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PACCOR UK LTD AGAINST UNITED UK PROPCO 8 SARL [2021] ScotCS CSOH_124 (14 December 2021)
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[2021] CSOH 124,
[2021] ScotCS CSOH_124
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OUTER HOUSE, COURT OF SESSION
[2021] CSOH 124
CA138/19
OPINION OF LORD CLARK
In the cause
PACCOR UK LIMITED
Pursuer
against
UNITED UK PROPCO 8 SARL
Defender
Pursuer: Jones QC sol-adv; Brodies LLP
Defender: Garrity; DWF LLP
14 December 2021
Introduction
[1]
The pursuer is the tenant of premises, leased from the defender. The premises are
located in an industrial estate known as Brucefield Industry Park, Livingston. This action
concerns units 3 and 4 Young Square, in the industrial estate. These units are let under two
separate leases which have very similar terms. Another action (CA139/19) has been raised
by the pursuer in relation to units 5, 6, 7 and 8 Young Square, also let by the defender,
covered by a different lease. That lease contains terms which are also materially similar to
those in the leases for units 3 and 4. The two cases called together before me for a debate,
with each party challenging the relevancy and specification of the other's pleadings. There
2
are several common issues and a number of the decisions reached in this Opinion apply also
to the other action. My reasoning in respect of each of the points is set out below. As a
result, the Opinion in that other action merely summarises the decisions on the common
issues, although it also deals with additional matters in that case.
Background
[2]
The relevant terms of the leases for units 3 and 4 are considered when dealing with
each of the issues, but at this point it is convenient to note, in broad terms, certain key
provisions. Under each lease, the landlord is obliged to maintain insurance (clause 8.1.1).
Any "policy monies" are to be laid out in respect of repairing or rebuilding the premises
following insured risk damage (clause 8.1.4). If the premises or any part thereof are
destroyed or damaged by any of the insured risks, so that the premises are unfit for or
incapable of occupation or use then the rent and service charge, or a fair proportion thereof
according to the nature and extent of the damage sustained, shall be suspended until the
premises are rendered fit for or capable of such occupation or use by the tenants or until
the expiration of three years from the date of such destruction or damage (clause 8.3.1).
[3]
The pursuer occupied the premises until around December 2015. The leases
remained in force and the pursuer continued to pay the rent. The pursuer claims that
between 16 and 18 April 2019 travellers who had camped on the estate damaged each of the
units and in particular damaged parts of the premises covered by the defender's insurance
obligations. The damage is said to have been caused by malicious actions and theft. The
pursuer seeks the following orders: declarator that the damage occurred as a result of an
insured risk (which will result in abatement of rent and service charges); repayment of an
amount of rent paid after the damage; that the defender as landlord must lay out the policy
3
monies under the insurance policy; and declarator that if the premises remain unrepaired
the lease will come to an end. The defender argues that it has no such liability and the
remedies sought should not be granted. In its counterclaim, the defender seeks payment
of rent which the pursuer ceased to make as a result of the alleged damage to the premises.
Relevancy and specification issues raised by the defender
The pursuer's averments about damage to the premises
Submissions for the defender
[4]
The pursuer's pleadings about damage to the units were irrelevant and lacking in
specification. There was no proper distinction made between unit 3 and unit 4. Damage
to one did not mean that the other was damaged. The averments of damage to services, if
applicable to both units, must necessarily be to common services and therefore would not
form part of either of the subjects let under the two leases. No specification was offered
as to whether the items damaged formed part of the subjects let or were tenant's
additions/fixtures and fittings, which were not covered by the landlord's obligations.
[5]
Images of the premises showed that various items of equipment, such as a
transformer, an electricity sub-station and a water sprinkler hopper, did not form part of
the premises. The pursuer's pleaded case failed to take cognisance of the fact that the leases
specified what the premises comprised. The pursuer did not make clear whether allegedly
damaged items formed part of the premises for the purpose of the lease. In relation to each
unit, the lease defined "the premises", as including the landlord's fixtures and fittings and
services which exclusively served the subjects let. The clear intention was that common
services did not form part of the premises leased, which were in turn subject to the
insurance obligation. For further items (such as fixtures and fittings added by the tenant)
4
to fall within the insurance obligation, the landlord required to be notified of those items.
