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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Legal & General Assurance Society Ltd v Tesco Stores Ltd [2001] ScotCS 119 (18 May 2001)
URL: http://www.bailii.org/scot/cases/ScotCS/2001/119.html
Cite as: [2001] ScotCS 119
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OUTER HOUSE, COURT OF SESSION

 

 

 

 

 

 

 

 

 

 

OPINION OF LORD HAMILTON

in the cause

LEGAL & GENERAL ASSURANCE SOCIETY LIMITED

Pursuers;

against

TESCO STORES LIMITED

Defenders:

 

________________

 

 

Pursuers: Keen, Q.C., Cormack; Dundas & Wilson , C.S.

Defenders: Currie, Q.C., Higgins; Semple Fraser

18 May 2001

Introduction

[1] By Lease dated 5 January and registered in the Books of Council and Session on 23 February 1994 ("the Lease") Faraday Properties Limited let to Wm. Low Supermarkets Limited for a term of 125 years at a nominal rent an area of ground at Coatbank Street, Coatbridge, forming part of larger subjects which had been developed or were to be developed for shopping purposes and were to be known as Faraday Retail Park. The pursuers are now the proprietors of that Park. Wm. Low Supermarkets Limited in about 1995 become a wholly owned subsidiary of the defenders. Although the former remained technically the Tenant under the Lease, the latter have corresponded with and are now sued as the commercial body having the ultimate interest on the Tenant's part with respect to the issues arising in this action. The defenders are content that they rather than their subsidiary conduct the defence to this action.

[2] The Lease took the Tenant bound at its own cost to construct on the ground let a retail food superstore. Works were duly carried out and the subjects are now used, consistently with the user clause in the Lease, as a Tesco superstore devoted primarily to the retail sale of food. Its approximate gross floor area is 4,838 square metres. It functions as the anchor store of the Park. Also within the Park are eight other retail units the largest of which, with a gross floor area of approximately 3,423 square metres, was formally occupied for non-food retail purposes by Homebase but has for some time been unoccupied. Arrangements have recently been made to assign the lease of that unit to Matalan. The remaining retail units range in gross floor area between 643 and 943 square metres. All those units are ranged along a north-west/south-east axis forming one side of the roughly triangular area comprising the Park. The Tesco superstore lies at the north-west end of that range. In front of the range of retail units and bounded also by the two remaining sides of the triangle is an area of open ground presently laid out for car parking purposes. In the north-west corner of the Park lies a leisure unit and in the south-east corner a fast food outlet. The principal vehicular access to and egress from the Park is in the vicinity of the fast food outlet with another access/egress point in the vicinity of the leisure unit. These routes are referred to in the Lease as "the Access Road" and "the Service Road". A roadway presently passes between them along the front of the retail units. Pedestrian access/egress can be had in the vicinity of the leisure unit and also in the vicinity of the apex of the triangle forming the Park (i.e. in the north-east corner). The former leads generally towards the town centre of Coatbridge.

[3] Immediately outside the northern boundary of the Park lies an area of open ground commonly known as the Town Park Site. On 20 October 2000 North Lanarkshire Council, the local planning authority, in furtherance of an application dated 3 July 2000 by MacDonald Estates plc granted planning permission, subject to conditions, for the development of the Town Park Site as a non-food store (also incorporating a restaurant, a garden centre and certain other facilities). The ground floor area of that proposed development is 7,897 square metres with a mezzanine floor extending to 1,579 square metres. Conditional arrangements have been made with a view to Woolworths plc (trading as Big W) occupying and trading from the developed site. As at the end of June 2000 the pursuers were in discussion with MacDonald Estates plc concerning a possible joint venture to develop that site and incorporate it into Faraday Retail Park.

[4] Following a preliminary telephone call an agent for the pursuers, Ms Jemma Stacey of Investment Management Property, by letter dated 26 June 2000 wrote to Mr Niall Hunter, the Senior Development Executive in the defenders' Assets & Estates Management Department with responsibility for the defenders' properties in various places including Scotland, advising him of those prospective arrangements. She indicated that the pursuers were supportive of the anticipated planning application and viewed the addition of Woolworths plc as a positive step for the future tenant mix of the Park. She further stated -

"As part of the planning application and overall development, the existing car park will be reconfigured to provide a more efficient car park for customers to use together with an additional 100 (approximate) spaces. The proposals are shown on the attached plan, which also gives an indication of what will be submitted to the planning authority.

I trust this information is of interest to you. The proposed development of this new concept for Woolworths plc will bring an additional attraction to Faraday."

[5] Correspondence followed between the parties and also between their respective solicitors. The issues between the parties in this action are concerned with the consequences of the defenders' attitude towards the proposed arrangements, which include provision for customers of the projected Big W store making use for car parking purposes of open ground within the existing Park. The defenders have indicated that they are not content with those arrangements.

The terms of the Lease

[6] It is appropriate first to consider the position of parties as regulated by the Lease. The grant was by Clause 2 of "the Premises" (the area of ground on which the superstore was subsequently built together with certain immediately adjacent strips of ground) "TOGETHER WITH the Common Rights" (as specified in Part III of the Schedule to the Lease) "but EXCEPTING and RESERVING the Reserved Rights" (as specified in Part IV of the Schedule).

[7] Part III of the Schedule provides:

"The Landlord grants to the Tenant (in common with the Landlord and all others entitled to the same and all others authorised by the Landlord, including without prejudice to the foregoing generality, the other tenants of the Development or any of them) the following rights:

....

3.1 To use the Car Park for the parking of the Tenant's and its customers' cars...".

"The Car Park" as defined is a large area of ground lying in front of the range of retail units and substantially comprising the whole unbuilt - on portion of the Park. Also defined in the Lease is "the Tenant's Car Park", being a substantial proportion (perhaps about half) of the Car Park extending out from the front of the superstore. Despite the title "Tenant's Car Park" the grant of lease did not give to the Tenant possession and control of the Tenant's Car Park nor confer on it any exclusive rights of car parking for its customers or employees in the Tenant's Car Park. Certain rights or interests of the Tenant in the Tenant's Car Park are, however, granted or acknowledged in the Lease. The Tenant has a right with the consent or approval of the Landlord to place recycling units on the Tenant's Car Park and to form trolley bays there (Clause 5.9.1.4). Under Part IV of the Schedule the rights reserved to the Landlord to carry out certain measures (under paragraphs 7, 10 and 11 - all set out below) are qualified in particular ways having regard to certain consequences for the Tenant's Car Park. Part III of the Schedule concludes:

"DECLARING THAT such rights are granted subject always to the Landlord's rights reserved under Part IV of the Schedule and any other Part or Parts of the Schedule referred to therein."

Part IV of the Schedule provides:

"There are excepted and reserved to and in favour of the Landlord and all others authorised by it or otherwise entitled thereto the following rights which shall be exercised by the Landlord... in any case in such reasonable manner as shall cause the least practicable damage to the Premises (including the Buildings) and disruption to the business of the Tenant:

.....

7. Subject always to and without prejudice to Clause 7.4 of this Lease, to vary, alter or extend the Access Road and Service Road but so as not to alter the general location, routes and capacity of the Access Road and the Service Road nor to affect adversely the Tenant's Car Park or the Tenant's use thereof...

8. To redevelop the Development in terms of Part VIII of the Schedule.

9. To build or rebuild upon any land adjacent to or adjoining the Development to such height and in such manner and otherwise as the Landlord may desire or permit and to use the same in whatever manner as may be desired providing such building or rebuilding shall not materially and adversely affect the Premises or the Tenant's use and occupation of the Premises and without prejudice to the Tenant's rights under the Planning Acts (if any).

