Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2011] CSOH 78
A89/09	OPINION OF LORD PENTLAND in the cause CRIEFF HIGHLAND GATHERING LIMITED Pursuer; against PERTH AND KINROSS COUNCIL Defender: ­­­­­­­­­­­­­­­­­________________

Pursuer: Martin, Q.C., Burnet; Shepherd & Wedderburn LLP

Defender: Mure, Q.C., Lindsay; Biggart Baillie LLP

12 May 2011

Introduction
[1] In 1872 an unincorporated association known as the Crieff Highland Gathering was established. It aims were to promote the holding of an annual Highland Gathering in Crieff and, in the language of that era, to encourage games and athletic and other sports and amusements in the Parish of Crieff and the surrounding district. In 1935 the pursuer was incorporated as a limited company to acquire the whole property and assets of the Crieff Highland Gathering. By that time the Gathering's assets included an area of ground in the town of Crieff known as the Market Park; it is this area of land which is the subject of the present litigation. In this Opinion I shall refer to the Market Park as: "the subjects". The pursuer has, since its incorporation, been the heritable proprietor of the subjects. They comprise a roughly rectangular-shaped area of ground on the south side of the town centre, lying to the north-east of Broich Road and extending to about three hectares. Around 70 per cent of the site is open grass, formed by a football pitch with embankments on three sides. There is, in addition, an area of level ground used as a kick-about and practice area. On the south-west part of the site, along Broich Road, there is an area of hard standing used for car parking, a sports pavilion, an equipment store and some derelict land. At the southern corner of the site there is a yard owned and used by the defender. It accommodates winter maintenance machinery as well as some buildings used by the defender's staff. The subjects are bounded on the north-west and north-east sides by a stone, coped, wall, which varies in height. Along the south-east boundary there is a low stone wall, much of which is surmounted by a metal fence. The boundary along Broich Road is partly walled, but includes also the walls of some houses and yard buildings and derelict gables. There are gates at various points on three sides of the subjects. The Market Park is listed in the statutory list of historic buildings and structures kept by the Scottish Ministers. The information supplementary to the listing prepared by Historic Scotland gives the following description: "Mid to later 19^th century. Rectangular-plan park with high semicircular-coped rubble boundary walls and ball-finialled circular ashlar gatepiers with ironwork gates." This refers to the gate posts on the King Street boundary on the north-west side of the subjects. Since the nineteenth century the annual Crieff Highland Gathering has been held at the subjects on a Saturday (and more recently on a Sunday) in August.

[2] By a lease dated 11 and 26 May 1983, and recorded in the Division of the General Register of Sasines for the County of Perth on 6 July 1983 ("the lease"), the pursuer let the subjects to the Perth and Kinross District Council for use as a public park and recreation ground. Following local government reorganisation, the defender now holds the tenant's interest under the lease. In the present action the pursuer seeks declarator that, by notice sent to the defender on 22 January 2009, the lease was validly terminated on the ground that the defender was in material breach of certain of its obligations under the lease. The pursuer also seeks decree ordaining the defender to flit and remove from the subjects. The defender denies that it was in material breach of the lease and maintains that, in any event, a fair and reasonable landlord would not, in the whole circumstances, seek to terminate the lease. The defender also seeks to reduce the notice of termination ope exceptionis on the ground that it was inept, invalid and of no effect.

[3] The case came before me for a diet of Proof before Answer, at which evidence was led by both parties. The pursuer led the evidence of Mr Colin Grassick, one of its directors. The pursuer also led expert evidence from a chartered building surveyor, Richard Chalmers, formerly of the Hurd Rolland Partnership. The defender led the evidence of Mr James Low, its estates manager; of Mr Alistair Cummings, its facilities management officer; and of his assistant, Mr Neil Scott. Finally, the defender led expert evidence from a chartered building surveyor, Mr Ian Henderson. At the end of the day, while there were some differences of emphasis and on points of detail in the evidence given by the various witnesses, there was (as counsel on both sides accepted) a substantial measure of agreement about the facts that are relevant for the purposes of the case.

The Lease
[4] The preamble to the lease records inter alia that in 1981, because of the lack of sporting facilities for the community of Crieff, the Perth and Kinross District Council offered to lease from the pursuer the Market Park in order to promote more widely its use for local sporting activities, to develop its facilities and to relieve the pursuer of its responsibility for its day-to-day management, on the understanding that the Market Park would be made available to the pursuer for the purposes of holding the Highland Gathering every year.

[5] The provisions of the lease which are material for the purposes of the present action may be summarised as follows. I shall set out in full those which are of particular importance for present purposes. It is important to mention first, however, that the lease does not contain an irritancy provision. Under clause SECOND the term of the lease was to be for sixty years from 1 April 1983, which was to be the date of entry, until 31 March 2043. Clause THIRD of the lease provided that the defender was to pay to the pursuer a rent of £100 per annum and that this rent was not to be subject to review. In terms of clause FIFTH, the defender was to operate the ground leased as a public park and recreation ground and, in particular, the area shown hatched in blue on the annexed plan was, so long as required by the pursuer, to be operated as a football ground for the use of football teams based in the Crieff area. The scale of charges used by the district council in respect of parks and recreational facilities in other parts of the Perth and Kinross District was to be applied to the ground leased. In terms of clause SIXTH, the defender was to be entitled to sub-let the whole or any part of the ground leased to such clubs, organisations or other bodies as it thought fit for such football matches, organised games, travelling fairs and other recreational activities as the defender considered would make fit and proper use of the ground leased. By virtue of clause SEVENTH, the defender, after prior consultation with the pursuer and with its consent (which was not to be unreasonably withheld), was to be entitled generally to develop the ground leased and to improve its facilities for the purpose of a public park and recreation ground. Clause EIGHTH provided that the ground leased was to include the pavilion and toilets indicated on the plan. The tenants were to be entitled, after prior consultation with the pursuer and with its consent (which was not to be unreasonably withheld), to sub-let and/or to demolish the pavilion and/or the toilets as might be agreed, either during the currency of or at the expiry of the lease.

[6] Clause NINTH provided as follows:

"The Tenants, or their sub-tenants, after prior consultation with the Landlords and with the consent of the Landlords, provided such consent is not unreasonably with-held, shall be permitted to erect on the ground leased a new Pavilion, new Toilets or other building ancillary to the use of the ground leased as a public park and recreation ground. Any such building or buildings erected by the Tenant, or their sub-tenants, shall be maintained and upheld by the Tenants, or their sub-tenants, as the case may be, in good condition and repair during the currency of this lease and at the expiry of this lease, the Landlords shall have the option to take over, or to require the removal without cost to them, of any such building or buildings. If any or all of the said buildings referred to in this Clause are erected by the Tenants, they shall be entitled during the currency of this lease to sub-let them as they shall think fit."

