In The Cause Gyle Shopping Centre General Partners Ltd V Marks And Spencer Plc
| Jurisdiction | Scotland |
| Judge | Lord Tyre |
| Neutral Citation | [2014] CSOH 122 |
| Date | 06 August 2014 |
| Docket Number | CA190/13 |
| Published date | 06 August 2014 |
| Court | Court of Session |
OUTER HOUSE, COURT OF SESSION
[2014] CSOH 122
CA190/13
OPINION OF LORD TYRE
In the cause
GYLE SHOPPING CENTRE GENERAL PARTNERS LTD as trustee for and general partner of GYLE SHOPPING CENTRE LIMITED PARTNERSHIP
Pursuer;
against
MARKS & SPENCER PLC
Defender:
Pursuer: G Walker, L Walker (solicitor advocate); Gateley (Scotland) LLP
Defender: Murphy QC, E Robertson; DWF Biggart Baillie LLP
6 August 2014
Introduction
[1] The pursuer is the owner of the Gyle Shopping Centre, Edinburgh. The defender is the tenant of subjects in the shopping centre which were leased to it in 1992 by the City of Edinburgh District Council, a predecessor in title of the pursuer. The pursuer has entered into an agreement with Primark Stores Ltd for the construction and leasing of a new retail store building which would abut the existing shopping centre and would be constructed on currently unbuilt‑upon land including part of the car parking area. The defender contends that it has not given its agreement in probative writing to the construction of such a building, and accordingly that the pursuer is not entitled to commence construction or to grant a lease of it to Primark.
[2] In my opinion dated 25 March 2014 (published with the reference [2014] CSOH 59), I held, after a debate, that the pursuer was not entitled to declarator that the defender had given its unqualified written consent to the use by the pursuer of areas currently forming part of the Shared Areas and car parking areas of the shopping centre for construction of a new building to be leased to Primark. The basis of the pursuer’s argument was that the Management Committee established in accordance with the defender’s lease had had power to agree, and had agreed, to a variation of the lease to the effect of permitting the construction of the new building on part of the Shared Areas, including the car parking area. I held that variation of the lease was not within the power of the Management Committee. I also expressed the view that the effect of certain clauses in the defender’s lease was that probative writing was required for any agreement that had the effect of altering the area within the site allocated to car parking, roads, and/or pedestrian routes.
[3] This opinion deals with a matter which was not addressed at the previous debate. The pursuer seeks declarator that, in the event that it commences construction of the proposed new building, the defender will be personally barred from taking any action to prevent the pursuer from carrying out that construction or proceeding to lease the resulting building to Primark. The pursuer contends that the parties entered into a contract – or the defender undertook a unilateral obligation – for the variation and partial extinction of the defender’s real rights so as to permit the Primark development. That agreement — or obligation — was said to have been entered into verbally by the defender’s representatives at meetings of the Management Committee and by signature of minutes of these meetings “for and on behalf of” the defender. The pursuer acted in reliance on the contract or unilateral obligation, with the knowledge and acquiescence of the defender, by incurring fees, removing shop tenants, and entering into an agreement to lease to Primark. If the defender were permitted to withdraw from its contract or obligation, the pursuer would be materially adversely affected. The defender is accordingly barred, according to the pursuer, from insisting upon a formal variation of the lease by the provisions of the Requirements of Writing (Scotland) Act 1995, section 1(3) and (4) or, alternatively, by the pre-1995 common law of rei interventus.
[4] At a proof before answer, the pursuer led evidence from three individuals concerned with the management of the shopping centre, namely:
- Andrew Cronie, the Centre Manager of the shopping centre since 2007, who was and is responsible for the day to day operation of the centre;
- Brian Gaffney, who was at the material time a director of and in charge of the management department at Colliers International Belfast Limited, the shopping centre’s property managing agents; and
- Andrew McKelvey, portfolio manager since 2008 for William Ewart Properties Limited, the controlling entity of the pursuer.
The defender led evidence from Adam Colton who has been the defender’s Head of Property UK since January 2013. I accept the evidence of all four witnesses as credible and reliable.
