Scottish Court of Session Decisions

It states:

At the time of the debate before me the dispute between the parties was focused on the construction of the words

In short, the discussion was concerned with the meaning to be given to "the car park factor". It was implicit in the defenders' approach, at that stage, that they accepted that the figure produced by the formula set out in clause 3 had to be added to the passing rent at the date of review for the purposes of arriving at the reviewed rent. My views as to the meaning of the "car park factor" as contained in my opinion, as a result of the defenders' amendments to their pleadings, are now accepted by the defenders to be correct.

In the amended version of their pleadings, the defenders in Answer 6, on the other hand, aver, inter alia as follows:

In brief, therefore, the dispute between the parties is now as to whether the figure arrived at by the formula provided for in clause 3 produces the reviewed rent, or whether it requires to be added to the rent passing at the review date to arrive at the reviewed rent. The difference in those two approaches produces a very significant difference, indeed, in the rent payable as from 1 July 2002.

Matters were taken up, again, when the pursuers apparently appointed Mr Guy Strachan of St Quintin, Chartered Surveyors to act, on their behalf, in relation to the proposals for amending the lease. On 16 May 1997 Mr Strachan wrote to a Mr J A Jack at Chesterton. The terms of the letter (46/15 of process) were as follows

Mr Strachan then went on to refer to redrafting the provisions regarding insurance and then wrote "I trust that this proposition will prove to be acceptable to your clients". By February 1998, the person at Chesterton who was looking after the defenders' interests in the matter, was Mr Richard Evans who is a senior surveyor with Chesterton. On 27 February 1998 a meeting took place, attended by Mr Perry of the pursuers, Mr Guy Strachan and Mr Richard Evans to discuss proposed amendments of the lease. Mr Evans' manuscript note of what was discussed at the meeting is 46/18 of process. In that appears, inter alia, the following:

A further meeting, apparently, took place among the three same individuals and further correspondence ensued between the parties representatives. On 3 August 1998, Mr Richard Evans wrote to Mr Strachan (46/25 of process). In that letter he wrote, inter alia:

The letter also dealt with the duration of the lease, the insurance provisions and the alienation provisions. The contents of this letter resulted in a meeting being fixed between Mr Evans and Mr Strachan, which was held on 15 September 1998. It was also attended by Mr Peter Burt as a representative of the defenders. Notes of that meeting (46/29 of process) were taken by Mr Evans. Under the heading "(a) Rent", the note narrates "GS proposing rent of £26,250 per annum = 35 car spaces @ £750 per space" (emphasis added). Under the heading "(b) Rent Review Clause" the note narrates "GS's proposal is to increase the initial rent on a 3 yearly rent review cycle based on the % increase in the average daily car parking rate between the review dates". A manuscript note made by Mr Evans of the same meeting is 46/30 of process. Discussions between the parties' representatives then carried on, off and on, over a number of months until 14 May 1999 when Mr Evans wrote to Mr Strachan (46/41 of process). He did so, inter alia, in the following terms:

Mr Evans then went on to deal with the question of insurance and alienation and continued:

Mr Strachan replied to that communication by letter of 3 June 1999 (46/42 of process) in it he wrote inter alia as follows:

Mr Strachan then addressed the question of insurance and alienation and by saying:

Mr Evans responded on 11 June 1999 (46/43 of process). He explained in that letter that his clients were not prepared to accept the pursuers' proposals regarding the lease term and alienation rights. Further discussions between Mr Evans and Mr Strachan took place. As a result, Mr Strachan wrote on 16 June 1999 to Mr Evans (46/45 of process). That letter commenced:

Under the heading "Initial Rent", Mr Strachan wrote:

Under the head "Rent Review Clause" he wrote:

A copy of that letter was sent by fax by Mr Perry to Mr Struan Leishman, of Henderson Boyd Jackson, who is the pursuers' solicitor, with a request to Mr Leishman to discuss its contents - see 46/47 of process. Mr Evans, on 17 June 1999, contacted Miss Eilidh Knox of Hardy Macphail Solicitors, Glasgow who were the defenders' then solicitors, and informed her that a deal had now been done amending the lease, that it was the landlord's wish that matters should be tied up by 30 June and that he would send "Heads of Terms as agreed" see 46/48 of process. This was in effect an instruction, on behalf of the defenders, to Miss Knox to put the heads of agreement into the form of a Minute of Amendment of the lease. Mr Evans had raised two matters with Mr Strachan which Mr Strachan addressed in a letter to Mr Evans of 17 June 1999 (46/50 of process). One of these concerned solicitors' fees. The other related to the rent review clause and in that respect he wrote:

Against the wording "Initial/Reviewed Rent" appeared as follows:

Following that telephone conversation, Miss Macphail endeavoured to telephone Mr Peter Burt of the defenders to discuss matters but he was unavailable. Miss Macphail then made some manuscript revisions to the draft. On 22 June 1999, she had a telephone call with Mr Burt to discuss the draft Minute of Amendment. On 23 June she faxed a letter to Mr Burt (46/63 of process). In that letter she wrote, inter alia, as follows:

On 24 June, Mr Burt telephoned Miss Macphail with the defenders' instructions. Miss Macphail's file note for that conversation is 46/68 of process. In relation to the rent review provisions, she noted that Mr Burt "would prefer that we try to use the formula set out in Chesterton's Heads of Terms as he thinks it simpler". The formula referred to there was that contained in Mr Evan's letter of 20 June 1999. As a result of Mr Burt's instructions to her during that telephone call, Miss Macphail made further written revisals to the draft Minute of Amendment including the replacement of the rent review formula contained in the draft with that contained in Mr Evans' letter of 20 June 1999. She then, on 25 June, faxed the revised version of the draft under cover of the letter to Mr Leishman (46/69 of process). In her letter she wrote, inter alia as follows:

On receipt of this letter, Mr Leishman faxed a copy of it together with the revised draft of the Minute of Amendment to Mr Perry of the pursuers (46/70 of process). In his covering letter to Mr Perry, Mr Leishman wrote inter alia as follows:

On 29 June 1999, Mr Leishman faxed Miss Macphail a copy of the draft Minute of Amendment further revised. In his covering letter (46/76 of process), he advised Miss Macphail

The content of this letter was discussed by Miss Macphail with Mr Richard Evans. He faxed her a copy of the letter of 16 June 1999. In an accompanying fax message to her (46/78 of process), he wrote, inter alia:

Mr Peter Burt also telephoned Miss Macphail on 29 June, having seen Mr Leishman's letter and he confirmed that the defenders preferred the formula put forward by Mr Evans (46/80 of process). A further discussion took place between Mr Evans and Miss Macphail on the telephone on 29 June 1999. Miss Macphail's file note for that telephone conversation (46/81 of process) notes, inter alia,

As a result of her discussions with Mr Burt and Mr Evans, Miss Macphail then faxed Mr Leishman on 29 June (46/86 of process). In the fax message she said inter alia, as follows:

Mr Leishman spoke to Miss Macphail on the telephone on the 30 June and told her that his clients still wanted to insist on their own wording. On 1 July Miss Macphail spoke to Mr Burt again. She suggested that the defenders should now accept the pursuers' wording for the amended rent review clause. He agreed to that but did not want the pursuers to be informed of that being the defenders' position until other matters were finally agreed (see 46/93 of process). On 13 July 1999 a telephone conversation took place between Mr Evans and Mr Strachan, during which Mr Evans agreed that the defenders would accept the pursuers' version of the wording in the new rent review clause, in exchange for agreement on certain other matters (46/94 of process). Miss Macphail, in the course of 13 July, obtained instruction from Mr Burt to proceed on that basis (46/95 of process). She then wrote to Mr Leishman on 14 July (46/98 of process). In that letter she wrote inter alia,

