WHY DID THE GCC-HS 1996 CPO FAIL?

THE EGYPTIAN HALLS - A REVIEW OF THE FAILURE OF JOINED UP

GOVERNMENT 1998 - 2018 IS AGAIN REQUESTED

www.egyptianhalls.co.uk

RESTORE & REGENERATE

or REBUILD & REGENERATE

8th November 2018

Fao GCC DRS, Historic Environment Scotland, Ward Councillors, MSP’s, MP’s, Scottish Government and all Heritage stakeholders.

Why have FOUR approved Planning Applications for the Egyptian Halls Failed?

Further to the October emails on GDA’s role. And also in November we’ve reinforced Historic Scotland’s (HS) role in this once farrago that now accelerates towards being a massive cultural disaster. It’s clear that GCC was not alone in creating this the distinct lack of proper collaborative engagement, negative cultural responsibility and vision coupled with ineffectual political awareness all contributed to a lack of joined up government And now still in 2018 the lack of joined up government is still palpable or all but non-existent. Then again since 2010 the mantra has been to blame the co-owners. And that’s now also failed. More and more I now believe as do my fellow Directors/Investors that the request for a CPO Review should be enlarged and renamed: The Egyptian Halls - A review of the Failure of Joined up Government 1998-2018

Regards

Derek J Souter BA Hons, MBA, FCIM Director USD Ltd, USI Ltd and USP Ltd

Appendix A

2008-2000 - Scotsman article explaining the effect of a lack of joined up Government

Oct 2018 - The Egyptian Halls - 18 Years on from a lack of joined up Government derailed the Year 2000 Scheme.

Wednesday,  31  October  2018  14:39:29  Greenwich  Mean  Time

Page  1  of  1

Subject: The  Egyp)an  Halls-­‐  18  Years  on  from  a  lack  of  joined  up  Government  derailed  the  Year  2000Scheme.

Date: Wednesday,  24  October  2018  08:20:21  Bri)sh  Summer  TimeFrom: Derek  SouterTo: Richard  Brown,  Ken  Clark,  Susan  Connelly,  Simpson,  Shona  (DRS),  Dara  Parsons,  Humm  L

(Louisa),  Gail  Williamson,  George  Morrison,  John  Addison,  Steven  W  BarneW,  Kelvin  Kerr,Duncan  Souter

CC: Eva  Bolander,  Christy  Mearns,  Philip  Braat,  Angus  Millar,  Sandra  White,  Shona  Robison,  DavidSeers

Morning  All

As  we  all  try  to  somehow  reconcile  a  project  deficit  of  circa  -­‐£20M-­‐£25M,  see  aWached  which  I  came  across  when  pruning  the  Egyp)an  Halls  archives.  And  18  years  later  the  lack  of  joined  up  government  then  has  impacted  so  nega)vely  it’s  very  difficult  to  actually  fathom  the  quantum  that  the  commercial  marketplace  has  refused  to  fund  since  1996.  We  now  have  an  idea  of  the  numbers  but  this  is  now  gargantuan  compared  to  the  circa  £2M  required  Year  2000.

For  the  record  considerable  effort  and  )me  was  expended  aWemp)ng  to  get  GDA/SE  Glasgow  to  change  their  mind  and  in  parallel  for  HS  to  grant  what  it  had  promised.  That  failed  but  even  if  it  had  succeeded  any  scheme  would  have  then  been  unable  to  be  implemented  due  to  the  then  non-­‐disclosed  and  legally  irreversible  CPO  Amendment  that  GCC  had  unilaterally  imposed  late  1997/early  1998,  which  if  fact  was  the  catalyst  for  the  GDA  to  rescind  their  then  £245k  grant.

I’ve  also  copied  in  the  poli)cal  stakeholders  on  the  premise  the  objec)ve  is  not  to  look  to  blame  anybody  but  to  reinforce  there  is  STILL    a  solu)on  that  can  be  reached  that  would  preserve  the  Egyp)an  Halls,  begin  the  long  overdue  regenera)on  of  Union  Street,  whilst  in  parallel  deliver  a  commensurate  return  for  the  long  term  commercial  investors.

Should  there  be  a  joined  up  government  approach  re-­‐introduced  then  the  current  preparatory  work  for  a  FIFTH  Planning  and  LBC  ApplicaRon  can  be  expedited  this  side  of  2018.

Regards

Derek J Souter BA Hons, MBA, FCIM

DirectorUSD Ltd, USI Ltd and USP Ltd26 Foundry Lane, Dundee, DD4 6AYTel 01382 451 702Mob 07850 08 11 88Registered in Scotland: SC 193368 www.egyptianhalls.co.uk

Appendix B

• Nov 2018 - A review of the Failure of Joined up Government 1998-2018 - HISTORIC SCOTLAND'S SIGNIFICANT CONTRIBUTION

• 0320-2001 Chesterton Valuation Figures

• 0327-2001 Chesterton Letter to Historic Scotland

• 0504-2001 Chesterton Valuation Commentary

Monday,5November2018at11:00:15GreenwichMeanTimeJimiSutherland

Page1of3

Subject: TheEgyp)anHalls-AreviewoftheFailureofJoinedupGovernment1998-2018-HISTORICSCOTLAND'SSIGNIFICANTCONTRIBUTION

Date: Monday,5November2018at10:14:23GreenwichMeanTime

From: DerekSouter<derek@djscm.com>

To: RichardBrown<Richard.Brown@drs.glasgow.gov.uk>,KenClark<Ken.Clark@glasgow.gov.uk>,SusanConnelly<Susan.Connelly@glasgow.gov.uk>,Simpson,Shona(DRS)<Shona.Simpson@glasgow.gov.uk>,DaraParsons<dara.parsons@hes.scot>,HummL(Louisa)<louisa.humm@hes.scot>,GailWilliamson<gail.williamson@hes.scot>,GeorgeMorrison<g.morrison@themorrisonpartnership.com>,JohnAddison<john@addisonconserva)onanddesign.com>,StevenWBarnea<s.barnea@shepherd.co.uk>,KelvinKerr<kerr-john@btconnect.com>,DuncanSouter<duncansoutar@b)nternet.com>

CC: EvaBolander<eva.bolander@glasgow.gov.uk>,ChristyMearns<christy.mearns@glasgow.gov.uk>,PhilipBraat<philip.braat@councillors.glasgow.gov.uk>,AngusMillar<angus.millar@glasgow.gov.uk>,SandraWhite<Sandra.White.msp@scobsh.parliament.uk>,ShonaRobison<dundee@shonarobison.com>,DavidSeers<david.seers@gov.scot>

MorningAll

Furthertobelow’semaildetalingGDA’snega)verole,it’salsoworthwhilereinforcingHistoricScotland’s(HS)significantroleinthisoncefarragothatnowacceleratestowardsbeingamassiveculturaldisaster.Thereforeseeaaached,whichcameaboutwhenHSdecidedwithoutanyprofessionaladvicethattheUpperFloorswereworthfarmorecirca£1.7Mthanthe£515k-£600kChestertonsandIthinkCBREhadvaluedthemat.AndnotethequotefromthehighlyrespectedDavidMurdochthenofChestertons,whichiseventodayiss)llbeingrepeated.

