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Cite as: [2005] CSOH 94, [2005] ScotCS CSOH_94, 2005 SCLR 958

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Pik Facilities Ltd v. Shell Uk Limited & Anor [2005] ScotCS CSOH_94 (13 July 2005)

OUTER HOUSE, COURT OF SESSION

[2005] CSOH 94

OPINION OF LORD KINGARTH

in the cause

PIK FACILITIES LIMITED

Pursuers;

against

SHELL UK LIMITED

Defenders:

and

BP OIL UK LIMITED

Third Party:

________________

Pursers: Reid QC, di Emidio; McClure Naismith

Defenders: Scott QC, Crawford; Shepherd & Wedderburn WS

Third Party: Robertson; Biggart Baillie

13 July 2005

[1] The pursuers are the heritable proprietors of Glasgow Prestwick International Airport. On 31 March 1992 they acquired the lessor's interest in a Lease between the British Airports Authority and Shell-Mex and BP Limited dated 3^rd and 19 May 1971 (hereinafter referred to as "the Lease"). The defenders and the third party became common tenants under the Lease by Assignation in their favour by Shell-Mex and BP Limited dated 10^th, 29^th and 30 April 1981. The term of the Lease was expressed to be from 1 January 1971 to 31 December 2000. On said latter date, accordingly, the right of occupation of the common tenants came to an end.

[2] The subjects of let comprised inter alia a fuel storage tank farm, with associated offices, plant works, fixed plant and fixtures. During the currency of the Lease the tenants had the right to sell fuel to aircraft operators on two of the airport aprons. The fuel was distributed from the tank farm by means of two parallel pipelines, and associated apparatus, forming the fuel hydrant system (hereinafter referred to as "the fuel hydrant system").

[3] Clause 2 of the Lease referred to certain undertakings by the tenants. In terms thereof the tenants undertook inter alia:-

"(8) From time to time and at all times during the said term to keep the subjects hereby let both internally and externally (including the sanitary apparatus and the drains thereof and also the water and electrical installations up to the points of connection referred to in sub-clauses (b) and (c) of the First Schedule hereto (namely the Lessor's meters) and also any other fixed plant and fixtures for the time being comprised in the subjects hereby let whether or not similar to the foregoing) in good and substantial repair and condition and properly cleaned AND ALSO to keep such parts of the subjects hereby let as are for the time being unbuilt upon clean and tidy and in good order and condition AND ALSO the said fuel pipe lines including the connecting pipe line in good and substantial repair and condition.

...............

(15) In case at any time during the said term there shall be occasion to rebuild or renew or replace any part of the subjects hereby let or any boundary wall thereof or the said pipeline or the connecting pipeline whether by reason of destruction by fire, explosion, storm, tempest, flood or damage by aircraft or articles dropped therefrom or through decay or from any other cause the same shall be rebuilt, renewed or replaced as the case may be by the Lessee according to the original plans and elevations or specifications thereof or according to such other plans or specifications as shall be previously approved of in writing by the Lessor and not otherwise.

................

(33) Quietly to yield up unto the Lessor at the expiration or sooner determination of the said term the subjects hereby let, the said fuel pipe lines and also the connecting pipeline, including all fixed plant and fixtures of every kind including tenants' and trade fixtures so painted, repaired, cleansed maintained, amended and kept as aforesaid together with all additions and improvements made thereto and together also with the said rights.

(34) That at least fourteen days before the expiration or other sooner determination of the said term a proper estimate or valuation shall be made as between the Lessor and the Lessee of any sum or sums required to put the subjects hereby let or part thereof, as in the preceding sub-clause hereof mentioned (including the additions, improvements, plant and fixtures referred to in the said preceding sub-clause hereof) into such good order, repair and conditions as they ought to be left in, in accordance with the undertakings hereinbefore contained and that the Lessee will forthwith pay to the Lessor the amount of such estimate or valuation (which shall be recoverable as liquidated damages PROVIDED ALWAYS that payment by the Lessee of the amount of such estimate or valuation shall relieve the Lessee of any obligation under sub-clause hereof to carry out the items of repair in respect of which such payment is made."

[4] In terms of paragraph (g) of the First Schedule of the Lease the tenants were obliged, in pursuance of their rights and duties to erect, construct, maintain or inspect erections or works of any description, to comply with the requirements of the lessor and the directions of the General Manager of the airport in all respects and, without prejudice to the generality of that obligation, with respect to the time when operations might take place, the manner of working, the hours during which works might take place and otherwise. The tenants were further obliged under the said paragraph (g) to restore and make good the ground and carry out remedial works necessitated by their operations, and all operations, restoration and remedial works were to be carried out under the supervision of and to the satisfaction of the lessor.

