Scottish Court of Session Decisions

Scottish Youth Theatre Pty. Ltd v. Anderson & [2002] ScotCS 94 (4th April, 2002)

OUTER HOUSE, COURT OF SESSION
	OPINION OF LORD CLARKE in the cause THE SCOTTISH YOUTH THEATRE (PROPERTY) LIMITED Pursuers; against JOHN NEILL ANDERSON AND OTHERS Defenders:   ________________

Pursuers: Glennie, Q.C.; McClure Naismith

Defenders: Dean of Faculty, Young; MacRoberts

4 April 2002

1. In this commercial action, the pursuers, the Scottish Youth Theatre (Property) Limited seek certain declarators and interdict against the defenders, who are the trustees of the Royal Scottish Academy of Music and Drama Endowment Trust.

Background to the Dispute

2. The action relates to an agreement entered into between the parties, (No. 6/2 of process) regarding the purchase of heritable subjects at Dunblane Street, Glasgow. The mechanics of the purchase were that the defenders, would, in the first place, purchase the whole of the subjects from the then owners and, thereafter, sell a part thereof to the pursuers. The context in which the agreement was entered into was that the defenders wished to construct student accommodation on this particular site, and the pursuers were interested in building premises for their purposes, including rehearsal space, on the remainder of the site. Both parties saw advantages in having these respective facilities built adjacent to each other.
3. The whole of the site, in question, was, as envisaged, in due course, acquired by the defenders. On 27 September 2001, that is prior to the date, namely 5 November 2001, which the parties had provided as the completion date for the purchase of that part of the subjects which the pursuers had undertaken to purchase, in terms of the agreement, agents acting for the defenders wrote to the agents acting for the pursuers. In that letter they stated, inter alia, as follows:

"On behalf of the Royal Scottish Academy of Music and Drama Endowment Trustees, I hereby intimate that my clients are treating the agreement as repudiated and at an end. Specifically, my clients will not be conveying any land at Dunblane Street to SYT".

4. The pursuers' agents replied to that letter, by letter dated 5 October 2001 and intimated therein that the pursuers did not consider that the agreement had been repudiated by them. Accordingly, the pursuers intended to perform their obligations under the contract and to hold the defenders to their obligations arising therefrom. This letter was followed up by a letter dated 2 November 2001, from the pursuers' agents to the defenders' agents in which the defenders' agents were informed that the pursuers were in a position to settle the transaction on 5 November 2001 and there was set out the documents which fell to be delivered in return for payment of the price. Under cover of a letter dated 5 November 2001, delivered to the defenders' agents on that date, the pursuers' solicitors tendered their cheque for £400,000 in payment of the price which the parties had agreed, was to be paid by the pursuers for that part of the site to be purchased by them. The cheque was returned by the defenders' agents under cover of a letter dated 6 November 2001, addressed to the pursuers' agents, in which it was repeated that the defenders considered that the agreement was at an end, and that they were not, in the circumstances, prepared to convey the area of land in question to the pursuers.
5. The pursuers, thereupon, raised the present proceedings in which they seek a declarator, in the first place, that the agreement is still in force and that the defenders remain bound by it. They also seek interdict and interim interdict against the defenders taking steps to dispose of the land in question to third parties, and from commencing building works on the land, or contracting with third parties, to allow such third parties to commence building works on the land. Failing decree of declarator and implement as concluded for the pursuers seek payment by the defenders of £100,000. The defenders gave the pursuers certain undertakings which obviated the need for the Court being asked to grant interim interdict.
6. The matter came before me for a debate in relation to the parties' preliminary pleas as to relevancy. Mr Glennie, Q.C., for the pursuers and the Dean of Faculty who appeared for the defenders were, at one, in saying that the dispute between the parties could be resolved by reference to the pleadings and certain documents, the content of which was agreed. The issue, in the debate, was whether the conduct of the pursuers, as evidenced in certain agreed documents, and on the basis of certain averments that were not disputed by the pursuers, was such as to entitle the defenders to regard the pursuers as having repudiated the agreement. The answer to that question turns largely on how the agreement between the parties is properly to be construed and the debate, accordingly, focused to a very large extent, on the precise terms of the agreement.