10. Subject always to and without prejudice to Clause 7.4.4 of this Lease, to alter or depart from the composition and/or layout of the Car Park or to extend the Car Park in each case in such manner and to such extent as the Landlord acting reasonably may decide.

11. To make, vary or alter reasonable regulations for the Development and for the control, regulation and limitation of pedestrian or vehicular traffic on any part of the Common Parts for safety, traffic flow or other reasonable purpose and to erect such reasonable signs as may be appropriate and to make any reasonable regulations in relation to the Common Parts which are designed for the general benefit of the Development and which do not materially affect adversely the Tenant's business; Declaring (i) that at no time, without the prior approval of the Tenant (which approval will not be unreasonably withheld) shall the Landlord impose any charge to any customer at the Premises, for the use of the Car Park and/or the Access Road and/or the Service Road nor, except where required by law, limit the hours of access thereto, and (ii) subject to paragraph 6 of this Part of the Schedule, the Landlord will not suspend temporarily or permanently any access route or the Tenant's Car Park from time to time without providing a reasonably equivalent alternative route or routes or areas during the period of such suspension, such alternatives to be, in the case of temporary suspension broadly equivalent to, and in the case of permanent suspension no less suitable than, the route or routes or areas in use prior to the suspension."

Clause 7.4.4 (referred to in paragraph 10 of Part IV of the Schedule) appears in the body of the Lease in a section headed generally "Landlord's Obligations" and under the particular heading "Restrictions on Use etc.". That clause is in the following terms:

"The Landlord undertakes to the Tenant not to amend, vary, alter or extend the Tenant's Car Park in any manner of way without the prior written consent of the Tenant which consent will not be unreasonably withheld or delayed."

The "Common Parts" (referred to in paragraph 11 of Part IV of the Schedule) include the Car Park (which in turn encompasses the Tenant's Car Park).

[8] Part IV of the Schedule concludes:

"PROVIDED ALWAYS that any such alteration of the Common Parts shall be made by the Landlord for the benefit of the tenants of the Development as a whole and in the interests of good estate management."

[9] Among the obligations undertaken by the Landlord by Clause 7.3 (as read with paragraph 8 of Part V of the Schedule) is an obligation "To manage and administer the Development in keeping with the principles of good estate management".

[10] The Lease envisaged the possibility of redevelopment of the Park. In that respect, among other provisions, Part VIII of the Schedule provides:

"1. The Landlord shall not require in terms of this Lease to obtain the approval or consent of the Tenant to any redevelopment of the Development and subject only to obtaining planning permission and any other necessary consents which may be required, the Development may be used from time to time for any purpose or purposes notwithstanding the grant of this Lease but subject always to the provisions of Clause 7.4 of this Lease."

Clause 7.4 includes among other restrictions that provided for by Clause 7.4.4.

The conclusions of the action

[11] The principal conclusions of the summons are in the following terms:

"For declarator that the Tenants in a Lease between Faraday Properties Limited and Wm. Low Supermarkets Limited dated 5 January and registered in the Books of Council and Session on 23 February, both 1994 in terms of Clause 7.4.4 thereof have unreasonably withheld consent to the alteration of the Tenant's Car Park, as defined in the Lease, which forms part of the development proposal shown on the site layout plan with number 9860 (PL) 001 Rev. H, which is produced.

2. For declarator that (I) in terms of the Lease, the pursuers are entitled to undertake or permit the alteration and use of their property forming Faraday Retail Park, Coatbridge, and (II) the pursuers are entitled to undertake and permit the alteration and use of adjacent land both so as to implement that development proposal."

[12] Mr Currie for the defenders submitted that certain difficulties were presented by the terms in which those conclusions were framed. But it is appropriate first to address and endeavour to resolve the substantive issues between the parties before considering the form of any remedies. It is also appropriate, in my view, to address at least some of the legal issues raised in argument on the interpretation of the Lease before addressing whether any consent which was required was unreasonably withheld.

Submissions on interpretation of the Lease

[13] The Town Park Site lies outwith but immediately adjacent to "the Development" as defined in the Lease (the latter being effectively the area within the existing boundaries of Faraday Retail Park) and there is nothing in the Lease or otherwise which entitles the Tenant generally to object on a contractual basis to any works carried out by the Landlord or its associates insofar as within that Site. The possibility of building or rebuilding by the Landlord on land adjacent to or adjoining the Development is expressly envisaged in Part IV of the Schedule. Some protection to the Tenant in respect of affection to the Premises of such building or rebuilding is provided but no issue arises in this action about building or rebuilding on the Town Park Site as such. The issues concern the proposed use of the Car Park (or part of it) by customers of any developed and trading unit on that Site.

[14] Mr Keen for the pursuers contended in the first place that the pursuers were entitled without any consent of the defenders to permit such use. The pursuers were the proprietors of the Car Park. As such they had the rights in it incidental to ownership, including the right to permit others to use it. The Lease was not designed to take away any such rights. Clause 2 of the Lease did not transfer to the Tenant the Common Parts; these and the rights associated with them remained with the Landlord unless expressly taken away. The preamble to Part III of the Schedule (as read with paragraph 3.1 thereof) recognised that the Landlord was entitled to authorise any other persons to use the Car Park. Reference was also made to the proviso to that Part, to paragraphs 10 and 11 of Part IV and to paragraph 1 of Part VIII. The scope of the Landlord's undertaking under Clause 7.4.4 was limited to structural changes to the Tenant's Car Park (such as the introduction of speed bumps or kerbing); it did not extend to an undertaking not to reconfigure the Tenant's Car Park. Insofar as the pursuers' proposals involved any alteration to the Tenant's Car Park they were for the benefit of the tenants of the Development as a whole, it being plain on the evidence that the extension of the Park to encompass the Big W development would reinvigorate the Park to the benefit of its present tenants taken as a whole. Redevelopment of the Development within the meaning of paragraph 1 of Part VIII could be for any purpose. That included any redevelopment of the Car Park (insofar as that arose) to accommodate car parking there by customers and employees of a development on the Town Park Site. The link between Part VIII and Part IV of the Schedule was paragraph 8 of the latter which reserved to the Landlord the right "to redevelop the Development in terms of Part VIII of the Schedule". It was impossible to divorce the alteration to the car parking arrangements from the benefit which the attraction of Big W customers to the Park would confer on the existing units. Although the Specification of Tenant's Works comprised in Part IX of the Schedule envisaged certain provision being made for car parking, it did not provide for any specific layout or configuration in the Car Park or the Tenant's Car Park. The total number of car parking spaces was in terms of that Part to be agreed between the Landlord and the local authority. There was accordingly no defined configuration (in which the Tenant had had any say), a change to which could constitute an amendment, variation or alteration within the meaning of Clause 7.4.4. All that existed on the ground was a flat surface with markings on it, the exact provenance of which was now uncertain. This pointed to Clause 7.4.4 being restricted to alterations of a physical nature. It did not extend to reconfiguration or additional usage. Subject only to the possibility of a raised footpath extending into the Tenant's Car Park none of the pursuers' proposals involved a matter to which Clause 7.4.4 related.

