Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION

[2016] CSOH 138

CA31/16

OPINION OF LORD DOHERTY

In the cause

TONSLEY (STRATHCLYDE) LIMITED and TONSLEY (STRATHCLYDE NO. 2) LIMITED as Trustees of the Tonsley 2 Trust

Pursuers

against

SCOTTISH ENTERPRISE

Defenders

Pursuer:  Thomson;  CMS Cameron McKenna LLP

Defender:  Barne;  Burness Paull LLP

4 October 2016

Introduction
[1]        The pursuers are the registered proprietors of heritable subjects which include Unit 3, Euromed Business Park, Strathclyde Business Park, Bellshill (“the Premises”).  When they became proprietors in 2012 they succeeded to the landlords’ interest under a lease of the Premises between Euromed Business Park Limited and the defenders dated 14 June and 6 September 1994 as amended by Minute of Amendment of Lease between Medical Centres Scotland 2000 Limited and the defenders dated 8 and 13 July 2004 (the lease as so amended being hereafter referred to as the “Lease”.  The ish of the Lease was 30 September 2013.  The Lease was terminated and the defenders vacated the Premises at the ish.

[2]        In this commercial action the pursuers’ principal claim is for payment from the defender of the sum of £395,589.17 with interest from 15 July 2015 until payment.  The sum of £395,589.17 is said to be equal to the cost of rectifying dilapidations said to have existed at the ish.

[3]        The pursuers aver that during the currency of the Lease the defenders did not discharge the repairing and maintenance obligations which were incumbent upon them;  and that on the expiry of the Lease the premises were not in the state and condition in which they ought to have been had the defenders performed their obligations.  The defenders admit that they were in breach of their repairing and maintenance obligations.  However, the parties are in dispute as to the proper construction of Clause 3.38.2 of the Lease.

The Lease
[4]        Clause 1.2 of the Lease contained inter alia the following definitions:

“…

‘Premises’ means the whole subjects hereby let as more fully described in Part I of the Schedule and each and every part thereof together with the offices, laboratory/workshop areas and other structures and each and every part thereof now or hereafter erected or in the course of erection thereon… together also with all additions, alterations and improvements thereto which may be carried out during the Period of this Lease, all service systems and media to include but without limitation all channels, ventilation ducting, drains, sewers, telecommunication lines, pipes, wires, cables, aerials or other conducting media, pumps, valves, manholes, meters, connections and the like therein and all plant and equipment and landlord’s fixtures and fittings from time to time in and about the same including and in addition (but without prejudice to the foregoing generality) the following items of plant and equipment in so far as provided by the Landlord within the Premises from time to time namely the boilers, all central heating systems, the lighting systems, the fire/smoke detector alarm/ sprinkler systems and also the wall coverings and the carpets/carpet tiles and other floor coverings.

…

‘These Presents’ means this Lease and any document which is supplemental hereto or which is expressed to be collateral herewith or which is entered into pursuant to or in accordance with the terms hereof.

…”

In terms of Clause 2 the Tenant accepted the Premises in their present condition at the outset of the Lease.  The Tenant’s obligations throughout the period of the Lease included:  an obligation to put into and keep in good and substantial repair and condition and where necessary to renew and replace the plant and machinery within the Premises (Clause 3.6.1);  an obligation to put into and keep in good and substantial repair and condition and to keep clear from obstruction all service systems and media forming part of the Premises (Clause 3.6.3);  and an obligation well and substantially to repair, maintain, renew, rebuild and reinstate and generally in all respects to put and keep in good and substantial condition the Premises (Clause 3.8).  Clauses 3.9 (exterior) and 3.10 (interior) obliged the Tenant to decorate the Premises regularly and during the last year of the Lease.  Each of those clauses contained the proviso:

“PROVIDED ALWAYS that the Landlord shall have the option (in lieu of requiring the Tenant to carry out the work in this sub-clause provided to be done by the tenant during the last year of the Period of this Lease) of requiring the Tenant to pay to the Landlord the sum certified by the landlord as being equal to the cost of carrying out such work and if the Tenant shall pay to the Landlord the sum as certified together with any surveyors’ fees incurred by the Landlord in connection with such Certificate within fourteen days of demand the Landlord shall accept the same in full satisfaction of the Tenant’s liability under this sub-clause quoad the work referred to in this proviso.”

