Pursuers and Respondents: Lord Davidson of Glen Clova QC, MacColl; Shepherd & Wedderburn LLP

Defenders and Reclaimers: Clark QC, Simpson; Harper Macleod LLP

20 January 2012

Introduction

[1] The pursuers and respondents, EDI Central Limited ("EDI") are a wholly owned subsidiary of the EDI Group ("the EDI Group"). The EDI Group in turn is wholly owned by the City of Edinburgh Council ("the Council"). Although originally run from within Edinburgh District Council (the predecessor of the Council), the EDI Group became fully independent from the Council in 1991. It now operates as a private limited company, whose directors include councillors and the Chief Executive of the Council.

[2] Between 2001 and April 2008 Ian Wall was the Chief Executive of the EDI Group. From April 2008 until July 2009, he was succeeded as Acting Chief Executive by John Mark Di Ciacca, who had previously been the Director of Property and Development of the EDI Group. EDI was set up as a wholly owned subsidiary of the EDI Group to carry out the proposed re-development of the Castle Terrace Car Park with which this action is concerned.

[3] The defenders and reclaimers are National Car Parks Limited (NCP), a company traditionally associated with the running of car parks. Amongst the car parks NCP operate in Edinburgh is the Castle Terrace Car Park ("the subjects"), which is owned by the Council and leased to NCP. The current lease runs for 25 years from the end of March 1995 ("the Lease"). By 2005 it had a further 15 years to run. Clause Fifth of the Lease provides that, subject to an exception which was not material for present purposes, the subjects are to be used by NCP "solely as a car park for private cars and light vans".

The Agreement

[4] In recent years NCP has moved on from merely running car parks to become "a more profit focussed development business". That led to NCP entering into discussions with the EDI Group about the development opportunities presented by the Castle Terrace Car Park. Those discussions came to fruition during 2005. Between April 2005 and November 2005 missives were concluded between NCP, EDI and the EDI Group relating to the Assignation of the Lease of the Castle Terrace Car Park and the sharing of profit in relation to its redevelopment. Annexed to the missives was a draft Agreement between NCP and EDI, which related to the proposed redevelopment and incorporated a guarantee by the EDI Group. Although the draft Agreement was never signed, it was agreed to be binding on those three parties. In the Agreement the defenders and reclaimers are referred to as "NCP", the pursuers and respondents as "the Developer" and the EDI Group as "EDI". In his opinion the Lord Ordinary took the view that for the purposes of the opinion it was unnecessary to differentiate between the EDI and the EDI Group. He accordingly referred to EDI and the EDI Group, whether separately or together, simply as EDI. We propose to do likewise.

[5] The basic structure of the Agreement was that, in exchange for making a capital payment of £5 million to NCP, EDI would take an assignation of NCP's interest in the subjects under the Lease and would then grant a sub-lease of those subjects back to NCP. The recitals to the Lease rehearsed that this was in order to procure the development of the subjects by EDI, who wished "to procure construction thereon of a commercial (or commercial and residential) building together with related services, car parking (if any), landscaping and others". In Clause 1 of the Agreement the term "CT Project" is defined in great detail. The definition encompasses a variety of matters including designing the proposed redevelopment, obtaining and securing at the appropriate time or times the required permissions, consents and licences and the construction of the works involved in the project, which were to include a multi-occupancy mixed use or commercial building.

[6] The recitals to the Agreement also provided inter alia that EDI had agreed to grant certain rights of first refusal to NCP in respect of the Development Area, an area defined in the Lease under reference to postcodes EH1, EH2 and EH3 in central Edinburgh, and that EDI and NCP had agreed to share profit, as defined and provided for in the terms and conditions of the Agreement. As the Lord Ordinary records in paragraph [9] of his opinion, the provisions in the Agreement concerning the sharing of profit between NCP and EDI are complex. It is sufficient to record that they include a provision that within 15 working days of EDI procuring the issue of an outline or detailed planning permission for the CT Project, EDI required to serve written notice upon NCP that such planning permission had been obtained and request NCP to notify EDI in writing whether NCP wished to negotiate terms with EDI to be an equal partner in the CT Project.

