Outer House case concerning a lease of premises at the Gyle Shopping Centre in Edinburgh under which the Gyle was the landlord and Marks & Spencer, the tenant.

Gyle entered an agreement with Primark for the erection of a new store on land which included part of a car park. However, Marks & Spencer’s premises were let together with a one-third pro indiviso share of shared areas which included the car park. Gyle sought declarator from the court to the effect that (1) that the building of the Primark store did not breach the lease and (2) Marks and Spencer had consented to the building of the new store. (Gyle also made a further argument based on personal bar, which would only require to be considered if the Court found in favour of Marks & Spencer on the first two arguments).

A breach of the lease?
The essence of Gyle’s argument was that the right to the car park granted to Marks & Spencer under the lease was not a real right.  In particular they argued that a self-standing grant of tenancy to a pro indiviso share in land could not meet the requirements of a lease conferring a real right. As a consequence they contended that the right was only enforceable against the original landlord (Gyle’s predecessor in title) and not Gyle. Lord Tyre rejected that argument finding that the right in the car park was granted as a pertinent of the lease which conferred a real right enforceable against the landlord’s successors and, as such, the right in the car park was also enforceable against the landlord’s successors. Consequently, building the Primark store in the car park would constitute a breach of Marks and Spencer’s lease.

Consent to the new store?
In the absence of a variation recorded in the appropriate register, the lease could only be varied in accordance with its terms. Gyle argued that Marks and Spencer had approved the building of the store at a meeting of the shopping centre management committee and that the approval had been recorded in the minutes and signed by all of the parties (including Marks and Spencer). However Lord Tyre found that there was nothing in the lease conferring a power to vary the lease upon the management committee. Although he did not require to decide the issue, Lord Tyre also found that the terms of the lease required that a change to the car parking area would require probative (i.e. signed and witnessed) writing.

Having regard to the outstanding issue of personal bar, Lord Tyre put the case out By Order to discuss further procedure.

The full judgement is available from Scottish Courts here.

(See also summaries of decisions in which the court found (1) that M&S was not personally barred from preventing Gyle from erecting the store on the car park and (2) that M&S was not unreasonably withholding consent to the Primark development.)

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.