[5] In paragraphs 2 to 19 of my previous opinion, I set out the relevant clauses of the defender’s lease and also the terms of the minutes of the relevant Management Committee meetings. For ease of reference, I annex those paragraphs to this opinion. It is necessary to narrate one further clause of the lease, namely clause 104:
“No failure or delay on the part of any party in exercising any power or right hereunder shall operate as a waiver thereof (except as otherwise specifically provided herein) nor shall any single or partial exercise of any such right or power preclude any other or further exercise of any such right or power.”
[6] I require to address the following issues:
(i) Has the defender’s lease been varied, to the effect of extinguishing the defender’s real right in the areas upon which the pursuer wishes to construct the building to be leased to Primark, by oral agreement at Management Committee meetings from which the defender is not now entitled to withdraw (the statutory personal bar argument)?
(ii) Alternatively, is the defender barred by the pre-1995 law of rei interventus
from withdrawing from such an oral agreement at Management Committee meetings (the rei interventus argument)?
(iii) Has the defender otherwise barred itself, by waiver of its right under the lease, from taking any action to prevent the pursuer from constructing the building and leasing it to Primark (the waiver argument)?
The first two issues can, in my opinion, be disposed of as matters of law. The third requires consideration of evidence. I consider that I require to address an issue in these general terms because it reflects the declarator sought by the pursuer and because, at times, the pursuer’s argument was presented on a broader basis than either statutory personal bar or pre-1995 rei interventus. It is convenient to narrate at this stage the actings by the pursuer knowledge of which is said to bar the defender from withdrawing from the oral agreement claimed to have been reached at the Management Committee meetings.
Pursuer’s actings in reliance on agreement
[7] The pursuer’s case is somewhat unspecific as to when exactly the oral agreement between itself and the defender (and, of course, Morrisons) to the construction and letting of the Primark store was concluded. At paragraphs 16 to 19 of my previous opinion, I narrated the relevant terms of the minutes of Management Committee meetings held on 24 February 2011, 24 March 2011and 24 November 2011. I also noted that on each occasion an employee of the defender had, on behalf of the defender, signed a page annexed to the minute containing the following text:
“I confirm I have read the minutes of the above date and that they are an accurate reflection of the meeting. The proposals made therein are hereby approved.”
The meeting on 24 February 2011 was attended by Mr Gaffney, another employee of Colliers, Mr Cronie, and Mr Gavin Neil, the defender’s Finance and Operations Manager for their store at the Gyle, on behalf of the defender. The page approving the minutes was signed on behalf of the defender by Ms Sarah Blackburn, the defender’s Store Manager and Mr Neil’s superior. The meeting on 24 March 2011 was attended by Mr Gaffney, Mr Cronie, a representative of Morrisons, and Ms Catriona Morse, a trainee manager employed by the defender. The page approving the minutes was again signed on behalf of the defender by Ms Blackburn. The meeting on 24 November 2011 was attended by Mr Gaffney, Mr Cronie and Mr Neil. The page approving the minutes appears to have been signed by Mr Neil. References to the Primark development were also made in the minutes of Management Committee meetings held on 6 October 2011, 31 January 2012 and 16 March 2012 but these do not add anything material to those I have already quoted. The defender’s contention is that an agreement – or a unilateral obligation – for the variation and partial extinction of the defender’s real right under the lease:
“was entered into verbally by the defender’s representative at the said meetings [ie all of the six meetings to which I have referred] and then by signature of the minutes by a person that the defender allowed to hold her/himself out as signing ‘for and on behalf of M&S’”.
[8] By missives dated 30 November and 2 December 2010, prior to any of the Management Committee meetings already mentioned, the pursuer and Primark bound themselves to enter into an Agreement for Lease relative to the development of the Primark premises. These missives were not among the documents lodged for the proof, but the Agreement for Lease itself, dated 20 June and 1 August 2011 and signed on behalf of the pursuer and Primark, was lodged. In terms of clause 11.2 of the Agreement for Lease, the pursuer undertook to procure the grant to Primark of a 25-year lease of the subjects upon which the Primark store was to be constructed. The pursuer’s obligation was, however, subject to three suspensive conditions in clause 2.1. The first related to the obtaining of planning permission in terms satisfactory to the pursuer. The second was the securing of vacant possession of units 33 to 36 of the shopping centre on terms “entirely satisfactory to the [pursuer], acting reasonably”. The third suspensive condition was:
“obtaining all necessary approvals from the Management Committee (as detailed in the Lease) to the entering into of the Lease and that on terms acceptable to the [pursuer], acting reasonably”.
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