PACCOR UK LTD AGAINST UNITED UK PROPCO 8 SARL

Factual and Procedural Background

The Plaintiff is the tenant of premises leased from the Defendant, located in an industrial estate known as Brucefield Industry Park, The City. This action concerns units 3 and 4 Young Square, leased under two separate but similar leases. The Plaintiff occupied these premises until approximately December 2015 and continued paying rent thereafter. The Plaintiff alleges that between 16 and 18 April 2019, travellers camping on the estate caused malicious damage and theft to the premises, which the Defendant was contractually obliged to insure. The Plaintiff seeks declarators that the damage was caused by an insured risk, repayment of rent paid after the damage, an order requiring the Defendant to lay out insurance policy monies for repairs, and a declarator that the lease will end if the premises remain unrepaired. The Defendant denies liability and counterclaims for rent ceased to be paid following the alleged damage. The case was heard together with another action concerning other units in the same estate, due to overlapping issues.

Legal Issues Presented

1. Whether the Plaintiff’s pleadings regarding damage to the premises are relevant and sufficiently specified.
2. The nature and sufficiency of intimation (notification) of insured risk damage by the Plaintiff to the Defendant.
3. Whether there is an implied term in the leases requiring the Defendant to take reasonable care to prevent squatters remaining on the estate.
4. Whether the Defendant has waived its right to payment of rent and service charges during the period of alleged damage.
5. The scope and effect of the duty of reasonable care in relation to damage caused by trespassers and the allocation of repair obligations between the parties.
6. The relevance and sufficiency of the Defendant’s averments regarding the Plaintiff’s fixtures and fittings and the insurance obligations relating thereto.
7. The implications of the Defendant’s acquisition of the landlord’s interest in the premises on claims for repayment of rent and service charges.

Arguments of the Parties

Defendant's Arguments

• The Plaintiff’s pleadings about damage were irrelevant and lacked necessary specification, failing to distinguish damage between units and failing to clarify whether damaged items were part of the premises or tenant’s additions.
• Damage to common services outside the leased premises was not covered by the landlord’s insurance obligations.
• Intimation of damage required to be formal and sufficiently clear, preferably in writing or from a principal person, to avoid misapprehension of obligations.
• There was no basis for an implied term requiring the Defendant to take reasonable care to prevent squatters; existing contractual terms governed security obligations.
• The letter relied upon by the Plaintiff did not amount to a waiver of the Defendant’s right to payment of rent and service charges.
• The Plaintiff failed to take adequate security measures, and the obligation to repair damage caused by trespassers rests with the Plaintiff, not the Defendant.
• The Defendant’s acquisition of the landlord’s interest was based on the expectation of continued rent payments, making repayment claims inequitable.
• The Defendant’s pleadings regarding fixtures and fittings clarified that insurance obligations only extend to items notified to the landlord and that some tenant additions did not form part of the premises.

Plaintiff's Arguments

• The Defendant’s suggestion that licensed works did not form part of the premises contradicted the licences themselves and was not pleaded in both actions.
• The leases impose full insuring and repairing obligations on the Defendant, and the Plaintiff intended to prove all listed damaged items were part of the leased premises, either original or added under licences.
• Damage was inside the premises, including piping and wiring, which should be covered by the landlord’s insurance.
• Intimation did not require formal written notice; it could be established by the facts and circumstances, including communications between representatives of both parties.
• The Plaintiff was not required to prove every detail of additions or alterations in pleadings; these factual issues are for proof.
• The letter relied upon was sufficient to establish waiver of the right to payment of rent and service charges during the period of suspension.
• The Defendant failed to explain how it suffered loss given its contractual obligation to insure, which the Plaintiff paid for.
• The Plaintiff rejected reliance on earlier expert reports and referred to later reports detailing damage per unit.

Table of Precedents Cited

Court's Reasoning and Analysis

The court first examined the terms of the leases, particularly the insurance obligations binding the Defendant as landlord to insure the premises and any fixtures or additions made by tenants, provided proper notification is given. The licences for works confirmed that the Plaintiff bears the cost of any increased insurance premiums resulting from alterations, implying such works form part of the insured premises.

Regarding the Plaintiff’s pleadings on damage, the court found that while the pleadings lacked detailed specification distinguishing tenant’s fixtures from common parts, fair notice of damage was given. The factual issues of whether damaged items fall within the premises or tenant’s additions are matters for proof, not for exclusion at this stage.

On intimation, the court distinguished "intimation" from formal "notice" under the lease, holding that intimation means making known and does not require prescribed formalities or written communication. The Plaintiff’s averments of communications with the Defendant’s representatives were sufficient to survive challenge on relevancy.

The court rejected the Plaintiff’s claim of an implied term requiring the Defendant to take reasonable care to prevent squatters, reasoning that existing contractual terms govern security obligations and no separate implied term was identified. The Defendant’s position on irrelevancy of this claim was accepted.

On waiver, the court acknowledged that waiver is a unilateral act requiring voluntary abandonment of a right. The letter from the Defendant’s agents was examined and found insufficient to establish waiver of the right to payment of rent and service charges; it did not amount to abandonment of the lease or rights therein.

Regarding the duty of reasonable care, the court analysed the lease clauses imposing repair obligations on the Plaintiff irrespective of cause, subject to exceptions for insured risks covered by the Defendant’s insurance obligations. The court found that any common law duty of reasonable care by the tenant is impliedly excluded in respect of acts necessitating repairs covered by insurance. The Defendant’s argument that the Plaintiff’s failure to secure the premises shifts repair obligations to the Plaintiff was rejected as inconsistent with the contractual insurance scheme.

The court also held that the Defendant’s averments regarding fixtures and fittings and insurance coverage were sufficiently pleaded to give fair notice, rejecting the Plaintiff’s complaint of lack of clarity.

Finally, the court accepted that issues of unjustified enrichment and repayment of rent paid would require evidence and were not suitable for exclusion at this stage.

Holding and Implications

The court fixed a by-order hearing to determine further procedure and to decide which specific averments should be excluded from probation. All questions of expenses were reserved.

The decision means that the case will proceed to proof on the substantive issues of damage, insurance obligations, and repair liabilities. No pleadings were excluded at this stage, and the Plaintiff’s claims and the Defendant’s counterclaims remain to be fully examined with evidence. The court’s ruling does not establish new legal precedent but clarifies the application of lease terms relating to insurance, intimation, waiver, and implied duties in the context of commercial leases in an industrial estate.