Gordon Keyden

DC Watson & Sons (Fenton Barns) Ltd leased a storage unit in the building to Philip Samson and a fire in a separate part of the building spread to Mr Samson’s unit. He claimed damages for the loss of goods stored there, plus an amount representing rent.

Mr Samson took his case to the Edinburgh Sheriff Court and the court at debate ruled that there was no implied term of safety in a commercial lease. Subsequently, he appealed to the Sheriff Appeal Court.

First ground of appeal – scope of the implied term

Mr Samson’s first ground of appeal was that the sheriff erred in taking a restrictive approach to the scope of the implied terms. It was submitted that the implied term that the unit was reasonably fit for purpose and in good tenantable condition should have been held to require meeting the building and fire safety standards. Mr Samson submitted that the sheriff erred in distinguishing commercial leases from residential leases, as the risk to safety posed by fire applied equally to both categories of lease. It was further submitted that the sheriff erred in determining that the implied term did not apply to those parts of the building outwith the unit rented by Mr Samson, as the use of the unit was affected by the fire safety of other parts of the building.

The court dismissed these submissions, upholding the decision at first instance that the authorities do not support the extension of the implied terms of being fit for human habitation and lacking latent defects in residential leases to commercial leases. The court accepted the defender’s submission that in the authorities cited “the considerations of safety are designed for personnel, not premises” and that there was no authority to support the implication of such terms to protect property in commercial leases.

The court also accepted the defender’s submission that reference to building and fire safety standards when assessing whether the property was reasonably fit for purpose was irrelevant, and that the landlord’s obligation is limited to the unit leased, and not other parts of the building.

Second ground of appeal – loss of a chance

The second ground of appeal was that it was not irrelevant to plead that, had the premises been constructed with reference to fire safety standards, there was a reasonable chance that the damage suffered by Mr Samson would have been less.

The court also dismissed this ground of appeal, accepting the defender’s submission that to plead both that the object of the lease was to prevent fire damage and also that it was to prevent the chance of fire damage was inconsistent.

The case offers some clarity as to the limited scope of the implied contractual terms in commercial leases, confirming that these standards are more restricted, in both the content of the term and the extent to which it applies to the building, than in residential leases.

The Clyde & Co team was led by consultant Gordon Keyden and included trainee Rachael Miller as well as advocate, Alan Cowan of Ampersand Advocates.