There were no averments of notification. Several licences for works were granted to the
tenant by the landlord for alterations by the pursuer, which included additional common
services. In the absence of clarity as to what was said to be damaged, it was impossible
to analyse whether damage was to the premises let and what that would mean for the
purposes of the tenant's use and enjoyment of the premises and the extent to which the
tenant might be entitled to an abatement of rent. Fair notice was not given. It is the
premises that have to be unfit for occupation or use. Here, full abatement was sought
but it was not clear why full abatement was appropriate.
[6]
In its pleadings the pursuer made reference to its expert reports, said to fully detail
the damage caused. However, the reports did not make any distinction between the leases
and did not apply the definition of the premises. The report from March 2020 dealt with
events in 2017, which had previously been averred but were no longer relied upon, and
identified damage to the external switchroom and transformer, affecting electricity supply.
The expert also assumed that the tenant's additions and alterations formed part of the
property. Even though the defender had made clear in its pleadings that there was an
issue in that regard, the matter was not dealt with. In the further reports lodged concerning
units 3 and 4 (but not units 5-8) reference was again made to damage to the electricity
supply.
[7]
The reference to a schedule which listed the damage, but not applying the definition
of the premises, meant that the defender was effectively being asked to figure out what
was relevant and what was not. For the pursuer just to say there were photographs of a
dilapidated building was not sufficient. It was necessary to identify when and in what
respect damage had occurred. Proper specification was not provided.
5
Submissions for the pursuer
[8]
The suggestion that the works carried out under the licences did not form part of
the premises for the purposes of the leases was a startling one. It was not advanced in the
defender's pleadings in both actions and it also contradicted the wording of the licence for
work agreements. Indeed, the defender made reference to those agreements in its pleadings
in both actions, in effect as additions to th e premises. The licences made clear that the tenant
bears the cost of any increased insurance premium as a result of the altered state of the
premises, indicating that the works done form part of the premises. The main point was
that the leases each contained full insuring and repairing obligations on the landlord. The
pursuer was offering to prove that the items listed in the pleadings and expert reports all
formed part of the leased premises.
[9]
In relation to common services, the pursuer was offering to prove that the miscreants
went into the premises and ripped out piping and wiring, sinks and water containers rather
than damaging items outside. The landlord had to put in place the insurance, paid for by
the defender as tenant, which the pursuer avers should have covered at least pipes and
electrical equipment inside the premises, whether that was original or added material under
the licences. Accession could be pertinent if something else was attached or done, not under
a licence. Lengthy pleadings were discouraged in commercial actions and fair notice was
given here.
[10]
The reports from March 2020 were no longer relied upon. The pleadings referred to
later reports. There were ample averments about the damage to the premises and the expert
reports listed the damaged items for each of the units. It was not for the experts to interpret
the lease. The defender's own expert had also examined the premises and must have seen
6
the voluminous evidence of damage. Reference was made to one report in which the expert
identified a lot of the damage to the premises. This contradicted the defender's point about
a lack of fair notice. The defender had advice on the issues of additions and alterations and
could challenge evidence led for the pursuer.
[11]
If the pursuer discharged the provisional onus to establish that damaged items were
parts of premises let, then the onus of rebutting that is on the defender. It was surprising
not to have an indication from the defender of what it was required to insure. It was not
for the pursuer to give a history of every single addition or alteration. Experts on each side
speak to a large amount of cable stripped out from inside the premises. The pursuer offered
to prove this formed part of the premises. The defender would require to show why it did
not. It was not for the pursuer to disprove averments not made against it. There was expert
evidence of the age of the wiring and other damaged items.
Decision
[12]
The terms of the lease for each unit regarding the insurance obligations of the
defender, as landlord, are clear. Clause 8 binds the landlord to insure the development
area and the premises, each of which are defined. As is obvious, fixtures or additions which
come to be made by the incoming tenant do not form part of the existing development area
or the premises. However, the following are included in the insurance obligations:
"8.1 (i)...and all fixtures of an insurable nature (including additions and fixtures
made by the Tenants and other tenants of the Development Area in accordance with
the provisions of their several leases so far as the Landlords shall have been made
aware of the same and of which, in the case of those made by the Tenants details and
an insurance reinstatement value shall have been given to the Landlords in writing
by the Tenants) against loss or damage by the Insured Risks...