Derek -They are comparing apples and pears [ witness to this is the struggle which the owners of other upper floor space have in this location e.g. 78/82 Union St.currently at £6 - £7per sq ft compared to prime rents over £20psf]. It is top grade space that is performing well. The Union St space will never be top grade on account of - David

Asaresulttherequestforanincreased£1.5Mgrantwasreducedfromthethenawarded£990kto£250K.SowhenoneaddedthistotheGDAgrantrescindmentthethenfundamentallygreater100%ConservaPonschemewasthenbeingdenied£1.5Mofgrantfunding.Andwhichifithadbeenawardedwouldhavecombinedwiththe£1.7MofprivatefundingtodelivertheYear2000Scheme.AlsopleasedonotoverlookthattwooftheFRItenantsweretopaytheirshareofcostscirca£250kbutalsopay£250ktoexiteach.Againtorepeatthiswouldhavebeenusedto“smooth”overthethennon-disclosedCPOAmendment/)tletransferissue.

AndofcourseHSwhilstdoingthisignoredcompletelythesignificantposiPvesUSP/USDhadbroughttotheprojectbynego)a)ngthatthethenUpperFloorownersdroptheirthenstrongCourtofSessionAppeal.Andofcoursereplacetheoriginalapprovedwhichremovedtheexis)ngfloorsandthenreplacedthemwithnewfloors,whichwouldhaveimperilledthestructureofthebuilding.Thiswasthenreplacedbythethen100%Preserva)onYear2000schemewhichwasthenapprovedandthenderailedbyGDA,thenHS,thenGCC.Andthenofcourseitallcamecrashingdowntosaytheleast.

Andnows)llin2018thelackofjoinedupgovernmentiss)llpalpableorevennonexistent.Thenagainsince2010themantrahasbeentoblametheco-owners.Andthat’snowalsofailed.MoreandmoreInowbelieveasdomyfellowDirectors/InvestorsthattherequestforaCPOReviewshouldbeenlargedandrenamed

TheEgyp)anHalls-AreviewoftheFailureofJoinedupGovernment1998-2018

Regards

Derek J Souter BA Hons, MBA, FCIM

DirectorUSD Ltd, USI Ltd and USP Ltd

Page2of3

26 Foundry Lane, Dundee, DD4 6AYTel 01382 451 702Mob 07850 08 11 88Registered in Scotland: SC 193368 www.egyptianhalls.co.uk

From:DerekSouter<derek@djscm.com>Date:Wednesday,24October201808:20To:RichardBrown<Richard.Brown@drs.glasgow.gov.uk>,KenClark<Ken.Clark@glasgow.gov.uk>,SusanConnelly<Susan.Connelly@glasgow.gov.uk>,"Simpson,Shona(DRS)"<Shona.Simpson@glasgow.gov.uk>,DaraParsons<dara.parsons@hes.scot>,"HummL(Louisa)"<louisa.humm@hes.scot>,GailWilliamson<gail.williamson@hes.scot>,GeorgeMorrison<g.morrison@themorrisonpartnership.com>,JohnAddison<john@addisonconserva)onanddesign.com>,StevenWBarnea<s.barnea@shepherd.co.uk>,KelvinKerr<kerr-john@btconnect.com>,DuncanSouter<duncansoutar@b)nternet.com>Cc:EvaBolander<eva.bolander@glasgow.gov.uk>,ChristyMearns<christy.mearns@glasgow.gov.uk>,PhilipBraat<philip.braat@councillors.glasgow.gov.uk>,AngusMillar<angus.millar@glasgow.gov.uk>,SandraWhite<Sandra.White.msp@scobsh.parliament.uk>,ShonaRobison<dundee@shonarobison.com>,DavidSeers<david.seers@gov.scot>Subject:TheEgyp)anHalls-18YearsonfromalackofjoinedupGovernmentderailedtheYear2000Scheme.

MorningAll

Aswealltrytosomehowreconcileaprojectdeficitofcirca-£20M-£25M,seeaaachedwhichIcameacrosswhenpruningtheEgyp)anHallsarchives.And18yearslaterthelackofjoinedupgovernmentthenhasimpactedsonega)velyit’sverydifficulttoactuallyfathomthequantumthatthecommercialmarketplacehasrefusedtofundsince1996.Wenowhaveanideaofthenumbersbutthisisnowgargantuancomparedtothecirca£2MrequiredYear2000.

Fortherecordconsiderableeffortand)mewasexpendedaaemp)ngtogetGDA/SEGlasgowtochangetheirmindandinparallelforHStograntwhatithadpromised.Thatfailedbutevenifithadsucceededanyschemewouldhavethenbeenunabletobeimplementedduetothethennon-disclosedandlegallyirreversibleCPOAmendmentthatGCChadunilaterallyimposedlate1997/early1998,whichiffactwasthecatalystfortheGDAtorescindtheirthen£245kgrant.

I’vealsocopiedinthepoli)calstakeholdersonthepremisetheobjec)veisnottolooktoblameanybodybuttoreinforcethereisSTILLasolu)onthatcanbereachedthatwouldpreservetheEgyp)anHalls,beginthelongoverdueregenera)onofUnionStreet,whilstinparalleldeliveracommensuratereturnforthelongtermcommercialinvestors.

Page3of3

Shouldtherebeajoinedupgovernmentapproachre-introducedthenthecurrentpreparatoryworkforaFIFTHPlanningandLBCApplicaPoncanbeexpeditedthissideof2018.

Regards

Derek J Souter BA Hons, MBA, FCIM

DirectorUSD Ltd, USI Ltd and USP Ltd26 Foundry Lane, Dundee, DD4 6AYTel 01382 451 702Mob 07850 08 11 88Registered in Scotland: SC 193368 www.egyptianhalls.co.uk

84 - 100 Union Street, Glasgow

Funding Shortfall On Refurbishment – Entire Building Consider Building as a whole – Current Value £2.33m (OMV current) Scheme Cost Value On Completion

(OMV Comp) Shortfall

OMV Comp deduct (OMV

Current + Cost)

A £986,206 £2,700,000 (£546,203)

B £3,683,615 £3,295,000 (£2,718,615)

C £4,900,000 £5,325,000 (£1,905,000)

84 - 100 Union Street, Glasgow

Funding Shortfall On Refurbishment of Upper Floors Assume minimum scheme to Historic Scotland specification ie. creating shell on upper floors. OMV as existing £10,000

OMV when shell complete £515,000

Cost of Scheme B £3,683,615

Gross shortfall (£3,178,615)

less share of listed buildings repair notice; recovered from ground floor properties cost £986,206 @ 58% £571,996

Net shortfall (£2,606,619)

84 - 100 Union Street, Glasgow

Funding Shortfall On Refurbishment of Upper Floors Assume scheme to Historic Scotland specification plus fit out of upper floors. OMV as existing £10,000

OMV when complete £2,350,000

Cost of Scheme C £4,900,000

Gross shortfall (£2,560,000)

less share of listed buildings repair notice recovered from ground floor properties cost £986,206 @ 58% £571,996

Net shortfall (£1,988,004)

!

