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OUTER HOUSE, COURT OF SESSION

[2006] CSOH 188

P1273/06

OPINION OF LORD HODGE

in the cause

JOHN FINDLAY

(as executor of the late

Robert Findlay)

Petitioner;

Petition for Judicial Review

________________

Petitioner: Sir Crispin Agnew Q.C., Carmichael, Advocate; Morton Fraser LLP

Respondents: Mrs. S.P.L. Wolffe, Advocate; Simpson & Marwick WS

6 December 2006

[1] The petitioner is the son and surviving executor of the late Robert Findlay ("Mr Findlay"), who was the owner of Redhouse Farm, Blackburn. In 1967 Mr Findlay sold a field of about 14 acres to West Lothian County Council, which acquired the land for development under threat of compulsory purchase in terms of section 37 of Town and Country Planning (Scotland) Act 1947. When in 2002 the land was recognised as being surplus to requirements, the statutory successors to West Lothian County Council, namely West Lothian Council ("the respondents"), resolved to sell the field and advertised it on the open market. At that time the northern part of the field was allocated for housing in both the relevant Structure Plan and Local Plan and the field was advertised for sale at offers over £950,000. Mr Findlay's executors raised an application for judicial review which was settled when respondents by letter dated 19 November 2002 undertook to dispose of the field "in accordance with the Crichel Down Rules". In December 2004 the respondents initiated a process to give the executors the opportunity to repurchase the land in accordance with the Crichel Down procedures set out in Scottish Executive circular 38/1992 ("the Crichel Down circular"). This judicial review arises from decisions taken by the respondents in this context.

[2 ] The judicial review application challenges two decisions of the respondents taken in December 2005 and March 2006 respectively. The first decision was to impose as a condition of an offer to extend the timescale in which the sale could be completed that the respondents would review the price agreed in April 2005. The second decision, which the executors challenged if the first decision was valid, was the respondents' stipulation of a price at which the field would be sold without giving the executors any opportunity to negotiate on the price.

[3 ] This judicial review application raises two main issues. The first is the way in which the Crichel Down circular should be interpreted. The second is the relationship of the obligations arising as a result of the respondents' undertaking to operate the procedures in the circular with their statutory duty, under section 74(2) of the Local Government (Scotland) Act 1973, not to dispose of land for a consideration less than the best that can reasonably be obtained.

The Crichel Down circular

[4 ] The procedures, so far as relevant, are set out in paragraph 18 of the Crichel Down circular. First, the public authority invites the former owner to buy the land at a valuation made by the authority's professionally qualified, appointed valuer and the former owner then has two months in which to indicate his intention to purchase (stage 1). Thereafter parties have two months to agree terms other than value (stage 2). After those terms are agreed parties have six weeks to negotiate the price (stage 3). Paragraph 18 also provides: "If the price or other terms cannot be agreed within these periods, or within such extended periods as may reasonably be allowed (e.g. to negotiate appropriate clawback provisions), the property will be disposed of on the open market". Paragraph 24 of the Crichel Down circular provides that disposals to former owners under these arrangements will be at current market value.

[5 ] There was no dispute as to the policy behind the Crichel Down circular. Bingham LJ in R v Commissioner for the New Towns ex parte Tomkins [1989] 58 P & C R 57, 65-66 stated:

"the guidelines reflect another policy objective also: that the former owners of land which had earlier been compulsorily purchased for purposes of ... development and is now not needed for that purpose should ordinarily be given the first opportunity to buy back what had been their land at its full current open market value, taking account of development prospects.

The public interest underlying this policy is obvious also. When land is compulsorily purchased the coercive power of the state is used to deprive a citizen of his property against his will. He is obliged to take its assessed value whether he wants to or not. This exercise is justified by the public intention to develop the land in the wider interests of the community of which the citizen is part. If, however, that intention is not for any reason fulfilled, and the land becomes available for disposal, common fairness demands that the former owner should have a preferential claim to buy back the land which he had been compelled to sell, provided he is able and willing to pay the full market price at the time of re-purchase, that price reflecting the development potential of the land."

