Kennedy And Others For Suspension And Interdict
| Jurisdiction | Scotland |
| Judge | Lady Stacey |
| Neutral Citation | [2015] CSOH 103 |
| Published date | 31 July 2015 |
| Date | 31 July 2015 |
| Court | Court of Session |
| Docket Number | P930/14 |
OUTER HOUSE, COURT OF SESSION
[2015] CSOH 103
P930/14
OPINION OF LADY STACEY
In the petition
KENNEDY AND OTHERS
Petitioners;
for
Suspension and interdict
Petitioners: Logan; Campbell Smith LLP
Respondents: Dunlop; Gillespie MacAndrew LLP
31 July 2015
[1] In this proof the petitioners are Peter Norman Bingham Kennedy as an individual and as one of the trustees under a deed of trust registered in the Books of Council and Session 19 April 1994. The petitioners were owners of a site comprising 6.293 hectares at Doonholm, Alloway, Ayr. The respondents are Dickie & Moore Holdings Limited, a limited company which is a developer and house builder.
[2] In 2008 the petitioners agreed to sell the site to the respondents. The missives which were concluded in 2008 and varied, in a manner immaterial to the present case, in 2009, included a term whereby if the respondents wished to resile from the bargain they required to pay an “abort fee” to the petitioners. The respondents did resile, by letter dated 7 December 2009, and paid the abort fee. The bargain between the parties to buy and sell the site thereby came to an end.
[3] The parties entered into a Minute of Agreement dated 16 May 2011 and subsequent dates and registered in the Books of Council and Session on 7 June 2011. So far as relevant, the minute is in the following terms: –
“Whereas in pursuance of Missives concluded between DMH [the respondents] and the Sellers [the petitioners] dated 25 March 2008 and subsequent dates in connection with the purchase from the Sellers by DMH of 6.293 hectares of ground at Doonholm Alloway Ayr, DMH expended the sum of £165,397.10 sterling in professional fees as detailed in the Schedule annexed and subscribed as relative here to and whereas it has been agreed between the parties that in the event of the Sellers concluding unconditional… missives with a third party for the sale of the said subjects… during the shorter of the period when the Planning Consent obtained or to be obtained by DMH for the development of the said subjects remains extant and the period of five years from the date of these presents, as the case shall be, the Sellers will reimburse DMH the full amount of the said professional fees together with any further professional fees (up to a maximum of £10,000) incurred by DMH in obtaining such Planning Consent which reimbursement will take place within 10 days of the Sellers receiving payment of the price or the first instalment thereof in respect of the said subjects or part thereof;”
[4] The issue before the court is the meaning of that Minute of Agreement. The respondents have served charges on the petitioners for payment of £165,397.10. The petitioners deny liability to pay and seek suspension of the charges. There is no dispute between the parties that the petitioners concluded unconditional missives with a third party, Miller Homes Ltd (Miller Homes), within five years of the date of the agreement; nor is it disputed that the petitioners have received the first instalment of the purchase price. There is no dispute that the respondents did not obtain planning consent. The dispute is whether there is liability to pay when the respondents did not obtain planning consent.
[5] The petitioners argue that there is no planning consent obtained by the respondents; therefore the period during which any such consent is extant must be shorter than five years. Thus the sale of the site during the five years following the execution of the agreement does not trigger liability to pay. Their argument is that planning permission must be granted before any obligation to pay may exist. The respondents argue that there is no obligation on the respondents to obtain planning consent; the petitioners are obliged to pay if they sell to a third party within five years of the agreement; they did so; therefore the petitioners are obliged to pay.
Background
[6] Evidence was given orally and by affidavit by Mr Kennedy, Mr John Dickie, a director of the respondents, Mr Jamie Irvine, a director of Miller Homes, Mr Andrew Lindsay, a surveyor, and the solicitors for the parties, Sir Adrian Shinwell (for the petitioners) and Mr Harris Muir (for the respondents). Mr Tom Donald, the petitioners’ land agent was mentioned in evidence. He died in 2011 and Mr George Gourlay took over as land agent. There was little if any dispute between the parties about the underlying facts. Both counsel accepted that each witness was credible as they were doing their best to be truthful. The issue between the parties arises on the proper interpretation of the Minute of Agreement.