[15] Mr Currie submitted that on a sound construction of Part III of the Schedule its preamble did not entitle the pursuers to authorise others to use the Car Park for the purpose of serving or using subjects other than those within the Development as defined. Nor did paragraph 1 of Part VIII assist the pursuers. The latter was intended to apply only to a redevelopment of the Development which involved a change or changes of use (in the sense employed in user clauses of a lease) of land or subjects within the Development. If it had been intended that the Landlord should have power to allow the Car Park to be used to serve subjects other than those physically within the Development, one would have expected a provision of that importance to have been expressly set out among the Reserved Rights in Part IV; it had not been. The whole flavour of the Reserved Rights was that they were reserved in relation to the Development. Reference was made to Clause 1.2.2 of the Lease. The preamble to Part III entitled the Landlord to authorise other tenants of the Development and persons otherwise associated with the Development to use the Car Park - not an unrestricted class of persons. As the pursuers' proposal proceeded on an unlawful extension of permission to use the Car Park, the whole action was unfounded. Even if what was proposed did involved a "redevelopment of the Development" within the meaning of paragraph 1 of Part VIII, it was still necessary for the pursuers to bring themselves within paragraph 10 of Part IV (as read with the proviso to that Part). Any benefit to the tenants of the Development as a whole to be effected by the arrival of Big W on its boundary was irrelevant to the right reserved by paragraph 10. That paragraph envisaged that the alteration etc to the Car Park itself required to be for the benefit of the tenants of the development as a whole (and in the interests of good management). The pursuers' proposals (involving, as they did, restriction on the car parking available to the tenants of the Development) could not satisfy the proviso. If Clause 7.4.4 arose at all, it was clear that the pursuers' proposals involved the introduction of serious competition for car parking affecting the Tenant's Car Park. While it was not clear on the evidence what exactly was the physical state of the Tenant's Car Park at the outset of the Lease, it was important to bear in mind that this lease was for a 125 year term during which the Tenant (which included permitted successors in title of the original tenant) had a continuing right reasonably to withhold consent to an alteration etc to the Tenant's Car Park from its current state at the time when the Tenant's consent was sought. The phrase "amend, vary, alter or extend" included changes to the orientation of aisles, pedestrian routes and parking bays. Changes in respect of cul-de-sacs to aisles or to the location of trolley bays were also within the meaning of the expression. "In any manner of way" imported a wide category. It was not restricted to structural changes such as the introduction of sleeping policemen. It was wide enough to include an alteration in the relationship of car parking spaces to retail units in the Car Park (including the Tenant's Car Park). It was plain that the whole purpose of the pursuers' proposals was to secure a reorientation of the Car Park, including the Tenant's Car Park, in favour of the interests of the projected Big W unit. Such reorientation and the competition which would potentially be generated for car parking spaces between customers of Big W and those of the Tesco superstore in the Car Park as a whole (and in the Tenant's Car Park in particular) were matters which the defenders were entitled to take into account for the purposes of Clause 7.4.4.

Some conclusions on interpretation of the Lease

[16] "The Development" is defined by Clause 1.1.9 of the Lease not by reference to buildings or other structures but as subjects described under reference to certain prospective registration numbers in the Land Register (under certain exceptions) - that is, as an area of land. It was clearly envisaged that those subjects, albeit developed by the construction of the superstore under the Lease (and no doubt by the construction of other physical units under separate arrangements), might be redeveloped during the 125 years of the duration of the Lease. Among the rights specifically reserved to the Landlord under Part IV of the Schedule was the power, subject to the preamble and the proviso to that Part, to redevelop the Development in terms of Part VIII. Paragraph 1 of Part VIII absolved the Landlord from any need to obtain the approval or consent of the Tenant to any redevelopment of the Development and provided that, subject to Clause 7.4 (as well as to planning permission and any other necessary consents), the Development might be used from time to time for any purpose or purposes. The nature of the redevelopment and the uses to which the redeveloped Development might be put were, subject to the whole expressed qualifications, otherwise unrestricted. Paragraph 3 of Part VIII clearly envisaged that redevelopment might include the construction of new buildings, extensions or alterations to existing buildings and changes to the Access Road and the Service Road, all however also subject to Clause 7.4 and to certain other specified protections. There might, accordingly, during the currency of the Lease be fundamental changes to the Park. These might include, for example, the construction of new buildings on the Car Park, a development which could affect the availability of car parking provision within the Car Park and potentially impinge on competition for car parking spaces within the Tenant's Car Park (in which the Tenant does not have any exclusive rights). Such redevelopment would require to satisfy the preamble of Part IV (relative to the manner in which it was carried out) and the proviso to that Part (as an alteration made for the benefit of the tenants of the Development as a whole and in the interests of good management). "Redevelopment of the Development" might also, in my view, include a material change of use of the Development or part of it. The expression "development" is defined by Clause 1.1.8 as having the meaning given by section 19 of the Town and Country Planning (Scotland) Act 1972 (which includes "any material change in the use of any buildings or other land") and I see no reason why "redevelopment" should not be understood in a like sense. The references in paragraph 1 of Part VIII to planning permission and to the Development being used for any purpose would appear to confirm this interpretation. A redevelopment might, again subject to the whole relevant qualifications (which in the case of the Tenant's Car Park might involve the need to provide a suitable alternative - Part IV paragraph 6), involve translating some part of the Car Park into a new built unit with a parking facility exclusive to it. It might simply involve a material change in the use of the Car Park.

[17] I am not persuaded that a redevelopment of the Development to provide within it a facility (built or otherwise) which was complementary to a built unit physically outwith it would fall outside the scope of redevelopment within the meaning of paragraph 8 of Part IV and Part VIII. While most things referred to in Part IV relate to matters within the geographical compass of the Development, that is because that Part is primarily concerned with reserving to the Landlord things it may do within it. The possibility, however, of the Landlord building or rebuilding outwith the Development (on land adjacent to or adjoining it) is also specifically contemplated. In these circumstances the redevelopment of part of the Development so as to provide an ancillary provision (including a parking provision) for a building outwith the Development is, in my view, not beyond redevelopment as provided for. The protection for the Tenant against redevelopment with extraneous connections (as well as against any other redevelopment) lies in the need to satisfy the preamble and the proviso to Part IV. In relation to the Tenant's Car Park the Tenant may also in a particular case have specific protection under Clause 7.4.4.

[18] Consistently with that approach, I am persuaded that, where in Part III of the Schedule the Landlord grants certain Common Rights to the Tenant "in common with the Landlord and all others entitled to the same and all others authorised by the Landlord, including without prejudice to the foregoing generality, the other tenants of the Development or any of them", those to whom it is envisaged such rights or some of them may be granted include the operator of a unit built on land adjoining the Development. Such Common Rights might, in my view, include the right to use the Car Park for the parking of its cars or those of its customers. However, I reject Mr Keen's submission that the Landlord's right is unqualified - whether by virtue of the Landlord's fundamental rights incidental to proprietorship or by virtue of the words in parenthesis in the opening part of Part III. The rights granted by that Part are by the declaration appended to it subject to the rights reserved to the Landlord under Part IV or any other Part or Parts of the Schedule. The Common Parts enumerated in Part II (which include the Car Park) are "all as the same may be varied, altered or extended pursuant to the provisions of Part IV of the Schedule". The effect of this interrelationship of the Common Parts and the Common Rights with the Reserved Rights and of the expressing and thus defining of the latter appears to be in this Lease to delimit, in a question with the tenant, the scope of the proprietorial or other rights which the landlord seeks to keep available to himself relative to the Common Parts. The result is, in my view, that the scope of the class of "all others authorised by the Landlord" may at least in some circumstances be restricted to such authorisation as is compatible with the preamble and proviso to Part IV.

