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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Robbie The Pict v Miller Civil Engineering Ltd & Ors [1999] ScotCS 66 (3 March 1999)
URL: http://www.bailii.org/scot/cases/ScotCS/1999/66.html
Cite as: [1999] ScotCS 66
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OPINION OF LORD EASSIE
in the petition of
ROBBIE THE PICT
Petitioner:
against
MILLER CIVIL ENGINEERING LIMITED and OTHERS
Respondents:
________________
|
Petitioner: Upton; Digby Brown
First and Third Respondents: Reid; Shepherd & Wedderburn, WS
Second Respondents: Creally; Scottish Office Legal Services
3 March 1999
Introductory
The petitioner in this petition for interdict lives in Dunvegan on the Isle of Skye. In order to reach the Scottish mainland from his home he uses the A87 trunk road which crosses from Kyleakin to Kyle of Lochalsh by means of the Skye Bridge. The first respondent is Miller Civil Engineering Limited ("MCE") and in the prayer of the petition interdict is sought against MCE or any of its servants or agents from demanding any toll from the petitioner for using the Skye Bridge or from preventing or attempting to prevent him from crossing should he refuse to pay. The second respondent is the Secretary of State for Scotland and the third respondent is a company, Skye Bridge Limited.
By way of a brief introductory exposition of the relationship between the three respondents it may be noted that the Secretary of State's right to charge tolls on those using the Skye Bridge ("The Crossing") has been assigned by him to the third respondent, Skye Bridge Limited. The first respondent - MCE - is a partner along with a German company, Dyckerhoff & Widmann AG in a joint venture known as "Miller-Dywidag Joint Venture" ("MDJV"). Skye Bridge Limited is averred by the respondents to have entrusted inter alia the collection, on its behalf, of tolls from users of the Crossing to the MDJV, which is said in turn to carry out that service through the agency of MCE as one of the two partners in the joint venture. Put very broadly, the issue raised in the petition is whether MCE has lawful authority to carry out that function of ingathering tolls from people using the Crossing.
The Legislative Framework
Part II of the New Roads and Street Works Act 1991 ["the 1991 Act"] introduced statutory powers whereby the Secretary of State or a local roads authority providing a new "special road" might be authorised to charge tolls by virtue of a "toll order". The Crossing is part of a "special road" provided by the Secretary of State.
Section 27(2) of the 1991 Act provides that a toll order relating to a special road to be provided by the Secretary of State shall be made by the Secretary of State. Sub-section (3) provides that the making of such a toll order is subject to certain procedural requirements including those in Part IIA of Schedule 1 to the Road (Scotland) Act 1984 ["the 1984 Act"] and sub-section (4) of section 27 states that so far as practicable the proceedings required by Part IIA of Schedule 1 to the 1984 Act shall be taken concurrently with the other statutory procedures for the making of a special road scheme. Sub-section (5) provides that the Secretary of State shall not make or confirm the scheme or the toll order unless he makes or confirms them both.
Part IIA of Schedule 1 to the 1984 Act was inserted by paragraph 96 of Schedule 8 to the 1991 Act, read along with section 168(1) of the latter Act. It makes provision for advertisement of a proposal to make a toll order; for facilities for the public to inspect the draft toll order; and for interested parties to give notice to the Secretary of State of objections to the proposed toll order. Part IIA of the 1984 Act includes paragraph 14A(3) which is in these terms:-
"Where it is intended that the proposed toll order shall authorise the special road authority to assign their rights to charge and collect tolls, the Secretary of State or, as the case may be, the local road authority shall make a statement containing such information as may be prescribed with respect to that assignation and the person to whom the rights are intended to be assigned and -
(a) the statement shall be made available for inspection with the copy of the order to which the notice under sub-paragraph (1) [ie the notice advertising the proposal to make a toll order relates]; and
(b) the notice shall state that such a statement will be so available."
The terms of sub-paragraph (3) of paragraph 14A of Schedule 1 to the 1984 Act evidently stem from the provisions of section 28 of the 1991 Act which include the following:-
"-(1) A toll order may authorise the special road authority in whose name it is made to assign, subject to subsection (2), to a person, for such period and subject to such terms and conditions as they think fit, their rights under a toll order to charge and to collect tolls.
(2) A special road authority may grant such an assignation only to a person who has undertaken such obligations as may be specified in the assignation with respect to the design, construction, maintenance, operation or improvement of the road.
