Commercial Property

Trygort (Number 2) Limited v. UK Home Finance Limited and Another [2008] CSIH 56

Thu, 06 Nov 2008 10:57:00 GMT

Appeal from the Sheriff Court:- The appellants let to the first respondents commercial subjects at 110 West George Street, Glasgow, for a period of three years from 28 May 2004. The second respondents were guarantors of the tenant's obligations. On 24 December 2005 the first respondents vacated the subjects. In this sheriff court action the appellants sought inter alia declarator that the first respondents were contractually bound to use and occupy the subjects until 27 May 2007 and to pay the rent until that date and by vacating the premises the first respondents were in breach of the lease. It was submitted on behalf of the first respondents that they were entitled to vacate the premises by virtue of a notice which they had given the appellants to exercise a break option in terms the lease. At debate the sheriff dismissed the action, holding that there were no relevant averments to indicate that the first respondents were not entitled to exercise the option and the sheriff was of the view that although the ordinary meaning of the language of the clause favoured the contentions of the appellants this was a case where the ordinary meaning could not be given to the words used. At appeal both parties submitted that the words used were capable, as a matter of ordinary language, of only one meaning, albeit the parties differed as to what that was. Here the court considered the construction of the relevant clause and the interpretation to be given to it.

Scottish & Newcastle plc (Original Respondents and Cross-appellants) v Raguz (Original Appellant and Cross-respondent), [2008] UKHL 65

Wed, 29 Oct 2008 16:18:00 GMT

Under common law, a tenant agrees to pay the rent in terms of a lease whether or not he has assigned the lease to someone else. This rule was changed by s.5(2) of the Landlord and Tenant (Covenants) Act 1995, which provides that if a tenant assigns the leased premises, he becomes released from his covenants. However, this change only applies to tenancies granted after the Act came into force in January 1996. The common law continues to apply to earlier tenancies, but subject to the restrictions contained in ss.17 – 20 of the 1995 Act.

s.17(2) states that the former tenant shall not be liable to pay the rent unless, within the period of 6 months beginning with the date when the charge becomes due, the landlord serves on the former tenant a notice informing him (1) that the charge is now due; and (2) that in respect of the charge, the landlord intends to recover from the former tenant the amount specified in the notice.

s.17(4) states that where the landlord has served a notice under s.17(2), the amount which the former tenant is liable to pay shall not exceed the amount specified in the notice unless -(a) his liability is subsequently determined to be for a greater amount, (b) the notice informed him of the possibility that the liability would be so determined.

Scottish and Newcastle (S&N) were the original tenants of premises under two leases dated 1967 and 1969. The leases contained provisions for rent review every 14 years. S&N assigned the leases to Mr Raguz who also assigned the leases. One of the assignees then defaulted on the rent. In 1999, the landlord served several s.17(2) notices on S&N who paid the arrears.

Rent reviews were commenced in 1995 and 1996. They were concluded in 2000 and 2001. The landlord then served further notices on S&N to recover the backdated increases. S&N paid the increased sums and sought to recover the sums from Mr Raguz. Mr Raguz argued that he was not liable to pay as S&N should not have paid the landlord. He argued that the notices should have been served within 6 months of the rent review dates in 1995 and 1996.

Therefore, the question in this case was whether, for the purposes of s.17(2), an increase under a rent review was to be treated retrospectively as having become due from the commencement of the rent review period, thereby triggering the six month period during which the landlord must serve a notice on the former tenant or lose the right to claim under the covenant.

Mr Raguz argued that the increased rent became due on the rent review date. S&N argued that the increased rent became due when it was agreed. The Court of Appeal held that the sums were due on the review date. This placed an administrative burden upon landlords who then had to serve notices within six months of each date that the rent fell due until a rent review had been agreed, even if the tenant was not in arrears. The Court of Appeal recognised the existence of this administrative burden but concluded that it was an "unintended anomaly of the legislation". S&N appealed.

The House of Lords unanimously allowed S&N’s appeal stating that the Court of Appeal’s decision was a "ridiculous conclusion”. It held that s.17 notices need only be served within 6 months of the outcome of the rent review.

