Outer House judge repels commercial landlord’s objections to repairing report prepared by independent surveyor in damages claim

About this case:

• Citation:
  [2023] CSOH 18
• Judgment:
  External link
• Court:
  Court of Session Outer House
• Judge:
  Lord Harrower

Ashtenne Caledonia Ltd raised actions against tenants Mahmood Saleem and Denny Enterprises Ltd in relation to various units at the premises, which were each addressed in separate opinions. In each of the cases the pursuer argued that the reporter appointed to value the claims had stepped outwith his remit.

The case was heard by Lord Harrower in the Outer House of the Court of Session. A Jones KC appeared for the pursuer and M Steel, advocate, for the defenders.

Impliedly decided

The pursuer let out the premises at Unit 2, Kelvin Avenue, to the defender in April 2015, with the lease expiring in April 2020. In December 2019, the pursuer served the defender a schedule of dilapidations, and later sued for damage in respect of losses incurred as a result of the defender’s breach of the repairing obligation in the lease. It was agreed by the parties that the claims would be remitted to a charted surveyor, Mr Jon Rowling, who would issue a report on the valuation of the claims.

Objections to the draft reports issued by Mr Rowling were made by the pursuer on the grounds that he had “decided” a point of law when he should have sought directions from the court and conflated the obligation to “keep, maintain and repair, renew, rebuilt and reinstate” the premises “in good and substantial condition and repair” with an obligation “which exclusively requires repair”.

In particular, the pursuer drew attention to the surveyor’s citation of Proudfoot v Hart (1890), a resource not referred to in the joint remit, and his referral to a Scottish textbook in connection with its use in Scots law. Counsel submitted that, because the reporter’s interpretation of the law was at odds with that put forward in the pursuer’s submissions, he should be understood as having impliedly decided that the pursuer was wrong.

In addition to the general objections across all three cases, a specific objection to the reporter’s conclusions as regards the unit let by Mr Saleem was made on the basis that he had erred by not asking for evidence of an asbestos issue in the form of asbestos surveys identifying loose fibres present in the inner roof of the unit.

Well-known authority

In his decision on the common objections across all three cases, Lord Harrower began: “In my view, the reporter, when citing Proudfoot, was merely providing his understanding, as a surveyor, of the legal context in which he wished his draft reports to be understood. He may not have provided a full description of the Proudfoot formula. In particular, he may not have made express reference to the notional reasonably minded tenant. I consider below whether any such failure amounted to a material error of law. For present purposes, it is sufficient to reject the submission that, merely by citing a well-known authority, the reporter had misdirected himself.”

He continued: “The wording of the lease in this case is typical of the form of repairing covenant generally adopted in commercial leases throughout the United Kingdom, and is apt to cover what the older Scottish cases would have treated as extraordinary repairs. In these circumstances, neither the distinction between ordinary and extraordinary repairs, nor the older Scottish authorities, is relevant for present purposes.”

On whether the wrong test had been applied to the obligations under the lease, Lord Harrower said: “The reporter may not have expressed himself as a lawyer would have done when concluding that the standard of repair to be applied to the property throughout the lease term is ‘low’. As the pursuer says, ‘Good and substantial repair and condition does not mean low repair’. However, the reporter made it clear in his draft reports that ‘low’ should be understood as a relative concept.”

He went on to say: “I am not persuaded that the draft reports disclose any error of law. Having renounced probation, the parties elected to remit their dispute to a man of skill. The pursuer may not have liked the draft conclusions the reporter reached, but that is no reason to direct him to carry the exercise out all over again.”

Turning to the specific objection, Lord Harrower concluded: “The reporter was not required to ask for directions just because he was empowered to do so. The reporter had carried out an inspection under the guidance of the surveyors for each party. He received submissions. There is no complaint that the reporter failed adequately to investigate.”

Lord Harrower therefore repelled the relevant objections by the pursuer, and directed the reporter to apportion the sum of £3,696.46 among items that were subject to other objections that were agreed by the parties.