Factual Background

[6 ] After the settlement of the first judicial review application in November 2002, there appears to have been a hiatus until 22 December 2004 when the respondents sent the executors an invitation to purchase and heads of terms which included a proposed price of £2,000,000 and stated that the date of entry was to be mutually agreed. The letter referred to the timescales in the Crichel Down circular and warned that failure to comply with those timescales could lead to the offer being withdrawn and the land being disposed of on the open market. The letter also stated that it was not intended to form part of a legally binding contract and that formal missives would be required. By letter dated 13 January 2005 the executors stated their intention to purchase the field, but did not agree to the terms proposed. On 24 January 2005 the respondents confirmed that the price stated in the heads of terms was current market value determined by their appointed valuer and that price took account of the terms of the detailed planning brief for the site which had been prepared in 2002 and current land values in the area. The respondents also reminded the executors of the terms of paragraph 18 of Crichel Down circular which provided for disposal of the land on the open market if parties did not reach agreement on the price within the stipulated timescale. In response to a request by the executors' solicitors, the respondents sent them the planning brief on 1 February 2005. The planning brief stated:

"It is believed that all services are available close to the site. Drainage pipes appear to be present running parallel to, and just within, the eastern boundary of the site. ... Developers must contact service providers and SEPA directly for their specific requirements. ... Interested parties must satisfy themselves on all matters relating to ground conditions and services."

Sir Crispin Agnew QC accepted on behalf of the petitioner that the agreement which I mention in the following paragraph was reached on the basis that it was for the executors to satisfy themselves as to these matters.

[7 ] In an undated letter, which was probably sent in February 2005, the respondents sent the executors' solicitors expanded heads of terms. The significant change in the heads of terms was that the respondents now stipulated that the date of entry was 30 September 2005. The heads of terms also stated that the sale of the field was to be on the basis of unconditional missives, other than in relation to standard title matters. There was a flurry of activity in late April 2005 as the stage 3 deadline under the Crichel Down procedure approached and on 22 April agreement was reached between the respondents and surveyors on behalf of the executors that the purchase price was to be £1,820,000. I was informed that the reduction in price resulted from an agreement that the developable area of the field was less than had originally been thought and that the price per developable acre was not altered. The respondents confirmed the agreement as to price by letter dated 27 April 2005 and enclosed expanded heads of terms, which the executors' solicitors accepted by letter dated 17 May 2005. In those heads of terms the date of entry was stated to be 30 September 2005. Thereafter it appears that the executors and the developers, with whom they were negotiating a back-to-back agreement, investigated the site and there were some discussions between the executors' solicitors and the respondents as to the terms of the missives.

[8 ] A problem emerged for the executors on 7 September 2005 when, in response to an inquiry on 19 August 2005, Scottish Water wrote to the developers' engineers stating that the existing waste water infrastructure in the Blackburn area had insufficient capacity to accommodate the additional demands from their proposed development. Scottish Water stated that they would object to the development unless the developers promoted a satisfactory waste water scheme and were prepared to meet the costs of that scheme. Scottish Water also stated that they could only determine the impact of the proposed development if they undertook a drainage impact assessment and that if the developers instructed them to carry out such an assessment they would be expected to meet the cost. Faced with this difficulty, the developers asked the respondents to extend the "long-stop date" (i.e. the date of entry) from 30 September 2005. The respondents by letter dated 15 September 2005 declined to do so, stating that they had adhered to the requirements of the Crichel Down rules. But, after further representations by the executors' solicitors, the respondents by letter dated 30 September 2005 agreed a revised "long-stop date" of 31 December 2005. In that letter the respondents stated "settlement must take place within this period". The respondents also suggested that it would be possible to conclude missives in early course and confirmed that the purchase price would not be adjusted "given the agreed terms negotiated previously".

[9 ] This extension of time did not resolve the executors' problems. On 22 December 2005 the solicitors acting for the executors wrote to the respondents intimating that Scottish Water had not yet confirmed that they had adequate drainage capacity to accommodate the proposed development of the field. They explained that the developers had funding which would be available only when Scottish Water gave that confirmation. The executors' solicitors therefore asked the respondents further to extend the "long-stop date" until Scottish Water had made available a proper assessment of the drainage capacity and to allow the executors to use all reasonable endeavours to settle within 20 days after receipt of that assessment.

[10 ] The respondents replied by letter dated 23 December 2005. As the letter contains one of the decisions which the petitioner challenges in this judicial review application, I quote the material parts of the letter. In it the respondents' solicitor stated:

"I have been instructed by my client Service, Property Management, to advise you that they are prepared to extend the long-stop date until 31^st March 2006 but on the strict understanding that you will confirm in writing that you accept and will respond with expediency [sic] to the following:

1. The Council reserves the right to review the purchase price.

2. You will provide copies of all correspondence and documentation to date between your client and/or Boyack Holmes and Scottish Water as well as copies of any future correspondence between these parties. The purpose of this proviso being that the Council need confirmation that everything possible has been and is being done to resolve the Scottish Water issue.

