LORDS DECISIONSLORDS DECISIONS >>LORD & TENANTLORD BROWNE-WILKINSON —MY LORDS, I HAVE HAD THE ADVANTAGE OF READING IN DRAFT THE SPEECH PREPARED BY MY NOBLE AND LEARNED FRIEND, LORD HOPE OF CRAIGHEAD. FOR THE REASONS WHICH HE GIVES I WOULD DISMISS THE APPEAL.LORD JAUNCEY OF TULLICHETTLE—MY LORDS, I HAVE HAD THE ADVANTAGE OF READING IN DRAFT THE SPEECH OF MY NOBLE AND LEARNED FRIEND, LORD HOPE OF CRAIGHEAD, WITH WHICH I AGREE. IT IS THEREFORE UNNECESSARY FOR ME TO SET OUT IN DETAIL THE CIRCUMSTANCES IN WHICH THE APPELLANTS (DLC) CAME TO BE THE TENANTS UNDER THE SUBLEASE OF 8 NOVEMBER 1983 AND 2 FEBRUARY 1984. SUFFICE IT TO SAY THAT DLC DEFAULTED ON THEIR PAYMENTS OF RENT AND THE RESPONDENTS (CIN) INVOKED THE IRRITANCY CLAUSE (5) IN THE SUBLEASE. IN CIN PROPERTIES LTD V DOLLAR LAND (CUMBERNAULD) LTD THIS HOUSE FOLLOWED THE EARLIER DECISION IN DORCHESTER STUDIOS (GLASGOW) LTD V STONE 1975 SC (HL) 56 AND REJECTED THE CONTENTION OF DLC THAT THE IRRITANCY CLAUSE WAS UNREASONABLE INASMUCH AS THE RELATIONSHIP OF THE PARTIES WAS MORE AKIN TO A JOINT VENTURE, AND THE IRRITANCY WAS REALLY A PENALTY CLAUSE. THE LORD ORDINARY'S DECREE OF THE DECLARATOR OF IRRITANCY WAS ACCORDINGLY UPHELD. IT IS SIGNIFICANT THAT COUNSEL FOR DLC BEFORE THIS HOUSE ON THAT OCCASION EXPRESSLY DECLINED TO MAKE ANY SUBMISSIONS ON OPPRESSION.LORD ORDINARY AND AN EXTRA DIVISION OF THE INNER HOUSE BY A MAJORITY.LORD THE AMOUNT BY WHICH THE LATTER HAS BEEN ENRICHED BY THE TERMINATION OF THE LEASE IS A NOVEL ONE IN THE LAW OF SCOTLAND AND NO CASE WAS REFERRED TO BY SENIOR COUNSEL FOR DLC IN WHICH SUCH A RIGHT HAD BEEN RECOGNISED. HOWEVER HE ARGUED FORCEFULLY THAT THE PRESENT SITUATION WAS NOT THE SIMPLE LANDLORD AND TENANT RELATIONSHIP UNDER A SINGLE LEASE BUT A MORE COMPLEX COMMERCIAL ARRANGEMENT WHEREBY THE HEAD LEASE WAS INTENDED TO PROVIDE SECURITY TO CIN FOR THEIR INVESTMENT AND THAT THERE WAS NO REASON IN PRINCIPLE WHY A CLAIM BY DLC FOR UNJUST ENRICHMENT IN THESE CIRCUMSTANCES WAS NOT COMPETENT. ALTHOUGH, IN A PARTICULAR SITUATION, IT MIGHT BE PERFECTLY REASONABLE FOR A LANDLORD TO ENFORCE AN IRRITANCY CLAUSE IN A LEASE, THAT DID NOT PREVENT THE COURT AFFORDING A REMEDY TO THE TENANT WHERE THE ADVERSE CONSEQUENCES TO HIM AND THE ENRICHMENT TO THE LANDLORD WERE WHOLLY DISPROPORTIONATE TO THE BREACH. IN SUCH A SITUATION THE COURT WAS ENTITLED TO CONSIDER THAT THE DISEQUILIBRIUM TO THE PARTIES WARRANTED ITS INTERVENTION.LORD TO GET RID OF AN UNSATISFACTORY TENANT, BUT WHICH DID NOT EXCLUDE A SUBSEQUENT CLAIM BY THE TENANT FOR UNJUST ENRICHMENT. IN MONCREIFF V HAY AND CHALMER'S TRUSTEE V DICK'S TRUSTEE IT WAS HELD, AS A MATTER OF CONSTRUCTION OF THE RESPECTIVE IRRITANCY CLAUSES IN THE AGRICULTURAL LEASES, THAT ENFORCEMENT THEREOF HAD DEPRIVED THE TENANTS OF ALL PROPERTY IN THE CROPS GROWING AT THE TIME WHEN THE LEASES WERE TERMINATED. IN STEWART V WATSON THE COURT HELD THAT AN IRRITANCY CLAUSE TAKING EFFECT ON THE SEQUESTRATION OF A TENANT WAS LAWFUL AND, IN CONTRADISTINCTION TO A LEGAL