Commercial lease – Former garage premises with underground fuel tanks – Clause permitting entry by landlord to inspect and examine condition of premises – Claimant landlord wanting to enter and drill boreholes to assess whether contamination of land from tanks – Whether permitted under terms of lease – Whether clause confined to inspections of non-intrusive nature – Judgment for claimant
The claimant was the landlord and the defendant was the tenant under a lease of commercial premises in Edinburgh for a term of 25 years from 1993. The premises had originally been used as a garage and contained underground tanks for storing fuel. However, that use had ceased before the lease was granted, and the defendant used the premises to sell and fit car parts and to carry out MOT tests.
In 2007, the claimant informed the defendant that it intended to inspect the premises to ascertain whether the fuel storage tanks had caused contamination. This was to involve the drilling of six boreholes, of which five were to be 6m deep and the other 30m deep, in order to collect samples of groundwater and gas, with the work to take up to four days. The defendant objected, maintaining that the claimant was not entitled to carry out intrusive works of that kind. The claimant sought to rely upon a clause in the lease that required the defendant to “permit the landlord and its agents at all reasonable times with or without workmen… 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”. It brought proceedings to establish its entitlement to enter and carry out the works.
The defendant argued that undertaking such works would involve the claimant taking possession of parts of the premises for a distinct period and would amount to an eviction of the tenant for that period, contrary to the claimant’s obligations as landlord. It submitted that the words “inspect and examine” in the clause did not entitle the landlord to do more than examine the premises and see what could be seen, rather than to carry out intrusive works.
Held: Judgment was given for the claimant.
The central question was whether the power to inspect and examine implied a power to undertake intrusive work for the purposes of an inspection or examination. The reference to “workmen” implied that the landlord was entitled to carry out works; there was nothing to imply that its inspection had to be limited to a superficial visual inspection. The application of the clause was not limited in the way contended for by the defendant. It would not be sensible to curtail the power of inspection in that way, particularly in a long lease, when the condition of the premises might materially alter over time and it might be in both parties’ interests for that condition to be properly ascertained. Further, if the claimant was worried that an environmental problem might arise, it would benefit both parties if an investigation were made to ascertain the extent of the problem, provided that this could be done with reasonable regard for the conduct of the defendant’s business.
Gavin MacColl (instructed by Todds Murray LLP, of Edinburgh) appeared for the claimant; Jonathan Lake (instructed by Anderson Strathern LLP, of Edinburgh) appeared for the defendant.
Sally Dobson, barrister