Our Ref: DJM/LD/GP3735/2303002

Historic Scotland Langmore House Salisbury Place Edinburgh EH9 1SH FAO Ms Shelagh Thorne

International Property Consultants 48 St Vincent Street Glasgow G2 5TS Telephone 0141 221 2897 Fax 0141 221 1949 E-Mail: david.murdoch@chesterton.co.uk DX GW372 Glasgow

23 March 2001

Dear Sirs

EGYPTIAN HALLS UNION STREET, GLASGOW Your letter of 15 March 2001 to Mr Souter of Union Street Properties has been referred to me. I believe you have forwarded a copy of my report to the District Valuer and note that his opinions differ from mine, although I do not appear to have any details on his approach. While I would not be unduly surprised or concerned to find that there were small differences of opinion in yields or rents, as valuation is of course a matter of opinion, I do consider there is a fairly major funding shortfall on the refurbishment of the upper floors. To illustrate this, I attach a brief analysis which shows the shortfall in achieving what I understand is the minimum scheme which you would support, namely Scheme B (referred to in my report) namely creating a fully refurbished shell on the upper floors, ready for fitting out. I will be pleased to discuss this with either yourself or the District Valuer and look forward to hearing further in order that the way ahead can be determined. Yours faithfully DAVID J MURDOCH, FRICS Director Of Professional Services

Derek They are comparing apples and pears [ witness to this is the struggle which the owners of other upper floor space have in this location eg 78/82 Union St.currently at £6 - £7per sq ft compared to prime rents over £20psf]. It is top grade space that is performing well. The Union St space will never be top grade on account of [a] the lines of columns breaking up the floor space [b] the deep configuration with consequent limited natural light [c] the long narrow entrance and winding stair which are restricted compared to modern standards [d] this will be a refurb not a demolition and rebuild - nb even a demolition and rebuild behind the facade cannot be justified - witness the discounted rents on Ca' dora(Union St] and Wellington House[Wellington St] [e] Union Street is not a popular office location. [f] the completed investment on the upper floors will have a limited demand in the market as growth prospects will always be restricted by [a] - [e] above. We are only forming offices because there is no other viable use of all of the space. You will recollect my earlier suggestion that we simply secure the upper floors wind and watertight and quietly forget about them...looks as though this will be the best way unless grants are forthcoming which would allow a proper scheme.Without grant assistance for the full shortfall there can be no commercial justification for proceeding. With the upper floors wind and watertight., you will be able to put the retail tenants on a proper footing [largely at their own expense!!]. David

Appendix C

10th March 2018 Scotland on Sunday Article

GCC Contract Breach Admittance July 2018

1991-2018 Raft of Chronological LBRN and CPO Errors

February 2018 CPO Review Request

March 2016 CPO Review Request New Evidence

Appendix 1

10th March 2018 Scotland on Sunday Article

Appendix 2

GCC Contract Breach Admittance July 2018

From:"Fisher,Richard"<Richard.Fisher@glasgow.gov.uk>Date:Tuesday,3July201815:20To:DerekSouter<derek@djscm.com>Cc:"Miller,Iain"<Iain.Miller@glasgow.gov.uk>Subject:RE:emailofthe21stJune2018Ken,Irestmycase!Everyresponseresultsinthesamerehasheddiatribegoingoveroldground.TheonlypointhehaswasthatinDecember1999weenteredintomissiveswithUnionStreetDevelopmentsLtd(notUSPLtd)(renewingthetermsofthe1996missiveswiththepreviousconsortium).ThesemissivescontainedtheprovisionthatGCCwouldobtaintitleusingtheGVDprocedure.InfactGCChadagreedwiththeconsortiumthattheywouldusetheNoticeofTitle/NoticetoTreatprocedureinordertoobtainimmediateentry.Thisprocedurehadinfactbeeneffectedbeforeweenteredintothe1999missives.Accordinglywewereinbreachofthemissivesenteredinto(subjecttoaweakargumentonerror).IfUSPhadexpendedmoneyoralteredtheirpositioninsomewaypriortoknowingaboutthiserrorin2002andhadtakenactionthentheymayhavehadsomesortofcase.Thisissubjecttothembeingabletogetoverthedifficultythatthemissiveswerenotwiththem,whichseemstometobeamajorinitialdifficulty.TheywouldfurtherhavetoshowtheyreliedupontheGVDprocedurebeingutilisedandthatiftheyhadknownthenoticetotreatprocedurewasbeingusedtheywouldneverhaveproceeded.Howevertheywerefullyawarein2002ofthechangeandinfactagreedthatitshouldbeusedinallmissivessince2002.AsfarasIamawarenopropertywasacquiredbyUSPbetween1999and2002(astheycouldnotgetfinancearranged).Mostofthepropertieswereacquiredbeforetheyenteredintothemissivesandself-evidentlycouldnothavebeeninducedbyanythinginsubsequentmissives.

USPthenpurchasedafurtherpropertyintheblockin2005whentheywerefullyawareoftheagreedutilisationoftheNoticetoTreatprocedure.Thisisentirelyinconsistentwiththepositionnowadvanced:thatiftheyhadknowntheywouldhavepulledoutofthedeal.Nocomplaintletalonelegalactionwasmadeuntilc2013.Onthisbasisanyrightofactionhaslongsinceprescribed.WecouldanswerSoutar’squestionsonthebasisoftheabovebutIwouldstronglyadviseagainstdoingso.Toconcedenowthatwewereindeedinbreachofthe1999missiveswilljustrenewhisconvictionheisrightandwillperpetuatefurtherdiatribes.Ithinkitisstronglyadvisabletomaintainthepositionthat1)Itwasagreedthatallcorrespondenceonthehistoriclegalissuewouldbebetweenmyselfandhissolicitorand2)thatourpositionhasbeensetoutclearlyandfinally.Onthenon-legalissuesofgrants,redevelopment,designsetcobviouslythesecanbeaddressedifsowished.IhopethisisOKbutnomatterwhatwedoitwillnotpreventwidelycirculated,histrionice-mailsbeingcirculated.Regards

Appendix 3

1991-2018 Raft of Chronological LBRN and CPO Errors

The Egyptian Halls Building Preservation Trust26 Foundry Lane Dundee DD4 6AY

Telephone: (01382) 451702 Fax: (01382) 456778Email: derek@djscm.com

H O T E L L E I S U R E A R T S R E T A I L H O T E L L E I S U R E A R T S R E T A I L

HOTEL L E I S U R E A RTS R E TA I L

HOTEL LEISURE ARTS RETAIL HOTEL LEISURE ARTS RETAIL

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THE EGYPTIAN HALLS – GCC’S LBRN AND CPO ERRORS 1991-2018 See below and overleaf evidence of the consistent and chronological errors all caused by GCC and none attributable to any of the previous consortium member or the current co-owners 1991 - LBRN Error- Notice has to be re-served 1996 - CPO Error – CPO has to be re-advertised 1998 - CPO Error – CPO Amendment unilaterally legally irreversible, non-disclosed for 16 years 1999 - CPO Error- CPO Contract breach, known but non-disclosed for 19 years till July 2018 2004 - CPO Review Error - GCC, fail to disclose the truth to everyone including, GCC’s Lord Provost and also Scotland’s First Minister 1999-2018 - The consequences of these errors are then compounded year after year And now 20 years later GCC continues to attempt to re-write its pivotal and negative role and in parallel also deny any responsibility. And also refuses to discuss any aspect, refuses all FOI requests meanwhile attempting to divert all consequences both cultural and financial onto the current co-owners who did not become involved until after the 1998 CPO Amendment Error. For and on behalf of USP/USD/USI Ltd

