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Cite as: [1999] ScotCS 227

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OUTER HOUSE, COURT OF SESSION

CA100/98

OPINION OF LORD HAMILTON

in the cause

(FIRST) TOM SUPER PRINTING SUPPLIES LIMITED and ANOTHER

Pursuers;

against

SOUTH LANARKSHIRE COUNCIL

Defender:

________________

Pursuers: Brailsford, Q.C., Bowen; Cunningham Paterson

Defender: Paton, Q.C., A.N. Clark; Simpson & Marwick, W.S.

28 September 1999

The first pursuer is an incorporated company which owns premises at 23-31 Castle Street, Hamilton ("the Castle Street Subjects") from which it carries on business as printers and stationers. The second pursuer is a body of trustees which administers a pension fund associated with the first pursuer's business. The second pursuer owns a car park ("the Castle Street Land") adjacent to the Castle Street Subjects. The defender is the local authority for the area in which the Castle Street Subjects and the Castle Street Land are situated.

From at least May 1997 an interest had been shown in the defender acquiring the Castle Street Subjects and the Castle Street Land on terms which included provision for the relocation of the first pursuer's business to a site at Hamilton Business Park ("the Caird Street Subjects"). That interest had been expressed by a Mr Steven Hulance, an employee of the defender, who then held the posts of project director of "Hamilton Ahead" and director of "South Lanarkshire Development Partnerships". Although correspondence with which this case is concerned passed on stationery headed with each of those names, neither name described a distinct legal entity. During the relevant period these headings were names under which the defender discharged certain of its functions in the economic and development field. Between May 1997 and April 1998 communings passed between representatives of the first pursuer (and latterly of the second pursuer also) on the one hand and Mr Hulance and other employees of the defender on the other concerning inter alia the acquisition by the defender of the Castle Street Subjects and the Castle Street Land and the acquisition by the first pursuer of the Caird Street Subjects. The issue in this case is whether an enforceable bargain was concluded in the terms claimed by the pursuers.

The case was discussed at debate on a challenge by the defender to the relevancy of the pursuers' averments. In the course of the debate a Minute of Amendment was tendered on behalf of the pursuers. That Minute was concerned largely with clarifying certain aspects of the pursuers' pleadings. Amendment in terms of it was not opposed by counsel for the defender and was allowed. However, towards the end of the fourth speech Mr Brailsford, senior counsel for the pursuers, indicated an intention to seek further to amend the pursuers' pleadings. That suggested amendment went more fundamentally to the basis of the pursuers' case and was opposed by Mrs Paton, senior counsel for the defender. At that stage no Minute of Amendment was tendered. The case was continued to allow such a Minute to be tendered and considered. On it being lodged Mrs Paton renewed her opposition to amendment in terms of it - largely on the ground that a debate extending over several days had been conducted and substantially completed on the existing basis. After discussion I decided that the appropriate course was to allow the further Minute of Amendment to be received but in hoc statu to refuse amendment in terms of it. I indicated that I would issue an Opinion directed to the case as presently pled, the matter of any further amendment thereafter to be considered in the context of the views expressed therein.

An important element in the pursuers' case as pled is a meeting held in October 1997. In respect of this meeting the pursuers aver -

"Following discussions proceeding over previous months, a meeting took

place on 21 October 1997 between Martin Gerard Super representing the first pursuers and Steven Hulance and Pat Carr, both officials employed by and representing the defender... At said meeting the first pursuers and said persons representing the defender agreed terms for the sale by the first pursuer to the defender of the Castle Street Subjects and the Castle Street Land in consideration of the sum of £900,000 to be paid by the defender. It was further agreed that the first pursuers would buy from the defender a 3,000 square foot retail unit to be built by the defender on the Castle Street Land in consideration of the sum of £150,000 to be paid by the first pursuers, that the first pursuers would buy from the defender in consideration of the sum of £64,000 a 2,651 square metre site at Hamilton Business Park ('the Caird Street Subjects") and that the date of entry of the first pursuers to the Caird Street Subjects would be as early in 1998 as practicable. It was agreed between Martin Super of the first pursuers and Steven Hulance of the defender on 21 October 1997 that the 2,651 square metre site was Block 4, as specified in revised drawing No. 11 produced by Cullen Lochhead & Brown on behalf of the defender. Said drawing is referred to for its whole terms which are adopted herein brevitatis causa. At all material times the shareholders in the first pursuer were Martin Gerard Super, Tom Super, Marion Ferguson, Caroline Aitchison and Teresa Super who have complete control of the first pursuer. Said Martin Gerard Super, Tom Super, Marion Ferguson and Caroline Aitchison were also trustees of the second pursuer. The defender knew that the purchaser of the Caird Street Subjects was to be either the first or the second pursuer depending on tax advice to suit the pursuers because in the first or second week of November 1997 Pat Carr had said to George Nisbet [the pursuers' surveyor] that the identity of the purchaser was not a matter of concern for the defender. It was further agreed that the defender would grant to the first pursuer rent free a lease of the whole of the Castle Street Subjects until completion of new premises by the pursuers on the Caird Street Subjects, and thereafter a lease of the ground floor and part of the upper floor of the Castle Street Subjects until completion by the defenders of said retail unit on the Castle Street Land. The date of completion of and entry to said retail unit was to be two years from the date of the sale of the Castle Street Subjects, the location of said retail unit was the part of the car park which was available for immediate redevelopment. The lease of the whole of the Castle Street Subjects back to the pursuers was to commence at the same time as the sale of the Castle Street Subjects to the defender. It was further agreed that the defender would pay the architect's fees up to the Design C stage of a Design and Build Contract for the Caird Street Subjects, and the Planning Application fee. Said agreement was expressly conditional on the approval of the defender's Home and Property Services Committee. The defender's representatives on 21 October 1997 indicated that such approval was likely and that when the approval had been granted the pursuers would be notified and formal documentation implementing the agreement would be prepared...".

In this context the pursuers also make certain averments in relation to authority said to have been enjoyed by Mr Hulance. After reference to his posts as project director of Hamilton Ahead and as director of South Lanarkshire Development Partnerships, the pursuers aver -

"The defender held Mr Hulance out as having actual authority to enter into the agreement on behalf of the defender. The correspondence from Mr Hulance to the pursuers bore Mr Hulance's name and was on Hamilton Ahead headed notepaper which stated that Strathclyde Regional Council and its successor, the defender, were members of Hamilton Ahead. A letter dated 9 March 1998 from Steven Hulance to Martin Super was typed on Hamilton Ahead notepaper and signed on behalf of 'Steven Hulance, South Lanarkshire Development Partnerships'. Said letter is referred to for its whole terms which are adopted herein brevitatis causa...".

