Scottish Court of Session Decisions

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URL: http://www.bailii.org/scot/cases/ScotCS/2020/2020_CSIH_48.html
Cite as: [2020] ScotCS CSIH_48, [2020] CSIH 48, 2020 GWD 26-343

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FIRST DIVISION, INNER HOUSE, COURT OF SESSION

Lord President

Lord Menzies

Lord Malcolm

OPINION OF THE COURT

[2020] CSIH 48

CA176/19

delivered by LORD MALCOLM

in the commercial action by

HIGHLANDS AND ISLANDS ENTERPRISE

against

Pursuer and Respondent

CS WIND UK LIMITED

Defender and Reclaimer

______________

Pursuer and Respondent: D. M. Thomson, Q.C.; CMS Cameron McKenna Nabarro Olswang LLP

Defender and Reclaimer: R. Dunlop, Q.C.; MacRoberts LLP

18 August 2020

[1] The defender manufactures wind turbines at a site at Campbeltown airport. At the

outset it received substantial financial assistance from the pursuer. In return, in a formal

and detailed deed of undertaking, the defender agreed to various restrictions on its activities

for the period to March 2021, which the pursuer required in order to protect its investment

and ensure that it created employment and economic activity in its area of operation. The

pursuer is concerned that the defender is not complying with its obligations, and has raised

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a commercial action seeking, among other things, an interdict prohibiting the removal of

plant and equipment used in the business; something which is said to be in breach of the

undertaking. The summons states that the defender has expressed doubts as to the

sustainability of its operations and has announced the redundancy of three-quarters of the

workforce. The commercial judge granted an interim interdict against such removal, and

subsequently refused the defender’s motion for recall, albeit he altered its wording. With the

leave of the judge, the defender now reclaims (appeals) against that interlocutor.

[2] The commercial judge subsequently explained his reasoning in a note to this court.

The balance of convenience strongly favours the pursuer. Out of 80, only 13 employees

remain on site. Items of plant and equipment, said to have been covered by the

undertaking, have been removed. The defender is part of a South Korean operation with

production facilities in other parts of the world. It would cause no material prejudice to the

defender if the plant and equipment still on site stayed there pending resolution of the

action. As to whether the pursuer had put forward a prima facie case in support of interim

interdict, the judge described the issue as concerning the proper approach to clause

FOURTH 1(8) of the undertaking. It stops the defender from moving “the Business or any of

(the defender’s) plant, equipment or other assets acquired in connection with the Purpose

out of the Highlands and Islands area of operation of HIE.” The defender contends that this

clause does not cover plant and equipment used in its business. It is said to be restricted to

plant and assets acquired for the construction of the premises from which it operates. The

commercial judge took the view that, having regard to the pursuer’s submissions, which

included reference to the factual background and the purpose of the restrictions, there is a

prima facie case in support of interdict ad interim in the terms granted.

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[3] The defender has three grounds of appeal. First it is said that, by addressing balance

of convenience at the outset, the commercial judge misdirected himself, in that his view on

that issue will have coloured his approach to prima facie case in a manner favourable to the

pursuer. In effect he “put the cart before the horse”. The defender accepts that if it fails on

the other grounds of appeal, which as will become apparent is indeed the case, this issue is

academic. In any event, in the view of the court the decision on balance of convenience was

clearly open to the judge, and there is no foundation for the assertion that the order of

treatment caused or led to a misdirection on his part.

[4] The second ground of appeal focusses on prima facie case, and asserts that the

defender’s construction of the said clause is the only tenable outcome; therefore it follows

that the interim order should have been refused. The defender has no intention of removing

plant and other assets acquired in connection with the building works on the site. Attention

is drawn to the definition of “Purpose” in the undertaking, and its connection with the

construction works, allied to a textual analysis of the clause itself. The pursuer contends that

if regard is had to the background of assistance from public funds to provide economic

activity in its area; the fact that the parties knew that the defender would not be responsible

for the construction works; the terms of the deed of undertaking as a whole; and its

commercial purpose, the overall intention of the parties is tolerably clear. The commercial

judge’s decision on prima facie case was more than justified. In any event the court should

not, in effect, treat the appeal as a fully-fledged debate on relevancy; something which the

defender could have sought from the commercial judge, but instead chose to reclaim a

determination on interim regulation. Affidavit evidence might be relevant to a proper

consideration of the issue, and it was explained that the pursuer’s case is not intended to be

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predicated solely on clause FOURTH 1(8), there being a number of other relevant provisions

in the deed of undertaking.

[5] The court is not prepared to embark on a consideration of the merits of this dispute.

An interim order of this kind made at an early stage of proceedings is the result of the

exercise of a discretionary power designed to regulate matters pending a substantive

hearing. As it is put in Burn-Murdoch, Interdict in the Law of Scotland, (1933) at paragraph

143, “The question at this stage is not so much the absolute relevancy of the case as the

seeming cogency of the need for interim interdict.” In Toynar Ltd v Whitbread & Co plc 1988

SLT 433, their Lordships of the Second Division observed (434F): “Where matters of law are

raised, it is neither necessary nor desirable for any concluded decision to be made upon

them at the stage of considering the making of an interim order.” That is as true for this

court as it was for the commercial judge. Suffice to say that, having considered all the

submissions, both oral and written, we have identified no good reason to criticise the view

taken by the commercial judge on the question of prima facie case. Given that the whole

matter will be remitted to the commercial roll for further procedure it would not be

appropriate to express any more definitive opinion on the proper approach to clause

FOURTH 1(8), or as to the other clauses mentioned in the course of the discussion.

[6] The final ground of appeal states that any prima facie case is so weak, an interim

order should have been refused. While the court does not wish to address the merits of the

matter, it can say that it does not accept that description of the pursuer’s position.

[7] For the above reasons, the reclaiming motion is refused and the action will be

remitted to the commercial roll for further procedure.

[8] By way of a postscript, the court adds that it is surprised that leave was granted for

this reclaiming motion. It will only be in a clear case that this court will interfere with an

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interim order of a commercial judge. And speaking more generally, given the potential for

delay, when commercial procedure is designed for a speedy resolution of business disputes,

the court expects leave to be granted in respect of an interlocutory matter only when such

delay is outweighed by compensating benefits which further the just and effective disposal

of the case at hand.