IRRITANCY, COULD NOT BE ARGUED. MY LORDS, I DO NOT FIND THAT THESE CASES THROW ANY LIGHT ON THE PROPOSITION ADVANCED BY DLC.LORD.LORD IS FAR FROM UNUSUAL. IN MONCREIFF V HAY AND CHALMERS' TRUSTEE V DICK'S TRUSTEE, THE LANDLORD ACQUIRED THE GROWING CROPS SOWN BY THE TENANT. WHEN A GRASSUM HAS BEEN PAID BY A TENANT FOR A LEASE, IT HAS NOT BEEN SUGGESTED THAT IT IS RECOVERABLE IF THE LEASE IS IRRITATED. SIMILARLY, WHERE A TENANT HAS EFFECTED IMPROVEMENTS TO PROPERTY IN THE EXPECTATION OF ENJOYING THAT PROPERTY FOR A SIGNIFICANT PERIOD, THE VALUE OF THOSE IMPROVEMENTS IS NOT RECOVERABLE AT COMMON LAW. DLC ACCEPTED THAT MERE ENRICHMENT TO THE LANDLORD IS NOT ENOUGH; THAT ENRICHMENT MUST BE UNJUST OR, IN OTHER WORDS, DISPROPORTIONATE IN ALL THE CIRCUMSTANCES TO THE CONSEQUENCES TO THE LANDLORD OF THE BREACH. TWO DIFFICULTIES STAND IN THE WAY OF DLC. IN THE FIRST PLACE A CLAIM FOR RECOMPENSE QUANTUM LUCRATUS EST IN THE LAW OF SCOTLAND NORMALLY ARISES WHERE ONE PARTY PROVIDES GOODS OR SERVICES DISCONFORM TO CONTRACT WHICH ARE NEVERTHELESS ACCEPTED BY THE OTHER AS, FOR EXAMPLE, WHERE A BUILDER DEPARTS SUBSTANTIALLY FROM THE CONTRACTUAL PLANS FOR A HOUSE (RAMSAY & SON V BRAND) AND IS THEREBY DISABLED FROM SUING ON THE CONTRACT. YOUR LORDSHIPS WERE REFERRED TO NO CASE IN WHICH A PARTY WAS CLAIMED TO HAVE BEEN LUCRATUS UNJUSTLY SOLELY BY REASON OF THE TERMINATION OF A CONTRACT IN ACCORDANCE WITH THE SPECIFIC PROVISIONS THEREOF. IN THE SECOND PLACE, THE ALLEGEDLY UNJUST NATURE OF CIN'S ENRICHMENT ARISES DIRECTLY FROM THE TERMS OF THE IRRITANCY CLAUSE. IT IS THE SECOND DIFFICULTY WHICH, TO MY MIND, PRESENTS AN INSURMOUNTABLE HURDLE FOR DLC. THEY MUST SHOW NOT ONLY THAT CIN WERE ENRICHED, BUT THAT THEY WERE UNJUSTLY ENRICHED.LORD AND IT SHALL BE LAWFUL FOR THE LANDLORD OR ANY PERSON OR PERSONS DULY AUTHORISED BY THE LANDLORD IN THAT BEHALF TO ENTER UPON THE POSSESSION OF THE LEASED PREMISES OR ANY PART THEREOF IN NAME OF THE WHOLE AND TO UPLIFT RENTS, EJECT THE TENANTS, SUBTENANTS AND OCCUPIERS AND THEREAFTER USE, POSSESS AND ENJOY THE SAME FREE OF ALL CLAIMS BY THE TENANT, SUBTENANTS AND OTHERS AS IF THESE PRESENTS HAD NEVER BEEN GRANTED ....’LORD WHO MIGHT NOT KNOW UNTIL IT WAS TOO LATE WHETHER ENFORCEMENT OF AN IRRITANCY WAS FOR HIM A BENEFICIAL COURSE. ANY REFORM OF THE LAW COULD, IN MY VIEW, MORE APTLY PROCEED ALONG THE LINES OF THE OBSERVATIONS OF LORD SHAND AT P 383 IN HANNAN V HENDERSON TO WHICH I REFERRED ON P 126, AS TO THE POSSIBILITY OF ATTACHING CONDITIONS TO THE PURGATION OF AN IRRITANCY WHERE ENFORCEMENT INVOLVED THE LOSS OF LARGE VESTED RIGHTS OF PROPERTY.LORD NOLAN —MY LORDS, I HAVE HAD THE ADVANTAGE OF READING IN DRAFT THE SPEECH PREPARED BY MY NOBLE AND LEARNED FRIEND, LORD HOPE OF CRAIGHEAD. FOR THE REASONS WHICH HE GIVES, I WOULD DISMISS THE APPEAL.LORD HOFFMANN —MY LORDS, I HAVE HAD THE ADVANTAGE OF READING IN DRAFT THE SPEECH PREPARED BY MY NOBLE AND LEARNED FRIEND, LORD HOPE OF CRAIGHEAD. FOR THE REASONS WHICH HE GIVES, I WOULD DISMISS THE