The factual situation in general

[19] Before addressing other aspects of interpretation of the Lease it is appropriate to describe in more detail the factual situation against which the present dispute arises. The Specification which comprises Part IX of the Schedule makes provision among other things for the carrying out by the Tenant of works related to car parking. The format of the Specification suggests that it has been incorporated into the Lease from some other (earlier) agreement. It provides for the dimensions of car parking bays and for the delineation of these and of other traffic signage; provision is also made for the substructures and topping of car parking areas. No reference is there made to the Tenant's Car Park as such. It is not easy to reconcile these provisions either with the plan annexed to the Lease or with the physical arrangements presently on the ground. The plan annexed to the Lease shows the Tenant's Car Park without any defined configuration of car parking arrangements but with substantially the whole balance of the Car Park laid out in a semi-circular pattern with its straight side running along the front of most of the retail units other than the superstore. On the ground as at 2000 the car parking arrangements in the balance of the Car Park appear at least in some respects to be similar to those on the Lease plan; but as at that date the Tenant's Car Park was also laid out for car parking. The current arrangement appears broadly to extend the semi-circular pattern into the Tenant's Car Park. At the farthest point of the extension the curved lines become almost straight. The practical result of this arrangement is that in the immediate vicinity of the Tesco superstore the traffic aisles in the Tenant's Car Park run at almost right angles to the front of that store. This allows a customer coming out of its front door (and possibly having first walked some distance along the face of the store) to wheel his or her shopping trolley up a directly opposite aisle to his or her parked car. This is generally perceived as an advantage over arrangements which involve different alignments of traffic aisles.

[20] The proposals involving the Big W store envisage its construction abutting the northern boundary of the existing Park. The store building, as planned, will extend substantially towards the north-west corner of the Park, though the part closest to that corner is proposed to be used as a service yard and for staff parking. The pursuers' original proposal was that the entrance/exit for customers to the Big W store would be approximately in a central position along its southern face, that is the face abutting the Park. A revision to the proposals depicts that entrance/exit moved some distance to the east, that is, farther from the north-west corner close to which lies the Tesco superstore. The proposals also include realignment of the present parking arrangements within the Car Park (including the Tenant's Car Park). Such realignment includes the parking aisles running at right angles to the front of the Big W store. Under the reconfiguration (as proposed) of the Car Park the number of car parking spaces would be increased. Ignoring dedicated parking for the fast food outlet at the south-east corner (which lies outwith the Car Park), the existing configuration provides for 907 customer spaces in the Car Park (including the Tenant's Car Park) and 27 spaces for staff. Under the proposals (in their final form) 1,085 customers and 87 staff spaces would be provided in the Car Park (including the Tenant's Car Park). The size of individual spaces would be marginally reduced. Changes are also proposed to the arrangements for circulation of vehicles in the Car Park, for pedestrian walkways, for the location of shopping trolley bays and for a number of other matters.

[21] Those proposed changes potentially affect customers of the Tesco superstore. At present the car parking facilities in the Park are substantially under-utilised. Consequentially car-borne customers of the Tesco superstore are in general able to park without difficulty in the immediate vicinity of the front of that store and to proceed to and from their cars along aisles which are conveniently orientated for that purpose. (The general arrangement is unusual and it is far from certain that it was designed with that specific purpose in mind.) The area in which such customers generally park is within the Tenant's Car Park. If the pursuers' proposals are implemented the orientation of the aisles will to some extent be less convenient for those customers. There is also likely to be introduced some measure of competition for the most convenient car parking spaces between customers of the Tesco superstore on the one hand and customers of the Big W store on the other. Such competition is likely to be the most intense in the north-west corner of the Car Park (being an area within the Tenant's Car Park). Although some elements of the pursuers' proposals may involve physical construction in the Tenant's Car Park (such as the creation of marginally elevated pedestrian routes), most will not do so. Markings on the surface of the Tenant's Car Park (laying out of the parking bays, aisles etc) will, however, have practical consequences. There is also likely by reason of the reconfiguration and of the introduction of Big W customers, to be an intensification of use for car parking purposes of the surface area of the Tenant's Car Park.

[22] The current under-utilisation of the car parking facilities in the Car Park is, to some extent at least, a reflection of the present state of its commercial health. In the three years following its opening for trade in 1994 the Park appears to have prospered; but thereafter its performance declined. In 1998 the unit until then occupied by Homebase was vacated by it. That unit has remained vacant, though an assignation has very recently been granted to Matalan. Poor performance by the remaining non-food occupiers has been reflected in difficulties in assigning leases and in poor growth in rental values. Both in terms of rental income and of capital growth the Park has in recent years performed poorly as an investment. The pursuers have been attracted by the prospect of a Big W development on the Town Park Site (with car parking for it within the existing Park) as they perceive that such a development will provide a stimulus to improved trading within the Park, attracting as it is expected to do a significant number of customers who are also likely to find it convenient to shop at existing units within the Park.

[23] With the exception of Tesco the Big W proposal is welcomed by the current occupiers of those existing units. They, being somewhat farther than Tesco from the proposed new store, are likely to be less directly affected by the proposed alterations to the car parking and the related arrangements. The current occupiers of one of those units (unit 6) is the Comet Group plc. At present the Comet store in the Park is close to the poorest performing Comet store in the United Kingdom. Its property manager, Mr Richard Beemer, gave evidence (which I accept) that, notwithstanding that the Big W store if realised is expected to sell some goods in competition with those sold by Comet, his company having regard to the number of customers Big W would be likely to attract to the Park would welcome its arrival. He stated that for similar reasons the arrival of Big W would be in the interests of all the tenants of the Park. He acknowledged that he was not in a position to speak for any special interest of Tesco. I shall return in due course to consider the specific concerns expressed by Tesco but, subject to that, my provisional conclusion is that the arrival of Big W, although it would involve the alteration of the Car Park (including the Tenant's Car Park) to allow for car parking by its customers, would be for the benefit of the tenants of the Development as a whole and would be in the interests of good estate management.

The relative correspondence

[24] Before reaching a final conclusion on the effect of the proviso to Part IV, it is appropriate to consider the defenders' response to the pursuers' agents' letter of 26 June 2000 and their attitude otherwise to what was then proposed. By letter dated 28 June Mr Hunter responded by first explaining some of the background, including Tesco's general strategy for Coatbridge and its attitude towards MacDonald Estates plc. The letter included the following paragraphs:

"Tesco's Preferred Development Route

I have enclosed a copy of a plan which indicates a re-developed Tesco store to provide our ideal size together with a petrol filling station. This store would be badged as a Tesco Extra and our experience of developing such stores suggests that it would draw from a fairly wide area and we would expect this to have a positive effect on the retail park. Clearly, Tesco could not deliver this development without the co-operation of Legal & General and we had anticipated discussing the opportunity with you when the position on the Town Park site became clearer. We are fairly flexible in relation to the current store. This could be surrendered back to Legal & General for car parking following demolition or sub-divided. Other more interesting development opportunities may also exist involving the current Homebase unit.

Your Letter of 26 June

From your letter of 26 June, it seems that you view the possibility of a Big W on the Town Park site as your preferred development route. It is pleasing to note that you have not yet entered into a contractual position with McDonald Estates and that there is therefore still scope to consider an alternative option.

For the record, I should advise that Tesco would not be supportive of the Legal & General/McDonald Estates proposal and would indeed strongly oppose the proposals through all legal and planning routes available. The impact on car parking numbers, configuration and conflicts which would arise are the key concerns. If ultimately you succeeded in your development plans, I think it is reasonable to anticipate that Tesco would have secured a site elsewhere and closed the unit for sub-division or sale."

The enclosed plan depicted a Tesco store built on the Town Park Site with parking provision for it on the Car Park.

[25] By letter of 30 June Ms Stacey replied expressing her disappointment at the defenders' attitude towards the proposals. After responding to certain of the matters raised in Mr Hunter's letter she stated that the pursuers' strategy remained as expressed in her earlier letter. She indicated that a meeting might be beneficial.

[26] Meantime correspondence had been passing between Scottish solicitors acting for the parties. On 28 June Messrs Dundas & Wilson, solicitors for the pursuers, wrote formally to "Tesco Stores Limited/Wm. Low Supermarkets Limited" under reference to the Lease and apparently enclosing a plan with two detailed drawings (these latter documents were not before me). They stated after certain introductory remarks -

"We refer to the rights reserved to the Landlords in terms of Part IV of the Schedule to the Lease and the Re-development provisions in Part VIII of the Schedule to the Lease and seek your consent to the proposed redevelopment to the extent required under the Lease."

