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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Salaried Staff v Swears & Wells [1985] ScotCS CSIH_2 (15 February 1985)
URL: http://www.bailii.org/scot/cases/ScotCS/1985/1985_SC_189.html
Cite as: 1985 SLT 326, [1985] ScotCS CSIH_2, 1985 SC 189

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JISCBAILII_CASE_SCOT_CONTRACT

15 February 1985

SALARIED STAFF LONDON LOAN COMPANY LIMITED
v.
SWEARS AND WELLS LIMITED

At advising on 15th February 1985,—

LORD PRESIDENT (Emslie).—In 1977 the defenders became tenants of premises on the Anniesland Industrial Estate under a commercial lease, which is reproduced in the appendix to this reclaiming motion. The ish prescribed by the lease is 1st August 2011. In 1981 the pursuers succeeded the granters of the lease and are the landlords of the premises. It is unnecessary to rehearse the whole obligations imposed upon the tenants under the lease. All that needs to be said is that inter alia they bound themselves to pay an annual rent which was subject to review at five-yearly intervals, to pay additional rent in terms of clause 2, to make certain payments all as prescribed in clause 3, and to maintain the premises, replace them if damaged, and keep them regularly painted, and insured in the joint names of the landlords and the tenants.

By letter dated 25th March 1982 the defenders purported to "renounce" the lease with effect from 31st March 1982. They vacated the premises and on 26th March 1982 handed the keys to the pursuers' factor. It is accepted that they had no conventional right to do any of these things and that by their actions they are comprehensively in breach of contract. No explanation is offered by the defenders in their pleadings for their repudiation of the lease which the pursuers have refused to accept.

In this action the pursuers seek to enforce the defenders' obligation under the lease to pay the rent and the additional rent, by concluding for payment of the rent and the additional rent which became due and payable by the defenders on various dates subsequent to their repudation of the lease and which remain unpaid as at the date when this action began. We are informed that two further actions for payment of rent for periods of time subsequent to the bringing of this action have been brought by the pursuers, and have been sisted to await the disposal of this action.

In the procedure roll to which the action was sent on the defenders' motion the Lord Ordinary sustained the defenders' first plea-in-law—a plea to the relevancy—and dismissed the action. As his opinion shows he accepted that in the law of Scotland the general rule in cases of breach of contract is that the innocent party has a choice of remedy and in that connection said this:

"He may sue for implement of the contract. Alternatively, he may accept the repudiation of the contract and claim damages for the breach. He cannot in the normal case be compelled to seek the alternative remedy if he does not wish to do so. This was authoritatively stated by Lord Watson in Stewart v. Kennedy (1890) 17 R. (H.L.) 1, at p. 10, in the context of a contract for the sale of a specific subject".

He then went on to hold, as I understand his opinion, that the general rule does not permit innocent parties in the position of the pursuers, faced by repudiation of an entire contract, to enforce only a particular term of the contract. They must either seek specific implement of the whole contract, or accept the repudiation and claim damages. In effect, accordingly, the Lord Ordinary's decision to sustain the plea to the relevancy appears to have rested upon the view that it is not competent for the pursuers in this action merely to seek payment of unpaid rent.

In this reclaiming motion the defenders did not seek to support the Lord Ordinary's reasons for dismissing the action. They recognised, quite correctly in my opinion, that if an innocent party is entitled to refuse to recognise and accept a repudiation of a contract he is entitled to hold the party in breach of contract in this way to each and every obligation, but is not bound to sue for performance of all the obligations in one action. The hearing before us, accordingly, came to be conducted as a debate about the correctness of the result which the defenders maintained was a perfectly sound one although it was arrived at for the wrong reasons. In these circumstances, although this is a reclaiming motion for the pursuers, it will be both convenient and appropriate to begin by summarising, first of all, the submissions for the defenders.