Director 15th October 2018

1991 LBRN Error- Notice has to be re-served

1996 CPO Error – CPO has to be re-advertised

1998 CPO Error – CPO Amendment unilaterally legally irreversible, non-disclosed for 16 years

1999 CPO Error- CPO Contract breach, known but non-disclosed for 19 years till July 2018!

From:"Fisher,Richard"<Richard.Fisher@glasgow.gov.uk>Date:Tuesday,3July201815:20To:DerekSouter<derek@djscm.com>Cc:"Miller,Iain"<Iain.Miller@glasgow.gov.uk>Subject:RE:emailofthe21stJune2018Ken,Irestmycase!Everyresponseresultsinthesamerehasheddiatribegoingoveroldground.TheonlypointhehaswasthatinDecember1999weenteredintomissiveswithUnionStreetDevelopmentsLtd(notUSPLtd)(renewingthetermsofthe1996missiveswiththepreviousconsortium).ThesemissivescontainedtheprovisionthatGCCwouldobtaintitleusingtheGVDprocedure.InfactGCChadagreedwiththeconsortiumthattheywouldusetheNoticeofTitle/NoticetoTreatprocedureinordertoobtainimmediateentry.Thisprocedurehadinfactbeeneffectedbeforeweenteredintothe1999missives.Accordinglywewereinbreachofthemissivesenteredinto(subjecttoaweakargumentonerror).IfUSPhadexpendedmoneyoralteredtheirpositioninsomewaypriortoknowingaboutthiserrorin2002andhadtakenactionthentheymayhavehadsomesortofcase.Thisissubjecttothembeingabletogetoverthedifficultythatthemissiveswerenotwiththem,whichseemstometobeamajorinitialdifficulty.TheywouldfurtherhavetoshowtheyreliedupontheGVDprocedurebeingutilisedandthatiftheyhadknownthenoticetotreatprocedurewasbeingusedtheywouldneverhaveproceeded.Howevertheywerefullyawarein2002ofthechangeandinfactagreedthatitshouldbeusedinallmissivessince2002.AsfarasIamawarenopropertywasacquiredbyUSPbetween1999and2002(astheycouldnotgetfinancearranged).Mostofthepropertieswereacquiredbeforetheyenteredintothemissivesandself-evidentlycouldnothavebeeninducedbyanythinginsubsequentmissives.

USPthenpurchasedafurtherpropertyintheblockin2005whentheywerefullyawareoftheagreedutilisationoftheNoticetoTreatprocedure.Thisisentirelyinconsistentwiththepositionnowadvanced:thatiftheyhadknowntheywouldhavepulledoutofthedeal.Nocomplaintletalonelegalactionwasmadeuntilc2013.Onthisbasisanyrightofactionhaslongsinceprescribed.WecouldanswerSoutar’squestionsonthebasisoftheabovebutIwouldstronglyadviseagainstdoingso.Toconcedenowthatwewereindeedinbreachofthe1999missiveswilljustrenewhisconvictionheisrightandwillperpetuatefurtherdiatribes.Ithinkitisstronglyadvisabletomaintainthepositionthat1)Itwasagreedthatallcorrespondenceonthehistoriclegalissuewouldbebetweenmyselfandhissolicitorand2)thatourpositionhasbeensetoutclearlyandfinally.Onthenon-legalissuesofgrants,redevelopment,designsetcobviouslythesecanbeaddressedifsowished.IhopethisisOKbutnomatterwhatwedoitwillnotpreventwidelycirculated,histrionice-mailsbeingcirculated.Regards

2004 - CPO Review Error - GCC, fail to disclose the truth to everyone including, GCC’s Lord Provost and also Scotland’s

First Minister

Appendix 4

February 2018 CPO Review Request

SURELY IT’S TIME AFTER 22 YEARS TO ASSESS THE CONTINUING NEGATIVE CONSEQUENCES

OF GCC’S FLAWED AND FAILED 1996 CPO? WHY WON’T GCC ANSWER THREE VERY,

VERY, VERY SIMPLE QUESTIONS?AND THEN THE NEAR 40 YEAR WAIT

CAN BE RECONCILED TIMEOUSLY.

egyptianhalls.co.uk

The Egyptian Halls Building Preservation Trust26 Foundry Lane Dundee DD4 6AY

Telephone: (01382) 451702 Fax: (01382) 456778Email: derek@djscm.com

H O T E L L E I S U R E A R T S R E T A I L H O T E L L E I S U R E A R T S R E T A I L

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The Egyptian Halls Building Preservation Trust26 Foundry Lane Dundee DD4 6AY

Telephone: (01382) 451702 Fax: (01382) 456778Email: derek@djscm.com

H O T E L L E I S U R E A R T S R E T A I L H O T E L L E I S U R E A R T S R E T A I L

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ADDITONAL INFORMATION AND CORRESPONDENCE

APRIL 2017 - GCC LETTER TO ANDERSON STRATHERN

MAY 2017 - ANDERSON STRATHERN LETTER TO GCC

OCTOBER 2017 - THE FACTS 1998-2017

Recent Background

For the record since the last request for a CPO Review 1st March 2016 there was a response eventually from GCC dated 5th April 2017 and that was replied to May 2017, which there has been no response as yet to date by GCC and given that was now more than 10 months ago USP is more than entitled to continue to request a response. And given during this period GCC also refused 4 separate FOI requests via USP’s solicitors USP decided after near 20 years of ZERO progress to ask GCC THREE SIMPLE QUESTIONS, which GCC has confirmed to date it is unwilling to answer. For everyone’s benefit and clarification these are as follows. 1, Did GCC breach it ’s 1999 contract with USP, which made no reference to the existence or legal irreversibi l i ty of the CPO Amendment? 2, If GCC did breach the 1999 Agreement with USP, why then did GCC fai l to disclose this and that the breach was due to a non disclosed CPO Amendment? 3, Did GCC between May- June 2004 mislead USP/Kidstons and also i ts Lord Provost who then misled the First Minister about ful l disclosure of al l CPO related facts? Given

A) GCC DRS quote of 27th Apri l 2004 states "an appropriate and informative response wil l be sent to the Lord Provost”.

B) GCC stated 25th May 2004 “ the circumstances surrounding the CPO process have now been explained to Union Street. as a fol low up a meeting wil l be held with them, their sol icitor and the Council ’s Solicitor to provisionally agree a way forward For the record this meeting was held 27th May 2004 and if GCC did del iver on A and B it ’s asked to provide the evidence that i t did so. And also note this was st i l l within the original 5-year prescript ion period.

And as an aide to supporting full answers of these questions can I draw attention again to the following opinion from the highest court in the land, which also has been noted to GCC "but al l the judges concurred in holding that where a representation had been made there was an obligation to disclose any subsequent fact which affected its truthfulness. I t is conceived that the obligation, in such cases, is to disclose al l new developments which would affect the mind of a reasonable man, and that non-disclosure wil l render the contract voidable even although the party may have honestly thought the new developments immaterial.” (House of Lords: Carlyle v RBOS June 2016)

However via recent email correspondence rather than answer these questions GCC instead states USP has somehow developed a “fundamental misconception” relating to GCC’s CPO strategy. And also confusingly also stated earlier via correspondence April 2017 “ i t ’s dif f icult to understand how your cl ient could have been unaware of the notice to treat procedure being uti l ised at the t ime of the 1999 Missives”, and to which USP’s lawyers have stated “ i t ’s extraordinary” they and USP did not know of this as nobody had disclosed this. And of course GCC signed the 1999 Agreement relying on the original notice to treat contained in the 1996 CPO Missives. Therefore if what USP alleges is untrue or inaccurate then GCC by answering the aforementioned questions directly or via USP’s Solicitors by the end of March 2018 will surely reconcile this situation. And allow focus and resources to be directed to achieving the preservation of the Egyptian Halls and its long term commercial sustainability at the least cost to the public purse whilst delivering a commensurate and fair return to the long term core investors.