(3) In this Part, a person to whom the rights under a toll order to charge and to collect tolls have been assigned is referred to as a concessionaire.
(4) References in this Part to a person authorised to charge tolls include references to a concessionaire."
Section 35(1) of the 1991 Act further provides that:-
"The rights of a concessionaire under an assignation granted under section 28(1) may, with the consent of the special road authority, be assigned by the concessionaire."
Section 37 of the 1991 Act provides thus:-
"(1) The Secretary of State may make provision by regulations with respect to the collection of tolls in pursuance of a toll order.
(2) Different provision may be made for different types of road or different types of toll, or for particular roads or particular tolls.
(3) Regulations may, in particular, impose requirements with respect to -
(a) the displaying of lists of tolls, and
(b) the manner of implementing changes in the amount of tolls;
and where any such requirements are imposed, a toll may not be demanded unless they are, or as the case may be have been, complied with.
(4) A person who in respect of the use of a road to which a toll order relates demands a toll -
(a) which he is not authorised to charge, or
(b) which by virtue of subsection (3) may not be demanded,
commits an offence and is liable on summary conviction to a fine not exceeding level 3 on the standard scale."
In pursuance of the power given to him under paragraph 14A(4) of Schedule 1 to the 1984 Act, the Secretary of State on 26 September 1991 made The Assignation Statement (Prescribed Information) (Scotland) Regulations 1991 [S.I. 1991/2152] which came into force on 21 October 1991, being the date on which sections 27 to 41 of the 1991 Act also entered into force. In Regulation 2 the expressions "assignation statement" and "concessionaire" are duly defined in terms relating them to the statement and the proposed assignee referred to in paragraph 14A(3) of Schedule 1 to the 1984 Act. Regulation 3 is in the following terms:-
"3. An assignation statement shall contain the following information:-
(a) the identity of the concessionaire;
(b) where the concessionaire is a company with issued share
capital, the identity of each member of the company who is the registered owner of at least ten per cent of the issued share capital at the time the assignation statement is made available for inspection under paragraph 14A(3) of Part IIA of Schedule 1 to the 1984 Act;
(c) the proposed length of the concession period and any provision to be incorporated in the assignation for early termination of the concession period;
(d) a summary of any obligations to be undertaken by the concessionaire during the concession period in relation to the maintenance, operation, or improvement of the toll road;
(e) a summary of any obligations undertaken by the concessionaire in return for the rights to charge and to collect tolls in relation to -
(i) the steps to be taken to minimise the risk of adverse environmental effects arising out of the construction or operation of the toll road;
(ii) the provision of service stations or other buildings or facilities to be used in connection with the toll road and any special requirements for services to be offered by such stations or other buildings or facilities;
(f) a summary of any undertakings to be given by the concessionaire with regard to the stopping up, diversion, improvement or any other alteration of any road which will cross or enter the route of the toll road or will be otherwise affected by the construction or improvement of the toll road, and with regard to the construction of any new road for purposes connected with any such alterations as aforesaid."
The Statutory Procedures Relating to the Crossing
Following the entry into force of the relevant provisions of the 1991 Act, the Secretary of State initiated procedures which resulted in the making in due course on 26 June 1992 of the necessary special road scheme [S.I. 1992/1499] and the toll order [S.I. 1992/1501] which enabled the construction of the Crossing to proceed.
Article 3 of the toll order provides:-
"3. The Secretary of State as special road authority is hereby authorised:
(a) subject to Article 4, to charge tolls in respect of the Crossing in relation
to tolled traffic using the Crossing during the toll period, and
(b) subject to section 28(2) of the Act, to assign his rights to charge
and to collect tolls to a person for such period and subject to such terms and conditions as the Secretary of State thinks fit."
During the course of the procedures leading to the making of the toll order, the Secretary of State provided an "assignation statement" in terms of para. 14A(3) of Schedule 1 to the 1984 Act, a copy of which is contained in No 7/4 of process. The second paragraph of the assignation statement is in these terms:-
"It is proposed that the concessionaire will be Skye Bridge Tolls Limited, incorporated under the Companies Acts and having their registered office at Miller House, 18 South Groathill Avenue, Edinburgh and their permitted successors and assignees in accordance with the concession agreement."
