limited. On the wider question of whether the clause, which was reflected in the order, was sufficiently specific to found an order for specific implement (and indeed could not be said to be void for uncertainty), the court in general should approach the defenders' arguments about supposed problems with proper scepticism. The commercial reality was that on the one hand the continued trading of the defenders was critical to the pursuers' investment and that damages would be inadequate, and on the other that the dispute had arisen, not because the defenders had had any difficulties with the terms of the contract since its inception (as to which there was no evidence), but because for commercial reasons they wished to cease trading therefrom. The court should bear in mind Lord Guthrie's stricture in R. & J. Dempster Limited v. Motherwell Bridge & Engineering Company Limited 1964 SC 308 at 332 that
"The object of our law of contract is to facilitate the transactions of commercial men and not to create obstacles in the way of solving practical problems arising out of circumstances confronting them, or to expose them to unnecessary pitfalls".
Although it was accepted that it was necessary before any order for specific implement could be pronounced that the defenders should be clear as to what they were to do, the pragmatic approach of the court, in the context of orders in implement of "keep open clauses" in commercial leases, which had been adopted in Retail Parks Investments Limited was to be commended. The court there recognised that such clauses were often drafted with a measure of flexibility to benefit both parties and that a degree of flexibility in any order for implement was both possible and sensible. The court had recognised the importance of having regard to the commercial realities. Reference was made to a Discussion Paper of the Scottish Law Commission, published in April 1999, on remedies for breach of contract where the Commission had noted, in relation to "keep open clauses",
"After initial hesitations it appears now to be clear that, although much will depend on the obligations sought to be enforced in particular cases, the requirement of sufficient precision does not prevent specific implement from being used to enforce performance of the obligations in such clauses. An order may be flexible in the sense that it specifies the end to be achieved but leaves open the precise means by which the end is to be achieved". (Para. 6.2).
Reference was also made to para. 6.10 where it was said:
"It seems to us that the Scottish approach to specific implement is consistent with the overriding policy of fostering respect for contractual obligations, while avoiding unjust or unreasonable results. It is firmly in line with the approach adopted in modern international instruments on contract law. We suggest no change in basic approach".
There had been and would be no real difficulty in the defenders' understanding of what was meant by "keep open". Equally, although what was a high class retail store might be difficult to describe, it was something readily capable of recognition. The defenders' witnesses had had no problem with "high quality" stores, as the Lord Ordinary had indicated. The identity of the particular tenant in this case could not be ignored. The approach of the Lord Ordinary in Co-operative Wholesale Society Limited v. Saxone Limited on both of these matters was commended. The phrase "normal hours of business" referred to the tenants' hours - as established by trading practice over the four years of occupation prior to the signing of the Lease. These could be varied, and had been, with consent of the landlords. There was evidence as to the current normal business hours. The court had reached a similar view in Retail Parks Investments Limited. The pursuers were not seeking to argue that normal hours of business meant normal opening hours in the sector of the retail market represented by the traders' business (the evidence establishing that each Presto store operated its own opening hours according to local demand), nor that normal business hours was the same as "the ordinary hours of business" referred to in CLAUSE FIFTH (1). There had been, and would be, no problems with this phrase.
I am of the clear view, in accordance with the views of the Lord Ordinary and the argument of the pursuers, that the defenders' initial approach to the construction of CLAUSE THIRD 12(a) is misconceived. The general starting point was, it seems to me, well set out by the Lord Ordinary
"Where patent absurdity results from a literal interpretation of a provision one must consider whether the literal approach is valid and appropriate in the circumstances. 'The essence of commerce is making bargains and unenforceable arrangements are the exception and not the rule': R. & J. Dempster v. Motherwell Bridge & Engineering Company Limited 1964 SC 308 at 328. The presumption is that there is agreement, and that what parties have made the measure of their commercial relationships has meaning. In Bidoulac and Others v. Sinclair's Trustees 1889, 17 R. 144 Lord President Inglis rejected what was seen as an absurd construction. He said:-
'That is a construction so repugnant to common sense, in relation of landlord and tenant, that it must be rejected'.
Literal meanings leading to absurdity or repugnancy may properly be rejected in favour of a workable and reasonable result (Mackay's Executors v. Firth 1972 S.L.T. 22)".