[5] In the summons the pursuers aver (at condescendence III) "The defenders have failed to implement their obligations as tenants in Clause 2(33) or, alternatively Clause 2(34) of the Lease". Having averred that no payment has been made under Clause 2(34), it is said further: "At the expiration of the Lease, the two parallel pipelines and associated apparatus forming part of the fuel hydrant system at the airport had not been kept in good and substantial repair and condition. One of the two parallel pipelines (hereinafter "Line No.1") has been empty for such a period as is likely to have caused severe local corrosion. It is unable to be used. The sections of Line No.1 and of the other parallel pipeline (hereinafter "Line No.2") are connected by flanges bolted together. In about 1990 subsidence of a section of Tay Road (now Robertson Road) within the airport led to an excavation being carried out by the tenants. It was discovered that Line No.2 was leaking at an underground flange. It is likely that leaks exist at other underground flanges. The third party investigated the leakage and concluded that continued use of the pipe involved significant risk of unpredicted leakage leading to environmental damage. They discontinued use of Line No.2 immediately the leak was discovered and infilled the excavation prior to the pursuers acquisition of the airport". After averments which narrate inter alia that the pursuers have been advised that it is not viable to carry out an internal examination of the fuel hydrant system without excavation of the whole of both pipelines, it is averred that it "is necessary to excavate the whole of both pipelines so that they may be restored to good and substantial repair and condition".

[6] In the first conclusion (as amended) the pursuers seek:-

"1. To ordain the defenders to implement their obligations as tenants in terms of the Lease between British Airports Authority and Shell-Mex and B. P. Limited dated 3^rd and 19^th May, 1971 to put the fuel pipe lines and hydrants depicted on the plan marked Plan No. 4 annexed and signed as relative to the said Lease indicated on the said Plan by the words 'Shell' in good and substantial repair and condition; and that by;

1.1 putting into good and substantial repair and condition the two parallel pipelines depicted on the said plan and indicated as aforesaid and associated apparatus forming the fuel hydrant system serving the area referred to in the Lease as 'the said Apron';

and that by replacing:-

(a) a total length of about 1,451 metres of pipe runs made up of pipe runs containing 6 pipes amounting to 1,217 metres, 4 pipes amounting to 109 metres and 2 pipes amounting to 125 metres;

(b) 33 fuel hydrants consisting of 19 hydrants with 6 terminals, 4 hydrants with 4 terminals and 5 hydrants with 2 terminals; and

1.2 complying with the requirements of the pursuers and the directions of the General Manager of Glasgow Prestwick International Airport with respect to the time when the above operations may take place, the manner of working, the hours during which work may take place and otherwise;

1.3 restoring and making good the ground and carrying out all remedial works necessitated by their operations; and

1.4 carrying out all operations, restoration and remedial works under the supervision of and to the satisfaction of the pursuers

and that within 24 months from the date of decree to follow hereon, or within such other period as to the Court seems proper".

The detail referred to at para 1.1(a)(b) and (c) was added on by amendment on 18 May 2005.

[7] Alternatively, in conclusion 2, the pursuers conclude for payment by the defenders of damages in the sum of £10,759,180. In condescendence V it is said that £5,806,600 of that sum represents the cost of putting the fuel hydrant system into good and substantial repair and condition. This sum is said to represent the total cost of replacing pipe runs, fuel hydrants and valve chambers, all as set out in detail at page 32 of the Record (corresponding, it seems, with the detail referred to at paragraph 1.1 of the first conclusion). In addition, it is averred that the pursuers will suffer loss as a result of the interruption to business occasioned by the repair operations. There are detailed averments relative to this claimed loss which is said to amount to £4,952,580.

[8] In Answer 5, the defenders, who do not accept liability in respect of the repairs said to be necessary, also maintain that the sum sued for is excessive. They aver inter alia that in all the circumstances the expense of the works contended for by the pursuers (and the sum sued for in the alternative) is out of all proportion to the benefit that might be obtained from carrying out the work. At page 40(B) they aver "It is improbable that the condition of the fuel hydrant system has deteriorated so as to be beyond repair".

[9] As part of their defences the defenders also aver that any obligations upon them in terms of the Lease are binding also upon the third party, and their sixth plea-in-law reads:-

"Separatim, to the extent that the defenders are liable to carry out works or to make reparation to the pursuers they are liable jointly and severally with BP Oil UK Limited and they are entitled to a contribution from BP Oil UK Limited".

[10] The defenders also have a plea of waiver which reads:-

"Any right to require compliance with the terms of the Lease as to maintenance of the fuel pipelines and hydrant systems having been waived, the defenders should be assoillzied from the conclusion anent such maintenance of the fuel pipelines and hydrant systems".

In Answer 3 they aver inter alia (at page 23):-

"Soon after it was originally commissioned, Line No.1 was decommissioned and filled with nitrogen. The pursuers' predecessors agreed to this course of action. Line No.2 was tested in 1996 and was found capable of maintained pressure. It was then decommissioned by BP in 1997. The pursuers were aware of this and expressly permitted it. It was not economic in view of the volume of traffic using the airport to carry out fuelling using the hydrant system".

In addition they aver (at page 24):-

"In or about April 1992, the pursuers purported to release BP Oil UK Ltd from liability for the maintenance and repair of the fuel hydrant system".

[11] The matter came before me on procedure roll. The case has a long history. At one stage an opinion was issued by a temporary Lord Ordinary following a procedure roll debate held in February 2002 in respect of the pleadings as they then were. Although the pursuers reclaimed that decision, the pleadings were, I was informed, substantially amended in the Inner House from where the cause was remitted back, without argument on the merits of the reclaiming motion, to the Outer House. In the event none of the parties referred me to the earlier opinion in the course of the hearing before me.