[7] Clause TENTH provided as follows:

"The Tenants shall, during the currency of this lease, relieve the Landlords of their whole responsibility for the maintenance of the boundary fences, walls and others enclosing the ground leased."

[8] Clause ELEVENTH provided as follows:

"The Tenants bind and oblige themselves to keep the ground leased in a neat and tidy condition at all times during the currency of this lease."

[9] Under clause TWELFTH the pursuer was to be entitled, on giving to the defender not less than one calendar month's prior notice, to take on let from the defender, the whole or part of the ground leased for a period of not more than four consecutive weeks in each year, for the purpose of holding the Crieff Highland Gathering. The defender was obliged to ensure that the ground sub-let is in a suitable condition, all to the reasonable satisfaction of the pursuer. The pursuer was to pay to the defender a rent of £100 per annum in respect of the sublet. The unchallenged evidence at the proof was that neither the rent due by the defender to the pursuer in terms of clause THIRD, nor the rent due by the pursuer to the defender for the annual sub-let had ever been demanded or paid.

[10] Clause FOURTEENTH of the lease provided that:

"The Tenants shall at all times during the currency of this lease at their sole expense obtain all necessary consents, permissions and licences other than those which the Landlords shall require to obtain in terms of Clause TWELFTH hereof and shall comply in all respects with all requirements in respect of the ground leased or the said buildings erected or to be erected thereon, which by virtue of any present or future legislation (which expression includes Acts of Parliament and all subordinate legislation) are or may be required by any competent authority."

[11] Clause SIXTEENTH of the lease provided inter alia as follows:

"The Landlords shall be entitled in each year during the currency of this lease to call a meeting on one calendar month's notice having been given in writing to the Tenants, such meeting to be held between representatives of the Landlords and the Tenants (the representatives from the Tenants shall include the elected District Council members for Crieff and district) to discuss matters generally arising from this lease and matters of importance to the running of the Market Park for the purposes as stated herein ..."

Background to the present dispute
[12] It was clear from the evidence that the background to the present proceedings lay in the parties' conflicting views as to what the future should hold for the subjects. Put shortly, the pursuer's position has for some years been that the subjects should be sold for development as the site for a Sainsbury's supermarket. They have entered into option agreements with developers which, if implemented, would allow for the sale of the subjects and the development of an improved sports ground at Pittenzie Road in Crieff; the establishment costs of this (though not the future running costs) would be funded by Sainsbury's; in the future the Highland Games would be held at that location and the pursuer would hope to be able to lease those subjects to the defender on similar terms to those contained in the present lease. Following a public local inquiry in July 2006, outline planning permission was granted by a Reporter for these two developments, the defender having previously refused to grant such permissions. The defender, on the other hand, considers that the Market Park should be retained for use as public open space. It acknowledges that there is a need for a new supermarket in Crieff, but favours a site on land at Duchlage Farm, not far from the subjects. It can thus be seen that the defender disagrees fundamentally with the outcome arrived at by the Reporter.

[13] There was evidence from Mr Grassick that the pursuer's directors had been dissatisfied and had become frustrated over the years with what they considered to be slow and inadequate maintenance and upkeep of the subjects by the defender, particularly in relation to the condition of the boundary walls. For example, at a meeting of the pursuer's Board of Directors on 29 January 1996 concern was expressed about the condition of the boundary walls and fences. The minutes state that a meeting was to be arranged with the then District Council to discuss this and other matters of concern. At the next quarterly meeting it was recorded that arrangements had been made for the walls to be repaired. At the directors' meeting held on 24 March 1998 considerable concern was expressed, according to the minutes, about the condition of the high boundary wall. The matter was to be raised with Mr Gallagher of the defender. It is of interest to note that the minute of the meeting states that the responsibility for all boundary walls lay with the defender. That this was the pursuer's understanding is confirmed by the terms of a letter dated 27 April 1998 sent by the pursuer's then chairman, Mr Frank Duncan, to Mr Ken Wilson, a Project Technician at the defender's Property Department. The letter refers to a recent visit to the subjects by the defender's Mr Gallagher. It goes on to record the pursuer's concern that the "maintaining lease" held by the defender was not being honoured. Reference is then made to the existence of many signs of severe deterioration in the perimeter wall. The wall at the south side of the subjects is said to be unsafe because it was "completely tunnelled through in one ever enlarging area". There is mention of a missing section of wall at the north side of the subjects; the hole is said to be gradually increasing in size. The letter records that Mr Gallagher had taken in hand "unsightly dumps of rubble". The letter concludes with Mr Duncan stating that he trusts that the pursuer "can rely on your department to start restoring the property with immediate effect to fulfil the contractual terms of the lease." By a further letter dated 30 May 1998, Mr Duncan wrote in a similar vein to a local councillor, Mr Iain Hunter. He again expressed concerns about the safety of the deteriorating boundary walls. The letter says that Mr Wilson had responded to the earlier letter and had agreed to carry out an inspection and prepare a programme of repairs, but nothing further had happened. Mr Duncan referred to the excavation in the large sandstone wall to the south of the subjects and to the gap in the northern boundary wall. Mr Grassick's recollection was that, following this correspondence, the defender had carried out the necessary repairs. The next recorded expression of concern would appear to have been at a directors' meeting on 17 July 2002 when it was noted that a section of boundary wall at Duchlage Road required to be replaced. An excerpt from the defender's 2007 Orders Database (7/42 of process) suggests that this repair may not have been carried out until August 2007.

[14] Notwithstanding the intermittent concerns expressed by the pursuer about the defender's maintenance and upkeep of the subjects, it was not until November 2007 that there was any suggestion by the pursuer that the lease should be brought to an end on the basis that the defender was in material breach of its obligations thereunder.

The November 2007 Notice and its immediate aftermath
[15] By November 2007 it had become clear that the defender was unwilling to relinquish its tenancy interest in the subjects so that the planning permissions granted by the Reporter could be implemented. By notice dated 23 November 2007 the pursuer's solicitors (at that stage HBJ Gateley Waring) intimated what were described in their brief letter as "numerous wants of repair within the subjects which fall within the tenant's responsibility in terms of the lease". They enclosed an Interim Schedule of Dilapidations prepared by Mr Chalmers. The notice purported to require that the wants of repair be remedied within a period of 3 calendar months and warned that if the defender failed to comply with this requirement, the lease might be terminated. The Interim Schedule made reference inter alia to clauses NINTH, TENTH and ELEVENTH of the lease.

[16] In his evidence Mr Chalmers explained the nature and extent of the inspection of the subjects which he carried out in November 2007. He described problems with the boundary walls. He noted several areas where there were cracks in the walls and others where there were gaps in the mortar or between coping stones such as would allow water penetration. He also observed several areas where vegetation, including saplings and small trees, was growing out of cracks in the walls. He explained how lack of maintenance could lead to more serious problems threatening the structural integrity of the walls. He referred to the presence of "excess rubbish and debris" in the south-east corner of the subjects and to the dilapidated condition of the gates. He noted sections of walls that were off-plumb and the presence of rotting fascias on the sports pavilion. Mr Chalmers took a total of 260 photographs at the subjects and these were referred to in his evidence. The photographs show clearly that in some areas the stonework in the boundary walls had deteriorated; that cracks had opened up; that there were gaps between coping stones; and that vegetation was growing out of some of the gaps in the walls. In general, the photographs support Mr Chalmers' findings.