APPEAL.LORD HOPE OF CRAIGHEAD—MY LORDS, IN THIS APPEAL THE APPELLANTS SEEK TO OBTAIN COMPENSATION UNDER THE LAW OF UNJUSTIFIED ENRICHMENT FOR THE LOSS WHICH THEY HAVE SUSTAINED AS A RESULT OF THE EXERCISE AGAINST THEM OF A CONVENTIONAL IRRITANCY. THE ISSUE WHICH THEY HAVE RAISED BRINGS INTO COMPETITION TWO QUITE DIFFERENT REMEDIES. ON THE ONE HAND THERE IS THE LAW OF UNJUSTIFIED ENRICHMENT, BY WHICH THE PERSON ENRICHED IS OBLIGED TO RESTORE OR MAKE GOOD TO THE OTHER THE AMOUNT OR THE EXTENT OF HIS ENRICHMENT. ON THE OTHER THERE IS THE CONTRACTUAL REMEDY WHICH A LANDLORD IS ENTITLED TO EXERCISE ÀGAINST THE TENANT IN TERMS OF AN IRRITANCY CLAUSE. IN THIS CASE THE APPELLANTS INCURRED THE IRRITANCY BECAUSE THEY ALLOWED THE RENT TO REMAIN UNPAID FOR THE RELEVANT PERIOD. A DECLARATOR OF IRRITANCY HAS BEEN GRANTED, AND THEIR INTEREST AS TENANT HAS COME TO AN END. THE QUESTION NOW IS WHETHER THEY CAN RECOVER COMPENSATION FROM THEIR FORMER LANDLORDS FOR THE ENRICHMENT WHICH THE FORMER LANDLORDS HAVE OBTAINED AT THEIR EXPENSE AS A CONSEQUENCE OF THE EXERCISE OF THE IRRITANCY.LORDS HAVE OBTAINED NO MORE THAN THEY WERE ENTITLED TO UNDER THEIR CONTRACT AS A RESULT OF THE EXERCISE OF THE IRRITANCY, THERE WILL BE NO ROOM FOR THE OPERATION OF THE LAW OF UNJUSTIFIED ENRICHMENT. AN OBLIGATION IN UNJUSTIFIED ENRICHMENT IS OWED WHERE THE ENRICHMENT CANNOT BE JUSTIFIED ON SOME LEGAL BASIS ARISING FROM THE CIRCUMSTANCES IN WHICH THE DEFENDER WAS ENRICHED. THERE CAN BE NO BETTER JUSTIFICATION FOR AN ENRICHMENT THAN THAT IT WAS OBTAINED AND IS BEING RETAINED IN THE EXERCISE OF A CONTRACTUAL RIGHT AGAINST THE PARTY WHO SEEKS TO INVOKE THE REMEDY.LORDS UNDER THE SUBLEASE. THE RENT PAYABLE BY CIN TO CDC AS LANDLORDS UNDER THE HEAD LEASE WAS A NOMINAL ONE, AN ANNUAL RENT OF £1 IF ASKED. IN PURSUANCE OF THE 1979 AGREEMENT CDC GRANTED TO CIN A HEAD LEASE DATED 4 AND 12 MARCH 1980 FOR A TERM OF 125 YEARS FROM THE DATE OF PRACTICAL COMPLETION OF THE DEVELOPMENT. ON COMPLETION OF THE DEVELOPMENT, IN IMPLEMENT OF THEIR OBLIGATION UNDER THE 1979 AGREEMENT, CIN GRANTED TO CDC A SUBLEASE DATED 8 NOVEMBER 1983 AND 2 FEBRUARY 1984 FOR A TERM OF 99 YEARS FROM 11 NOVEMBER 1981, WITH AN OPTION TO EXTEND THE TERM FOR A FURTHER PERIOD OF 26 YEARS.LORDS UNDER THE HEAD LEASE. BY AN ASSIGNATION DATED 21 OCTOBER 1987, WITH THE CONSENT OF CIN, CDC COMPLETED THE TRANSACTION BY ASSIGNING TO DLC THEIR INTEREST AS TENANTS UNDER THE SUBLEASE. THE AMOUNT OF THE RENT PAYABLE TO CIN BY CDC AND AFTER THE ASSIGNATION, BY DLC WAS TO BE THE GREATER OF (I) A BASIC RETURN, CALCULATED BY REFERENCE TO DEVELOPMENT COSTS AND, IN CERTAIN CIRCUMSTANCES, THE RENTS PAYABLE BY OCCUPATIONAL SUB-TENANTS AND (II) WHAT WAS TERMED THE ‘LANDLORD'S EQUITY PROPORTION’ OF THE RENTS FOR EACH YEAR. BY A SUPPLEMENTAL AGREEMENT DATED 5 MAY AND 15 OCTOBER 1987 CIN AND CDC AGREED ON FIGURES FOR THE FINAL AMOUNT OF THE DEVELOPMENT COSTS. THEY ALSO AGREED THAT THE ‘LÀNDLORD'S EQUITY PROPORTION’ OF THE NET RENTS FOR THE PURPOSE OF CALCULATING