Forthwell Limited (Appellant) v Pontegadea UK Limited (Respondent)

Case summary

Case ID

UKSC/2025/0081

Parties

Appellant(s)

FORTHWELL LIMITED

Respondent(s)

PONTEGADEA UK LIMITED

Issue

In what circumstances can a party to a contract recover damages for a breach of that contract in respect of losses that were sustained not by the contracting party itself but by its subsidiary?

Facts

The appellant (“Forthwell”) is the tenant and the respondent (“Pontegadea”) the landlord of a restaurant premises in Glasgow. The Rogano restaurant, one of the oldest and most celebrated restaurants in Glasgow, has traded from this premises since 1935. The current lease was entered into in 1996, then assigned to the Appellant on 20 August 2013. At that time, Forthwell granted a licence to occupy the premises to its wholly owned subsidiary, Lynnet Leisure (Rogano) Limited (“Lynnet”). Lynnet traded from the premises as the Rogano under this licence. Lynnet was not a party to the lease between Forthwell and Pontegadea. On three occasions in late 2020 and early 2021, the premises were damaged by flooding and water ingress. An electrical fire rendered the electrics unsafe and the premises were left without heating. The Rogano, which had closed at the height of the Covid-19 restrictions, was not able to reopen. The lease requires Pontegadea to maintain insurance for the premises and to rebuild any part of the premises which is damaged by an “insured risk”, including flooding. Forthwell argues that Pontegadea is required to repair the premises or to pay damages for the cost of repairs. In addition, Forthwell argues that Pontegadea should pay damages for Lynnet’s loss of profit in relation to its inability to trade as the Rogano. Pontegadea argues that Forthwell is not entitled to recover for loss of profit sustained by a third party, Lynnet, because Lynnet is not a party to the lease. The Outer House held that Forthwell was in principle entitled to recover damages for Lynnet’s loss of profits. Pontegadea reclaimed (appealed) to the Inner House. The Inner House by a majority allowed Pontegadea’s appeal, holding that Forthwell was not entitled to recover damages in respect of Lynnet’s losses. Lord Malcolm dissented. Forthwell now appeals to the Supreme Court

Date of issue

8 May 2025

Case origin

Appeal As of Right

Judgment appealed

Written arguments

Statements of Facts and Issues

Appeal

Justices

Lord Reed

Lord Stephens

Lady Simler

Lord Doherty

Lord Hodge

Hearing dates

Start date

20 May 2026

End date

20 May 2026

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