The Defenders' Submissions
[12] There were no relevant averments to support the first conclusion for specific implement. It was not disputed that, in general, under Scots law a party had a right to enforce contractual obligations by specific implement. Reference was made to Gloag on Contract at pages 655 and 656; Stewart v Kennedy 1890 17R HR (H.L.) 1; Grahame v Magistrates of Kirkcaldy 1882 9R HL 91; Grosvenor Developments (Scotland) Plc v Argyll Stores Limited 1987 SLT 738 and Highland & Universal Properties Limited v Safeway Properties Limited 2000 SC 297. The contractual obligation in question, however, required to be one which remained extant as between the parties. Performance could not be demanded of an obligation which fell to be performed during the term of a lease when it had terminated. The only remedy then was damages. The obligation under Clause 2(33) was to leave the premises at the ish "so........ repaired ....... and kept as aforesaid .....", referring back to the obligations under inter alia Clause 2.8 which pertained throughout the term of the Lease. The clause did not provide for any further duty of repair. Indeed the words "so repaired....... and kept as aforesaid ......." could have been omitted. An obligation to carry out work during a lease does not equiparate with any obligation to execute work after. To require the tenants to return now to carry out works to put the fuel hydrant system into a state of repair would innovate upon the Lease. The question was not one of access, but of the entitlement of the landlord to demand re-entry and the execution of works after the termination of the Lease. The matter was clearly settled by the decision of the First Division in Sinclair v Caithness Flagstone Company Limited 1898 25 R. 703. In that case the conclusion for specific implement, founded inter alia on a clause similar to Clause 2(33), was held to be incompetent. The same principle was applied, albeit in relation to a clause dealing with the method of working by the tenant, in A & J Faill v Wilson 1899 36 SLR 941. Although the Lord President in that case pointed out that the action was not based on "a redding up clause", his remarks were obiter and their significance was unclear. Although the Lord Ordinary in Coventry v British Gas Corporation (unreported 15 August 1984) had interpreted Sinclair v Caithness Flagstone Company Limited as being restricted in its application, and had supported a landlord's right to seek implement of a clause obliging the tenant to restore the subjects to a particular condition prior to the ish, his Lordship's reasoning could not be supported. In any event, the clause with which he required to deal was very different from Clause 2(33). Both Clause 2(33) and Clause (g) of the First Schedule plainly related to the period of the Lease.

[13] Secondly, the first conclusion was insufficiently specific in important respects. Decree for specific implement must be sufficiently clear to let the defender know what he is required to do. Reference was made to Robertson v Cockburn 1875 3 R. 21; Hendry v Marshall 1878 5 R. 687; McArthur v Lawson 1877 4 R. 1134; Fleming & Ferguson v Paisley Magistrates 1948 SC 547; Munro v Liquidator of Balnagown Estates Company 1949 SC 49; Highland & Universal Properties Limited v Safeway Properties Limited and Retail Parks Investments Limited v The Royal Bank of Scotland Plc (No 2) 1996 SC 227. In the present case it was not clear, in so far as the pursuers sought replacement of various pipelines etc, whether they sought replacement according to a new design or according to the original specification or some mixture of the two. Not only was it not clear what the defenders required to do in this respect, it was unclear whether or not the pursuers were seeking to innovate on the contract. Further, it was not known which pipelines etc the pursuers were seeking to have replaced. It was not known to the defenders whether the items referred to comprised the whole of the fuel hydrant system or only parts thereof. Whereas the court had countenanced a certain latitude in respect of "keep open" clauses during the currency of leases, the position where the tenant was being asked to come back to carry out particular works was different.

[14] In the third place, the pursuers had no relevant or sufficiently specific averments as to the alleged state of disrepair at the ish. Without such averments there could be no relevant case that the defenders had failed to comply with their obligations, and thus no relevant basis for either of the conclusions. In any event the averments were insufficiently specific to indicate that any state of disrepair was such that the replacement called for was necessary. Calls made on Record at pages 21 and 26 for further and better specification had gone unanswered. All that the pursuers could be said to be offering to prove in relation to Line No.1 was that it was "likely" that there was severe local corrosion, and in respect of Line No.2 that it is was "likely" that leaks existed on the underground flanges. This was not enough. Insofar as the pursuers did not themselves know, they appeared to be seeking to invert the onus of proof.

[15] Fourthly, the pursuers' claim for losses resulting from interruption to business could not be supported. In particular it appeared from one passage in the pleadings that the claim for damages was presented on the basis of an alleged breach of Clause 2(34). That passage was at the end of condescendence IV (where certain averments of the defenders and third party were responded to) and was in the following terms:-

"Esto the pursuers are not entitled to specific implement and the relevant obligation on the defenders that the end of the Lease is in terms of Clause 2(34), the measures of liability under said Clause is as hereinafter condescended on and concluded for in the alternative".

Clause 2(34) provided only for payment of a specific sum representing the cost of repair. If, however, the claim for damages was, properly understood, presented on any other basis (and in particular on an alleged breached of Clause 2(33)), it was accepted that a proof before answer in relation to the claim for losses from business interruption would be necessary.

