E. & J. Glasgow Limited V. Ugc Estates Limited
| Jurisdiction | Scotland |
| Judge | Lord Eassie |
| Neutral Citation | [2005] CSOH 63 |
| Court | Court of Session |
| Published date | 16 May 2005 |
| Date | 16 May 2005 |
| Docket Number | CA108/03 |
| OUTER HOUSE, COURT OF SESSION [2005] CSOH 63 | |
| CA108/03
| OPINION OF LORD EASSIE in the cause E & J GLASGOW LIMITED Pursuers; against UGC ESTATES LIMITED Defenders: ________________ |
Pursuers: Borland, Richardson; Masons
Defenders: Connal, QC, Solicitor Advocate; Cormack, Solicitor Advocate;
McGrigor Donald
16 May 2005
Introductory
[1]In 1998 a decision was taken by the owners of a cinema in Glasgow that the site should be redeveloped to provide a new multiplex cinema, together with some retail accommodation. For certain reasons the owners chose not to contract directly with designers and a building contractor. Instead a scheme involving a number of different parties and a number of different contractual relationships was put in place. In summary the basic arrangements were that the site would be sold to an insurance company - Pearl Assurance Plc - in order that it might later be leased back to the cinema operator. A property development company would carry out the redevelopment of the site to the extent of constructing the shell of the building, which would then be fitted out by the tenant. In order to construct the shell of the building the property development company would enter into a design and build contract with a building contractor. The pursuers in this action are the property development company and the defenders are the tenant under that basic arrangement.
[2]As part of the overall arrangements the pursuers and the defenders were parties, along with others, including Pearl, to a contract styled an "Agreement for Lease" - hereinafter "the AFL" - the last date of execution which was 10 November 1998. In the AFL the pursuers are referred to as "the Developer" and the defenders as "the Tenant". The AFL is No 6/1 of process. As envisaged and required by the AFL the pursuers subsequently entered into a building contract with Kier Regional Limited - "Kier" - on 3 March 1999 (No 6/3 of process) for the construction of the "shell" works, termed in the AFL "Developer's Works", which could then be fitted out by contractors engaged by the defenders.
[3]In this action the pursuers' primary claims are for payment of two sums of money. The first sum claimed is for the additional costs of giving effect to what the pursuers maintain were variations to the Developer's Works instructed by the defenders. The second sum is claimed as damages for breach of contract in respect of terms said by the pursuers to be implied in the AFL regarding the provision of information by the defenders to the pursuers, the absence of timeous provision of that information being said to have resulted in the pursuers having incurred a liability to Kier in terms of the building contract for what might shortly be described as prolongation costs. Both of the pursuers' claims are based upon the terms of, or terms said to the implied in, the AFL. The defenders contend that the pleadings advanced by the pursuers in support of both of these claims are irrelevant and they argued in debate that the action should accordingly be dismissed. The pursuer's secondary claims are contained in the third and fourth conclusions of the summons and are for certain declarators reflective of the primary claims. No independent issue respecting them was raised. The pursuers seek a proof before answer.
[4]By way of background to the AFL it is averred by the pursuers that sometime previously an associate of the pursuers had been involved with the defenders in the development of a multiplex cinema in Cardiff which involved stacking the auditoria vertically, rather than adjacent to each other on a horizontal plane as is the more customary arrangement for such cinemas. It is averred by the pursuers that the defenders were pleased with the design used in Cardiff and identified the Glasgow site, with its relatively small "footprint" as a possible further development. At that time the Glasgow site was advertised for sale on the open market. It was then withdrawn from the market and thereafter from the summer of 1998 the pursuers and their architects worked with the defenders and their design team, who were the same team as has been engaged in the Cardiff project, in order to develop the design for the Glasgow multiplex using the underlying design concept inherited from the Cardiff project.
The AFL
[5]The AFL is a multi-party agreement to which, in addition to the parties to this litigation ("the Developer" and "the Tenant" respectively) the landlord - Pearl - and a guarantor and a further company described as "the owner" are also party. However, so far as pertinent to the dispute in this litigation the material provisions of the AFL are as mentioned in the following paragraphs.