(iii) ...(b) all boilers, heating plant and fixed mechanical equipment and apparatus
in or forming part of the Premises and the Development Area against breakdown,
7
damage and failure provided full details of such fixed mechanical equipment, if
installed by the Tenants, shall have been given to the Landlords by the Tenants
in writing".
[13]
The licences for works are also of relevance. While the wording of each of them is
not identical, they make the same point. It suffices to quote this example of what the tenant
undertook:
"To pay to the Landlords any increased or extra premium payable for insurance of
the Premises and any other adjoining or neighbouring premises against the risks
referred to in the Lease in consequence of the Works."
Thus, the defender as landlord is obliged to insure against loss or damage caused by
insurance risks not only in respect of the development area and premises as let at the
beginning of the lease, but also in respect of the stated additions and fixtures and plant
and equipment, subject to the notification requirements as set out. The pursuer as tenant
will require to pay any increased insurance premium in consequence of works which have
been licensed.
[14]
The pursuer's averments give reasonable notice of the damage and make reference
to the expert reports from September 2020, which list the individual points of damage. The
pursuer is contending that the damage did concern the subjects let under the lease. As I
understand it, the pursuer is proceeding on the basis that the items listed in the pleadings
and expert reports were either there from the outset or added by work done under the
licences. In relation to items which form part of the tenant's fixtures and fittings, the nature
and scope of these is a factual issue which can only be determined after proof. In relation to
any damage to common property, not forming part of the premises let, it is not clear to me
that the pleadings or the expert reports found upon any such damage. But if there is such
an issue it also requires to be dealt with at the proof. I do not regard it as necessary for the
pursuer to identify, in its pleadings, whether or not each item of damage was to the tenant's
8
fixtures or additions, or common parts, and to aver that appropriate notification had been
given to the landlord. It suffices that fair notice of the damage is given and these other
underlying details and issues, including the application of the terms of the leases and the
licences of works to the factual circumstances, can be dealt with at the proof. The fact that
full, rather than partial, abatement is sought is also something that falls to be dealt with in
evidence and submissions.
[15]
The expert reports from March 2020 referred to by counsel for the pursuer are not
relied upon. I do not accept that the pursuer's expert was required to carry out, or even be
advised upon, interpretation of the lease. On the other hand, the fact that the defender's
expert has embarked upon an analysis of the alleged damage and offered a view on fixtures
and fittings by the tenant, does not of itself assist the pursuer. It is the pursuer's pleaded
position upon which it needs to rely, but as I have noted that suffices for the case to go to
proof.
Intimation of damage
[16]
The insurance risks include "malicious damage" (clause 1.8). When the premises or
any part of them are destroyed or damaged by insurance risks, the pursuer is required "to
intimate that fact to the landlords as soon as reasonably practicable" (clause 8.2.3).
Submissions for the defender
[17]
The pursuer's averments about purported intimation to the defender of insured risk
damage were irrelevant. Intimation required to be either in writing (under clause 9.11) or,
if not, at least more formal than brief discussions between two lay persons. It had to be
sufficiently clear and from, for example a solicitor or principal person in the pursuer
9
company, so that the defender would be under no misapprehension that the tenant
considered itself free of its repairing obligation in respect of that damage or destruction.
Submissions for the pursuer
[18]
The defender had now conceded that intimation does not necessarily mean a written
notice in terms of clause 9.11 of each lease. That was correct, there being no basis in the
terms that written notice was required. There were no prescribed formalities and whether
there was intimation could be established by reference to the facts and circumstances:
Christie Owen & Davies Plc v Campbell [2009] SC 436. There was no need to set out in the
pleadings the content of the discussion that took place.
