SHERIFFDOM OF GRAMPIAN, HIGHLAND and ISLANDS AT ABERDEEN
A744/10
JUDGMENT
by
SHERIFF PRINCIPAL DEREK C W PYLE
in causa
LOUISE RICHAL, residing at Sirrah Neuk, Auchnagatt, Ellon AB41 8UR
Respondent
against
MICHAEL SEED and ANDREA SEED (Assisted Persons), both residing at 7 Strand Street, Carlisle
Appellants
Background
[1] This is an appeal from the judgment of the sheriff who sustained the preliminary plea for the respondent and thereby found the defences irrelevant on the issue of whether the appellants were in breach of contract. The sheriff allowed parties a proof on quantum.
[2] At the outset of the appeal the solicitor for the appellants confirmed, as had been the position before the sheriff, that there was no dispute on the material facts to determine whether or not there was a breach of contract.
[3] On 9 June 2010 the parties concluded missives for the sale by the appellants to the respondent of heritable property in Ellon. The date of entry was fixed for 6 August 2010. The missives incorporated certain standard clauses which, as is now common elsewhere in Scotland, were agreed by solicitors in Aberdeen and the surrounding areas as appropriate to be used in the purchase and sale of residential property. These clauses are described as "The Aberdeen and Aberdeenshire Standard Clauses (2007 Edition)" and are set out in a Deed of Declaration by John Alexander MacRae and Denise Merson dated 27 September 2007 and registered in the Books of Council and Session for preservation on 1 October 2007. The parties agreed certain amendments to the clauses but nothing turns on that in the present dispute. The relevant parts of Clause 2 are in the following terms:
"AWARENESS OF CIRCUMSTANCES AFFECTING THE PROPERTY
(i) So far as the Seller is aware the Property is not affected by:-
...
(g) any proposals, applications or re-development plans affecting the Property or any adjacent or neighbouring property which could reasonably be considered to be detrimental to the Property.
(ii) Without prejudice to the foregoing, the Seller warrants that he has not been served with nor received any neighbour notification notice issued in terms of planning legislation by any third party. If such notice is served on or received by the Seller prior to the date of settlement, the Seller will immediately forward the notice to the Purchaser's Solicitor. If the proposals contained in the notice would have a materially detrimental effect on the Property the Purchaser will be entitled to resile from the Missives without penalty due to or by either party."
[4] As at the date of conclusion of the missives, the parties are agreed that there were no such proposals, applications or re-development plans; nor had the appellants been served with or received any such notice. However, the parties agreed to amend the date of entry to the day before 6 August 2010. This was achieved by two letters. The first was from the appellants' solicitors, was dated 27 July 2010 and was in the following terms:
"On behalf of and as instructed by our clients' (sic) Mr and Mrs Michael Seed we hereby reopen the missives concluded between our respective clients and dated 9th June 2009 (sic) in respect of the subjects at Sirrah Neuk, Auchnagatt, Ellon and amend the missives as follows:-
- Entry and actual occupation shall be as at 5th August 2010.
Except as varied hereby we confirm and ratify the terms and conditions of said missives."
The second letter was from the respondent's solicitors, was dated 30 July 2010 and was in the following terms:
"We refer to the following:-
a) Our Offer dated 14th May 2010;
b) Your Qualified Acceptance dated 20th May 2010;
c) Our formal letter dated 4th June 2010;
d) Your formal letter dated 9 June 2010;
e) Our formal letter concluding missives dated 9 June 2010;
f) Your formal letter dated 27th July 2010 seeking to reopen the missives;
On behalf of and as instructed by our client, Mrs Louise Emma Richal, we hereby accept the terms of your said formal letter dated 27th July 2010 and now hold the bargain for the purchase of Sirrah Neuk, Auchnagatt, Ellon AB41 8UR to be concluded at a price of £285,000.00 with a date of entry of 5th August 2010."