Although Mr Hulance had on 8 October 1997 written to Mr Nisbet setting out fairly fully "the proposed transaction which Pat Carr and I are prepared to recommend to our respective Committees of elected Members of the Council...", no written communication appears to have passed immediately following the meeting of 21 October recording the terms or the status of what had then been discussed. The letter of 8 October, like a number of other written communications from Mr Hulance, contained certain caveats as to its status. Those included serially at the top left hand corner of the first page the printed words "Subject to Contract", "Without

Prejudice" and "Private & Confidential"; at the end of the letter there appeared within quotation marks the words "This letter is not intended to be contractual in its effect".

On 2 December 1997 a relative report was placed before the Home and Property Services Committee of the defender. That report was formally made by Mr Michael Docherty, the Executive Director (Enterprise Resources) but its author was Mr Carr, who had attended the meeting on 21 October and who was an estates manager with the defender. The report opened with an introduction explaining the discussion which had taken place and outlining the background, including identification of a number of local economic reasons in favour of the defender acquiring the various subjects at Castle Street. The circumstance that the second pursuer held title to part of those subjects appears not at that stage to have been clearly identified; the other party was simply referred to as "Super Quick Print", a trading name of the first pursuer.

Paragraph 3 (entitled "Proposal") of the report was in the following terms -

"The following terms have been provisionally agreed subject to Committee Approval.

(a) The open market value of Super Quick Print's existing premises including the car park has been agreed at £650,000.

(b) The land value on Hamilton Business Park has been agreed at £100,000 per acre and the 0.64 acre site required by Super Quick Print will cost them £64,000.

(d) The LDA may be able to contribute £50,000 under the Business Environment Support programme.

(e) As part of the negotiations Super Quick Print insisted on retaining a 280 square metre retail unit in Castle Street. In addition they insisted they will only accept outright ownership. This means that a 280 square metre unit will be provided for Super Quick Print's ownership out of the 745 square metres of retail proposed. The financial effect of this is to reduce the residual value of the development site by £400,000. This caused a breakdown in the negotiations but a compromise has now been provisionally agreed whereby the Council will contribute £250,000 and Super Quick Print will contribute the remaining £150,000 as a cash payment to the Council.

This proposal has been considered by the Finance and Legal Sections of the Council who have indicated that they are supportive of the proposal".

Paragraph 4 (entitled "Recommendation") of the report was in the following terms -

"It is recommended that South Lanarkshire Council acquire the Heritable Interest of Super Quick Print's existing premises including the car park at Castle Street, Hamilton for the sum of £600,000 [this figure appears to have been a misprint for £650,000].

Sale of the site extending to 0.64 acres at Hamilton Business Park for the sum of £64,000.

Make available additional package of £250,000 to go towards the provision of the freehold of a retail unit in the re-developed site in Castle Street.

Investigate the possibility of offering a PEGS grant in respect of the development by the Company at Hamilton Business Park to the sum of £30,000.

Investigate whether the LDA will be able to contribute the sum of £50,000 under the Business Environment support programme, the Companies (sic) Development at Hamilton Business Park.

Accept the sum of £150,000 as a cash payment by the Company to the Council towards the cost [of] providing the Freehold of a 280 sq. metre retail unit at the redeveloped Castle Street site.

In view of the requirement to progress this matter as soon as possible, it is recommended the Committee agree to act with Delegated Powers in terms of Standing Order 37B and that the appropriate action be taken immediately".

The Minute of the Meeting of the Committee held on that date is in the following terms -

"A report dated 25 November 1997 by the Executive Director (Enterprise Resources) was submitted on proposals by the Council to:-

acquire the business premises and an adjacent car park owned by Superquickprint at Castle Street, Hamilton in connection with a regeneration programme for that area of the town square

relocate the office furniture and printing departments of that business on a site extending to 0.64 acres at Hamilton Business Park

provide the company with outright ownership of a 280 square metre retail unit at the redeveloped Castle Street site.

Financial settlements for all aspects of those transactions had been agreed by both parties.

The Committee decided:

(1) that the proposals outlined in the Executive Director's report and the costs associated with each of them be approved:

(2) that the Council investigate the possibility of the company's development at Hamilton Business Park being offered:-

a grant of £30,000 from the Property Enhancement Grants Scheme

a contribution of £50,000 from the Lanarkshire Development Agency's Business Environment Support Programme.

(3) that, in view of the requirement to progress this matter as soon as possible, and in terms of Standing Order No. 37(b), appropriate action be taken immediately".

Copies neither of this Minute nor of the report appear to have been transmitted at this time to the pursuers. However, on 5 December 1997 Mr Nisbet was able to report to his clients that Mr Carr had telephoned him to confirm "that committee approval was agreed to the transaction on 2 December 1997". Mr Nisbet's letter continued that he expected a formal offer from the Council in very early course.

On 17 December 1997 Mr Harvie Paterson, Principal Solicitor of the defender, wrote to solicitors then acting for the pursuers in the following terms -

"I understand that you are instructed by Tom Super Limited. To enable me to draft an offer or Minute of Agreement please let me have on loan the title deeds to the Castle Street, Hamilton premises.

I confirm that the Home & Property Services Committee of my Council recently accepted recommendations made by the Estates Manager. These recommendations related inter alia to the acquisition of your client's premises at Castle Street for the sum of £650,000. My instructions I think are that your clients should be able to stay on on a Lease-back basis.

I look forward to receiving the title deeds".

In their response of 6 January 1998 those solicitors observed, among other matters -

"We should point out that the subject[s] comprising the car park .....are presently the subject of Missives transferring the subjects from Tom Super Printing and Supplies Limited to Tom Super Printing and Supplies Limited Directors Retirement Scheme. It is anticipated that that transaction shall be finalised soon and we will let you have a copy of the relevant Disposition etc.

In the meantime we trust that this is sufficient to enable you to prepare the Offer/Minute of Agreement and we look forward to receiving same as a matter of urgency".