In terms of clause 3.26.1 the Tenant was obliged to pay to the Landlord

“…all reasonable costs, charges, expenses, disbursements and fees … properly and reasonably incurred by the Landlord:-

3.26.1.1      incidental to the preparation and service of all notices and schedules relating to wants of repair or requiring the Tenant to remedy any breach of any of the obligations herein contained …;

3.26.1.2      in the preparation and service of a schedule of dilapidations at any time during or after the expiration of the Period of this Lease …;

3.26.1.3         in connection with or procuring the remedying of any breach of any obligation on the part of the Tenant contained in These Presents …;

…”

Clause 3.38.2 provided:

“3.38.2 At the expiration or sooner determination of the Period of this Lease without any warning away or process of removal to that effect to remove from and leave void and redd the Premises in such good and substantial repair and condition as shall be in accordance with the obligations on the part of the Tenant contained in These Presents together with all fixtures and fittings (excepting Tenant’s fixtures and fittings) and improvements and additions which now are or may at any time hereafter be in or about the Premises save such as the Tenant has been required to remove pursuant to Clause 3.38.1.3; Provided always that (a) if at such expiration or sooner determination the Premises shall not be in such good and substantial repair and condition then at the option of the Landlord either (i) the Tenant shall carry out at its entire cost the works necessary to put the Premises into such repair and condition or (ii) the Tenant shall pay to the Landlord the sum certified by the Landlord as being equal to the cost of carrying out such work and if the Tenant shall pay to the Landlord the sum as certified together with any surveyor’s fees incurred by the Landlord in connection with such Certificate within fourteen days of demand the Landlord shall accept the same in full satisfaction of the Tenant’s liability under this sub-clause quoad the work referred to in this proviso and (b) if the Landlord elects to require the Tenant to carry out the works foresaid and the Tenant defaults in doing so the Landlord shall be entitled to carry out such works at the entire cost of the Tenant and whether such works are carried out by the Tenant or in default by the Tenant as aforesaid, by the Landlord there shall in addition be paid to the Landlord by the Tenant a sum equivalent to the rent which the Landlord would have received had These Presents subsisted until the date that all such necessary works had been completed to the satisfaction of the Landlord such sum to be paid on a date being seven days from the date of the Landlord informing the Tenant that all such works have been so completed.”

The pleadings
[5]        The pursuers’ primary case is that the defenders are bound in terms of Clause 3.38.2(a)(ii) to pay them a sum equal to the cost of putting the Premises into such good and substantial repair and condition as was in accordance with the defenders’ obligations under the Lease.  They aver that the defenders did not discharge their repairing and maintenance obligations;  that on 29 August 2013 the pursuers issued to the defenders an un-costed Schedule of Dilapidations which was followed by a costed Schedule of Dilapidations, and then a revised Schedule of Dilapidations, the revised Schedule being served in the defenders under cover of a letter of 14 October 2015.  The pursuers aver that the letter of 14 October 2015 together with the revised Schedule was a notice in terms of Clause 3.38.2(a)(ii) and that it required the defenders to pay £395,589.17.  The pursuers’ alternative case is that, esto the defenders are not bound in terms of Clause 3.38.2(a)(ii) to pay them a sum equal to the cost of putting the Premises into good and substantial repair and condition, the pursuers are entitled to damages of £395,589.17 in respect of the defenders’ breach of contract.  The pursuers aver that to date they have spent the sum of £155,686.20 on works to the Premises, that a further £39,422 is to be spent, and that professional and other fees will also become due.  In relation to that expenditure the pursuers aver:

“The cost of works already carried out, and shortly to be completed, is not, however, either the appropriate measure of the sum due to be paid under clause 3.38.2(a)(ii) or, alternatively, of any damages due to be paid to the Pursuer. In neither case need the Pursuer establish a current intention to carry out further works as a precondition to establishing its entitlement to payment.  The Pursuer is, rather, fully entitled to recover payment from the Defender before determining what to do with the sums recovered.”

[6]        The defenders deny that the sum claimed is due and payable.  They aver that neither the letter of 14 October 2015 nor the revised Schedule which accompanied it (nor the two taken together) was a certificate in terms of Clause 3.38.2(a)(ii).  A certificate satisfying the terms of the clause had to be in the nature of a final unreserved claim.  In any case the sum claimed was over-stated and it was challenged.  In any event, nothing was due either under Clause 3.38.2(a)(ii) or as damages because the pursuers had no intention or need to carry out the works listed in the Schedule or any other works.  They had entered into a full repairing and insuring lease with Critiqom Limited (“Critiqom”) in terms of which Critiqom was obliged to carry out extensive works to the Premises at the end of the lease.  Properly construed Clause 3.38.2(a)(ii) did not entitle the pursuers to a windfall payment for remedial work which it had not carried out, and never would carry out.

