Petition Macdonald Estates For Review Of A Decision
| Jurisdiction | Scotland |
| Judge | Lord Hodge |
| Neutral Citation | [2009] CSOH 130 |
| Date | 15 September 2009 |
| Docket Number | P1128/09 |
| Court | Court of Session |
| Published date | 15 September 2009 |
| OUTER HOUSE, COURT OF SESSION [2009] CSOH 130 | |
| P1128/09 | OPINION OF LORD HODGE in the Petition of MACDONALD ESTATES PLC Petitioner; For review of a decision of Gordon Murray, architect dated 27th August 2009 ________________ |
Petitioner: Lake QC; Brodies LLP
Interested Party: Clark QC et Davies; Harper McLeod LLP
15 September 2009
[1] In this application Macdonald Estates Plc ("Macdonald") seek Judicial Review of a decision of Gordon Murray, architect, in his capacity as Independent Expert under a contract between Macdonald and National Car Parks Limited ("NCP"). The contract was contained in detailed legal missives dating between 21 March and 12 December 2008 ("the missives") as averred in statement 5 of the petition. NCP are the interested party.
[2] As I discuss more fully below, Mr Murray was appointed as Independent Expert to determine whether or not a suspensive condition in the missives had been purified. The missives contained a relatively tight timetable for the purification of the suspensive condition and provided that on the expiry of the time allowed, either party could resile from the contract. The date at which parties are allowed to resile from the contract, if the suspensive conditions have not been purified, is 26 September 2009. The essence of the dispute between the parties is whether Mr Murray, when acting as Independent Expert, was acting as an arbiter and could be required to state a case for the opinion of the Court of Session under section 3 of the Administration of Justice (Scotland) Act 1972 ("the 1972 Act"). If Mr Murray was acting as an arbiter and did state a case for the opinion of the court, it is likely that NCP would take the opportunity to resile from the missives. Accordingly Macdonald has sought an urgent decision of the court in this application.
[3] The full text of the operative part of Mr Murray's decision was:
"(a) That in determining the dispute between the parties the Independent Expert is acting as an arbiter;
(b) That as a result as Independent Expert I may be required to state a case for the opinion of the Court of Session in accordance with section 3 (1) of the 1972 Act;
(c) That as the Independent Expert I will not take any further action regarding the issuing of any further determination, at least for a period of seven days from the date of this opinion.
(d) That as the Independent Expert I invite parties to make written representations as soon as possible as to the procedure to be adopted in accordance with Part II of Chapter 41 of the RCS in connection with the request received from the Tenant (Appendix 2) to state a case for the opinion of the Court of Session."
[4] Macdonald seek (a) declarator that the Independent Expert is required to determine the issue referred to him as an expert and not as an arbiter, (b) reduction of the decision mentioned in the previous paragraph, and (c) decree ordaining Mr Murray to issue a determination in terms of his draft findings dated 6 August 2009 on the business day following that on which judgment is given prior to 10am.
[5] Macdonald initially sought an interim order under section 47 (2) of the Court of Session Act 1988 but did not need to make that application as I was able to hear the submissions of the parties at a First Hearing between 8 and 10 September 2009.
Background
[6] The missives comprised among other things an agreement to lease ground as a multi-storey car park. Attached to the missives were several documents including a draft lease and a draft car parking agreement, both of which were to last for 35 years. Under the lease NCP would be obliged to pay a substantial annual rent for the car park. The conditions in the principal missives were concerned with the steps which Macdonald and NCP required to take in order to develop the site and equip the car park before entering into the lease and car parking agreement. While I consider the principal relevant conditions in more detail below, it may be useful to summarise the sequence of events which the missives envisaged. First, the suspensive conditions required to be purified (condition 2) and Macdonald required to obtain the necessary consents (condition 3). Secondly and thereafter, Macdonald required to carry out the Developer's Works by preparing detailed drawings and commencing those works within three months after the purification of the suspensive conditions (conditions 1.1.83 and 4). Thirdly, when the Developer's Works were sufficiently completed as to allow NCP access to the development in order to proceed with the tenant's works, the missives provided for the issuance of an Access Certificate and thereafter a Certificate of Practical Completion (condition 8). Fourthly, NCP were required to commence the tenant's works as soon as practicable after the completion date (conditions 1.1.20 and 13). NCP were entitled but not obliged to take access earlier at any time after an Access Certificate had been issued (condition 13.2). Fifthly, condition 14 provided a mechanism for the calculation of the rent payable under the lease. One of the components in this calculation was the number of car spaces in the car park. Sixthly, the lease (Schedule Part IV) and the Car Parking Agreement (Schedule Part XIV)) were to commence on the date of entry which was defined by reference to the issuance of the Certificate of Practical Completion (conditions 1.1.23, 1.1.20 and 15). Thereafter the lease and the car parking agreement were to endure for 35 years.
