Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION
	[2014] CSOH 29
CA104/13	OPINION OF LORD MALCOLM in the cause KIPPAX LIMITED Pursuer; against GLASGOW HARBOUR DEVELOPMENT LIMITED Defender: ________________

Pursuer: Lord Davidson of Glen Clova, QC, Thomson; Anderson Strathern LLP

Defender: Lake QC, Pinsent Masons

19 February 2014

[1] In terms of a framework agreement entered into in 2004, the pursuer purchased land from the defender and undertook to construct approximately 500 apartments, together with car parking and commercial space, being phases 1 and 2 of the overall development. There was provision for the transfer of land for a third phase involving a further 330 apartments, plus car parking and retail space. Phases 1 and 2 have been completed. In February 2007 the parties concluded a development and sale agreement (DSA) in terms of which the defender undertook to purchase certain car parking spaces and retail units. The agreement identified the location of the 95 car parking spaces to be acquired. The parties are in dispute as to whether the location of those spaces has been altered. The pursuer contends that this occurred as a result of events in 2009. The defender submits that it would require the agreement of the defender, which has never been forthcoming.

[2] The DSA defines "car parking spaces" as 95 spaces "to be located as indicated on the base drawings and specifications (car park) to be formed as part of the development on the upper basement floor in accordance with the base drawings and specifications (car park)....". The drawings and specifications are part of what are described in the DSA as "the relevant documents". They include detailed instructions for the construction of several hundred car parking spaces in the development, including their location, headroom, dimensions, carriageway width, security arrangements, etc. Elevations and plan drawings are provided.

[3] Clause 2.2 of the DSA prevents the pursuer from making any material alteration to any of the relevant documents without prior approval in writing from the defender. A non-material alteration which falls within the scope of clauses 2.2.1/3 does not require prior approval in writing, and will be effective on written notification to the defender. Where the purchaser's approval is required, the developer must submit full details, including any appropriate drawings (clause 2.3). A response is to be given in writing within five days, failing which it will be deemed that approval has been given.

[4] The first issue discussed at the debate was whether the variation provisions in clauses 2.2 and 2.3 apply to a proposed alteration to the location of the car parking spaces to be purchased by the defender. For the pursuer, Lord Davidson of Glen Clova QC submitted that a positive answer flows naturally from the fact that the base drawings and specifications (car park) can be altered under the terms of clauses 2.2 and 2.3, and that the location of the spaces to be purchased is identified on the said drawings. However, I prefer the submissions of Mr Lake QC on this point. He contended that the variation provisions in clause 2.2 relate to the details shown in the plans. They cannot be used to alter the subjects which the defender has agreed to purchase. In my view, though the particular spaces to be purchased are shown by a shading on a copy of the upper basement plan, this does not make their location part of the drawings for the purpose of a variation under clauses 2.2/3. The plan was used simply as a means of identifying the location of the spaces to be purchased by the defender. Clause 2 of the DSA was framed in the context of the purpose of the relevant drawings, which was to give content to the developer's obligations under clause 6 of the DSA, not to define the heritable subjects to be purchased in terms of clause 11. In so far as the drawings relate to the car park, they deal with issues such as the dimensions of the car parking bays, carriageway widths and other details. The drawings themselves are not concerned with the location of the subjects of sale, which is set by the terms of clause 11 and the definition of "car parking spaces".

[5] It follows that any alteration to the location of the spaces to be purchased by the defender requires a properly agreed and authenticated alteration to the DSA. It cannot be achieved by the deeming provisions in clauses 2.2 and 2.3. Any change in the marking or shading of the 95 spaces is not truly a change to the plan itself; it is a change to the subjects to be purchased. The drawings and specifications of the car park spaces are unaltered in terms of location, dimensions, carriageway width, etc. There are minor changes proposed in respect of bicycle racks and other small details which might fall into a different category, but this dispute does not concern such matters. In my view the pursuer is really trying to alter the definition of "car parking spaces". There is no provision for this in chapter 2 of the DSA.

[6] If I am wrong on this point, there is another difficulty for the pursuer. Firstly, it can be noticed that the proposed change does not fall within the scope of the non-material variations set out in clauses 2.2.1/3, which can be achieved by mere notice on the part of the developer. Plainly the defender has not agreed to the change in the position of the spaces, therefore the pursuer relies upon the deeming provision in clause 2.3. In this regard reliance is placed upon a letter dated 11 March 2009 from the pursuer's operations director to Mr Euan Jamieson, who is one of the defender's directors. It states:

"Re: Glasgow Harbour Phase 2 - car park layout

Further to our meeting yesterday, please find enclosed a copy of the revised basement car park layout, as per the development and sale agreement dated 17 February 2007. I forgot to give you the drawing before you left. If you have any queries regarding the above, please give me a call to discuss".

The revised layout plan was enclosed. No response to this letter was received within five working days, thus the argument is that, standing the terms of clause 2.3, the defender is deemed to have agreed to the revisions. Lord Davidson submitted that the letter was, and would be understood to be a request for the written approval of the defender in terms of clauses 2.2 and 2.3. Whatever the intention of the author, in my view the letter cannot be so read. It is very informal in tone. It was a substitute for handing over the plan at the previous day's meeting. Neither party was keen to lead evidence as to the events at that meeting, but, on any view, the letter of 11 March would not alert a reader to the importance now being placed upon it. Even if Mr Jamieson, or whoever opened the letter, recalled the terms of clauses 2.2 and 2.3 of the DSA, they would not be informed that these provisions were being invoked, nor that a failure to respond within five days would result in the defender being contractually obliged to permit the revisal. In my opinion, whatever else, a specific request for approval under clause 2.2 was required. In short, there is nothing in the letter to suggest that the enclosed plan could have contractual effect. I reject Lord Davidson's submissions on this issue.

[7] This is sufficient to dispose of the issues raised at the debate. I uphold Mr Lake's submission that the pursuer is not entitled to a declarator that the base drawings and specifications (car park) have been modified in terms of the enclosure forwarded with the letter of 11 March 2009. In the course of the debate Lord Davidson intimated that the pursuer no longer insists upon the other declarator. It follows that I need not address the other matters discussed in the notes of argument for the parties. Parties did not address whether the action should be dismissed, or decree of absolvitor granted. In case there is a difference of view on this, I shall have the case put out by order for resolution of this and any question of expenses.