Decision
[19]
It is clear that the terms of the lease occasionally use the word "notice" but in the
context of clause 8.2.3 the reference is to "intimation". No basis exists for concluding that
these words were intended to mean the same thing. I adopt and follow the view reached by
the Inner House that where there are no prescribed formalities the word "intimate" simply
means "make known": Christie Owen & Davies Plc v Campbell (at para [14]). The pursuer
avers that "on 16, 17 and 18 April 2019 the Pursuer's David Gordon liaised with the
Defender's David Fry" intimating the damage caused to the premises on those dates. There
is also a reference to correspondence between the parties' agents at that time. The issues of
what is said to have been made known, when, by whom and to whom, are all matters for
proof. The defender's argument on irrelevancy of the averments in question is not accepted.
10
Implied term
[20]
The pursuer avers that: "It was an implied condition of the Leases that the Defender
would take reasonable care to prevent squatters remaining in the Park".
Submissions
[21]
The pursuer's position was that, as averred, the defender was responsible for the
maintenance and security of the park. The averment about reasonable care concerned the
standard of care which the defender required to meet in dealing with security and hence
was not about the existence of a separate implied term. The defender argued that there was
no proper basis for such an implied term.
Decision
[22]
In my view, the averments of the pursuer regarding an implied condition are
irrelevant. If there already exists a contractual duty in respect of security arrangements then
it is that term that has to be construed and applied. However, the pursuer does not identify
any specific term in that regard, other than a reference to clause 9.13 (which does not deal
with security) and a broader reference to schedule 4. The latter does contain some reference
to security, in paragraph 15, which requires the landlord to provide such other services
which, in its opinion, "it is reasonable...to provide for maintaining and securing the facilities
and amenities of the Development Area". That contractual term sets its own standard. No
other specific term was identified. I therefore accept the defender's position on the
irrelevancy of this point.
11
Waiver
[23]
In its answers to the defender's counterclaim, the pursuer relies upon the terms of
a letter dated 2 September 2019, from the defender's agents to the pursuer's agents, as an
express waiver of any right to insist upon payment of rent and service charge (answer 12).
The letter refers to receipt of a draft summons and goes on to say:
"The First lease and the Second Lease
We note your comments regarding the above Leases and the averred overpayments
by the Tenant. Our client does not agree that these were overpayments. The Tenant,
whether consciously or mistakenly, opted to continue to pay rent and service charge
under both the First Lease and the Second Lease. They later chose to exercise their
option to abate both rent and service charge. Time was of the essence when choosing
to exercise this right and they failed to exercise it immediately.
The Landlord has not taken any issue with the choice of the Tenant to exercise this
right, albeit they have failed to do it timeously. The rent and service charge paid by
the Tenant up until the cessation of payments will not be returned by our client."
The First and Second Leases referred to are th e leases in respect of units 3 and 4.
Submissions for the defender
[24]
Such a waiver would amount to a fundamental variation of the lease. It would
effectively entitle the pursuer to occupy the premises free of charge for the remaining
duration of the lease. The letter was incapable of being construed as waiving or abandoning
the defender's right to future payments under the lease. Moreover, the lease was a contract
and to vary it unilateral abandonment was not allowed; there required to be a written
agreement varying the lease. In terms of section 1(2) of the Requirements of Writing
(Scotland) Act 1995, express waiver of a real right to obtain rent and service charge would
have required formal writing between the parties in order to vary the lease in that respect.
12
In any event, on no analysis could the letter be taken to amount to an express waiver of rent
and service charge, effectively amounting to abandonment of the lease by the landlord.
Submissions for the pursuer
[25]
The right being waived was the right to payment of the rent and service charge
during the period when it should be suspended. The relevant terms of the Requirements of
Writing (Scotland) Act 1995 were met, as the document was signed by an authorised agent.
A waiver is a unilateral act and it does not require an acceptance. This was not being
characterised as an amendment or variation of the lease. The terms of the letter sufficed to
establish waiver.