3. You will provide confirmation that the sale to Mr Findlay is not conditional upon Boyack Homes (or any other developer) securing permission for their proposed development of this site."

[11 ] The executors' solicitor, having responded by telephone on 23 December 2005, also responded by letter dated 4 January 2006. In reply to the respondents' first condition in their letter of 23 December, he stated:

"The Council's position is noted. I take it that in considering any review of the purchase price regard would have to be had to the timescale with[in] which we are able to settle the transaction and also if the Scottish Water Assessment discloses some major problem that is something which the Council may have to take into account."

[12 ] On 19 January 2006 the executors' solicitors sent the respondents correspondence between the developers and Scottish Water, which revealed discussions about the cost of the assessment and the developers' eventual instruction of and payment of over £15,000 for the drainage impact assessment on 26 October 2005. The executors' solicitors also wrote to the respondents on 23 January 2006 about the conveyancing of the site. On completion of the drainage impact assessment, Scottish Water wrote to the engineers for the developers, intimating that they considered the modelled development flows were acceptable. The executors' solicitors telephoned this good news to the respondents on 3 February and wrote to them on 6 February stating that they were in a position to proceed towards settlement of the transaction.

[13 ] On 3 March 2006 the executors' solicitors wrote expressing concern about the respondents' delay in following up their requests in relation to the conveyancing of the field. By fax dated 6 March the respondents stated (among other things) that they were seeking to increase the price to reflect current values. This drew a swift response from the executors' solicitors who in a letter and fax dated 7 March expressed disappointment at the proposal to increase the price, suggesting that that would cause further delay and that the value of development land had not increased materially. The respondents' valuer replied by letter dated 10 March 2006 stating that they were not willing to reconsider their decision to reassess the price. He pointed out that the valuation had been agreed in April 2005 and that having considered recent evidence of movement in the market he assessed the current value as £2,388,000. He intimated that he had instructed the respondents' solicitor to conclude the transaction on those terms. This is the second decision which the petitioner challenges in this judicial review.

[14 ] The executors' solicitors replied by letter of 14 March 2006 to the respondents' valuer, protesting that an uplift of £568,000 (or 31.21%) was unreasonable and unacceptable. They wrote on the following day to the respondents' solicitor and for the first time challenged the legal basis on which the respondents sought to increase the price. In short they asserted that there had been an agreed price and that there was no mechanism in the Crichel Down rules by which that price could be reviewed. The correspondence between the parties then moved to its close with the respondents' valuer, on 23 March 2006, rejecting an offer by the executors to pay interest on the earlier agreed price from 31 December 2005 and then on 18 April the executors' solicitors writing to confirm that the executors would seek a judicial review of the respondents' decision. On 25 April 2006 the respondents' solicitor wrote to the executors' solicitors in the following terms:

"It is the Council's view that the Crichel Down Rules have been exhausted in terms of the Scottish Executive Circular 39/1992 and on the basis that there has been failure to agree the purchase price.

The Council reserved the right to review the purchase price and put in place the long-stop date of 31^st March 2006 in my letter to you dated 4 January 2006 and thereafter increased the price in terms of the letter by Scott Hughes [the respondents' valuer] to you dated 10 March 2006. You advised your clients did not accept the revised price in your letter of 15 March 2006.

My instructions are that the Council is now considering marketing the site for sale."

The parties never concluded missives for the re-purchase of the field.

Parties' submissions

[15 ] Sir Crispin Agnew QC for the petitioner advanced four principal submissions. First, he submitted that the Crichel Down rules did not envisage an agreed price being unilaterally changed. Thus the respondents had acted ultra vires in imposing a condition for the review of the price when granting an extension of the long-stop date on 23 December 2005. In the course of the debate he revised the formulation of this submission, acknowledging that it was not a matter of ultra vires but a breach of the petitioner's legitimate expectations arising out of the respondents' undertaking to comply with the Crichel Down rules. He referred to R (Bibi) v Newham London Borough Council [2002] 1 WLR 237. In support of his submission that the date of valuation envisaged in the Crichel Down rules was either the date when the former owner stated his intention to re-purchase or, in this case, the date when the price was agreed in April 2005, he referred to R v Commissioner for the New Towns ex p Tomkins (above), Manchester City Council v Secretary of State for the Environment (1987) 54 P & C R 212 and Stannifer Developments Ltd v Glasgow Development Agency 1998 SCLR 870 and 1999 SC 156. He also referred to the English Crichel Down rules (circular 06/2004), in which in the Annex giving guidance to Government departments it is suggested (at p.120) that current market value means the market value at the date of receipt by the disposing department of the former owner's intimation of intention to purchase. The respondents had acted on a misconception of their statutory duty to achieve the best consideration that could reasonably be obtained. They had fulfilled that duty in agreeing the price in April 2005 and were under no continuing duty thereafter.