Various documents, including draft Minutes of Agreement, draft Memoranda of Lease (concerning the basis on which the first pursuer should for a limited period continue to occupy certain parts of the Castle Street Subjects) and draft Minutes of Lease (concerning the basis on which the first pursuer should for a limited period continue to occupy certain other parts of the Castle Street Subjects), thereafter until early April 1998 passed to and fro between legal representatives of the parties (including new solicitors instructed by the pursuers) but these did not result in any formal bargain being concluded between or among the parties. As, however, the pursuers rely on certain of the terms of those draft documents as expressing the terms of an informal bargain fortified by actings, it will be necessary later to revert to them. It will also be necessary to consider communings between representatives of the pursuers and certain other officials of the defender in March and early April 1998 which are the subject of averment or which appear from the documentation discussed at debate.

In parallel with communings between legal representatives there had from December 1997 been communings between the pursuers or their representatives and other officials of the defender. On 10 December 1997 formal permission was granted to the first pursuer and its agents to enter upon the Caird Street Subjects for a limited period for the purpose of digging trial pits and sinking test bore holes. On 6 January 1998 under the reference "Acquisition - Castle Street, Hamilton" a letter from Mr Hulance (signed on his behalf by another official) was sent to Mr Martin Super. It was in the following terms -

"I refer to our most recent telephone discussion regarding the above and note that the titles will shortly be passed to the Council's legal department. Thereafter the legal department will be a position to progress this transaction.

However, I again confirm that the Council approval was granted on 2 December 1997 to the purchase of your property and that a total capital payment of £900,000 will be payable on conclusion of this transaction.

With regard to your purchase of land at Hamilton Business Park from the Council this is a separate transaction but it is hoped that this will be concluded at the same date if possible. The price payable for the land has been approved at £64,000.

I trust this information is sufficient for your purposes at this time and will allow you to make progress in the placing of the building contract.

To turn to the site investigation works as required the Landlords' agents Ryden, have again requested a copy of the method statement and a plan showing the location of the trial pits. Can you please provide this information as soon as possible to enable entry to be taken.

Nothing in this letter is to be taken as forming part of any contract, undertaking or commitment which is binding on South Lanarkshire Council".

This letter bore at its foot the note (again within quotation marks) "This letter is not intended to be contractual in its effect".

The first pursuer thereafter entered into arrangements with a builder for the construction of a new facility on the Caird Street Subjects. It issued a letter of intent to that company. The pursuers aver that on 22 January "in reliance on the agreement" [constituted by the conditional agreement of 21 October 1997 as purified by the approval of the Committee on 2 December 1997] and on the letter of 6 January the first pursuer entered into a contract for the construction of the production unit on the Caird Street Subjects. They further aver that in reliance on that agreement (and on a building warrant granted by the defender on 1 April 1998) the builder ordered structural steel work to a value of £50,000. Further sums amounting in total to £22, 556 are said to have been incurred to the builder. The pursuers found on Mr Hulance's letter of 6 January 1998 as the basis of knowledge and acquiescence by the defender of the placing by the first pursuer of an onerous building contract. They also rely on certain other actings (to which I shall return) in the period between December 1997 and April 1998.

The pursuers by their first conclusion in this action seek declarator that there is between the defender and the pursuers agreement to the effect specified in five paragraphs there set out. The first paragraph is in the following terms -

"(1) that the defender shall in terms of Section (ONE) of the Minute of Agreement between the first pursuer and the defender prepared by the defender and forwarded to the pursuers by letter dated 18 March 1998 sell and convey to the first pursuer that plot of land ("the Caird Street Subjects") at the junction of Caird Street and Caird Park, Hamilton, extending to 2,651 square metres or thereby as shown delineated in red on the plan 1 appended hereto at a price of £64,000".

The Minute of Agreement there referred to is an unexecuted Minute passing between the parties' respective legal advisers. Section (ONE) of that Minute sets forth an obligation on the defender to convey to the first pursuer the Caird Street Subjects on eleven terms and conditions there specified, including the price of £64,000.

The second paragraph of the first conclusion is in the following terms -

"(2) that the first pursuer shall in terms of Section (TWO) of said Minute of Agreement between the first pursuer and the defender sell and convey to the defender that plot or area of land ('the Castle Street Subjects') at Castle Street, Hamilton, shown delineated in red on the plan 2 appended hereto with the buildings, workshop premises and others thereon and the whole pertinents thereof, including a right of access from Campbell Street, Hamilton, in return for which conveyance the defender shall pay to the first pursuers consideration of £600,000 and a capital payment of £250,000 towards the cost of erecting certain buildings on the Caird Street Subjects".

Section (TWO) of the Minute there referred to provided that the first pursuer would convey to the defender the Castle Street Subjects on eight terms and conditions there specified, including a price of £650,000 representing the value of the Castle Street Subjects and £250,000 as a capital payment towards the cost of erecting buildings on the Caird Street Subjects.

The third paragraph of the first conclusion is in the following terms -

"(3) That the defender shall in terms of Section (THREE) of said Minute of Agreement between the first pursuer and the defender grant to the first pursuer, effective as at the defender's date of entry to the Castle Street Subjects (Firstly) a lease of the ground floor and of part of the upper floor of the Castle Street Subjects shown within the broad red and green lines respectively on the drawings 3 and 4 appended hereto and (Secondly) a lease of the remaining part of the first floor of the Castle Street Subjects and of the workshops and storage areas at the rear of the Castle Street Subjects shown within the broad purple and grey/black lines respectively on the drawings 5 and 6 appended hereto, such lease to be as per the draft Minute and Memorandum of Lease forwarded to the first pursuer by the defender under cover of the defender's letter of 18 March 1998".

Section (THREE) of the Minute there referred to provided in effect for a back lease by the defender to the first pursuer of two distinct parts of the Castle Street Subjects on six terms and conditions there specified. Those terms and conditions included reference to a draft Minute of Lease and a draft Memorandum of Lease which in turn set forth respectively the terms of the envisaged leases. The draft Minute of Lease (which was for a nominal rent) ran to fourteen clauses. The date of entry under it remained incomplete, although envisaged as being as at some date in 1998. The duration was likewise incomplete, though envisaged as being until some date in 2000 and from month to month thereafter. The draft Memorandum of Lease (which was likewise for a nominal rent) ran to fifteen clauses. The date of entry was incomplete but envisaged a date in 1998. The duration was incomplete but envisaged a date in 2000. There was no provision for continuation thereafter on a monthly or any other basis. Those arrangements, it may be taken, envisaged the bases on which the first pursuer would continue to enjoy occupancy rights of various parts of the Castle Street Subjects between the time of disposal of proprietorship of them to the defender and the time when the defender took physical possession for development purposes.