THE RENT PAYABLE TO CIN UNDER THE SUBLEASE WAS 77.532 PER CENT.LORD'S EQUITY PROPORTION’ HAD BEEN AGREED. DLC'S INVESTMENT IN THE SHOPPING CENTRE WAS IN THE EXPECTATION OF THE RETURN TO BE OBTAINED FROM THE 22.468 PER CENT OF THE OCCUPATIONAL RENTS WHICH THEY WERE ENTITLED TO RETAIN ONCE THEY HAD FULFILLED THEIR OBLIGATION TO PAY RENT TO CIN IN TERMS OF THE SUBLEASE. THE STRUCTURE OF THE ARRANGEMENTS UNDER WHICH THEY WERE TO BE ENABLED TO OBTAIN THAT RETURN ON THEIR INVESTMENT WAS UNREMARKABLE. THE MECHANISM WHICH CDC AND CIN DECIDED TO EMPLOY WHEN THEY ENTERED INTO THE 1979 AGREEMENT, WHICH INVOLVED THE INTERPOSITION OF A HEAD LEASE AND A SUBLEASE BETWEEN THE INTERESTS OF THE SITE OWNER AND THE OCCUPIERS OF THE SHOPPING DEVELOPMENT, IS ONE WHICH IS COMMONLY FOUND IN COMMERCIAL DEVELOPMENTS ON THIS SCALE. NOR WAS IT REMARKABLE THAT THE SUBLEASE CONTAINED AN IRRITANCY CLAUSE, AS CLAUSES OF THIS KIND ARE COMMONPLACE IN COMMERCIAL LEASES UNDER SCOTS LAW. THE CLAUSE WAS IN THESE TERMS: ‘PROVIDED ALWAYS AND IT IS HEREBY AGREED THAT THESE PRESENTS ARE MADE UPON THE EXPRESS CONDITION THAT IF THE RENT OR ANY OTHER PAYMENT UNDER THIS LEASE OR ANY PART THEREOF SHALL BE UNPAID FOR TWENTY-ONE DAYS AFTER ANY OF THE DAYS HEREIN BEFORE APPOINTED FOR PAYMENT THEREOF WHETHER THE SAME SHALL HAVE BEEN LAWFULLY DEMANDED OR NOT OR IF THE TENANT WHILE THE LEASED PREMISES OR ANY PART THEREOF REMAIN VESTED IN IT SHALL BE WOUND UP COMPULSORILY OR VOLUNTARILY (EXCEPT FOR RECONSTRUCTION OR AMALGAMATION) OR IN THE EVENT OF A RECEIVER BEING APPOINTED TO ANY OF THE TENANT'S PROPERTY OR IN THE CASE OF AN ASSIGNEE OF THE TENANT NOT BEING A CORPORATION SHALL BECOME NOTOUR BANKRUPT OR MAKE ANY ASSIGNMENT FOR THE BENEFIT OF HIS CREDITORS OR MAKE ANY ARRANGEMENT WITH HIS CREDITORS FOR THE LIQUIDATION OF HIS DEBTS BY COMPOSITION OR OTHERWISE OR IF THE TENANT OR ITS SUBTENANTS OR ANY OTHER PERSON DERIVING OCCUPANCY FROM IT SHALL AT ANY TIME FAIL TO IMPLEMENT OR SHALL CONTRAVENE ANY OF THE CONDITIONS, PROVISIONS, RESTRICTIONS AND OTHERS HEREIN CONTAINED THEN AND IN ANY OF THESE EVENTS THE TENANT SHALL FORFEIT ALL RIGHT AND TITLE UNDER THESE PRESENTS AND THE LEASE HEREBY GRANTED AND ALL TRANSMISSIONS AND SUBLEASES THEREOF WITH ALL THAT HAD FOLLOWED OR CAN COMPETENTLY FOLLOW THEREON SHALL BECOME IPSO FACTO VOID AND NULL AND THAT WITHOUT THE NECESSITY OF ANY DECLARATOR, PROCESS OF REMOVAL OR OTHER PROCEDURE AT LAW AND THE LEASED PREMISES SHALL THEREUPON REVERT TO THE LANDLORD AND IT SHALL BE LAWFUL FOR THE LANDLORD OR ANY PERSON OR PERSONS DULY AUTHORISED BY THE LANDLORD IN THAT BEHALF TO ENTER UPON THE POSSESSION OF THE LEASED PREMISES OR ANY PART THEREOF IN NAME OF THE WHOLE AND TO UPLIFT RENTS, EJECT THE TENANTS, SUBTENANTS AND OCCUPIERS AND THEREAFTER USE, POSSESS AND ENJOY THE SAME FREE OF ALL CLAIMS BY THE TENANT, SUBTENANTS AND OTHERS AS IF THESE PRESENTS HAD NEVER BEEN GRANTED WITHOUT PREJUDICE TO ANY RIGHT OF ACTION OR REMEDY OF THE LANDLORD IN RESPECT OF ANY ANTECEDENT BREACH