[17] It is important to note that Mr Chalmers was very frank in his evidence about the limitations of the inspection which he carried out in November 2007 and of his Interim Schedule of Dilapidations. In particular, he acknowledged that he had not been asked to look at the subjects in the detail which would normally be required when preparing a final schedule of dilapidations. He had not been made aware of the pursuer's intentions with regard to the subjects; he explained that he was simply asked to look at the condition of the walls. He did not ask for or receive any legal advice about the obligations incumbent on the defender under the lease. He said that he would expect the defender to carry out its own detailed inspection and to obtain legal advice before undertaking any of the work he recommended. He accepted that it would be difficult and disproportionately expensive to repair the lime mortar in the walls over the winter months.

[18] Upon receiving the pursuer's notice of 23 November 2007, the defender's Mr Low asked Mrs Whiteford, one of the solicitors in the Legal Services Department, for advice about it. She wrote on 29 November to the pursuer's solicitors asking if they would forward the title deeds. This was so that she could examine them to establish the extent of the pursuer's responsibility for maintenance of the boundary walls because she had noted that the defender's obligation under clause TENTH of the lease was to relieve the pursuers of their maintenance responsibility. The pursuer never sent the title deeds to the defender. Mr Grassick said that this was because the pursuer understood that the deeds would have been provided to the defender at the time when the lease had been entered into.

[19] The pursuer's solicitors did not reply to Mrs Whiteford's letter and she, therefore, sent them a reminder on 24 January 2008. In response to that, the pursuer's solicitors wrote saying that they understood that discussions were on-going "regarding the issues raised in relation to the lease obligations". They said that they did not propose to provide a detailed response pending the outcome of these discussions. In fact, it would appear that there were no such discussions, as Mrs Whiteford pointed out in her reply of 31 January to that letter.

[20] Upon receiving the notice, Mr Low, who is himself a chartered surveyor, went round the subjects. He too took a number of photographs. While he thought that the majority of the walls were in good condition, he acknowledged in evidence that the specific defects identified and photographed by Mr Chalmers were present. Mr Low recorded that there was cracking and gaps in some sections of the boundary walls and other areas where attention was required, for example in relation to paintwork on the pavilion.

[21] The next stage was an inspection of the subjects by Mr Cummings, the defender's facilities management officer, on 29 November 2007. In a report dated 4 December 2007 he highlighted problems with the main car parking area, the gates and the fencing and boundary walls. He took more photographs and attached these to his report. He stated that the photographs showed that there were indeed a number of what he described as "defect areas requiring attention". He said in the report that these varied from painting/repairs to gates and fencing to minor and major repairs to stone and brick walls. Mr Cummings' report contained an overview of the repair works which he considered to be required. He noted a number of areas of concern in particular. He considered the main area of concern to be the large stone/brick wall adjacent to the pavilion at the south end of the subjects. This required to be stabilized and repaired soon. He noted that repairs were required to the stone work along the entire length of the boundary walls, including pointing and rebuilding of some areas. He identified a need for repairs to cracking around the depot. The majority of the pedestrian and main vehicle gates required repairs to allow them to open and close. Ground works required to be carried out around the gates to allow them to operate. Mr Cummings recorded that the boundary metal fencing required repairs and repainting. Vegetation and tree sapling roots required to be removed from some walls. In various areas rubbish required to be removed. Finally, there was a need for resurfacing works at the main car parking areas and at the entrance gates.

[22] After this flurry of activity around the time of the November 2007 notice, nothing significant happened until January 2009. In particular, the defender did not arrange for any repairs to be carried out; it did not consider any of the repairs to be urgent and did not think that there were any health and safety issues arising. The pursuer, for its part, allowed matters to rest and did not follow up its concerns. Throughout that period the subjects continued to be used normally; in particular, the Highland Games went ahead as usual in August 2008 (they have taken place also in 2009 and 2010).

Events surrounding the purported termination notice of 22 January 2009

[23] In January 2009 the pursuer instructed Mr Chalmers to carry out a further inspection of the subjects, particularly of the boundary walls. He did so on 16 January 2009. The results of his inspection were set out in a letter dated 22 January 2009 from the Hurd Rolland Partnership to Mr David Geddes, the pursuer's company secretary. The inspection found that since November 2007 the defender had not undertaken any work to address the wants of repair identified by Mr Chalmers in his earlier inspection. A number of examples of the continuing problems were given in the Hurd Rolland letter: vegetation was still growing in the joints of the walls in various places; the trees and shrubs growing out of the wall on the northern boundary had not been attended to; and nothing had been done to the red sandstone wall at the southern end of the site. Hurd Rolland considered the current condition of the boundary walls to be poor and to have deteriorated since November 2007. They raised concerns about public safety "particularly if the subjects were to be used for a major event such as the Crieff Highland Games."

[24] On the same date as the Hurd Rolland letter, Mr Geddes wrote to Mr Low on the notepaper of the solicitors' firm in which he was a partner, Messrs Irving Geddes WS. The letter explained that Irving Geddes were now instructed on behalf of the pursuer and made reference to the lease. The letter then continued as follows:

"We refer to the notice issued to you by Crieff Highland Gathering Limited's former agents HBJ Gateley Wareing, on 23 November 2007 (the "Notice"), a copy of which is attached for reference.

Whereas you have failed to remedy the breaches of the lease referred to in that Notice timeously in terms of said Notice, on behalf of Crieff Highland Gathering Limited, we therefore now give you Notice that the Lease is held to be terminated on the ground of your breaches of the terms thereof, and that with effect from today's date.

Termination of the Lease is without prejudice to and under reservation of Crieff Highland Gathering Limited's whole rights and remedies as landlords under the Lease, in respect of your obligations as Tenant thereunder."

[25] The defender's head of legal services replied to the notice of termination by letter dated 23 January 2009. In his reply he referred to the earlier correspondence in November 2007 and January 2008 and noted, in particular, that no response had been received to Mrs Whiteford's request for the title deeds or to her statement that there had, contrary to the assertion made by HBJ Gately Wareing, been no discussions between the parties. The letter then continued as follows:

"The Council are unable to take any steps to remedy the defects in the boundary walls until we have established the extent of the Council's maintenance obligations. As soon as we have received the requested information from you and established the extent of our liability we shall proceed with these works all in accordance with Landlord's approval.

Notwithstanding our position that no breach of the Lease has taken place, I am of the view that the alleged breach would not constitute a material breach given the nature of the obligation placed on the Council in terms of Clause Tenth of the Lease."

