Edinburgh harbour commercial tenant fails to establish wrongful payments
A tenant of commercial premises in Granton, Edinburgh, has been unsuccessful in its action against an agent of its landlord for reduction of invoices and repayment of sums it alleged were wrongfully paid to its landlord’s agents.
The Glasgow Angling Centre Ltd, which was assigned the tenancy in March 2018, raised the action against its former landlord, Granton Central Developments Ltd, as well as other parties that were entitled to demand payments of common services and other charges on behalf of the landlord.
The case was heard in Edinburgh Sheriff Court by Sheriff Nigel Ross.
The first defender acquired the landlord’s interest in June 2014 but disponed it to British Overseas Bank Nominees Ltd and others in the same month. The terms of the lease obliged the pursuer to pay part of the costs of maintaining and repairing common parts of the building, as well as access roads and other infrastructure.
The premises were also subject to a Deed of Conditions that permitted a “promotor” to demand various payments in respect of the area forming Granton Harbour Estate, such as service charges levied on a designated Public Realm Area.
The third defender, PIP Asset Management LLP, demanded three payments from the pursuer on behalf of the other defenders in the amount of 4.58% of an unspecified budget. The total sum of the three payments was £20,023.65.
By process of deduction, the pursuer inferred that these payments were demanded by reference to the provisions of the Deed of Conditions. It averred that no Public Realm Area had been designated that would form the basis of a charge, and thus the invoices were wrongfully charged.
In support of their claims the pursuer lodged the correspondence from which it inferred that the charges were based on the Deed of Conditions rather than its lease obligations. The terms of the lease merely reflected the liability to pay under the Deed of Conditions rather than imposing an obligation to pay a service charge. At the time that the payments were made, the pursuer was under the mistaken belief that the lease did create such obligations.
The defenders averred that the payments had no basis in the Deed of Conditions and were actually calculated in reference to the service charge budget for the total Granton Harbour estate. The lease created and imposed any liability for payment.
No live issue
In his decision, Sheriff Ross first addressed the correspondence lodged as evidence by the pursuer, saying: “That correspondence, unfortunately, refers both to the Deed of Conditions and the Lease. I express no view on whether the inference drawn by the pursuer was supportable or not, save to notice that any demand letter which fails to state unequivocally the bases for liability, for calculation and for apportionment respectively, is liable to create exactly this sort of difficulty.”
He continued: “What is clear, and accepted by the defenders, is that the pursuer is attacking a proposition of fact which the defenders do not make or rely upon. There is therefore no live or immediate dispute before the court in this respect.”
Regarding the plea for reduction of the invoices, he said: “The case on record is firmly, and solely, directed against the Deed of Conditions. It does not contemplate any liability calculated (as opposed to liability imposed) under the Lease. The pleadings in the final article do, however, tend to support a claim that the pursuer made payment in mistaken reliance on a non-existent (in their view) liability under the Lease. That is theoretically capable of lending some support to a case for reduction.”
However, he went on to say: “While the pursuer may be able to state an argument in opposition to the defender’s position, it has not presently done so. The pleadings are neither relevant nor relevantly specific for that purpose, for a number of reasons. The relevant plea-in-law contains no claim, and no fair notice of a claim, that reduction is justified by reference to the Lease terms.”
Sheriff Ross concluded on this matter: “The pursuer has set out its case, by reference to clause 4.4 of the Lease, in terms that can only be fairly understood as reflecting liability to pay under the Deed of Conditions. That is quite different from founding on or attacking clause 4.4 as a basis to create liability to make payment. The case for reduction of the invoices, as it appears on record, does not relevantly aver, or give fair notice of, any case based on liability arising solely under the Lease.”
Addressing the pursuer’s crave for repayment, he commented: “The merits of the claim are dependent on the rationale set out in the pleadings. As discussed, the detailed averments about the want of power under the Deed of Conditions to levy such charges is now redundant. The defenders have disclaimed any such entitlement. The existence of any such power under the Lease is not the subject of any sufficient pleading by the pursuer to put the matter fairly before a court.”
For these reasons, the pursuer’s claims were held to have failed.
© Scottish Legal News Ltd 2021