BY THE TENANT, SUBTENANTS AND OTHERS OF ANY OF THE CONDITIONS IN THIS LEASE WHICH IRRITANCY IS HEREBY DECLARED TO BE PRACTIONAL AND NOT PENAL AND SHALL NOT BE PURGEABLE AT THE BAR …’LORD ORDINARY, AND ON 29 MAY 1991 THE INNER HOUSE ADHERED TO HIS INTERLOCUTOR. DLC THEN APPEALED TO YOUR LORDSHIPS' HOUSE, BUT THEIR APPEAL WAS DISMISSED BY YOUR LORDSHIPS ON 21 MAY 1992.LORDSHIPS OF THE SECOND DIVISION AND IT WAS NOT RENEWED IN YOUR LORDSHIPS' HOUSE. BUT IN THE COURSE OF THE SPEECHES WHICH WERE DELIVERED ON THAT OCCASION CONCERN WAS EXPRESSED ABOUT THE SEVERE NATURE OF THE PENALTY WHICH DLC HAD INCURRED AS A RESULT OF THE IRRITANCY CLAUSE. LORD KEITH OF KINKEL SAID AT P 118 THAT HE DID NOT REGARD THE RESULT IN THAT CASE AS SATISFACTORY, AND LORD GOFF OF CHIEVELEY AT P 119 AND LORD JAUNCEY OF TULLICHETTLE AND LORD BROWNE-WILKINSON AT P 127 MADE OBSERVATIONS TO THE SAME EFFECT. LORD KEITH SAID AT P 119 THAT HAD IT NOT BEEN FOR PARLIAMENT'S INTERVENTION BY SEC 4 OF THE LAW REFORM (MISCELLANEOUS PROVISIONS) (SCOTLAND) ACT 1985, FOLLOWING CONSIDERATION OF THE MATTER BY THE SCOTTISH LAW COMMISSION, HE WOULD HAVE CONSIDERED FAVOURABLY A SUBMISSION THAT CONDITIONS SHOULD BE ANNEXED TO THE GRANTING OF AN IRRITANCY BY WHICH THE LANDLORD WOULD BE REQUIRED TO PAY COMPENSATION FOR THE VALUE OF IMPROVEMENTS TO THE SUBJECTS WHICH HAVE BEEN BROUGHT ABOUT BY THE TENANT OR HIS PREDECESSORS IN TITLE. BUT HE AGREED WITH LORD JAUNCEY'S OBSERVATION AT P 125 THAT IT WAS NOT OPEN TO YOUR LORDSHIPS' HOUSE TO DEVELOP THE LAW IN THIS FIELD FURTHER THAN WAS THOUGHT APPROPRIATE BY PARLIAMENT.LORD AND THE TENANT TO BE ADJUSTED TO ACHIEVE AN EQUILIBRIUM. IF THAT WERE POSSIBLE IT WOULD GO A LONG WAY TOWARDS MEETING THE ANXIETY WHICH HAD BEEN EXPRESSED ON THE PREVIOUS OCCASION ABOUT THE UNSATISFACTORY NATURE OF THE RESULT IN THIS CASE AND ABOUT THE IMPLICATIONS OF THE DECISION FOR THE FUTURE OF COMMERCIAL LEASES IN SCOTLAND GENERALLY. CIN HAVE SUBMITTED BY WAY OF CROSS-APPEAL THAT THIS ARGUMENT IS NO DIFFERENT IN SUBSTANCE FROM THE CLAIM FOR EQUITABLE RELIEF WHICH WAS PRESENTED TO AND REJECTED BY THIS HOUSE ON THE PREVIOUS OCCASION, OR ALTERNATIVELY THAT IT IS SUSCEPTIBLE TO THE PLEA OF COMPETENT AND OMITTED AS IT SHOULD HAVE BEEN PRESENTED THEN AS A DEFENCE TO THE ACTION FOR DECLARATOR OF THE IRRITANCY. BUT IT IS NECESSARY TO CONSIDER FIRST WHETHER THE ARGUMENT WHICH COUNSEL ADVANCED SO ATTRACTIVELY ON DLC'S BEHALF IS OPEN TO DLC HAVING REGARD TO THE TERMS OF THE IRRITANCY CLAUSE.LORDSHIPS IN THE INNER HOUSE, SITTING AS AN EXTRA DIVISION, AGREED WITH THE LORD ORDINARY. LORD COULSFIELD, THAT DLC'S AVERMENTS IN SUPPORT OF THEIR CLAIM BASED ON UNJUSTIFIED ENRICHMENT WERE IRRELEVANT. BOTH LORD SUTHERLAND AND LORD CULLEN HELD THAT THE CLAIM WAS EXCLUDED BY THE TERMS OF THE IRRITANCY CLAUSE. LORD SUTHERLAND SAID AT PP 345H–346A: ‘IT APPEARS TO ME, THEREFORE, TO BE QUITE CLEAR THAT THE WINDFALL WHICH HAS ACCRUED UNDOUBTEDLY TO THE DEFENDERS IN THIS CASE IS ONE WHICH ACCRUED AS A RESULT OF THE