| FIRST DIVISION, INNER HOUSE, COURT OF SESSION |
Lord President Lord Bonomy Lord Wheatley | [2013] CSIH 12 CA14/11 OPINION OF THE LORD PRESIDENT in the cause REGUS (MAXIM) LIMITED Pursuer and Reclaimer; against BANK OF SCOTLAND PLC Defender and Respondent: _______ |
Act: Lake QC; Balfour & Manson LLP
Alt: Dunlop QC, O'Brien; Shepherd & Wedderburn LLP
28 February 2013
Introduction
[1] The pursuer sues for decree ordaining the defender to release to the pursuer the sum of £913,172 held by the defender on behalf of Tritax Eurocentral EZ Unit Trust (Tritax) and TAL CPT (Land Development Partnership) LLP (TAL CPT); and, alternatively, for payment by the defender of that sum. The sum in question represents fit-out costs that were incurred by the pursuer when it took a sub-lease of a building at Maxim Office Park at the Eurocentral site in North Lanarkshire. The pursuer avers that the landlord of the subjects made a commitment to meet this sum as an incentive to the pursuer to take the sub-lease. The issue is whether a letter by the defender dated 12 February 2010 created a legal obligation on the part of the defender to release the sum sued for from funds held by it to meet the landlord's commitment.
[2] This is a reclaiming motion by the pursuer against an interlocutor of Lord Menzies in the Commercial Court dated 11 August 2011 by which he dismissed the action as irrelevant.
The scheme of investment
[3] The Eurocentral site lies partly within the former Lanarkshire Enterprise Zone. Development within the Enterprise Zone was encouraged by tax incentives and by a simplified planning regime. The general scheme of investment in an Enterprise Zone is that a developer sells the land to a syndicate of investors or, as in this case, to a unit trust. The developer constructs and finds tenants for the buildings. The developer and the landlord agree on a headline rent for the development. The headline rent is payable by the developer whether or not the developer finds a tenant. To secure the landlord's position, the developer creates a guarantee fund representing a certain number of years' rental income from which the developer pays the headline rent. It is therefore in the interests of the developer to find a qualifying tenant, that is to say a tenant that can meet strict financial requirements and take on the lease at the headline rent. If an incentive is given to an incoming tenant, such as fit-out costs or a rent-free period, the cost of it comes out of the guarantee fund. Once the development is built and let, the developer may then uplift the rent guarantee fund, or what remains of it, as profit.
The development
[4] The original developers of Maxim Office Park sold the development to Tritax. Tritax funded its purchase in part with a loan from the defender. TAL CPT was employed as development manager, in effect fulfilling the role of developer. Rent and project cost guarantees were provided through TAL CPT to Tritax. Sums representing the guarantees were deposited with the defender.
[5] The operation of the guarantee accounts was governed by a Facility Agreement between Tritax and the defender. The defender had sole signing rights for the guarantee accounts. Payments could be made only with the defender's permission. The Facility Agreement specified certain events of default. These included insolvency or a failure to make payment when due. On the occurrence of an event of default on the part of Tritax, the defender was entitled inter alia to apply the funds in the guarantee account to payment of the sums owed to it by Tritax (cl 24.2.5).
The reclaimer and HUB
[6] The pursuer was incorporated to take a lease of part of the development. It was not a qualifying tenant in terms of the rent guarantee agreement between TAL CPT, Tritax and the defender. It was therefore arranged that TAL CPT HUB Company Limited (HUB) would be interposed as head-tenant, and that HUB would grant a sub-lease to the pursuer.
The capital contribution
[7] During negotiations, Tritax agreed to meet the pursuer's fit-out costs. The payment to the pursuer to meet these costs was referred to as "the capital contribution." TAL CPT, Tritax and the pursuer discussed a number of proposals regarding the timing of and the mechanism for the payment. The defender was involved in these negotiations.