The returned version of the Minute of Amendment included the reinstatement of the pursuers' version of the rent review clause. On 15 July, Mr Leishman replied (46/99 of process) advising that the defenders proposals were acceptable. He enclosed a simple offer for acceptance and a travelling draft of the Minute of Amendment for comparison and return. The offer is attached to 46/100 of process. It states inter alia:

Mr Leishman wrote to Mr Perry of the pursuers on 15 July (46/102 of process). In his letter he wrote:

Miss Macphail sent an acceptance of the offer, under cover of a fax letter to Mr Leishman of 16 July (46/105 of process). On 19 July, Mr Leishman sent the engrossment of the Minute of Amendment to Miss Macphail for execution by the defenders (46/107 of process). On 4 August 1999, Miss Knox of Hardy Macphail sent the Minute of Amendment executed by the defenders to Mr Leishman (46/111 of process). The Minute of Amendment was executed by the pursuers on 9 August 1997 (46/116 of process). On 24 August 1999, Mr Leishman wrote to Miss Macphail (46/114 of process) in the following terms:

Miss Macphail replied to that letter on 1 September 1999 (46/111 of process) by confirming that her clients agreed the figures detailed in Mr Leishman's letter.

the new rent review provision was to be based was reflected also in paragraph 3 of the last mentioned letter, where it is stated:

Paragraph 5 of that letter, as has been seen, stated:

Mr Leishman accepted that that reflected, in general terms, "the principle" that the parties' agents had agreed would form the basis of the new rent review provision. A third car park, was in the event, added for comparison purposes. The witnesses accepted that the focus was on the use of a multiplier. In his own words, he said that the principle was "to look at the other three car parks at the rent review date and see how the daily rates for parking had increased, since the fixing of the new rent, and then to take the average of the increased rates which then became the multiplier". He accepted that this was the point arrived at at the end of the negotiations between the parties' respective surveyors. When matters were handed over to him, by Mr Perry, the position changed in that a third car park was added as a comparator. Mr Leishman explained to the Court how the figure of 96, which appears in the rent review clause was arrived at. The new annual base rent of £26,250 was in respect of a car park area which had 35 car park spaces. The annual rental per space was £750. At the time of drafting the Minute of Amendment, the average hourly rate for car parks at the three comparator car parks was £7.83. Mr Leishman said that the £750 was then divided by £7.83, the result of which division, rounded up, produced the figure of 96. All of that was what he had explained to Miss Macphail in his telephone conversation with her on 21 June 1999 and which is recorded in her file entry (46/61 of process). Mr Leishman on being referred to the calculation carried out by Chesterton, in Mr Richard Evans' letter of 20 June 1999 (46/52 of process) said that what was being done there was the same kind of exercise as had been incorporated into his Minute of Amendment in order to produce a multiplier, the difference being that Mr Evans' calculation produced the total reviewed rent for all 35 spaces, whereas his calculation in his Minute of Amendment gave the annual rental for one space only. That evidence, it appeared to me, was of some considerable significance. Mr Leishman did, however, go on to say that both calculations were designed at arriving at the same rent except that the pursuers' approach required adding the result of the calculation to be added to the passing rent. He accepted, however, that he and Miss Macphail, in their various communings, never focused on, or discussed, the expression "by addition per space". Nor was there any discussion between them as to the level of rent which the operation of the rent review clause in 3 years time might be anticipated to reach. Mr Leishman accepted that when he wrote to Mr Perry on 25 July 1999 (46/70 of process), there was an agreement between the parties' representatives that there was no difference in the effect of the respective wordings of the clause, though that had to be understood in the context of there having been no discussion regarding the words "by addition per space". Again, I considered it was of some significance that Mr Leishman said that these words were not referred to in his discussions with Miss Macphail because "possibly at that time I did not appreciate the effect of those words". He then went on to say, somewhat surprisingly, perhaps, "my intention was not to produce the substantial benefit that my clients are now saying that they are entitled to". The witness accepted that, after matters were handed over to himself, and Miss Macphail, by their respective clients, they were each checking matters with the respective surveyors, Mr Evans and Mr Strachan. He put matters this way,

He acceded, in cross-examination, to the suggestion that "the principle" upon which the rent review provision was to be based had already been agreed between the surveyors and that he was not concerned with any additional perceived advantage having to be obtained for his client. His explanation for writing his letter of 24 August 1999 (46/114 of process) was that he merely wished to record what the then hourly rates for the three comparators were, as this was how he had arrived at the average figure of £7.83. He accepted that that letter was designed to perform no function beyond that of recording these matters.