[6]It is convenient to start with Clause 3.1 of the AFL, which assumed an important place in the debate. It states:-
"3.1Employer's Requirements: The parties shall confer in order to develop the Specification (including the Drawings) into fully detailed design drawings incorporating all service runs to accommodate the Tenant's reasonable fit out requirements and to agree the Employers Requirements and in the event of the parties being unable to agree the same within thirty working days then either party shall be entitled to refer any dispute for determination by the expert under Clause 17.2"
The term "Specification" is defined in Clause 1.1 of Clause 1 ("Definitions") as being:-
"'Specification' means the specification which is comprised in Part I of the Schedule and the Drawings all of which are to be comprised the [sic] Employer's Requirements and the Contractor's Proposals (and/or any specifications and/or drawings which the parties may subsequently agree shall be substituted therefore or used in conjunction therewith)."
The term "Drawings" is given the definition:-
"'Drawings' means the drawings annexed to the Specification and part of Part I of the Schedule."
Part I of the Schedule to the AFL contains a document entitled "General Specification Shell and External Works" to which is appended as "Appendix A" a number of drawings preceded by a frontispiece "Atkins Walters and Webster Agreed layout drawings". (The firm of Atkins Walters and Webster were the architects who had been engaged in the Cardiff project and who apparently worked on the development over the summer and autumn months of 1998 of the design for Glasgow).
[7]The term "Employers Requirements" is also included in the many definitions in Clause 1.1 of the AFL. Its definition is in these terms:-
"'Employer's Requirements' means the document issued by the Developer for the design and carrying out and completion of the Developer's Works (which shall incorporate the Specification) agreed or determined pursuant to Clause 3.1 with such Variations (if any) approved by the Tenant pursuant to Clause 3.3."
The term "Developer's Works" is earlier defined in Clause 1.1 as being:-
"'Developer's Works' means the construction of the Building with all mains services and loading bay as described in the Specification".
And since "Building" has its own definition, for completeness it should be quoted:-
"'Building' means the building comprising the Subjects and other areas to be constructed by the Developer on the Property in accordance with the Specification the Employers Requirements and the Measurement Plans."
[8]The AFL provides for the Developer (the pursuers) entering into "the Building Contract" whereby the "Building" would be constructed. Clause 1.1 of the AFL gives a definition to "Building Contract":-
"'Building Contract' means the design and build contract in respect of the Developer's Works in the form of The Scottish Building Contract with Contractor's Design (August 1998 Edition) (which incorporates the JCT Standard Form of Building Contract with Contractor's Design 1981 Edition incorporating Amendments 1 to 7 and 9 and 10 and T.C./94/WCD) ('UK Form')) as amended by the Schedule of Amendments (which shall incorporate the Specification and the Employers Requirements) and as may be amended pursuant to Clause 12.1 to be entered into between the Developer and the Building Contractor and executed in self-proving form (together with any contract or contracts from time to time entered into by the Developer and the Building Contractor supplemental thereto which shall be in a form consistent with the UK Form as amended) with any Variations previously approved by the Tenant pursuant to Clause 3.3."
Clause 3.7 provides, inter alia that "... the Developer shall before commencement of the Developer's Works enter into the Building Contract with the Building Contractor...".
[9]Clause 5.1 of the AFL provides that:-
"5.1Commencement: The Developer shall as soon as reasonably practicable after the date of this Agreement commence and thereafter proceed diligently and expeditiously with the execution and completion of the Developer's Works".
Clause 5.2 provides further that the Developer should execute and complete the Developer's Works inter alia "...(d) in accordance with (i) the Building Contract...".
[10]From the foregoing it may be seen that the contractual documentation envisages a process of "conferral" whereby the "Specification (including the Drawings)" would be developed to an agreement on "Employers Requirements" which would then be incorporated into the design and build contract between the Developer and the Building Contractor. However, the AFL also provides for completion dates unrelated to the process of conferral. Thus Clause 5.10 provides that the Developer shall "... procure that the Certificate of Completion shall be issued by the earlier of (i) the Estimated Date of Completion and (ii) Six (6) weeks after the date of issue of the Access Certificate". The first and last of the terms within that Clause have, under Clause 1.1, the following definition:-
"'Certificate of Completion' means the written statement validly issued by the Developer's Project Managers under Clause 10 certifying that practical completion...
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