Derek J Souter For and on behalf of USP, USI and the holders of the Standard Securities

APRIL 2017 - GCC LETTER TO ANDERSON STRATHERN

The Egyptian Halls Building Preservation Trust26 Foundry Lane Dundee DD4 6AY

Telephone: (01382) 451702 Fax: (01382) 456778Email: derek@djscm.com

H O T E L L E I S U R E A R T S R E T A I L H O T E L L E I S U R E A R T S R E T A I L

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THE EGYPTIAN HALLS PROJECT

MAY 2017 - ANDERSON STRATHERN LETTER TO GCC

The Egyptian Halls Building Preservation Trust26 Foundry Lane Dundee DD4 6AY

Telephone: (01382) 451702 Fax: (01382) 456778Email: derek@djscm.com

H O T E L L E I S U R E A R T S R E T A I L H O T E L L E I S U R E A R T S R E T A I L

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THE EGYPTIAN HALLS PROJECT

OCTOBER 2017 - THE FACTS 1998-2017

The Egyptian Halls Building Preservation Trust26 Foundry Lane Dundee DD4 6AY

Telephone: (01382) 451702 Fax: (01382) 456778Email: derek@djscm.com

H O T E L L E I S U R E A R T S R E T A I L H O T E L L E I S U R E A R T S R E T A I L

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THE EGYPTIAN HALLS PROJECT

EGYPTIAN HALLS FACTS 1980 - 2017

FACT- GCC’s Buildings at Risk Register notes the Upper Floors problems as beginning in 1980-37 years ago! GCC then 11 years later in 1991 issued an LBRN to the then 10 ownership interests.

FACT- GCC with the 1st Consortium promoted the 1996 Upper Floors CPO 16 years later.

FACT – The 1996 CPO was awarded £1.5M grant funding, now 21 years later £20M+ is needed.

FACT- The project was originally intended to be the highlight of Glasgow's 1999 City of Architecture and Design celebrations.

FACT – The Upper Floor owners lodged a Court of Session Appeal in late 1997.

FACT – Feb 1998 GCC noted it had implemented a CPO Amendment without the approval of the 1st Consortium and which has now caused a near 20-year delay at least.

FACT- USP became involved in mid 1998 and based on a conservation- centric assessment of the approved scheme proved it was undeliverable to both GCC and HS, which both accepted.

FACT- USP’S architect’s alternative scheme was then recognised by both GCC and HS as being significantly more preservation biased (on record) than the original scheme.

FACT – This 2nd scheme needed £2M of grant funding to preserve and not destroy a Grade A architectural masterpiece as the first approved scheme would have done!

FACT- USP became the driving force behind the 2nd Ground Floor Consortium and negotiated with the former owners to drop their Court of Session Action.

FACT- GCC then entered contemporaneously into a legally binding contract Dec 1999 with USP that was impossible to deliver.

FACT- It’s extraordinary that GCC’s then Chief Solicitor negotiated and signed this agreement ignorant of the existence of the CPO Amendment, which made performance by GCC impossible.

FACT- GCC failed to disclose this massive error and fundamental breach of contract law.

FACT – USP would have protected their position and sought damages as early as Jan 2000.

FACT- USP purchased No 84 Union Street on the basis it was to get the Upper Floors conveyed to it by the terms of the 1996 CPO Missives ergo General Vesting Declaration.

FACT- If USP had known of the existence of the CPO Amendment it would not have purchased No 84 Union Street as a straight no pre-conditions purchase. Also USP would have purchased No 100 in 2005 under similar conditions.

FACT – USP would have reconciled the CPO Amendment issue as early as mid-1999.

FACT - GCC’s CPO 1998 Amendment was legally irreversible and has delayed project since then coupled with the effects of the 2008 recession accelerating the project increasing non-viability.

FACT – GCC then induced USP to sign updated CPO contracts, which would not have been signed if GCC had disclosed their contractual breach.

FACT- GCC has stated it would act to protect its position and it certainly has actioned this.

FACT- Mid 2004 GCC DRS misrepresented the circumstances surrounding the CPO process to USP, and also GCC’s Lord Provost who then misrepresented this to the then First Minister, who had in fact written to the Lord Provost requesting clarification on why there was such a delay.

FACT – it took GCC 8 years to lodge an action for compensation with the Lands Tribunal instead of the projected 12-18 months!

FACT- USP reconciled the CPO in 2008 not GCC and GCC have acknowledged this formally.

FACT- The CPO Amendment which USP has still never seen sight of has caused a near 20 year delay which is extraordinary for something which gained a 28 day time advantage to carry out Urgent Repairs, which GCC has been unable to provide evidence they were in fact implemented.

FACT- GCC states in a Report July 2010 that the project is non - viable in commercial terms.

FACT- HES states the project is non-viable August 2010 FACT- since 2010 the non-viability has increased significantly by circa £1M-£1.5M per year.

FACT- GCC stated in July 2010 “As you may know the Council has been working with USP Properties for many years in order to help them bring the building into a single ownership. And the developer has committed very significant expenditure on bringing the building into a single ownership, on preparing a range of technical and conservation studies, and in completing both option and development appraisals for a variety of potential end uses.”

FACT- GCC-Scot Govt - Co Owners should be working effectively to save the Egyptian Halls.

FACT - The type of CPO Amendment GCC used is now not permitted under 2011 Legislation.

FACT- GCC has refused to date to discuss any aspect of the 1999 USP-GCC CPO Agreement; including refusing four separate FOI requests to disclose the relevant correspondence.

FACT- USP/USI’s investment at 15% compound is circa £15.5M and at 20% it’s circa £23M

FACT- USP and USI are financially solid and controlled by three equal core investors.

FACT- The core investors now hold the relevant Standard Securities.

FACT- GCC was presented a Joint Venture/Purchase Document July 2016. It has yet to respond.

FACT- More scheme delays either by via continuing funding or legal arguments will only see “scheme” costs and non - viability increase!

CONJECTURE- has the 1998 CPO Amendment caused a £35M+ problem and how can this be reconciled?

Derek J Souter

6th October 2017

Appendix 5

March 2016 CPO Review Request New Evidence

The Egyptian Halls Building Preservation Trust26 Foundry Lane Dundee DD4 6AY

Telephone: (01382) 451702 Fax: (01382) 456778Email: derek@djscm.com

1st March 2016

Richard Brown Exchange House Executive Director DRS GCC 231 George Street Glasgow G1 1RX

The Egyptian Halls- The Compelling NEW evidence for a CPO Review GCC requires!!!

Dear Mr Brown

In a letter to USP 14/04/2104 (see Appendix A) GCC stated there requires to be new evidence for it to review again the 1996 Egyptian Halls Upper Floors process. Therefore can I bring to your immediate attention the following?

1, The aforementioned letter makes no reference to the Dec 1999 CPO Agreement between GCC and USP, which GCC agreed to transfer the Upper Floors titles to USD. This agreement is appended for reference (see Appendix B) and will be founded upon going forward if required.

2, Also find attached additonal, requested, corroborated opinion detailing that GCC failed to act appropriately with regard to the Egyptian Halls Project and specifically relating to the CPO process from 1998 onwards (see Appendix A) and also that GCC failed to disclose a singularly germane CPO Amendment for 16 years. And also that this non disclosure should be assessed against the following opinion

“but all the judges concurred in holding that where a representation had been made there was an obligation to disclose any subsequent fact which affected its truthfulness. It is conceived that the obligation, in such cases, is to disclose all new developments which would affect the mind of a reasonable man, and that non-disclosure will render the contract voidable even although the party may have honestly thought the new developments immaterial.” (House of Lords Carlyle v RBOS)

For example May – June 2004 Correspondence (see Appendix C)

GCC DRS CPO Non Disclosure Letter 25/05/2004 to Lord Provost- Page 5 see 2nd red ringed para

“the circumstances surrounding the CPO process have now been explained to Union Street” As a follow up a meeting will be held with them, their solicitor and the Council’s Solicitor to provisionally agree a way forward”.

