The litigation in Gyle Shopping Centre General Partners Ltd (as trustee for and General Partner of Gyle Shopping Centre Limited Partnership) v Marks and Spencer plc [2014] CSOH 122; [2014] PLSCS 241 highlights the importance of understanding the remit and authority of management committees created to foster co-operation between landlords and tenants where premises are in multiple occupation.
The owner of the Gyle Shopping Centre in Edinburgh had entered into an agreement for lease with Primark. The new retail store was to abut the existing shopping centre and part of it was to be constructed on land that was used for parking, resulting in the loss of 100 car parking spaces and necessitating changes to the pedestrian routes and roads within the existing development.
The landlord needed planning permission, as well as vacant possession of some of the units in the shopping centre, to enable the development to proceed. So it made sure that the agreement for lease was conditional on securing both, on terms that were satisfactory to itself. The agreement also stipulated that it was conditional on the landlord obtaining all necessary approvals from the management committee – on which M&S, which had a long term lease of part of the centre, was represented.
When the landlord was satisfied that everything was in place, it wrote to Primark to confirm that the agreement had become unconditional. However, it subsequently became clear that M&S objected to the development.
M&S had a one third share of the parking area and argued that the landlord should have asked it to vary its lease to enable the development to proceed. The landlord pointed to previous arrangements that had been approved by the management committee and produced minutes of a meeting of the committee, together with a page signed by one of M&S’s employees, stating that the redevelopment proposals described in the minutes were approved. It claimed that M&S had, as a result, waived any right to object to the proposals.
The Outer House of the Scottish Court of Session upheld M&S’s claim. The parties had agreed that any variations to their lease were to be made in accordance with the provisions in the lease itself, or by an agreement that was recorded in one of the Scottish registers.
The landlord’s belief that M&S had agreed to the Primark development arose from its own erroneous assumption that such an agreement was within the competence of the management committee, and not from any of M&S’s acts or omissions. The parties’ lease did not empower the management committee to take decisions that would permanently interfere with M&S’s property rights, and the fact that M&S had tacitly acquiesced to previous arrangements affecting the shared areas did not prevent it from insisting on compliance with the terms of its lease on this occasion.
The landlord had laboured under a misapprehension from the very outset. It had thought that it was protected by the condition in its agreement for lease with Primark requiring management committee approvals. However, the condition provided no protection at all against the possibility that M&S would refuse to vary its lease to enable the development to proceed.
Allyson Colby is a property law consultant