Style Menswear Limited for a Suspension of a Charge for Payment and for Interdict and for Suspension and Interdict Ad Interim [2008] CSOH 149

Wed, 22 Oct 2008 09:39:00 GMT

The petitioners are tenants of Unit 25, St Enoch Centre, Glasgow and the respondents are the landlords. The respondents sought to execute diligence against the petitioners in respect of two quarters unpaid rent and a charge was served on 23 September 2008. On 7 October 2008 the petitioners sought and obtained an order suspending the charge ad interim and now sought an order for interim interdict to prevent the respondents and all others acting on their instructions from doing further diligence or raising any other legal proceedings on the basis of "the pretended certificate" of sums allegedly due by them. It was submitted on behalf of the petitioners that there was a prima facie case that the respondents were in breach of the lease and that that breach had caused them to suffer loss. It was further submitted that the balance of convenience favoured the granting of interim interdict. It was submitted on behalf of the respondents that the petitioners had not made out a prima facie case and the order of 7 October suspending the charge should be recalled. Here the court considered whether the petitioners had shown they had a prima facie case and whether the balance of convenience favoured them.

Cathay Loon Fung Ltd v. Purewal Enterprises Ltd [2008] CSOH 129

Tue, 09 Sep 2008 18:19:00 GMT

The pursuers are the tenants of a restaurant on Sauchiehall Street, Glasgow in a lease between themselves and the defenders, the heritable proprietors and landlords of the premises, dated 30 August 2005. The defenders served on the pursuers a pre-irritancy notice giving the pursuers notice that the lease might be terminated by them if rent allegedly due in terms of the lease was not paid within a period of 14 days. In this action the pursuers sought declarator that they were entitled to use and occupy the premises and for interdict prohibiting the defenders or anyone on their behalf from performing any act interfering with the pursuers right to use and occupy the premises. On 11 June 2008 interim interdict was granted by the Lord Ordinary in terms of the summons. On 1 July 2008 the defenders' agents served an irritancy notice on the Company purporting to terminate the lease of the premises. The notice was founded upon the failure to pay the sums referred to in the pre-irritancy notice and also upon the apparent insolvency of the Company as evidenced by the appointment of a provisional liquidator who took the view that the grounds of irritancy relied upon by the defenders in the notice could not be purged and returned the keys to the premises to the defenders. Here a minute was lodged on behalf of the pursuers craving the court to ordain an office holder of the defenders to appear personally at the bar of the court to explain the defenders' breach of interdict and to inflict upon the defenders such punishment as the court saw fit in the circumstances. Here the court considered whether the defenders' action in serving an irritancy notice was in breach of the interim interdict granted on 11 June 2008.

Oriental Express (Scotland) Ltd v. Purewal Enterprises Ltd [2008] CSOH 130

Tue, 09 Sep 2008 18:16:00 GMT

The pursuers are the tenants of a takeaway in Larkahhall in a lease between themselves and the defenders, the heritable proprietors and landlords of the premises, dated 4 February 2008. The defenders served on the pursuers a pre-irritancy notice giving the pursuers notice that the lease might be terminated by them if rent allegedly due in terms of the lease was not paid within a period of 14 days. In this action the pursuers sought declarator that they were entitled to use and occupy the premises and for interdict prohibiting the defenders or anyone on their behalf from performing any act interfering with the pursuers right to use and occupy the premises. On 11 June 2008 interim interdict was granted by the Lord Ordinary in terms of the summons. On 1 July 2008 the defenders' agents served an irritancy notice on the Company purporting to terminate the lease of the premises. The notice was founded upon the failure to pay the sums referred to in the pre-irritancy notice and also upon the apparent insolvency of the Company as evidenced by the appointment of a provisional liquidator who took the view that the grounds of irritancy relied upon by the defenders in the notice could not be purged and returned the keys to the premises to the defenders. Here a minute was lodged on behalf of the pursuers craving the court to ordain an office holder of the defenders to appear personally at the bar of the court to explain the defenders' breach of interdict and to inflict upon the defenders such punishment as the court saw fit in the circumstances. Here the court considered whether the defenders' action in serving an irritancy notice was in breach of the interim interdict granted on 11 June 2008.

Gallagher (Valuation Officer) (Respondent) v Church of Jesus Christ of Latter-day Saints (Appellants), [2008] UKHL 56

Wed, 30 Jul 2008 20:08:00 GMT

This appeal concerns the assessability for non-domestic rating of a group of buildings belonging to the Church of Jesus Christ of Latter-Day Saints in Lancashire. The main building in this dispute is the Temple.