Settlement duly took place on 5 August 2010. On taking entry, the respondent discovered a handwritten note left for her by the appellants. Attached to it was a letter from Aberdeenshire Council dated "as postmark" but received by the appellants on 15 July 2010. There was also a notice and plan attached to it. The letter explained that the Council had published the proposed local development plan and that it included a proposal for development on or adjacent to the property. The notice and plan were, it was said, being issued to the appellants in line with regulation 14(2) of the Town and Country Planning (Development Planning ) (Scotland) Regulations 2008. The notice and plan showed that an adjacent piece of agricultural land was to be allocated for a mixed use development for up to 16 houses and 8 small business units.
[5] In the pleadings the respondent avers that the appellants are in breach of contract on two grounds: first, they should have forwarded the letter with attachments to the respondent's solicitors, all in terms of Clause 2(ii); secondly, they are in breach of the warranty contained in Clause 2(i). The appellants contest these averments on two grounds: first, that the notice contained in the letter was not a "neighbour notification notice "; secondly, that the warranty was in respect of the knowledge of the appellants as at the date of conclusion of the original missives, namely 9 June 2010, over five weeks before the Council's letter was received, not as at the date of the amended missives, namely 30 July 2010, over two weeks after the letter was received.
[6] Thus, two questions were asked of the sheriff and were the subject of this appeal:
- Was the letter with attachments a neighbour notification notice in terms of the missives?
- Did the warranty apply to the appellant's state of knowledge as at the date of the conclusion of the later missives rather than as at the date of the conclusion of the original missives?
The sheriff answered both questions in the affirmative, the parties having agreed that if he did so a proof should be fixed on only the quantum of damages claimed by the respondent.
The Submissions of the Parties
[7] In respect of the first question, the appellants' solicitor submitted that a "neighbour notification notice" is a term of art derived from the statutory scheme contained in The Town and Country Planning (General Development Procedure) (Scotland) Order 1992 (section 9(1) and schedule 4), in terms of which the owner of ground upon which he intended a development required to intimate that intention to his neighbours. The scheme was changed by the coming into force of The Town and Country Planning (Development Management Procedure ) (Scotland) Regulations 2008, in terms of which (section 18) the local authority was thereafter responsible for the intimation of proposed planning developments. No set style of notification is contained in the regulations. The statutory rules for notification of a draft local development plan are contained in The Town and Country Planning (Development Planning) (Scotland) Regulations 2008, per section 14 and schedule 2. Nowhere in these regulations is reference made to a "neighbour notification notice".
[8] The respondent's solicitor submitted that the terms of the missives did not preclude the notice which had been given.
[9] In respect of the second question, the appellants' solicitor submitted that the parties had reached consensus in idem on 9 June 2010. The sole purpose of the later letters was to change the date of entry. In the construction of a contract, the task is to discover the intention of the parties to it. That was to be discovered from the wording of the formal document, which superseded the previous negotiations between the parties; where ordinary words are used in their ordinary way, they should be given their ordinary meaning; and when the meaning of a word is clear and unambiguous, effect should be given to that meaning. (City Wall Properties (Scotland) Limited v Pearl Assurance plc 2004 SC 204, para [7]) The respondent's proposed construction would lead to an unreasonable result. (Bruce v Barratt Developments plc 1991 SC 348 (pp 351-352)) The words "to confirm" mean merely to assert for a second or further time; the words "to ratify" mean to give formal approval or consent. (Chambers Twentieth Century Dictionary)
[10] The respondent's solicitor submitted that if the appellants' proposed construction was correct no meaning would be attached to the last sentence of the letter of 27 June 2010. The sheriff's construction was to be preferred given that it gave effect to all of the words of the contract.
