Law of leases

Question 1

PS Supply Chain Solutions v Glasgow Airport Ltd

Answer 1

1. A lease was intended for a cargo centre
2. In the missives, the landlord had agreed to set it out in a certain way and to a certain standard
3. When it was built and the lease was entered into, there was a clause in the lease which said that the tenant accepted the centre as it was
4. The tenant was able to argue, successfully, that the missives were still in place and therefore they could sue the landlords to bring the cargo centre up to the standard which was envisaged in the missives

Question 2

Joint Administrators of Rangers Plc, Noters

Answer 2

1. Involved season tickets
2. You don’t have an exclusive right to the seat

Question 3

St Andrews Forest Lodges Ltd v Grieve

Answer 3

1. Held that exclusive possession has become a fifth essential element of a lease

Question 4

Andert Ltd v J & J Johnston

Answer 4

1. The subject was defined very generally
2. The court held that this was fine because they were able to refer to the extent of the tenant’s possession

Question 5

Shetland Islands Council v BP Petroleum Development Ltd

Answer 5

1. BP built an oil terminal and only realised afterwards that the oil terminal acceded to the land
2. The parties entered into negotiations for BP to lease the oil terminal
3. They agreed for 23 years and most of the cardinal terms, but could not agree on the rent
4. SHC sought a declarator that a lease had been entered into and that, because a lease had been entered into, they were required to pay rent for both the land and the terminal
5. The court could not set a fixed rent in a long lease, but it could set a fair rate payable from year to year

Question 6

Glen v Roy

Answer 6

1. A man looked after a cottage which belonged to his father
2. Father and son agreed that when the father died, the son should continue living in the cottage
3. The court held that by occupying, the man was presumed to be a tenant and was due rent

Question 7

Secretary of State for Defence v Johnstone

Answer 7

1. A serviceman’s wife was occupying an RAF home and she continued to occupy the home after they separated
2. She overstayed the period during which she was allowed to stay there
3. The SSD was able to bring an action for recompense (unjustified enrichment)
4. The basis for the rent was the market rent

Question 8

Gray v Edinburgh University

Answer 8

1. The University was renting the property out to somebody
2. They agreed on all terms of the lease, but not on how long the lease would be
3. They also had not agreed the rent
4. The University went to court and they sought a confirmation that the lease had been in place
5. The court held it could not do so where both the rent and the end date had not been in place

Question 9

Wallace v Simmers and Scottish Residential Estates Co v Henderson

Answer 9

1. In both cases it was held that the agreements were licenses and not leases
2. There was a deliberate decision not to agree a term

Question 10

Birkbeck v Ross

Answer 10

1. The 1449 Act does not apply to shootings

Question 11

Mann v Houston

Answer 11

1. The tenant simply paid a one-off payment at the start of the lease
2. It was held that this was not rent
3. There had to be some sort of periodical payment

Question 12

Gyle Shopping General Partners Ltd v Marks and Spencers plc

Answer 12

1. M&S were granted a right for their customers to use the car park
2. This was included in their real right (enforceable against successive landlords)

Question 13

Turner v Nicholson

Answer 13

1. The landlord’s heir would compensate the tenant
2. This was held to be a personal agreement between the parties

Question 14

Ross v Duchess of Sutherland

Answer 14

1. The tenant lived in accommodation
2. There was an agreement for a discount on the rent
3. It was held that this was purely a personal condition

Question 15

Renfrewshire Council v HR

Answer 15

1. A car park was compulsorily purchased by the council
2. They were scared they would become subject to certain grounds that the car park was subject to
3. Because it was a registered lease, any terms in it would necessarily bind successive landlords
4. The court disagreed and held that registration does not change the nature of rights

Question 16

Bisset v Magistrates of Aberdeen

Answer 16

1. Options to purchase by their very nature are not inter naturalia

Question 17

Davidson v Zani

Answer 17

1. It was accepted by the parties that the option to buy was not inter naturalia
2. The tenant argued that, because the landlord knew about the option to purchase and the new buyer knew about it, they were bound by it
3. The court agreed with this argument

Question 18

Advice Centre for Mortgages Ltd v McNicoll

Answer 18

1. Bisset v Magistrates of Aberdeen was applied
2. Options to purchase cannot be inter naturalia
3. An option to purchase cannot bind subsequent landlords