The Valuation Officer’s case is simple in that he says that the Temple is not a place of “public religious worship”, and therefore not exempt, because it is not open to the public. The right of entry is reserved to certain members of the Mormon Church called the Patrons.

The appellants argue that a “place of public religious worship” does not have to be open to the public. What is required is only “congregational worship”.

The House had already considered this question in a previous case (Church of the Jesus Christ of Later-Day Saints v. Henning (Valuation Officer) [1964] AC 240) in which it was held that the words “place of public religious worship” could not apply to places used for religious worship from which the public was excluded.

The House held that even though subsequent legislation had come into force since the 1964 case, it seemed inconceivable that Parliament did not intend the same phrase to carry the same meaning which it had been given in the Henning case. Consequently, the Henning case was conclusive against the appellants on this point.

The appellants also argue that a different construction is required by s.3 of the Human Rights Act 1988. The exclusion of all but the Patrons is a manifestation by the Mormons of their religion. Therefore, to deny them exemption on that ground would be to discriminate against them on grounds of religion, contrary to arts.9 and 14 of the Convention.

The House held that in order to discriminate on grounds of religion, the alleged discrimination must fall “within the ambit” of a right protected by art.9 – in this case the right to manifest one’s religion. In this case, the liability of the Temple to a non-domestic rate would not prevent the Mormons from manifesting their religion. Having said that, if the legislation imposed rates only upon the Mormons, the House would have regarded that as being within the ambit of art.9 even if the Mormons could easily afford to pay them. However, the present case is not one in which the Mormons are taxed on account of their religion. It is only that their religion prevents them from providing the public benefit necessary to secure a tax advantage. That is an entirely different matter.

Further, even if the case could be regarded as one of indirect discrimination, it was justified on the ground that Parliament must have a wide discretion in deciding what should be regarded as a sufficient public benefit to justify exemption from taxation.

The Church’s alternative argument is that the Temple is a church hall or similar used in connection with another building which admitted the public and was accepted as a place of public worship. This argument was rejected on the grounds that the Temple was far too important in the life of the Mormon Church to be described as being similar to a church hall being used in connection with another building.

The House of Lords unanimously dismissed the appeal.

Doherty (FC) (Appellant) and others v Birmingham City Council (Respondents), [2008] UKHL 57

Wed, 30 Jul 2008 11:39:00 GMT

The question in this case is whether a local authority can obtain a summary order for possession against an occupier of a site which it owns and has been used for many years as a gipsy and travellers’ caravan site. His licence to occupy the site has come to an end. He has no enforceable right to remain there under English property law. But he claims that his removal would violate his rights under art.8 of the ECHR.

The respondent in this case asserted that it required vacant possession of the site to carry out essential improvement works. Once the works were completed the site was to be managed as temporary accommodation for travellers. Genuine travellers, it was said, were currently deterred from going on the site because of the presence there of the appellant and his family. As a result the site was underutilised. This had led to unauthorised encampments elsewhere in the area. It should be noted that the claim was not based on any allegation of misconduct on the part of the appellant or any members of his family, nor was it alleged that the licence agreement had been breached. It was based on the respondent’s judgment as to the appropriate use of the site for travellers. The appellant maintained in his defence that the respondent was only entitled to an order for possession if it was proportionate in all the circumstances of the case, and that in the circumstances of his case this test was not satisfied. He relied, inter alia, on his right to respect for his home under art.8 and on the respondent’s duty not to act in a way which is incompatible with a Convention right under s.6(1) of the Human Rights Act 1998.

The Birmingham District Registry of the High Court found in favour of the respondent. In doing so, the judge did not form any view about the merits of the justification that the respondent had given for seeking possession. He held that the appellant could not rely on the provisions of the Human Rights Act 1998 or on art.8 of the Convention. However, he did not think that there were factual disputes between the parties such as to make judicial review inappropriate. The judge gave permission to appeal and certified the case as suitable for an appeal direct to the House of Lords.

The case did, in fact, go to the Court of Appeal where the appellant’s appeal was dismissed.

The House of Lords unanimously allowed the appeal. The House stated that the case should be remitted to the judge in the High Court so that he could review the reasons that the respondent had given for serving a notice to quit to obtain vacant possession of the plots that the appellant and his family occupied. It would be for the judge to resolve any dispute that he needed to resolve about the facts and, having done so, to determine whether the decision to terminate the appellant’s licence on the grounds stated in its particulars of claim, and having regard to the length of time that the appellant and his family have resided on the site, was reasonable. If he was satisfied that this requirement had been met he would have to make a possession order. There would be no answer to the respondent’s unqualified right to recover possession. If he was not satisfied, he would have to decline to make the order unless or until a justification that met that test had been made out.