The Relevant Contractual Provisions

7. It is therefore appropriate and convenient for me, before turning to summarise the submissions made to me, to set out those provisions which were particularly relied upon by counsel.

The preamble to the agreement is in the following terms:

"WHEREAS : -

(A) The Trustees have completed negotiations for the purchase of the subjects;

(B) Subject to the purification of the suspensive conditions set out in the contract, SYT is committed to purchasing the SYT area from the Trustees.

(C) Subject as aforesaid, the Trustees and SYT have agreed to co-operate in the re-development of the Subjects to enable the Trustees to acquire and develop the Student Residence Area and SYT to acquire and (subject to SYT obtaining funding for such development as aftermentioned) develop the SYT site."

Clause 1 of the agreement is a Definition and Interpretation Clause. It provides, inter alia, the following definitions:

"The Student Residence Area means the northern part of the Subjects shown delineated and shaded pink on the plan;"

"The Subjects means that area of ground on the west side of Dunblane Street, Glasgow, registered in the Land Register of Scotland under Title No. GLA116795;"

"The SYT Area means the southern part of the Subjects shown delineated and hatched blue on the Plan;"

"The Plan means the plan annexed and signed as relative to this Agreement;"

"The SYT Project means the acquisition, design, construction and completion of a complex including rehearsal space on the SYT area by SYT" and

"Trust Project means the acquisition, design, construction and completion of residential accommodation for students on the Students Residence Area by the Trustees".

The next provision, which assumed particular importance in the debate was Clause 2.1 which provides as follows:

"The parties hereby agree that with effect from the date of this agreement the parties shall co-operate with one another in fairness and in good faith in all practical matters of mutual responsibility and interest affecting the implementation of the SYT Project and the Trust Project respectively and will respond promptly to requests properly made by the other party for approvals, information or assistance."

Clause 2.5 of the agreement then provides:

"The Trustees and, provided that (a) the suspensive conditions set out in the Contract are purified and (b) SYT obtains funding for that part of the SYT project, other than the acquisition of the SYT area, on terms acceptable to SYT (as to which SYT shall be the sole judge) SYT respectively undertake that the SYT project and the trust project will be implemented:-

2.5.1. in a good and workmanlike manner and of an accordance with good building practices;

2.5.2 with good and suitable material;

2.5.3. in conformity with the Consents; and

2.5.4 with due diligence.

Clause 3 of the contract provides as follows:

"The Trustees hereby enter into a contract for the sale of the SYT Area by the Trustees to SYT on the terms and condition set forth in the Schedule".

Clause 4, which I will not set out in detail, provides for a share of the cost of demolition of existing buildings on the whole site to be borne by the pursuers and makes provision for the arrangements in relation to such demolition. Clause 7 is a pre-emption Clause whereby the pursuers undertake that:

"Until the full implementation of the SYT project (as evidenced by the issue by the relative local authority of a completion certificate in respect of the building warrant therefor) it will not sell, alienate (including alienation by the grant of a lease) or otherwise dispose of the SYT area or any part thereof to a third party without first making a formal offer to the Trustees to sell the SYT area to the Trustees with the date of entry 2 months from the date of such offer", at a price and on terms and conditions thereafter specified in the agreement.

In Clause 16 of the Schedule to the agreement, there is a further provision providing for a right of pre-emption in favour of the defenders. The last provision of the agreement to which reference was made in the course of the debate, was Clause 8 of the principal agreement which provides as follows:

"Notwithstanding the terms of this Agreement, it is expressly declared that the provisions of this Agreement shall not constitute or operate as any form of partnership between the parties within the meaning of The Partnership Act 1890 and the provisions of this agreement are intended solely to assist the parties in connection with the implementation of the Trust Project and the SYT Project".

The Pursuers' Actings and Statements

8. The conduct of the pursuers, upon which the defenders found, in their pleadings, as having amounted to repudiation, focused particularly on a letter addressed to the chairman of RSAMD, and dated 17 August 2001 from the pursuers' chairman. Given the significance this letter assumed in the debate, it is appropriate that I set out its terms in full. These are as follows:

"As you are aware, over the past few weeks various conversations have taken place between our organisations regarding the future development of the site at Dunblane Street. A meeting has been proposed by RSAMD, but has not taken place due to the difficulty in getting the necessary people together during the summer.