The fourth paragraph of the first conclusion is in the following terms -

"(4) that the defender shall erect consistently with Architect's impression drawing 7 provided by the defender to the respective pursuers and appended hereto on that area or piece of ground shown delineated in blue on plan 8 appended hereto a ground floor retail unit of 280 metres squared gross internal area finished to shell and core specification but with shop front and service connections and convey the same to the first pursuer or to the first pursuer's nominee at a price of £150,000 upon practical completion of that unit; et separatim at a price of £150,000 in the event that there shall be practical completion of that unit before 30 March 2000; at a price of £137,500 in the event that there shall be practical completion of that unit between 30 March 2000 and 30 June 2000; at a price of £125,000 in the event that there shall be practical completion of that unit between 1 July 2000 and 30 September 2000; at a price of £112,500 in the event that there shall be practical completion of that unit between 1 October 2000 and 31 December 2000; at a price of £100,000 in the event that there shall be practical completion of that unit between 1 January 2001 and 30 March 2001; damages being for completion after March 2003 payable by the defenders to the pursuers at a rate of £50,000 per annum and rateably in respect of parts of a year until practical completion is achieved...".

The obligation there sought to be declared concerns the envisaged arrangement that the defender would develop the area hitherto owned by the pursuers or one of them and on completion convey to the first pursuer or its nominee a ground floor retail unit. That contemplated the first pursuer being able upon completion of such development to carry on the retail aspect of its business from those premises. The provision for a diminishing price (finally converting to a liability in damages) in the event of practical completion being achieved at increasingly remoter times has its basis in certain communings in March 1998 to which I shall return.

The Minute of Agreement referred to in paragraphs (1) to (3) inclusive of the first conclusion set forth in Section (FOUR) provisions (running to eight sub-paragraphs) concerning the development of the Castle Street Land and the conveyance to the first pursuer of a unit within it; these provisions (particularly as to the consideration passing) were not, as originally framed or as subsequently revised, in the terms now sought to be declared. The Minute of Agreement set forth a further seven sections ((FIVE) to (ELEVEN) inclusive) concerning general aspects of the envisaged bargain between the first pursuer and the defender.

The fifth paragraph of the first conclusion is in the following terms -

"(5) that the defender in terms of the Minute of Agreement between the second pursuer and the defender prepared by the defender and sent to the pursuers by letter dated 18 March 1998 is bound to purchase from the second pursuers that plot or area of land at Castle Street, Hamilton, shown delineated in red on the Plan 9 appended hereto with any buildings and structures thereon and the whole pertinents thereof, including a right of access from Campbell Street, Hamilton, as expressed in Title No. LAN 19575 at a price of £50,000..".

The Minute of Agreement there referred to is distinct from that referred to in paragraphs (1) to (3). The former is a further unexecuted Minute passing between the parties' legal representatives. Section (ONE) of that Minute set forth an obligation on the second pursuer to convey to the defender the Castle Street Land on seven terms and conditions there set forth, including the price of £50,000. Sections (TWO), (THREE) and (FOUR) of that Minute made further provision.

The first conclusion finally seeks a declarator that the defender "is bound, in performance of such agreement, to join with the first pursuer in executing that Minute of Lease in respect of the premises to which reference is made at (3) (Firstly) hereof and that Memorandum of Lease in respect of the premises to which reference is made at (3) (Secondly) as also to execute a Feu Disposition of the Caird Street Subjects and that on the terms and conditions set forth in the Minute of Agreement compiled in draft by the defender and forwarded to the first pursuer under cover of its letter dated 18 March 1998 as varied by that part of Clause (TWO) in the amendment to the Minute of Agreement between the second pursuer and the defender sent by the defender to the second pursuer and headed in manuscript "2^nd and final draft (Trustees)" which starts "further declaring" to "Value Added Tax".

The amendment referred to is contained in a revised draft of a Minute of Agreement between the second pursuer and the defender which passed between the parties' legal representatives towards the end of March or very early in April 1998. The "amendment" (partly in typescript and partly in manuscript) makes provision against the contingency that the defender did not provide the envisaged retail unit on the Castle Street Land. In that situation the making available of an alternative site for that retail unit was envisaged and detailed provision (including provision for arbitration in the event of dispute) was made in respect of it.

The pursuers in the second conclusion seek orders for specific implement largely reflecting the declaratory matters referred to in the first conclusion. They further seek, failing implement, damages. They separately seek damages for breach of contract. Although the defender initially criticised the specification of the pursuers' averments of damage, that criticism was, following the initial amendment, departed from. The issue at the end of the discussion was whether the pursuers' averments in relation to the constitution of an agreement in the terms claimed by them were (as read with certain documentation contained in an agreed bundle) sufficiently relevant to justify a proof before answer being allowed.

A substantial number of documents comprised in that agreed bundle were considered in the course of the debate. That exercise was useful in tracing the general sequence of communings among various persons concerned with the transaction (or putative transaction). But the pursuers' case proceeds also upon averments of oral communings and Mr Brailsford submitted that it was inappropriate, even as respects the documentary basis of the pursuers' case, to determine the critical issues without hearing testimony from the authors of the written communings. There is force in that submission. While there can be advantages (particularly in commercial actions) in proceeding on a paper basis, it would in general be inappropriate to deny to a party who seeks to explain documents in their context by oral testimony an opportunity to do so unless it is plain that such explanation could not assist. I approach on that basis consideration of the material placed before me and the arguments presented.

Although Mr Bowen, junior counsel for the pursuers, had submitted that I might approach what had occurred as a series of distinct contracts, Mr Brailsford did not press that submission. The pursuers, he said, accepted that their case turned on the establishment of a single contract reached, albeit not legally constituted, by December 1997 and varied in certain respects in the Spring of 1998.

The transaction discussed was undoubtedly a complex one, involving the disposal to the defender of the Castle Street Subjects and the Castle Street Land and the disposal by the defender of the Caird Street Subjects, as well as other matters. A material consideration for the first pursuer was that it should be in a position, insofar as practical, to maintain business activity at Castle Street until it could take occupancy of the new premises at Caird Street and at Castle Street respectively. The contractual arrangements, both in respect of purchase and sale and of lease, concerned interests in land and were accordingly subject to Sections 1 and 2 of the Requirements of Writing (Scotland) Act 1995. It is convenient to set out at this point the relevant statutory provisions. Section 1 provides-

"(1) Subject to subsection (2) below and any other enactment, writing shall not be required for the constitution of a contract...