Mr Evans explained in evidence that all he was seeking to do there was to make the point that while there was a range of levels of charges, the formula to be employed would take an average. Mr Evans explained that between October 1998 and May 1999 further discussions ensued between himself and his clients and the pursuers' representatives regarding the lease. This culminated in the exchange of correspondence in May/June 1999 between Mr Evans and Mr Strachan. On 14 May 1999 Mr Evans wrote to Mr Strachan setting out his client's proposals for a revisal of the existing lease (46/41) including a proposal regarding a new rent review clause. That was met with what Mr Evans described as a counter-proposal from Mr Strachan - his letter of 3  June (46/42 of process). Further discussion between Mr Evans and Mr Strachan took place. This then resulted in Mr Strachan sending his letter of 16 June to Mr Evans (46/45 of process). When asked what he understood was being said in paragraph 5 of that letter regarding the rent review clause, Mr Evans said that, in it, Mr Strachan was confirming that the formula would be based on the increase in the average daily car parking charges between review dates. The increase would be used as a multiplier to be applied to the initial rent. He understood that at the end of this letter "the deal was agreed" subject to final confirmation by the clients. The Heads of Terms were agreed, subject to the solicitors documenting them. By that he said he meant putting into legal format the terms agreed by himself and Mr Strachan, including the rent review formula. He did not consider that any further discussion between himself and Mr Strachan was required regarding the rent review formula because he believed they had an understanding of what it was to provide. He accepted that he had been told that the landlords had their own wording which they wanted to use and which he had not seen. When he spoke to Miss Knox, of Hardy Macphail, on 17 June 1999, the position was as referred to in her note (46/48 of process), that is, an agreement had been arrived at between himself and Mr Strachan as to the Heads of Terms upon which to instruct solicitors. He was still required to give advice to the solicitors as to the exact wording to be used. Mr Evans said that in his letter of 20 June 1999 to Miss Knox (46/52 of process) under reference to the rent review clause he was setting out what gave the multiplier to be applied to the passing rent. When Mr Evans' attention was drawn to the wording of the rent review provision incorporated in the actual draft of the Minute of Amendment prepared by Mr Leishman, he discussed matters with Miss Macphail. In particular he recalled getting clarification as to how the figure of 96 was arrived at. In evidence he said there was no discussion about the meaning and effect of the words "by addition per space". His own interpretation of these words was, he said, that they required an adding together of the relevant figure for each of the car park spaces at the rent review date. This was consistent with the formula which he had put forward in his letter 46/52 of process which did not require such an addition, but which itself produced the global rent for all the car parking spaces in the subjects. The witness said that he considered the expression "by addition per space" required clarification by discussion between the solicitors. He himself spoke to Mr Strachan on the telephone on 13 July then conveyed his client's request that the landlords' formula should be explained (46/94 of process). I did not note any evidence, from this witness as to what explanation, if any, Mr Strachan gave him during this telephone call. Mr Evans said he could not actually remember having discussions with Mr Strachan on the telephone as to how the landlords' wording of the formula would actually work but suggested that he would have done so. In any event, he subsequently spoke with Miss Macphail and advised her that the pursuers' version of the rent review formula could be accepted, subject to agreement on two other matters. His understanding was that the rent review formula as proposed by the landlords would involve the following calculation: 35 x 96 x car park factor. It was not his understanding that the passing rent would be added to the figure produced by the formula. He said he did not believe that he ever had any discussion with anyone (including Miss Macphail) on the basis that that would indeed be how the landlords' version of the formula would operate. By agreeing, on behalf of the defenders, that the pursuers' version of the formula would be accepted, Mr Evans said that he did not consider that anything different was being agreed, in principle, from what had been agreed between himself and Mr Strachan. In particular, he did not consider that the figure produced by the formula was to be added to the passing rent.