It is my feeling that such a meeting is probably not necessary at the present time. As previously stated, Scottish Youth Theatre is at present in negotiation with Persimmon City Developments over a proposal to house the company at the former Sheriff Court building in Ingram Street. However, these negotiations are by no means finalised, and it could be some months before any form of definitive agreement is reached.

In addition, it could be longer before we are confident that the project is progressing as planned.

Scottish Youth Theatre is still committed to going ahead with the agreed programme of work on the shared site, as detailed in our present contract. Scottish Youth Theatre will purchase the agreed portion of the site and proceed with the demolition of the Stagecoach building, contributing 40% of the cost.

If the situation changes significantly, we will, of course, inform RSAMD as soon as possible. However, at present Scottish Youth Theatre cannot afford to lose the option of the Dunblane Street/McPhater Street site without knowing that the alternative at Sheriff Court is confirmed. Unfortunately, as stated above, this process looks like being a prolonged one.

I hope this clarifies our position, and we will, of course, keep you informed of any development.

I trust this is in order."

The letter was then signed by the chairman of the pursuers.

9. In averment, and in submission before me, the defenders relied also upon an extract from a publication, apparently emanating from the pursuers as an in-house magazine, and named "the Sytizen", and an extract from another document headed "Henderson Warnock", which were published in the course of 2001, and wherein it was indicated that the pursuers were planning to develop their proposed premises at the former Sheriff Court building in Ingram Street, Glasgow. Reliance was also placed by the defenders on statements said to have been made at a meeting between representatives of the parties during 2001, when the pursuers' representatives indicated that they might pursue another option in respect of their proposed complex.