A response was sought within 14 days. A copy of this letter was apparently sent to Ms Stacey, to the relevant partner in Messrs Semple Fraser and to Mr Hunter.

[27] By letter dated 11 July the relevant partner of Messrs Semple Fraser, the solicitors for the defenders, under reference to earlier communings wrote to the relevant partner of Messrs Dundas & Wilson in relation to the pursuers' proposals. After a narrative the author expressed the defenders' concerns as follows:

"My clients do have concerns with the proposals:
    • They state that there is only sufficient parking at present to serve the existing retail park, and for a store size of 85,000 square feet the addition of 100 new spaces does not offer sufficient additional parking, indeed falls far short of this. It would of course be different if for example my clients (or indeed another tenant) had vacated their unit which freed up significant further space for new parking - but this does not appear to be the case.
    • They are concerned that the reconfigured car park will work to their detriment, by concentrating all parking for their store and the new unit in the one area, so resulting in their customers potentially being unable to find suitable parking. From their perspective adequate parking within close proximity to their store is key to its success.
    • They believe that the new unit, the direction for customer parking and the positioning of the service yard serving the new unit will result in traffic congestion.
    • The positioning of the new unit may well have an adverse impact on the visibility of the Tesco store, and its prominence within the retail park."

After discussion of various legal issues the letter continued:

"Equally whilst your clients have the right to alter the layout of the car park, again the lease has an over-riding proviso to the effect that Tesco's consent is required to any variation to their car parking area. Tesco are not, based on the proposals seen to date, willing to grant consent to such a variation, and believe, for the reasons detailed above, that they are acting reasonably in this regard."

Later it was stated:

"Obviously we can discuss the above in more detail, and these are our preliminary views, but for the meantime could you please advise your clients that my clients do indeed have concerns for the reasons stated and as such are not in a position at present to grant consent to the proposals."

This letter was copied to Mr Hunter on whose instructions it had been written. In the event, despite further discussion and the tabling of certain modifications by the pursuers to the proposals, the defenders have maintained the attitude expressed in this letter and in Mr Hunter's letter of 28 June.

The issue of consent

[28] An important issue in this case is whether the Tenant (technically Wm. Low Supermarkets Limited) has unreasonably withheld consent within the meaning of Clause 7.4.4 (set forth earlier in this Opinion). The first conclusion of the summons seeks declarator that the Tenant in terms of that clause has unreasonably withheld consent "to the alteration of the Tenant's Car Park, as defined in the Lease which forms part of the development proposal shown on the site layout plan with number 9860 (PL) 001 Rev. H, which is produced". Parties are agreed that the relevant decision-maker was Mr Hunter and that the critical decision was made by him personally after receiving Ms Stacey's letter of 26 June. There is a measure of dispute as to whether that decision was taken immediately (so that the relevant refusal of consent is to be found in Mr Hunter's own letter of 28 June) or after further consideration (with the relevant refusal in Messrs Semple Fraser's letter of 11 July instructed by him). But it is not disputed that the relevant decision was taken and expressed in June/July 2000 notwithstanding that Revision H, which shows the entrance to the proposed Big W store in a revised location, was not issued until several months later. That timing is in the event unimportant because, although the revisal was an attempt to improve matters for the Tenant, Mr Hunter's attitude was not altered by it (or by any other change made after July 2000). Accordingly, for the purposes of Clause 7.4.4 the essence of the Landlord's proposals is to be found in the plan attached to Ms Stacey's letter of 26 June.

[29] Some difficulty of analysis is presented by the circumstance that Ms Stacey's letter does not formally seek any consent by the Tenant and that there is no express reference in it to Clause 7.4.4. But the formal request was made contemporaneously by Messrs Dundas & Wilson's letter (apparently copied to Mr Hunter among others) and it is reasonably clear on the evidence that, when he took the relevant decision, Mr Hunter knew that the Lease contained Clause 7.4.4 (or at least that it contained a clause of equivalent effect). It is also clear that he took the decision without first instructing any traffic analysis or carrying out any detailed enquiries (from the current Tesco manager at the Park or otherwise). He took the decision on his own authority as Senior Development Executive and against his general familiarity with the Park and its environment and with Tesco's business policies. I am satisfied that he had taken that decision on commercial grounds substantively by the time he replied on 28 June to Ms Stacey's letter. That decision, albeit formulated in some respects in different terms, was reiterated in Messrs Semple Fraser's letter of 11 July.

The relevant law

[30] There was no serious issue between counsel as to the relevant law. While much of this has been developed in the context of the withholding of consent by a landlord to a proposed assignation (anglice, assignment) by a tenant of its lease, it was accepted that the same principles applied to the withholding by the Tenant of consent to measures by the Landlord in relation to the Tenant's Car Park of the kind referred to in Clause 7.4.4. In International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] 1 Ch 513 Balcombe L.J. (with whom the other members of the court agreed) identified at pps.519-20 a number of propositions of law applicable to the withholding of consent to assignment. These included that "a landlord is not entitled to refuse his consent to an assignment on grounds which have nothing whatever to do with the relationship of landlord and tenant in regard to the subject matter of the lease" (that is, a refusal for a collateral purpose is bad), that "the onus of proving that consent has been unreasonably withheld is on the tenant" (this principle has, it seems, subsequently been changed in England by statute in relation to withholding of consent to assignment of leases) and that "it is not necessary for the landlord to prove that the conclusions which led him to refuse consent were justified, if they were conclusions which might be reached by a reasonable man in the circumstances". These propositions were regarded by Balcombe L.J. as well settled. He also concluded, after considering some divergent streams of authority, that a proper reconciliation of these could be achieved by saying that "while a landlord need usually only consider his own relevant interests, there may be cases where there is such a disproportion between the benefit to the landlord and the detriment to the tenant if the landlord withholds his consent to an assignment that it is unreasonable for the landlord to refuse consent." Subject to these (and to certain other propositions which are for present purposes irrelevant) Balcombe L.J. considered that "it is in each case a question of fact, depending upon all the circumstances, whether the landlord's consent to an assignment is being unreasonably withheld". These propositions mutatis mutandis are potentially relevant to the present case.

[31] It is also clear that a collateral reason need not be a disingenuous reason; it is equally collateral if it is a reason which is extraneous to the intention of the parties when the lease was entered into (Bromley Park Garden Estates Ltd v Moss [1982] 1 W.L.R. 1019, per Cumming-Bruce L.J. at p.1031). Thus, questions of interpretation (including the scope) of the relative provision may arise. The same case vouches the proposition that the only reasons for refusal which are relevant to the issue of the unreasonable holding of consent are those which influenced the decision-maker at the time when he made the relative decision. Subsequent considerations, however cogent, are irrelevant. Reference was also made to Jaison Property Development Co Ltd v Roux Restaurants Ltd [1996] 74 P. & C.R. 357.

[32] Scottish authority also confirms that collateral reasons (including reasons outwith the intendment of the lease) are bad and cannot found reasonable withholding of consent (Renfrew District Council v A.B. Leisure (Renfrew) Ltd 1988 S.L.T. 635; Scottish Tourist Board v Deanpark Ltd 1998 S.L.T. 1121). In the latter case Lord Penrose (at p.1127D) also expressed the view that the relevant state of knowledge is that existing when the attitude of the potential consentor is evinced.