(2) Subject to subsection (3) below, a written document complying with section 2 of this Act shall be required for -

(a) the constitution of -

(i) a contract... for the creation, transfer, variation or

extinction of an interest in land...

(3) Where a contract... mentioned in subsection (2)(a) above is not constituted in a written document complying with section 2 of this Act, but one of the parties to the contract... ('the first person') has acted or refrained from acting in reliance on the contract... with the knowledge and acquiescence of the other party to the contract... ('the second person') -

(a) the second person shall not be entitled to withdraw from the contract...; and

(b) the contract... shall not be regarded as invalid,

on the ground that it is not so constituted, if the condition set out in sub-section (4) below is satisfied.

(4) The condition referred to in subsection (3) above is that the position of the first person -

(a) as a result of acting or refraining from acting as mentioned in that subsection has been affected to a material extent; and

(b) as a result of such a withdrawal as is mentioned in that sub-section would be adversely affected to a material extent.

...

(6) This section shall apply to the variation of a contract... as it applies to the constitution thereof but as if in subsections (3) and (4) for the references to acting or refraining from acting in reliance on the contract... and withdrawing therefrom there were substituted respectively references to acting or refraining from acting in reliance on the variation of the contract... and withdrawing from the variation".

Subsections (7) and (8) contain definitions which are immaterial for present purposes, it being accepted that the contract claimed to have been constituted was one to which section 1(2)(a) applied. Section 2 makes provision as to the type of writing required for formal validity of certain documents. It is not maintained that those requirements were relevantly satisfied here.

It is plain that, where the word "contract" is first used in section 1(3), it refers to an agreement of a contractual nature which, not being constituted in a written document complying with section 2, does not on being made have legal force. Such an agreement may, however, come to have such force if subsections (3) and (4) come to be satisfied in respect of it. Such an agreement may be an oral agreement.

In the present case the agreement on which the pursuers fundamentally rely is that averred to have been made orally on 21 October 1997 between representatives of the pursuers and certain officials of the defender. The pursuers aver that this agreement was expressly conditional on the approval of the defender's Home and Property Services Committee. Mr Brailsford catergorised this condition as suspensive. Accordingly, the pursuers accept that no contract capable of being relied on for the purposes of section 1(3) came into effective existence until such approval had been given. The pursuers maintain that such approval was given on 2 December 1997.

The defender's fundamental position is that no agreement of any kind was made between the parties in 1997 (or subsequently). It accepts that discussions took place between representatives of the pursuers and certain of the defender's officials but disputes that their result can properly be described as a contract (even a contract subject to a suspensive condition) among the parties to this action. Mrs Paton described the role of Mr Hulance as that of a "facilitator" - that is, as I understood it, an official concerned to identify whether there existed a basis on which he or his fellow development officials could put forward to the elected members of the defender a proposal with a recommendation for approval by them. This, of its nature, would involve an accord, at least in respect of basic features, being first reached between the officials and the other persons (such as the pursuers) potentially affected; but this did not, it was maintained, constitute a contract of any kind to which the defender was a party. Mr Clark, junior counsel for the defender (whose whole submissions were adopted by Mrs Paton), submitted that there were no relevant averments by the pursuers of authority, actual or ostensible, had by Mr Hulance to commit the defender to an agreement of any kind.

I am not satisfied that the pursuers' reliance on what transpired at the meeting of 21 October can at this stage be rejected on that basis. The pursuers have certain averments relating to the authority of Mr Hulance. These display some confusion between actual and ostensible authority but at least set up the status of Mr Hulance as a director of divisions within the defender's organisation concerned with a relevant aspect of its statutory functions. It is not suggested by the pursuers that Mr Hulance had authority at his own hand to commit the defender to any arrangement. Any arrangement made between him and the pursuers was expressly subject to approval by a relevant committee of elected members. In these circumstances the distinction may be narrow between a "mere facilitator" and an official empowered to reach with a third party an agreement wholly suspensive on subsequent approval by elected members. The report submitted early in December to the Committee by Mr Hulance's superior (Mr Docherty, Executive Director, Enterprise Resources) narrated - "The following terms have been provisionally agreed subject to Committee Approval". The Minute of the Committee meeting on 2 December bears in relation to this matter - "Financial settlements for all aspects of these transactions have been agreed by both parties"; it also records that the Committee decided that "the proposals outlined in the Executive Director's report and the costs associated with each of them be approved". These documents are suggestive of provisional agreement rather than of none at all. It would be inappropriate, in my view, to hold at this stage that the result of the October meeting was clearly incapable of being characterised in Mr Brailsford's formulation. While the circumstances of Dornier GmbH v Cannon 1991 SC 310 and British Bata Shoe Co v D. M. Shah Limited 1980 SC 311 are each very different from those of the present case, they do illustrate that issues of authority of employees may in some cases be dealt with more conveniently after proof. This is, in relation to the position of Mr Hulance relative to the meeting of 21 October, in my view, such a case. The status which Mr Hulance had or appeared to have by virtue of the post which he held may also touch upon apparent authority (Bowstead and Reynolds on Agency (16^th Ed.) para 8-018). The issue of authority may, however, require more critical consideration in another context - to which I shall come.

There are, moreover, a number of surrounding circumstances which will require to be considered before determining the proper character of what occurred at the meeting of 21 October. These include the terms of written communications emanating from Mr Hulance before and after that meeting, including as they did the proliferation of "caveats" in the form of superscription or postscript. The significance of these in the contexts in which they occur is not immediately obvious, albeit they give the general impression that the writer (or perhaps those responsible for the form of stationery made available for his use) was anxious to obviate any possibility of those writings being held as contractually binding. There does not, however, as Mr Brailsford pointed out, appear to be an absolute consistency in the incidence of those caveats. Their significance, if any, for the oral discussions relied on by the pursuers is best determined after inquiry. A similar conclusion applies to a letter of 20 November 1997 from the chartered surveyor acting for the pursuers, which purports to exclude any contractual relationship or commitment other than by exchange of missives between the parties' solicitors. The pursuers maintain that this letter was sent without their knowledge or authority. That assertion and the significance, if any, of the statement in its context cannot be evaluated at this stage. Moreover, it may or may not be of significance that following the Committee's decision on 2 December there was no immediate written communication of it to the pursuers, word of it apparently being received in a telephone conversation between an official of the defender and the pursuers' surveyor. The first written communication after 2 December appears to have been a letter of 17 December to the pursuers' then solicitors from a solicitor in the defender's corporate resources department opening the formal discussions. This pattern of actings may tend to suggest that, at least from the defender's perspective, approval by the Committee was simply a preliminary to rather than the making of a bargain, even of an informal character.