[16] Secondly, he submitted that if the respondents were entitled to bring the re‑purchase negotiations to an end in December 2005, they required to give reasonable notice of their intention to do so, by giving an ultimatum such as was sanctioned in the law of contract in Rodger (Builders) Ltd v Fawdry 1950 SC 483. He referred also to Burns v Garscadden (1901) 8 SLT 321. The respondents had not done so, depriving the executors of an opportunity to complete the transaction.

[17] If, contrary to his first submission, the respondents were empowered to review the price, he submitted, thirdly, that they acted unlawfully in imposing an increased price unilaterally and in failing to give the executors, who had been advised that the market had not moved to the extent that the respondents claimed, an opportunity to negotiate the price. This was envisaged in the Crichel Down rules, which the respondents purported to follow until their letter of 25 April 2006. In any event they purported to reserve the right to review the price and it was implicit in the word "review" that they would negotiate the price with the executors. Finally he submitted that it was unfair and Wednesbury unreasonable for the respondents to impose such a price increase on a take it or leave it basis. It was unfair in the context that the executors had not been given the opportunity, by means of an ultimatum, to complete the transaction in December 2005 at the April 2005 price. It was also unfair because, if the executors did not take the field at the revised price, the respondents would gain the benefit of the drainage impact assessment for which the developers had paid.

[18 ] Sir Crispin invited me to reduce the decision of December 2005 to review the price and the decision of March 2006 to increase the price. He submitted that the court should order the respondents to complete the conveyance of the land at the April 2005 price within a reasonable period which the court should fix. In any event, if the respondents were entitled to review the price after 31 December 2005, he submitted that the court should order them to negotiate a price for the land with a valuation date of 1 January 2006, which he submitted was when the executors had been in a position to settle the transaction.

[19 ] Mrs Wolffe for the respondents invited me to dismiss the petition. She advanced five principal submissions. First, she submitted that the Crichel Down rules were merely guidance as to government policy; they were commended to but were not of themselves binding on local authorities. They were open to a range of possible interpretations and the court should not interfere with the respondents' actings unless their interpretation was outside that range. She referred to R v Secretary of State for Defence ex parte Wilkins [2000] 40 EG 180. The petitioner's argument that the Crichel Down rules were exhaustive was misconceived. If it were correct, it would undermine the petitioner's case as the rules contain no power to extend the long-stop date once the terms of the re-purchase have been agreed. Properly construed, the rules were silent on many matters and that did not mean that those things were not permitted.

[20 ] Secondly, she submitted that what the Crichel Down rules offered was the first opportunity to purchase. She accepted that it had to be a real opportunity but the time limits on reaching agreement were set out in paragraph 18 of the rules. The respondents had a statutory duty to obtain the best consideration and could not be held indefinitely to a price which with the passage of time had become less than the current market value. She referred to Buttle v Saunders [1950] 2 All ER 193, R v Lancashire County Council ex p Telegraph Service Stations Ltd (unreported, McCowan J 20 June 1988), R v Commission for the New Towns ex p Tomkins (above), R v Secretary of State for Defence ex p Wilkins (above), J D P Investments v Strathclyde Regional Council 1997 SLT 408 and Morston Assets Ltd v City of Edinburgh Council 2001 SLT 613. She submitted that the Crichel Down rules should be interpreted in the context of the respondents' statutory duties and that those duties could trump any obligation under the rules.

[21 ] In relation to the valuation date she submitted, thirdly, that the petitioner's reliance on the guidance to government departments in the Annex to the English Crichel Down rules did not support the view that the date at which land was to be valued was immutable. It was merely guidance on guidance. In this case parties had valued the field as at April 2005. Even if there was an understanding as to the appropriate valuation date, that did not mean that the value could not be reviewed if the passage of time rendered the earlier valuation outdated.