The Defenders' Submissions

10. The Dean of Faculty, relying on these matters, which the pursuers' counsel was content that I should take, pro veritate, for the purposes of the debate, submitted that they cumulatively amounted to a breach of the pursuers' obligation, under the contract, to co-operate in good faith with the defenders and to proceed with their proposed project of building the rehearsal complex and associated facilities on the Dunblane Street site. He emphasised that the purpose of the agreement had been to promote benefits for both parties in their respective developments, going ahead, side by side on the site. He founded particularly on para. C of the preamble to the agreement and its reference to "co-operation" and Clause 2.1, which he said put further flesh on the duty to co-operate. The Dean of Faculty's point, was a short one - having regard to the provisions of Clause 2.1, it prevented the pursuers from looking at, or exploring, any other possible location for the building of their proposed complex, during the currency of the agreement. If they indicated that that was what they were, in fact, doing, that was a repudiation of the obligation under Clause 2.1, to co-operate in good faith with the defenders.
11. The Dean of Faculty submitted that the close relationship between the pursuers' project, on the one hand, and the defenders' project, on the other, was embodied in the contractual provisions and that was not surprising, given the nature of the two bodies and the "synergy" of their interests. The defenders' continued interest in what was happening on the part of the site to be purchased by the pursuers, was demonstrated by the pre-emption Clause in the agreement. The Dean of Faculty, furthermore, submitted that, on a true construction of the agreement, it provided, most significantly that, from the date of its execution, which took place in June and August 2000, both parties had agreed to commit themselves to their respective developments - the only escape route from that commitment which was available to the pursuers being the proviso to Clause 2.5 to the effect that, if the pursuers' fail to obtain satisfactory funding for their development on the Dunblane Street site - a matter about which the pursuers were to be the sole Judge - they would be released from an obligation to build the complex on that site.
12. The effect of what the defenders learned, during 2001, the pursuers were doing, with regard to pursuing the possibility of building their project on an alternative site, culminating in the content of their letter of 17 August 2001, was as follows. The only commitment that the pursuers had, during the period running up to the agreed date of 5 November 2001, was to purchase their part of the larger site from the defenders and to contribute to the demolition costs of the existing buildings on the site as a whole. Beyond that, the defenders were being told by the pursuers that building their proposed complex on the Dunblane Street site was only an option which they wished to retain, at least until the alternative possibility was finally confirmed and that, as it was stated in the letter of 17 August, "could be a prolonged matter". So the defenders were faced, submitted the Dean of Faculty, with a completion date in November and the prospect of selling off 40% of the site to the pursuers who, at that very moment, were actively pursuing the possibility of building their project on the Ingram Street site. In that situation, the question came to be, in the Dean of Faculty's submission, - were the defenders, nevertheless, bound to sell the subjects to the pursuers, notwithstanding these developments? The answer to that question, the Dean of Faculty submitted, was in the negative. Given that the defenders were being informed by the pursuers that they were no longer committed to development on the Dunblane Street site, but, at most, wished simply to hold onto it as a second best option, just in case their now preferred choice of site did not in the event materialise, amounted to a repudiation of the contract by them. The pursuers were not, and could not be, exercising the sole escape route contained in Clause 2.5, since they did not claim that their actings, in pursuing the alternative site, arose out of any funding problem regarding the completion of the project on the Dunblane Street site. What the pursuers' actings did amount to, according to the Dean of Faculty, was a material breach of their obligations arising from the contract, having regard to the purpose of the contract, being one of a mutual development of the site, and having regard to the obligations contained in Clause 2.1 of the agreement. Pursuance of an alternative site by the pursuers was simply not compatible with their contractual obligations. Those contractual obligations, arising from Clause 2.1, the Dean of Faculty submitted, came into effect from day one of the agreement.
13. In discussion with the Court, the Dean of Faculty's attention was drawn to the fact that the obligation to co-operate "in fairness and in good faith" in Clause 2.1 of the agreement, was qualified by the words, "In all practical matters of mutual responsibility and interest affecting the implementation of the SYT project and the Trust project respectively". The Dean of Faculty contended that those qualifying words did not, in any respect, undermine his basic submissions because he said the content of the pursuers' letter of 17 August, was addressing "practical matters" and was demonstrating a lack of good faith and co-operation in relation thereto. The Dean of Faculty submitted that the defenders, themselves, were, on a proper construction of the agreement, from the date of its execution, bound to build the halls of residence on their part of the site. Because of that, the agreement did not oblige them to sell the other part of the site to the pursuers, if the pursuers were not regarding themselves as committed and bound to build their proposed development on the other part of the site. The pursuers' attempt to argue, as evidenced by what was said in their pleadings, that their conduct was legitimised in terms of the agreement because of the suspensive condition relating to suitable funding, was misconceived. The agreement required the pursuers, with due diligence, to pursue matters such as the obtaining of funding, in respect of their proposed development on the Dunblane Street site and not to explore or promote the possibility of building the development on another site. What the pursuers had been doing was seeking to prevent the fulfilment of the condition regarding funding.
14. On the basis of these submissions, the Dean of Faculty, invited me to sustain the defenders' third plea-in-law which is to the effect that "The pursuers having repudiated the agreement through their breach of contract, the defenders should be assoilzied". The Dean of Faculty recognised that, since the matter came before me for debate, on relevancy, normally the more appropriate disposal would be dismissal, but his position was that, standing the fact that all the material circumstances were, in effect, a matter of agreement absolvitor should be pronounced.