[7] Clearly if the provisions relating to the sharing of profit were to be of value to NCP, they required some assurance that EDI would pursue the CT Project to the best of their ability. Clauses 6 and 13 of the Agreement are of relevance in this regard. They provide:-

"6. DISPOSAL

6.1 The Developer shall procure that the CT Project is pursued with all reasonable endeavours and as would be expected of a normal prudent commercial developer experienced in developments of that nature and in accordance with the Main Objectives. Save insofar as they are precluded from doing so by any confidentiality undertakings or the like, the Developer shall deliver to NCP, prior to the Developer entering into any Agreement for Lease for the same, an executive summary of such Agreement for Lease (and of such relevant Lease) (disclosing all material details of the same).

6.2 The Developer shall keep NCP advised as to the progress of all negotiations for the grant of Leases and shall as soon as reasonably practicable intimate to NCP the dates of completion of the Agreement(s) for Lease for the same and of the projected date of entry under such Agreement(s) for Lease, save insofar as they are precluded from doing so by any confidentiality undertakings or the like. _ _ _

13. MAIN OBJECTIVES

The Developer and NCP shall use all reasonable endeavours to achieve the Main Objectives and shall act in good faith in respect of the same and in accordance with this Agreement."

[8] The term "Main Objectives" is defined in Clause 1 of the Agreement in the following terms:-

"(a) to carry out the CT Project in a manner commensurate with a prudent commercial developer;

(b) so far as reasonably practical to minimise the period required in order to obtain the CT Required Permissions;

(c) to use reasonable endeavours to incorporate proposals for a commercially viable public car park within the CT Project and for which planning permission could be obtained free from unduly onerous conditions."

There was no dispute between the parties that the reference to a public car park was to proposals for a car park within the Castle Terrace site. The term "CT Project", accordingly, comprised inter alia the redevelopment of the whole site, including the design and construction of the works and the letting of the lettable units on the market. The term "CT Required Permissions" encompassed "every permission, consent, permit, licence, approval and agreement which is required (by any statutory requirements, contract or otherwise) for the complete implementation of the CT Project in full compliance with all such requirements.".

[9] As Clause 4 of the Agreement provided for, once the consent of the Council had been obtained, NCP assigned the Lease of the subjects to EDI and EDI sub-let the subjects back to NCP. The annual rent payable by NCP under the sub-lease was fixed at a sum which was £397,500 in excess of the annual rent payable by EDI to the Council.

[10] The Agreement also makes provision for the assignation of the Lease of the subjects by NCP and the payment of £5 million to NCP to be reversed. Clause 12.1 of the Agreement provides that Clauses 12.3, 12.4 and 12.8 are essentially and suspensively conditional upon the Landlords under the Lease, the Council, granting consent to the re-assignation referred to in Clauses 12.3, 12.4 and 12.8 on terms acceptable to NCP and EDI (acting reasonably). Clause 12.2.1 provides that NCP shall, without delay, give EDI written notice ("an NCP Re-Assignation Clearance Notice") when the provisions of the suspensive condition contained in Clause 12.1 have been satisfied so far as NCP are concerned. Clause 12.6 provides that during the period of not less than three years and not more than five and a half years after the assignation of the Lease by NCP, EDI may serve written notice on NCP requiring NCP to buy back EDI's interest as tenants under the Lease. Clause 12.3 provides that if EDI has served notice on NCP in accordance with Clause 12.6, it shall, having obtained the consent of the Landlords, the Council, to such re-assignation, assign to NCP its interest in the Lease. Schedule 4 makes further provision in that respect.

[11] On 27 May 2009, EDI served a Notice on NCP in accordance with the provisions of Clauses 12.3 and 12.6 of the Agreement requiring NCP to buy back EDI's interests under the Lease. Having obtained the consent of the Council to re-assignation, EDI sent a copy of that consent to NCP by letter dated 9 June 2009. They called upon NCP to deliver the NCP Re-Assignation Clearance Notice, in accordance with Clause 12.2.1 of the Agreement. NCP failed to do so. That failure has given rise to the present action. Despite the fact that since the latter part of 2007 there had been little if any activity calculated to progress the redevelopment project, EDI did not include an assessment of the position reached by the project in either of their letters of 27 May 2009 and 9 June 2009.