Ensuing paragraphs of the assignation statement contain, among other matters, details of the identity of the shareholders in Skye Bridge Tolls Limited (the former name of the current third respondents, Skye Bridge Limited); the length of the concession period; and summaries of the obligations proposed to be undertaken by the concessionaire.
The Contractual Documents
In anticipation of the eventual making of the toll order and the other orders necessary for the construction of the Crossing a number of contractual documents were entered into on 16 December 1991.
Of those documents executed on 16 December 1991 the contracts with which this petition is principally concerned are:-
(a) the "Concession Agreement" entered into between the Secretary of State and Skye Bridge Limited (No 6/7 of process);
(b) the Operation and Maintenance Agreement ["OMA"] between Skye Bridge and MDJV relating to the operation and maintenance of the Crossing; (No 7/1 of process) and
(c) A Memorandum executed by all three respondents and also by Miller Group Limited, Dyckerhoff & Widmann AG, and MDJV. (No 7/2 of process).
Apart from those three documents, additionally, contracts were concluded between Skye Bridge Limited and the Secretary of State and between Skye Bridge and MDJV relating to the design and construction of the Crossing and guarantees were executed by Miller Group Limited respecting the obligations of it subsidiary, MCE.
The Concession Agreement is a lengthy document containing many detailed contractual provisions immaterial to this petition. For present purposes it is sufficient to state that by Clause 2.1 of the Concession Agreement the Secretary of State, subject to the terms of the Concession Agreement, assigned to Skye Bridge Limited inter alia the right to collect tolls for the duration of the concession period. Under Clause 4 Skye Bridge Limited obliged themselves to maintain the Crossing and operate the Crossing in accordance with detailed maintenance and operational requirements set out in a schedule to the Concession Agreement. Clause 28 of the Concession Agreement provides:-
"..... except where this Agreement expressly provides otherwise the concessionaire shall not be entitled to assign or sub-contract its rights or obligations under this agreement in whole or part without the consent of the Secretary of State, such consent not to be unreasonably withheld (subject to the provisions of the Act)..... in the case of employment of a reputable contractor to carry out some or all of the Concessionaire's obligations under this Agreement in respect of operation, maintenance, renewing, rebuilding and modification of the Crossing."
Clause 1.2.3 of the Concession Agreement is in these terms:-
"Wherever in this Agreement provision is made for the giving or issuing of any notice, endorsement, consent, approval, certificate or determination by any person, unless otherwise specified, such notice, endorsement, consent, approval, certificate or determination shall be in writing and the words 'notify', 'endorse', 'consent', 'approval', 'certify' or 'determined' shall be construed accordingly."
As already indicated, the OMA was entered into between Skye Bridge Limited and MDJV who are referred to in the OMA as "the Concessionaire" and the "Operator" respectively. Clause 3.1 of the OMA states:-
"The Concessionaire appoints the Operator and the Operator accepts such appointment, to perform the Services on and subject to the terms and conditions of this Agreement."
It is further provided in Clause 4.1 of the OMA as follows:-
"In consideration for (sic) the amounts payable to it hereunder, the Operator shall, with effect from the Commencement Date, provide and perform the Services."
The term "Services" is defined as:-
"(i) The operation of the Main Bridge in accordance with the Operation Requirements, the Operations Manual and Schedule OM1;
(ii) The maintenance of the Main Bridge in accordance with the Maintenance Requirements, the Maintenance Manual and Schedule OM1;
(iii) The Services specified in Schedule OM1; and
(iv) Any other specific services or responsibilities identified in this Agreement."
Elsewhere in the OMA one may find more detailed descriptions of the scope of the maintenance and operational obligations undertaken by the MDJV. The services specified in Schedule OM1 include, under Clause E(1), the collection of tolls. Sub-Clause (3) of Clause E enjoins the Operator to pay all tolls collected from users of the bridge and any other non-toll income collected by the Operator directly into such bank accounts as the Concessionaire may designate in writing from time to time for that purpose. I was informed by counsel for the first and third respondents that the bank account designated by Skye Bridge Limited was one in its own name with a Scottish bank at a local branch. The OMA provides for payment by Skye Bridge Limited to MDJV of an annual fee, calculated in a specified manner.
The Memorandum states that it is "a record of an agreement made among" the parties whom I have already listed "in relation to the documents identified in Appendix 1 to this letter ('the relevant documents' and 'relevant document' shall be construed accordingly)". The Memorandum then provides as follows:-
"(i) In this letter, the expression 'the Parties' means the signatories to this Memorandum and 'Party' shall be construed accordingly.