[7]        The pursuers make averments in answer in respect of the Critiqom lease:  that it is res inter alios acta;  and that in any event in terms of that lease Critiqom is not obliged to put the Premises into any better repair and condition than shown in the Schedule of Condition referred to in the lease.

Counsel for the pursuers’ submissions
[8]        Mr Thomson moved that certain of the defenders’ averments in Answer 4 of the defences should not be admitted to probation, and that the pursuers’ first plea‑in‑law (a plea to the relevancy) should be sustained to that extent.  Thereafter, a Proof Before Answer would be required.  The averments concerned (from “However, in any event,” to the end of the Answer) refer to the Critiqom lease and its terms;  they state that the pursuers have no intention or need to carry out any works to the Premises, and that neither Clause 3.38.2(a)(ii) nor any right to damages for breach of contract entitles the pursuers to receive payment for remedial work that has not been and will never be carried out.

[9]        Mr Thomson submitted that on a proper construction of the Lease Clause 3.38.2(a)(ii) operated as a “payment clause”.  In the event of the Tenant being in breach of its obligations at the ish the Landlord had the option to certify a sum equal to the cost of carrying out the works necessary to put the Premises into such good and substantial repair and condition as would accord with the Tenant’s obligations under the Lease.  The clause gave the Landlord the option of obtaining payment of the sum certified instead of other remedies, such as damages for breach of contract.  That was the ordinary and natural reading of the provision.  It was, in fact, the only possible interpretation.  The Tenant’s suggested construction ‑ that the clause only requires the Tenant to make payment to the Landlord of the loss actually suffered by it as a result of the Tenant’s breach of its repair and maintenance obligations ‑ was not a possible construction.  For that reason Grove Investments Ltd v Cape Building Products Ltd 2014 Hous LR 35 (“Grove”) fell to be distinguished, and @SIPP Pension Trustees v Insight Travel Services 2016 SLT 131 (“@SIPP”) was in point.  In Mapeley Acquisition Co (3) Ltd (In Receivership) v City of Edinburgh Council [2015] CSOH 29 (“Mapeley”) the relevant clause had been very similar to the clause in the present case:  but in light of Arnold v Britton [2015] AC 1619 and @SIPP it now appeared that Mapeley had been wrongly decided.  Even if the defenders’ suggested construction was a possible construction, it ought not to prevail where, as here, the clause had a clear, and different, natural meaning:  Arnold v Britton;  @SIPP.  The approach to construction discussed in Grove was not apt in such circumstances.

[10]      Where the Landlord exercised the option, the sum certified was not necessarily final and binding (cf. Fairfield Sentry Ltd v Migani [2014] UKPC 9, per Lord Sumption at paragraph 26;  Minster Trust Ltd v Traps Tractors Ltd [1954] 1 WLR 963, per Devlin J at page 976;  R E Brown & Ors v GIO Insurance Ltd [1998] CLC 650, per Chadwick LJ at page 659C-D).  Certification did not prevent the Tenant from showing that it was not in fact in breach of one or more of the obligations which the Landlord contended it had breached.  Nor did it prevent the Tenant from challenging the reasonableness of the quantum of the cost certified.  However, if the option was validly exercised the relevant issue was whether the cost certified represented a sum equal to the cost of carrying out the works necessary to put the Premises into such good and substantial repair and condition as would accord with the Tenant’s obligations under the Lease.  Whether the Landlord would actually use the sum for that purpose was neither here nor there, and the defenders’ averments relating to that issue and to the terms of the Critiqom lease were accordingly irrelevant.

[11]      Even in the context of the alternative claim for damages, the Critiqom lease was res inter alios acta (see eg Haviland v Long [1952] 2 QB 80), and the defenders’ averments as to its terms were both irrelevant and erroneous.  The pursuers were entitled in the first instance to quantify their claim by reference to the cost of repairs.  If the defenders could prove that the pursuers’ true loss was less than this it was open to them, on suitable averments, to do so (Duke of Portland v Wood’s Trs.1926 SC 640, per Lord President Clyde at pages 651-2;  Prudential Assurance Co. Ltd v James Grant & Co. (West) Limited 1982 SLT 423, per Lord McDonald at page 424).  In the present case the defenders did not aver that some alternative measure of loss was appropriate.

