Lease – Variation – Shopping centre – Claimant landlord entering in to agreement for construction of retail store in car parking area — Development requiring variation of defendant’s leaser as existing tenant – Defendant objecting to variation — Whether defendant personally barred from objecting to variation – Whether defendant waiving rights under lease – Claim dismissed
The claimant was the owner of a shopping centre in Edinburgh. The defendant was the tenant of units in the shopping centre which had been leased to it in 1992 by the claimant’s predecessor. The claimant entered into an agreement with Primark Stores Ltd for the construction and leasing of a new retail store building which would abut the existing shopping centre and would be constructed on currently unbuilt upon land including part of the car parking area. The development required a variation of the defendant’s lease as an existing tenant. The defendant contended that it had not given its agreement in probative writing to the construction of such a building, and accordingly that the claimant was not entitled to commence construction or to grant a lease of it to Primark.
In an earlier decision, Lord Tyre had found that the building of the store would breach the lease with the defendant and that a meeting of the shopping centre management committee approving construction of the new building was not sufficient to vary the terms of the lease: see [2014] CSOH 59.
In the present case, the claimant argued that, although the lease had not been varied, the defendant was personally barred from objecting to the construction of the building as its representatives had agreed to the building at the management committee meeting and that the claimant had relied on that agreement with their knowledge. In particular, the defendant was personally barred: (i) in terms of section 1(3) of the Requirements of Writing (Scotland) Act 1995; (ii) in terms of the common law rule of rei interventus (in Scots law, a doctrine of personal bar preventing a person who did not want to adhere to a formally defective agreement being allowed to do so by the party who wanted the bargain to succeed); or (iii) by waiving its right under the lease.
Held: The claim was dismissed.
(1) Section 1(3) of the 1995 Act did not apply to leases but only to separate contracts relating to the land (ie transactions giving rise to merely personal rights) and not to dispositions and other deeds which actually effected the creation or transfer of an interest in land (ie transactions giving rise to a real right). The personal bar provisions were to be confined to transactions that created rights which were purely personal and were not intended to apply to a transaction creating rights that could be made real by registration or taking possession. That fundamental distinction had to be given effect in the case of leases. Where, therefore, it could be inferred that the intention of the parties to a lease was that real rights would be created in favour of the tenant, the document would fall within section 1(2)(b) and the personal bar provisions in section 1(3) would not apply. Section 1(6) of the 1995 Act made it clear that the same rules applied to transfer, variation and extinction of rights as applied to creation of rights, it followed that the statutory personal bar provisions of section 1(3) had no application to the variation of a real right in land. There was no reason to distinguish between a real right in the principal subjects leased and a real right which was granted as a pertinent to the principal subjects. Applying that analysis to the circumstances of the present case, the statutory personal bar would be capable of applying to an agreement to vary the terms of the defender’s lease, but not to a variation of the lease itself: William Grant & Sons Ltd v Glen Catrine Bonded Warehouse Ltd 2001 SC 901 and The Advice Centre for Mortgages v McNicoll 2006 SLT 591 considered.
(2) With regard to the common law rule of rei interventus, the common law rules had been replaced in their entirety by the statutory rules contained in the 1995 Act and did not continue in parallel: Bargaddie Coal Co v Wark (1859) 3 Macq 467, Kirkpatrick v Allanshaw Coal Co (1880) 8R 327 and Carron Company v Henderson’s Trs (1896) 23R 1042 considered.
(3) As regards the potential waiver of the defendant’s rights in the lease, the evidence fell well short of establishing that there had been voluntary, informed and unequivocal waiver by the defendant of its right to prevent the construction and leasing of the building. The claimant’s analysis perpetuated its original error of treating the defendant’s representatives who attended and approved the minutes of management committee meetings as equivalent to the defendant itself. It wrongly characterised the conduct of those individuals as the conduct of the defendant. Those individuals were not empowered in terms of the defendant’s lease to take decisions affecting the defendant’s real rights in the shared areas. There was no evidence to indicate that they were even aware of what those rights were, although the question of real rights was given no consideration by the claimant’s representatives. Nor was there any evidence of actions of any person within the defendant’s organisation who was truly responsible for taking decisions regarding the variation of real rights under the lease which might induce the claimant to believe that the defendant regarded such decision-making as falling within the competence of the management committee.
Gavin J Walker and Lynsey Walker (solicitor advocate) (instructed by HBJ Gateley LLP) appeared for the claimant; Laurence Murphy QC and Eric W Robertson (instructed by DWF Biggart Baillie LLP) appeared for the defendant.
Eileen O’Grady, barrister