(ii) Each Party who is a party to one or more of the relevant documents irrevocably acknowledges and confirms to each other party thereto that each such relevant document has been or will be entered into on the basis that the documents identified in Appendix 2 have not yet been entered into by [Skye Bridge Limited] and the other parties thereto and accordingly that the rights and obligations of such Party and each other person who is party to each such Relevant Document shall cease to exist (all to the same extent and effect as if the Relevant Document in question had not been entered into) unless the condition referred to in the immediately following paragraph (iii) is satisfied.
(iii) The condition referred to in the above paragraph (ii) is that each of the documents identified in Appendix 2 shall have been entered into by [Skye Bridge Limited] and the other parties thereto on or before the Commencement Date as defined in the development agreement.
....".
Appendix 2 to the Memorandum specifies a number of proposed agreements between, principally, Skye Bridge Limited on the one hand and banks and other financial institutions on the other. The documents included in Appendix 1 consist of the Concession Agreement, the OMA and the various other contracts executed on 16 December 1991 to which I have referred. The entry in that Appendix relating to the Concession Agreement is in these terms:-
"An Agreement ('the Concession Agreement') dated the date of this memorandum between the Secretary of State and [Skye Bridge Limited] relating to the grant to [Skye Bridge Limited] of the right to use, operate and maintain a crossing between mainland Scotland and the Isle of Skye and collect and retain tolls therefrom".
The entry relating to the OMA is worded thus:
"An Agreement ('the O&M Agreement') dated the date of this Memorandum between [Skye Bridge Limited] Miller and Dywidag (in Joint Venture) relating to the operation and maintenance of the above crossing by Miller and Dywidag (in joint venture)".
The Petition
It is averred by the petitioner and effectively admitted by the respondents that those who are employed to staff the toll booths and take in the money from drivers proceeding across the Crossing are employees of MCE. It is also averred on behalf of the petitioner that MCE have been dormant within the meaning of section 252 of the Companies Act 1985 since about 5 March 1992 and that their directors' reports lodged with the Registrar of Companies state that MCE does not trade, but acts as agents on behalf of the Miller Group Limited.
However, the essence of the contention advanced in the petition is to be found in the following averments in Statement 11:-
"The Secretary of State has not consented in writing to the assignation or sub-contracting by [Skye Bridge Limited] of the right to change and collect tolls in respect of the use of the bridge either to [MCE] or to The Miller Group. Accordingly MCE have no authority to demand this.
.....Skye Bridge are the authors of any rights of [MCE] to charge and collect tolls. By virtue of Clause 2.1 of the Concession Agreement, Skye Bridge rights to do so are subject to the terms of that Agreement. Clauses 1.2.3 and 28 therein prevent Skye Bridge from assigning or sub-contracting without the written consent of the Secretary of State. Absent such written consent Skye Bridge were not entitled to assign or sub-contract such rights, none have been validly assigned or sub-contracted to [MCE], and the latter have no right to charge or collect tolls from the petitioner".
The third plea-in-law for the petitioner is in the following terms:-
"The petitioner being reasonably apprehensive that [MCE] will seek to charge him and collect from him tolls in relation to toll traffic using the Skye Bridge and they having no right or title to do so, decree should be pronounced in terms of the prayer of the petition".
Summary of Submissions
Mr Reid, who appeared for the first and third respondents, invited me to dismiss the petition as not disclosing any relevant case. I was informed that parties were agreed that in considering their arguments I was entitled to look at the documents lodged and treat them as being what they bear to be.
In opening his submissions, Mr Reid observed that the Concession Agreement clearly envisaged that inter alia the activity of collecting the tolls at the toll booths was one for which the concessionaire might employ a sub-contractor. (cf. Clause 4.7 of the Concession Agreement which enjoined the concessionaire not to discriminate in his choice of sub-contractors). Sub-contracting the task of collecting in the toll monies at the toll booths did not however mean that the right to charge and collect tolls had been assigned. Under the OMA the actual task of collecting the tolls at the toll gates and the administrative work involved in paying them to the concessionaire was contracted out to the MDJV but the right to receive the toll monies remained with the concessionaire.