Decision
[26]
As is stated in Reid and Blackie, Personal Bar (2006) (at paragraph 3-08 et seq), waiver is
the voluntary abandonment of a right. It requires the creation of a misapprehension that the
right is not to be enforced. It can be constituted by the abandonment of a defence. Waiver is
a matter of fact and the conduct or statement in question requires to be viewed objectively in
order to ascertain whether it is consistent with a continuing intention to exercise the right
(paragraph 3-10). As is also stated in the same work (at paragraph 3-43) a waiver of a real
right in land must comply with the formal validity requirements of section 2 of the 1995 Act.
[27]
Parties' submissions proceeded upon the basis that this issue concerned waiver of a
real right in land. While a tenant's right in a lease is a real right in land, it was not explained
to me why I should view the landlord's right to payment of rent as equating with a real right
for the purposes of the 1995 Act. But even if for some reason the provisions of the Act are
relevant, its requirements are met in the signed letter. In addition, waiver is a unilateral act
13
and no formal agreed variation of the lease was required: see Minevco Ltd v Barratt Southern
Ltd 2000 SLT 790 at 791, where it was observed in the Inner House that counsel accepted that
the requirements of averment and proof for a case of waiver were less exacting than for a
variation of the term of a written contract.
[28]
However, the fundamental point is the proper interpretation of the wording of the
letter. It was sent following receipt of the draft summons. Its terms are not, when viewed
objectively, sufficient to mean that there was a voluntary abandonment of a right or a
defence. It focuses principally upon overpayments. The words "the Landlord has not taken
any issue with the choice of the Tenant to exercise this right" merely refer to what the
defender has not, up to that stage, done. It would be inappropriate to view those words
as meaning (as the pursuer asserts) that the defender would not in the future, including in
defence to the action just intimated to it, take any such issue and had waived its right to
payment of rent and service charge during the alleged period of abatement. The pursuer's
averments on waiver are therefore irrelevant.
Relevancy and specification issues raised by the pursuer
Duty to exercise reasonable care
[29]
The defender avers:
"Ans 8 The pursuer failed to put in place adequate security measures to prevent
unauthorised break-ins at the Premises over a lengthy period of time. The pursuer
failed to take adequate measures to prevent or deter damage, destruction or theft
during the occurrence of any break-in. As a result, travellers took entry to the
Premises in April 2019 for a period of 2-3 days and caused damage to the Premises.
This was not the first or only time that the pursuer failed to take reasonable care of
the Premises such that travellers took entry to the Premises and caused damage...
Ans. 9 The pursuer ceased its business operations at the Premises in or around
December 2015, and has not occupied the Premises thereafter. The Premises were
subject to break-ins and/or damage/destruction during 2016, 2017, 2018 and 2019
14
Believed and averred that the pursuer has failed to take reasonable care of the
Premises since it vacated the Premises in December 2015. Further believed and
averred that the averred damage to/destruction of the Premises would not have
occurred had the pursuer taken reasonable care of the Premises. In the
circumstances condescended upon, (a) the obligation to make good any damage
to the Premises rests with the pursuer and is not an obligation of the defender's in
terms of the Leases and (b) the pursuer is not entitled to any rent or service charge
abatement under the Leases".
Submissions for the pursuer
[30]
The duty was said to arise from an implied term, but the lease terms made clear what
liabilities arose and in particular the liability of the defender for matters covered by the
landlord's insurance obligation. That insurance obligation did not exclude damage caused
by negligence on the part of the tenant. Further, the defender offered no explanation as to
how it suffered any loss or damage in circumstances where it was contractually obliged to
have put in place insurance cover, paid for by the tenant, that would indemnify the defender
in respect of such loss and damage.
[31]
The insurance premium was paid by the pursuer as tenant. The obligation to repair
was on the tenant. But each lease indicates that if damage is caused by an insured risk then
the tenant is relieved of that repairing obligation because the landlord has the insurance to
address that matter. A problem with the defender's position was that if there is a duty of
reasonable care on the pursuer, the logical outcome is that the landlord is entitled to require
the tenant to repair and keep the insurance proceeds for himself. The leases say in terms
that if the tenant has done something or not done something to cause the insurers to void
the policies then the repairing obligation falls back on the tenant. There was no suggestion
that the tenant has done anything to cause the policies not to be paid out. The broad thrust
of the defender's averments was that the pursuer owed such a duty, was in breach of it, and
so the obligation to make good the damage rested with the pursuer, who had no entitlement
15
to abatement or suspension of rent, and there was no obligation on the defender to reinstate
or repair.
Submissions for the defender
[32]
There was long-standing authority supporting, at common law, an implied
obligation on the part of the tenant to take reasonable care of the premises, including
commercial premises. That common law duty applied unless it was excluded, either
expressly or clearly by implication. The landlord's implied repairing obligation was
excluded but there was no exclusion of the tenant's implied obligation on repair. Parties
having contracted for insurance was not a displacement of any implied obligation. The
insurer might wish to exercise rights of subrogation. If the defender was to be made liable,
that loss was caused by the pursuer's breach of duty. So far as fair notice was concerned,
the defender's pleadings were adequate and made clear why there had been a breach of
the duty.
Decision
[33]
In terms of clause 6.6, the pursuer, as tenant, was obliged
"...to repair, maintain, and, if necessary, reinstate, renew and keep the exterior and
interior of the Premises and all additions thereto and all boilers, heating plant and
fixed mechanical equipment forming part of the Premises (including the Landlords'
fixtures belonging to the Premises) and all drains, soil and other pipes, sewers,
sanitary and water apparatus in so far as exclusively serving the Premises and all
walls, fences and railings, forming part of the Premises and the whole parts and
pertinents of the Premises in good and substantial repair and maintained, tidy and
cleansed in a satisfactory condition in every respect, which obligations shall subsist
irrespective of the cause of damage or destruction necessitating such repair, renewal
or reinstatement as aforesaid. Provided that to the extent only that the obligations
under this Clause are obligations of the Landlords under Clauses 7 or 8.1 hereof,
the Tenants shall not be liable under the foregoing provisions of this Clause."
16
Under clause 7.2, the landlord has a duty to comply with its obligations relating to insurance
contained in clause 8.1. The insurance obligations set out in clause 8.1.1 include to keep
insured
"...for such sum as the Landlords shall (acting responsibly) from time to time
consider sufficient to cover the cost of completely rebuilding the same ...the
Development Area and the whole erections of which the Premises form part..."
As noted earlier, that clause goes on to include additions and fixtures made by the tenants
and it then states:
"Provided that any shortfall in such insurance cover shall be the responsibility of the
Landlords (subject however to the Tenants fully and timeously complying with their
obligations under Clause 8.2.2)."
Under clause 8.2.1, the pursuer was obliged to pay the insurance premium. Clause 8.2.2
states:
"8.2.2 Not to do or suffer to be done any act, matter or thing whatsoever whereby
the insurance of the Premises, the Development Area, the whole erections of which
the Premises form part and any fixtures of an insurable nature or of any adjoining or
contiguous property belonging to the Landlords shall be made void or voidable in
whole or in part or whereby the insurers may decline to cover any of the Insurance
Risks or whereby the premiums payable in respect of such insurance shall be
increased beyond the normal rate; and in the event of default by the Tenants of the
provisions of this Clause 8.2.2 but without prejudice to any other remedy of the
Landlords in respect thereof, to make good any shortfall in the proceeds of such
insurance and any increase in such premiums."
[34]
The principle that the common law position on a particular matter can be altered or
qualified by the terms of a lease, whether expressly or impliedly, is well-recognised in the
authorities. In this case, the landlord has to take out the insurance cover and the tenant pays
the premium. Clause 6.6 of the lease imposes an obligation on the tenant to repair, which is
not qualified by only having to do so where the tenant has not acted with reasonable care.
The obligation applies regardless of the cause of the damage. It is of course subject to the
proviso that the obligation does not apply to insurance risks which are to be dealt with by
17
the landlord under clause 8.1. If, however, the tenant has caused the insurance to be void or
voidable or caused the insurers to decline to cover any of the risks, clause 8.2.2 requires the
tenant to make good any shortfall.