In support of a submission that the surrounding circumstances indicated that parties intended to be bound only by a formal written contract, Mr Clark relied on Gordon's Executors v Gordon (1918) 1 SLT 407. He also cited Stobo Limited v Morrisons (Gowns) Limited 1949 SC 184 and Comex Houlder Diving Limited v Colne Fishing Co Limited 1986 SLT 250. The first of those cases, and in particular the speech of Viscount Haldane, lends support to the proposition that in some circumstances a presumption may arise that it was not intended that there should come into an existence an agreement enforceable by law until a written instrument had been executed. But that case was decided after evidence had been heard. As Viscount Haldane said (at page 411) -

"...the question is, What does the evidence disclose as the object aimed at, and what was the series of steps meant by those concerned to be taken as preliminary to full finality in the process of binding themselves? To answer this question it is always necessary to look as a whole at the series of steps actually taken, and to avoid inferences based on anything short of the entirety of the process".

In the present case the answer to that question will depend on the result of consideration of the whole evidence. The relevant issues in Stobo Limited v Morrisons (Gowns) Limited and Comex Houlder Diving Limited v Colne Fishing Co Limited were, it is true, decided without hearing evidence but these issues turned essentially on the interpretation of correspondence, with in the former case some limited account being taken of certain background facts about which there appears to have been no serious controversy.

A number of other considerations were urged on behalf of the defender as demonstrating that there was no relevant consensus between the parties as at the end of 1997. Those included various aspects of the identification of the subjects to be conveyed (including the precise boundaries of the Caird Street Subjects and a right of access pertaining to the Castle Street Subjects) but I do not consider that these require further discussion at this stage. Three matters should, however, be noticed. First, the circumstance that the person in whom the Castle Street Land was or would be feudally vested was the second pursuer rather than the first pursuer does not, from the pursuers' averments, appear to have been noticed at the meeting on 21 October; nor is there any express reference to the second pursuer in the report put before the Committee or in the Minute of its meeting. However, given the apparently close relationship between the pursuers, I am not satisfied at least without hearing evidence that the emergence of the second pursuer as the party truly in a position to convey the Castle Street Land or as the prospective recipient of the purchase price from the defender gives rise to sufficient lack of consensus as to parties so as to render unsustainable the proposition that consensus had been reached. Moreover, according to the pursuers' averments, there appears to have been some communication between parties' representatives in November 1997 to the effect that the exact identity of the other party was not of concern to the defender. The second matter concerns the continued occupation by the first pursuer of parts of the Castle Street Subjects after proprietorship of these had passed to the defender. As previously noticed, the pursuers make certain averments in relation to leases on a rent free basis during certain periods. No draft Minute of Lease or Memorandum of Lease was in existence as at the meeting of October. When these did appear (as part of the subsequent formal communings) they contained no exact dates of entry (nor consequentially exact dates of expiry) - although the years were inserted. No exact dates were at any stage inserted. Reliance was placed by Mr Clark on Gray v Edinburgh University1962 SC 157 for the proposition that duration was a cardinal element in a lease. The absence of exact dates in the draft as produced is unsurprising in circumstances in which there may have been an understandable desire to use calendar dates rather than events as termini. But there would, in my view, be no insuperable difficulty in translating into formal documents the verbal agreement as to leases if such agreements were found both to have been reached and to have become enforceable. ("Rent free" inevitably meant at a nominal rent as the drafts provide). There may be some difficulty for the pursuers in that the rent free back-leasing arrangement does not appear to have been expressly put before and approved by the Committee. However, I am not disposed to find at this stage that that circumstance is fatal to the pursuers' case. In circumstances where a local authority is acquiring heritable property (voluntarily or compulsorily) with a view to development at some future date, an arrangement under which the property is in the meantime allowed to be occupied without charge may not be difficult to infer. In his initial letter (written on 17 December 1997) the defender's legal representative stated that it was his understanding of his instructions "that your client should be able to stay on on a Lease-back basis". The third matter concerns the absence of any agreed date of entry by the first pursuer to the Caird Street Subjects or by the defender to the Castle Street Subjects or to the Castle Street Land. The only date of entry referred to on averment as having been agreed at the meeting of 21 October was that of "two years from the date of the sale of the Cas

Early in 1998 the pursuers instructed a new firm of solicitors to act for them in this matter. On 13 February the defender's legal representative sent to those solicitors a draft Minute of Agreement together with drafts of a Minute of Lease, a Memorandum of Lease and a Feu Disposition. Those documents proceeded through a number of revisals but so far as concerns paragraphs (1), (2), and (3) of the first conclusion of the summons, they do not appear, either in their original form or as revised, to have introduced any radically new matters. They are to that extent in broad terms consistent with the alleged oral agreement of 21 October and the approval by the Committee on 2 December and may be capable of being regarded (at least at this stage) as in substance an exercise concerned with creating formal documents to reflect arrangements already made. The same may be said (at least at this stage) about paragraph (5) of the first conclusion ie. to the phrase "at a price of £50,000" which concerns the alleged obligation on the defender to purchase the Castle Street Land from the second pursuer. Although the second pursuer was not, it seems, mentioned expressly at the meeting of 21 October nor referred to before the Committee, I would not for the reasons earlier given be disposed to hold that the emergence of a formally new party (to which no objection appears to have been taken) was a bar to the elements necessary for consensus having been settled.

However, there did emerge in March 1998 elements which are no part of what is averred to have been agreed and approved in the previous year. These impinge, first. on the latter part of paragraph (4) of the first conclusion ("the sliding scale element") and, secondly, on the last lines of Conclusion 1 ("the alternative site element"). Those elements both concern potentially important aspects of the arrangements relative to the provision by the defender of new retail subjects.