CONTRACTUAL ENTITLEMENT UNDER THE IRRITANCY CLAUSE. BECAUSE THE RECEIPT OF THE WINDFALL IS PART OF A CONTRACTUAL ENTITLEMENT THIS DOES NOT CONSTITUTE ENRICHMENT AS THAT WORD IS UNDERSTOOD IN THE PHRASE "UNJUSTIFIED ENRICHMENT". ON ANY VIEW THE INCOME FROM WHICH THE PURSUERS RETAINED 22.468 PER CENT WAS INCOME OBTAINED FROM THE OCCUPATIONAL SUBTENANTS AND WAS THEREFORE INCOME DERIVED FROM THE PURSUERS' OCCUPATION OF THE LAND AS TENANTS. IT IS PRECISELY THAT INCOME WHICH IS DEALT WITH IN THE IRRITANCY CLAUSE AND IT IS MADE PERFECTLY CLEAR IN THAT CLAUSE THAT IN FUTURE ALL SUCH INCOME REVERTS TO THE LANDLORD.’LORD RODGER, DISSENTING FROM THE MAJORITY, SAID AT P 360D–F THAT IN HIS VIEW THE IRRITANCY CLAUSE WOULD EXCLUDE ANY ACTION OF DLC WHICH AROSE OUT OF CIN'S USING, POSSESSING OR ENJOYING THE SUBJECTS AS IF THE SUBLEASE HAD NOT BEEN GRANTED. IN THE NORMAL CASE THE WORDS OF EXCLUSION WOULD PREVENT ANY ACTION ARISING FROM THE LANDLORD'S POSSESSION, SINCE AS A RESULT OF THE IRRITANCY THE LANDLORD WOULD POSSESS THE SUBJECTS IN THE SAME WAY AS HE WOULD HAVE DONE IF THE LEASE HAD NOT BEEN GRANTED. BUT IN HIS OPINION THAT WAS NOT THE POSITION IN THIS CASE. CIN'S POSITION WAS TO A LIMITED BUT IMPORTANT EXTENT NOT THE SAME AS IT WOULD HAVE BEEN IF THE LEASE HAD NOT BEEN GRANTED BUT WAS INSTEAD ENHANCED BY THE FREE ENJOYMENT OF THE PURSUERS' INVESTMENT. IN AN EARLIER PASSAGE AT P 357F HE SAID THAT IT WAS CIN'S POSSESSION OF THE SUBJECTS WITH COMPLETE FREEDOM TO EXPLOIT THEM, WITHOUT BEING OBLIGED IN TERMS OF THE 1979 AGREEMENT TO GRANT A FRESH SUBLEASE, WHICH LAY AT THE HEART OF DLC'S ACTION. HE EXPRESSED HIS CONCLUSION AT PP 360G–361A: ‘WITH SOME HESITATION I HAVE REACHED THE VIEW THAT IT WOULD BE WRONG TO APPROACH THE ISSUE BETWEEN THE PARTIES IN THIS PARTICULAR CASE SIMPLY BY LOOKING AT THE TERMS OF THE HEAD LEASE AND SUBLEASE IN ISOLATION. THE VERY EXISTENCE AND TERMS OF BOTH ARE EXPLICABLE ONLY AGAINST THE BACKGROUND OF THE ORIGINAL SCHEME FOR THE DEVELOPMENT OF THE SHOPPING CENTRE WHICH WAS EMBODIED IN THE 1979 AGREEMENT. WHEN THAT WIDER CONTEXT IS EXAMINED, THEN IN MY VIEW IT BECOMES APPARENT THAT THE DEFENDERS' POSSESSION OF THE SUBJECTS AFTER THE IRRITANCY IS IN REALITY DIFFERENT FROM AND GREATER THAN THE POSSESSION WHICH THEY HAD BEFORE THE SUBLEASE WAS GRANTED BECAUSE THE DEFENDERS NOW ENJOY THE FRUITS OF THE PURSUERS' INVESTMENT AS WELL AS OF THEIR OWN. THEY ARE TO THAT EXTENT ENRICHED AT THE PURSUERS' EXPENSE AND, FOR THE REASONS WHICH I HAVE GIVEN, NEITHER THE TERMS OF THE 1979 AGREEMENT NOR THE TERMS OF THE IRRITANCY CLAUSE APPEAR TO ME TO CONSTITUTE A SUFFICIENT BASIS TO ENTITLE THE DEFENDERS TO RETAIN THAT ENRICHMENT.’LORD PRESIDENT (LORD RODGER) POINTED OUT THAT REPETITION, RESTITUTION, REDUCTION AND RECOMPENSE ARE SIMPLY EXAMPLES OF REMEDIES WHICH THE COURTS GRANT TO REVERSE AN UNJUST ENRICHMENT, DEPENDING ON THE WAY IN WHICH THE PARTICULAR ENRICHMENT HAS ARISEN. IT MAY BE UNREALISTIC TO EXPECT THOSE WHO PRACTISE IN THE COURTS TO DEPART FROM