Turning to the Memorandum, Mr Reid accepted that its purposes were to ensure, or encourage, that the operational requirements could be carried through on the basis of the documents set out in Appendix 1 if funding were available on the basis of the documents set out in Appendix 2, and to provide for what was to happen were that funding not available. But in executing the Memorandum the Secretary of State had acknowledged in writing the existence of the OMA. While the Secretary of State was not a party to the OMA and might indeed not have read it, he would know from the description of it in Appendix 1 that it was an agreement "relating to the operation and maintenance of the.... Crossing". The inference to be drawn from the Secretary of State's execution of the Memorandum was that he was content with the existence of the other documents and hence the further inference was that he was content with the arrangements for which they had made provision. The Memorandum accordingly constituted an implied, written consent to those arrangements.
In amplification of that submission Mr Reid went on to explain that the documents to which the Memorandum referred in its Appendix 1 constituted a complete commercial structure which could only be implemented were the Secretary of State consenting to it. Consent required to be implied in order to give business efficacy to that arrangement. In that connection I was referred to certain well-known authorities on the implication of contractual terms, particularly, Gloag on Contract (2nd Edition), p. 288 and 402; Crawford v Bruce 1992 S.L.T. 524, especially at 531F.
If the Memorandum were not to be seen as a "consent in writing", Mr Reid submitted next that it was evident that the Secretary of State had acquiesced in the arrangements for the collection of tolls set out in the OMA. The Secretary of State could not object to the employment of MDJV as sub-contractors to Skye Bridge Limited in, amongst other things, the work of collecting in the tolls on behalf of Skye Bridge Limited. In his answers to the petition the Secretary of State accepted that he had agreed and acquiesced in the employment of the current arrangements. He stated in writing in his pleadings that he was aware of them and did not object to them. Accordingly there was no doubt that the Secretary of State could not object to the authority of MCE to collect tolls on behalf of Skye Bridge Limited. Mr Reid referred by way of general support for his contentions to what was said in relation to waiver in Armia Limited v Daejan Developments Limited 1979 SC (HL) 56 and to the application of the doctrine of acquiescence in relation to leases as expounded in Rankine, p. 180 and 192 and Paton and Cameron, p. 155-156.
Given that the Secretary of State had, at least by acquiescence, given consent and authority to the employment of MCJV, Mr Reid turned to the issue of the petitioner's title to challenge the Secretary of State's consent. It was an important feature that the petitioner was not a party to the Concession Agreement or the OMA. The Concession Agreement gave him no ius quaesitum tertius. Neither the Concession Agreement nor the OMA were public documents. The assignation statement did not require identification of any proposals on the part of the concessionaire for his arrangements for the collection of the tolls. The Secretary of State could not now challenge the arrangements and the petitioner had no entitlement to do so.
In relation to the petitioner's averments on dormancy, counsel for the first and third respondents pointed out that dormancy is a technical expression, defined in section 250(3) of the Companies Act 1985 and was relevant only to the lodging of accounts. Whether MCE were "dormant" was not pertinent to the question of the authority of their employees to act as toll booth personnel. The OMA authorised and required MDJV to collect the tolls on behalf of Skye Bridge Limited. A joint venture was a form of partnership (cf. Mair v Wood 1948 S.C. 86) and in terms of section 5 of the Partnership Act 1890 a partner had authority to act as agent for the partnership. As employees of a partner in the MDJV those employed by MCE at the toll booths were authorised to collect the tolls.
Finally, counsel submitted that interdict should not be granted without the respondents being given an opportunity to remedy any deficiency which the Court might find established. For example, if necessary, the Secretary of State could immediately issue an express written consent.
Counsel for the Secretary of State, Mr Creally, also invited dismissal of the petition. Mr Creally adopted the arguments which had been advanced by counsel for the first and third respondents. He further stressed that it could not be suggested that in executing the Memoradum the Secretary of State was unaware of the arrangements proposed for the operation and maintenance of the Crossing. He stated additionally that the Secretary of State could not and did not challenge the existing arrangements and he pointed to the averments made by the Secretary of State in Answer 11 in which it was averred inter alia that the Secretary of State is and has been fully aware of the manner of collection and payment from the outset and has not objected thereto. Even if there were any doubt over the proper construction of the Memorandum, what was averred in Answer 11 was in itself written consent to the current arrangements.