[33] Where more than one reason is advanced for refusing consent, a question may arise as to the legal consequences when one or more of those reasons are bad but one or more are good. In British Bakeries (Midlands) Ltd v Michael Testler & Co Ltd [1986] 1 EGLR 64 Peter Gibson J. found that one of two reasons advanced at the hearing had not been a reason which had affected the mind of the landlord when consent was refused. It was also on legal grounds a bad reason. However, the landlord at the time of refusing consent had given another reason which, having considered the evidence, Peter Gibson J. held to have been a good reason. He also held that it was a real (genuine) reason for refusing consent. In these circumstances he held that the landlord was not acting unreasonably and that the reason he had given was not vitiated by the bad reason subsequently advanced.

[34] In BRS Northern Ltd v Templeheights Ltd [1998] 2 EGLR 182 three grounds for withholding consent were advanced. Two of these were held to have been reasonable. The third was bad for two reasons, first, because it was not in the landlord's mind at any relevant time and, secondly, because it was bad in law. Having considered various English authorities (some of the ex facie conflicting) Neuberger J. (at pps.192-3) said:

"In my judgment where, as here, a refusal of consent to an assignment is based on a number of reasons, the fact that one of those reasons is bad will not normally render the refusal unreasonable, assuming that the other reasons are good. As the observation in [Berenyi v Watford Borough Council [1980] 2 EGLR 38] and British Bakeries suggests, it seems to me that, ultimately, it is a question of considering the covenant and the refusal of consent in each case. Thus, it may be clear that the bad reason is by far the most important reason, and that the purportedly good reasons were merely makeweights; or it may be that the existence of the bad reason infects or vitiates what would otherwise, in the absence of the bad reason, be a good reason. However, in the absence of such special factors, I consider that what was agreed in British Bakeries... represents, at any rate prior to 1988, the law in relation to most covenants not to do something without landlords' consent, such consent not to be unreasonably withheld...".

(The reference to 1988 is to the (English) Landlord and Tenant Act of that year; his Lordship later opined that the law on that aspect had not been altered by the 1988 Act). Albeit this may be a controversial area, both counsel before me were content to accept Neuberger J.'s views as applicable to the present case. Neuberger J. towards the end of his judgment also addressed the matter of the balance of hardship, the contention being that the disadvantage to the tenant of the landlord's refusal of consent was so disproportionate to the disadvantage to the landlord if it granted consent that it was nonetheless unreasonable for the landlord to refuse consent (effectively a contention based on the proposition relative to disproportionality formulated by Balcombe L.J. in International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd.). Neuberger J., while not doubting the principle, rejected that contention on the facts of that case. In this general context reference was also made by Mr Keen to certain observations made by Lord Penrose in his unreported Opinion in Taylor Woodrow Property Co Ltd v Strathclyde Regional Council (15 December 1995) where his Lordship was considering the effect of a repairing clause in a lease "all to the satisfaction of the Landlords". At pps.14-15 his Lordship, after reference to a number of authorities, said:

"The question for enquiry therefore is whether in stipulating for repair of any item the landlords acted reasonably in defining the scope of the work required, having regard inter alia to their own interests as owners of the building, and the fact that the position of the obligant is that of tenant under a lease of the premises."

Some regard to the position of the other party if the consent were refused was accordingly required of the potential consentor. It is, however, as Lord Clyde emphasised in parallel circumstances in Gordon District Council v Wimpey Homes Holdings Ltd 1989 S.L.T. 141 at p.143, the Tenant's decision and not that of anyone else which is in issue. The relevant question is whether the decision to refuse consent was a reasonable one for the Tenant to take.

Initial analysis of the proposal and the response

[35] In the course of the proof I heard evidence from expert witnesses on either side in relation to traffic and to planning matters. That evidence was of assistance in a number of respects including setting the commercial context in which the relevant issues fell to be addressed. But the critical issue on this aspect of the case turns on an analysis of the character of the proposals put on behalf of the Landlord to Mr Hunter and the grounds on which Mr Hunter refused on behalf of the Tenant to give consent to their implementation. The proposals, as described and depicted in Ms Stacey's letter of 26 June and attached plan, may be summarised as follows. They included the development of the Town Park Site by building on it a non-food retail unit of 85,000 square feet to be occupied as a Big W store, the intention being effectively to incorporate that store into the Faraday Retail Park by making provision for its customers (and staff) to park their cars in the Car Park (including the Tenant's Car Park); the plan envisaged a change in the car parking arrangements as delineated on the ground in bays and aisles, a feature being that the aisles were under the proposals to be orientated towards the Big W store; under the proposed arrangements it was implicit that, once Big W began to trade, there would be a material increase in the number of cars seeking to park in the Car Park (including the Tenant's Car Park); the physical relationship between the Tesco superstore and the proposed Big W store also implicitly gave rise to the prospect of some competition between Tesco customers and Big W customers in the Tenant's Car Park for the most convenient car parking spaces.

[36] Mr Hunter's response of 28 June included the critical sentence:

"The impact on car parking numbers, configuration and the conflicts which would arise are the key concerns."

Mr Keen contended that, on a proper analysis of the evidence, those concerns were not genuinely held by Mr Hunter, his motivation in refusing consent being to keep open the possibility, in the event of the pursuers' proposals being incapable of implementation, of securing the Town Park Site for development on it of a new Tesco superstore. I shall return to that contention.

[37] The concerns expressed by Messrs Semple Fraser on behalf of their clients have already been set out. The last of the bullet points (the suggested impact on the visibility of the Tesco store and its prominence within the retail park) may be left aside. It was not pursued in the proof before me. The other bullet points may be summarised as (1) insufficiency of parking provision, (2) reconfiguration of the Car Park to the detriment of the Tesco store by concentrating all parking for it and for the new store in one area with resultant competition for spaces and (3) various elements of the proposals leading to traffic congestion.

[38] There are some common features between Mr Hunter's expressed "key concerns" and the concerns expressed by Messrs Semple Fraser (such as total numbers of car parking provision and the reconfiguration leading to conflicts between customers for spaces in the areas immediately adjacent to the two stores); there are also possible discrepancies (while Mr Hunter refers to "conflicts", he does not refer, at least expressly, to traffic congestion - a matter which did not feature significantly in Mr Currie's submission to me). It is noticeable also that, while Messrs Semple Fraser refer to "the direction for customer parking", that is in the context of traffic congestion. Neither letter refers expressly to the reorientation of aisles as being a material consideration in respect of customer preference on emerging from a store exit to proceed directly forward up an aisle (that is, perpendicularly to the front of the store).

[39] In explaining in evidence his immediate reaction to Ms Stacey's letter Mr Hunter testified that what struck him was (1) that the proposal in relation to overall car parking provision in the Car Park (applying a standard of one car parking space for each 20 square metres of non-food unit, being half Tesco's current standard for a food unit of one car parking space per 10 square metres) indicated a significant shortfall in provision for the Big W unit, (2) that the relationship of the Tesco superstore and the Big W unit indicated a "pinch" for parking in the general area between them and (3) the configuration (of aisles) towards the Big W unit rather than towards the Tesco store.