[12]      If the court took the view that it was possible that the averments which the pursuers challenged might nonetheless be relevant in relation to the alternative claim for damages (and for that reason ought not to be excluded from probation) it would assist if the court made it clear in its Opinion that that was the only context in which they might be relevant.

[13]      The pursuers’ averments that they had validly exercised the option to certify in terms of Clause 3.38.2(a)(ii) were suitable for inquiry.  The Lease did not require any particular formality for certification.  Certification was the notification of a claim by the Landlord.  The pursuers offered to prove that certification was made in the letter of 14 October 2015/the revised Schedule;  or alternatively that certification was effected by raising the present proceedings.  On either basis the reasonable recipient would have been left in no real doubt as to the intention of the pursuers (Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749).

[14]      Mr Thomson also moved for decree de plano in terms of the third conclusion (which sought payment of £3,404.50 professional fees incurred in connection with the preparation of the Schedule of Dilapidations);  and for decree of declarator that the pursuers were entitled in terms of Clause 3.26.1 of the Lease to recover all reasonable costs, charges, expenses disbursements and fees including “the full cost of the present action, including all reasonable fees of solicitors, counsel and experts”, all in terms of the fourth conclusion.

Counsel for the defenders’ submissions
[15]      Mr Barne moved for a proof before answer.  His primary submission was that, properly construed, Clause 3.38.2(a)(ii) was not a payment clause or a liquidated damages clause.  Rather, Clause 3.38.2, read as a whole, clarified and confirmed the Landlord’s right to claim common law damages for breach by the Tenant of its repairing and maintenance obligations under the Lease.  It focussed on the Landlord’s remedies of implement and damages.  He submitted that, following “the broad thrust of the reasoning” in Grove, Clause 3.38.2, properly construed, only required the Tenant to make payment to the Landlord of the loss actually suffered by it due to the Tenant’s failure to implement its repair and maintenance obligations.  The manner in which Clause 3.38.2 was arranged could be explained as providing certainty where the common law was uncertain ‑ in relation to whether or not a landlord could compel a tenant to return to undertake remedial works after the expiry of a lease:  PIK Facilities Ltd v Shell UK Ltd 2003 SLT 155, at para 23.  The construction for which the defenders contended was at the very least a possible construction.  The fact that the jurisdiction conferred on the Landlord did not extend to certification of the wants of repair or the nature and extent of the necessary remedial work, but only “the sum …equal to the cost of carrying out such work” tended to support the defenders’ construction.  While it was accepted that the construction for which the pursuers contended was also a possible construction, there was ambiguity.  In those circumstances it was legitimate to have resort to commercial common sense and to the other aids to construction which had assisted the court in both Grove and Mapeley.  When resort to those aids was had here the outcome ought to be similar to the outcomes in those cases.  Both of those cases had been correctly decided.  Neither of them had been doubted or disapproved in @SIPP, and the reasoning in them had not been undermined by anything said in Arnold v Britton or @SIPP.

[16]      In any case the requirements of certification had not been met.  Certification connoted the making of a definitive statement:  Fairfield Sentry v Migani, supra, per Lord Sumption at paragraphs 26-28.  Clause 3.38.2 (a)(ii) envisaged such certification, not mere notification of a claim.  It was salutary to note that in terms of Clause 8 the parties had consented to registration of the Lease and of any certificate issued under it for preservation and execution.  Summary diligence could follow upon a valid certificate issued in terms of Clause 3.38.2 (a)(ii).  The letter of 14 October 2015 and the accompanying Schedule could not be certification because in terms of paragraph 4.7 of the Schedule the pursuers had reserved the right to alter and amend the Schedule at any time up to full and final settlement of the dilapidations claim.  Since in the present action the pursuers relied on the letter and the Schedule the contention that the summons amounted to certification was open to the same objection.

[17]      On any view the defenders’ averments about the pursuers’ intentions and about the existence and the terms of the Critiqom lease were relevant to the pursuers’ alternative claim for damages.  It was far from clear that in that context the Critiqom lease ought to be disregarded on the general principle of res inter alios acta (cf. Dimond v Lovell [2002] 1 AC 384, per Lord Hoffman at pp. 398C- 400D).  At the very least it could not be said at this stage that the pursuers’ intentions, and the existence and the terms of the Critiqom lease, would have no bearing when the court decided what was the true loss suffered by the pursuers:  Duke of Portland v Wood’s Trs., supra, per Lord President Clyde at pages 651-2;  Prudential Assurance Co. Ltd v James Grant & Co. (West) Limited, supra, per Lord McDonald at page 424;  Grove, per Lord Drummond Young at paragraphs 5 and 18;  McGregor on Damages (19^th ed.), paragraphs 9-176 to 9-177.