[16] Lastly, in relation to the defenders' own pleadings in respect of waiver, the averments at page 23 in relation to the decommissioning of the pipelines were sufficient to entitle the defenders to a proof before answer. In every case the question of waiver was one of fact. Reference was made to Rankine on Leases at page 454. The circumstances under which any decommissioning was permitted and the implications for the fuel hydrant system would require to be investigated. It could not be said at this stage that the defenders plea of waiver would necessarily fail.

The Third Party's Submissions
[17] The defenders' submissions attacking the relevance and specification of the pursuers' claims were adopted. The case of Sinclair v Caithness Flagstone Company Limited was binding authority to the effect that a landlord could not require a tenant to carry out the obligations of a lease after its expiry. Properly understood there was nothing in the case of A & J Faill v Wilson which detracted from that. The Lord Ordinary's approach in Coventry v British Gas Corporation was misconceived.

[18] So far as the conclusion for specific implement required the defenders to "put in order" the fuel hydrant system, this did not embody the language of Clause 2(33) and was an innovation on the Lease, which could not be justified. Reference was made to Retail Parks Investments Limited v The Royal Bank of Scotland Plc (No 2) (in particular at page 245) and Highland & Universal Properties Limited v Safeway Properties Limited (in particular at page 302). The words "put in order" had been lifted out of context from Clause 2(34). That latter clause could not properly be said to be a relevant basis for the conclusion for specific implement (being a clause relative to the payment of a sum of money if a certain mechanism was followed (as apparently, on the pursuers' averments, it had not been).

The Pursuers' Submissions
[19] The question raised by the defenders in relation to the first conclusion was essentially a question of competence. Although there was no specific plea-in-law directed to that matter, no specific issue was taken on that basis. It was clear from the pursuers' pleadings that the foundation for the conclusion for specific implement was Clause 2(33) - a clause which required to be understood when read along with Clause 2(8). The reference in condescendence III to Clause 2(34) was only to emphasise that, failing any payment under Clause 2(34), the obligation of the tenants was under Clause 2(33). In Scotland specific implement was a primary remedy, subject only to certain well-known exceptions. Reference was made to Stewart v Kennedy; Retail Parks Investment Limited v The Royal Bank of Scotland Plc (No. 2) and Highland & Universal Properties Limited v Safeway Properties Limited. Reference was also made to Rankine on Leases at pages 453, 454 and 456; Gloag on Contract at pages 655 to 656; The Stair Memorial Encyclopaedia volume 13 at paragraphs 8 and 9 and to Gordon on Scottish Land Law (2^nd Ed.) at paragraph 19-211. Impossibility of performance was one of the exceptions recognised. It was plain on a proper reading of Sinclair v Caithness Flagstone Company Limited that Lord Kinnear's emphasis was on the pursuer's attempt to seek specific implement of a clause dealing with the working of the quarry throughout the term of the lease. This could be seen as an attempt to seek the undoing of what had been done in breach of the lease (rather than implement of what should have been done and yet remained to be done). This could be seen as an aspect of impossibility. In A & J Faill v Wilson a similar clause relative to the working of a quarry throughout the term of the lease was held to be incapable of the enforcement since what was being sought was effectively an undoing or redress rather than implement. The clear implication of certain paragraphs in the Lord President's opinion, however, was that matters would have been different if the pursuers had sought to enforce the redding up clause. These remarks were consistent with the restricted application of Sinclair v Caithness Flagstone Company Limited. The distinctions drawn by the Lord Ordinary in Coventry v British Gas Corporation were rightly drawn and the decision could not be impuned. In the present action the pursuers were not seeking an undoing, or something that could be described as impossible. Plainly the pursuers impliedly consented to the defenders returning to the premises to carry out the works required. Reference in that connection was made the Lord Ordinary in Coventry v British Gas Corporation, Matthey v Curling 1922 AC 180 (in particular Lord Arkinson at page 240) and Duke of Portland v Wood's Trustees 1926 SC 640 (in particular Lord Murray at page 645). Clause 2(33) could not be said to be an obligation applicable only to the period of possession. Although it was not essential to the pursuers' submission, Clause 2(34) might be taken to suggest that the parties themselves understood that works might have to be carried out under Clause 2(33) after the ish. That clause also made it clear, as was obvious, that if the relevant property at any stage was not in good and substantial order and repair the obligation under Clause 2(33) would require works to be done to put "it into repair". In so far as the conclusion used similar language it did not innovate upon the terms of the Lease.

[20] As to the defenders' (and third party's complaint) about the specification of the first conclusion, the Court should be guided by the more flexible approach adopted in the modern cases (albeit in the different context of "keep open" clauses). Reference in particular was made to Retail Parks Investments Limited v The Royal Bank of Scotland Plc (No.2), Highland & Universal Properties Limited v Safeway Properties Limited and to the unreported Outer House decision of Oak Mall Greenock Limited v McDonald's Restaurants Limited (9 May 2003). It was clear that in seeking replacement the pursuers were (absent any further words) seeking replacement according to the existing specification. The pursuers did not need, or seek, to rely on the terms of Clause 2 (15). Further it was clear from the pleadings at pages 16 and 17 that the pursuers' case was that the whole fuel hydrant system required to be replaced. It appeared the defenders were well aware of this from their averments at page 40B. It was thus sufficiently clear at this stage that the various pipelines etc referred to at page 32, and in the conclusion itself (as amended), constituted the whole system.