Discussion
[11] In answering the first question, I have little difficulty in agreeing with the sheriff's construction of the contract. The appellant's proposed construction ignores the fact that the words used are "any neighbour notification notice issued in terms of planning legislation by any third party". I regard the use of the word 'any' as significant. The clause does not refer in terms to the 1993 Order; rather it is intended to cover planning legislation as a whole. It was not disputed that the 1983 Regulations, or indeed the 2008 Regulations, are part of that legislative subject matter. In any event, the words "neighbour notification notice" were not a term of art expressly defined in the 1993 Order. In my opinion, these are sufficient grounds for concluding that the Council's notice was indeed covered by the terms of the clause. But in reaching that conclusion I am also comforted by the thought that it would surely be startling to decide that the body of Aberdeen and Aberdeenshire solicitors expert in the law and practice of residential conveyancing would not have been aware of the changes in the legislative framework and would not have considered whether or not the standard clauses should be amended to take that into account. That would be the inevitable result if the appellants' construction was preferred.
[12] Turning now to the second question, I find this a more difficult one to answer. As every law student knows, the system for reaching a bargain for the sale and purchase of heritable property in Scotland proceeds upon the basis of an offer and an acceptance. In the event that an acceptance is qualified it is treated in law as a counter offer and so on until a final letter of acceptance is able to be dispatched. The appellants' solicitors' letter of 27 July 2010 does not accord with that practice in that it purports to "amend the missives" which as a matter of law it plainly could not do. Instead, one would have expected that the letter should have been framed as an offer to vary the concluded bargain, which offer would then have been open for acceptance in an unqualified way by the respondent's solicitors. If it was intended merely to amend the date of entry, on one view it is also difficult to understand why the appellants' solicitors thought it necessary to add the last sentence of the letter. But, then again, proper conveyancing practice would surely have dictated that the sentence should have been couched in terms of an offer to confirm and ratify the terms and conditions of the missives. On the other hand, the respondent's solicitor relied upon that sentence to justify his construction of the missives, it being implicit in that submission that without it the effective date of the warranty would not have changed.
[1] In these circumstances, I am reminded of the words of Lord Hope of Craighead in another context ((Multi-Link Leisure Developments Ltd v North Lanarkshire Council 2011 SC (UKSC) 53, para [19]):
"... the solution must be found by recognising the poor quality of the drafting and trying to give a sensible meaning to the clause as a whole which takes into account the factual background known to the parties at the time when the lease was entered into."
There is no dispute between the parties that the sole purpose of the letter of 27 July 2010 was to amend the date of entry. But that does not mean that the only change to the bargain is that the keys of the property are handed over on a different date. In fact, as the missives make clear, a number of obligations of the parties have to be performed on the new date. The question is what is the overall effect of the parties' letters of 27 and 30 July 2010. One possible answer is that as at the latter date the parties have entered into a new bargain. But, in my opinion, the better way to express the same point, but which does less violence to the terms of those letters, is to consider what the parties intended to be the date at which the warranty given. It was a matter of concession by the appellants' solicitor, both before me and before the sheriff, that the warranty was of the planning situation as at the date of conclusion of the missives, rather than as at the date of the original offer. The effect of the later letters was to create a new date for the conclusion of the bargain to sell the property. Thus the natural consequence of amending the date of entry was to create a new date as at which the warranty was given. If I am right in that approach, it also follows that the last sentence added nothing to the effect in law of the change in the date of entry; all it did, however badly expressed, was to highlight what that effect would be so far as the other clauses in the bargain were concerned.
Decision
[14] Accordingly, for the reasons I have given, I agree with the conclusions of the sheriff. The appeal is refused. I was asked to reserve the question of expenses given that the appellants are assisted persons. I invite parties to contact my secretary to arrange a diet for that purpose. If agreement on expenses can be reached, parties should advise my secretary in the normal way and I will be able to issue an interlocutor without a diet being necessary.
Aberdeen A744/10
Louise Richal v Michael & Andrea Seed
Aberdeen, 20 November 2012
The sheriff principal, having resumed consideration of the cause, Refuses the appeal; Adheres to the sheriff's interlocutor of 29 February 2012; Reserves the question of the expenses of the appeal until a date afterwards to be fixed.