[8] At this time Maclay Murray and Spens LLP (MMS) acted for Tritax, TAL CPT and HUB. On 21 April 2009, MMS e-mailed the pursuer's solicitors. MMS said that their clients' position was "dictated and much measured by their funders' requirements." Payment of the capital contribution could be made against invoices as this was acceptable to their funders in other lettings.
[9] There was a proposal for the capital contribution to be put in escrow or joint accounts with the defender. On 5 May 2009, in an e-mail to the chief executive of TAL CPT, Mr Norman Smith of MMS said that he would speak to Mr Matthew Reilly, an associate director of the defender, to firm up on what he would agree on the "escrow point." On 8 May 2009 in an e-mail to the pursuer's property agents, to MMS and to the property agents for Tritax and HUB, Karen Campbell of Tritax said:
" ... the bank would like to simplify matters and issue a letter of confirm (sic) that ... [the then amount of the capital contribution] is on deposit. They feel to (sic) that opening an account for a period of 8 weeks is not worthwhile."
[10] On 30 July 2009 in their note of "revised terms" the pursuer's solicitors still contemplated that a joint account would be set up. This was their proposal:
"The capital contribution ... will be placed on joint deposit account on the date of entry ...
The deposit account will be held in the names of ... [solicitors] for Regus [sc the pursuer] and MMS for TAL CPT."
[11] On the same day, TAL CPT said that the capital contribution structure appeared to be fine, as long as the defender was happy with the deposit account.
[12] However, on 3 August 2009, by e-mail to TAL CPT and the defender, among others, MMS said:
"We have made it clear that the deposit will not be separately held in joint names but will be dealt with by way of a letter from the Bank as in previous cases confirming that funds are available and following conclusion of missives can be drawn down during the fit-out period ... "
[13] On 5 August 2009, by e-mail to the pursuer's solicitors, MMS said:
"With regard to the fit-out contribution this is governed by the bank and they will grant a letter as previously outlined and as has been agreed with all other affected tenants".
[14] On 11 August 2009, MMS e-mailed the following redacted letter to the pursuer's solicitors. The letter had been used for another lease in the same development. It had been sent by Mr Reilly to MMS:
"20 October 2008
Dear Sirs,
TAP CPT Land Development Partnership LLP (TAL CPT)
We understand that Heads of Terms have been agreed with between (sic) TAL CPT and for the lease of the unit at Maxim.
It may assist the proposed tenant to have confirmation from us that, on behalf of the landlord (Tritax Eurocentral EZ Unit Trust) and TAL CPT, we hold the sum of £ to meet the landlord's commitment to fit-out costs. These funds will be released in accordance with the drawdown procedure agreed between the parties, whereby the proposed tenant's contractor will submit fortnightly certificates.
This is subject always to agreement of wider commercial terms with the incoming tenant ... "
[15] On 18 August 2009, Mr Douglas Smith of the property agents for Tritax and HUB e-mailed the property agents for the pursuer as follows:
"Have alook [sic] at the words below and let me know if this, together with a BoS letter will be sufficient ...
The entire purchase price is held by BoS in blocked accounts with an ability for funds to be drawn down for specified purposes only. These specified purposes include all agreed development cost [sic] which covers tenant incentives.
Thus, whilst Regus will be looking to TAL CPT ... to provide the incentives package, this is procured from the BoS accounts with the consent of [Tritax] ... "
[16] On 21 August 2009, the property agents for Tritax and HUB e-mailed Mr Reilly (tab 28). MMS, Tritax and TAL CPT were copied in. The e-mail said:
" ... There has been considerable discussion whether Regus required any further security in relation to the developers capital contribution. Further information has been provided to Regus to explain how the overall project is funded. We have also exhibited the style of letter which Matthew [sc Mr Reilly] has previously provided in support of other tenant proposals eg [sic] and suggested that we are willing to request that a similar letter be obtained in relation to the proposed Regus letting. They have confirmed that a letter in these terms will be satisfactory ... "
[17] On the same day, the pursuer's solicitors e-mailed, among others, the property agents for Tritax and HUB noting that:
"Just to highlight, Regus have confirmed that they are willing to accept that the contribution isn't held on joint deposit ... "
A new note of "revised terms" was attached. The provision that the deposit account for the capital contribution would be held in the names of the solicitors for the pursuer and the solicitors for TAL CPT was deleted. Instead, the note provided that:
"On the date of entry, a letter will be delivered from the Bank of Scotland substantially in terms of the letter attached."
