Lord Ordinary orders proof in dispute over completion certificate for Glasgow Airport advertising structure

Lord Clark

About this case:

• Citation:
  [2022] CSOH 14
• Judgment:
  External link
• Court:
  Court of Session Outer House
• Judge:
  Lord Clark

The action was originally raised by the head tenant, GWR Property Co Ltd, seeking declarator that the defender, Forrest Outdoor Media Ltd, had no right to resile from missives under which it agreed to enter a sub-lease following the construction of the totem. The pursuer sought payment of £480,000 as well as declarator that the relevant suspensive condition in the missives had been purified.

The case was heard by Lord Clark in the Outer House of the Court of Session. Thomson QC appeared for the pursuer and Walker QC for the defender.

Standard of completion

In November 2018, the pursuer entered a head lease of land owned by Glasgow Airport Ltd, which also authorised it to carry out work to construct the advertising totem on that land. The defender undertook to sub-let the land, as well as the totem, in missives dated to June and October 2018. These missives were suspensively conditional on the pursuer giving notice that the totem had been fully completed and the issue of a competition certificate.

Notice of a completion certificate was issued by a Mr Chandler on behalf of the pursuer on 14 October 2020. However, the defender disputed that practical competition had taken place due to defects in the works and sent a letter later that month intimating that it was resiling from the missives.

It was averred that the defender was entitled to resile from the missives because the certificate was not issued in accordance with the express terms of the building contract and thus did not purify the suspensive condition. Further, Mr Chandler had a personal interest in both the pursuer and Wildstone, the company that had constructed the totem, and thus he could not be an independent third-party certifier for the purposes of the missives.

Counsel for the pursuer submitted that the defender’s averments on the alleged defects were lacking in specification and irrelevant. Further, the defender’s case of fraud proceeded on the incorrect assumption that it was entitled to receive, and to rely upon, confirmation that the works had reached an objective standard of completion, when in fact it was given the right to inspect the works and form its own judgment about the state of those works.

In its own submissions, the defender argued that no project manager would genuinely believe the works were practically complete, and it was entitled to rely upon this in resiling from the missives. Its alternative position was that the competition certificate had been issued fraudulently by Mr Chandler and relied upon dishonestly by the pursuer, which allowed for the reduction of the contract ope exceptionis.

Must be open

In his opinion, Lord Clark began by observing: “When one views the language used by the parties objectively, in context and looking at its purpose, it is clear that completion is a matter dealt with under other contracts not involving the defender, with GAL able to challenge completion, and with the defender having specific rights under the missives to make its own representations.”

Addressing whether there was an implied term of the contract of assistance to the defender, he continued: “Having regard to what I view as the proper construction, and the points noted above about the defender’s right of inspection and GAL’s rights to challenge the certificate, I do not consider that an implied term in any of the forms proposed by the defender is warranted. It cannot be said that the officious bystander element of the test is met for any of the implied terms or that either of them is so obvious that it goes without saying.”

Turning to the arguments on fraud, Lord Clark said: “In effect, the allegation is that there was an attempted fraud or a dishonest assertion intended to achieve, and which if not reduced will achieve, a practical result. While I was not addressed in any detail on the law applying to such an attempt or assertion, a false document dishonestly prepared to achieve purification of a suspensive condition must be open to reduction.”

He concluded: “I cannot therefore conclude that the defender’s case for reduction ope exceptionis on the basis of alleged falsity, characterised as fraud or connivance, is bound to fail. My reasoning in reaching that view is based, as it requires to be, on taking the defender’s averments pro veritate, and to succeed at the proof the defender will of course require to establish the serious allegations it avers.”

Lord Clark found, therefore, that the defender’s contentions on fraud were a matter for proof, and fixed a by-order hearing to determine the averments that fell to be excluded from probation.