Interim Interdict: A Risky Business?

On 3 June 2004, the Inner House of the Court of Session (roughly equivalent to England’s Court of Appeal) issued their judgement in the case of Mirza v Salim and Another.

The case represents a fairly complicated set of facts, which are of some importance to anyone practising in the civil courts in Scotland.

The case surrounds a shop and yard at 398 Cumbernauld Road, Glasgow. In 1999, the shop was leased. The tenant and landlord (Mr Mirza) did not intend to include the shop, but, in error, it was included. That meant in terms of land registration procedure in Scotland, a land certificate was issued showing the lease for the shop and yard being in place until 2020.

In short, the tenant then assigned her interest in the lease to the Defender in the current court action. The original tenant’s solicitors raised the fact that the lease did not include the yard in the course of the transactin.

In due course, the landlord sought to redevelop the yard. After the construction was nearly completed, the Defender raised court proceedings against him for interdict (an order to stop him possessing the property). The Defender successfully interdicted the landlord from possessing the yard area while the court case was going on. His motion for recall was refused. Following an evidential hearing (a Proof), the landlord’s claims were vindicated and his counterclaim to allow the land register to be rectified, to reflect the true position of what had been agreed (namely the shop was let but not the yard too) was successful.

The landlord then raised proceedings in the Court of Session for “wrongful interdict”. He argued that the tenant had wrongfully obtained the interdict against him. He said that he was therefore entitled to payment for damages. At first instance, the court seems to have decided that the landlord was not entitled to damages. This was because at the time the tenant applied for the interdict, she was in possession of a lawful justification of her position (that is, she could rightly argue that she had the rights to the yard in question as far as the land register was concerned).

In a majority judgement, the Inner House of the Court of Session rejected that view. They indicated that the landlord’s appeal should be allowed and rather than the case be dismissed, there should be an argument restricted to how much in the way of damages the landlord should receive. Much of the discussion of the court centred around section 8 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985 (although there was discussion too of the not yet enforced Land Register Etc (Scotland) Act 2012). On majority, the court decided that section 8 of the 1985 Act did not provide the tenant with lawful justification for the action she took. It retroactively operates to vary the land register when invoked. That is to say, following rectification being allowed, it was as if the tenant had never had an interest in the yard so far as the land register was concerned. There was therefore nothing to vary the normal common law rule that when someone obtains an interim interdict they do so periculo petentis; that is to say at their own risk, and on the basis that they will have to pay damages if it turns out their claims were wrongful in a legal sense.

The court found that the obtaining of the interdict did not need to be in bad faith or malicious. It had been sought in error and the landlord was therefore entitled to damages. The discussion is useful both in regard to rectification of the land register, but perhaps most tellingly, because such cases do not arise too often, on the subject of wrongful interdict. It is a timely reminder that interim interdict proceedings should not be rushed into, without the client being made fully aware of the risks if their claims are not vindicated.

Eric Baijal is Head of BBM’s litigation department: emb [AT] bbmsolicitors [DOT] co [DOT] uk