In response, Mr Upton for the petitioner observed that the validity of the Concession Agreement and the OMA was not in issue. So far as the petitioner's entitlement to found on the terms of the agreements was concerned, he submitted that a road user was entitled to enquire whether someone stopping him from using the road except on payment of a toll was authorised to demand that toll. Mr Upton submitted that para. 14A(3) of Schedule 1 to the 1984 Act gave to the public an interest in the identity of the person "collecting the tolls". Under reference to the Assignation Statement (Prescribed Information) (Scotland) Regulations Mr Upton said that its provisions gave to the public a right to be told who would actually be on the bridge collecting the tolls so that the public might object to the presence of that person. Counsel for the petitioner went on to describe the Concession Agreement as being not really a contract but "a public administrative act of a Government minister". As I understood counsel, the submission was that this categorisation flowed from the provisions of section 28(1) and (2) of the 1991 Act because it assigned the Secretary of State's right to receive tolls to a private company. Mr Upton conceded however, that as between the Secretary of State and Skye Bridge it was a private contract. The assignation to Skye Bridge Limited was subject to the terms of the Concession Agreement as a whole. Clause 28, read with Clause 1.2.3, provided that Skye Bridge Limited could assign only with the written consent of the Secretary of State. That provision could not be waived by the Secretary of State since it existed for the general public benefit. If written consent were not required for a further devolution of the right to collect tolls, the procedures in Schedule 8 of the 1991 Act (ie. paragraph 14A as inserted into Schedule 1 to the 1984 Act) would be circumvented. Although he conceded that there was no obligation on the Secretary of State to stipulate for written consent, counsel said that having done so the administrating authority should be held to that provision.
Counsel for the petitioner next submitted that the expression "written consent" meant an express written statement of consent. A writing which by implication acknowledged the existence of a document did not imply written consent to the arrangements included in it. The Memorandum did not contain any words expressing consent.
If implication of consent would suffice, which Mr Upton did not accept, the implication must yet be necessary and logical. Although, when executing the Memorandum, the Secretary of State might have been aware of the existence of the OMA, that awareness carried no implication of positive consent to the involvement of MDJV for this particular function. The matter might be under consideration, or the Secretary of State may never have addressed his mind to the issue. Silence did not imply consent - see Ampliflaire Limited v Secretary of State (unreported 4 February 1998). It might well be that the execution of the Memorandum was consistent with the Secretary of State's having no objection to the terms of the OMA but such consistency did not equiparate with the written expression of consent. The fact that the Secretary of State now had to point to the Memorandum meant that he had not considered whether to issue a written consent.
Turning to the respondents' averments of acquiescence and personal bar, counsel for the petitioner readily accepted that the Secretary of State had acquiesced in the employment of the MDJV and that the Secretary of State could not now object to their employment. But personal bar and acquiescence could operate only in a question between the contracting parties. It could not operate against a third party such as the petitioner. A legal requirement which existed for the public benefit could not be waived by the Secretary of State. The averments of the respondents as regards acquiescence were accordingly irrelevant so far as the petitioner was concerned.
The penultimate chapter of Mr Upton's argument proceeded upon the fact that the assignation statement had stated that the concessionaire would be Skye Bridge Limited or "their permitted successors and assignees in accordance with the Concession Agreement". He submitted that the entitlement of Skye Bridge Limited to assign their right to collect tolls was inherently qualified by the written contract. The terms of the Concession Agreement accordingly qualified their title to assign. In support of this branch of his submissions Mr Upton referred to Blackpool Corporation v Locker [1948] 1 Q.B. 349.
Finally counsel for the petitioner questioned the rôle of Miller Group Limited. Although it was accepted by counsel that the OMA provided for the collection of the toll monies by the MDJV and that as a partner MCE would be entitled to collect the tolls on behalf of the Joint Venture, the terms of the directors' reports lodged with the Registrar of Companies indicated that MCE might in fact be collecting tolls on behalf of Miller Group Limited. Counsel accordingly submitted that some inquiry would be appropriate if his primary motion to grant the prayer of the petition were not to be granted.