The basic arrangement on this matter, as averred to have been agreed in October 1997 and subsequently approved by the Committee, was that on completion the first pursuer would buy and the defender sell at a price of £150,000 a 3000 square foot (280 square metre) retail unit comprised in a development on the Castle Street Land. No arrangements were then made varying the consideration by reference to the time at which the development was completed. Nor was any arrangement made against the event that the defender did not for any reason proceed with development on the Castle Street Land. The pursuers make the following averments -

"Pursuant to said agreement [that reached on 21 October and approved on 2 December] the pursuers and the defender further agreed on 9 March 1998 that the defender would provide the first pursuers or its nominee with the retail unit on the Castle Street Land before the end of March 2003 and that the pursuers' payment of £150,000 would be reduced by £50,000 for each year after [the] end of March 2000 that the defender failed to deliver said retail unit. After March 2003 the defenders would compensate the pursuers at the rate of £50,000 per annum until delivery of said retail unit. The compensation would be paid to the second pursuer as the owner of the retail unit. A copy of said letter will be produced, and is referred to for its whole terms which are adopted and held as repeated herein brevitatis causa. Steven Hulance told Martin Super on 6 March 1998 that the subject matter of the agreement of 9 March 1998 would have to be approved by Michael Docherty, an employee of the defender and the Executive Director of Enterprise Resources. On the morning of 9 March 1998 Steven Hulance telephoned Martin Super and said that Michael Docherty had agreed the terms of the letter of 9 March 1998, and then Steven Hulance faxed to Martin Super a letter dated 9 March 1998 confirming that Michael Docherty had approved said subject matter. Martin Super was told by Steven Hulance to provide a letter stating the first pursuer's retail turnover for its Hamilton premises, which the first pursuer provided in a letter dated 17 March 1998 which was collected from the first pursuer's premises by Ian Stewart. The letter of 17 March 1998 is referred for its full terms which are adopted and held as repeated herein brevitatis causa".

The pursuers make no averments directed to the alternative site element, although that is raised in the agreed documentation and was the subject of discussion at debate.

Perusal of the documentation suggests that the narrative given by the pursuers on averment in relation to the sliding scale element might appropriately be elaborated as follows. It seems that a meeting took place on 6 March attended by Mr Hulance and others from the defender and by Mr Martin Super of the pursuers. At that meeting it was stated on behalf of the defender that the new retail unit could not be provided within less than five years but that it was recognised that this would create problems for the first pursuer's business. Certain financial arrangements to deal with these problems were then mooted. Following the meeting Mr Hulance sent to Mr Super a fax setting forth an account of the former's understanding of it. Mr Super did not regard that account as accurate and marked on the fax his alternative understanding, primarily but not exclusively concerning the financial arrangements (document 38B - pp. 183/3-/4). This appears to have been transmitted to Mr Hulance who on 9 March sent to Mr Super a recast version (document 39 - pp. 184-5) of the fax of 6 March adopting Mr Super's version of the financial arrangements but adding the following paragraph -

"I would advise that the principle of these adjustments to the payment for the new unit has now been discussed with the Executive Director. However, I have been instructed by him to provide a financial justification to these proposals to satisfy the Council's statutory obligations for both internal and external auditing purposes. In this connection I shall require further information on the projected turnover forecasts for the retail operation over this period".

The letter of 17 March referred to in the pleadings (document 39B - p. 186/1) set out in brief terms the retail sales turnover of the first pursuer's business at Castle Street for 1998 (sic) and stated that the annual growth in that sector of the business averaged 5% per year as expressed over the past 20 years. It appears that communings in relation to the sliding scale element continued thereafter. On 19 March Mr Hulance wrote a letter (document 45 - pp. 224-5) to Mr Super which opens -

"Further to our telephone conversation yesterday we appear to have reached an impasse regarding my letter to you dated 9/3/98. From the Council's perspective it is now apparent that our auditors will require any reduction to the £150,000 to be paid by you will need to be justified as a proven loss. As I understand you regard this as unacceptable...".

A proposal for resolving the apparent impasse was then advanced by Mr Hulance. The pursuers' solicitors, however, wrote to the defender's legal representative, a letter dated 19 March (document 46 - pp. 226 - 7) stating that the sliding scale had been discussed and agreed in certain terms at the meeting on 9 March (which the pursuers' solicitor, among others, had attended). On 20 March Mr Hulance wrote again to Mr Super a letter (document 47 - pp. 234-5) in which he bore to set out "the agreement reached on 19 March" regarding the retail unit. The letter of 20 March sets out a somewhat different arrangement from that referred to in each of the letters of 9 or 19 March, both of which are said in the letter of 20 March to be superceded. On 27 March Mr Hulance again wrote to Mr Super (document 49C - pp. 242A-B). That letter opens -

"As you know we are in the process of obtaining the necessary Committee approvals to give effect to my letter to you dated 20 March 1998.

Due to the unusual nature of this transaction we need to consult widely within in the Council and consider how our auditors will view the completed transaction.

Two refinements need to be made neither of which affect the spirit of what has been agreed to date which was always subject to the above approvals".

The second "refinement" is expressed thus -

"The Council must be able to offer a suitable alternative new retail unit in the event that the new retail unit as currently envisaged cannot be delivered in the manner that we intend. To this end we propose the following additional provision to be added to my letter above.

The parties agree that the Council may at any time propose an alternative location, size or specification of a new retail unit if the Council is unable to construct the new retail unit due to matters beyond its control or if the anticipated costs exceed the Council's reasonable budget. Any alternative proposal shall be subject to your consent which shall not be unreasonably withheld or delayed beyond 20 working days of receipt of all information on the alternative scheme.

The penalty payment arrangements shall also be transferred on the same terms and shall terminate on the current site. The alternative scheme will need a separate Committee approval at that time".

All the written communications from Mr Hulance (the fax and subsequent letters) referred to above bear the postscript "This letter is not intended to be contractual in its effect".

Mr Super does not appear to have responded in writing to any of those communications other than by the marked fax. The pursuers do not aver when and how any resolution was achieved in relation to the alternative site element (though this feature is in the final part of their first conclusion). The sliding scale element (in a formulation not wholly consistent with paragraph (3) of the first conclusion) appears in a revised draft Minute of Agreement emerging from the defender's legal representantive. That formulation was rejected by the pursuers' solicitors by their letter dated 3 April 1998 (document 51 pp. 257-8). An elaborated version of the alternative site element (including an arbitration provision) also appears in a revised draft Minute of Agreement. This is marked in term with various proposed revisals (apparently in the hand of the pursuers' solicitors).

Mr Brailsford submitted that the sliding scale element (which the pursuers seek to have declared as part of the bargain to be enforced) constituted a variation of the agreement reached earlier between the parties. He submitted that this and any other variation did not alter the basic structure of the earlier agreement and that such variations arose as a result of the defender's attempts, which the pursuers had been prepared to accommodate, to alter that agreement.