This is obviously a reference to the redacted letter.
The agreements to lease and sub-lease
[18] On 23 September 2009, MMS e-mailed to the defender's solicitors a draft offer from HUB to sub-lease to the pursuer. On the date of entry, defined as being ten working days after certain building works (cl 1.15), HUB, as head tenant, was to "deliver the validly executed Bank Letter" (cl 16.9). The Bank Letter was defined as "a letter from Bank of Scotland plc in the form set out at Part 16 of the Schedule". At this point Part 16 was blank, but I infer that the redacted letter was to be placed there.
[19] On 9 October 2009, the defender wrote to its solicitors confirming that it had no objection to the proposed head lease. The head lease was ultimately executed on 18 March and 7 April 2010.
[20] On the same day, MMS on behalf of HUB wrote to the pursuer's agents offering a sub-lease. The provisions regarding date of entry and the Bank Letter were the same as in the draft of 23 September 2009, except that the obligation to deliver the Bank Letter was now at clause 18.8. The form of the Bank Letter was to be set out in Part 16 of the Schedule. This offer was accepted on the same date. Under this agreement the pursuer was to carry out the fit-out works and HUB was to pay to the pursuer the capital contribution of £913,172 towards its costs by way of instalments in accordance with provisions that I need not quote. This money was to come from Tritax. Under clause 18.8, HUB was to deliver the Bank Letter to the pursuer at the date of entry.
[21] On 12 February 2010 the letter on which this action is founded was sent from the defender to MMS. I shall call it "the Bank Letter." It was in the following terms:
"TAP CPT Land Development Partnership LLP (TAL CPT)
We understand that Heads of Terms have been agreed with between (sic) TAL CPT and Regus (Maxim) Limited for the lease of the first floor of Building 1 at Maxim.
It may assist the proposed tenant to have confirmation from us that, on behalf of the landlord (Tritax Eurocentral EZ Unit Trust) and TAL CPT, we hold the sum of £913,172 to meet the landlord's commitment to fit-out costs. These funds will be released in accordance with the drawdown procedure agreed between the parties, whereby the proposed tenant's contractors will issue monthly certificates.
This is subject always to agreement of wider commercial terms with the incoming tenant ... "
The words that I have italicised constitute the changes from the redacted letter.
Subsequent events
[22] The pursuer completed the fit-out works and sought payment of the £913,172. The defender declined to release the money on the ground that, by reason of an event of default under the Facility Agreement, it was entitled to retain it.
[23] The pursuer then raised this action on the basis that the Bank Letter constituted a binding undertaking by the defender to pay to the pursuer the capital contribution. Alternatively, it sought payment on the basis that the Bank Letter constituted a misrepresentation.
[24] In October 2011, HUB went into liquidation.
The decision of the Lord Ordinary
The promise issue
[25] The Lord Ordinary took as his starting point the principle that if a document is to be held to constitute an enforceable promise, the intention of the alleged promisor must be expressed in clear words. For this proposition the Lord Ordinary relied on the dictum of Lord Kinnear to that effect in Morton's Trs v The Aged Christian Friend Society of Scotland ((1899) 2 F 82, at p 85) and on cases in which, in his view, that dictum had been approved and reiterated (Lord Adv v Glasgow DC, 1990 SLT 721; Van Klaveren v Servisair UK Ltd, 2009 SLT 576; Ballast Plc v Laurieston Properties Ltd, 2005 CSOH 16). He was unable to find such clear words in the Bank Letter. For several reasons he considered that the defender expressed no intention to incur an obligation to pay the capital contribution to the pursuer "come what may."