Decision
I would observe at the outset that although during the course of his argument counsel for the petitioner referred to the right to collect tolls having been devolved, assigned or transferred to MCE, the contractual documents - particularly the OMA - do not provide for any assignation or transfer of the right to receive tolls from Skye Bridge Limited to any other party. The OMA is a contract between Skye Bridge Limited and MDJV whereby the latter is employed by Skye Bridge Limited to do the physical task of ingathering the tolls and remitting them to Skye Bridge Limited's account. Additionally of course the MDJV is employed to carry out many other functions in connection with the maintenance and operation of the Crossing. While, under those arrangements, MDJV act as agents for Skye Bridge Limited and MCE, as one of the two partners in the MDJV in turn acts as agent for MDJV, the right to receive the toll monies plainly remains with Skye Bridge Limited - the concessionaire - and Skye Bridge Limited remain liable to the Secretary of State for ensuring the due performance of their obligations under the Concession Agreement.
The essence of the contention advanced on behalf of the petitioner was that the engagement, under the OMA, of MDJV as contractors to Skye Bridge Limited for the operation of the Crossing, which included the provision of the service of ingathering the tolls, was made subject by Clause 28 of the Concession Agreement to the consent of the Secretary of State and, under Clause 1.2.3 of that agreement, consent was defined as being a consent expressed in writing. It was not asserted by counsel for the petitioner (and in light of the respondents' averments plainly could not be asserted) that at any time the Secretary of State was not agreeable to the engagement of MDJV as an agent of the concessionaire, Skye Bridge Limited. The inner core of the petitioner's submission was thus the very technical objection that such consent had supposedly not been given expression in written form.
I shall assume for the moment that no such written expression of consent exists. That then raises the matter focussed by counsel for the first and third respondents in the course of his submissions whether the petitioner, who is plainly not a party to the Concession Agreement, can found on its provisions insofar as they stipulate, in Clause 1.2.3 for consent to be expressed in writing.
In my opinion the petitioner is not entitled to found on that provision. The only parties to the Concession Agreement are the Secretary of State and Skye Bridge Limited and the relevant terms were a matter for agreement between them. As Mr Upton accepted, there was no statutory requirement for the Secretary of State to include in that contract any provision stipulating for consent to be expressed in writing. Indeed, there was no obligation at all on the Secretary of State to stipulate for any consent in relation to the employment by Skye Bridge Limited of any agent or contractor to carry out the operation and maintenance of the Crossing. Since there was no obligation on the Secretary of State to include in the terms of the Concession Agreement any condition requiring him to consent to the employment of a particular contractor, let alone an obligation to stipulate that the consent be dependent on the formal requirement of writing, it follows, in my view, that the Secretary of State could properly waive any contractual stipulation for the giving of consent by express waiver or by acquiescence, without giving any written expression to that consent. The contract in my opinion does not give the petitioner any ius tertii.
Counsel for the petitioner sought to overcome this substantial difficulty by asserting that the Concession Agreement was not truly a contract but was a "public administrative act". No legal authority was put forward for that submission and I do not accept it. While the legislation contemplates that a special roads authority, such as the Secretary of State, which promulgates a toll order may seek authority to assign the right to receive the tolls and while the legislation requires a limited public disclosure in terms of the information specified in the Assignation Statement (Prescribed Information) (Scotland) Regulations, the Concession Agreement is not a public document. It has, by means not explored before me, become available in this petition but as Mr Upton accepted, there is no obligation on the special roads authority to publish its contract with the concessionaire. It is also to be noted that the authorisation given to the Secretary of State by the Toll Order [S.I. 1992/S. 501] to assign his rights does not restrict those rights in any way - particularly it does not make that legislative authorisation subject to the terms of the Concession Agreement.
I also regard as unsound the further submission of counsel for the petitioner that if the Concession Agreement were not treated as a public administrative act the procedures in paragraph 14A of Schedule 1 to the 1984 Act would be circumvented. It is to be noted that the Assignation Statement (Prescribed Information) (Scotland) Regulations require certain details relating only to the proposed concessionaire. Nothing is required to be included in relation to any party to whom the concessionaire may in turn assign his rights. By contrast, section 35 of the 1991 Act expressly provides that a concessionaire may assign his rights subject only to his obtaining the consent of the original cedent, the roads authority. A further assignation by the concessionaire is thus not subject to any statutory or public requirement that the consent of the original cedent be expressed in writing. Further, consistently with that, there is no provision for the publication of any grant of written consent and there is no provision for any public intimation of a proposal by the concessionaire to assign his rights or for public objection to such a proposal. Accordingly, in my opinion, the legislature does not contemplate that an assignation by a concessionaire of his rights should be the subject of any procedure and it is thus, in my view, a misconception to speak of the provisions of paragraph 14A being circumvented were a roads authority to consent in a non-written form to an assignation of the concessionaire's rights. I would also observe, reiteratively, that in the present case one is concerned not with any assignation by Skye Bridge Limited but merely with employment of a contractor or agent to carry out the task of collecting the tolls.