The Pursuers' Submissions

15. In beginning his reply, senior counsel for the pursuers, submitted that, as far as disposal of the matter was concerned, it would be more appropriate that I should put the matter out By Order, once I had decided the questions raised by the debate.
16. Pursuers' counsel then proceeded with a careful scrutiny of the provisions of the agreement. In the first place, he stressed that, in the preamble to the agreement, a clear distinction was drawn between the obligation on the pursuers to purchase the "SYT area" and their obligation to implement "the SYT project" - see paras. (B) and (C) of the preamble. There was an obligation on the pursuers, on the one hand, to purchase the SYT area, as defined in the agreement, and, on the other hand, an obligation in relation to the SYT project, defined in the agreement as meaning "The acquisition, design, construction and completion of a complex including rehearsal space on the SYT area by SYT". This fundamental distinction emerged, again, in Clause 2.5 of the agreement, where the suspensive condition regarding funding related only to that part of the SYT project other than the acquisition of the SYT area. The "stand alone" character of the rights and obligations of the parties relating to the land purchase by the pursuers, was carried forward, senior counsel submitted, in Clause 3 of the agreement.
17. Moreover, Clause 7 of the agreement contemplated, and expressly provided for the possibility that the SYT area might be acquired by the pursuers, but that the "SYT project" would not materialise, by providing rights of pre-emption in favour of the defenders to cover such an eventuality. Equally, standing the terms of Clause 2.5, it was possible that the pursuers would acquire the SYT area and, absent acceptable funding for the SYT project, retain ownership of the SYT area, without any obligation to go ahead with the SYT project. On the other hand, the defenders were obliged, in such a situation, by virtue of Clause 2.5.4 to continue with the construction of the student residences in the meantime. Accordingly, if there was a delay in the pursuers obtaining acceptable funding for the SYT project, the two projects would not proceed together in a co-ordinated way, and in tandem with each other.
18. Senior counsel for the pursuers said that, no doubt, parties to many contracts foresee possible advantages arising out of those contracts which are not based on any contractual entitlement. In the present case, the possible advantage of the two projects proceeding, and proceeding more or less together, was not based on any contractual obligation or guarantee that they should do so. That was because of the funding condition contained in Clause 2.5 which, standing its terms, made it a subjective matter for the pursuers alone to decide if, and when, they had acceptable funding available to them for the purpose of building the SYT complex. In coming to a view about that matter, the pursuers were entitled to consider the possibility that while funding acceptable for the building of the complex on the Dunblane Street site, might not be available, it might be available for the construction of the complex on another site. The contractual provisions of the agreement, did not bar them from exploring such a possibility. The contractual provisions did not impose any specific time limit by which the pursuers had to obtain funding acceptable to them.
19. Senior counsel for the pursuers developed his argument by saying that the pursuers' approach to matters was supported by the fact that the agreement was not one for the construction of one project, but was an agreement for the construction of two separate projects. This was clear from the terms of recital C and the definition Clause, each party being concerned with developing its own project. Clause 2.5 provided for co-operation between the parties in relation to their respective projects. The co-operation envisaged by the agreement, was not some abstract concept. It was qualified by the words, "In all practical matters", and came into play when there was a practical need for co-operation, for example, to obtain access over the other party's site. The words "in fairness and in good faith", qualified, or informed, the obligation in the Clause which was one of co-operation in relation to such practical matters. If that was the correct way to construe the provisions of Clause 2.1, the question could be put - what breach of that Clause 2.1 obligation had been averred by the defenders? If one kept in mind that there were two distinct projects, in terms of the agreement, and that the pursuers' obligation of co-operation was one of co-operating, when the defenders needed co-operation, for the progressing of their project, no relevant breach of that obligation had been averred by the defenders.
20. In any event, for the reasons which he had already advanced, senior counsel for the pursuers submitted that, even if that approach were wrong, and in some way the Clause 2.1 obligation fell to be read as imposing an obligation on, the pursuers, in respect of their own project, any such obligation was subject to the suspensive condition contained in Clause 2.5 regarding the obtaining of acceptable funding. At this stage, no acceptable funding had been obtained by the pursuers. The pursuers were, however, in a position to purchase the SYT area and were entitled in terms of the agreement to do so. They were bound to co-operate with the defenders in the progressing of the defenders' project in terms of Clause 2.1, and in terms of Clause 4, they were bound to share the costs of demolishing existing buildings. The defenders did not aver any relevant breach of contract or obligation by the pursuers, once the contract was properly understood.
21. Counsel for the pursuers went onto to address the possibility that the defenders were relying on some broad concept of good faith, other than what was referred to in Clause 2.1 of the agreement. I have noted the Dean of Faculty as saying, however, that he did not seek to rely on any such concept, separate from the terms of Clause 2.1 of the agreement. In any event, senior counsel for the pursuers submitted that the concept of good faith had to be linked to specific obligations, otherwise it would involve the policing of the mind of the person said to be in mala fides, which produced the sorts of considerable difficulties that were alluded to by Lord Ackner in the case of Walford v Miles (1992) 2 AC 128 at Page 138. The defenders' position was that the pursuers had repudiated the agreement, thus entitling the defenders to regard themselves as freed from the agreement. The Dean of Faculty had expressly said that they were not relying on an anticipatory breach by the pursuers and that was because the obligation to co-operate ran from the date of execution of the agreement. But, counsel for the pursuers submitted, any breach of the obligation to co-operate, could only occur, from time to time, when co-operation was required. There were no averments by the defenders that the pursuers had failed to provide co-operation in any particular respect. There was no proper case of repudiation relied upon here. What the true position of the defenders appeared to be was an attempt to spell out of the letter of 17 August, an anticipatory breach of contract by the pursuers. An anticipatory breach arose where one party by his words or conduct, demonstrated an intention not to perform fundamental obligations created by the contract, as and when they fell due to be performed. While Mr Glennie initially made what seemed to be a sharp distinction between repudiation and anticipatory breach in his submissions, one of the authorities he later on relied upon, makes it clear that anticipatory, breach is but an example of repudiation. In The "Afovos" (1983) 1 Lloyd's Rep 335, Lord Diplock, at page 341 (second column) said:

"The doctrine of anticipatory breach is but a species of the genus repudiation and applies only to fundamental breach. If one party to a contract states expressly or by implication to the other party in advance that he will not be able to perform a particular primary obligation on his part under the contract when the time for performance arrives, the question whether the other party may elect to treat the statement as a repudiation depends upon whether the threatened non-performance would have the effect of depriving that other party of substantially the whole benefit which it was the intention of the parties that he should obtain from the primary obligations of the parties under the contract then remaining unperformed. If it would not have that effect there is no repudiation, and the other party cannot elect to put an end to such primary obligations remaining to be performed. The non-performance threatened must itself satisfy the criteria of a fundamental breach".

His Lordship then continued, in a passage relied upon by Mr Glennie, as follows:

"Similarly where a party to a contract, whether by failure to take timeous action or by any other default, has put it out of its power to perform a particular primary obligation, the right of the other party to elect to treat this as a repudiation of the contract by conduct depends upon whether the resulting non-performance would amount to a fundamental breach".

Mr Glennie, also referred me, in this connection, to what Lord Hamilton said in the case of Edinburgh Grain Limited v Marshall Food Group Limited 1999 SLT 15 at page 22, D-E, where his Lordship was to the following effect:

"What, in my view, is required for repudiation is conduct demonstrative of an intention not to perform fundamental contractual obligations as and when they fall due. That intention may have its origin in a choice by the obligant not to fulfil his contract or in an inability on his part to do so".

22. Applying those statements of the law to the circumstances of the instant case, senior counsel for the pursuers submitted that the letter of 17 August did not contain an expression of repudiation of the contract by the pursuers. On the contrary, it affirmed that the pursuers were proceeding with the purchase and acquisition of their part of the site and were committed to sharing the demolition costs. As for the rest, the letter simply stated that the pursuers were not yet in a position to say that the SYT project would go ahead. That did not amount to a repudiation of the contract. It could not be said to involve a threatened breach of Clause 2.1, which was the Clause founded upon by the Dean of Faculty to support his case of a repudiation having taken place. There was nothing in the letter to suggest that the pursuers would not co-operate in respect of the defenders' project when called upon to do so.
23. It was, in the event, essential for the defenders not only to show that there was either a hint, or even a clear indication, arising from the pursuers' conduct or statements that some co-operation would be refused, but also that any such failure to co-operate would go to the root of the contract. It was conceded by the other side that, having regard to the contract as a whole, and in particular Clause 7, if the pursuers did not obtain acceptable funding for the project to be built on the Dunblane Street site, (a matter which was entirely for them to determine), they could hold on to their part of the site, which they were entitled to purchase in terms of the agreement, and build their project on another site. It could not, therefore, be said that the exploring of the possibility of building on another site, amounted to a repudiation of fundamental contractual obligations. The matter could be tested in this way - had the letter said that the pursuers had now ascertained that no acceptable funding would be available for the SYT project, it would not have been a repudiation of the contract for them to say that there were, accordingly, exploring other options regarding the building of their complex. The position was no different, in principle, when the letter stated, as it did, in effect, that the pursuers did not yet know what the position was regarding funding. The contract, in that situation, did not preclude them from looking at other possibilities in the meantime, and that fact that they were doing so did not amount to a repudiation of the contract. The terms of the letter did not absolutely foreclose the possibility of acceptable funding becoming available for the construction of the pursuers' project on the Dunblane Street site. Accordingly, the primary position of the pursuers, was that the content of the letter, and the other statements and actings of the pursuers, founded upon the defenders, did not amount to a repudiatory breach of contract by the pursuers.
24. As a subsidiary argument, senior counsel for the pursuers contended that even if, contrary to his primary submission, it could be conceivably considered to be a breach of contract by the pursuers for them to look at other possible sites, when the funding question remained to be resolved, it could not be regarded as a breach going to the root of the contract in the way argued for by the defenders, since it did not threaten any breach of the co-operation Clause 2.1, once the provisions of that Clause were properly understood, and it could only be a breach going to the root of the contract if it could be said that it was an essential part of the contract that the two developments proceeded hand in hand. While it had, no doubt, been the wish of both parties that, in an ideal world, the two projects would proceed in tandem, so that each would have access to the others' respective facilities created by their projects, that was simply a matter of wish rather than contractual obligation. Clause 7 dealt with the eventuality of such a wish not being capable of being fulfilled. Accordingly, there had been no breach by the pursuers so material as to undermine the contract. That being so, there had been no repudiation of the contract by the pursuers and it remained in full force and effect.

