UK LAW firm DWF could be forced to pay its former Glasgow landlord close to £1 million after failing to have a case against it thrown out at the Court of Session.

The firm, which entered the Scottish market in 2012 via the takeover of Biggart Baillie, is being pursued by property business Moor Row after allegedly leaving its former office in a state of disrepair at the end of its lease.

The claim relates to Dalmore House on Glasgow’s St Vincent Street – the former headquarters of whisky giant Whyte & McKay - which DWF rented part of until last year. In May 2016 the firm moved its 90 Glasgow employees into 18,350 square feet of open-plan working space at 110 Queen Street.

Moor Row, which sublet the Dalmore House space to DWF, claims that the firm “did not leave the premises in a state consistent with […] the obligations owed as tenant under the lease” and is demanding £910,894 to carry out all necessary repairs.

While DWF admitted during a Court of Session debate that it had breached the terms of its lease by failing to pay for the so-called dilapidations, it refused to hand over the cash because it does not believe it will be spent on repairs.

This is because at around the same time as DWF moved out of Dalmore House Whyte & Mackay also vacated the office block, which was then put up for sale by property investment company Praxis. The 70,000 square foot, nine-storey building was marketed by commercial property agent CBRE, with the sales document advertising a £10 million “refurbishment/redevelopment opportunity”.

At the time Martyn Brown, director of CBRE’s Glasgow Capital Markets team, said: “We anticipate that a quality refurbishment of this landmark building will be very well received by the occupational market and timing could not be better.”

The sales document also said that the purchaser would “be entitled to the benefit of any dilapidations over the DWF space”.

In its bid to have Moor Row’s claim against it rejected DWF told Court of Session judge Lady Wolffe that none of the work the landlord said DWF had to pay for had been carried out, adding that it had seen “no evidence” that it ever would be.

“The premises have been marketed for sale as a redevelopment opportunity,” the firm told the court.

“In these circumstances it is reasonably believed and averred that no tenders have been sought for the works, no contractor has been identified, no price for the works has been agreed with such a contractor and no contract has been concluded for the carrying out of the works.

“It is further reasonably believed and averred that in these circumstances [Moor Row does not have] any intention to carry out the works and [will not] incur any costs or expenses in so doing.”

While Lady Wolffe was unconvinced by DWF’s argument that the case should be thrown out on that basis she also said that she did “not entirely accept [Moor Row’s] submissions”. In particular, she said it did not appear that Moor Row had suffered a loss due to DWF’s actions.

“[DWF] is of course liable in the sense that it is admittedly in breach of the contractual repair obligation – (Moor Row] has sustained a legal injuria,” she said.

“It does not necessarily follow, however, that [Moor Row] has sustained a loss as a consequence of that breach or that there is automatically […] a liability incumbent upon [DWF] to make any payment in respect of its breach of obligation.”

As a consequence the case has been slated for a further hearing, when Moor Row will have to prove that it suffered a loss as a direct consequence of DWF breaching the terms of its lease.

“It remains the case, in my view, that, as with any common law claim for damages for breach of contract […] it is still incumbent upon the pursuer in such a case to prove the fact and quantum of the actual loss flowing from the defaulting party’s breach of contract,” Lady Wolffe said.

In the meantime, Praxis, which received a number of offers for Dalmore House last year, has taken the property off the market and embarked on a £6m refurbishment of the building that is expected to complete this October. Under plans drawn up by Glasgow architect Cooper Cromar, Praxis has committed to “re-styling the interiors throughout”, something its managing director Gary Roberts said the firm is “incredibly excited about”.

“The Glasgow office market is fundamentally undersupplied with good quality, modern office accommodation and our proposals for this building seek to remedy that situation,” he added.