Also in the 1st para on Page 1 it is recognised by GCC that there was an original consortium, which as we also found out by GCC in April 2014 had in fact been disclosed the CPO Amendment as far back as Feb 1998. Yet USP was never disclosed this? WHY?

Kidstons File Note from 27th May 2004 meeting

See Page 2 and again GCC did not disclose the CPO Amendment but did a) ask for a profit share b) look to improve GCC’s contractual position. Neither would have been discussed if the CPO Amendment had been disclosed. Let’s be 100% clear GCC did not explain before and at the 27th May 2004 meet with USP and Kenneth Gerber of Kidstons “the circumstances surrounding the CPO process have now been explained to Union Street” As a follow up a meeting will be held with them, their solicitor and the Council’s Solicitor to provisionally agree a way forward”.

USP’s Letter to GCC Lord Provost 3rd June and Lord Provost’s response 3rd June 2004

These two letters would have been entirely different if the phrase “the circumstances surrounding the CPO process have now been explained to Union Street” had actually been. USP in fact details what GCC told it and if GCC had disclosed the CPO Amendment, USP would still have had 6 months to raise the relevant protective action and causal Damages action given the normal 5-year Prescription.

However if GCC disagrees? Can it provide a record of this explanation and also follow up meeting as neither USP nor its lawyers have any recollection of at which GCC disclosed the CPO Amendment, which would then allow GCC to state with conviction that the circumstances surrounding the CPO process have now been explained to Union Street”?

Given USP had spent the last 4 years trying, trying and trying some more to get this title transfer sorted, so as to allow the approved scheme to progress. And the fact GCC also details in the opinion the then immense frustration USP is experiencing and let’s try to guesstimate the increase in this in the now 12 years+ since May- June 2004 till March 2016.

Referring back to GCC’s 25/05/2004 letter to USP does not recognise at all the “considerable support and patience” GCC claims it demonstrated towards USP at that time. Further by then it had taken GCC 4 years to NOT HAVE RAISED A LANDS TRIBUNAL ACTION. And its then claim it would take 4-6 months to reconcile actually took another 5 years or so! And USP and its by then £4M investment was left powerless and in limbo by this flawed and failed use of CPO legislation.

And now given GCC it’s been proven GCC was then deliberately withholding material and fundamental information from USP, which has coalesced to cause massive financial increases and scheme delays this claim becomes wholly untenable. And let’s not overlook apparently this has all been caused by the commercial interests in the project. Therefore for GCC in 2016 to continue to ignore the consequences of the unilaterally imposed and then non-disclosed Feb 1998 CPO Amendment cannot be ethically, legally and morally correct. And see overleaf a succinct explanatory statement by Kenneth Gerber who has been the lawyer for USP and now USI since mid 1998 and is for the record a highly respected and regarded Commercial Property lawyer.

Without any doubt GCC’s flawed and failed use of the CPO prevented any scheme from happening between 1998 and mid 2009. However despite this GCC believes it has no responsibility for the consequences of this failure. USP and USI’s repeated request for a CPO Review is as follows "When specific LBRN and CPO legislation has been implemented to assist an approved project’s delivery then that legislation should then not impact negatively on or discriminate financially against the relevant owners who are co-operating and collaborating fully with the public sectors agencies.

Also the fact GCC only disclosed in April 2014 the letter dated 1998 they had issued to Bird Semple Crawford Herron that said they had used the Notarial Instrument procedure instead of General Vesting Declaration procedure will be tested to ascertain if it’s such a fundamental disclosure that it allows USP to state it now has 5 years to challenge GCC on this, especially given the aforementioned, the overall chronological correspondence and the concept that USP had no active knowledge of this CPO Amendment until April 2014 and which since then GCC has refused to discuss this.

The Egyptian Halls also can't be mothballed according to the expert advice from Conservation accredited scheme professionals. Scheme costs have risen from £3M in Year 2000 to circa £18M in 2016 and are increasing by circa £1.5M per year. The Egyptian Halls can still be preserved and returned to commercial sustainability. However to achieve this requires collaboration and transparency and without liability discussions on how to achieve this are again offered to GCC.

Yours sincerely

Derek J Souter Director

STATEMENT BY KENNETH STEVEN GERBER TO

UNION STREET PROPERTIES LIMITED

RE CPO OF UPPER FLOORS OF BUILDING 84/100 UNION STREET, GLASGOW

I am Kenneth Steven Gerber, Solicitor, and was a partner at Kidstons & Co, Solicitors, Glasgow from 1996 until 30th September 2007, since when I have been and remain, a partner at Anderson Strathern in Glasgow. I acted for Union Street Properties Limited (“USP”) at Kidstons, and continue to act for them at Anderson Strathern.

When I was at Kidstons & Co, I acted for USP in 1998 in acquiring the two shops 88 and 96 Union St Glasgow, at which time I became aware of the listed buildings repair notice and the resultant CPO affecting the upper floors of the building. The purchase of 88 and 96 Union Street completed on 11th September 1998. When USP went on to purchase 84 Union Street, I was given a copy of the missives dated 28th March 1996 between Portfolio Holdings Ltd on behalf of the consortium of ground and basement floor owners / occupiers and Glasgow District Council, which provided for the Council to promote a CPO and to complete by General Vesting Declaration title on behalf of the consortium, and to then convey the upper floors on the basis that the works to satisfy the statutory notice were carried out. The purchase of 84 Union Street completed on 15th December 1999. The negotiations for that purchase were lengthy, and were carried on at the same time as negotiations with the Council for USP to enter into missives to renew and amend the 1996 missives between Portfolio and the Council. The 1999 missives between USP and the Council referred to the CPO, and stated that no compensation had been agreed or was being negotiated. They also dealt specifically with USP having to complete works within 30 months after USP acquires title, and on Paratus No 303 Ltd withdrawing its appeal against the CPO, with a time limit imposed of 22 January 2000, and a deadline for carrying out and completing the works of 30th November 2002. The 1996 missives referred to the Council completing title by General vesting Declaration, and as we negotiated a renewal and amendment of the 1996 missives and as there was no reference at all to change of procedure from GVD, I had no reason to doubt that the GVD would proceed. I had dealt with many properties in the past where there was a CPO involved, and these had always been followed through with a General Vesting Declaration (“GVD”) or a voluntary statutory conveyance.

Shortly after the purchase of 84 Union Street was completed, I attended meetings with USP at the planning department of Glasgow City Council to discuss the carrying out of the works to satisfy the Listed Buildings repair Notice and to carry out the re-development of the building. The Council personnel at these meetings stressed the importance of preserving the architecturally important building.

The Council were very supportive of and welcomed USP’s involvement, and I certainly perceived that there was a mutual atmosphere of co-operation and trust between USP and the Council.

After USP had concluded missives with the Council, I remember meeting at Kidstons’ office with Graeme McDiarmid of the Council’s legal department to discuss the drafting, and I believe this was around the middle of 2002. At the end of the meeting when he was preparing to leave our office, he mentioned to me that instead of taking entry by the usual General Vesting Declaration route, the Council had used a Notarial Instrument (“NI”); he apologised that this had not been told to us sooner. He did not confirm this in writing, but given there was significant, tangible momentum and collaboration between GCC and my client, plus GCC had set a 30 month timescale for completion, my client and I expected fully the procedure would be expedited; unfortunately this did not transpire, hence my client began lobbying relevant political stakeholders. The reason given to me by the Council’s solicitor for the change from GVD to NI was that with a GVD, the Council would have to have waited 28 days before going into the property, whereas, with a Notarial Instrument, they could go in immediately. The Council’s desire for immediate entry had been in order to do immediate required repairs. I’m advised by USP that these repairs were not carried out, and that GCC cannot confirm they were either, as they have no record of any such works.

USP has informed me that the original consortium’s lawyer has cast doubt on GCC’s claim in their letter of 14th April 2014 that this CPO Amendment was in fact requested by his clients, given the immediate effect was to cause a then significant grant of £245,000 to be withdrawn due to the title conveyance required being unable to be achieved within the grant timescales.

I understand that the effect of using the NI procedure is that the Council could not acquire title until the compensation payable to the property owner is agreed or is determined by The Lands Tribunal for Scotland, whereas with a GVD, title can be obtained without delay, leaving compensation to be dealt with after the event. I reported verbally to USP at the time that this would result in it not being possible for GCC to complete title to the upper floors until compensation had been agreed or had been determined by the Lands Tribunal. I was aware (from having attended along with USP various meetings at the Council) that there was a lot of co-operation at the time between USP and GCC.

I was not aware, until GCC wrote to USP on 11th April 2014 of the existence of a letter dated 11th February 1998 from GCC to Bird Semple, in which the Council notified the change from GVD to NI to the Consortium and asked whether the delay involved would result in the consortium not remaining willing to proceed with the CPO. The existence of that letter was not at any time disclosed to me by the Council, or anyone else. I understand from USP that the Council did not disclose the letter to them.

If I had known about the GCC letter of 11th February 1998 to Bird Semple detailing the change from GVD to NI in respect of the CPO before the existing CPO missives were re-stated as between USP and GCC in 1999, I would have been aware that the Council could not fulfil the obligation it had undertaken to complete title by GVD, I would have advised USP that they could not agree any date-specific time limits, as date of entry and thus completion of title were rendered uncertain by the change form GVD to NI, and I would have recommended strongly to USP, to the extent that I would have said they should not proceed at all, that at the time when the undertaking was being obtained from Paratus (403) Ltd to drop their appeal in respect of the CPO, that they should either also simultaneously drop all future compensation claims, or alternatively that the level of compensation should have been agreed at that time, so as to remove the Paratus obstacle to GCC completing title. I understand that from USP that it would have been relatively very easy to achieve this at the same time, as Paratus (403) Ltd were very keen to see a scheme delivered, which would give them a future profit;,

I understand from USP that until USP’s now pivotal involvement this profit could not hope to be realised. Also, if USP and I had the benefit of knowledge of the 11th February 1998 letter from GCC to Bird Semple, USP would have been able to attempt to protect itself by negotiating accordingly (to take account of the open-ended delay involved) when entering into missives with the Council. Unfortunately, that opportunity was denied to them, and thus a delay of many years (10) was suffered. As the NI was used instead of the GVD, this could not be undone. It would have needed a new CPO to have been promoted and confirmed to undo the continuing delay.

The original missives between Portfolio and GCC contained various time limits, which could not be met due to the delay in acquiring title, and so we exchanged letters with GCC on numerous occasions to extend the time limits. As part of one of these exchanges, the missives were made more onerous against USP, and the amendment included reference to the NI procedure, so as to record what had happened factually. USP agreed to this, as they were keen to see the project through and to save the building, and to protect their investment, which was made in good faith beginning with the 1999 CPO Agreement with GCC

If matters were being negotiated to-day for the carrying out of the works to the building and title were needed to the upper floors, I would certainly be advising USP to negotiate so as to protect themselves against the inevitable increased cost arising from delay in the event that title were not obtained by GVD, given that compensation would have to be agreed or awarded to the owners before obtaining the title.

I have seen a copy of GCC’s Legal Department’s letter to USP of 11th April 2014, and I comment on its terms as follows

2nd page Point 1, Given GCC admits it disclosed the CPO Amendment to the original consortium it had entered into missive with, why did GCC not then disclose this to USP with whom it was also entering into missives?

2nd page Point 2 - if the CPO Amendment had been disclosed to USP, I would doubt whether USP would have purchased No 84 at the outset, or No 100 Union Street, or if they had, they would have sought indemnities from the Council regarding extra cost / delay.

2nd page Point 3 – I am informed that given the CPO Amendment was unilaterally imposed by GCC it cost the 1st consortium a £245k grant from then GDA due to the title being unable to be conveyed and any project starting within a specified timescale.

2nd page Point 5 - If there had been no initial reassurance after GCC’s disclosure about the change from GVD to NI mid 2002, and if there had not been the strong atmosphere of trust and co-operation between USP and the Council, I would have advised USP to protect its position by reserving its rights and to obtain an indemnity re costs and delay.

I’d have also advised USP to ensure its two FRI tenants take similar action to protect their own and ultimately USP’s position by reserving their rights and to obtain an indemnity re costs and delay, given they had liability for the statutory repairs notice under the leases.

And can I also note that in GCC’s letter of 14/04/2014 to USP Ltd there is no reference made to the 1999 CPO Missives between the Council and USP, which of course specifically included the GVD title conveyance mechanism, but the 2002 and 2005 Agreements contain the Notarial Instrument mechanism which agreed legally that in return for Paratus dropping their CPO Appeal GCC would transfer from Portfolio Holdings to USP the CPO missives, and in parallel USP would purchase No 84 from Portfolio.

Point 4 - it is denied that the apology I have detailed above was ever given. I have a very clear recollection that the apology was indeed verbally given. While the letter states at point 1 on page 2 that the change in entry / title procedure was disclosed to the consortium’s solicitors in terms of letter dated 11 February 1998, it was not disclosed by these lawyers to USP or me as their solicitor, and the Council did not disclose it to me, nor did the Council take cognisance of the change in entry procedure when renewing and amending the 1996 missives in 1999. Because USP could not comply with the time limits set out in the original missives (as renewed and amended in 1999), USP / USD had to keep seeking extensions of time, for fear of losing the whole project after investing, I understand, circa £2.5M. However if the CPO Amendment had been disclosed at that time this would been protected by seeking indemnities from GCC in respect of increased costs that would accrue as a result of the delays and also by gearing the obligation to carry out the works to the date on which title would finally be obtained. Initially, these extensions were granted by formal amendment of the deadline in the missives, but in 2005 GCC insisted on effectively bettering their commercial position to the detriment of USP as a condition of agreeing a further extension, and this betterment was only needed because of the change in procedure from GVD to NI, which had not been disclosed to USP or me at the critical time when USP was becoming fully committed to eth project by acquiring 84 and 100 Union St and binding itself into the 1996 missives. I do, however, believe that when the 1999 USP-GCC “back to back” agreement was drafted, Mr McDiarmid was not aware of the change in procedure for obtaining entry.

I attended a meeting at GCC’s offices in Glasgow on 27th May 2004 to discuss the objective of the project, which had remained constant, of both preserving and returning to commercial sustainability of the Egyptian Halls, and also very belatedly the disclosure of the CPO change. This meeting had been scheduled, I understand, as a result of USP lobbying the then First Minister Jack McConnell from early 2002, due to delay in expediting the compensation issue caused by the change from GVD to NI. At the 2004 meeting, David Black of GCC Legal explained that a general vesting declaration is impossible because the Council did an expedited procedure in order to obtain early physical entry to the property, and therefore it is essential that title be completed only by way of Notarial Instrument.