Further conclusions on interpretation of the Lease

[40] A preliminary question on this aspect of the case is, in my view, whether and if so to what extent the pursuers' proposals involved the proposed exercise of a power reserved to the Landlord under paragraph 10 of Part IV or under paragraph 8 of that Part as read with Part VIII. In my view they involved an element of each. I accept Mr Currie's submission (made in the particular context of Clause 7.4.4) that the tenant in a lease of this kind and duration has a continuing right reasonably to withhold consent to changes proposed to be made by the landlord from the state of affairs existing at the time when consent is sought. Thus, it is in the present context irrelevant to consider the state of the car parking arrangements as they may have existed at the outset of the Lease or at any other time prior to June 2000 or who may or may not have dictated them at any such time. At the relevant time the Car Park (including the Tenant's Car Park) was laid out, as regards parking bays and aisles, in the semi-circular fashion earlier described. The Car Park (including the Tenant's Car Park) was also at that time used only for the purpose of serving units constructed within the geographical boundaries of the Development. The pursuers' proposal involved, in my view, an alteration or departure from the layout of the Car Park by reconfiguring the orientation and shape of the aisles. An alteration or departure within the meaning of paragraph 10 of Part IV is not restricted, in my view, to structural changes such as the introduction or variation of three-dimensional features; the painting of a different pattern of aisles and bays, in my view, suffices. (This is in effect a matter of agreement in the pleadings.) Similarly, the undertaking by the Landlord under Clause 7.4.4, which is referred to in paragraph 10, not to vary or alter the Tenant's Car Park extends, in my view, to variation or alteration by introducing a different pattern of aisles and bays. I reject Mr Keen's submission that something more "physical" would be required. However, I am satisfied in the whole circumstances (including those discussed hereafter) that in deciding to alter the Car Park the Landlord acted reasonably within the meaning of paragraph 10. Moreover, there was, in my view, a proposed redevelopment of the Development by a change of use of the Car Park (including the Tenant's Car Park) from use only by the occupiers (and their customers) of units within the Development to use also by the prospective Big W unit and its customers; the potential impact of the arrival of customers of a unit of the size of the proposed Big W store clearly rendered that change of use material.

[41] Insofar as such changes might take place on that part of the Car Park outwith the Tenant's Car Park, the Landlord did not require, in my view, the consent of the Tenant, though those changes would require to be consistent with the preamble and proviso to Part IV. Insofar as they might take place within the Tenant's Car Park a question arises as to the construction and application of Clause 7.4.4. But before expressing any views on that matter I regard it as appropriate to return to consider Mr Keen's contention that the concerns expressed by Mr Hunter, when he in effect refused consent, were not genuinely held by him.

Analysis of the stated grounds for refusal of consent

[42] In addressing this contention it is necessary to consider events prior to June 2000. For some time Tesco had been considering its business strategy in relation to food retailing in the Coatbridge area. It initially contemplated the replacement of its superstore in Faraday Retail Park by a new superstore on a freehold site some distance away from the centre of Coatbridge. Although the Town Park Site was made available for sale by the local authority, its situation did not meet that strategy. However, planning obstacles ultimately made the realisation of an out of centre development difficult to achieve. Tesco also required to give consideration to the implications for its trade in Coatbridge of the acquisition of Asda (a competitor of Tesco with a large store in Coatbridge town centre) by Walmart. In these circumstances Tesco, having considered a number of options, including a possible extension of its existing superstore, turned its attention to the feasibility of the development of a new superstore on the Town Park Site. A feasibility study for a "Format 60" store (that is one with a 60,000 square foot net sales area - about 85,000 square foot gross) on that site was instructed from the Parr Partnership by Mr Hunter. The proposed layout envisaged customer car parking principally on the Car Park within Faraday Retail Park. A revision to take into account the need to avoid construction on a part of the Town Park Site devoted to a Japanese garden envisaged such car parking wholly on the Car Park. The earlier version envisaged that the Car Park would accommodate 1,184 car parking spaces of which 600 would effectively be dedicated to use by Tesco customers. The figures on the revised version were respectively 1,099 and 558. Those proposals had been formulated by the early months of 2000. Each of them contemplated that an even larger Tesco store (Format 80) might be built on the Town Park Site.

[43] In March 2000 Mr Hunter was in communication with a Mr Weir of MacDonald Estates plc. The latter company had in 1998 entered into conditional missives with North Lanarkshire Council for the purchase from it of the Town Park Site. Those missives remained conditional as at March 2000 (and still remained so at the date of the proof). Mr Hunter did not know whether there was a contractual relationship between MacDonald Estates plc and the proprietors of the Town Park Site but was for commercial reasons interested in discovering, if he could, whether there was. In response to an approach by Mr Weir, Mr Hunter responded by letter of 9 March 2000 enclosing the earlier version of the Format 60 layout which he described as "a configuration which would be acceptable to Tesco".

[44] Matters appear not to have been taken further between Tesco and MacDonald Estates plc but the Format 60 proposal (in its revised version) re-emerged in Mr Hunter's response to Ms Stacey's letter of 26 June. Mr Hunter attached a copy of the revised version to his letter of 28 June. This proposal was described by Mr Hunter in that letter as "Tesco's Preferred Development Route". It is plain from this letter (and from Mr Hunter's evidence) that what he wished to achieve, in conjunction with the pursuers, was the development of the Town Park Site as a Tesco superstore with car parking on the Car Park within the existing Faraday Retail Park. For financial reasons he wished, by this stage at least, to exclude MacDonald Estates plc from any benefit from such a development. However, when very shortly thereafter MacDonald Estates plc lodged its planning application for the Town Park Site, Tesco did not lodge any objection to it. This was consistent with preserving "Tesco's Preferred Development Route" since, if realisation of any planning permission obtained by MacDonald Estates plc was (due to the Tenant's refusal to give any necessary consent or otherwise) not achieved, a planning permission for retail development would nonetheless enhance Tesco's prospects of obtaining a planning permission requisite for its purposes. Tesco's (and Mr Hunter's) attitude towards the planning application can properly be backdated to at least the latter part of June 2000 when Ms Stacey advised that such an application was impending.

[45] It is thus clear that at the time when Mr Hunter refused on the Tenant's behalf consent to the proposals put forward by Ms Stacey, he had an interest in the matter not confined to that of Wm. Low Supermarket Limited as Tenant of the Premises. It is in that context that it is appropriate to consider whether the refusal of consent was truly for a collateral reason. The first reason given for refusal was in substance that the overall provision for car parking was inadequate to accommodate the introduction of the Big W store. In my view that reason is difficult, if not impossible, to maintain having regard to what was envisaged by Mr Hunter as appropriate for car parking as depicted in the Parr Partnership plans. While it is true that these envisaged part of the provision as being effectively dedicated to Tesco customers (though no physical exclusion appears to have been planned), in terms of overall numbers the provision proposed was very close to that regarded as acceptable by Mr Hunter in terms of the Parr Partnership layouts. There are undoubtedly differences - the latter do not appear to envisage any mezzanine floor while, on the other hand, the former was a food retail unit with a significantly greater need for car parking spaces. But Mr Hunter's testimony in evidence-in-chief that his reaction to Ms Stacey's letter was that the introduction of a Big W store would require the provision of an additional 425 car parking spaces (rather than the 100 then proposed) was substantially departed from under cross-examination. While such suggested shortfall might be arrived at if calculated under reference to the standard which Tesco currently adopted for new freehold sites, in light of what was regarded by Mr Hunter as acceptable within the restraints of Faraday Retail Park and the Town Park Site I am unable to accept that in June/July 2000 he seriously considered that the proposals involved a relevant under-provision of the order initially suggested by him in evidence. His position may also be tested against such standards as might ordinarily have been regarded as acceptable in planning and commercial terms. It is clear that the local planning authority had regard to the adequacy of car parking provision when considering the application by MacDonald Estates plc and that its relevant official was satisfied on that matter. While there was a divergence of opinion between the traffic experts adduced by the parties to this action, I am satisfied that, taking into account local circumstances and bearing in mind that the reoccupation by Matalan of one of the existing retail units will itself increase the car parking requirement from that at present, the provision can reasonably be considered as adequate for at least the foreseeable future. Tested against that conclusion, Mr Hunter's unparticularised assertion (reiterated by Messrs Semple Fraser) that the impact of car parking numbers was one of "the key concerns" must be regarded as very dubious, even when viewed from Tesco's perspective and in the longer term.