I accordingly consider that the petitioner is not entitled to found on the contractual provision in this particular Concession Agreement to the effect that the Secretary of State's consent should be expressed in writing. Since the petition is essentially founded on that proposition, it is to that extent irrelevant.
The views which I have just expressed regarding the relevancy of the petition proceed on the hypothesis that no written consent exists for the engagement of MDJV under the OMA. Counsel for the respondents submitted however that written consent did exist and it is appropriate nonetheless that I should express my view on those submissions.
It was contended firstly that in executing the Memorandum the Secretary of State impliedly consented to the engagement of MDJV under the OMA and that the "Secretary of State has thus consented in writing those arrangements". In support of his argument Mr Reid referred to certain well-known authorities on the implication of implied contractual terms. One is of course familiar with the implication of a particular contractual condition where the implication of such a term is necessary in order to allow the contract to function and the term is one to which the parties would have agreed. However, to my mind, that is a rather different question or issue from that of deciding whether a person has given a written expression to his consent to a particular matter. I accept that it may be readily inferred from the execution by the Secretary of State of the Memorandum that the Secretary of State was aware of the existence of the OMA and that it may further be inferred that he was in fact agreeable to the involvement of MDJV in the operation and maintenance of the Crossing. However, it does not follow that because the execution of a document is consistent with the existence of consent that the document thereby becomes the expression of consent in writing. The purposes of the Memorandum were completely unrelated to the particular issue of eliciting the Secretary of State's written consent to the engagement of a sub-contractor for the operation of the Crossing. Accordingly, despite the skill with which the point was argued by Mr Reid, I have come to the view that the execution of the Memorandum does not constitute an expression of consent in writing for the purposes of Clause 1.2.3 of the Concession Agreement.
Counsel for the respondents submitted alternatively that if there were any doubt over treating the Memorandum as an expression of consent in writing what was said by the Secretary of State in his written pleadings was such an expression. Among other averments it was stated in those pleadings:-
"Esto the consent of the Secretary of State has not been given in writing (which is denied), he has acquiesced in the appointment of the Joint Venture inter alia to collect tolls and pay them to Skye Bridge. He is and has been fully aware of the manner of collection and payment, namely by the respondents to Skye Bridge from the outset and has not objected thereto."
In my view the terms of the Secretary of State's written pleadings can and should be read as a written expression of his consent to the arrangements contained in the OMA and to the collection of tolls by MCE as a partner in the joint venture. No doubt the matter might have been expressed yet more forcefully but, as Mr Upton properly observed in his argument, the use of the words "I consent" is not essential for an expression of consent. As he put it, terminology such as "I have no objection" would clearly be an expression of consent sufficient for present purposes.
Accordingly, since the Secretary of State expresses written consent in his pleadings, the petition, which seeks interdict for the future, is in that simple, straightforward manner irrelevant insofar as it is based on the proposition that written consent is lacking.
There remains Mr Upton's alternative submission that a proof before answer should be allowed particularly respecting the averments in Statement 4. In that respect I agree with the submission of counsel for the respondents that those averments are irrelevant. On the basis of the contractual documents which have been lodged in process, and which are in probative form, it is plain that the MDJV has written authority to ingather tolls on behalf of Skye Bridge Limited. I agree with Mr Reid that as a partner in the joint venture MCE is entitled to act on behalf of the partnership and I did not understand that clear proposition to be disputed by Mr Upton. Put shortly, it is plain that from the agreed documents and the pleadings that the employees of MCE have authority to operate the toll booths and collect tolls on behalf of the concessionaire. Whether or not that activity entitles MCE to the status of dormancy for the purposes of company accounting and whether or not the Director's Report may be strictly accurate are matters which it is not necessary to examine since they cannot detract from the fact that MCE is entitled to operate the Crossing on behalf of the Joint Venture and to employ personnel to staff the toll booths and ingather the tolls. It is therefore on any view inappropriate that they be interdicted from carrying out the functions which they are entitled to carry out under the contractual arrangements.
The petition must therefore be refused.