For this to happen, the matter of compensation needs to have been sorted out before title is taken, and cannot run in tandem we already knew that in mid 2002 when we were told by GCC of the change in procedure, and thus GCC could then not convey the Upper Floors title by GVD as had been legally agreed, so nothing new was then disclosed or discussed. He said that Paratus has claimed compensation and that there had been various discussions and an offer of £5,000 has been made by the Council, but this had been rejected. Hamish Munro was conducting the negotiations for Paratus, and there had been some muttering by Paratus regarding the possibility of seeking judicial review.

The Council said it is happy to meet with Paratus but only to discuss compensation, and that it will be surveyors who meet Paratus. The Council is not willing to let the matter drift and will impose a deadline and, if agreement is not reached by that time, will then put it to the Lands Tribunal. David Black said that it is likely that the Lands Tribunal process will take four to six months,

From the start of USP’s involvement with the Council and even at the time of the 2004 meeting, there was positive, amicable collaboration between USP and the Council, and USP were happy initially to rely on the Council doing its best to resolve the compensation issue by negotiation or by swift process via the Lands Tribunal. (but note not the CPO Amendment) was holding up the project

If I had been made aware of the letter of 11th September 1998 from the Council to Bird Semple, I would have advised USP to protect its position by seeking an indemnity in respect of project costs and increase in building costs at the time of entering into the 1999 missives and at each renewal / extension of the missives with the Council. In fact, given the uncertainty involved, it may well be that USP would have decided to not proceed with buying no 84 or no 100 Union Street if they had known about the indefinite delay that could arise from the Council having taken entry by NI instead of GVD. However, even at the May 2004 meeting, the Council said they anticipated it would be able to obtain title within six months after that.

Due to the non disclosure of the 1998 letter from the Council to Bird Semple, which GCC had the opportunity to rectify many times before April 2014 and most definitely by May 2004 meeting, I do believe USP have been disadvantaged significantly and have incurred huge financial loss and burdens as a direct result. Further, contracts were entered into between USP and GCC, which could be re-examined in the light of the existence of the 1998 letter to Bird Semple, which was not disclosed to USP or its solicitor. I understand from USP that in June 2004 GCC’s then DRS Director briefed the Lord Provost who then briefed the First Minister as follows the circumstances surrounding the CPO process have now been explained to Union Street”. As a follow up a meeting will be held with them, their solicitor and the Council’s Solicitor to provisionally agree a way forward”; therefore one must assume the then GCC Lord Provost and then First Minister had every reason to believe the CPO situation had been fully explained to USP and its lawyer, which was definitely not the case – they had explained at this meeting a Change to Entry (from GVD to NI) which we had assumed had occurred in 2002 when in fact it had occurred in Feb 1998 and was actually a conscious decision to amend the method of the CPO to gain immediate entry, which then meant the 1999 CPO Missives which GCC agreed would not be able to be satisfied by GCC unless the upper floor owners (one of whom was living out of the country and the other was Paratus No 403 Ltd which was a company known to the Council and who had appealed against the CPO itself) reached swift agreement with the Council on the level of compensation. And this was all before USP was committed to GCC and to the building as a whole?

1st March 2016

Scottish Law Contractual Fundamentals

When assessing Kenneth Gerber’s statement please take full cognisance of the followingFor ANY contract to exist under Scots Law and virtually all other systems there must be consensus in idem or a 'meeting of minds' which applies to all any contract from buying a over the counter medicine to a second hand car up to and well beyond a transfer of an already in place CPO Agreement.

Therefore I'd like to bring to your attention case from the Court of Session - Scotland, Carlyle V RBOS, which does have relevance to the CPO Review USP, has asked GCC to carry out Relevant key extracts The defenders' case [20] At the conclusion of the evidence, the defenders' counsel, Mr Barne, explained that the enforcement of the guarantee is resisted on the basis that it was induced by negligent misrepresentations by Mr Marsh while acting on behalf of the pursuers. Mr Barne prefaced his remarks by reference to Lord Jeffrey's opinion in Royal Bank of Scotland v Ranken (1844) 6 D 1418; the speech of Lord Clyde in Smith v Bank of Scotland 1997 SC(HL) 111; and Gloag & Irvine, Rights in Security at 706 ff. In summary, a creditor must not mislead a proposed cautioner as to the hazards of the undertaking whether intentionally, from carelessness, or by mere blunder. Any representation must be "full and fair". A misrepresentation can occur by withholding all or part of the truth. The pursuers' response [23] Mr McBrearty submitted that there had been no misrepresentation and no failure in duty on the part of the pursuers. In any event, any such failures did not induce the defenders to provide the guarantee. Key Point [52] Under reference to the case of Shankland, Gloag comments (Contract 2nd ed at 461): "The House of Lords, taking a different view of the negotiations, decided that nothing had occurred which would have suggested (to Shankland) that requisition was probable, and therefore sustained the sale, but all the judges concurred in holding that where a representation had been made there was an obligation to disclose any subsequent fact which affected its truthfulness. It is conceived that the obligation, in such cases, is to disclose all new developments which would affect the mind of a reasonable man, and that non-disclosure will render the contract voidable even although the party may have honestly thought the new developments immaterial." USP can claim the Defender's case very, very easily. GCC however in USP's opinion cannot under any circumstances claim the Pursuers' response relevant to their conduct in relation to the non –disclosure of the CPO Amendment GCC therefore fails very, very easily the test of "full and fair representation" whether be intentionally, from carelessness or by mere blunder” and which option it is will be decided by objective assessment or indeed court action going forward.

APPENDIX A

• GCC Letter to USP 14/04/2014

• GCC 1998 CPO Amendment

APPENDIX B

• GCC 1996 GVD Clause

• USP-GCC 1999 CPO Agreement

APPENDIX C

• May-June 2004 GCC-USP - Kidstons Correspondence

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NOTE UNION STREET DEVELOPMENTS LTD Note of Meeting at Glasgow City Council Offices on 27th May 2004 Present Iain Love - GCC Development Regeneration

John Telfer - GCC Property Valuation Division (deputising for Alan Jardine) Lawrence Tough - Group Manager - Contracting and Maintenance David Black - GCC Legal Department Derek Souter - USD/USP KSG - Kidstons & Co.

1. The Building Mr Tough said that basically the Building is in reasonable condition, although there is some corrosion to the wrought iron and steel and to parts of the roof slab. There are one or two localised problems in the rear elevation, but these have been shored. Derek Souter authorised Mr Tough to speak to the Morrison partnership to get costings and to sort out works that are necessary to the roof. Costs spent by GCC to date incurred on work to the building and on security are £21,000 of which two-thirds approximately relates to common parts. Derek Souter said that the tenants would pay their part.

2. End User and Ideas Iain Love said that GCC would like to participate in profit from the whole exercise; Derek Souter explained that there had been delays, the withdrawal of GDA funding, the ground floor consortium faced 60% cost increase and USP had invested 6 years in the project. Therefore USP would need full recompense for the significant risks expended and opportunity cost of capital invested before it could consider this. GCC also recognise the present CPO agreement makes no provision for this. The Council is sensitive regarding what the property could end up being used for, especially in view of the fact that it is a prominent listed building. Derek Souter explained that there is likely to be a 20 year lease granted to Colin McDougall and Anna Ryder Richardson for a members only nightclub on top floor, studio

Union Street Properties Ltd & Union Street Investments Ltd26 Foundry Lane, Dundee DD4 6AY

Telephone: (01382) 451702Email: derek@djscm.com