For the defenders it was accepted that when one party to a contract repudiates it as the defenders have done in this case, making it clear that he refuses for the future to carry out his part of the contract, the general rule in the law of Scotland is that the innocent party has an option. He may accept that repudiation and sue for damages for breach of contract or, if he chooses, may disregard or refuse to accept it and then the contract remains in full effect. There is, accordingly, under the general rule a legal right in the aggrieved party to sue for implement, where implement is possible, but, said counsel for the defenders, the court has inherent power to refused on equitable grounds, to allow the aggrieved party to exercise that legal right if it would be inconvenient and unjust or unreasonable to exercise it instead of accepting the repudiation and suing for damages for breach of contract. This submission was derived, it was said, from the case of Stewart v. Kennedy (1890) 17 R. (H.L.) 1, and the speech of Lord Reid in particular in White and Carter (Councils) Ltd. v. McGregor 1962 SC (HL) 1. In the circumstances of this case the course of action which the pursuers have decided to follow is not obviously convenient, just, and reasonable. The lease has more than 25 years to run. The defenders have made it plain that they have no intention of carrying out any of their obligations thereunder. It is prima facie wholly unreasonable for the pursuers to seek to hold the defenders to their contractual obligations under the lease throughout its life and, in particular, to their obligation to pay rent. In the absence of any averments by the pursuers that it is convenient, just, and reasonable for them in the circumstances of this case to maintain the contract instead of accepting the defenders' repudiation and claiming damages, their averments are not relevant to support the conclusions of the summons.

For the pursuers the reply was a simple one. They have chosen to exercise one of the options provided for them by law. They have a legal right to seek to enforce all or any of the obligations to which the defenders bound themselves in the lease. They are not inviting the court to give them an equitable remedy. Although it is accepted that in certain circumstances which will be both rare and exceptional, the Court of Session may refuse, on equitable grounds, to allow an innocent party to exercise the option which the pursuers have chosen to exercise in this case, it is not for the pursuers, who have a legal right to sue for implement of obligations under a lease which remains in full effect, to seek to justify the exercise of that right by averments directed to the convenience, justice or reasonableness of their chosen option. If there are exceptional circumstances which might be thought to entitle the court to refuse to allow the pursuers to exercise the legal right conferred by the general rule of law it is for the defenders to plead these circumstances in defence to the action. In any event the court is not entitled to consider whether it is reasonable to allow a party to enforce his full rights under a contract and it is far from obvious that there is anything inconvenient and unjust in what the pursuers have elected to do. It is not averred, nor has it been decided, that the pursuers will insist on maintaining the lease until the ish. Even if it had been so averred or decided the defenders have the right under the lease to relieve themselves of the whole obligations thereof by assigning it to another with the consent of the pursuers, such consent, according to the lease, "not to be unreasonably withheld". The defenders do not explain why they have not sought to exercise this right already. In all the circumstances, the defenders' attack upon the relevancy of the pursuers' averments is without substance and the interlocutor of the Lord Ordinary should be recalled.

At the outset I should say that although it was suggested in the speech of junior counsel for the pursuers that they had an express conventional right to sue for arrears of rent where the defenders have repudiated the lease in breach of contract, this is not so. Clause 5 (1) of the lease makes express provision for irritancy in defined circumstances and, alternatively, for two specific courses of action which the pursuers may take. The declaration which follows these stipulations does no more than to make it clear that the exercise of any of the pursuers' conventional powers shall be without prejudice to all other remedies available to them at the relevant date. In other words, the common law rights of the pursuers are expressly reserved and it is to the common law that one must look in order to test the defenders' submission that the pursuers' averments are irrelevant et separatim lacking in specification.

The common law which is applicable in the events which have happened in this case is not in doubt. In Stewart v. Kennedy (1890) 17 R. (H.L.) 1, Lord Watson at pp. 9–10 said this:

"I do not think that upon this matter any assistance can be derived from English decisions; because the laws of the two countries regard the right to specific performance from different standpoints. In England the only legal right arising from a breach of contract is a claim of damages; specific performance is not matter of legal right, but a purely equitable remedy, which the court can withhold when there are sufficient reasons of conscience or expediency against it. But in Scotland the breach of a contract for the sale of a specific subject such as landed estate gives the party aggrieved the legal right to sue for implement, and although he may elect to do so, he cannot be compelled to resort to the alternative of an action of damages unless implement is shewn to be impossible, in which case loco facti subit damnum et interesse.Even where implement is possible, I do not doubt that the Court of Session has inherent power to refuse the legal remedy upon equitable grounds, although I know of no instance in which it has done so. It is quite conceivable that circumstances might occur which would make it inconvenient and unjust to enforce specific performance of contract of sale, but I do not think that any such case is presented in this appeal."

That these observations are of general application in all cases of breach of contract is clear enough and I cannot do better than to quote from the speech of Lord Reid in White and Carter (Councils) Ltd. 1962 SC (HL) 1, at p. 11:

"The general rule cannot be in doubt. It was settled in Scotland at least as early as 1848, and it has been authoritatively stated time and again in both Scotland and England. If one party to a contract repudiates it in the sense of making it clear to the other party that he refuses or will refuse to carry out his part of the contract, the other party, the innocent party, has an option. He may accept that repudiation and sue for damages for breach of contract, whether or not the time for performance has come, or he may, if he chooses, disregard or refuse to accept it and then the contract remains in full effect."

The only question which remains is as to the circumstances in which the Court of Session may deny to the victim of a breach of contract the exercise of his undoubted legal right to sue for implement of all or any of the obligations incumbent upon the party in breach, It has already been noted that the court may only do this on equitable grounds and in this connection the case of Grahams v. Magistrates of Kirkcaldy (1882) 9 R. (H.L.) 91 offers authoritative guidance. In that case Lord Watson, in a passage quoted by Lord Reid in his speech in White and Carter (Councils) Ltd. expressed himself thus:

"It appears to me that a superior Court, having equitable jurisdiction, must also have a discretion, in certain exceptional cases, to withhold from parties applying for it that remedy to which, in ordinary circumstances, they would be entitled as a matter of course. In order to justify the exercise of such a discretionary power there must be some very cogent reason for depriving litigants of the ordinary means of enforcing their legal rights. There are, so far as I know, only three decided cases, in which the Court of Session, there being no facts sufficient to raise a plea in bar of the action, have nevertheless denied to the pursuer the remedy to which, in strict law, he was entitled. These authorities seem to establish, if that were necessary, the proposition that the Court has the power of declining, upon equitable grounds, to enforce an admittedly legal right; but they also shew that the power has been very rarely exercised."

As the speeches of Lords Reid and Hodson in White and Carter (Councils) Ltd. show, the court is not concerned at all with the question whether it is reasonable for a pursuer to enforce his contractual rights in a particular way. From this brief examination of the authorities it will be seen that the court will only decline to allow a pursuer to enforce an admittedly legal right in exceptional circumstances and must find some very cogent reason for exercising the particular power which has been rarely used. Consideration of what is or is not reasonable is quite irrelevant. I have only to add that Lord Reid in White and Carter (Councils) Ltd., in examining the possibility that there is some general equitable principle or element of public policy which requires some limitation of the contractual rights of an innocent party, expressed the view that the court might not allow such a party to enforce a legal right if he has no legitimate interest, financial or otherwise, in performing the contract rather than claiming damages.

In this settled state of our law I have not the slighest doubt that the pursuers in this action do not require to make averments in justification of their claim. They sue for payment of a contractual debt, in the exercise of a legal right to do so. They are not seeking an equitable remedy at the hands of the court. It is not for the pursuers to show that there are no circumstances which might lead the court to decline to enforce their legal right. If there are exceptional circumstances and cogent reasons which might persuade the court on equitable grounds to refuse to the pursuers their legal remedy it is for the defenders to make the appropriate averments in defence to the action. They have not done so in this case. In the result there is no room for the view that the pursuers' averments are irrelevant or lacking in specification. The reclaiming motion for the pursuers must, accordingly, in my opinion, be allowed.

In expressing this opinion I should say that I consider that in this action, which is concerned only with rents which have accrued unpaid in the relatively short period between the repudiation of the lease by the defenders and 31st December 1982, it would be extremely difficult to envisage the existence of cogent reasons to support the suggestion that it is somehow inconvenient and unjust for the pursuers to maintain the contract instead of accepting the repudiation and suing for damages. If the pursuers continue to maintain the contract and continue to sue for payment of unpaid rent in subsequent actions it may well be that different considerations will then arise. These, no doubt, will be focused in the defenders' pleadings. Lest it may be thought that I may have overlooked the matter I should add that in the single action which we are considering in this reclaiming motion, it is impossible to support the suggestion that the pursuers have no legitimate interest, financial or otherwise, to insist, at least meantime, in maintaining the lease instead of accepting the repudiation and claiming damages.

Upon the whole matter I would recall the interlocutor of the Lord Ordinary for the reasons which I have given. That having been done we can now dispose of the action by sustaining the pursuers' second plea-in-law—a plea to the relevancy of the defences—and granting decree de plano.Senior counsel for the defenders informed us that he accepted that this must be a necessary consequence of success for the pursuers in their attack upon the interlocutor of the Lord Ordinary.

LORD CAMERON .—I agree that this reclaiming motion succeeds. In the course of his opinion the learned Lord Ordinary said this:

"In the present case, if the pursuers were right, they can sit back until the year 2011 and raise actions against the defenders for arrears of rent at such intervals as they choose irrespective of the fact that in all other respects the contract is not being implemented. This seems contrary to common sense, and I do not think it is correct in law".

For reasons which I shall endeavour to state briefly I think this consequence would by no means necessarily follow. The Lord Ordinary then proceeds to give his reasons for deciding that the reclaimers' action is incompetent; on that matter, however, it is not necessary to express any view because both parties treated and argued the real issue in the case as one of relevancy, and in this I think they were right. If, as I think, our law has long recognised that when there has been a breach of contract by one party, the other has a choice whether to compel implement or sue for damages, then I think it also follows that it lies in the choice of that party also as to the manner and extent in which he seeks to have the contract implemented.

In approaching consideration of this reclaiming motion I think it is necessary to keep clearly in view what it is that the respondents seek. It is not a decree which will ensure payment of each quarter's stipulated rent with appropriate interest until expiry of the lease in 2011. It is no more than decree for payment of four quarterly instalments of stipulated rent, service charges and additional rent with interest, the quarterly payments being in respect of proportions of rent due as at 18th May, 1st August and 11th November 1982 and 2nd February 1983. That is all that the reclaimers seek in this present action, and I respectfully agree with your Lordship in the chair in thinking that if the reclaimers succeed in the present action this does not by that circumstance of itself fix the respondents with liability for all sums of rent stipulated for until the expiry of the lease nor, as I understand the reclaimers' submission, did they seek to adopt such a proposition.

The facts on which the decision of the reclaiming motion turns are few and not in dispute. It is not in dispute that the respondents entered into the lease which the reclaimers found upon. It is not in dispute that the rent payable under the lease is as condescended upon, and it is not in dispute that the respondents purported to renounce the lease in the manner and at the time condescended upon. In addition, I do not think it is disputed that the sums sued for are correct and accurate in their figures. Now the effect of the respondents' renunciation of the lease did not and could not bring the contract to an end. If then the contract is still in existence, the remedies available to the innocent party are not in doubt since at least the date of Stewart v. Kennedy (1890) 17 R. (H.L.) 1. The freedom of the innocent party's choice of remedy is uncontrolled by the party in breach; it is for the innocent party primarily to select that course which to him seems appropriate, subject, however, to a very limited discretionary power in the court which may be invoked in certain exceptional circumstances, to control and direct the remedy which the innocent party will be held entitled to exercise.

In the case of Grahame v. Magistrates of Kirkcaldy (9 R. (H.L.) 91) Lord Watson said this:—

"It appears to me that a superior Court, having equitable jurisdiction, must also have a discretion, in certain exceptional cases, to withhold from parties applying for it that remedy to which, in ordinary circumstances, they would be entitled as a matter of course. In order to justify the exercise of such a discretionary power there must be some very cogent reason for depriving litigants of the ordinary means of enforcing their legal rights…(The) authorities seem to establish, if that were necessary, the proposition that the Court has the power of declining, upon equitable grounds, to enforce an admittedly legal right; but they also shew that the power has been very rarely exercised."

In the later case of Stewart v. Kennedy Lord Watson put the matter in a passage regarded as the locus classicus in this branch of the law of contract. In making clear that where a contract is breached the general rule of our law is that the other party has the choice either to seek implement of the contract or to sue for damages, Lord Watson said:

"Even where implement is possible, I do not doubt that the Court of Session has inherent power to refuse the legal remedy upon equitable grounds, although I know of no instance where it has done so. It is quite conceivable that circumstances might occur which would make it inconvenient and unjust to enforce specific performance of a contract of sale, but I do not think that any such case is presented in this appeal."

Thus it is not for a court to intervene to interpel a party to a contract from seeking implement of his contract merely because that court thinks it would be unreasonable for the innocent party to select and enforce his chosen remedy, but it must appear that it would be both "inconvenient and unjust" to permit that party to exercise his undoubted legal remedy. This view of the law was in terms repeated in the recent case of White and Carter (Councils) Ltd. v. McGregor 1962 SC (HL) 1, per Lord Reid at pp. 12 and 14.

If that be the law, and I do not think there can be room for doubt on that matter, then the question at once becomes upon whom lies the burden of showing that a legal and contractual remedy should be taken away from a party who seeks to enforce it. In my opinion the answer is and must be, upon the party who seeks to avoid implement of the obligation which the law and his contract have placed upon him. Therefore it is for the party in breach who seeks to invoke the exercise of this exceptional and equitable power of the court, to set out in relevant averments the grounds upon which he seeks that exercise.

The argument for the respondents appeared to me to be one which placed the onus on the reclaimers to make averments which could "justify" this recourse to the demand for payment with interest, of the instalments of rent past due, and that as they had not done so this failure was fatal to the relevancy of their claim. In my opinion this argument is misconceived: the reclaimers are seeking a legal remedy conferred upon them by the precise terms of a contract freely negotiated and freely entered into by the respondents; if now the respondents seek to invoke an equitable jurisdiction of the court to avoid enforcement of a covenanted liability which they now refuse to accept and obtemper, then in my opinion it is clearly for them to set out the reasons why they seek their release. All that the respondents say in their pleadings is "explained and averred that having renounced said lease and given up possession of the subjects as condescended on the defenders are not liable to pay rent after the date of the renunciation"—an averment which is both an allegation of fact and a proposition in law, which is echoed in their third plea-in-law. This complete failure to set out by way of averment and plea-in-law the precise factual and legal ground upon which the respondents maintain that the reclaimers are not entitled freely to select that remedy which they seek, appears to me fatal to the defence to the reclaimers' claim for payment of rent and other sums already past due. To affirm the reclaimers' claims in the present action is in no sense to foreclose the determination of any future claims for arrears of rent. Such a proposition is, in my opinion, unsound because each claim by the present reclaimers for payment of rent etc. under the lease will necessarily be considered in light of the circumstances at the time when the claim is pursued by legal action, and the hands of a court exercising an equitable jurisdiction in relation to a future claim cannot be tied by a decision in this case, determined, as it must be, in light of circumstances ruling at the time and as disclosed and founded upon in the pleadings.

In my opinion the respondents have made no relevant averments entitling them to invoke the limited equitable jurisdiction of the court, and refuse to the reclaimers a remedy which the law allows and their contract provides, in the circumstances which have arisen. I would sustain the reclaiming motion.

LORD ROSS .—It is not disputed that since 25th March 1982, the defenders have not paid the rent due under the lease. On 25th March 1982, the defenders purported to renounce the lease and vacated the premises. It is accepted that they had no contractual right to do so, and that they are accordingly in breach of contract.

In the present action, the pursuers are suing for the total rent remaining unpaid at the date of raising the action. They have apparently raised two further actions for subsequent accrued rent, but these actions have been sisted, and the pleadings in these other actions were not before us.

As the Lord Ordinary put it, the pursuers are, in short, seeking to enforce the terms of the lease so far as these relate to payment of rent. The defenders have pleaded that the pursuers' action is irrelevant, and the pursuers have pleaded that the defences are irrelevant. The question raised, as one of relevancy, is whether the pursuers are entitled to the remedy which they are seeking or whether their only remedy in the circumstances is to sue for damages.

When rent due under a lease has not been paid, it is well-established that the landlord is normally entitled to sue the tenant for the rent which is outstanding. "All the ordinary remedies available for recovery of debt are open to the landlord for the recovery of rent. He may raise an ordinary petitory action for debt…" (Rankine on Leases (3rd ed.), p. 357). Junior counsel for the defenders suggested that this remedy was only open to the landlord where the tenant continued in possession of the subjects let, but I do not see why the landlord's right to invoke this remedy should be so restricted. On the other hand, I accept that in this instance the landlord by suing for the outstanding rent, is seeking implement of one only of the obligations incumbent on the tenant under the lease.