Decision

25. I have reached the conclusion that the submissions made, on behalf of the pursuers, were soundly based. It seems to me that Mr Glennie's careful analysis of the contractual provisions, exposed a number of misconceptions in the defenders' position. The Dean of Faculty's position had to be that, during the subsistence of the agreement, from the very date of its execution, the pursuers were barred from even looking at other potential sites for the construction of their complex. No doubt a contractual term could have been incorporated in the agreement imposing such a ban, but no such term appears in this contract. Nor, in my judgment, can such a term be read, as a matter of implication, arising from the other terms of the contract upon which the Dean of Faculty founded with regard to co-operation, for the reasons advanced by counsel for the pursuers which are set out above. The obligation of co-operation, as provided for by the contract, was to provide co-operation with regard to the other party's project and in relation to practical matters pertaining thereto. The fundamental problem for the defenders, in the position which they sought to advance, was, in my judgment, that the agreement does not provide that the purchase and sale provisions in relation to the land, were absolutely conditional on the two projects proceeding, far less that they should proceed in tandem. Again, that is something that the agreement may have provided for, but it did not do so. On the contrary, it envisages the possibility of the SYT project not proceeding at all, and expressly provides for that possibility in Clause 7. Furthermore, having regard to the suspensive condition contained in Clause 2.5 regarding funding, the financing and accordingly the timing of the construction of the SYT project has been left as a matter entirely for the pursuers to determine.
26. I have, for these reasons, been unable to discern from the terms of the letter of 17 August and the other actings and statements of the pursuers, founded upon by the defenders, a repudiation of the contract, permitting the defenders to refuse to carry out their obligations in terms of Clause 3 of the contract to sell the SYT area to the pursuers, when the pursuers are willing and able to purchase the area in question on the agreed sale terms. The content of the pursuers' letter, 7/1 of process, may have been a disappointment to the defenders in that it raised the possibility, perhaps the strong possibility, that the hopes and expectations that the pursuers would build their complex alongside the student residence complex of the defenders, would not be fulfilled. In my judgment, however, those hopes and expectations, never having been translated into absolute or unconditional contractual obligations, on the part of the pursuers to build only on the Dunblane Street site, so that any exploration of any other possible sites, amounted to a repudiation going to the root of the contract, the defenders were not entitled, on the receipt of that letter, to regard to contract at an end. Moreover, and in any event, I consider that the content of that letter amounted only to the raising of the possibility, however strong, that the SYT project would not be built on the Dunblane Street site, but did not preclude the alternative possibility of the pursuers' project, in the event, being built on the Dunblane Street site. In that situation, the defenders were, on any view, in my judgment, premature in arriving at the conclusion that the pursuers were repudiating the contract.
27. Having reached these conclusions, with regard to the parties' respective positions, I consider that it is appropriate to accede to the submission of counsel for the pursuers, regarding further procedure, and, I shall put the case out by order to enable further discussion as to the appropriate interlocutor to be pronounced.