[26] The Lord Ordinary also considered the argument advanced for the pursuer to the effect that, in determining whether the letter constituted an enforceable promise, the court was bound to examine not only the letter but all of the surrounding circumstances in which it was written. He concluded that there was nothing in those circumstances that would cause him to take a different view. On the whole matter he considered that the letter was no more than a letter of comfort.
The misrepresentation issue
[27] The Lord Ordinary considered that if the letter was not a binding undertaking, it was difficult to see how it could amount to a misrepresentation. Since in his view the letter was no more than an expression of revocable intention (Gloag, Contract, 2nd ed, pp 463-464; Royal Bank of Scotland v Davidson 2010 SLT 92, at para [20]; Opinion para [57] -[58]), and since no case of fraud was pled, he concluded, for the reasons that he had given, that the letter had no legal effect and therefore did not amount to a misrepresentation.
[28] In any event, it was not suggested that the first sentence of the relevant passage in the letter contained any misrepresentation. He considered that the second sentence contained no more than an expression of future intention that was not suggested to be fraudulent.
The issues
[29] At the outset of the hearing of the reclaiming motion, counsel for the pursuer was granted leave to amend the pleadings by adding a case to the effect (a) that the defender is in breach of its alleged unilateral obligation in respect of its failure to release the sum sued for to the pursuer within a reasonable time of its having been demanded; and (b) that if the defender is unable now to comply with that obligation by reason of the liquidation of HUB, the sum sued for represents the loss caused to the pursuer by the defender's breach of the obligation. Counsel were agreed that this amendment did not alter the fundamental issue, namely whether the defender incurred a liability directly to the pursuer by reason of the Bank Letter. Accordingly, if the pursuer fails in the reclaiming motion on the question of the alleged promissory nature of the Bank Letter, the amended case fails too.
[30] In the Outer House the pursuer relied upon the Bank Letter on several grounds. Only two are now insisted in. First, the pursuer submits that the letter constituted an undertaking by the defender, enforceable by the pursuer, to release the sum held to the credit of Tritax to meet the capital contribution if the defender still held that sum when the pursuer demanded it in accordance with the sublease. Second, and in the alternative, the pursuer submits that the letter amounted to a negligent misrepresentation that that sum would be released, and that the defender is therefore liable to make reparation to the pursuer.
Conclusions
The promise issue
The nature of promissory liability
[31] Counsel for both parties took as the starting point the opinion of Lord Kinnear in Morton's Trs v The Aged Christian Friend Society of Scotland (supra). That case is often cited for the proposition that a promise is binding in Scots law. Lord Kinnear's statement of the principle is as follows:
"If a promise is intended, as Mr Bell puts it, as a final engagement it is binding, but it is not binding if it is a mere expression of a probable intention which the promissor might or might not fulfil ... What is necessary is that the promissor should intend to bind himself by an enforceable obligation and should express that intention in clear words" (at p 85).
[32] The unreferenced quotation from Bell is to be found in the Principles (10th ed, ch 1, para 8). Lord Kinnear then professes to apply that principle to the letters of the late Mr Morton on which the case turned. He treats the first and second of the three "charity letters" as being offers that were accepted. He then turns to the "pension letters." He considers that the first of them constitutes a promise, but nevertheless concludes that it is a "distinct offer of personal responsibility, and an offer that invites acceptance or rejection as an offer on conditions ... " that was in the event accepted. Later he refers to the pension letters in terms of agency and mandate (at p 88). In these respects Lord Kinnear's analysis is confused and confusing. The difficulties that it causes in these respects are readily explained by the fact that counsel for the Society in that case argued inter alia that the relevant correspondence constituted a series of binding contracts, and that there had been actings in reliance on the deceased's offers constituting rei interventus (ibid, at p 85).