Luigi Romano v. Standard Commercial Property Securities Ltd & Atlas Investments Ltd [2008] CSOH 105

Thu, 24 Jul 2008 10:21:00 GMT

Debate:- This action concerned heritable rights attaching to two adjacent tenement buildings on the west side of Buchanan Street in Glasgow. Here the pursuer sought a declarator that he had:- "A heritable and irredeemable right to attach to the subjects known as the ground or upper ground floor of the tenement 209 Buchanan Street, Glasgow...a shop front, including fascia." At debate the first and second defenders submitted:- (1) that their first plea-in-law of no title and interest to sue be sustained; (2) that the pursuer's case based upon the existence of a servitude was irrelevant, there being no servitude of "signage" in the Law of Scotland; and (3) that the pursuer's case based on prescription was irrelevant as the pursuer required to aver that the use of the purported servitude was not only continuous and uninterrupted but that it was made in assertion of its existence as a right. On behalf of the pursuers it was submitted that a proof before answer be allowed in that the pursuers had made out a relevant case of possession for the requisite twenty years and the question of whether the facts demonstrated a possession as of right or mere tolerance was a matter for proof. Here the court considered whether the pursuer had title to sue and whether the pursuer could have a prescriptive servitude right to use that part of the external wall as a shop front.

HOLLAND HOUSE PROPERTY INVESTMENTS LIMITED v. NORNA FORSYTH CRABBE+J. EUAN EDMENT [2008] CSIH 40 XA35/07

Mon, 07 Jul 2008 10:01:00 GMT

First Division, Inner House, Court of Session. Appeal of decision of the sheriff principal who upheld a previous interlocutor of the sheriff at Glasgow by which interlocutor the sheriff had granted decree against the defenders for payment to the pursuers of the sum of £49,725,with interest. The sum represents backdated rent said to be due by the appellants under a least of premises occupied by them as tenantsof a property of which the respondents are the landlords. Having failed to agree the level of rent, both parties had instructed an independent surveyor, in terms of their own Lease agreements, to set an appropriate rent. Disputed whether the independent surveyor had in fact become an arbiter adn ,if so, whether he breached the rules of natural justice. Whether his decision was binding on the parties. Whether the sheriff principal should have granted a proof before answer on these issues. If proof before answer allowed, whether any material, other than the lease, would fall to be considered.

Possfund Custodian Trustee Limited v. Kwik Fit Properties Limited [2008] CSOH NUMBER79

Thu, 29 May 2008 15:20:00 GMT

Landlord/Tenant:- In this action the pursuers were the landlords and the defenders were the tenants of premises in Edinburgh. In the past the premises were a garage and had underground storage tanks for fuel. On 30 October 2007 the pursuers advised the defenders that they wished to make investigations into the solum of the premises in order to ascertain whether there had been any contamination of it from the storage tanks. The defenders contended that the pursuers had no entitlement to carry out the intrusive examination and refused permission for the proposed works. In this action the pursuers sought declarator that the defenders were obliged to permit the pursuers to enter the subjects "to inspect and examine the whole premises (including the solum of the premises and the underground tanks situated therein) in order to view the state of repair and condition thereof and, in particular, to drill five shallow boreholes and a single deep rotary borehole within the premises in order to inspect and examine the the condition of the solum of the premises." Here the court considered whether such works were permissable in terms of the lease, in particular, with regard to the clause of the lease which required the tenant "To permit the landlord and its agents at all reasonable times with or without workmen on giving 48 hours' written notice (except in emergency) to the tenant to enter upon the premises generally to inspect and examine the same, to view the state of repair and condition thereof and to take a schedule of the landlords' fixtures and of any wants of compliance by the tenant with its obligations hereunder".