The Lord Ordinary dismissed the action apparently upon the view that if the pursuers did not elect to seek damages, their only remedy was specific implement of the whole contract, not merely one of the terms which suited them, i.e. payment of rent. He cited no authority for this proposition, and before us, counsel for the defenders not surprisingly did not seek to support this part of the Lord Ordinary's judgment. When one party has wrongly sought to repudiate a contract which imposes a variety of obligations upon him, I do not see why the other party should not seek to enforce one only (or less than all) of these unperformed obligations.

The defenders have purported to repudiate the contract, but the pursuers are entitled to decline to accept the defenders' repudiation of the contract. "If one party to a contract repudiates it in the sense of making it clear to the other party that he refuses to carry out his part of the contract, the other party, the innocent party, has an option. He may accept that repudiation and sue for damages for breach of contract, whether or not the time for performance has come; or he may, if he chooses, disregard or refuse to accept it and then the contract remains in full effect" (White and Carter (Councils) Ltd. v. McGregor 1962 SC (HL) 1, per Lord Reid at p. 12). In the present case, the pursuers have exercised their option; the pursuers have not accepted the repudiation, and the result must be that the contract remains in full force and effect.

The crucial question is whether there is any limitation on the pursuers' right to enforce the outstanding contractual obligations. Before us, counsel for the defenders maintained that the court required to consider the reasonableness of the pursuers' course of action; where there has been a breach of contract, if the innocent party has a choice of remedy, the court should not permit that party to choose one of these remedies if it would be manifestly unjust and unreasonable to the party in breach to allow the innocent party to do so.

In my opinion, the reasonableness of the pursuers' course of action is not the test. (See Lord Reid, supra p. 14.) On the other hand, it has long been recognised that the court may in exceptional circumstances refuse a party one of two alternative remedies if enforcing his rights in that way would be inconvenient or unjust or would cause exceptional hardship. In Stewart v. Kennedy (1890) 17 R. (H.L.) 1, at p. 10, Lord Watson said:

"But in Scotland the breach of a contract for the sale of a specific subject such as landed estate gives the party aggrieved the legal right to sue for implement, and although he may elect to do so, he cannot be compelled to resort to the alternative of an action of damages unless implement is shown to be impossible, in which case loco facti subit damnum et interesse. Even where implement is possible, I do not doubt that the Court of Session has inherent power to refuse the legal remedy upon equitable grounds, although I know of no instance in which it has done so. It is quite conceivable that circumstances might occur which would make it inconvenient and unjust to enforce specific performance of contract of sale, but I do not think that any such case is presented in this appeal."

In the earlier case of Grahame v. Magistrates of Kirkcaldy (1882) 9 R. (H.L.) 91, Lord Watson referred to the discretion which the court might have in certain exceptional cases to withhold a remedy to which the party applying for it would normally be entitled. In commenting that this power had been very rarely exercised, Lord Watson said:

"In order to justify the exercise of such a discretionary power there must be some very cogent reason for depriving litigants of the ordinary means of enforcing their legal rights".

The dicta of Lord Watson in Grahame v. Magistrates of Kirkcaldy were referred to by Lord Reid in White and Carter (Councils) Ltd. v. McGregor, supra.

Counsel for the defenders conceded that there was no reported case where, when a contract of lease remained in full force and effect, the landlord had been precluded from suing for rent, but he contended that in the present case it would be manifestly unjust and unreasonable to allow the landlord to seek to recover payment of rent in this action. (I did not understand him to suggest that there was any question of exceptional hardship.)

Since it would be wholly exceptional to withhold from the pursuers a remedy to which they would normally be entitled, it is necessary to consider whether there are special circumstances here such as would justify the court in holding that the pursuers are not entitled to the particular remedy which they seek.

Mr Nimmo Smith, for the defenders, submitted that the pursuers' case was irrelevant in that they had not averred that what they were seeking to do was reasonable in all the circumstances; indeed the circumstances tended to point in the opposite direction. I have already observed that the reasonableness of the pursuers' course of action is not the correct test. If the court will only withhold a remedy to which a pursuer would normally be entitled if it would be manifestly unjust and unreasonable to allow the pursuer that remedy, then, in my opinion, the onus would be on the defender to aver facts and circumstances from which such manifest injustice and unreasonableness could properly be inferred.

In the present case, the defenders' pleadings are not addressed to this issue at all. In answer 2, it is averred that the contract cannot be continued without the co-operation of the defenders, and that the pursuers in the circumstances of the defenders' repudiation have no legitimate interest in seeking to enforce the lease. The making of these averments appears to be an attempt to found on certain dicta of Lord Reid in White and Carter (Councils) Ltd. v. McGregor, but that case was very different on its facts from the present case.