SUCH TERMINOLOGY. IN THE CONTEXT OF THE WRITTEN PLEADINGS WHICH ARE USED IN OUR PRACTICE THE PURSUER IS EXPECTED TO STATE THE NATURE OF THE REMEDY WHICH HE SEEKS, AS WELL AS THE LEGAL BASIS FOR IT. FOR MY PART I SEE NO HARM IN THE CONTINUED USE OF THESE EXPRESSIONS TO DESCRIBE THE VARIOUS REMEDIES, SO LONG AS IT IS UNDERSTOOD THAT THEY ARE BEING USED MERELY TO DESCRIBE THE NATURE OF THE REMEDY WHICH THE COURT IS BEING ASKED TO PROVIDE IN ORDER TO REDRESS THE ENRICHMENT. THE EVENT WHICH GIVES RISE TO THE GRANTING OF THE REMEDY IS THE ENRICHMENT. IN GENERAL TERMS IT MAY BE SAID THAT THE REMEDY IS AVAILABLE WHERE THE ENRICHMENT LACKS A LEGAL GROUND TO JUSTIFY THE RETENTION OF THE BENEFIT. IN SUCH CIRCUMSTANCES IT IS HELD TO BE UNJUST.LORD FRASER SAID THAT NOTHING HAD HAPPENED SINCE 1909, WHEN IN EDINBURGH AND DISTRICT TRAMWAYS CO LTD V COURTENAY, AT P 105, LORD PRESIDENT DUNEDIN SAID THAT HE DID NOT THINK THAT IT WAS POSSIBLE TO FRAME A DEFINITION OF RECOMPENSE WHICH WOULD BY ITSELF AT ONCE INCLUDE ALL CLASSES OF CASES WHICH FALL WITHIN THE DOCTRINE AND AT THE SAME TIME SUCCESSFULLY EXCLUDE THOSE WHICH DO NOT, TO MAKE THE FRAMING OF SUCH A DEFINITION ANY EASIER. THE APPROACH WHICH HE ADOPTED WAS TO IDENTIFY THE FACTORS WHICH ARE ESSENTIAL TO THE SUCCESS OF A CASE BASED ON RECOMPENSE AND TO SEE WHETHER THEY WERE PRESENT IN THAT CASE. NOW THAT UNJUSTIFIED ENRICHMENT IS MORE CLEARLY SEEN AS THE EVENT WHICH JUSTIFIES THE GRANTING OF THE REMEDY, THE MORE OBVIOUS IT BECOMES THAT LORD FRASER'S APPROACH WAS THE CORRECT WAY IN WHICH TO SUBJECT THE FACTS TO ANALYSIS. I THINK THAT LORD RODGER STATED THE MATTER CORRECTLY IN THE PRESENT CASE AT P 353D WHEN HE SAID THAT THE PURSUERS MUST SHOW THAT THE DEFENDERS HAVE BEEN ENRICHED AT THEIR EXPENSE, THAT THERE IS NO LEGAL JUSTIFICATION FOR THE ENRICHMENT AND THAT IT WOULD BE EQUITABLE TO COMPEL THE DEFENDERS TO REDRESS THE ENRICHMENT.LORDS UNDER THE HEAD LEASE. BUT THE RENT UNDER THE HEAD LEASE IS A PURELY NOMINAL ONE. SO THEY HAVE NO PROSPECT UNDER THE EXISTING ARRANGEMENTS OF OBTAINING ANY FURTHER RETURN ON THEIR INVESTMENT IN CDC'S SHARE OF THE DEVELOPMENT. THE ENTIRE BENEFIT OF THAT SHARE IN THE DEVELOPMENT NOW RESIDES WITH CIN. AS WAS OBSERVED ON THE PREVIOUS OCCASION WHEN THE CASE WAS BEFORE THIS HOUSE, THE RESULT CANNOT BE REGARDED AS SATISFACTORY. CIN WERE UNDOUBTEDLY WITHIN THEIR RIGHTS IN ENFORCING THE IRRITANCY CLAUSE, HAVING GIVEN NOTICE OF THEIR INTENTION TO DO SO AS REQUIRED BY SEC 4 OF THE LAW REFORM (MISCELLANEOUS PROVISIONS) (SCOTLAND) ACT 1985. THAT SECTION WAS ENACTED IN THE TERMS RECOMMENDED BY THE SCOTTISH LAW COMMISSION AFTER CONSIDERING THE OPERATION OF THE IRRITANCY CLAUSE IN LEASES OF COMMERCIAL AND INDUSTRIAL PROPERTY. SO IT CANNOT BE SAID THAT THE RESULT WAS OUTWITH THE SCOPE OF THE PROPOSALS WHICH THE SCOTTISH LAW COMMISSION MADE FOR REFORM IN THIS AREA OF THE LAW. BUT EQUITABLE CONSIDERATIONS SUGGEST THAT CIN SHOULD BE SUBJECTED TO THE REMEDY OF RECOMPENSE UNLESS THE CONTRACT ITSELF PROVIDES