[35]
The effect of the defender's approach, if a duty to exercise reasonable care by the
tenant is implied in these leases, is that breach of that implied term gives rise to a loss on the
part of the landlord. That loss is to have to make payment to the tenant when the landlord
has not carried out its insurance obligations. It would make no commercial sense for the
landlord to be contractually liable in that respect but to be able to avoid that liability by
reliance upon this implied term. That is particularly so when the tenant is liable for all
repairs, but is relieved from that liability in respect of insured risks to be insured by the
landlord, the premium for which is paid by the tenant. The tenant's payment of the
insurance premium to relieve it of liability for repair following insured risks would be
rendered meaningless if the tenant became liable under this implied term. The tenant
would be liable for the landlord's loss arising from the landlord's own breach of the lease
obligations. In my view, the common law obligation on the tenant to exercise reasonable
care is impliedly excluded, in respect of acts or failures to act which give rise to the need for
repairs.
[36]
In any event, there is no fair notice of any alleged breach of a duty to exercise
reasonable care. The pleadings refer to the pursuer having failed to take adequate measures
to prevent or deter damage, destruction or theft during the occurrence of any break-in. Fair
notice is required of what measures ought to have been taken and why they would have
prevented the damage. The reference in answer 9 to what is "believed and averred" in
relation to breach of duty is unsupported by any proper basis elsewhere in the averments.
18
[37]
The reference in submissions for the defender to the insurer perhaps wishing to rely
upon a right of subrogation to seek recovery from the pursuer is of no relevance for present
purposes. In any event, it does not in my view arise where the tenant has paid for the
insurance cover and is contractually entitled to rely upon the landlord having performed its
insurance obligations. If the insurer wished to avoid liability for damage caused by a failure
to exercise reasonable care on the part of the tenant, the wording of the policy could no
doubt have sought to achieve that end, although that would be rather unlikely.
Written intimation
[38]
As noted earlier, the defender makes reference in its averments in relation to
intimation to clause 9.11, which provides that "Any notice under this Lease shall be in
writing."
Decision
[39]
For the reasons given above, intimation is not the same as notice and accordingly the
defender's averments on clause 9.11 are irrelevant.
The defender's purchase of the subjects
[40]
The defender avers (in answer 10):
"Further explained and averred that the defender acquired the landlord's interest in
the Premises on the basis that the pursuer had continued to pay the rent and service
charge prior to its acquisition, and would continue to do so thereafter. Further
explained and averred that, in the circumstances averred, it would be inequitable to
compel the defender to repay any rent and service charge already paid by reference
to the Leases."
19
Counsel for the pursuer submitted that while equitable factors can be relevant to unjustified
enrichment, the mere fact that the pursuer had continued to pay the rent and service charge
could not make it inequitable that it be repaid. Mistakenly paying sums was not a basis for
excluding recovery.
[41]
On behalf of the defender, it was submitted that a party who acquires a commercial
interest is buying it for a financial return. In this case that was payment of rent and
fulfilment of the tenant's other obligations. An unjustified enrichment claim is fact-sensitive
and relevant considerations were set out.
Decision
[42]
I accept the submission for the defender that unjustified enrichment is an issue that
should be decided after hearing evidence on the factual circumstances. This argument for
the pursuer, seeking exclusion of the averments from probation, is therefore rejected.
The defender's averments about the pursuer's fixtures and fittings
[43]
As noted earlier, the defender has averments about the licenses for works. Counsel
for the pursuer argued that there was no notice that the defender would take the line that
these additions did not form part of the premises. If the defender wished to establish that
certain fixtures and fittings were not part of the premises, its pleadings should identify those
items. There was no basis for the defender leading evidence on such matters.
[44]
Counsel for the defender referred to averments (in answer 1) about the landlord
having no obligation to insure additional or tenant's fixtures and fittings/plant and
equipment unless and until the conditions of clauses 8.1.1(i) and/or clause 8.1.1(iii)(b) are
20
met. It is also averred that such fixtures and fittings do not form part of the premises in any
event, under reference to clause 1.12.
Decision
[45]
Having regard to the defender's averments, there is no merit in the assertion for the
pursuer of a lack of fair notice on this matter.
Disposal
[46]
I shall fix a by-order hearing to deal with further procedure and to determine the
specific averments which require to be excluded from probation as a consequence of my
findings above. In the meantime, I reserve all questions of expenses.