Action raised

[12] In this action, EDI seek decree ordaining NCP to implement their contractual obligation under Clause 12.2.1 of the Agreement by delivering to EDI an NCP Re-Assignment Clearance Notice that the provisions of the suspensive condition contained in Clause 12.1 of the Agreement have been satisfied so far as NCP are concerned. The complex machinery of the notice provisions to be found in Clause 12 of the Agreement is not in issue in this action.

[13] NCP seek to defend the action on the basis that they were not obliged to deliver an NCP Re-Assignment Clearance Notice to EDI because EDI are themselves in material breach of the Agreement. NCP rely on the doctrine of mutuality and retention. They contend that EDI failed to pursue the redevelopment of the Castle Terrace Car Park with "all reasonable endeavours and as would be expected of a normal prudent commercial developer experienced in developments of this nature". EDI dispute that contention. Before the Lord Ordinary it was accepted on behalf of NCP that if they could not establish that EDI were in breach of contract, in that respect, they would have no defence to EDI's action or to EDI's claim that they could proceed with re-assignation of EDI's interests under the Lease.

[14] Having heard a proof, at which NCP led, the Lord Ordinary found against NCP and by interlocutor dated 12 November 2010 ordained NCP to deliver an NCP Re-Assignation Clearance Notice to EDI without delay. NCP have reclaimed against that interlocutor.

Submissions on behalf of NCP

[15] NCP, as reclaimers, argue that in terms of the contract between the parties the respondents had been under an obligation to use all reasonable endeavours to pursue the proposed redevelopment of the Castle Terrace site ("the Castle Terrace project"). As the Lord Ordinary had correctly summarised in paragraph [20] of his opinion, the court required "to consider whether there were reasonable steps which could have been taken but were not taken. The party on whom the obligation was placed will be expected to explore all avenues reasonably open to him and to explore them all to the extent reasonable."

[16] Senior counsel for NCP explained that the position of NCP in their written pleadings and during the proof had been that EDI had not considered any strategy for pursuing the redevelopment of the Castle Terrace Car Park, other than by seeking to link the redevelopment project with the development of a site owned by the Council in King's Stables Road. Indeed after September 2007 EDI had not taken any steps to pursue the redevelopment project at all. By September 2007, officials of the Council had made clear to EDI that the Council was not prepared to make available the site in King's Stables Road for the purposes of providing an alternative location for the off-street parking which would be displaced from Castle Terrace by the proposed redevelopment. EDI's justification for "downing tools" on the project in late 2007 had apparently been that in the absence of any alternative site(s) for the provision of off-street parking, the Castle Terrace redevelopment project was never going to get the green light from the Council, whatever efforts EDI might make. Against that background, the critical issue at the proof had been whether anything more could have been done by EDI to progress the redevelopment project, in the absence of the King's Stables Road site as a location for the alternative provision of off-street car parking. That issue had been flagged up by NCP in their written pleadings in Answer 7.

[17] Senior counsel for NCP explained that NCP had identified a line of enquiry which it would have been reasonable for EDI to have taken, but which they had failed to pursue. That line of enquiry would have involved EDI investigating what car parking provision would have been lost, both temporarily during the redevelopment and permanently, as a consequence of redeveloping the Castle Terrace site; what provision would have been required to replace the lost car parking provision; and whether alternative sites could have been identified, which, taken separately or together, could have provided adequate replacement for the off street car parking that would be lost. That line of enquiry had also been flagged up in general terms, in Answer 7 of NCP's written pleadings. Such an avenue of enquiry had been possible and would have been a reasonable one for EDI to have undertaken in implement of their obligations under Clauses 6 and 13 of the Agreement.

[18] Senior counsel for NCP acknowledged that it would have been open to EDI to prove that at the material date, around September 2007, such a line of enquiry would have been bound to fail, or indeed that at the date of the proof a similar outcome would result. EDI could have done so by leading evidence of a sufficiently detailed analysis, supported by a witness with appropriate expertise, as to the off street car parking that would be lost, whether temporarily or permanently and in terms of the number of spaces and usage of spaces; and the inadequacy of any other identified sites to replace such loss of parking.

[19] However the onus had been on EDI to establish such a line of defence, in answer to NCP's contention that EDI had acted in material breach of contract (see Agroexport State Enterprise for Foreign Trade v Compagnie Europeene de Cereales [1974] 1 Lloyd's L R 499, Ackner J at p 506; and MacTaggart and Mickel Homes Ltd v Hunter [2010] CSOH 130, Lord Hodge at paras. [1], [57]-[59], and [64]).

[20] Once NCP had identified a step that would have been prima facie reasonable for EDI to have taken, the question for the Lord Ordinary had been whether EDI had established that such a step would have been bound to fail. EDI had failed to lead the necessary evidence. Indeed it was clear from the evidence EDI did lead from Ian Wall and John de Ciacca that no such analysis had been carried out. It was also clear that the respondents had not pursued any avenue other than the possibility of developing the King's Stables Road site and including some replacement car parking there. Accordingly the Lord Ordinary had erred. He should have held that on the basis of the evidence before him he was unable to find that a more detailed investigation of the car parking issue would have been unable to identify a solution acceptable to the planning authority. In such circumstances, the Lord Ordinary should have held that the respondents had not discharged the burden of proof on them. It followed that NCP had been entitled to retain performance of their own obligations and in the result they should have been assoilzied by the Lord Ordinary.

Submissions on behalf of EDI

[21] Senior counsel for EDI submitted that there had not been any manifest error on the part of the Lord Ordinary. He had correctly approached the questions of law involved. EDI did not dispute the Lord Ordinary's summary of the evidence or his analysis of that evidence, except in respect of one issue. That was in respect of his application of the onus of proof in relation to the provision of alternative car parking spaces, during and following upon the completion of the proposed redevelopment. In paragraph [108] of his opinion the Lord Ordinary had indicated that had any existing car parks been considered to be genuine alternatives to the King's Stables Road site, he would have expected to have been provided with a detailed analysis, supported by a witness with expertise in transport planning and car park provision, showing the existing use of such car parks, what spare capacities they had, what additional car parking space could have been created and how, in terms of location, they fitted in with what was required. Senior counsel for EDI argued that NCP had not placed such matters in issue, either in their written pleadings or during the evidence. In such circumstances, NCP had not taken sufficient steps to shift the onus of proof on to EDI in relation to the provision of alternative car parking. Furthermore NCP had not positively averred that any particular sites had been capable of providing the required replacement car parking when EDI had been considering whether the Castle Terrace Car Park could be successfully redeveloped.

[22] Senior counsel for EDI also submitted that such evidence as the Lord Ordinary had heard about possible alternative sites had not supported the conclusion that any of those sites was a realistic option. The Skypark within the Edinburgh International Conference Centre was not operational on account of mechanical failure. The Morrison Street Goods Yard car park was not suitable. The Riego Street and Greenside car parks were too far away from Castle Terrace to be of any relevance.

[23] Senior counsel for EDI stressed that EDI had not been obliged to investigate in detail each of the possible alternative sites mentioned during the evidence. That was because there had been no prospect of one or more of them providing the alternative car parking that would have been necessary to unlock the possible redevelopment of the Castle Terrace site. Nor had there been any need for EDI to lead detailed expert evidence to demonstrate that there were no suitable alternative sites available. That had all been demonstrated by a number of witnesses from whom the Lord Ordinary had heard, including Mr Wall and Mr Di Ciacca, who had been led on behalf of EDI and who had considerable experience of development projects in the centre of Edinburgh.

[24] In summary, sufficient evidence had been placed before the Lord Ordinary entitling him to hold that

(a) there had been no prospects of getting the go-ahead from the Council for the redevelopment of the Castle Terrace car park, unless an alternative car parking provision was identified;

(b) the need for alternative car parking necessitated, in turn, the pursuit of the redevelopment of the King's Stables Road site; and

(c) there was no other realistic possibility for alternative car parking on offer at the relevant time.

Discussion

[25] As we have indicated, in terms of Clause 6 of the Agreement EDI undertook to procure that the Castle Terrace project was pursued with all reasonable endeavours and as would be expected of a normal prudent commercial developer experienced in developments of that nature. Clause 13 imposed a similar duty in respect of the Main Objectives in the Agreement. In advance of the proof, NCP accepted that the burden was on them to establish that EDI was in breach of their obligations under the Agreement. In those circumstances it was agreed that NCP should lead at the proof (Opinion of Lord Ordinary para [17]).

[26] The concession made by NCP as to where the onus of proof lay is difficult to reconcile with the views expressed by Lord Hodge in MacTaggart and Mickel Homes Ltd v Hunter (supra). That case concerned a dispute between builders and landowners, who had entered into missives for the purchase of land by the builders. The builders were under an obligation to use reasonable endeavours to obtain planning permission to develop the site to which the missives related and one of the issues between the parties had been whether the builders had used such "reasonable endeavours". On that issue Lord Hodge took the view that the onus of showing that the builders had used "reasonable endeavours" rested on the builders themselves (para [58]). In support of that view Lord Hodge referred to Yewbelle Ltd v London Green Developments Ltd [2008] 1 P & C R 17 (CA). Although the Lord Ordinary in this case returned to the issue of onus in paragraph [22] of his Opinion, when he came to set out his detailed consideration of the extensive evidence he had heard, he did so without any reference to the issue of onus (paras [99] - [115]). On the contrary the Lord Ordinary identified the various questions which he considered to have arisen, articulated the evidence he was prepared to accept and set out his conclusions as to what had been established on the basis of such evidence. By virtue of that approach the issue of onus of proof became, for all practical purposes, academic.

[27] Guidance as to the correct construction of the term "all reasonable endeavours" is to be found in the judgment of Ackner J in Agroexport State Enterprise for Foreign Trade v Compagnie Europeene de Cereales (supra). That case concerned a dispute between the plaintiffs as sellers and the defenders as purchasers of Romanian maize. The dispute arose on account of difficulties the plaintiffs had encountered in obtaining the necessary licences to export the full tonnage of the maize contracted for from Romania. The licence granted covered only half of the contracted tonnage. In such circumstances, when there had been a partial prohibition of export, the sellers were not only under an obligation to apply for a licence, they were obliged to use all reasonable efforts to obtain permission to export the full tonnage. In order to take advantage of the exemption clause, implied into the contract, the sellers required to show that despite having taken all reasonable steps to obtain permission they had been unable to achieve success or alternatively that it would have been useless for them to take any further steps because they were foredoomed to failure (page 506).

[28] In our opinion it is clear that the obligation to pursue a project or seek a planning consent with all reasonable endeavours is one that requires the court to consider whether there were reasonable steps which the obligant could have taken but did not. For that reason it is a higher or more onerous obligation than one restricted to using "reasonable endeavours". However, whether the phrase used is "all reasonable endeavours", as in Clauses 6 and 13, or "reasonable endeavours" we agree with the view expressed by Lord Hodge in MacTaggart & Mickel Homes Ltd v Hunter, at para [63], that an obligation in either terms does not require the obligant to disregard its own commercial interests. Where the balance between the obligation to use reasonable endeavours and countervailing commercial considerations falls to be struck depends on the wording of the obligation in question. In considering what steps would be reasonable, the court also has to consider whether any further steps would have been successful. We agree with Lord Hodge (at para [64]) that if an obligant can show that it would have been useless for it to have taken a particular step (or steps), because it would not have been sufficient to achieve success, that would provide an answer to any claim that the obligant had acted in breach of contract (see also Agroexport State Enterprise for Foreign Trade v Compagnie Europeene de Cereales, Ackner J at page 506). Equally if there was an insuperable obstacle, it is irrelevant that there may have been other obstacles which could have been overcome, or at any rate in respect of which the obligant had not yet done all that could reasonably be expected of it to try to overcome (see Yewbelle Ltd v London Green Developments Ltd [2008] 1 P. & C. R. 17, Lloyd L.J. at para 103, cf Waller L. J. at para 126).

[29] In our opinion it is quite clear from the evidence before the Lord Ordinary that he was entitled to reach the conclusion, which he did, that there were no prospects of EDI getting the "go ahead" from the Council for redevelopment of the Castle Terrace car park without some alternative provision of off-street parking provision (paras. [105 - [107]). The Lord Ordinary heard evidence to that effect from a number of council officials, some of whom were called as witnesses by EDI and others by NCP. Evidence to similar effect was given on behalf of EDI by Mr Wall and Mr de Ciacca, who had taken part in discussions with Council officials. Whilst the Lord Ordinary acknowledges that the witnesses had differing views as to the extent of short- term replacement parking, which would be required during the period of redevelopment, it is clear that he preferred the evidence that some such provision would be required. The Lord Ordinary was, however, in no doubt, that substantial provision for alternative car parking in the long term was essential, before there was any possibility of the Council giving the proposed development its support.

[30] In our opinion, the Lord Ordinary was entitled to hold that the requirement to provide replacement off-street parking pointed to the need for EDI to pursue a development at King's Stables Road as the site for such provision, as there was no other realistic possibility on offer at the time (para [108]). That involved the Lord Ordinary considering two distinct issues (a) the availability of the site at King's Stables Road for the provision of replacement off-street parking, and (b) the availability of any other suitable site(s) for such provision.

[31] Before the Lord Ordinary the parties were agreed that if the Council had been willing to dispose of the King's Stables Road site, or allow it to be used for off-street parking, that site would have offered a realistic prospect of providing the additional car parking provision required as a consequence of the proposed development. However, parties were not in complete agreement as to whether, and if so when, the Council had made it clear that there were no prospects of their releasing the King's Stables Road site. In our opinion, it was open to the Lord Ordinary to deal with this issue in the way that he did. His findings in fact on this issue are to be found in paragraph [109] of his opinion, where he states in terms that it was clear by early to mid 2007 that EDI's efforts to get the go-ahead to develop King's Stables Road were not going to succeed. By 2007 the Council's ambition was to use the redevelopment of the King's Stables Road site as a means of improving the area to the west of the Grassmarket, an area including an office block, Argyll House, which the Council does not own.

[32] Such findings as to the Council's position vis-à-vis the King's Stables Road site were amply supported by the evidence the Lord Ordinary heard, particularly from Council officials who were involved in the disposal of various properties in the city, including the King's Stables Road site, which had been rendered surplus to the Council's requirements, or from officials who were engaged in discharging the Council's planning responsibilities for the centre of Edinburgh.

[33] If the King's Stables Road site was not going to be made available to EDI, what other site or sites could have provided the replacement off-street parking that the redevelopment of the Castle Terrace car park would require? The Lord Ordinary's findings in relation to this question are to be found in paragraph [108] of his opinion - "There was simply no other realistic possibility on offer at the time". In the same paragraph the Lord Ordinary goes on to discuss other sites that were mentioned during the course of the evidence. These were (a) an existing car parking site at Morrison Street Goods Yard, near Haymarket, which had been mentioned before EDI had decided that they were not going to proceed with the proposed development; (b) Skypark within the Edinburgh International Conference Centre; (c) Greenside car park, near the top of Leith Walk at the east end of Princes Street; and (d) Riego Street car park, to the east of Tollcross. Some reference was made to all four of these sites during the evidence heard by the Lord Ordinary, although the evidence also disclosed that prior to the action having been raised NCP had never suggested to EDI any of the Skypark, Greenside or Riego Street car parks as being sites that might provide, whether temporarily or permanently, car parking spaces to replace the reduction in parking at the Castle Terrace car park which would arise as a consequence of the proposed redevelopment. Indeed, as senior counsel for EDI was at pains to stress, NCP's written pleadings did not make any reference to any of the four sites. Nor did NCP lead evidence calculated to establish that one or more of those sites was suitably located to have provided, both during the course of and following the redevelopment, sufficient off-street car parking to replace any reduction in the car parking currently available in the Castle Terrace car park.

[34] In our opinion the Lord Ordinary heard sufficient evidence, in particular from EDI's employees Mr Wall and Mr de Ciacca, to entitle him to hold that around the time when the Council indicated it was not prepared to release the King's Stables Road site, there were no other site(s) available in the centre of Edinburgh that presented a realistic possibility of providing additional car parking spaces to replace those which would be lost as a consequence of redevelopment. The Lord Ordinary was entitled to regard Mr Wall and Mr de Ciacca as witnesses who had extensive experience in development and, as a consequence of that experience, a sound knowledge of the layout of the centre of Edinburgh and about the activities of car users who visit, work and shop in that area. Both witnesses dealt in their evidence with questions relating to the four "alternative sites". The car park at Haymarket, within the Morrison Street Goods Yard was described as being unsuitable because it was too far away from Castle Terrace, in particular for the use of shoppers. In any event the site was already in use as a car park. It was also earmarked for commercial development, which might have a bearing on the car parking provision it would be in a position to provide in the future. The Skypark in the Edinburgh International Conference Centre was also unsuitable, primarily because it had never operated on account of mechanical failure. The Riego Street Car Park near Tollcross and the Greenside Car Park to the east of Leith Street were deemed to be unsuitable on account of their location in relation to Castle Terrace and the fact that both were existing car parks, which provided car parking space for the users of commercial premises erected at the same times as the car parks had opened.

[35] In paragraph [108] of his opinion the Lord Ordinary observes that had any of those four sites been considered to be genuine alternatives to the King's Stables Road site, he would have expected to have been provided with a detailed analysis, supported by someone with expertise in transport planning and car park provision, showing exactly what was the existing use of the site, what spare capacity it had, what additional spaces (if any) could have been created and how in terms of location they fitted in with what was needed. He noted that in the absence of such evidence he was unable to find that any of them provided a realistic prospect of providing an alternative to the off-street car parking spaces which would be lost in a redevelopment of the Castle Terrace car park. In so far as that passage could be construed as having required either or both of the parties to have led such evidence relating to one or more of the four alternative sites, before any findings in fact could be made in respect of the four sites, we disagree. In our opinion it was not necessary for either Mr Wall or Mr de Ciacca or any other official of EDI to undertake such an analysis before they were in a position to express the view that a particular site was unsuitable. Whilst the carrying out of such an analysis would have been an option open to EDI, such an exercise would to some extent have been artificial. That is because such an analysis would require to have been based on provisional estimates as to the scale and nature of the constituent elements of the proposed redevelopment and the variable demands for car parking space that such elements would generate. That in turn meant that any assessment of the overall reduction in the car parking space in the existing Castle Terrace Car Park would be provisional. Even if an analysis could have been carried out, it was open to the Lord Ordinary to accept the evidence on which EDI sought to rely, such as that of Mr Wall and Mr Di Ciacca, and make findings in fact upon that evidence in the terms he did. In the absence of NCP leading any detailed evidence as to existing and additional car parking spaces that could be made available at each of the four alternative sites, it is hardly surprising that the Lord Ordinary reached the factual conclusions that he did.

[36] For these reasons, we have reached the conclusion that the Lord Ordinary was entitled to hold that EDI had used all reasonable endeavours in pursuing the project to redevelop the Castle Terrace car park and that the work they carried out and the assessment they reached were not significantly different from those to be expected of a normal experienced prudent developer in the circumstances. In particular, we agree with the Lord Ordinary that EDI cannot properly be criticised for not having pursued further steps in relation to any of the four alternative sites which were mentioned during the evidence, since it was open to the Lord Ordinary to take the view on the evidence he did hear that such further steps would have been futile. It is quite clear from all the papers available to the court and the opinion of the Lord Ordinary, and indeed from the submissions before this court, that the problem of finding alternative car parking space for that which would be lost on the redevelopment of the Castle Terrace Car Park was critical to unlocking the development. It did not prove possible to identify alternative provision for car parking . That was one reason why the project could not proceed.

[37] In these circumstances the reclaiming motion falls to be refused.­