AN ANSWER TO THE CLAIM THAT THE ENRICHMENT WAS UNJUSTIFIED.LORDS UNDER THE SUBLEASE FROM CIN. THE IRRITANCY CLAUSE MAKES IT ABSOLUTELY CLEAR THAT IN THE EVENT OF ITS EXERCISE THE TENANT WAS TO FORFEIT ALL RIGHT AND TITLE UNDER IT, THAT THE LEASED PREMISES WERE THEREUPON TO REVERT TO THE LANDLORD, AND THAT IT WAS TO BE LAWFUL FOR THE LANDLORD TO ENTER INTO POSSESSION, TO UPLIFT THE RENTS AND TO EJECT THE SUBTENANTS. THE CONSEQUENCE TO DLC OF INCURRING THE IRRITANCY AS REGARDS THE LOSS OF THE RETURN ON THEIR INVESTMENT IN THE SHOPPING CENTRE WAS SPELLED OUT FOR THEM PRECISELY IN THAT CLAUSE. THE BENEFIT WHICH HAS ENRICHED CIN IS ONE WHICH WAS PROVIDED FOR THEM EXPRESSLY IN THE CONTRACT OF SUBLEASE.LORD RODGER SAW A GROUND FOR HOLDING THE ENRICHMENT TO BE UNJUSTIFIED IN THE FACT THAT CIN WERE TO BE ENTITLED TO ENJOY THE FRUITS OF CDC'S INVESTMENT WHICH HAD BEEN PURCHASED BY DLC WITHOUT MAKING ANY PAYMENT FOR THEM. HE SAID THAT CIN'S POSSESSION HAD BEEN ENHANCED BY THE FREE ENJOYMENT OF DLC'S INVESTMENT, WHICH WAS A DIFFERENT KIND OF POSSESSION THAN THAT WHICH THEY WOULD HAVE ENJOYED IF THE SUBLEASE HAD NOT BEEN GRANTED. HE DREW A DISTINCTION BETWEEN THIS CASE AND WHAT HE DESCRIBED AS THE NORMAL CASE WHERE THE TENANT'S POSSESSION WAS A DIRECT COUNTERPART OF THE RENT AND THE LANDLORD WOULD AUTOMATICALLY BE RESTORED AFTER THE IRRITANCY TO THE SITUATION WHICH HE WAS IN PRIOR TO THE GRANT OF THE LEASE. THE DISTINGUISHING FEATURE WHICH HE SAW IN THIS CASE WAS THE OBLIGATION IN REGARD TO THE SHARING OF THE OCCUPATIONAL RENTS BETWEEN THE PARTICIPANTS IN THE DEVELOPMENT BY WHICH CIN WERE BOUND IN 1984 UNDER THE 1979 AGREEMENT WHEN, IN IMPLEMENT OF THAT OBLIGATION, THEY GRANTED THE SUBLEASE TO CDC. WHEN THE IRRITANCY WAS ENFORCED IN 1992 CIN WERE NO LONGER BOUND BY THAT OBLIGATION, SO TO THAT EXTENT THEIR POSSESSION UNDER THE HEAD LEASE WAS DIFFERENT.LORD DECIDES TO EXERCISE HIS RIGHT UNDER AN IRRITANCY CLAUSE. THE FIRST IS THAT THE RESULT OF ITS EXERCISE WILL NORMALLY BE TO CONFER AN ADVANTAGE ON THE LANDLORD TO THE DISADVANTAGE OF THE TENANT WHOSE RIGHTS ARE BEING BROUGHT TO AN END. THE NATURE OF THAT ADVANTAGE WILL VARY FROM CASE TO CASE. IT MAY TAKE THE FORM OF THE RIGHT TO RETAIN A GRASSUM WHICH WAS PAID WHEN THE LEASE WAS GRANTED, OR THE RIGHT TO RETAIN BUILDINGS OR OTHER IMPROVEMENTS WHICH THE TENANT HAS MADE TO THE SUBJECTS IN THE EXPECTATION THAT HE WOULD CONTINUE IN OCCUPATION OF THEM OR THE RIGHT TO TAKE ADVANTAGE OF AN IMPROVED MARKET BY RE-LETTING THE SUBJECTS, PERHAPS TO THE SAME PARTY, AT AN INCREASED RENT OR BY SELLING THE PREMISES WITH OPEN POSSESSION AT A MUCH HIGHER PRICE THAN HE WOULD HAVE BEEN ABLE TO OBTAIN FOR THEM IF THE LEASE HAD CONTINUED. IN EACH OF THESE CASES, WHICH I TAKE ONLY AS EXAMPLES, THE BENEFIT OBTAINED BY THE LANDLORD WILL ACCRUE TO HIM WITHOUT ANY CORRESPONDING RIGHT IN THE TENANT TO DEMAND PAYMENT. IT WILL FLOW TO HIM AS A DIRECT RESULT OF THE REMEDY TO BRING THE LEASE TO AN END WHICH HE HAS EXERCISED UNDER THE CONTRACT.