In other words Miss Macphail said:

At no stage did she consider that the relevant rent would be arrived at by adding to the foregoing calculation the passing rent at the date of the review.

Mr Strachan said that that was an accurate description of what he had been instructed to propose on behalf of his clients. Again, under reference to what Mr Evans wrote in his letter to him of 14 May 1999 (46/41 of process) about the rent review clause, Mr Strachan said that that was, in principle, getting close to what his client wanted to be the case, namely a particular formula to be used for ease of calculation. That was what was reflected in what Mr Strachan himself wrote in his letter to Mr Evans on 3 June 1999 (46/46 of process). Agreement had been reached between the parties that the rent review should take place at three yearly intervals on an upwards only basis. His clients he said intended to provide a formula to be embodied in the new lease agreement. Its function was to enable easier calculation of the reviewed rent. The formula was to be based upon the rates of charges made for parking at the comparable car parks and those rates were to be put into the formula. By the time of his letter to Mr Evans of 17 June 1999 (46/50 of process) Mr Strachan said that "an in principle deal" had been reached - the only thing that was left to be done was to choose the exact wording of the formula. Matters were then passed to the solicitors who were to put matters into detailed, and legal, wording. Mr Strachan said that he never himself had, before that stage, seen the wording which was to be put forward by the pursuers' solicitor, Mr Leishman. He said that in his experience if difficulties had been encountered by the solicitors in such a situation and it was thought that agreement on some particular point had not been reached the surveyors would have been asked to discuss matters further. At the close of his examination in chief this witness said that as at 16 June 1999 "I did not have any expectation that the passing rent would be part of the formula". The witness was not re-examined.

His Lordship took the view that, applying that approach, meant that the application for rectification in the case before him had to fail. In doing so he said at p.523C:

Later, at page 524D-E, his Lordship said:

Senior counsel for the pursuers submitted that those dicta could suitably be applied to the defenders' rectification case in the present proceedings. They did not seek rectification of the missives. The declarator they sought did not lead to the order for rectification. The counterclaim should be dismissed. Senior counsel then referred to the fact that the defenders' own agents, in their letter of instruction to senior counsel 46/117 of process, had construed the clause as requiring the product of the formula to be added to the passing rent. That argument had been put forward as the defenders' position at debate. I was invited, accordingly, not to accept Miss Macphail's evidence that she had never herself held that view of matters. Though she, in her evidence, had said that at consultation with senior counsel she had immediately indicated that the construction put forward at the debate did not accord with hers, Mr Ritchie had said that she only expressed that position after she had looked at her file after the consultation and, only after doing that, did she come back and put forward what was her now position regarding the construction of the relevant clause. The pursuers had insisted on the precise wording in the rent review clause being used. Neither Mr Evans nor Mr Strachan had seen that wording before the Minute of Amendment was executed. The agreement by the defenders' agents was that the pursuers' wording could be used. What the defenders were now seeking was to have the wording rectified to produce the bargain they would have made if they had understood the formula properly. There was, however, no evidence of any common intention to make that bargain and for that reason the pursuers' second plea-in-law in the counterclaim should be sustained and they should be assoilzied therefrom.

The Court now knew how the figure of 96 in the formula had been derived. The operation of the clause involved a mechanical exercise at the review date. First of all, one had to work out the car park factor. The parties were now at one as to how this was to be done. Next, one had to multiply the car park factor by 96. The exercise so far gave you the reviewed rent in respect of a single car parking space. In the context of a review in respect of 35 spaces, what happened, next, in operating the clause, was that by reason of the words "by addition per space", one then arrived at the global rental by adding the figure arrived by the application of the formula, 35 times. That was, in the context, a "commercially sensible construction".