Question 19

Gibson v Royal Bank of Scotland

Answer 19

1. Seems to suggest options to purchase might entitle the holder to the offside goals rule

Question 20

Optical Express (Gyle) Ltd v Marks and Spencer plc

Answer 20

1. Optical Express had an exclusivity agreement with M&S that they would be the only opticians at Gyle
2. This was breached
3. The tenant argued that it was inter naturalia and therefore enforceable
4. The court disagreed and held that it was not inter naturalia
5. The agreement was not actually written into the lease itself

Question 21

Davie v Stark

Answer 21

1. The exclusivity agreement was held to be inter naturalia

Question 22

Trade Development Bank v Warriner & Mason

Answer 22

1. The real right binds subsequent creditors, but prior creditors can have the lease set aside if they have not consented to it

Question 23

Trade Development Bank v Crittall Windows

Answer 23

1. There was a tenant with a real right of lease
2. The assignee was able to have the standard security set aside

Question 24

Mars Pension Trustees Ltd v County Properties & Developments Ltd

Answer 24

1. If you are trying to exclude common law rules, you need to do so expressly

Question 25

Graham & Black v Stevenson

Answer 25

1. The tenant had a lease of a hotel and got the lease of another neighbouring hotel 2. They did not occupy or use the hotel 3. They just wanted to eliminate the competition 4. This was held to be a material breach

Question 26

Blair Trust Co v Gilbert

Answer 26

1. The tenant was being punished for manslaughter 2. They were absent from the property 3. Being away for such a long time was held to be a breach

Question 27

Mickel v McCoard

Answer 27

1. The tenant was absent 2. The pipes flooded 3. The tenant was liable for damages due to the breach

Question 28

Wright v Wightman

Answer 28

1. Where the landlord’s hypothec applies (in commercial leases), the tenant is bound to plenish or stock the subjects

Question 29

Co-operative Insurance Society Ltd v Halfords Ltd

Answer 29

1. An interdict may be sought to prevent displenishment

Question 30

N B Storage Co v Steele’s Trs

Answer 30

1. The property was let with a drainage system in place 2. It was agreed that it could have been improved, but it was still functional 3. The landlord was not in breach

Question 31

Wolfson v Forrester

Answer 31

1. A tenant had a lease of a building 2. There was a downpipe on the side of the building 3. It got clogged up 4. The water flooded the subjects 5. On the facts of the case, the court disagreed with the argument that it was not wind and watertight 6. The tenant must have seen the hole in the wall before they agreed to renting, so they accepted the property as wind and watertight

Question 32

Glebe Sugar Refining Co v Paterson

Answer 32

1. A building collapsed 2. It was held that a landlord is only obliged to provide support for the weight ordinarily imposed on a building of that kind

Question 33

Gunn v National Coal Board

Answer 33

1. The landlord at common law is obliged to remedy rising damp

Question 34

Wolfson v Forrester

Answer 34

1. Although the subjects were fit for purpose at the start of the lease, they now weren’t anymore 2. The landlord is only obliged to fix when it is reasonable to do so

Question 35

Retail Parks Investments Ltd v The Royal Bank of Scotland plc (No 2)

Answer 35

1. Concerned a bank in a shopping centre 2. The bank tried to get around the clause by closing the branch and opening an ATM 3. The court held that this was a breach

Question 36

Highland & Universal Properties Ltd v Safeway Properties Ltd

Answer 36

1. Specific implement is available in Scotland

Question 37

Douglas Shelf Seven Ltd v Co-operative Wholesale Society Ltd

Answer 37

1. Damages for breach of a ‘keep open’ provision were awarded

Question 38

Cowie v Martalo

Answer 38

1. Confirms that although diligence cannot take place without a court order, the tenant can challenge an order for payment

Question 39

Crieff Highland Gathering Ltd v Perth and Kinross Council

Answer 39

1. The landlord claimed that the tenant was in material breach 2. It was held that failure to comply with some repair obligations did not amount to a material breach 3. Rescission was not possible

Question 40

Davie v Stark

Answer 40

v Stark (1876) 3 R 1114 1. The tenant claimed that the landlord was in breach regarding an exclusivity clause in the agreement 2. It was held that that was a material breach in the context of that lease

Question 41

HMV Fields Properties Ltd v Bracken Self Selection Fabrics Ltd

Answer 41

1. The landlord served a notice of irritancy to the tenants 2. Various triggers allowed them to do so 3. The case went to arbitration 4. In the meantime, the tenant continued to pay rent 5. They argued that by accepting rent, the landlord had personally barred themselves in relation to irritancy 6. Because the landlord had returned the payments quite quickly, on the facts, the landlord had not accepted the rent