[33] In my opinion, a promise in the law of Scotland is a unilateral juristic act. It acquires its binding force by reason of the declarant's expression of his will to be bound. Stair tells us that a promise is obligatory per se (Institutions, I. 10. 4). He says that "the will of the promiser constitutes a right in the other" (ibid). In this respect, as Erskine observes, Stair differs from Grotius and Pufendorf, who adhered to the view that an absolute promise required acceptance because no obligation could be formed without the joint consent or concurrence of both parties (Ersk, Institute, II, 3, 88; cf Swain, Contract as Promise, 2013 Edin L Rev 1, at p 13). Erskine considered Stair's view to be "agreeable to our practice" (loc cit).
[34] It follows, therefore, that because in Scots law a promise acquires its obligatory nature at the moment at which it is made, questions of acceptance and of actings in reliance on it are irrelevant (Smith v Oliver, 1911 SC 103, LP Dunedin at p 111). A valid promise has serious consequences. It is irrevocable, unlike an offer, which may be withdrawn at any time before acceptance. It is binding even though it is not known to the promisee. If it is conditional, it will become binding if the condition is fulfilled, even though the promisee did not know of the original promise. Moreover, a promise places an obligation on the promisor and on no one else. It may result in the promisor's being given something in return, typically where the promise is made subject to a condition; but the promise does not oblige the promisee to fulfil the condition.
[35] Furthermore, in my view, where the promise is made subject to a condition requiring action by the promisee, the fulfilment of the condition does not convert the promise into a contract ex post facto. The late Sir Thomas Smith pointed out that the distinction between a conditional promise and a conditional offer may be narrow (Pollicitatio - Promise and Offer, Acta Juridica (1958), p 141, at pp 148-150); but in my view it is a material and significant distinction nonetheless.
Clear words
[36] Counsel for the pursuer submitted that there was no special rule that a promissory obligation could be created only by clear words. If Lord Kinnear's dictum was understood in context, it became apparent that the words used in the instrument were only one consideration. He pointed out that on the charity issue, Lord Kinnear relied inter alia on the fact that the deceased had begun payment of the sums referred to. From the terms of the letters, together with the background circumstances, he inferred an intention to make a definite offer (at p 86). On the pension issue, Lord Kinnear started with the explicit language of the first pension letter that in his view was "perfectly conclusive." He considered that it was a fair construction, in light of the first letter, that the subsequent letters which were not in such strong terms disclosed an intention to incur a legal obligation (supra, at pp 87-88).
[37] I do not accept this submission. In my opinion, an obligation of this kind can be created only by clear words. Since any promissory obligation is intention-based, the court's task is to consider whether the evidence, objectively assessed, discloses an intention on the part of the alleged promisor to incur a legally binding engagement (Stair, op cit, I.10.2; cf Cawdor v Cawdor, 2007 SC 258). That question, in my view, is to be decided on a consideration of the alleged promisor's own words. Bearing in mind the stringent consequences of a valid promise that I have described, I consider that a promise is binding only if the promisor's own words are clear and unambiguous.
[38] Erskine sets a demanding standard. He indicates that a promise may be proved provided that it is made "in words proper to express a present act of the will, such as, 'I promise', or, 'I oblige myself to give,' or 'make over in a present.'" (Inst, III, 3, 88). I doubt whether clarity always requires such a specific expression. It may be that the meaning of the promisor's words will be clear if they derive their meaning from the relevant factual background known to both parties. I agree with the view of Lady Paton in Ballast Plc v Laurieston Properties Ltd (supra) that in a commercial context, the words of an alleged promise should be interpreted in the same way as any other alleged commercial obligation would be. Lady Paton accepted that the question of construction should be approached objectively on the basis of what a reasonable recipient with knowledge of the background would have understood by the documents in question (at para [143]). I understood counsel for the defender to be content with that approach.
[39] Counsel for the pursuer submitted that if there was a requirement of clear words, it applied only when the promise was gratuitous. He submitted that the Bank Letter was not gratuitous. It was issued in the defender's own self-interest. The defender was closely involved in the lease negotiations. The Bank Letter helped to secure the rental income of the pursuer from which the defender's lending could be repaid. Therefore any requirement for clear words did not apply.