Subclause 13(a) plainly indicates what the tenants may not do. It is a reasonable inference that they were entitled to do anything within those boundaries and thus inter alia to sell any goods which might from time to time be sold in a high class retail store. The obvious and reasonable construction of clause 12(a) is that the obligation to keep the premises "open for the trade specified in subclause 13(a)" is an obligation to keep the premises open for the trade allowed in terms of subclause 13(a).
Whether the clause thus construed is sufficiently specific to form the basis of a decree of specific implement is less straightforward. All the judges in Retail Parks Investments Limited discussed at some length the general approach to be adopted in circumstances such as these, and I see no reason to depart from that. Indeed, as I understood it, counsel for the defenders did not take serious issue with that approach, on the assumption that their arguments as to the general incompetence of such orders, or alternatively as to the general approach which the court should follow in the exercise of its discretion, were rejected. It is plain that while the court did not seek to quarrel with the general statements of Lord President Cooper in Munro and Fleming & Ferguson these cases could not give clear guidance as to how the test of reasonable certainty ought to be applied in the context of "keep open" clauses in modern commercial leases. In any event it seems clear that the observations of Lord President Cooper in Munro were very much dictated by its particular circumstances. While the court in Retail Parks Investments Limited accepted that it would be right to look carefully at obligations requiring acts extending over a long period, the notion was rejected that every single particular of what a defender required to do had to be spelled out. It was recognised that the clauses themselves were often drafted with a degree of flexibility to benefit both parties and that such flexibility could reasonably be retained in an order for specific implement which specified the end to be achieved but left open the precise means whereby it was to be achieved (see in particular Lord McCluskey page 241; Lord Cullen at page 248 and Lord Kirkwood at page 253). It was clearly indicated that it would be wrong to judge the matter by apparently hypothetical difficulties existing at the borderline. As Lord Cullen said at page 248
"I accept that there may be cases in which the meaning of a provision is so obscure that any attempt to enforce its terms would founder. In such a case the court might well refuse to make an order even if the clause was not void from uncertainty. However, in the present case the most that can be said against the order is that future changes within what is left of the currency of the lease might give rise to difficulty in determining whether the clause was complied with or not. It was not suggested, nor could it be suggested, by the defenders that there were not cases in which there would be clear non-compliance with the order. I do not accept that the correct way to judge the case for making an order is by reference to borderline cases". (See also Lord Kirkwood at page 253).
Further, as Lord McCluskey stressed it was open to the court to consider the commercial realities which formed the background to the undertaking of the parties' mutual obligations (see page 241). In that connection it seems to me that counsel for the pursuers were right to stress that the context in which the matter required to be assessed in this case was that what gave rise to the present dispute was the defenders' wish to cease occupation altogether for commercial reasons (which would damage the pursuers in a way which could not adequately be compensated by damages) and not any difficulties experienced with the terms of the obligations incumbent upon them. As to that - although the defenders were no doubt right to stress that the evidence did not disclose any clear consideration from time to time of the conditions of the contract - there was in fact no evidence. It is also difficult to ignore that after the present dispute arose the parties entered into a Minute of Agreement confirming inter alia that any future sublet would be upon precisely the same terms. Against that background it would, I consider, be right to look with some care at the defenders' submissions that the terms of the relevant clause were so unclear that they could not properly be enforced by order for specific implement, indeed that the clause was void for uncertainty.
I have come to the view - despite certain initial misgivings - that the defenders' arguments on this matter are not well-founded. As regards the "keep open" provision I consider that the defenders' concerns are no more valid than similar concerns expressed in Co-operative Wholesale Society Limited v. Saxone Limited. In that case, as the Lord Ordinary said,
"If it were a valid objection to positive enforcement of a 'keep open' provision that the tenant was left in uncertainty as to how far exactly he could lawfully reduce staff or stock, no 'keep open' clause would be enforceable and Retail Parks would necessarily have been decided otherwise than it was".