The sliding scale element clearly, in my view, involved an important departure from the pre-existing arrangement. It directly impinged on the consideration which the defender would be entitled to receive on a conveyance of the retail unit. Depending on the timescale achieved for practical completion of that unit, the consideration (whether by reduction in the price or by set-off of an entitlement to liquidated damages) might be markedly reduced, even to the extent of a negative figure emerging. I reject Mr Bowen's submission that the sliding scale element does not, by reason of it being merely a compensation provision, constitute a variation to which section 1(6) of the 1995 applies.

There is no suggestion that this alteration was in any form placed before and approved by any Committee of the defender. It is not suggested that Mr Hulance had authority (actual or ostensible) at his own hand to consent on behalf of the defender to such an alteration. Reference is made in the pursuers' pleadings to Mr Docherty, the Executive Director of Enterprise Resources. It is said that on the morning of 9 March Mr Hulance informed Mr Super by telephone that Mr Docherty "had agreed the terms of the letter of 9 March", which letter is said to have confirmed that such approval had been given. In their present pleadings the pursuers do not offer to prove that Mr Docherty at any stage actually approved in unqualified terms a financial arrangement in respect of any sliding scale (and, if so, how and when) or that he was duly authorised by the defender to do so (and, if so, how and when). The letter of 9 March (said on averment to confirm Mr Docherty's approval) refers to a discussion between Mr Hulance and Mr Docherty which resulted in an instruction "to provide a financial justification to these proposals to satisfy the Council's statutory obligations for both internal and external auditing purposes." Projected turnover forecasts were sought. While the pursuers aver that they provided this on 17 March, they say nothing about whether the information provided was regarded on the defender's side as satisfying its statutory obligations and, if so, by whom and with what authority they were so regarded. Subsequent communications from Mr Hulance tend to suggest that this may not have been regarded as straightforward. The pursuers say nothing on averment about (and do not rely in their conclusions upon) the subsequent discussions with Mr Hulance. Nor do they say anything on averment about the alternative site element (which may to some extent at least be inter-related with the sliding scale element).

While I recognise that much that is missing may be matter of which the defender has fuller direct knowledge than the pursuers, that does not absolve the pursuers from the requirement, if they are to seek to make a relevant case based on an agreement as varied, to aver the essential elements of consensus (including due authorisation). Their present averments (even as read generously and as amplified by the documentation) are, in my view, insufficient for that purpose.

I should add at this point that Mr Bowen, in the context of his general submissions, referred to Murray International Holdings Limited v Gillespie (18 February 1993, Lord Penrose, Unreported) and to Salvation Army Trustee Co Ltd v West Yorkshire Metropolitan County Council [1981] P & C R 179. I recognise the force of the observations in the earlier case on the proper approach to dealings between commercial men, though I am doubtful about their applicability to the circumstances of the relatively complex land acquisition transactions with which the present case is concerned. The latter case, while having certain interesting factual parallels with the present, was decided on purely English principles, including proprietary estoppel, which form no part of the law of Scotland; I have not in the end found it helpful.

I turn now to the issue of satisfaction of sub-sections (3), (4) and (6) of Section 1 of the 1995 Act. The material terms of the statute have already been set forth. As earlier narrated, the pursuers aver certain facts and circumstances on which they rely for this purpose. Had the scope of the alleged agreement stood in its state as at the end of 1997 (and had the pursuers sought to declare and enforce such an agreement) I would have been disposed to allow them a proof before answer on the basis that they had averred sufficient for inquiry as to the existence of the relevant consensus and of facts and circumstances capable of satisfying sub-sections (3) and (4). The placing of the building contract in the circumstances averred appears to me to be capable of constituting an act by the pursuers (or in any event by the first pursuer) of sufficient materiality to satisfy sub-section (4). Whether such placement was in reliance on the contract is a matter which would require to be proved; but it is not inconsistent with the chronological sequence or with what would appear to have been the occasion for Mr Hulance writing his letter of 6 January 1998. The pursuers, if they were to satisfy subsection (3), would also, of course, require to establish that the building contract was placed (or to be placed) "with the knowledge and acquiescence of the other party to the contract" viz. the defender. That raises potentially difficult questions about attribution to the defender of knowledge and acquiescence on the part of Mr Hulance, including questions of his authority and of the meaning and effect of the text of and of the postscript to his letter of 6 January. I should not, however, have been disposed to hold that the pursuers' case was so plainly irrelevant that, in such circumstances, dismissal was the only proper course.

However, the alleged contract which the pursuers seek to enforce includes (certainly) the variation constituted by the sliding scale element and (apparently also) the variation constituted by the alternative site element. Mr Brailsford submitted that any acts relied on did not require to be specific to particular variations. If by that is meant that the acts need not be directed to such variations in isolation, I would be disposed to accept that submission. But, if what is sought to be enforced is a contract (as varied) which does not comply with section 1(2), the acts sufficient for the purposes of section 1(3) must, in my view, be clearly referable to the terms of the contract as varied; acts equally consistent with the contract prior to variation do not, in my view, suffice. To hold otherwise would, in my opinion, be inconsistent with section 1(6).

The averred acts relied on by the pursuers are insufficient in my view to instruct satisfaction of section 1(3) and (4) in respect of the contract as allegedly varied. Most of those acts predate the making of the variation in relation to the sliding scale element (made at the earliest on 9 March). Those predating events include the placing of the building contract (in January), the obtaining of conditional planning consent for Caird Street on 12 December 1998 and the pegging out of the site (at Caird Street) "in or about early March". None of those could have been done in reliance on the contract as varied. Such subsequent acts as are averred (the obtaining of a variation to the planning consent, the preparation of an application to Lanarkshire Development Agency and the obtaining of building warrant for Caird Street) are no more referable to the contract as varied than to it prior to variation. None of those acts touches upon the sliding scale variation (relative to the consideration for acquisition of the retail unit at Castle Street) or to any alternative site for such a unit. Some reliance was put in argument on the ongoing arrangements under the building contract (for the Caird Street Subjects) but again these are no more referable to the contract as varied than to it in an unvaried state. In these circumstances the pursuers have, in my view, no averments relevant to instruct the satisfaction of section 1(3) and (4) in respect of the contract which they seek to have established.

For the foregoing reasons I would, on the basis of the existing pleadings, have dismissed the action as irrelevant. However, in the circumstances I shall before making any substantive order put the case out By Order at a time when the pursuers have had an opportunity of considering, in light of this Opinion, whether they are in a position to propose an amendment capable of curing the difficulties identified.