[22 ] Fourthly, while accepting that the respondents' undertaking to dispose of the field in accordance with the Crichel Down rules had given rise to legitimate expectations, she submitted that the court required to consider precisely what those expectations amounted to: R (Bibi) v Newham London Borough Council (above). At the outset that expectation was that the respondents would act in accordance with the Crichel Down rules in a way which was consistent with their statutory duty to obtain the best consideration for the land. By 22 December 2005, the respondents had complied with the Crichel Down rules and that procedure had been exhausted; there was no legitimate expectation of any postponement of the date of settlement. There was no obligation on the respondents to give a further ultimatum before taking the field to the open market. The rule in Rodger (Builders) Ltd v Fawdry (above) was a rule of the law of contract and was not relevant to administrative law. In the present case there were no concluded missives and the executors could at any stage have walked away from the deal. In any event, the respondents' letter of 30 September 2005 was an ultimatum making time of the essence. The respondents decided to increase the price in order to reflect current market values in March 2006 and thereby comply with their statutory duty. In so doing they considered that they were acting in accordance with the Crichel Down rules. The executors could have no legitimate expectation that the respondents would act in a way that was ultra vires: Ali Fayed v Advocate General 2004 SLT 798.

[23 ] Finally, Mrs Wolffe submitted that there had been no unfairness in the way in which the respondents had acted. The initial judicial review in 2002 and the passage of time until December 2004 caused no unfairness as at all times the executors were entitled to re-purchase the field only at current market value and would have sold on in that market. The respondents did not gain from the developers' expenditure on the drainage impact assessment as the planning brief required any purchaser to satisfy himself on that matter. The respondents had given the executors between January and December 2005 to negotiate binding missives and the executors could have acted more promptly. As a fall back she submitted that if the respondents were held to have been Wednesbury unreasonable in seeking to revalue the field, the court should withhold any remedy; if the executors' solicitor had demurred to the respondents' reservation of the right to review the price as a condition for granting the extension of time from 31 December 2005, the respondents would simply have refused to grant an extension. She referred to King v East Ayrshire Council 1998 SC 182.

Decision

[24 ] As the petitioner's challenge is based principally on the assertion of the frustration of a legitimate expectation, it is appropriate to start by considering the nature of the asserted expectation. I was referred to the judgment of the Court of Appeal in R (Bibi) v Newham London Borough Council (above) in which (at paragraph 19) Schiemann LJ stated:

"In all legitimate expectation cases, whether substantive or procedural, three practical questions arise. The first question is to what has the public authority, whether by practice or by promise, committed itself; the second is whether the authority has acted or proposes to act unlawfully in relation to its commitment; the third is what the court should do."

Taking that first question, I am satisfied that the undertaking which the respondents gave in their letter of 19 November 2002, in which they promised to dispose of the field in accordance with the Crichel Down rules, committed them to complying with those rules in giving the executors an opportunity to re-purchase the late Mr Findlay's field. The undertaking was clear and unambiguous. Using the terminology of Lord Woolf in R v North and East Devon Health Authority ex p Coughlan [2001] QB 213 CA, which Mrs Wolffe produced in her bundle of authorities, I consider that the undertaking gave rise to both procedural and substantive legitimate expectations. The expectation was procedural in so far as the undertaking was to comply with those rules in disposing of the field; it was substantive in that the respondents undertook to give the executors an opportunity to re-purchase.

[25] As there was a legitimate expectation of a substantive benefit, the relevant issues are (i) whether by their acts or omissions the respondents frustrated that expectation and (ii) if so, whether the frustration of the expectation was so unfair as to amount to an abuse of power. See ex parte Coughlan (above) in which Lord Woolf discusses, among others, the Revenue cases, In re Preston [1985] AC 835 and R v IRC ex p MFK Underwriting Agents Ltd [1990] 1 WLR 1545. In assessing whether there has been an abuse of power, it is necessary for the court to consider the legitimate expectation in the statutory context in which the public authority was operating and to ask whether there is any overriding public interest which justified its dishonouring the undertaking and thus frustrating the expectation. It is clear that that the executors could have no legitimate expectation that the respondents would be held bound in fairness by their undertaking if the undertaking was or had become inconsistent with their statutory duties - see Ali Fayed v Attorney General (above), Lord President Cullen at paragraphs 118-119, and R v Devon County Council ex p Baker [1995] 1 All ER 73, Simon Brown J at 88-89, whom Lord Woolf cited with approval in ex parte Coughlan (above) at paragraph 73.