[18]      Mr Barne made a number of further observations.  Even if the pursuers’ construction was correct, the proviso in Clause 3.38.2 related only to wants of repair.  It did not concern costs of removing additions or improvements.  Thus, notwithstanding the inclusion in the Schedule of entries relating to the removal of additions (eg items 45, 50-52), any claim in relation to such items could only be a claim for damages.  He submitted that the costs of exterior and interior decoration did not fall within the ambit of Clause 3.38.2 (a)(ii) because Clauses 3.9 and 3.10 had their own certification provisions and no certificates under those clauses had been issued.

[19]      It was premature to pronounce any decree in relation to professional fees.  The obligation in Clause 3.26.1 was to pay reasonable costs etc.  The court was not in a position to determine at this stage whether the sum claimed in the third conclusion was reasonable.  Nor was the court in a position to say at this stage that “the full cost of the present action” ought to be recoverable by reason of Clause 3.26.1.  Prima facie that language was indicative of a right to a complete indemnity for the costs of the action which fell to be contrasted with the right to reasonable costs referred to in Clause 3.26.1.

Decision
[20]      I agree with Mr Thomson that Clause 3.38.2 (a)(ii) is in very similar terms to the corresponding provision in Mapeley.  More importantly, in my opinion its terms are also very similar to the corresponding provision in @SIPP.  The proviso to Clause (Seven) in @SIPP gave the Landlord the option to:

“call upon the Tenant by notice in writing (in which event the Tenant shall be bound), to pay to the Landlord at the determination date … a sum equal to the amount required to put the leased subjects into good and substantial repair and in good decorative condition in accordance with the obligations and conditions on the part of the Tenant herein contained in lieu of requiring the Tenant himself to carry out the work.”

Clause 3.38.2 (a)(ii) is much closer to the corresponding provision in @SIPP than it is to the relevant provision in Grove (article Twelfth) which provided:

“The tenants bind themselves … to pay to the landlords the total value of the Schedule of Dilapidations prepared by the landlords in respect of the tenants’ obligations under Articles Fifth and Sixth hereof declaring that the landlords shall be free to expend all monies recovered as dilapidations as they think fit …”

In Grove an important consideration was that the word “value” had been used rather than “cost” or “costs of repair”.  The court regarded “value” as being a word of more general signification than “cost” (paragraph 16).  Given the use of the word “value” it was clear that the construction urged by the Tenant was a possible construction.  That conclusion falls to be contrasted with the conclusions reached by the court in @SIPP in relation to the provision under consideration there:  viz (i) that the ordinary and natural meaning of the provision was that it was a payment clause;  and (ii) that the provision was not ambiguous, and that in the whole circumstances the construction suggested by the Tenant was not a possible one.

[21]      The decision and reasoning in @SIPP provide important guidance.  I am mindful that it is the language of the present Lease which the court requires to construe, but I am not persuaded that there is any sound basis for distinguishing @SIPP, or for otherwise holding the guidance contained in it to be inapplicable to the present case.  On the contrary, I am clear that it is my duty as an Outer House judge to follow it.

[22]      In my opinion the ordinary and natural meaning of Clause 3.38.2 (a)(ii) is that it provides the Landlord with the option of certifying a sum equal to the cost of the works necessary to put the Premises into the condition in which they ought to have been at the ish had the Tenant duly performed its obligations under the Lease.  Following the approach of the court in @SIPP, I am not persuaded that the construction of Clause 3.38.2 (a)(ii) suggested by the defenders is a possible construction.  I can see that uncertainty concerning the Landlord’s right at common law to seek implement of repairing obligations after the ish might explain the inclusion of Clause 3.38.2 (a)(i) (as to which uncertainty see Stair Encyclopaedia of the Laws of Scotland, Vol. 13 (1992), Landlord and Tenant (contributed by J.G.S.  Cameron and J. Colquhoun), paragraph 276;  Fleming, MacKinlay and McMillan, Dilapidations in Scotland (2^nd ed.), paragraphs 5.7 - 5.8);  but there was no need to incorporate a term reflecting the Landlord’s right at common law to recover damages for the Tenant’s breach of contract.  Moreover, if the intention had been to include such a term it would not have been difficult to draft an appropriate provision. I would not have expected the language of Clause 3.38.2 (a)(ii) to have been employed.