[21] As to the averments about the state of disrepair, it was plain, on a fair reading, that the pursuers were offering to prove, on the balance of probabilities, that there was, so far as Line No.1 was concerned, severe local corrosion and, so far as Line No.2 was concerned, that there were leakages in the underground flanges. At least enough had been averred at this stage to justify a proof before answer. It could not be said that the pursuers would be bound to fail to prove that a state of disrepair existed such that total replacement was necessary.

[22] The argument presented in relation to the claim for loss arising from disruption to business proceeded on a misreading, at least of the significance, of the averment at page 30 C-D. That averment, which did not reflect the pursuers' primary position, was simply an attempted response on an esto basis to an averment of the third party to the effect that at the end of the Lease the relevant obligation was to make payment of a sum required to put the subjects let into such good order, repair and condition as they ought to have been left in, under reference to Clause 2(34). It was plain on a fair reading that the pursuers' claim for damages rested on a claimed breach of Clause 2(33).

[23] So far as the defenders' pleadings were concerned, there were not, it was argued, sufficiently relevant averments to support the defenders' fifth plea-in-law (relating to waiver). The only possible averments were those at pages 24D (relating to an apparent release of the third party from liability in 1992) and at page 23 (relating to the decommissioning of the pipelines). The former averments did not indicate whether any such release was express or implied; if implied, what the actings were or if express what form such expression took. Any waiver required to be for all time. Reference was made to James Howden & Company Limited v Taylor Woodrow Property Company Limited 1998 SC 853 (in particular pages 866 and 867). As to the averments about decommissioning, the taking of property out of service did not mean that it was no longer part of the Lease.

Discussion
[24] I propose to leave aside for the moment the matter of the competence of the conclusion for specific implement, which became the main focus of the debate, and to deal, relatively shortly, as I think I can, with the other matters raised.

[25] On the question of the specification of the works required, although my initial impression was that the pursuers had not adequately indicated which pipes etc they sought to have replaced, I am persuaded that there is probably enough in the pursuers averments to suggest that what they are seeking is the total replacement of the fuel hydrant system and further, significantly, that that is understood by the defenders. Their position is to suggest inter alia that it "is improbable that the condition of the fuel hydrant system had deteriorated so as to be beyond repair", (page 40 B-C). There is thus, in my view, just enough in the averments to indicate that what is specified in the first conclusion is an attempted breakdown into its constituent parts of the whole fuel hydrant system rather than an attempt to isolate certain parts of it. Further, it seems clear, in the absence of any other averments, that the pursuers are seeking replacement in accordance with the original design. I record only some surprise that the pursuers eschewed any reference to Clause 2(15) as an appropriate measure of the standards to be adopted when replacement was required, apparently from any cause. Overall, for these reasons, I am unable to say that the first conclusion does not give adequate notice of what the pursuers seek. In the event I was not greatly assisted by the numerous authorities to which I was referred in this connection.

[26] As to the relevance of the pursuers' averments as to the state of disrepair, I have again come to the view that enough has been averred at least to entitle the pursuers to a proof before answer. Although it cannot be said in this respect either that the pleadings are a model of clarity or precision, it cannot, I think be said that if the pursuers proved all their averments they would be bound to fail. Enough has been said to suggest the pursuers are seeking to prove, on a balance of probabilities, that the fuel hydrant system was left in a state of disrepair (by reason of corrosion and flange defects) and further that total replacement is necessary. As above indicated, the latter appears to be understood by the defenders.

[27] On the question of the claim for losses from business disruption, although this claim appears to me to give rise to a number of questions however it is presented, the only attack which was made at this stage (i.e. before proof) was on the basis that the Court was persuaded that the claim for damages was presented as a breach of Clause 2(34). I agree with counsel for the pursuers that on a fair reading of the pleadings it is not, but rather that it is based on an alleged breach of Clause 2(33), as read along with Clause 2(8). The only doubt is caused by averments (at p 30) which form a somewhat odd response to certain averments made by the third party; a response which, whatever may have been intended, was not, it seems clear, intended to form the primary basis for the damages claim presented at condescendence V.

[28] On the question of waiver, I have again come to the view (although this time in favour of the defenders) that their averments are at least enough to entitle them to a proof before answer. Although, as the pursuers argued, it would by no means follow in any case that decommissioning of plant would imply waiver of responsibilities relating to maintenance, much might depend, in this case, upon evidence as to the circumstances in which the pipelines came to be decommissioned, and upon a better understanding of what would be involved (and would be known to be involved) for the plant in that process than can be gleamed from the pleadings. As was accepted by the pursuers, the defenders' averments about the circumstances of decommissioning appear to form part also of the defenders' position that the expense of the works contended for is out of all proportion to the benefit that might be obtained, and could not in any event be deleted from probation at this stage.