The witness accepted that he had not incorporated in that description any reference to the addition of the passing rent to the result of the formula being applied. That passage of evidence supported the defenders' approach as to the commercial purpose of the clause.

Senior counsel for the defenders submitted that while, in the present case, something remained to be done subsequent to the ending of the surveyors' negotiation, they, nevertheless, had reached a consensus on all the crucial elements in relation to the amendment of the lease. What had to be found was a suitably worded mechanism to deliver that agreement. That was in line with the evidence of both surveyors and, indeed, with the evidence of both solicitors. Each party intended the outcome to be the same. I was then referred to the case of Norwich Union Life Insurance Society v Tanap Investments VK Limited (In Liquidation) 2000 S.C.515, a decision of an Extra Division. The court in that case refused to dismiss without enquiry an action for rectification of certain Minutes of Agreement. In giving the Opinion of the Court in that case Lord Prosser, at p.522 B-E said this:

Senior counsel submitted that that passage might appropriately be applied to the circumstances of the present case. In the present case there was, in the shape of the deal struck by the surveyors, a relatively informal expression of common intention of the parties as at 16 and 17 June 1999. The Minute of Agreement was to embody that common intention. That was the intention of the parties. There was no suggestion in the evidence of the pursuers' solicitor, Mr Leishman, that the formula to be agreed would give any different result from what the parties' own surveyors had agreed. The missives were the formal expression of the parties' agreement already arrived at. Mr Leishman's evidence, fairly understood, was that he and Miss Macphail were at one that either of the forms of formula produced, in effect, the same result. He saw the solicitors' role as to document and put, in more detail, and in legal wording, the parties' agreement. It was clear from the evidence of the surveyors that they considered themselves to be at one as to what the basis of the rent review would be. That basis would be an indexation approach. Neither of them had considered that the approach, in principle, would differ when it came to being put in writing by the lawyers and, in particular, that the approach would involve not only producing a figure by the operation of the indexation formula but by adding that figure to the passing rent.

The pursuers were wrong, it was submitted, in contending that the agreement was contained simply in the missives which passed between the parties' agents. The formal agreement was contained in the missives and the executed Minute of Amendment. That was clear from the terms of Miss Macphail's letter of 16 July 1999, 46/105 of process. In her letter of 14 July 1999 to Mr Leishman, Miss Macphail had finished by saying, "The draft is returned further revised and hopefully we will be able to tie matters up shortly." Only after she had checked matters with Mr Evans did she conclude the transaction. That showed she was acting merely, in an executry capacity, in agreeing to the formal words which reflected the surveyors' agreement. Accordingly, if the Minute of Amendment did not express the common intention of the parties arrived at through their surveyors, as to the basis of the rent review, it fell to be rectified.

I have reached the conclusion that both parties' constructions of the existing wording of clause 3 are possible, though both require a process of reading the exact wording in a somewhat strained way. The first question, therefore, is whether or not, having regard to the relevant context, the Court can reach the view that one construction falls to be preferred to the other. I have, in approaching that question, in mind what Lord President Rodger said in Bank of Scotland v Dunedin Property Investment Company Limited at 665, that is:

