Factual and Procedural Background
The Plaintiff, an owner of a substantial office property in The City, brought a commercial action against the Defendant, a tenant under a lease, claiming damages and payment due to alleged breaches of repair and maintenance obligations at the termination of the lease. Key disputed issues, such as the existence of repair defects at lease end, whether these constituted breaches, the necessity of remedial works, and the reasonable cost of such works, were remitted to a chartered building surveyor (the Reporter) for expert determination. The Reporter provided a draft report, but the Plaintiff objected to certain aspects, particularly the failure to quantify reasonable remedial costs in some respects. The Defendant contested these objections. The court was asked to decide on further directions regarding the Reporter’s remit and whether the Reporter had exhausted his jurisdiction.
Legal Issues Presented
- Whether the Reporter has exhausted his remit by answering all questions posed, including the quantification of reasonable costs for necessary remedial works where breaches were found.
- Whether the Reporter’s jurisdiction extends to assigning a value to remedial costs where the parties have agreed or not disagreed on the value.
- Whether the Reporter is entitled to engage external expert assistance to resolve complex issues arising within the remit.
Arguments of the Parties
Plaintiff's Arguments
- The Reporter failed to exhaust his jurisdiction by not determining reasonable costs for all necessary remedial works as required by the remit, particularly regarding the curtain walling and mechanical and electrical works.
- The draft report was incomplete and, in some respects, illogical or unexplained, such as omitting agreed costs without proper reasoning.
- The Reporter should be allowed to engage a quantity surveyor to assist with determining costs, especially for curtain walling, to properly exhaust his remit.
- The Reporter’s failure to provide full reasons and cost quantifications amounted to a failure to comply with the remit and was legally unsatisfactory.
Defendant's Arguments
- The Reporter discharged his remit appropriately and did not fail to exhaust jurisdiction; any inability to quantify costs stemmed from deficiencies in the Plaintiff’s evidence.
- The burden of proof for repair defects and costs lay with the Plaintiff, who failed to provide cogent and reliable evidence on costs, justifying the Reporter’s inability to assign some cost values.
- The Reporter was entitled to reject or not accept agreed costs if not supported by evidence; he was the final arbiter on factual matters.
- The Reporter’s detailed reasoning on disputed costs, including curtain walling and mechanical and electrical works, was cogent and fair, reflecting the adversarial nature of the proceedings.
- The Reporter should not be permitted to engage third-party experts beyond the remit’s scope, as this would exceed his authority.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Blantyre v Glasgow, Paisley and Greenock Railway Co (1851) 13 D 570 |
Clarification of exhaustion of remit by a reporter; report must be conclusive on matters of fact remitted. |
Applied to determine that the Reporter had failed to exhaust his jurisdiction by not answering all required questions, especially on cost quantification. |
| Williams v Cleveland and Highland Holdings Limited 1993 SLT 398 |
Scope for objections to a reporter’s draft report is limited; objections must relate to failure in duty or principle. |
Referenced to reject Plaintiff’s objections as mere disagreement with factual findings rather than cogent legal objections. |
| HFD Management Services LLP Family Pension Trust v Apleona HSG Ltd [2023] CSOH 15, 2023 Hous LR 30 |
Reporter is not obliged to undertake a "voyage of discovery"; must rely on evidence presented. |
Applied to support that Reporter was not required to innovate or conduct independent investigations in absence of sufficient evidence. |
| BAM Buchanan Ltd v Arcadia Group Ltd 2013 Hous LR 42 |
Standards for reporter’s determinations including factual basis, rationality, and adequate reasoning. |
Used to emphasize the legal standards the Reporter’s final views must satisfy. |
Court's Reasoning and Analysis
The court undertook a detailed construction of the joint remit, focusing on the four key questions the Reporter was required to answer for each item in the Schedule of Dilapidations: existence of repair defects at lease termination, breach of lease, necessity of remedial works, and reasonable cost of those works.
The court found that the Reporter had failed to answer the fourth question in some respects where the first two were answered positively, thereby failing to exhaust his jurisdiction. The court clarified that an answer on costs is required regardless of whether the Reporter considered the proposed remedial works necessary, and that this obligation stands even if evidence is lacking or incomplete. The Reporter’s remit substitutes for the usual proof process before the court and thus requires definitive answers.
Regarding items where parties appeared to agree on costs, the court held the Reporter must still provide his own views, as his report is the conclusive factual basis absent a joint court decree. The court rejected any notion that the Reporter could simply ignore such matters on the basis of apparent agreement.
On the question of engaging external expert assistance, the court interpreted the remit as permitting the Reporter to interview individuals and request further evidence from parties but not to independently commission expert opinions. However, the court allowed the Reporter to ask parties to instruct additional professional advisers if necessary.
The court emphasized the importance of the Reporter’s final views meeting legal standards of rationality, adequate reasoning, and proper factual basis, and expressed hope that cooperation and sensible approaches would avoid further procedural complications.
Holding and Implications
The court held that the Reporter had not fully exhausted his remit and must be directed to answer all outstanding questions, especially regarding the reasonable costs of remedial works where breaches were found.
The court ruled that the Reporter must provide his own views on cost matters even where parties appear to agree and that the Reporter may request parties to instruct additional professional advisers but may not independently engage third parties beyond the remit’s scope.
The direct effect is that the Reporter will be required to revisit and complete his report in accordance with the court’s directions. No new precedent was established; the decision clarifies the proper construction and application of joint remits to expert reporters in commercial lease repair disputes.