AWG Business Centres Ltd v Regus Caledonia Ltd & Anor [2017] ScotCS CSIH_22 (08 March 2017)

AWG Business Centres Ltd v Regus Caledonia Ltd & Anor [2017] ScotCS CSIH_22 (08 March 2017)

Exception (c) in the lease, excluding costs 'in respect of or pertaining to the initial construction', refers only to costs incurred during the original construction and snagging, not to subsequent remedial works for latent defects. The lease structure and commercial context indicate that liability for such repairs is transferred to the tenant, and the exception does not apply to the costs at issue.

Citation
[2017] ScotCS CSIH_22
Parties
Pursuers and Respondents: AWG Business Centres Limited; First Defenders and Reclaimers: Regus Caledonia Limited; Second Defenders and Respondents: Cheshire West and Chester Council
Jurisdiction
Scotland
Judgment Date
08 March 2017
Procedural Posture
Reclaiming Motion (appeal) / Inner House, Court of Session, Post Interlocutor
Outcome
Reclaiming motion refused; interlocutor of 23 August 2016 adhered to.
Legal Topics
Interpretation of Lease Terms, Service Charge Liability, Latent Defects, Repairing Obligations, Commercial Leases
Property Law Landlord and Tenant Law Contract Law Interpretation of Lease Terms Service Charge Liability Latent Defects Repairing Obligations Commercial Leases

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Parties

AWG Business Centres Limited

Pursuers and Respondents

Regus Caledonia Limited

First Defenders and Reclaimers

Cheshire West and Chester Council

Second Defenders and Respondents

Procedural Posture

Reclaiming Motion (appeal) / Inner House, Court of Session, Post Interlocutor

Legal Issues

  1. 1 Whether the cost of repairing latent defects in the common parts (car park) is recoverable from the tenant under the lease terms, or excluded by exception (c) relating to initial construction costs.

Ratio Decidendi

Exception (c) in the lease, excluding costs 'in respect of or pertaining to the initial construction', refers only to costs incurred during the original construction and snagging, not to subsequent remedial works for latent defects. The lease structure and commercial context indicate that liability for such repairs is transferred to the tenant, and the exception does not apply to the costs at issue.

Court Disposition

Reclaiming motion refused; interlocutor of 23 August 2016 adhered to.

Orders

  • Decree for payment by the first defenders to the pursuers of £167,000.