[26] On 12 February 2009 the Summons initiating the present proceedings was signeted; it was duly served on the defender a short time later.

[27] On or about 1 April 2009 the defender instructed Mr Henderson, an independent chartered building surveyor, to inspect the subjects. He identified many of the issues previously described by Mr Chalmers and recorded these in a number of photographs. On the basis of these photographs, Mr Cummings, the defender's facilities management officer, prepared a schedule of works in June 2009. The works were carried out by W J Davidson (Builders) between about late July and September 2009. Subsequently, works were carried out to repair damage to the pursuer's shed on the subjects. The total cost of the works (including VAT) was £9,107.54, according to the various invoices referred to in evidence. The works carried out are listed in a document prepared by Mr Cummings (page 31 of 7/34 of process). That list refers to an extract from a report prepared by Mr Henderson for the defender on 8 April 2009 (7/24 of process). The extract identifies a number of items of repair at the subjects; it cross-refers to many (but not all) of the wants of repair reported on by Mr Chalmers. In summary, the defender carried out repairs to various sections of boundary walls; some coping stones and other loose stones were re-bedded; re-pointing of mortar was carried out at a number of locations; barbed wire and glass were removed from some areas of the walls; a section of unstable concrete wall was demolished and rebuilt; a manhole cover was replaced; and debris and rubbish were removed.

[28] The pursuer was not satisfied that the repairs carried out on behalf of the defender amounted to a satisfactory solution to the dispute and decided to press ahead with the present proceedings.

The legal issues arising in the present case
(a) Is the defender in breach of its obligations as tenant under the lease?

[29] The first question is whether the pursuer has proved that the defender is in breach of any of its obligations as tenant under the lease. The pursuer maintained that, under the lease, the defender had a duty to carry out the following:

·       The ordinary repairs which a tenant would ordinarily be liable to carry out;

·       The extraordinary repairs which a landlord would normally be liable to carry out, but responsibility for which had been transferred to the defender under clause TENTH;

·       Repairs to the pavilion under clause NINTH;

·       General tidiness and keeping in good order of the subjects under clause ELEVENTH; and

·       Repairs to the walls which are listed buildings;

[30] I shall examine each of these claims in turn.

[31] The defender argued that it was not open to the pursuer to rely on any breach of the tenant's common law obligation to carry out ordinary repairs because the notice of 23 November 2007 referred only to "wants of repair which fall within the tenant's responsibility in terms of the lease" and could not be read as extending to obligations which existed apart from the lease. This seems to me to be too narrow a reading of the notice. In my opinion, the clear purpose and import of the notice and the accompanying Interim Schedule of Dilapidations prepared by Mr Chalmers were to notify the defender of wants of repair which were understood by the pursuer to be the defender's responsibility as tenants under the lease.

[32] In his evidence, Mr Chalmers characterised as being ordinary repairs or maintenance the following wants of repair identified in his Interim Schedule of Dilapidations:

·       Item 2 (primarily) - overhaul, repair and, where necessary, replacement of access gates;

·       Item 3 (although there might be some need for rebuilding) - removal of vegetation, saplings and weeds from faces of boundary walls and making good;

·       Item 4 - removal of trees, saplings and roots growing into walls and making good;

·       Item 8 - repairs at base of walls where large voids and openings were evident;

·       Item 9 - all necessary maintenance work to boundary wall coping stones;

·       Item 10 - repairs to pointing in boundary walls;

·       Item 12 - making good missing or damaged wallhead detailing; and

·       Item 13 - checking all sections of walling (including the entrance pillar finial ball detailing) for security and soundness.

[33] In my opinion, the evidence clearly established that these defects existed at the time of the November 2007 notice and that they had not been attended to by the time the notice of termination was served in January 2009. I find that in each of these respects the defender was in breach of its obligations as tenant of the subjects, there being no dispute between the parties that, at common law, the tenant of a rural lease is liable to carry out ordinary repairs (Rankine, Law of Leases in Scotland, pages 249 to 251; Paton & Cameron, Landlord and Tenant, page 70). I shall turn, in due course, to consider whether these breaches were material and justified recission of the lease.

[34] As well as founding on breach of the defender's duty to carry out ordinary repairs, the pursuer contended that the effect of Clause TENTH was to transfer to the defender responsibility for undertaking extraordinary repairs to the "boundary fences, walls and others enclosing the ground leased". It was agreed that, under the common law, the tenant of a rural lease was not liable to carry out extraordinary repairs. If, during the currency of a rural lease, extraordinary repairs become necessary to a structure owing to natural decay, then the landlord is responsible for such extraordinary repairs (Johnstone v Hughan (1894) 21 R 777). The argument for the defender was that clause TENTH could not be construed as referring to the landlord's liability for extraordinary repairs. "Maintenance" meant something other than "extraordinary repairs". The clause should be construed strictly and contra proferentem because it was a relieving provision. The reference in the clause to "responsibility for maintenance" required one to ask "maintenance to whom"; the answer to that question was unclear and the pursuer had not sought to elucidate the matter by leading evidence as to the responsibility for maintenance imposed on it under the titles to the subjects.

[35] In my opinion, the defender's arguments on the construction of clause TENTH are unsound and must be rejected. It seems to me that, in the context of the lease when it is read as a whole, the clause should be construed as referring to the liability which would otherwise be incumbent on the pursuer as landlord for maintaining the boundary fences, walls and others enclosing the ground leased. Such liability includes the liability for carrying out extraordinary repairs to those parts of the subjects. The basic purpose of the contract between the parties was to grant to the defender a long lease of the subjects for a nominal rent because of the acknowledged shortage of sports facilities in Crieff. In return, the defender was to take on responsibility for management of the subjects and to operate the Market Park as a public park and recreation facility. The defender was to be entitled to develop and improve the subjects to enhance their use by the public for these purposes. It seems to me to be entirely consistent with that scheme for the defender to take on responsibility for carrying out all necessary repairs to the boundary walls and to relieve the pursuer of that responsibility. The defender, as the local authority with responsibility for managing the subjects in the public interest, would be much better placed to become wholly responsible for maintaining the boundary walls than a corporation, run by volunteers, which would have possession of the subjects for only a brief period each year and access to limited funds. The language of the clause supports this interpretation, in my view. In particular, it refers to the pursuer's "whole responsibility" for the boundary fences etc. The words "whole responsibility" are, in my opinion, sufficiently wide to extend to the landlord's common law liability for extraordinary repairs. I think also that the fact that the clause refers to the landlord's whole responsibility points towards the intention having been to transfer the liability which would, in the absence of express provision, normally fall upon the party holding the landlord's interest under a lease of rural subjects, namely the liability for extraordinary repairs. I should add that I am not persuaded that the clause should be construed contra proferentem or in some "strict" sense, as was submitted on behalf of the defender under reference to such well-known cases as Ailsa Craig Fishing Co Ltd 1982 SC (HL) 14 and Caledonia North Sea Ltd v London Bridge Engineering Ltd 2000 SLT 1123. The clause here is not (unlike the provisions considered in those cases) an indemnity clause or one involving an exemption from or limitation of liability. In my view, the correct approach to the construction of Clause TENTH is simply to give the language of the provision its ordinary and natural meaning, in the context of the parties' contract read as a whole. I should add that even if the clause did fall to be construed contra proferentem, this would not, as it seems to me, make any difference to its meaning in the circumstances of the present case.

[36] The wants of repair referred to in Mr Chalmers' Interim Schedule of Dilapidations, which he considered would qualify as extraordinary repairs covered by clause TENTH were these:

·       Item 5 - renewing and re-bonding of cracked and broken bond between sections of walling, including any necessary repairs to foundations;

·       Item 6 - rebuilding off-plumb, leaning and bulging stonework;

·       Item 7 - reinstating, re-bedding and bonding of all areas of walling where stonework has fallen out;

·       Item 11 - reinstating crumbling sections of the brick arches to provide full support to the stonework above;

·       Item 14 - repairing cracking in the concrete walling at the south-east corner of the subjects adjacent to the Roads Department depot;

·       Item 15 - all necessary re-securing, demolition and reconstruction of the off-plumb higher sections of walling at the north-west corner of the Roads Department depot;

·       Item 18 - all necessary repairs to walling on the Duchlage Road boundary, including removal of loose stones and pointing followed by raking out and complete repointing; and

·       Item 20 - renewal of higher sections of walling at the southern end of the subjects (not all of these sections of wall were boundary walls).

[37] I consider that the evidence clearly demonstrated that all of these defects existed at the time of Mr Chalmers' initial inspection in November 2007; the photographic evidence is incontrovertible. It follows from the view I have reached as to the meaning of clause TENTH, that the defender was in breach of its obligation to carry out the necessary extraordinary repairs to these various defects. I shall come later to consider whether these breaches were material.

[38] The other clauses relied on by the pursuer, on the basis of Mr Chalmers' inspection, were clauses NINTH and ELEVENTH. As to the former clause, this permitted the defender or its sub-tenants to erect a new pavilion. Any such new building was then to be maintained and upheld by the defender or its sub-tenants in good condition and repair. The evidence was that at some point in the late 1980's the pursuer agreed to the construction of a new pavilion; since then it has been used by local football clubs. Mr Chalmers found that the fascias on the pavilion were rotting; the detailing needed to be repainted and the cement mortar tifting required to be made good and safe. Again, there was clear photographic evidence of these problems. In these respects it seems to me to be clear that the defender had not complied with its obligations under clause NINTH and was, therefore, in breach of contract. I find also that the defender was in breach of its obligation under clause ELEVENTH to keep the ground leased in a neat and tidy condition at all times during the currency of the lease. Mr Chalmers found that at the south-east corner of the subjects adjacent to the Broich Road walling there was what he described as an excess of rubbish and debris. He took photographs to illustrate this. In my view, the defender was in breach of the obligation imposed on it under clause ELEVENTH in this respect. The latter clause could also be said, in my view, to have been breached because of the defender's failure to remove vegetation, saplings and weeds from the faces of the boundary walls.

[39] The pursuer argued also that clause TENTH had the effect of transferring to the defender the pursuer's responsibility as owner of the subjects for the preservation of the boundary walls as listed buildings. The pursuer acknowledged that no statutory notice had been served, but maintained that clause TENTH meant that the defender was responsible for taking reasonable steps for the proper preservation of the boundary walls insofar as they were listed buildings. Since I have already held that the defender was in breach of its obligation to maintain the boundary walls under clause TENTH, this aspect of the pursuer's case adds little to the overall analysis. It seems to me, however, that since no statutory notice has been served on the pursuer requiring it to carry out any repairs to the listed structures, it cannot be said that the pursuer is under any responsibility which would be capable of being transferred to the defender by clause TENTH. The pursuer has never had any more than a potential statutory responsibility for preserving listed buildings under Chapter V of Part 1 of the Planning (Listed Buildings and Conservation Areas) (Scotland) Act 1997.

[40] Finally on this branch of the case, I should deal with an argument advanced for the pursuer to the effect that the defender was in breach of the lease (and in particular of clause TENTH) because it had failed to comply with its statutory duty as occupier under the Occupiers' Liability (Scotland) Act 1960 ("the 1960 Act"). Reliance was placed also on clause FOURTEENTH in this connection. In my opinion, this line of argument is misconceived. The 1960 Act does not impose any direct obligations in respect of "maintenance" of the occupier's land or any structures on it. It is concerned rather with defining the care which an occupier of land or other premises is required to show towards a person entering upon the premises in respect of dangers due to the state of the premises (or anything done or omitted to be done on them) and for which the occupier is in law responsible (section 2(1)). The Act also imposes the same statutory duty upon a landlord where the landlord is responsible for the maintenance or repair of the premises (section 3(1)). Thus it may be seen that the Act does not impose any responsibility for maintenance; rather, the existence of such a maintenance responsibility (e.g. under a lease) may lead to liability under the Act arising in certain circumstances. So, in my view, clause TENTH has not transferred to the defender any liability which might, in certain circumstances, devolve upon the pursuer under the 1960 Act.

[41] In conclusion on this section of the case, I consider that the pursuer has proved that the defender was, in November 2007 and in January 2009, in breach of its obligations under clauses NINTH, TENTH and ELEVENTH of the lease for the reasons and on the grounds set out by Mr Chalmers in his Interim Schedule of Dilapidations and Wants of Repair dated November 2007. I find also that the defender was in breach of its implied obligation to carry out ordinary repairs on the grounds identified by Mr Chalmers.

(b) Was the pursuer entitled to terminate the lease?

[42] Both parties accepted that, in order for the pursuer to have validly terminated the lease, the defender must have been in material breach of its obligations thereunder. It is, therefore, logical to consider next whether, on the evidence, the pursuer has proved that the various breaches of the contract of lease, which I have found to be established, amounted in the circumstances to material breaches of contract. If the pursuer has failed to prove that the defender was in material breach of the contract of lease then the pursuer could not succeed in the present action.

[43] The question whether a breach of contract is or is not material has been said to be primarily a question of fact and degree (McBryde, The Law of Contract in Scotland, 3^rd edition, para. 20-96). Over the years, the type of breach which is required in order to justify recission of the contract has been described by different judges in different ways. Thus, in Collard v Carswell (1892) 19 R 987 at 991, the Lord Ordinary (Lord Kyllachy) said that what was required to justify the conclusion that "a contract is off" was a breach "in a material, and certainly in an essential part". In the Inner House, Lord McLaren (at page 996) spoke of "an implied right to either party to rescind where there is a failure of performance in a matter touching the essentials of the contract". His Lordship referred, in the same context, to a "substantial failure" and to "a matter of vital importance - I mean a matter touching the very existence of the contract". In Wade v Waldron 1909 SC 571 at 576 Lord President Dunedin said that what was needed was a breach going "to the root of the contract"; and at page 577 Lord McLaren said that the question always was "whether a stipulation which has been broken is of the essence of the contract". In Municipal Council of Johannesburg v D Stewart & Co (1902) Ltd 1909 SC 860 at 877, Lord Dunedin reiterated that in order to entitle the innocent party to say that the contract was at an end there had to be the breaking of a stipulation going to the root and essence of the contract; otherwise the innocent party had to "go on with the contract and do what he is bound to do under it; he may claim damages for the breach of the portion which has been broken." In Graham & Co v United Turkey Red Co 1922 SC 533 at 536 Lord Anderson referred to a term which was of "the root and substance of the contract". In Todd v Bowie (1902) 4 F 435, the Inner House considered a case where the tenant left a farm after three years of a 19 year lease, on the ground that the landlord had failed to implement his obligation to put the fences into good tenantable repair. The tenant had been awarded £35 as damages, but asked the court to apply the ordinary rule as to reciprocal obligations in a mutual contract, and to find that there had been a determination of the tenancy under section 42 of the Agricultural Holdings (Scotland) Act 1883. The First Division unanimously held that the contract was not at an end. It is of interest that the Lord President (Lord Kinross) observed, at page 437, that if the landlord persisted in refusing to fulfil a material term of a mutual contract, a right to abandon the subjects let might arise, and if the subjects were, in consequence of his failure to fulfil his obligation, unfit for the purpose for which they were let, the tenant might be entitled to leave at once. Lord Adam, after referring to the distinction between "essential" conditions and others, said (at page 438) that he had never heard that a tenant, because the fences were in a bad condition, was to be allowed to walk away.

[44] In the present case none of the various breaches on the part of the tenants (whether viewed singly or cumulatively) can properly be said to have been material, in my opinion. A number of considerations point to this conclusion. In the first place, it should be recalled that, throughout the time since the commencement of the lease in April 1983, both sides have been able to make full and uninterrupted use of the subjects for the purposes contemplated in their contract. The defender has throughout managed and operated the Market Park as a municipal sports ground, as required under the lease. Mr Low explained that since the start of the lease the defender has carried out the normal upkeep of the subjects; it has spent about £4,000 to £5,000 per annum on grounds maintenance. It has a programme for grass cutting and weeding, painting the white lines and looking after the trees. It handles booking and deals with the football clubs. For its part, the pursuer has been able to hold the Highland Gathering every year without interruption or significant difficulty. There was no evidence that the subjects have ever had to be closed to the public because of any of the wants of repair identified by Mr Chalmers or that there has ever been any difficulty in the public making full use of the Market Park. The fact that the Market Park has been run under the current arrangements without any significant difficulty for a period of 28 years since the inception of the lease seems to me to indicate that the essence of the contract between the parties has not been undermined. The subjects cannot be said to have become, in the words of Lord Kinross in Todd v Bowie "unfit for the purpose for which they were let". The pursuer argued that the defender's maintaining obligations were the most important component of the lease. In my view, this fails to recognise that the real purpose of the lease was to create a scheme under which the local authority would take over the running of the Market Park from the pursuer. Part of this scheme involved requiring the local authority to maintain the boundary walls, but to argue, as the pursuer did, that the maintenance obligations were at the heart of the contract seems to me to place disproportionate weight on a single element of a multi-faceted scheme.

[45] Secondly, whilst I accept that the defender has not always been as diligent or as prompt as it might perhaps have been in responding to complaints and concerns expressed by the pursuer about the condition of the subjects, I am not persuaded that these shortcomings can be said to be of such fundamental gravity as to touch on the very existence of the contract. Mr Grassick accepted in his evidence that the defender did carry out some repairs to the boundary walls from time to time. For example, there was evidence that walls were repaired in August 1983 (7/41 of process) and that a new post and wire fence was put up in September 1997 (7/43 of process). There is no evidence that matters ever reached the point at which the pursuer seriously considered arranging for repairs to be carried out at its own expense with a view to recovering the cost from the defender; nor was there any evidence that the pursuer ever considered that it would be necessary to seek an order from the court that the defender should carry out specific works of repair or maintenance. At no stage did the pursuer take steps to call a formal meeting on a matter considered to be important, as it could have done in terms of the procedure contemplated in clause SIXTEENTH. In this connection, it is notable also that the pursuer did nothing to follow up the November 2007 notice until 2009. That delay (which was not explained in the evidence) is hardly indicative of a serious or urgent problem. I accept that the pursuer's directors were from time to time (perhaps understandably) frustrated by what they perceived as unjustified delay and inefficiency on the part of the defender, but I am not persuaded that the state of the boundary walls (or any of the other problems) has ever been so fundamentally bad as to justify termination of the lease. The condition of the subjects at the outset of the lease was not addressed in the evidence so that it is difficult to assess the extent or rate of deterioration during the currency of the lease. It seems to me, however, that the nature and extent of the various wants of repair identified by Mr Chalmers is such that they must have been developing gradually for many years. It was not suggested that a point had ever been reached at which the problems became so bad that they could no longer have been put right. In the whole circumstances, I find it impossible to hold that the various problems discussed in the evidence were material in the sense identified in the case law.

[46] Thirdly, the lease is a long one with over 30 years still to run. The defender has now carried out repairs with a view to addressing the problems identified by Mr Chalmers. At the proof the pursuer criticised (for the first time) the quality of some of these repairs, for example because cement mortar instead of limestone mortar had been used in certain places and because gaps remained in some sections of the boundary walls. Mr Cummings and his colleague, Mr Scott, accepted at least some of these criticisms. I think it is also fair to say that the works should perhaps have been done sooner. Nonetheless, Mr Low stressed that the defender was committed to continuing to run the subjects as an important public facility and to fulfilling its contractual responsibilities under the lease in the future. Mr Low seemed to me to be a reliable and responsible public official and I accept his evidence on these points. A similar attitude is reflected in the letter of 23 January 2009 from the defender's Head of Legal Services in response to the purported termination notice. I note also that in the summer of 2010 the parties co-operated well in preparing for the Highland Gathering; that is clear from the email chain forming 7/33 of process - potholes were filled in and turf was replaced. By letter dated 2 September 2010, Mr Geddes expressed his appreciation to Mr Low for having attended a meeting at the Market Park with the pursuer's chairman and said that he hoped this could be repeated next year. These various indications of the tenant's future intentions are of importance because the courts have traditionally been reluctant to allow a rural lease without an irritancy clause to be brought to an end in circumstances where the tenant has made it clear that it intends to perform its side of the contract during the remaining period of the lease. I shall come back to this aspect in a somewhat different context in the next part of this Opinion. In the context of considering whether there has been a material breach of contract, however, it seems to me that the evidence I have just summarised about the carrying out of repairs and the continuing operation of the subjects for the purposes of the lease tends to lend support to the view that the essence of the contract has not been undermined.

[47] Fourthly, stepping back from the detailed evidence about the various wants of repair for a moment and trying to take a realistic view of matters, my impression is that the problems identified in the evidence were not particularly serious in the overall scheme of things. One indication of this is that the total cost of the repairs carried out on the defender's instructions in 2009 amounted to just over £9,000. Another is that the overall condition of the subjects (and the boundary walls in particular) seemed to me to be adequate to allow the subjects to be used without significant difficulty. I acknowledge that the photographs show the walls to be old and crumbling in places, but I am not myself persuaded that these deficiencies detract in any substantial sense from the value and utility of the subjects as a worthwhile facility for public recreation.

[48] For all these reasons, I have come to conclude that the pursuer has not established that the defender is now or has ever been in material breach of contract. It follows that the pursuer was not entitled to bring the contract to an end. That is sufficient to resolve the case in the defender's favour, but I propose to consider briefly certain other issues that were raised at the proof.

The relevance of the defender's willingness to perform in the future

[49] The absence of an irritancy clause in the lease means that the pursuer has had to rely on the general common law rule that a party to a mutual contract is entitled to rescind where the other party has committed a material breach of it. No doubt because of the prevalence of irritancy clauses in leases, cases involving recission of a lease on the ground of material breach are unusual. What then are the rules governing this area of the law?

[50] The subject is helpfully discussed in an article by Mr Martin Hogg of the University of Edinburgh entitled "To Irritate or to Rescind: Two Paths for the Landlord" (1999 SLT (News) 1), to which reference was made by both sides in their closing submissions at the proof. Mr Hogg draws attention to a fundamental distinction between the right to irritate a lease and the right to rescind such a contract. The right to irritate is the right deriving from the lease or ex lege for failure to pay rent to terminate the lease for past breach; the right to rescind (in a leasehold context) is the right deriving from the common law, to terminate for refusal by the tenant to perform de futuro. Thus the right to rescind a lease for material breach is somewhat narrower than the right to rescind other mutual contracts.

[51] The development of this approach to recission of a lease can be traced back to the dissenting opinion of Lord Fullerton in Hamilton v Hamilton (1845) 8 D 308. The case is not directly in point for the purposes of the present action because it concerned an attempt by an heir of entail to obtain a declarator of irritancy of a 31 year lease granted under the Montgomery Act (10 Geo. III. c. 51). The First Division refused to grant such a declarator on the grounds that the lease contained no irritancy clause, and a legal irritancy was not applicable in the circumstances. At least two of the judges (Lords Mackenzie and Jeffrey) appear to have been strongly influenced by the view that a lease created a real right and could, therefore, only be brought to an end by reliance on a legal or conventional irritancy. The Lord President (Lord Boyle) based his decision on the fact that the statute did not provide for irritancy of a lease granted under its terms. Lord Fullerton took a different approach from the other members of the Court. He thought that a lease was similar to any other mutual contract when it came to termination on the ground of material breach of its terms. His Lordship considered there to be one important difference, however. The distinction lay in the rule that the right to rescind a lease would only apply where the tenant was refusing to undertake performance of its obligations in the future. Thus he said (at page 312) that "the landlord is entitled to make the tenant say whether he will implement (the lease) or not; and if he will not, to have the contract of lease set aside."

[52] In Edmond v Reid (1871) 9 M 782, a landlord sought decree for declarator that a tenant was bound to reside with her family on a leased farm and, failing her doing so, for declarator that she had forfeited all right to the possession of the farm. The lease contained a clause requiring occupation by the tenant, but there was no irritancy clause. She refused to provide a satisfactory undertaking that she would fulfil the residence obligation; her undertaking to occupy for at least a week or 10 days every two months was not considered to be adequate. The Second Division upheld the Lord Ordinary's decision to grant the declarator sought. What is of interest for present purposes is that the members of the court were greatly influenced by the tenant's declaration as to her future intention. For example, the Lord Justice Clerk (Lord Moncrieff) at page 849 emphasised that, in contrast to an action for declarator of irritancy, the conclusions of the summons were "entirely for the future, and relate solely to the effect of a refusal for the future to fulfil the conditions of the right".

[53] In Blair Trust Company v Gilbert 1940 SLT 322 the tenant of a farm had been imprisoned for three years and was accordingly unable to fulfil a condition of the lease that he should reside on the subjects. That clause was not fenced with an irritancy provision. The Lord Ordinary (Lord Keith) was prepared to grant declarator that the defender had forfeited his right to remain in possession on the basis that he was in material breach since he had already been absent from the farm for over a year and would be absent for a further year and some months. His Lordship attached importance to the fact that the obligation founded on was a continuing or recurring obligation over a tract of time.

[54] On the basis of the evidence in the present case, I consider that it would be right to proceed on the footing that the defender has made it clear that it intends to fulfil its obligations under the lease (in particular in regard to maintenance of the boundary walls) for the remainder of its duration. I take this from the evidence of Mr Low, which I accept, and also from the other evidence to which I have referred in paragraph [46] supra. The pursuer argued that no account could properly be taken of anything done or said by or on behalf of the defender since the date of the purported termination notice in January 2009. I reject this line of argument. It runs counter to the approach taken by Lord Fullerton in Hamilton and to the decision of the Second Division in Edmond. It is also inconsistent with the view taken by Lord Keith in Blair Trust Company. In my opinion, it would be unsatisfactory and unduly rigid if the Court was not permitted to take account of the tenant's future intentions when considering whether it is right to declare that a long lease should be held to have come to a premature end. Having regard to the views expressed in the authorities I have cited, it seems to me that a landlord may only rescind a lease where a number of conditions are satisfied. These are: (1) that the tenant has committed a material breach of the contract of lease; (2) that the landlord has given the tenant a fair and reasonable opportunity to fulfil its contractual obligations and (3) that the tenant has demonstrated that it is unwilling or unable to perform in the future. It is clear from this analysis that the court must take into account the conduct and attitude of the tenant right up to the time when decree is sought. In the present case, I have already held that the defender has not committed a material breach of the lease. In addition, I consider that the pursuer has not proved that the defender is unable or unwilling to fulfil its contractual obligations in the future. In my view, the right conclusion to draw from the evidence is that the defender is indeed committed to ensuring that it adheres to its contractual responsibilities in the future. So the pursuer has, in my judgment, failed to satisfy conditions (1) and (3). That leaves for consideration the question as to whether the pursuer gave the defender a fair and reasonable opportunity to fulfil its contractual obligations (i.e. condition (2)).