[40] I do not agree. The expression "gratuitous unilateral obligation" is used in section 1(2)(a)(ii) of the Requirements of Writing (Scotland) Act 1995; but the interpretation of it in that context is not free from difficulty. In Van Klaveren v Servisair UK Ltd (supra, at para [9]), an Extra Division said that the requirement for clear words existed because "a unilateral obligation [ie promise] is normally gratuitous and a clear intention must be shown if a gratuitous obligation is to be undertaken." But the court did not explain what was required where a unilateral obligation was onerous. That is surprising since the alleged unilateral obligation in that case was an undertaking by an insurer to admit liability in an action of damages for personal injury. Other references in the case law to a gratuitous promise (eg Smith v Oliver, supra, LP Dunedin at p 110) do not assist us in a search for the definition of that concept.
[41] In my view, it is unnecessary to pursue the meaning of gratuitous in the context of this action, even if one assumes that there is a meaningful distinction between a gratuitous and an onerous unilateral obligation. The consequences that I have described apply to every promise, regardless of the reason for which, or the motive with which, the promise is made. In view of those consequences, I am of the opinion that the distinction for which counsel for the pursuer has contended, if it is meaningful, is irrelevant. Clear words are required to constitute a promissory obligation in every case.
Construction of the Bank Letter
[42] I am unable to construe the Bank Letter as constituting a binding promise by the defender to pay to the pursuer any sum in respect of its fit-out costs. On the contrary, like the Lord Ordinary, I consider that it is clear that the defender expressed no such promise. There is an initial improbability in the idea that a bank, whose normal obligations are owed to its customer, should choose to make a binding promise in favour of a third party.
[43] The unlikelihood that the Bank Letter constituted a promise to the pursuer is confirmed by the fact that the letter is not addressed to the pursuer. The defender contemplated that it would be shown to the pursuer; but that does not of itself have the consequence that, in a question with the pursuer, the document had promissory effect (cf Gloag, op cit, pp 16-17).
[44] The letter makes clear that the defender holds the money on behalf of Tritax and TAL CPT and not in its own right. It follows therefore that the defender's freedom to pay out any of the money to a third party will be regulated by the terms and conditions on which the defender holds the fund. That, in my view, excludes the possibility that the defender was undertaking to pay the money to the pursuer even if, when the pursuer came to demand payment, it no longer held any funds on behalf of Tritax and TAL CPT.
[45] That view is consistent with the email of 18 August 2009 sent on behalf of Tritax and HUB to the pursuer's property agents which suggested that "blocked accounts" were available to meet costs other than tenant incentives.
[46] Furthermore, the Bank Letter spells out that the release of the money is governed by an agreed procedure. That, in my view, is at odds with the submission for the pursuer that the defender was promising to pay it to the pursuer on demand as its own debt. In these circumstances the use of the words "will be released in accordance with the drawdown procedure" cannot, as counsel for the pursuer accepts, necessarily create a promissory obligation (Ballast Plc v Laurieston Properties Ltd, supra, at para [147]; Kleinwort Benson Ltd v Malaysia Mining Corpn [1989] 1 WLR 379). In my view, those words are not in any sense a guarantee by the defender. They simply presuppose that the funds will still be available when the time comes.
[47] Moreover, the letter refers only to funds actually held by the defender at the date of the letter. As counsel for the pursuer accepted, circumstances could arise, such as an arrestment or a liquidation, that could prevent the defender from releasing the funds to the pursuer. Counsel for the pursuer submitted that notwithstanding that the occurrence of an event of default, as defined in the Facility Agreement, gave the defender the right to transfer the funds to another account (cf Facility Agreement, cl 24.2.5, supra), the defender effectively renounced that right in the Bank Letter. I do not agree. In my opinion, that submission overlooks the fact that in a question with Tritax, the defender had the right at common law to balance accounts. There is nothing in the letter to suggest that the defender was renouncing its rights under the Facility Agreement or at common law.
[48] All of these considerations point strongly against the pursuer's proposed interpretation of the letter.
[49] It is also significant that in a question with the pursuer, the obligation to meet the capital contribution lay with HUB as head-tenant, yet HUB is not mentioned in the letter at all.