Wolanski & Company Trustees Limited v. First Quench Retailing Limited [2008] CSOH 50

Thu, 27 Mar 2008 11:40:00 GMT

Debate:- The pursuer was the heritable proprietor of premises at 81-85 Renfield Street, Glasgow, and succeeded to the landlord's part of a lease of those premises. The defender was vested in the tenant's part of that lease. Subsequently the defender sublet the premises to a company known as Big Mammy K Ltd. Thereafter Big Mammy K Ltd assigned its interest in the sublease to a company known as Soulband Ltd. Under the provisions of the lease the pursuers' consent was required to any assignation of the tenant's interest under the sublease. Thereafter the premises were occupied without right or title by a company known as Degreefresh Ltd who were evicted on 15 June 2005. However, notwithstanding the removal of Degreefresh Ltd, the persons who had been in occupation continued to occupy and trade from the premises as an Italian restaurant. The pursuer began summary cause proceedings for removal of the occupiers on 27 June 2005 and the occupiers removed from the premises voluntarily and the proceedings by the pursuer were dismissed. The pursuer thereafter raised an action in which they sought:- (1) declarator that the defender was tenant of the premises that were the subject of the lease; (2) declarator that the defender was bound to use and occupy the premises until 31 July 2010 or until the lease was lawfully terminated or assigned; and (3) declarator as to the amount of rent from 1 August 2001 onwards, decree ordaining the defender to execute a minute of agreement recording that rent, and payment of arrears of rent. The defenders lodged defences to the action and here at debate the pursuers submitted that the defender's averments were irrelevant.

Reid Furniture v Lothian Assessor [2008] CSIH 4

Thu, 17 Jan 2008 13:24:00 GMT

Appeal – Property valuation – Assessors valued retail property at net annual value (NAV) of £471,500. Following a Valuation Appeal Committee Hearing the assessors reduced the valuation to £426,500 NAV. The appellant appealed against that decision on the grounds that it was too high. The appellant was a tenant in the property. Argued that certain factors not accounted for in valuation including obscurity of property and comparisons with other floor space in that area. Considered whether method used by assessor and Committee in taking agreed standard rate of £350 psm for premises at Kinnaird Park and then applying end allowance for relative disadvantages of subjects of valuation was proper approach. Appeal refused.

Credential Bath Street Limited v. Venture Investment Placement LTD [2007] CSOH 208

Thu, 10 Jan 2008 17:36:00 GMT

Proof - These proceedings were concerned with a guarantee of the tenant's obligations under a commercial lease. The pursuers were the landlord of the let premises, and the defenders were the guarantor. The pursuers maintained that the defenders were liable under the guarantee to pay the cost of repairs which should have been carried out by the tenant. The defenders denied liability on the basis that the guarantee had expired before any demand was made upon them in accordance with the guarantee. The pursuers in addition sought damages in respect of an alleged breach of an implied term of the guarantee. The question whether the defenders was in breach of any obligation owed to the pursuers depended fundamentally on issues concerning the construction of the guarantee and certain other documents. It was agreed that those issues could be resolved on the basis of the relevant documents and the parties' submissions.

Strathclyde Associated Property Holdings Limited (in liq) and Others v. Kah Limited+Ronald Hannah [2007] CSOH 210

Thu, 10 Jan 2008 17:32:00 GMT

This was an action by the liquidator of Strathclyde Associated Property Holdings Limited to have five leases of vacant residential property in Glasgow in favour of the first defenders declared null and void and for interdict against the second defender from changing or attempting to change the locks on those properties. Here, the pursuers moved for decree by default and for expenses on the basis that the defenders had failed to state relevant defences and No representation has been arranged for a previous hearing and no appearance was made at this time.

Ben Cleugh Estates Limited v. Scottish Enterprise [2008] CSIH 1 CA38/05

Thu, 10 Jan 2008 14:28:00 GMT

This case concerned a commercial action involving a dispute, between the pursuers, as landlords, and the defenders, as tenants, of commercial premises as to whether the defenders had validly terminated the lease of the Premises by exercising a break option, or alternatively whether the pursuers were personally barred from denying that the break option was validly exercised. A proof before answer was allowed and the Lord Ordinary made avizandum and then granted decree of declarator as concluded for. The defenders reclaimed against the interlocutor and this was part heard and then continued. Due to problems with arranging a suitable date for all those involved, arrangements were made for written versions of the junior speeches to be submitted, and it was agreed that the hearing could proceed with the senior speeches only being presented orally to a differently constituted bench. Those further submissions had now been heard. The Reclaiming Motion was now being considered by the Court.

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Thu, 23 Aug 2007 00:00:00 GMT

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Thu, 29 Mar 2007 23:00:00 GMT

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unkown

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Conveyancing Law: