The Fife Council v Royal & Sun Alliance Insurance PLC [2017] ScotCS CSOH_28 (17 February 2017)

The Fife Council v Royal & Sun Alliance Insurance PLC [2017] ScotCS CSOH_28 (17 February 2017)

The court held that the bond did not require the pursuer to have already carried out the remedial works before making a claim. The requirement to provide 'reasonable evidence of the intention and ability' to proceed with restoration indicated that the works could be prospective. The notice given by the pursuer, in the context of the correspondence and circumstances, was sufficient to satisfy the requirements of the bond. The defender’s construction would render part of the notice provision otiose and was inconsistent with the commercial purpose of the bond.

Citation
[2017] ScotCS CSOH_28
Parties
Pursuer: The Fife Council; Defender: Royal & Sun Alliance Insurance PLC
Jurisdiction
Scotland
Judgment Date
17 February 2017
Procedural Posture
Commercial Action (claim Under Restoration Bond) / Opinion Following Debate on the Commercial Roll
Outcome
Pursuer succeeds; declarator granted that the notice triggered the defender’s obligation under the bond; defender ordered to pay the sum claimed.
Legal Topics
Interpretation of Performance Bonds, Triggering of Payment Obligations Under Bonds, Restoration Obligations Under Planning Agreements, Strict Compliance With Notice Provisions
Contract Law Insurance Law Planning Law Interpretation of Performance Bonds Triggering of Payment Obligations Under Bonds Restoration Obligations Under Planning Agreements Strict Compliance With Notice Provisions

Case Brief

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Parties

The Fife Council

Pursuer

Royal & Sun Alliance Insurance PLC

Defender

Procedural Posture

Commercial Action (claim Under Restoration Bond) / Opinion Following Debate on the Commercial Roll

Legal Issues

  1. 1 Whether the pursuer must carry out remedial works before claiming under the bond
  2. 2 Whether the notice given by the pursuer satisfied the requirements of the bond, specifically providing reasonable evidence of intention and ability to proceed with restoration

Ratio Decidendi

The court held that the bond did not require the pursuer to have already carried out the remedial works before making a claim. The requirement to provide 'reasonable evidence of the intention and ability' to proceed with restoration indicated that the works could be prospective. The notice given by the pursuer, in the context of the correspondence and circumstances, was sufficient to satisfy the requirements of the bond. The defender’s construction would render part of the notice provision otiose and was inconsistent with the commercial purpose of the bond.

Court Disposition

Pursuer succeeds; declarator granted that the notice triggered the defender’s obligation under the bond; defender ordered to pay the sum claimed.

Orders

  • Declarator that the notice of 2 December 2015 triggered the defender’s obligation to pay under the bond.
  • Order for payment of £3,124,840.55 by the defender to the pursuer.