Introduction

The case of L. Batley Pet Products Ltd v North Lanarkshire Council [2014] UKSC 27 provides useful guidance on the responsibilities of parties involved in the letting of commercial properties.

The Facts

L. Batley Pet Products (the 'Appellant') was the mid-landlord of two commercial premises in Cumbernauld, with North Lanarkshire Council (the 'Respondent') as the sub-tenant. On the expiry of the sub-lease, a dispute arose between the parties as to whether or not the Respondent had to remove alterations made to the properties when it was requested to do so, orally, by the Appellant's surveyor. The Appellant did not put the request in writing by way of a schedule of dilapidations, or by any other means.

The Issues

The UK Supreme Court noted that the case raised two questions of contractual construction in connection with documents relating to the letting of commercial premises:

(1) If the authority to make alterations to the premises was given by Minute of Agreement, did this  oblige the Appellant to provide the Respondent with a written request to remove the alterations  made?

(2) Did the repairing obligation under the Head Lease, which was applied to the sub-lease, oblige  the Appellant to provide the Respondent with written notification that it was required to make  repairs before the sub-lease expired?

The Decision

An Extra Division of the Inner House of the Court of Session had previously dismissed the appeal and held that a commercial landlord had to provide written notification to a tenant that it was required to reinstate the property. However, the UK Supreme Court disagreed and allowed the Appellant's appeal and a Proof before Answer.

The court noted that a disputed clause in the Minute of Agreement, which stated that reinstatement works were only obligatory 'if so required by the Mid-Landlord', did not require written notice.

The court also noted that the requirement in the head lease for the tenant to repair, maintain, and where necessary reinstate the premises in order to keep them in a tenantable condition at all times was a continuing obligation which did not require notice from the landlord. By requiring the landlord to provide written notice, the Extra Division imposed a hurdle that was not there.

Comment

This judgment by the UK Supreme Court provides commercial landlords with guidance as to their responsibilities, as well as insight into how the courts will interpret contractual provisions in commercial leases. It also provides a reminder that, while not always required in Scotland, use of writing can provide invaluable certainty for parties to a contract.

The UKSC judgment can be found here.