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United Kingdom Supreme Court
You are here: BAILII >> Databases >> United Kingdom Supreme Court >> Aberdeen City Council v Stewart Milne Group Ltd (Scotland)  UKSC 56 (7 December 2011)
Cite as: 2012 SLT 205, 2012 SCLR 114,  UKSC 56,  50 EG 58, 2012 SC (UKSC) 240
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 UKSC 56
On appeal from:  CSIH 81;  CSOH 80
Aberdeen City Council (Respondent) v Stewart Milne Group Limited (Appellant) (Scotland)
Lord Hope, Deputy President
JUDGMENT GIVEN ON
7 December 2011
Heard on 10 November 2011
R Craig Connal QC
(Instructed by McGrigors LLP)
Craig Sandison QC
(Instructed by Brodies LLP)
LORD HOPE (WITH WHOM LADY HALE, LORD MANCE AND LORD KERR AGREE)
The contractual provisions
"In addition to the purchase price detailed in Clause 2 hereof, the Purchasers and the Sellers have agreed that the Sellers shall be entitled to a further payment ('the Profit Share') upon the Purchasers purifying the suspensive conditions contained in Clause 4 hereof and issuing a notice to the Sellers intimating to the Sellers that the Purchasers wish to purchase the relevant part of the profit-share as defined in the Schedule to which the Sellers are entitled. The Sellers' entitlement to the relevant part of the profit-share will also be triggered by the Purchasers disposing either by selling or by granting a lease of the whole or part of the Subjects."
"'Estimated Profit' means the Open Market Valuation under deduction of the Allowable Costs.
'Gross Sale Proceeds' means the aggregate of the sale proceeds of the Subjects received by the Purchasers for the Subjects.
'lease' means a lease for a term of more than 25 years.
'Lease Value' means the open market capital valuation of the Subjects or that part of the Subjects to be leased having regard to the terms of the lease but assuming that the lease is an open market transaction carried out at arms length with no consideration or other incentives being paid by either party other than the rent or, in the case of a lease granted in consideration of a grassum, the grassum…
'Open Market Valuation' means the open market value of the Subjects or relevant part thereof as specified in the notice at the date of the notice served in accordance with clause 9.5, with the benefit of and subject to the necessary consents and all agreements entered into with the local Planning Road [sic], Water or other Authority or service provider relative to the Subjects and making due and proper allowance for the costs of remedying any adverse ground conditions, any off site infrastructure or planning gain contributions to be made in terms of any of the necessary consents or the aftermentioned agreements and the costs of completing any access road within or serving the Subjects to adoptable standard.
'Profit' means the Gross Sale Proceeds under deduction of the Development Costs.
'the Profit Share' means 40% of 80% of the estimated profit or gross sale proceeds or lease value less the Allowable Costs as herein defined."
"The relevant part of the profit share due to the Sellers shall be paid by the Purchasers to the Sellers within 14 days of it being calculated in accordance with clause 9.2 hereof or in the event of a sale 14 days after receipt of the gross sale proceeds by the Purchasers."
Clause 9.5 provided that the appellants were to be entitled to serve a notice to the respondents intimating that they wished to purchase the profit share at any time after purification of the suspensive conditions in clause 4. Clause 9.6 provided that in the event of the respondents disputing the appellants' Estimated Profit or the Lease Value the matter was to be referred, failing agreement between the parties, to an independent chartered surveyor for his determination. Clause 9.7 was in these terms:
"For the avoidance of doubt in the event of all or part of the Profit Share being paid following upon the grant of a lease of all or part of the Subjects no further Profit Share shall be payable upon the sale of that part of the Subjects in respect of which the Profit Share has already been paid."
LORD CLARKE (WITH WHOM LORD HOPE, LADY HALE, LORD MANCE AND LORD KERR AGREE)