[29] The remaining, and important, question relates to the competence of the pursuers seeking specific implement of the defenders' obligations under Clause 2(33) of the Lease notwithstanding the expiry of its term. I agree with senior counsel for the pursuers that the question is strictly one of competence, although, as recorded above, he did not seek to make anything of the absence of an appropriate plea in law. At the risk of over simplification, the essential question came to be whether it could be said to be sufficiently clear from the decision in Sinclair v Caithness Flagstone Company Limited that the pursuers' first conclusion could not be supported. The defenders' position was that that case was clear authority for the proposition that a clause such as Clause 2(33) could not be the subject of a conclusion for specific implement after the termination of the Lease; that nothing was said in A & J Faill v Wilson to detract from that, and that in so far as the Lord Ordinary in Coventry v British Gas Corporation had suggested the effect of Sinclair v Caithness Flagstone Company Limited was more restricted, he was wrong. The pursuers' for their part, maintained that, properly understood, Sinclair v Caithness Flagstone Company Limited was not clear authority for the proposition contended for; that this was confirmed by certain obiter comments of the Lord President in A & J Faill v Wilson, and that these cases had been properly understood and applied by the Lord Ordinary in Coventry v British Gas Corporation. Although, given certain of the language used, the matter can be argued either way (and the arguments from both sides were well presented in the debate before me), I have come to the view that the defenders' position is to be preferred.

[30] The case of Sinclair v Caithness Flagstone Company Limited related to the lease of a quarry for a period of 21 years, which had expired. By one of the clauses the tenants has obliged themselves to work the quarries in a particular way, inter alia so as not to cover up the face of any portion of quarry being worked, nor so as, in any way, to obstruct full and free access. It was said that the defenders, in breach of this stipulation, had left debris over and against rock in parts of the quarry so that access for working purposes was impossible and that they had blocked up quarries with debris so as to leave practically no roads through them. By another clause the tenants bound themselves "to maintain during the currency of this lease and to leave at the expiry thereof in good tenantable condition the whole buildings and enclosures of every kind already erected or to be erected on the quarry grounds and pavement yards hereby let, and also to pay their proportion of the cost of leaving in good order all roads leading to and from the quarries or pavement yards hereby let, as also to defray the whole expense of leaving in good repair all drains or ditches made or to be made in connection with the said quarries and payments yards". It was said that the defenders had failed also to implement this obligation.

[31] In the primary conclusion the pursuers sought to ordain the defenders "......forthwith to execute the necessary works of construction and repair, to put in proper order and condition the several quarries, roads, ditches, fences, drains, and buildings aftermentioned, .......". Alternatively the pursuers sought damages in the sum of £1,759.10 (£587.10 of that being, it was said, the cost of putting the buildings into the condition stipulated for under the lease, and £72 the cost of putting roads, fences and ditches in order). It is clear from the Record, obtained from the Session Papers, that the conclusion for specific implement was supported by two pleas-in-law. The first was that "The defenders being, in terms of their said lease bound to work the quarries thereby let to them in a proper and regular manner, and in regular faces, and to leave said quarries redd and clear and with proper roads therein and having failed to do so as condescended on decree should be pronounced, ordaining them to execute the works necessary to put said quarries in proper order and condition in terms of the prayer". The second plea-in-law was that "The defenders' being bound in terms of said lease to leave the roads, ditches, drains, enclosures and buildings thereby let to them in good order, and having failed to do so, should be ordained to put the same in proper order and condition in terms of the prayer".

[32] In the report of the decision at 25R it is recorded (at p705) that the defenders argued inter alia "(I) The conclusion ad factum praestandum was incompetent. The lease was at an end. If the tenants had not performed their obligations under it, the remedy of the lessor was an action of damages, but he could not claim specific performance of the obligations, which should have been performed during the currency of a lease, after that lease had expired". It is reported further that the pursuers argued that "The defenders were not entitled to find upon the expiry of the lease in order to escape performing the obligations which they should have performed during its currency. If the lessor was willing to allow them to enter for the purpose of fulfilling these obligations, he was entitled to call for such performance. The conclusion for specific performance was therefore competent".

[33] The case was heard by a bench consisting of the Lord President (Robertson), Lord Adam, Lord McLaren and Lord Kinnear. The leading opinion was given by Lord Kinnear, with whom all the others judges concurred. In the report of his opinion, it is recorded that, after referring to the conclusions of the summons and the averments of the pursuer, he said:-

"In so far as regards the first mentioned conclusion, I am of opinion that the action is incompetent. The pursuer seeks that the defenders shall be ordained to execute certain operations in terms of the lease, but the lease came to an end at Martinmas 1895, and the tenants' right to occupation and the corresponding right of the landlord to require them to occupy the subjects and execute works came to an end with it. If the tenants have failed to perform their obligations for the proper working of the quarries the landlord's remedy is an action of damages, but I know of no authority in support of the pursuer's claim to require his tenants after the termination of the contract of lease to re-enter the subjects which, by their contract, they are bound to quit, in order to perform after their possession has come to an end, obligations which were applicable only to the period of their possession, and which they are alleged to have already broken, they cannot be liable to a decree for specific performance, except by virtue of their contract. They have contracted to work in a certain way for a definite term which is exhausted. If they have failed they may be liable in damages for a breach of their contract which they committed while it still subsisted. But they have made no contract to do anything after the lease has expired. It appears to me therefore that in so far it concludes for a decree for specific implement, the action must be dismissed".

[34] It is, I think, important to try to understand what was the legal principle or basis for the decision that the conclusion for specific implement was incompetent, before asking whether it could be said that the decision was reached only because the pursuer was seeking to enforce the condition relating to the way in which the quarries were to be worked etc or whether the reasoning applied, and was intended properly to apply, to the whole basis on which specific implement was sought. Asking that first question there can, in my view, be little doubt that the expressed principle said to underlie the decision was that the defenders had not contracted to do what they were being asked to do. Lord Kinnear was, it seems, at pains (early on in the quoted passage) to stress that when the lease came to an end "........ the tenants rights to occupation and the corresponding right of the landlord to require them to occupy the subjects and execute works came to an end with it". Later he said "They cannot be liable to a decree for specific performance, except by virtue of their contract", and still later "But they have made no contract to do anything after the lease has expired".

[35] In these circumstances it is, in my view, not surprising that in Gloag on Contract, in a passage (at p658) which refers to the case as a footnote, it is said:

"So where a tenant has undertaken to build or repair, and has failed to do so during the period of his tenancy, an action calling on him for specific implement after that period is incompetent, in respect that his right to be on the lands, or to erect buildings, or to execute repair there, has determined, and that he cannot be assumed to have contracted to do anything which he has no right to do".

I note also that it is said in McBryde on Contract (Second Edition) at para. 23-24 - under reference to Sinclair v Caithness Flagstone Company Limited - that persons "cannot be liable to a decree for specific performance, except by virtue of their contract". So when tenants quit property at the end of a lease, they could not be ordered to go back to the property and execute works which should have been done during the currency of the lease. The landlord's remedy was damages".

[36] At points in the debate before me it was suggested (in part relying on what is said Rankine on Lease at p.454 and in the Stair Memorial Encyclopaedia volume 13 at para 8) that the principle behind the decision in Sinclair should be understood as being the "impossibility" of the defenders performing the obligations which they were called on to perform. That, however, is not the language used by Lord Kinnear. Nor would it be right, in my view, to conclude that the decision was based simply or mainly on the fact the tenants' right to occupation had ceased. Although that is mentioned, it is mentioned in the context that the corresponding right of the landlord to require the tenants to occupy the subjects and execute works had come to an end. It would, I think, have been abundantly clear that the pursuer, in seeking specific implement, was prepared to allow access. This no doubt would accord with observations made by Lord Atkinson in Matthey v Curling as to what, in similar circumstances, would be implied, but I question whether these observations have the potential significance suggested, obiter, by the Lord Ordinary in Duke of Portland v Woods Trustees. Nor at least in terms does Lord Kinnear express the basis for the decision in language to the effect that the defenders were being asked to undo what had been done in breach of contract rather than to implement it.

[37] Against that background, the question has to be asked whether in reaching his decision his Lordship essentially had in mind only the clause relating to the working of the quarry or both of the clauses on which the conclusion was based, including the clause requiring the tenants inter alia to leave the buildings at the expiry of the Lease in good and tenantable condition, a clause which (parties before me were agreed) could be said to be similar to Clause 2(33) in the present case.

[38] In my view, it is difficult to read the decision as having been reached only because of the attempt to enforce the clause relating to the working of the quarry. There can be no doubt whatsoever from the pursuer's pleadings and pleas-in-law that the conclusion for implement was based on alleged failures to comply with obligations imposed by more than that clause. The way Lord Kinnear dealt with the alternative claim for damages (where a distinction was drawn as to the relevance of that claim in so far as it was based on different clauses), makes it clear that the Court was well aware of the different clauses on which the conclusions were based. In these circumstances it can, I think reasonably be said, in the first place, that if the reason for the decision in relation to the conclusion for specific implement did not relate to the whole basis on which it was sought, Lord Kinnear would have been expected to say so.

[39] More significantly perhaps, the principle of the decision would seem to apply to both of the clauses which the pursuers sought to enforce. Both clauses related to matter which the tenants contracted to do during the lease. The tenants did not in terms contract to come back after the lease and do works necessary to put, even the buildings, into a proper state of repair. This should have been done prior to the termination of the lease. Indeed both the clauses upon which the pursuer founded could be said to have required the tenants to carry out work so as to leave the property in a particular state.

[40] Nor is it, in my view, clear, as was suggested, that the language used by Lord Kinnear necessarily indicates that he had only in mind proposed implement of the clause relating to the working of the quarry. It has to be remembered that the conclusion sought the execution of "the necessary works of construction and repair, to put in proper order and condition......." everything referred to. It is in that context that Lord Kinnear begins by saying that "The pursuer seeks that the defenders shall be ordained to execute certain operations in terms of the lease". Against that background it is, in my view not at all clear that when later he refers to obligations for the proper working of the quarries or to the tenant having contracted to work in a certain way he is intending to confine his remarks to obligations under a particular clause.