[26] In addressing what was the content of the legitimate expectation, I turn therefore to the disputed issue of how the Crichel Down rules should be interpreted and what they required the respondents to do. In this case, because of the undertaking, it is immaterial that, as Mrs Wolffe submitted, the rules of themselves are not binding on the respondents because they are a statement of policy in relation to surplus government land and are only commended to local authorities for application where appropriate. Nonetheless their status as a statement of policy is material to the correct approach to their interpretation.

[27 ] As mentioned in paragraph 19 above, Mrs Wolffe referred me to R v Secretary of State for Defence ex parte Wilkins and in particular to an obiter dictum by Moses J at p.182 in which he referred to R v Monopolies and Mergers Commission ex parte South Yorkshire Transport [1993] 1 WLR 23 in support of the view that there might be a range of interpretations which a decision maker might properly adopt. I did not derive much help from this passage in which Moses J recorded a party's submission and accepted it only as a fallback. But it is a succinct statement of an approach to the interpretation of the Crichel Down rules and there are other cases which bear on the correct approach for the courts to take in relation to the interpretation by public authorities of policy documents. I invited counsel to comment on the Scottish case, Freeport Leisure plc v West Lothian Council 1999 SC 215 and the following English cases: Northavon District Council v Secretary of State for the Environment [1993] JPL 761, Virgin Cinema Properties Ltd v Secretary of State for the Environment [1998] 2 PLR 24, R v Derbyshire County Council ex p Woods [1998] Env LR 277 and R v The Secretary of State for the Environment, Transport and the Regions and Kettering Borough Council ex parte Tesco Stores Ltd [2001] JPL 686.

[28] Counsel did not take issue with the approach taken in these cases. Mrs Wolffe submitted that they supported her submissions. Sir Crispin Agnew accepted the approach in these cases in relation to policy documents which contained broad statements of policy. But he submitted that the cases were of only limited relevance in relation to the Crichel Down rules in a context where a public authority had undertaken to dispose of the property in accordance with those rules. Further, while there were paragraphs in the Crichel Down rules which contained broad statements of policy to which the decision maker could give a range of interpretations, paragraph 18 was prescriptive and was not open to a range of meanings. He submitted that the Crichel Down rules contained legal rules. Once a price had been agreed, there was no mechanism by which the public authority could, while operating within the rules, impose a different price on the would-be purchaser.

[29 ] In my opinion there is a distinction to be drawn between the interpretation of documents which have the force of law, such as legislative texts, or which confer legal rights and obligations, such as contracts, on the one hand and documents that are statements of policy on the other. The task of interpreting the first class of documents is that of giving a legal meaning to the words used. Different legal documents may be interpreted using different methods, but the task is the same. In an Act of Parliament or in subordinate legislation every sentence has the force of a law or part of the law. Contracts are drafted with varying degrees of skill and formality but their drafters intend to confer legal rights or impose legal obligations by the words which they use. The courts will try to give an objective meaning to the words of a contract, but, if they cannot, those words or the contract as a whole may be unenforceable from uncertainty (see, for example, May & Butcher Ltd v The King [1932] 2 KB 17). An opinion or judgment of a court of law will be interpreted in a different way because, unlike a statute, not every sentence that a judge writes has the force of law. It is the ratio of the decision that may contain the law that binds an inferior court. But again the interpretative exercise for the court is ascertaining the legal meaning of the words used. In each of these cases the interpretation of the words is a question of law.

[30 ] Statements of policy, such as national planning guidelines or the Crichel Down rules, are not as a general rule intended to have legal effect. The meaning to be given to such documents is a question of fact, so long as the decision-maker gives the words a meaning that is not perverse or irrational. As a result, misinterpretation of such documents does not of itself necessarily entail an error of law (Freeport Leisure Ltd (above) at 221H).

[31 ] The court will interfere with a decision based on the decision-maker's interpretation of the relevant wording of such a document only if he has given the words a meaning which they could not properly have or has restricted their meaning in a way which the breadth of their terms could not justify (Northavon District Council (above) at 763-764). The court has first to determine as a matter of law what the words are capable of meaning. In many cases, some understanding of the thought and purposes behind the policies will be needed in order to determine the scope of the words used in the policy document. Particularly where a policy document uses open textured criteria which require the decision maker to make a qualitative judgement, regard must be had to the policy context as well as the ordinary and natural meaning of the words used. If the words are capable of bearing more than one meaning, the court will then consider whether the interpretation which the decision-maker has adopted is within the range of meanings which the words are capable of bearing. Only if the decision-maker's interpretation is outside that range or is otherwise perverse or Wednesbury unreasonable (for example because it is unduly restrictive having regard to the breadth of the words used) does the court have grounds to interfere with the decision, as only then has there been an error of law. See R v Derbyshire County Council ex p Woods (above) Brooke LJ at 290-291; ex parte Tesco Stores Ltd (above) Keene J at 692.