Question 42

Aubrey Investments Ltd v D S Crawford Ltd

Answer 42

1. The tenant went insolvent 2. The landlord did accept rent from the tenant, but they made clear that they were only doing so until the tenant found an assignee 3. When it became clear that no assignee would be found, the landlord invoked irritancy 4. The court held that the landlord was not personally barred as it was clear they were not actually accepting rent

Question 43

Tawne Overseas Holdings Ltd v Newmiln Farms

Answer 43

1. Failure to comply with the statutory rules will entail that the lease is not properly irritated

Question 44

Blythswood Investments (Scotland) Ltd v Clydesdale Electrical Stores Ltd

Answer 44

receivership) 1995 SLT 150 1. The landlord gave notice to carry out the repair obligations 2. They gave a three month notice 3. The tenant did not do so 4. The tenant did do so right after the deadline passed 5. It was held that irritancy could still be invoked

Question 45

Esso Properties Ltd v Dresser UK Ltd

Answer 45

1. The break clause date was 9 months 2. The court held that you do not include the date of service and the date of ish in this period

Question 46

Macdougall v Guidi

Answer 46

1. This case suggests that you can write into the lease that tacit relocation will not happen 2. This is a sheriff court decision, so not very authoritative 3. It is better to exercise caution in cases like these 4. Generally, a notice to quit has to be served in writing 5. Sometimes, unilateral actings of the tenant are sufficient to exclude tacit relocation

Question 47

Signet Group plc v J Clark Retail Properties Ltd

Answer 47

1. The tenants did send a notice of termination to the landlord, but they failed to comply with some of the notice provisions in the lease itself 2. The tenants argued that, nonetheless, they moved out, and that should be sufficient notice to the landlord that they wanted the lease to come to an end 3. The Inner House disagreed 4. They did agree that actions on the part of the tenant or landlord to communicate an intention to quit and therefore to exclude tacit relocation, but none of these actions were communicated to the landlord 5. Tacit relocation had not been excluded, and the lease renewed for a year

Question 48

Rockford v Trilogy Ltd v NCR Ltd

Answer 48

1. Neither the landlord nor the tenant served the notice to quit, and the ish arrived 2. The landlord sought a declarator that the lease had renewed by tacit relocation 3. However, it was clear by looking at correspondence between the parties that there had been negotiations between them about whether to renew the lease 4. The tenant’s solicitor had made clear to the landlord that they would only renew if they could secure certain better terms 5. The court held that the tenants had made clear that they did not want to renew the lease if they could not get those better terms 6. Therefore, that counted as communicating their intention to quit

Question 49

Allied Dunbar Assurance plc v Superglass Sections Ltd

Answer 49

1. The landlord argued that due to the principle of mutuality, a tenant could never exercise a break clause while in breach 2. The court did not find this argument convincing 3. A break clause is not about mutuality 4. Unless there is an express term which prevents break clauses from being exercised in the event of breach, then the tenant is entitled to exercise them

Question 50

Trygort (No 2) Ltd v UK Home Finance Ltd

Answer 50

1. There was a break clause which stated that the tenants could only use it if they were not in breach prior to exercising the break clause 2. The tenant was in breach of his repairing obligations 3. By the time the break clause came around, the repairs had been done and the breach had been remedied 4. The court held that it is not the case that once you have breached, you lose your right to the break clause forever 5. Provided you are not in breach when you exercise it, you are entitled to exercise the break option

Question 51

Tay Salmon Fisheries Co v Speedie

Answer 51

1. A party had a lease of salmon fishings 2. The place where the lease was exercisable was designated as a firing range by the Ministry of Defence 3. You could not go fishing there anymore, and so the lease was brought to an end through frustration

Question 52

Canary Wharf (BP4) T1 Ltd v European Medicines Agency

Answer 52

1. Brexit meant that it did not make sense for the EMA headquarters to be in London anymore 2. It was held that it was insufficient to frustrate the lease 3. There was no supervening impossibility

Question 53

United Scientific Holdings Ltd v Burnley Borough Council

Answer 53

1. A rent review was intimated by the landlords 2. They then allowed the date to pass without submitting the matter to arbitration 3. The lease in this case allowed the tenants to make their own lease proposal to the landlords (which they did) 4. The tenants’ right in these circumstances was such that it rebutted the presumption that time is not of the essence 5. The landlord had lost the opportunity to review the rent 6. This view was approved in Scotland in Visionhire Ltd v Britel Fund Trustees Ltd

