East Dunbartonshire Council v Gladedale (Northern) Division Limited

Case concerning tripartite agreement between East Dunbartonshire Council, Gladedale and Glasgow University. The agreement allowed the Council to sell the Bearsden Academy site to Gladedale for development and relocate the school to a site at St Andrews College in Bearsden which it was purchasing from the University of Glasgow.

The dispute between the parties related to Gladedale’s payment of the final instalment of the purchase price and the Council’s giving of vacant possession of the Bearsden Academy site to Gladedale.

The Council argued that Gladedale had made unequivocal representations that it was unable to pay the final installment of the purchase price and that this relieved them of their obligation to give vacant possession. They sought declarator from the Court that Gladedale were bound to implement the tripartite agreement and make payment of the final instalment in return for vacant possession of the site.

On the other hand, Gladedale argued that, by being unable to give vacant possession on the agreed date, the Council were in material breach of the contract and Gladedale, having accepted that material breach, were entitled to tread the contract as being at an end and rescind.

Lord Glennie came to the conclusion that the agreement remained alive for performance. The decision turned on whether the obligation to give vacant possession on the agreed date was an essential condition of the contract (i.e. whether time for performance was ‘of the essence’ of the contract). There was no express provision indicating that time was of the essence in relation to the giving of vacant possession and Lord Glennie identified various provisions in the agreement which indicated that time was not intended to be of the essence in relation to that particular provision.

Scottish Courts 24 March 2011