[32 ] Interpretation of policy documents is primarily a matter for the decision-maker and not the court because in most cases it is not a question of law. This is principally because of the nature of the document, which does not of itself have legal effect. While judges sometimes speak of exercising self-restraint in respect of such documents, it appears to me to be a question of the limits of the court's jurisdiction.

[33 ] Interpretation of policy documents is primarily a matter for the decision-maker also because of the broad texture of the words which policy-makers often use in such documents. But there is no complete dichotomy of approach between documents which of themselves have legal effect and policy documents which do not. In some cases, statutory criteria are so imprecisely worded that there is a range of conclusions which a decision-maker can reach in applying the criteria to the facts of a particular case without committing an error of law. Interpretation of the words of the statute is a question of law but there may be no single exclusively correct interpretation where the words are imprecise. Where a statute uses language whose breadth calls for an exercise of judgement by a decision-maker, the court will not interfere with a decision where the decision-maker remains within the permissible field of that judgement. There the court exercises self-restraint as the decision is at least in part a question of law, but the court declines to substitute one view of the meaning of the words for another tenable interpretation. Thus in R v Monopolies and Mergers Commission ex p South Yorkshire Transport Ltd (above), the House of Lords recognised that the Monopolies and Mergers Commission had a margin of judgment in deciding what amounted to "a substantial part of the United Kingdom" in section 64(3) of the Fair Trading Act 1973; see Lord Mustill at 32-33. See also Freeport Leisure Ltd (above) at 221G. Thus documents which have legal effect may use words whose breadth gives the decision-maker or party to a contract a degree of discretion in interpretation with which a court will not interfere by imposing its own view of the meaning of the words.

[34 ] The Crichel Down circular is a policy document. Some passages of the Crichel Down rules are not capable of bearing a wide range of meanings. For example the timetable in paragraph 18 for the agreement of heads of terms is unambiguous. Where a former owner had a legitimate expectation that a public authority would apply the Crichel Down rules, if that authority were unilaterally to allow less time than the paragraph envisaged, that decision would be open to challenge if it frustrated the legitimate expectation. Other passages or phrases involve issues of judgement. For example, there will be a range of values which different professional valuers may reasonably and honestly put forward as the current market value. Significantly, there are many matters on which the Crichel Down rules are silent. One of those is the date at which the land should be valued. It is clear that there must be a valuation date to enable the price to be agreed in order to comply with the timetable set out in paragraph 18. I consider that the English guidance, which states that it is the date on which the former owner indicates that he wishes to purchase, is an appropriate arrangement if the parties have not agreed another date. In this case the parties valued the land as at April 2005 and I see nothing objectionable in that.

[35 ] The Crichel Down rules are silent as to what is to be done after the terms and price have been agreed in accordance with paragraph 18. Thus in this case, we are concerned with the interpretation of silence. The issue therefore is whether the respondents' actions were consistent with a tenable interpretation of the broad policy articulated in the Crichel Down circular in a context where the rules did not set out any procedures or timescales.

[36 ] It is likely, as was envisaged in the heads of terms in this case, that in most cases the parties having reached a paragraph 18 agreement will then negotiate a binding contract of sale and the transaction will thereafter be completed by the conveyance of the land. But the rules do not provide for that process, nor is any mechanism set out to deal with delays between completing the paragraph 18 arrangements and the conclusion of missives or the settlement of the transaction. In my opinion it is for the public authority in discussion with the would-be purchaser to provide the mechanism for the timeous completion of the contract and the conveyance of the land. So long as the public authority, in establishing procedures which are not set out in the Crichel Down rules, gives the former owner what in the circumstances of the particular case is a real opportunity to purchase his land, the precise means of so doing is within the authority's discretion. In this case the respondents did so by stipulating in the heads of terms a settlement date, initially of 30 September 2005, to which the executors agreed. Thereafter, in order to give the executors a further opportunity to ascertain whether the proposed development could have access to public sewers for its drainage, the respondents granted a continuation to 31 December 2005. Subject to the question of the ultimatum procedure, which I discuss in paragraph 39 below, there was nothing to prevent the respondents from bringing the discussions with the executors to a close on 31 December 2005 and then seeking to dispose of the land on the open market.