[46] Similar doubts arise in relation to another of the grounds advanced at the time for opposition to the proposals. "Configuration" (without elaboration) was referred to by Mr Hunter but, insofar as that might relate to the alignment of aisles and bays, this emerges in Messrs Semple Fraser's letter of 11 July as "the direction for customer parking" as being a factor which "will result in traffic congestion". Although the realignment of aisles is clearly depicted in the plan attached to Ms Stacey's letter, no express reference is made in any contemporary document to any serious concern about perpendicularity of aisles to the store front.

[47] The remaining element (the potential competition for car parking spaces in the part of the Car Park adjacent to both stores) was capable of being a proper concern. Convenient car parking provision for customers is an important consideration for large scale food retailers such as Tesco. The prospective location of the Big W store relative to the Tesco superstore was and is likely to give rise to competition for the most convenient spaces. But it is necessary to view that stated concern in the context of the other purported concerns and against the whole background circumstances. Mr Hunter's response to Ms Stacey was that Tesco "would indeed strongly oppose the proposals through all legal and planning routes available". That firm statement of intention was made against Tesco having a "preferred option" that the Town Park Site be secured for its own development purposes. The furtherance of that option was unrelated to the position of Wm. Low Supermarkets Limited as Tenant. Mr Hunter had, however, been closely involved in exploring the feasibility of that option and had hoped to be in a position to present it to Tesco's board as a realisable opportunity. That hope would be dashed if the Legal & General/MacDonald Estates proposals were realised. The responsibility for responding to a request for consent under Clause 7.4.4 properly lay with Tesco's Property Department, a division of the Assets & Estates Management Department. The relevant executive was in June/July 2000 on maternity leave. Mr Hunter, being in overall charge, took personal responsibility for determining Tesco's decision on the request for consent. He did so in effect immediately and without first consulting solicitors or others. There was no distancing of the decision of the Tenant from the interest in securing the preferred option. Mr Hunter's decision to refuse consent was, I am satisfied, in these circumstances essentially motivated by his wish not to lose the development opportunity which he had identified. I am unable to accept his denial in evidence that this was the real reason for his decision. While a concern about competition among shoppers for convenient car parking could, if independently entertained from the stand-point of the Tenant (and subject to questions of proportionality and the like), have constituted a valid ground for refusal, the fact that it was advanced in association with untenable grounds tends to suggest that it was not truly a motivating consideration. The statement that Tesco "would indeed strongly oppose the proposals through all legal and planning routes" is also in its context telling. I find it unnecessary, however, in this connection to rely on a conversation in January 2001 between Mr Robertson of MacDonald Estates plc and an employee of Tesco when, in the context of a possible compromise, an alternative solution was discussed. In the whole circumstances I conclude that the pursuers have proved that the Tenant's refusal was motivated by the collateral factor of its desire to keep open the preferred option. It was for that reason bad.

Interpretation of Clause 7.4.4

[48] Having decided this issue on that ground it is unnecessary to consider whether on purely legal grounds the reasons for the decision were collateral and thus unreasonable. A question of interpretation arises as to whether what was proposed, insofar as it concerned the Tenant's Car Park, would infringe the Landlord's undertaking not without consent "to amend, vary, alter or extend the Tenant's Car Park in any way" within the meaning of Clause 7.4.4. While the proposed alteration to the configuration (by the alternative layout of aisles and bays) would, in my view, come within the scope of that phrase, I doubt whether intensification of use and the prospect of competition for preferred spaces would. The quoted expression appears to contemplate something being done to the Tenant's Car Park rather than merely circumstances which may affect its use. It is relevant in this context to take into account that the Tenant under the Lease has no exclusive right of car parking in the Tenant's Car Park; and that, where matters affecting use are dealt with, an express reference to use is generally made (as in Clause 7.4.1 and paragraph 7 of Part IV of the Schedule).

Conclusion on the proviso to Part IV

[49] I now return to the proviso to Part IV of the Schedule. There is no real doubt on the evidence that, viewed from the position of the tenants of the Development as a whole, the carrying out of the proposals would be for their benefit. I have already stated why, looked at from the point of view of the members of that class other than the Tenant, that is so. Including the Tenant and viewing the matter again, I am satisfied that, although in respect of the Tenant alone there are both negative and positive factors, the proposals would be for the benefit of the Tenants of the Development as a whole. Even if, which I doubt, it is appropriate for the purposes of the proviso to consider the alteration to the Car Park in isolation from the building of the Big W store, it is by virtue of the additional customers using the Car Park that extra custom will be brought to the existing units and that this redevelopment will enure to their benefit as a whole. The proposals would also, for the reasons already stated, be in the interests of good estate management. It is not suggested that the manner in which the proposals would be carried out would infringe the preamble to Part IV.

Separate grounds of judgement

[50] Separately I am satisfied that the refusal of consent was on other grounds unreasonable. It is necessary in this context to bear in mind, as I do, that the relevant decision was one for the Tenant to make. It was entitled in making it to have regard to its own interests as Tenant. But it was not entitled to leave out of account the interests of others likely to be affected directly by its decision - in particular, the Landlord and the other tenants of the Park. The first question is whether it was unreasonable for a person in the position of the Tenant and having due regard to those different interests to refuse consent. A related, though apparently separate, question is whether the detriment to the Landlord and the other tenants consequential on a refusal was so disproportionate to any disadvantage to the Tenant as such on a grant that it was unreasonable for the Tenant to refuse consent. In my view both questions fall to be answered in the affirmative. While there might be legitimate concerns for the Tenant (such as competition for convenient parking and the hostility of some shoppers to any change), these pale into insignificance when viewed against the substantial advantages (and alleviation of detriment) likely to accrue to the Landlord and the tenants (including the Tenant itself) from the extra business likely to be bought by the Big W store.

[51] I should add that in the course of the expert evidence adduced some further possible disadvantages of the pursuers' proposals were referred to. I do not regard these as relevant to the main ground of judgement since they were not matters in the mind of the decision-maker at the relevant time. In any event, they can at best be regarded in all the circumstances as makeweights.

Remedies

[52] I turn now to the matter of remedies. Mr Currie submitted in limine that difficulties were presented to granting declarator in terms of the first conclusion because the alteration to the Tenant's Car Park had not been sufficiently addressed and because it was not clear whether the pursuers were undertaking to carry through certain aspects of what had relatively recently been indicated as part of their proposals (particularly arrangements for shepherding Big W customers to a part of the Tenant's Car Park remote from the Tesco superstore). In my view any such difficulties are not sufficient to render it either incompetent or inappropriate for me, having reached the views which I have, to grant decree in terms of that conclusion. Although it refers in terms to a revision prepared some months after June/July 2000, parties to this action have essentially joined issue on whether the response by Mr Hunter (or by Messrs Semple Fraser) at that time was an unreasonable withholding of consent. There is no doubt but that the changes made since then have been designed to ameliorate the position as regards the Tenant and, in so far as they go, in fact do so. If consent was unreasonably withheld in June/July 2000, it would a fortiori be unreasonably withheld to the pursuers' proposals insofar as since revised. It is not in these circumstances for the court, as a pre-condition of granting decree of declarator, to require of the pursuers an undertaking that they will implement the shepherding or similar ameliorations - though the pursuers may be prepared to give to the defenders such an undertaking.

[53] Mr Currie also submitted that the second conclusion was too widely framed. In particular, it might be construed as a declarator that the pursuers had a wholly unrestricted right in terms of the preamble to Part III of the Schedule to proceed with their proposals. Mr Keen indeed made a submission to that effect. I have considered and rejected that particular submission. I have, however, on the basis explained in this Opinion held that the pursuers are entitled to do the things referred to in the second conclusion. That is sufficient, in my view, to warrant decree being granted in terms thereof.

Disposal

[54] In the whole circumstances I shall repel the defenders' whole pleas-in-law, sustain the pursuers' first and second pleas-in-law and grant decree in terms of the first and second conclusions of the summons.

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