In the present case, the parties, who are limited companies, allowed the negotiations as to the terms of the Minute of Amendment to be carried out largely through the agency of surveyors, principally Mr Evans and Mr Strachan. The knowledge of those individuals has, in my judgment, to be imputed to the parties. (I have not overlooked the fact that the pursuers' principal actor, Mr Perry, attended some of the meetings with the surveyors and that there was evidence as to his express instructions regarding the wording of clause 3, but he chose not to give evidence and in this situation the pursuers cannot, in my judgment, distance themselves from the knowledge of the surveyors in relation to what was being agreed or to be agreed). I am entirely satisfied that the defenders were well-founded in contending that, on the evidence, it was clear that neither Mr Evans nor Mr Strachan had ever considered that the new rent review provisions should provide for an indexation type of formula to produce a figure to be added to the global passing rent in respect of all 35 car park spaces. Mr Strachan, the pursuers' agent, expressly said that that had never formed part of his thinking. If the pursuers are correct, therefore, it means that there was a change of position on their part, after the matter passed from the surveyors to the solicitors. Had the wording set out by Mr Evans in his letter to Miss Knox on 20 June 1999 (46/55 of process) and which was put forward as a suggested amendment to the draft Minute of Amendment by Miss Macphail, ultimately found its way into the executed Minute of Agreement, then the pursuers' argument as to how the clause operated could not have been made. There is, no doubt, that Mr Evans considered that that wording reflected what he had agreed with Mr Strachan. In what Mr Evans, in his letter to Miss Knox, wrote the passing rent does play a part in the formula as "A", but it does also when the formula contained in clause 3 is properly explained, because the figure 96, (which does not explain itself), was arrived at by reference to the passing rent in relation to one car park space. That fact had to be explained to Miss Macphail by Mr Leishman, and it is, in my judgment, of extreme importance in construing clause 3. It means that the indexation process is being applied to the passing rent at the date of the review, albeit not to the global rent for the premises, but to one of the 35 spaces making up those premises. One can trace this approach of looking at the rent per space right back to the very beginning of the negotiations between the parties and it is an approach that the pursuers themselves put forward to arrive at the new rent to be paid at the date of the execution of the Minute of Agreement for the whole of the premises. It can be seen as pretty well a constant refrain from at least 1996 onwards, and Mr Miller of Chesterton's letter to Miss Cole (46/13 of process). The pursuers, in presenting this formula, in other words, had produced a formula in which the passing rent did have a role to play. The figure 96 is not an arbitrary one. The approach to construction of the clause put forward by the defenders would mean that the passing rent was having an index applied to it at the date of review. That is, in my view, what the parties' representatives had agreed as to the purpose and effect of the relevant rent review clause. On the other hand, the pursuers' approach to construction would mean that that purpose and effect were extended, as it were, by using the passing rent twice, first as a base figure, upon which the product of the formula was to be added at each review date and as a figure to which indexation had to be applied. That is not what the evidence shows the party representatives saw as the principle, or purpose, of the review clause. In ICS Limited v West Bromwich BS (1998) 1 W.L.R.896, Lord Hoffmann, at p.912, gave as one of the principles of contractual construction, the following:

As it is put by McBryde, The Law of Contract in Scotland (2^nd ed) at para.8-07

In my opinion, looking at the matter objectively, a reasonable commercial person, having all the background knowledge which was available to the parties in the present case, would reach the conclusion that the wording of clause 3 fell to be read as not involving the addition to the product of the formula, of the passing rent, at the date of each review. That construction would involve, in effect, an element of double-counting of the factor of the base rent. The defenders' approach to the construction of the clause is entirely in line with the concept, which correspondence between the parties' surveyors was directed consistently (in the passages and phrases I have emphasised) to, throughout, namely the application of something akin to an index, being applied to the rent payable at the rent review date, although the product only provided the figure for one of the 35 spaces, making up the total. I am satisfied, on the evidence, that when the matter was handed over to the parties' respective solicitors, neither Mr Leishman nor Miss Macphail had directed their attention to the wording possibly having the effect now advanced on behalf of the pursuers. Their discussion was, as has been said, concerned rather with the explanation that required to be given for the figure of 96. Miss Macphail came to the conclusion that the wording being insisted upon by the pursuers, had the same effect as the wording which she had been asked by the defenders' surveyors to try to have substituted. I think it is significant, in that regard, that Mr Leishman in his fax to Mr Perry of 25 July (46/70 of process) wrote "their comments regarding the rent review provisions are interesting and if there is nothing in it then we should stick to our original formula...". I consider that that reflects the position being that Mr Leishman was not in disagreement with Miss Macphail that the effect of the defenders' proposed wording was not significantly different from the landlords' preferred wording.