[41] More generally it is, I consider, difficult to sustain (and thus to think that Lord Kinnear had in mind) a principled distinction between implement of so-called working conditions and terminal conditions. It was argued before me that a conclusion seeking implement of the former could readily be said to be one seeking to undo that which had been done, whereas a conclusion seeking to implement the latter would be one seeking to implement an obligation which remained to be done. If a so-called working condition obliged a tenant to do X, Y and Z during the course of a lease, and he failed to do Z, could be a conclusion for implement properly be understood as one seeking to undo that which had been done? Equally if a terminal condition required a tenant to restore property to a particular state and extensive works were done prior to the ish but were done badly, perhaps with too much new material being introduced, could a conclusion seeking to implement that clause properly be described as one seeking to do that which had not been done as opposed to one seeking undoing of that which had been done in breach? Further, it is not easy, satisfactorily, to define, so-called working and terminal conditions. Would it depend for example on the nature of the work or the length of the period over which the obligation extended? As to the, former would an obligation to maintain be different from an obligation to work? On which side of the line would fall a clause such as the clause in Sinclair which obliged maintenance and repair throughout the lease and required that the subjects be left in repair at the ish? It seems to me that Lord Kinnear did not seek to address questions such as these or to make a clear distinction between working conditions and terminal conditions because the reason for his decision (which applied to the whole basis on which the conclusion was founded) did not require him to do so.

[42] It has to be acknowledged, however, that what do give rise to some doubts are the obiter observations of the Lord President (Robertson) in A & J Faill v Wilson. That case related also to a lease for a quarry. In it, the pursuers sought implement, after termination of the lease, of a clause prescribing the way in which the quarrying in operations required to be carried out. The pursuers did not base their conclusion for implement on an obligation under which the tenant bound himself to remove from the subjects let at termination and to leave the workings and the ground in a particular state. The conclusion for implement was found to be incompetent. In his opinion, (with which Lord McLaren and Lord Kinnear concurred) the Lord President (Robertson) said, inter alia "Now, it is quite plain that what is asked in these particulars is not specific implement - it is undoing or redress". On any view the decision was consistent with Sinclair v Caithness Flagstone Company Limited, which had been decided shortly before by the same bench, together with Lord Adam, and which was referred to in argument. In addition, however, the Lord President began by stressing that, "It is not an action to enforce fulfilment of the sixth clause of the lease which prescribes the final duties of an outgoing tenant"; and later said "Where at the expiry of a lease which contains what is sometimes called a redding up clause, the landlord founds not on it but on violation of the course of working prescribed to the tenant during the whole course of his occupancy, the natural claim is for damages, and not for the execution of remedial works". Whatever he may have meant, however, these remarks were obiter, and cannot, I think, be taken as providing any clear indication of what his Lordship would have done if he had had to consider an action based solely, or in addition, on a clause such as that referred to.

[43] For these reasons, I am, with respect, unable to agree with the conclusions reached by the Lord Ordinary in Coventry v British Gas Corporation as to the restricted basis for the decision in Sinclair v Caithness Flagstone Company Limited. Although it is not necessary to go further - because the decision in Coventry v British Gas Corporation related to a specific clause requiring restoration of the field in question to a certain condition prior to the ish (which is certainly different from the sort of clause considered in the present case)- it would, I apprehend, have been difficult for his Lordship to have justified his decision if he had not read Sinclair v Caithness Flagstone Company Limited as being restricted in the way he was invited to do.

[44] In these circumstances, and applying the decision in Sinclair v Caithness Flagstone Company Limited, as I consider it falls to be understood, I do not think that the present conclusion for implement of Clause 2(33) is competent. What the pursuers are asking the defenders to do (namely to return to the subjects and put the pipelines etc into a particular state in which they should have been left) is to do something which they did not contract to do. The remedy in the circumstances is, in my view, one of damages. Applying the test referred to by counsel for the pursuers, they are, in my view, seeking to put themselves in a position which they would have been had the obligation they found on been complied with. What they are seeking can be described as redress or reinstatement, and not specific implement. The difficulty between any supposed distinction between working conditions during the term of a lease and terminal conditions is perhaps particularly highlighted in the present case. As counsel for the defenders argued, the words in Clause 2(33) requiring the defenders "quietly to yield up... at the expiration .....the fuel pipelines ......so repaired ......and kept as aforesaid" did not, so far as the last quoted few words are concerned, add anything to the obligation under, for example, Clause 2(8), binding the tenants to keep inter alia the pipelines throughout the lease in good and substantial repair and condition, and could even have been omitted. It was, in my view, not without significance that senior counsel for the pursuers was, when pressed, reluctant to say whether Clause 2(8) could, after the termination of the lease, have been the subject of a claim for specific implement standing the decision of Sinclair v Caithness Flagstone Company Limited.

[45] Deciding that Clause 2(33) could not at this stage be the subject of a conclusion for specific implement does not, I consider, offend against the general rule that, in Scots Law, specific implement is to be regarded as a primary remedy. Rather in my view, what the pursuers are seeking here (properly analysed) is not, strictly speaking, specific implement of an existing contractual obligation but redress for the failure of their former tenants properly to carry out their obligations as tenants during the lease. So deciding the matter would, I agree with senior counsel for the defenders, avoid the oddity that otherwise, the defenders, as former tenants, would be liable to be brought back to the premises to carry out works of repair etc at any time within the prescriptive period notwithstanding the termination of the Lease.

[46] In the whole circumstances I shall repel the first plea-in-law for the pursuers, and sustain the first pleas-in-law for the defenders and third parties to the extent of dismissing the first conclusion. Otherwise I will allow a proof before answer.