[23]      Since I find that there is no ambiguity in Clause 3.38.2 (a)(ii), Grove is readily distinguishable.  In that case the language of the relevant clause was ambiguous.  It was materially different from the language of Clause 3.38.2 (a)(ii), and the word “value” was more open-textured than the word “cost”.  The clause in Grove was more amenable to bearing the construction contended for by the tenant than the language of Clause 3.38.2 (a)(ii).

[24]      In light of the Extra Division’s Opinion in @SIPP and the guidance relating to the construction of contracts provided in Arnold v Britton I do not think it is open to me to follow the approach I took in Mapeley (to Clause 3.37.2).  In any case, if at the time of construing that clause I had had the advantage of the guidance in those cases I would have been much less inclined to accept that the tenant’s construction of the clause was a possible construction.  I think it likely that I would have upheld the landlord’s construction.

[25]      Even if, contrary to my view, the defenders’ interpretation of Clause 3.38.2 (a)(ii) is a possible construction, the pursuers’ construction is plainly the ordinary and natural meaning of the clause.  The guidance in @SIPP and in Arnold v Britton makes clear that that may often be of great importance.  I am satisfied that the ordinary and natural meaning of the clause ought to be given substantial weight in the present case even if it is appropriate to have regard to the further considerations upon which Mr Barne relies.  Neither those further considerations nor any of the considerations discussed in Arnold v Britton lead me to conclude that the clause ought not to be given its ordinary and natural meaning.

[26]      I turn to the defenders’ attack on the pursuers’ averments of certification.  What constitutes “certifying” or a “certificate” is dependent upon the commercial or legal context in which the certification clause appears (Fairfield Sentry Ltd v Migani, supra;  Lewison, The Interpretation of Contracts (6^th ed.), paragraph 14.01).  Generally, unless the contract provides otherwise, a certificate need not be in any particular form (Lewison, supra, paragraph 14.06).  Nor is it necessarily a prerequisite of a certificate that it be final and conclusive (Lewison, supra, paragraphs 14.07, 14.08) (and the pursuers do not aver that certification under Clause 3.38.2 (a)(ii) was final and conclusive).  I do not attach much significance to the consent to registration and execution in Clause 8.  Even assuming (without deciding) that certification under Clause 3.38.2(a)(ii) was a  “certificate” in terms of Clause 8, summary diligence would be inappropriate in the event of dispute as to the relevant defects or as to the reasonableness or good faith of certification of the costs of remedial works;  where there was such dispute suspension of the charge and interdict of further diligence could be sought (see eg Halliday, Conveyancing Law and Practice (2^nd ed.), paragraph 4-65;  Rennie, Leases, paragraph 17-18;  Smith v Drummond (1829) 7 S 792;  Tennent v Glass 1990 SLT 282;  McLaughlin for Suspension and Interdict [2010] CSIH 24).  In the whole circumstances I am not satisfied that the pursuers are bound to fail to establish that the letter of 14 October 2015 and/or the revised Schedule or the summons involved “certifying” within the meaning of Clause 3.38.2(a)(ii).  The pursuers’ averments in relation to certification are sufficient to entitle them to inquiry.

[27]      I am not persuaded that it is appropriate to exclude from probation the averments in Answer 4 which are challenged (“However, in any event,” to the end of the Answer).  While I am clear that they do not provide a relevant defence to the primary basis of the pursuers’ claim (for payment in terms of Clause 3.38.2(a)(ii)), I am not convinced that they are irrelevant factors when it comes to considering the alternative claim for damages.  On the contrary, in that context it appears to me that the averments are directed to matters which may well be relevant to the true loss suffered.

[28]      Since an inquiry is required it is unnecessary to deal with the other points Mr Barne raised in connection with Clause 3.38.2(a)(ii) (see paragraph 17 supra).  While my provisional view on the basis of the submissions I heard is that none of those points are sound, I prefer to reserve my opinion on them until I have heard fuller argument.

[29]      As regards the pursuers’ claim for professional fees, I am not satisfied that it is appropriate that decree de plano should be pronounced in terms of the third or fourth conclusions.  Mr Barne’s submissions on this point appear to me to have considerable force.

Disposal
[30]      Counsel were in agreement that I should issue an Opinion and put the case out by order to discuss the terms of an appropriate interlocutor to give effect to my decision.  I shall accede to that request.  At the by order hearing it may also be convenient to deal with the expenses occasioned by the debate.