The one special feature of the present case is that the lease was for 35 years until 1st August 2011. In that situation, counsel for the defenders contended that if the pursuers were successful in their action, they could sit back until the year 2011 and raise successive actions against the defenders for arrears of rent at yearly or at least regular intervals until 2011, even though in all other respects the lease was a dead letter. At first I was inclined to think that there might be force in this contention, but on further consideration I find it less impressive. The present action relates only to the rent outstanding up to the date of raising the action. We have not seen the pleadings in the two other actions presently sisted. In these actions or in any subsequent actions raised, averments may be made from which it might be inferred that it would be manifestly unjust or unreasonable to allow the pursuers to continue suing for rent. The decision in the present case would not necessarily apply to a later case where there were different averments.

Moreover, it is plain from the provisions of the lease that the defenders need not necessarily remain tenants under the lease until 2011. There is an exclusion of assignees without the express consent in writing of the landlord, and in terms of clause 3 (XXVIII) (a) (1) the tenant may assign the lease with the written consent of the landlord (such consent not to be unreasonably withheld). Accordingly, it is open to the defenders to find a substitute tenant if they wish to terminate the contractual relationship between themselves and the pursuers.

In contending that the only remedy available to the pursuers is to accept the repudiation and to sue for damages, the defenders are seeking to place on the pursuers the obligation to find a new tenant for the subjects, whereas the provisions of the lease place that obligation upon them if they wish to cease to be tenants themselves. Likewise, in advancing the foregoing contention, the defenders are seeking to arrogate to themselves the right to elect the appropriate remedy, whereas it is the pursuers who have the choice of seeking implement or claiming damages.

In support of his submission, Mr Nimmo Smith founded on the judgment of Lord Denning M.R. in Attica Sea Carriers v. Ferrostaal [1976] 1 Lloyd's Rep. 250. That case was, however, quite different on its facts. The vessel chartered was out of repair to such an extent that it would cost more to repair her than she was worth even after the repairs had been done, and that lay at the root of the decision that the charterers were not bound to repair but were merely liable in damages; the circumstances almost amounted to frustration of the contract. In any event, the real question was one of construction of the contract (the charter party), and what the court held was that, in the absence of clear words, the interpretation giving the more reasonable result should be preferred. In all the circumstances, I do not find this decision of assistance in arriving at a conclusion here.

What is significant in the present case is that the defenders have made no averments which might justify the view that it would be manifestly unjust and unreasonable to allow the pursuers the remedy which they seek in that action. In their pleadings, the defenders offer no explanation for purporting to renounce the lease; they do not say that it has become uneconomic for them to continue as tenants, nor that it would be uneconomic for any other tenant; they do not aver that any attempts have been made by them to find a substitute tenant nor that it has been impossible to find such a substitute tenant.

The lack of any such averments appears to me to be fatal to Mr Nimmo Smith's contention. Although the court may, in exceptional circumstances, withhold a remedy from a pursuer, there is no material in the present case which would justify the court in concluding that it would be manifestly unjust and unreasonable to allow the pursuers the remedy which they are seeking. An action for payment is one remedy open to a landlord when rent is outstanding. The pursuers' action appears to me to be a relevant action to which the defenders have not put forward any relevant defence. I have already referred to some of the defenders' averments. Their third plea-in-law is presumably intended to express the legal proposition upon which the defence is based. It reflects the averments made in answer 4. The third plea-in-law is in the following terms—"3. The defenders having renounced said lease and yielded up possession of the subjects they are riot liable to pay rent thereafter and should be assoilzied".

It was not suggested and could not properly be suggested, that the proposition contained in that plea-in-law was sound.

In all the circumstances, I am satisfied that no relevant defence has been put forward in this action. I would accordingly grant the reclaiming motion, and recall the interlocutor of the Lord Ordinary. I would repel the first plea-in-law for the defenders, I would sustain the first and second pleas-in-law for the pursuers, and would grant decree de plano.

[1985] SC 189

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was granted by Scottish Council of Law Reporting and
the electronic version of the text was provided by Justis Publishing Ltd.
Their assistance is gratefully acknowledged.


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