Equally I am inclined to agree with counsel for the pursuers that though, in the abstract, a "high class retail store" may be difficult to describe, there is no reason to suppose - save perhaps in hypothetical borderline cases - that it could not be recognised, or more specifically that it could not be ascertained whether or not goods being sold were goods which might be sold in such a store. The defenders' witness appears to have had no difficulty with the concept of "high quality" store. Again, a similar approach was taken by the Lord Ordinary in Co-operative Wholesale Society Limited v. Saxone Limited. In neither of the two English cases, to which the court was referred, Patina Limited and Ropemaker Properties Limited was it ever suggested that the expressions "high class furnished accommodation" or "high class restaurant/nightclub" were expressions without ascertainable meaning.
The expression "normal hours of business" gives rise to more difficulty. The Lord Ordinary reached the view that
"The obligation of the tenant is to open during his ordinary hours of opening for the store. Those hours may change from time to time as market conditions and the demands of the public change and are reacted to, but there could not be any doubt at any given time what the normal hours of trading were. That would be determined on evidence and can be determined with ease on the evidence in this case. The pursuers do not seek to have those hours carved in stone, rightly".
As a matter of language, however, one might have expected, if that were right, some indication that the reference was indeed to the tenants' ordinary hours of opening for the store. Further, in a clause no doubt designed to give protection to the landlord, one might have expected that to be achieved by reference to some objective standard. As interpreted the tenant could, on the face of it, do what he wanted. In addition it is not at all clear, if the Lord Ordinary was right, how normal hours, once established, could be changed and the interpretation would seem to give no obvious content to the expression at the outset of the lease (or indeed of any sub-lease). For these and other reasons, no doubt, the interpretation advanced by the pursuers and respondents was not wholly at one with the views expressed by the Lord Ordinary. This, - that "normal hours of business" referred to the tenants' hours for the premises as established by trading practice over the four years of occupation prior to the signing of the Lease - would, it is true, give content to the term at the outset of the Lease, and give the landlord a measure of certainty. It is, however, an interpretation which would, contrary to what might reasonably have been expected, afford no apparent flexibility (notwithstanding that the landlord could no doubt agree to change it if he thought fit). It also remains an interpretation which suffers (perhaps even more - the obligation is said to be incumbent from the date of entry) from similar difficulties as a matter of language. Nor is it, I consider, right to suggest that the court reached a similar view in Retail Parks Investments Limited, where, in the Inner House, the court interpreted similar language by reference to bank branch offices in general (see in particular Lord McCluskey at p.243, and Lord Kirkwood at p.253).
I cannot, however, say that the term is meaningless or without content. It appears in a clause which, properly construed, requires the tenants of premises in a shopping centre to keep those premises open for retail trade. Although there is provision relative to that quality of goods that may be sold, the type or category of retail trade is not specified. There is no specific qualification of the phrase by reference to the tenants or to the centre. In these circumstances it is, I consider, reasonable to construe the relevant words as referring to normal hours of business in the retail trade. While these may change from time to time, and while certain premises or types of premises no doubt open for longer or shorter periods than the norm, they ought I consider to be capable of at least broad assessment. It is perhaps not surprising to notice in the instant case that in the centre itself most unit shops opened between 9 a.m. and 5.30 p.m. six days each week. So construed, the clause would impose a broad minimum requirement upon the tenants for the benefit of the landlords. It would, however, be right, I consider, that the orders pronounced by the court should, for the avoidance of doubt, refer not merely to "the normal hours of business", as in the interlocutor pronounced by the Lord Ordinary, but to "normal hours of business in the retail trade".
I am therefore of the view that the clause in question is not only not void from uncertainty but that the order for specific implement granted by the Lord Ordinary is, subject to the above, sufficiently specific in its terms. I reach the latter view even if - in accordance with the observations of Lord Cullen quoted above in Retail Parks Investments Limited and views expressed in other cases - there may be obligations which are not void for uncertainty but which are nevertheless insufficiently specific to found an order for specific implement. Although at least junior counsel for the defenders appeared to accept that the test to be applied in both these respects was the same - under reference in particular to the opinion of the Lord Ordinary in Co-operative Insurance Society Limited v. Halfords Limited (a position not surprisingly not disputed by counsel for the pursuers) - the matter was not fully argued before us and it is unnecessary to reach a concluded view upon it.
In the whole matter, in my opinion, the reclaiming motion falls to be allowed, but only to the limited extent referred to above.