The adequacy of the termination procedure adopted by the pursuer

[55] The pursuer contended that it was entitled to terminate the lease on the basis that the defender had failed to comply with the terms of the notice served on 23 November 2007. That notice, as I have previously explained, purported to require the defender to remedy within three months the "wants of repair" identified in the Interim Schedule of Dilapidations prepared by Mr Chalmers on the basis of his inspection of the subjects on 13 November 2007. The defender argued that the notification provided was, in the whole circumstances, insufficient and unfair. In approaching this point, it seems to me to be reasonable to expect that the notice should give fair and reasonable notice of the grounds on which the landlord seeks to bring the lease to an end and an adequate opportunity for the tenant to put matters right. In my view, the pursuer gave fair notice of the grounds on which it relied: the Interim Schedule referred to clauses NINTH, TENTH and ELEVENTH of the lease and it set out, in some detail, Mr Chalmers' findings. A total of twenty five photographs were included to illustrate the problems identified by Mr Chalmers. It would not have been difficult for the defender to understand the pursuer's complaints and to respond to them. While I consider that the notice, when taken along with the Interim Schedule of Dilapidations, set out in sufficient detail the pursuer's complaints and concerns, I am not persuaded that it was reasonable to expect the defender to address matters within a period of three months from 23 November 2007, as the pursuer purported to require should be done. Mr Grassick only went so far as to say that he and the pursuer's Board thought that three months was sufficient to allow for something to happen, in the sense that some response from the defender could be expected during that period. The pursuer's intention was to try to get things moving. Mr Chalmers accepted that the tenant would need to carry out its own inspection and appraisal; that it might require to take legal advice; that Historic Scotland might have to be consulted; that a competent contractor would have to be identified and that he would require to inspect the subjects and prepare a detailed programme of works. Mr Chalmers acknowledged in his evidence that it was not advisable to carry out the works during the three month period from 23 November 2007 because of the difficulties in repairing lime mortar over the winter months. He accepted that it would be impracticable for such works to be done over the period laid down by the pursuer's notice. Mr Low regarded the three month period as entirely unrealistic. Mr Cummings was of the same opinion. He referred to the well-known difficulties in working with lime mortar in the winter; to the fact that contractors would be on holiday for two weeks over Christmas and New Year; to the need for the works to be fitted into a contractor's existing programme; and to the delay likely to be involved in ordering materials. Mr Scott shared the views of his two colleagues about the difficulty of carrying out repairs in a three month period from November.

[56] In that state of the evidence, I have no difficulty in holding that the three month period specified in the notice of 23 November 2007 was unreasonable. It failed to allow sufficient time for the defender to address the wants of repair identified by Mr Chalmers. The ultimate notice of termination of January 2009 is based upon the defender's failure to comply with the time limit set in the November 2007 notice. Since that original time limit was, in my view, unfair and unreasonable, the pursuer is not entitled to terminate the lease on the ground that it was not met.

In any event, would a fair and reasonable landlord have terminated the lease in all the circumstances?

[57] The final issue discussed at the proof was whether, if the defender was in material breach and the pursuer was entitled to rescind, a fair and reasonable landlord would have sought to terminate the lease. The issue would have arisen because of the terms of section 5(1)(b) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985. This provides, so far as relevant, that a landlord shall not, for the purpose of terminating a lease, be entitled to rely on the fact that an act or omission by the tenant is a material breach of contract if in all the circumstances of the case a fair and reasonable landlord would not seek so to rely. Section 5(3) provides that in the consideration of the circumstances of a case where an omission is alleged to constitute a breach of a provision of the lease and the breach is capable of being remedied in reasonable time, regard shall be had to whether a reasonable opportunity has been afforded to the tenant to enable the breach to be remedied. I should record that in the course of submissions on this aspect of the case a number of authorities were briefly referred to: Blythswood Investments Ltd v Clydesdale Stores Ltd 1995 SLT 150; Aubrey Investments Ltd v DS Crawford Ltd (in receivership) 1998 SLT 628 and 1999 SC 21; Maris v Banchory Squash Racquets Club Ltd 2007 SC 501 and Burger King Ltd v Rachel Charitable Trust 2006 SLT 224. None of these cases seemed to me to be of assistance in the particular circumstances of the present case.

[58] In my opinion, there are a number of reasons why a fair and reasonable landlord would not have sought to terminate the lease in the circumstances of the present case, even if the defender had been in material breach. Firstly, the three month ultimatum given by the notice of 23 November 2007 was, for the reasons I have already set out, clearly too short. I consider also that the pursuer acted unreasonably thereafter in making no efforts to engage with the defender with a view to exploring whether it would be possible to find an amicable solution to the problems identified by Mr Chalmers. As I have explained already, the pursuer did nothing more until January 2009 when it served the termination notice without any further warning; in particular, the pursuer declined what seems to me to have been a reasonable request to make its title deeds available to the defender and it broke off correspondence on the false ground that discussions were taking place between the parties. Secondly, the wants of repair identified by Mr Chalmers did not, in my view, amount to justification for terminating the lease, especially when one recalls its duration (and the unexpired portion thereof), the nature of the subjects as a public park and the fact that the Market Park has been successfully used by both parties for the purposes envisaged in the lease since it was entered into in 1983. Thirdly, I consider that a fair and reasonable landlord would have resorted to remedies less draconian than recission in order to address the problems referred to by Mr Chalmers; such other remedies could have included arranging for the works to be carried out and seeking to recover the cost thereof from the defender or applying for a court order appointing the defender to carry out the necessary repairs. The problems highlighted by Mr Chalmers were all capable of being put right at a relatively modest cost. Another step which the pursuer could reasonably have taken, in my opinion, would have been to invoke the procedure envisaged in clause SIXTEENTH by calling for a formal meeting with representatives of the defender on a matter considered to be of importance. Like Lord Macfadyen in Euro Properties Scotland Ltd v Alam (unreported, 20 June 2000 at paragraph 44), I consider that it would not be fair and reasonable for the pursuer here to opt for termination where there are alternative remedies available which would (a) not deprive the tenant of its interest in the lease but (b) nevertheless adequately protect the landlord's interest. Looking at the circumstances as a whole, it appears to me to be reasonable to infer that the reason behind the pursuer's desire to terminate the lease was that it wished to proceed with the arrangements it had entered into with Sainsbury's, rather than because of a pressing concern over the condition of the subjects in general and the boundary walls in particular. For the reasons I have already given, I do not consider that the condition of the subjects was sufficient justification for terminating the lease. In my opinion, a fair and reasonable landlord would not have acted as the pursuer did in seeking to terminate the lease, even if the defender had been in material breach of contract.

Result

[59] In the result, I shall sustain the defender's third and fourth pleas-in-law and assoilzie them from the conclusions of the summons. In addition, I shall sustain the defender's sixth plea and grant decree of reduction ope exceptionis of the notice of termination of the lease dated 22 January 2009. I shall repel the pursuer's second and third pleas-in-law, the first plea having been repelled previously, following a Procedure Roll debate. I shall reserve meantime all questions of expenses.