[50] Finally, I agree with the Lord Ordinary that the last sentence of the letter is fatal to the pursuer's case. It makes plain that the defender's "confirmation" is not unconditional.
[51] In reaching these conclusions I have looked only at the wording of the letter. If counsel for the pursuer is right in submitting that the court should interpret the letter in the context of the surrounding circumstances, then that approach would lead me to the same conclusion. The key to this whole dispute is that the defender refused the pursuer's request that funds to cover the capital contribution should be placed in escrow or in joint names. That is the only reason why the defender issued the Bank Letter at all. Since the defender had refused the pursuer's proposal, I fail to see why the defender could be thought to have accepted the direct liability to the pursuer that is now contended for. Furthermore, since the email of 18 August 2009 disclosed to the pursuer that the release of money from the defender's accounts was subject to Tritax's consent; and since in the exchange of emails on 21 August 2009 the pursuer expressly acknowledged its willingness to accept that the capital contribution was not to be held on joint deposit, I fail to see how the pursuer could reasonably have construed the Bank Letter in the sense for which it now contends.
[52] I should add that I am not convinced that the Bank Letter can properly be described, as the Lord Ordinary thought, as a comfort letter. The essence of a comfort letter, in my view, is that the party issuing it, while disclaiming a legal liability to act as the letter describes, nonetheless makes an assertion in good faith of its present intention so to act (cf Kleinwort Benson Ltd v Malaysia Mining Corpn, [1989] 1 WLR 379). In my view, the better interpretation of the Bank Letter is that, in consequence of the defender's refusal to place the funds in escrow or in joint names, it gives clear and precise notice that an acknowledgment that it holds the funds to meet the capital contribution, subject to the qualifications that it sets out, is the only assurance of payment that the pursuer is to get.
The misrepresentation issue
[53] Counsel for the pursuer submitted that if the letter was not an undertaking, it was an unequivocal representation that a certain course of conduct would be followed. I do not agree.
[54] The letter made two representations. The first was that the defender held the sum of £913,172 on behalf of Tritax and TAL CPT to meet the capital contribution. That was a representation of fact. It is not suggested that it was untrue. The second was a representation as to the future, namely that the funds would be released in accordance with the drawdown procedure. It is not suggested that this did not accurately reflect the defender's understanding and intention at the time. Counsel for the pursuer however, suggested that it was a representation that the money would be released whatever the circumstances should be when the pursuer came to demand payment. For the reasons that I have given in concluding that the letter did not constitute a legally binding undertaking, I consider that the letter did not make any representation to the effect contended for by counsel for the pursuer.
Disposal
[55] I propose to your Lordships that we should refuse the reclaiming motion and adhere to the interlocutor of the Lord Ordinary.
| FIRST DIVISION, INNER HOUSE, COURT OF SESSION |
Lord President Lord Bonomy Lord Wheatley | [2013] CSIH 12 CA14/11 OPINION OF LORD BONOMY in the cause REGUS (MAXIM) LIMITED Pursuer and Reclaimer; against BANK OF SCOTLAND PLC Defender and Respondent: _______ |
Act: Lake QC; Balfour & Manson LLP
Alt: Dunlop QC, O'Brien; Shepherd & Wedderburn LLP
28 February 2013
[56] I agree that the reclaiming motion should be refused for the reasons given by your Lordship in the chair.
| FIRST DIVISION, INNER HOUSE, COURT OF SESSION |
Lord President Lord Bonomy Lord Wheatley | [2013] CSIH 12 CA14/11 OPINION OF LORD WHEATLEY in the cause REGUS (MAXIM) LIMITED Pursuer and Reclaimer; against BANK OF SCOTLAND PLC Defender and Respondent: _______ |
Act: Lake QC; Balfour & Manson LLP
Alt: Dunlop QC, O'Brien; Shepherd & Wedderburn LLP
28 February 2013
[57] I agree with the opinion of your Lordship in the chair and I have nothing to add.