Scotia Plastic Binding Limited (in administration) v London Development Agency
Decision date: 12 April 2010
Neutral citation: [2010] UKUT 98 (LC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned whether Scotia Plastic Binding unreasonably failed to mitigate its losses after selling its lease to the LDA by relocating to premises at Crayford in June 2006. The Tribunal found it was reasonably foreseeable that moving to Crayford would impair Scotia’s ability to serve City/West End customers, that suitable alternative premises were available and that Scotia unreasonably failed to mitigate by moving to Crayford when it did. The preliminary issue was decided for the respondent and Scotia was ordered to pay the LDA’s costs.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
Where relocation is likely to impair a business’s core service, a claimant who accepts displacement and actively searches for premises has a duty to consider reasonable alternatives; if suitable alternatives exist in the relevant period, the claimant must relocate to premises that avoid or reduce the loss. The relevant period for assessing availability was held to be the time from acceptance of displacement and active searching (here July 2005–March 2006).
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal suggested that an acquiring authority’s encouragement to relocate “if suitable alternative premises have been identified” does not amount to approval to relocate to less suitable premises or on a particular timetable, and that advance payments or discussions about specific expenditures do not alone validate a relocation decision if the claimant appreciated the business risks involved.