Question 54

Charterhouse Square Finance Co Ltd v A & J Menswear

Answer 54

1. In this case, the lease contained a rent review clause, but it also contained provisions setting out the consequences of the landlord failing to adhere to the agreed time limit 2. This again was held to rebut the presumption that time is not of the essence 3. The landlord had missed the opportunity to provide notice, and therefore also the opportunity to review rent

Question 55

Banks v Mecca Bookmakers (Scotland) Ltd

Answer 55

1. The landlord had a number of different leases 2. They missed rent review days of several of these leases by a period of around one or two years 3. Significantly, once they had missed their due date, they continued to accept rent at the old rate 4. The court held that this was evidence that the landlord had waived the right to review the rent

Question 56

Waydale Ltd v MRM Engineering

Answer 56

1. Banks v Mecca Bookmakers (Scotland) Ltd was followed and a similar decision was reached

Question 57

AWG Group Ltd v HCP II Properties

Answer 57

1. The tenants were claiming that their landlord had waived their right to review rent because they had missed the rent review date by three years 2. Although a landlord is able to waive their rent review powers, the party claiming waiver also has to show that it conducted its affairs on the basis that the landlord had abandoned this right 3. In this case, the landlord’s invoices were issued with a little note that said that acceptance of rent after the rent review date would not prejudice the landlord’s right to review the rent 4. There was also a specific clause in the lease which provided that accepting rent at a pre review rate would not be deemed as amounting to waiver 5. This clause was found to be significant in suggesting that the landlord had not waived his right in this case

Question 58

Amherst v James Walker Goldsmith & Silversmith Ltd

Answer 58

1. In England, it is very difficult for a landlord to waive a right to rent review 2. The landlord missed the rent review date by around six years 3. The court was happy for them to still review the rent late

Question 59

Manchester Associated Mills Ltd v Mitchells & Butler Retail Ltd

Answer 59

1. Where the valuation method used is turnover rent, the more successful a tenant is, the higher the rent

Question 60

Renfrew District Council v AB Leisure (Renfrew) Ltd

Answer 60

1. The tenant was seeking to assign the lease to an assignee 2. The landlord would only allow this if the tenant paid the arrears 3. The court held that this was reasonable 4. However, the landlords then decided they also wanted an immediate rent review as a precondition of granting permission for the assignation 5. They also wanted to add a few clauses to the lease to turn it into a full repairing and insurance lease 6. They also wanted future rent reviews to take place every three years rather than every five years 7. The court held that these provisions were not reasonable 8. The landlords were essentially creating a new lease instead of allowing assignation of the old one

Question 61

Lousada & Co v J E Lesser (Properties) Ltd

Answer 61

1. The landlords were willing to grant permission for assignation, but only subject to the conclusion of an outstanding rent review 2. A rent review was in progress, and they wanted that to be completed before the assignation took place 3. The court held that that was reasonable

Question 62

Burgerking Ltd v Rachel Charitable Trust

Answer 62

1. As long as one of the reasons given is reasonable, then the whole decision to refuse consent is reasonable

Question 63

Burgerking Ltd v Castlebrook Holdings Ltd

Answer 63

1. If a tenant is seeking permission to assign, they also have to give information to the landlord which would allow them to assess whether the new subtenant is suitable

Question 64

AB v CD

Answer 64

1. Failure to register as a landlord is a criminal offence, but does not make the lease void

Question 65

Them Properties LLP v Glasgow City Council

Answer 65

1. A landlord applied for an HMO license for a recently purchased property 2. This property had previously been let out by the previous landlord, who had had an HMO license 3. Objections were received in relation to the grant of a new HMO as previous students had been very disruptive 4. The objections were upheld and the license was not granted

Question 66

South Lanarkshire Council v McKenna

Answer 66

1. Concerned ECHR Article 8 2. Where a public authority landlord is terminating a lease, the tenant has to be given the opportunity to challenge that decision on the grounds of proportionality 3. In turn, the local authority landlord has to give the tenant the reason for the decision

Question 67

Salveson v Riddell

Answer 67

1. Concerned ECHR Article 1 protocol 1 2. A practice had developed among landlords of agricultural tenants which was intended to get around the various provisions which gave tenants security of tenure 3. Instead of granting a lease to a farmer, landlords would grant a lease to a limited partnership where the farmer was the general partner and the landlord continued as the limited partner 4. The Scottish parliament sought to close this loophole 5. In these circumstances, the tenancy could continue, but the general partner (the farmer) would simply become the tenant in place of the limited partnership 6. Landlords challenged this 7. The court held that this was outside the competence of the Scottish parliament 8. The Act was held to be unlawful and had to be remedied by secondary legislation