[7] The respondents wanted to develop the site but having concluded missives in 2008 found that their bank was not prepared to lend in 2009. Therefore they resiled from the missives. They had spent money in obtaining reports on the site and had made an application for planning permission, paying the requisite fee to the local authority to do so. They had obtained from the local authority a “minded to grant” decision which meant that in the Local Development Plan the site was zoned for new housing, and that subject to an agreement under section 75 of the Town and Country Planning (Scotland) Act 1997 being signed, and other conditions being accepted, planning permission would be granted. The respondents were disappointed at the lack of funds from the bank and wished to consider if there was some development which they could carry out at this site. They were aware that the local authority could decide to reallocate to another site the provision for new housing if the development did not go ahead. They knew that that would also affect the petitioners, as the value of the land would diminish. Further, the company had expended approximately £165,000 which it would be lost if they did not go ahead with any development at that site.
[8] Consequently, Mr Dickie, director of the respondents, spoke directly to Mr Kennedy in or around March 2010 indicating that it would be to the advantage of both of them if the development or another development of new housing on that site could go ahead. Mr Dickie was hopeful that he might be able to fund a different development from that first proposed. That did not prove possible. He contacted other house builders with a view to their developing the site. At one stage he thought that his company might succeed in developing a sub division of the site if another developer bought it from the petitioners. The respondents had appointed a team of advisers to deal with planning and architectural matters, landscape design and ecology, and engineering services, including site investigation reports. In his opinion the work which his company had carried out could be of use to another company; he described it as work which de-risked the site.
[9] Mr Dickie was keen to recover as much of the money his company had spent as possible. He instructed his solicitor to approach the petitioners’ solicitor with a view to agreement being reached that if the petitioners sold the site to someone else for development, the respondents would be paid approximately £194,576.59 by the petitioners.
[10] Mr Muir, solicitor acting for the respondents, sent a first draft of an agreement (7/2 of process) to Sir Adrian Shinwell, solicitor to the petitioners, by letter dated 27 May 2010. The draft was, so far as relevant, in the following terms:-
“WHEREAS in pursuance of Missives concluded between DMH [the respondents] and the Sellers [the petitioners] dated 25th of March 2009… in connection with the purchase from the Sellers by DMH of 6.293 hectares… DMH expended the sum of £194,576.59 in professional fees as detailed in the schedule annexed and subscribed as relative hereto AND WHEREAS it has been agreed between the parties that in the event of the Sellers concluding missives with a third party for the sale of the subjects… within a period of 10 years from the date hereof, the Sellers will reimburse DMH the full amount of the said professional fees which reimbursement will take place within 10 days of the Sellers receiving payment of the price or the first instalment thereof in respect of the said subjects…”
The schedule was in the following terms:
“Doonholm
Professional Fees
Summary
| Item | Company | Total
|
| Engineering, RCC, Drainage | URS | £ 46,652.00 |
| Landscape assessment | Hogarth | £ 13,527.30 |
| Architecture to planning | Lawrence McPherson | £ 43,500.00 |
| Architecture to planning: Affordable homes |
Lawrence McPherson
|
£18,900.00 |
| Design to sewer pumping station M&E | Ferrier Pumps | £ 3,500.00 |
| Existing drains CCTV | DAMM | £ 1,550.00 |
| Ground investigations | Ritchies | £ 23,267.80 |
| Solicitors Fees | Kerr Barrie | £ 19,229.49 |
|
| CRBP | £ 9.950.00 |
| Planning Fees | South Ayrshire Council | £ 14,500.00
|
|
| Total | £194,576.59” |
The sum involved reduced for reasons which are not material to this case, to approximately £165,000. The solicitor’s fees were deleted. It is not in dispute that the sum due, if any, is that in the agreement.) His covering letter (7/1 of process) was to the effect that he had received instructions from Mr Dickie and had drafted the agreement.
[11] Mr Dickie and Mr Donald met in the summer of 2010 and Mr Dickie wrote to Mr Donald on 30 August 2010 (6/25 of process) as follows:-
“Planning approval process to be completed. This will involve the completion of the section 75 agreement. Minute of Agreement requires to be completed, ensuring that if the land is sold to another party then Dickie & Moore shall be reimbursed for their costs. Please note that a draft agreement is with Sir Adrian Shinwell”.
[12] Sir Adrian wrote to Mr Kennedy and Mr Donald on 28 September 2010 summarising Mr Kennedy’s instructions to him. He stated, so far as relevant:-
“Peter has decided to go to stage 1 (planning) as detailed in John Dickie’s email of 30 August. This is however, subject to Tom...
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