[7] The missives contained several provisions for the resolution of disputes. Some involved the Independent Expert and others, such as condition 18 which concerned the identification of all rights reasonably necessary for the operation and use of the let subjects, involved an independent surveyor. Condition 24 provided:
"Expert Determination
Without prejudice to any specific provisions in the Missives concerning resolution of any disputes which may arise between the Developer and the Tenant, in the event of any dispute or disagreement arising as to the interpretation of the Missives or as to any matter as to be agreed between the Developer and Tenant hereunder, the same shall be referred at the instance of either party to the decision of an independent surveyor (acting as an expert) to be mutually agreed between the Developer and the Tenant for that purpose or failing such agreement to be appointed at the request of either party by the Chairman or senior officeholder for the time being of the Scottish branch of the Royal Institution of Chartered Surveyors, and the independent surveyor shall issue his proposed determination in draft at least fourteen days before giving his final decision, but whose eventual decision shall be final and binding on the Developer and the Tenant, in respect of all matters referred to him hereunder (save in the case of manifest error). The fees of such independent surveyor shall be payable by the Developer and Tenant in such proportions as the independent surveyor shall determine or in default of such determination, equally between the Developer and the Tenant. If any person appointed as an independent surveyor shall relinquish his appointment or die or if it shall become apparent that for any reason he will be unable to complete his duties hereunder or if the person appointed as an independent surveyor fails to reach a decision within three months of the date of his appointment, the Developer or the Tenant may apply to the aforesaid Chairman or other senior office holder for a substitute to be appointed in his place, which procedure may be repeated as many times as necessary. If the dispute relates to the legal interpretation of the Missives or as to any matter as to be agreed between the Developer and Tenant hereunder, the said independent surveyor will take appropriate independent legal advice before issuing their [sic] determination."
The role of the Independent Expert
[8] The first role which the missives gave the Independent Expert, and which is the one at issue in this application, was of determining whether Macdonald had obtained a "Satisfactory Planning Permission" for the Developer's Works.
[9] Condition 2 of the missives so far as relevant provided:
"2.1 The Missives shall be are [sic] essentially and suspensively conditional upon:-
2.1.1 The Developer obtaining a Satisfactory Planning Permission for the Developer's Works.
2.1.2 The Developer entering into a contract or contracts for the purchase of the Let Subjects and any such land as may be required for the purposes of the Developer's Works and any suspensive conditions therein being purified or waived or otherwise satisfied in full.
2.2 The Developer shall use all reasonable endeavours to purify the Suspensive Conditions by the Longstop Date (Conditions).
2.3 The condition contained in Condition 2.1.1 is conceived for the benefit of both the Developer and the Tenant.
.......
2.5 Condition 2.1.1 shall only be purified when either (i) both the Developer and Tenant notify each other that a Planning Permission is a Satisfactory Planning Permission under conditions 2.11.1 and 2.11.2 or 2.14.1 and 2.14.2 (or are deemed to have done so) (ii) the Independent Expert determines that the Planning Permission is a Satisfactory Planning Permission under condition 2.11.3 or 2.14.3.
.........
2.7 In the event that the Suspensive Conditions have not been purified in full prior to the Longstop Date (Conditions) then subject to Condition 2.8 the Developer or the Tenant may at any time thereafter (but prior to purification of the last of the Suspensive Conditions) resile from the Missives and that by written notice to the other party to that effect and that without any costs or damages being due to or by either party save in respect of any antecedent breach of the terms of the Missives.
2.8 Notwithstanding any other provision of the Missives, if a decision is awaited on an application for Planning Permission or the...
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