[37 ] The respondents were under a statutory duty to obtain the best consideration that could reasonably be obtained in disposing of the field: section 74(2) of the Local Government (Scotland) Act 1973. In agreeing a timetable for completing the sale of the field to the executors the respondents were bound to have regard to this duty. The second major question that arises in this case is how a public authority balances its statutory duty to obtain the best consideration with its obligations in implementing the Crichel Down procedures. In my opinion, in the light of the authorities set out in paragraph 20 above, the answer is straightforward to state but perhaps more difficult to apply in some cases.

[38 ] The public authority by agreeing a sale at current market value in accordance with the guidance in paragraph 24 and the procedures in paragraph 18 of the Crichel Down rules acts in accordance with its duty to obtain best consideration at that time. Thereafter the public authority must allow the would-be purchaser a real opportunity to complete the transaction within a reasonable time. What is a reasonable time will vary from case to case. When land prices are reasonably static, the public authority may allow more time for completion without creating a conflict with its statutory duty than when prices are moving upwards rapidly. If parties enter into binding missives of sale, the matter is then governed by contract. If there are no missives of sale, the public authority, having set a reasonable timescale and having allowed the would-be purchaser that time to conclude missives and to complete the transaction, is entitled to review the market value of the land. Where the public authority has reliable evidence that the market value of the land has increased materially since the price was agreed under paragraph 18 of the Crichel Down rules and has already given the would-be purchaser a reasonable opportunity to conclude missives and complete the transaction, it would have to review the price in order to comply with its statutory duty. The respondents did so in this case. Alternatively, on expiry of the time limit the public authority could dispose of the land on the open market.

[39 ] I am not persuaded that the respondents had to give the executors an ultimatum in December 2005 if they wished to bring to a close the negotiation for the re-purchase of the land. The ultimatum procedure in Rodger (Builders) Ltd v Fawdry (above) and similar cases exists in our law of contract to enable an innocent party to make the other contracting party's failure to perform on time a material breach of contract which would entitle the innocent party to rescind. The procedure is needed because, as a general rule in a contract for the purchase of heritable property, payment of the price on the appointed day is not an essential term of the contract. In the present case there was no contract. The respondents made it clear in their letter of 30 September 2005 that the executors had to complete the proposed re-purchase by 31 December 2005. See paragraph 8 above. That was sufficient notice. Had the respondents chosen at the end of December 2005 to terminate their discussions with the executors and to market the field on the open market, without giving the executors a further ultimatum, that course of action would not in my opinion have involved any unfairness which could be categorised as an abuse of power.

[40 ] The respondents' decision to continue to take forward the proposed transaction with the executors after 31 December 2005, by extending the "long-stop" date to 31 March 2006, meant that, having reviewed the value of the land, they required to offer the land to the executors at its new open market value. The respondents in extending the "long-stop" date professed to be acting in accordance with the Crichel Down rules, although the rules set down no procedures for prolonging the transaction. By so doing, they undertook to allow the executors an opportunity to purchase at the reviewed market price, as paragraph 24 of the rules requires a sale at current market value. This again in my opinion gave rise to a substantive legitimate expectation. But it has not been demonstrated that the respondents did anything to breach that undertaking. In my opinion the Crichel Down rules did not, either expressly or by implication, require the respondents to negotiate with the executors over the reviewed value. Nor was such a requirement implicit in the condition that allowed the respondents to review the value. The respondents could, consistently with the policy in the Crichel Down rules, have invited negotiations on the reviewed open market value. But they were entitled to interpret the policy underlying the Crichel Down rules as requiring them merely to offer to complete the transaction at the then current market price.

[41 ] The executors did not pursue their assertion that the price which the respondents specified was not supported by the evidence of the market and was therefore not the current market value. Instead they challenged the respondents' entitlement to alter the price from that which had been agreed in April 2005 and advanced that as their principal submission in this judicial review.

[42 ] I am not persuaded that the respondents have resiled from their undertaking or otherwise frustrated a legitimate expectation. Nor have they acted unfairly in such a way as to amount to an abuse of power. The petitioner's application therefore fails. While the court has a discretion to withhold a remedy when a judicial review challenge has been made out (London & Clydeside Estates Ltd v Aberdeen District Council 1980 SC (HL) 1 at 31 and King v East Ayrshire Council (above)), that issue does not arise in this case.

Conclusion

[43 ] The challenge to the respondents' decisions fails. I therefore sustain the third, fourth and fifth pleas-in-law for the respondents and refuse the petition.