Aberdeen Rubber Ltd v Knowles & Sons (Fruiterers) Ltd
| Jurisdiction | Scotland |
| Judgment Date | 18 March 1994 |
| Docket Number | No 44 |
| Date | 18 March 1994 |
| Court | Court of Session (Inner House - First Division) |
FIRST DIVISION
Lord Cameron of Lochbroom
ContractErrorError in description Heritable property and conveyancingMissives of sale and purchaseDisposition conveying more land than agreed in missivesWhether disposition reflected common intention of partiesWhether missives superseded by dispositionWhether court could look at informal correspondence prior to conclusion of missivesWhether partial reduction of disposition should be allowed
EvidenceOnus of proofHeritable property and conveyancingDisposition not conform to missivesWhether court could look at informal correspondence prior to conclusion of missives to ascertain common intentionWhether missives superseded by disposition
The defenders offered to purchase from the pursuers four areas of ground. The offer was not accepted timeously but parties acted with a view to completing the transaction and informal correspondence followed. A draft deed of restriction of a standard security was sent by the pursuers to the defenders. The description in that deed covered five areas of ground. The defenders then prepared a draft disposition in respect of the five areas and drew attention to the discrepancy between the areas to be conveyed and the original offer by requesting confirmation that it was all five areas that were to be conveyed. The pursuers confirmed that that was so. Thereafter, the original offer was accepted subject to certain qualifications. The bargain was then concluded, with the areas of ground in the missives being those set out in the original offer and not in the informal correspondence. The draft disposition was revised, engrossed and executed by the pursuers. That disposition was then delivered to the defenders in exchange for the purchase price. The disposition contained a non-supersession clause which held the missives to be in full force and effect except insofar as fully implemented by the disposition, notwithstanding delivery, for a period of two years from the date of entry. The pursuers subsequently brought an action seeking partial reduction of the disposition insofar as it purported to convey property not included in the missives. The defenders admitted that there was a discrepancy between the missives and the disposition but argued that the disposition expressed the common intention of the parties when looked at in the context of the informal correspondence. The Lord Ordinary (Lord Cameron of Lochbroom) allowed a proof before answer. The pursuers reclaimed.
Held (rev. judgment of Lord Cameron of Lochbroom) (Lord Coulsfield diss.) (1) that the sole issue in the case was whether the discrepancy was due to an error or reflected the common intention of the parties at the time when the contract was entered into; (2) that the burden of proof of showing error rested upon the pursuers; (3) that where, as here, the missives were not subject to challenge, they had to prevail over the earlier informal correspondence as evidence of the parties' common intention and as there was an admitted discrepancy between the missives and the disposition, reduction of the disposition to conform to the missives would be justified only if it was clear that the disposition was intended to implement the missives; and (4) that, on the agreed facts, the parties had intended that the disposition should implement the missives but, in light of the admitted discrepancy, there was no need for proof; and reclaiming motion allowed; and decree de plano pronounced.
Anderson v. LambieSC1954 S.C. (H.L.) 43distinguished.
Opinion (per Lord Coulsfield (diss.)) (1) that the disposition, once granted, was the governing document and not the missives, so that the hurdle which the pursuers had to surmount was to establish that it was the disposition that was in error, not the missives; (2) that the averment that the pursuers thought that the disposition conformed to the missives was an essential part of their case and had to be proved and it was irrelevant that the missives were unchallenged; and (3) that in order to discharge the heavy onus of proof which lay on them based upon an allegation of error in expression, the pursuers could not succeed merely by pointing to the terms of the missives or other formal contract preceding a conveyance and alleging that that contained the true contract, so that the subsequent conveyance had to be held to have been granted in error; and, accordingly, (3) that the defenders were entitled to put the pursuers to proof of their error.
Observed (per Lord President (Hope)) (1) that a strong presumption that the disposition was intended to conform to the missives was raised when regard was had to the non-supersession clause combined with the facts that the price in the disposition's inductive clause and date of entry were the same as those contained in the missives and the date from conclusion of the bargain and execution of the disposition was very short, it being unlikely that an additional area of ground would be included without some adjustment to price; and (2) that, for the defenders to challenge the missives as not expressing the common intention of parties at the time of their conclusion, they would have had to show not only that there was some prior agreement which the missives failed to express but also that due to common error at the time the missives were entered into they expressed an agreement which the parties did not intend to enter into at that date.
Aberdeen Rubber Limited brought an action in the Court of Session against Knowles & Sons (Fruiters) Limited in which they sought declarator that by missives dated 18th April and 20th September 1991 the pursuers had agreed to sell and the defenders had agreed to buy certain heritable subjects and that the disposition granted by the pursuers in favour of the defenders dated 24th September 1991 had failed to give effect to the common intention of the parties in that it disponed additional subjects which had not been agreed to be bought and sold in terms of the missives. The pursuers sought partial reduction of the disposition or, alternatively, rectification of it in terms of sec. 8 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985.
The cause called in procedure roll before the Lord Ordinary (Lord Cameron of Lochbroom) on the pursuers' preliminary plea-in-law to the relevancy and specification of the defences.
At advising, on 5th May 1993, the Lord Ordinary allowed a proof before answer. His Lordship's judgment appears sufficiently from the opinions of their Lordships in the Inner House [see also:Aberdeen Rubber Ltd. v. Knowles & Sons (Fruiterers) Ltd.UNK 1994 S.L.T. 176].
The pursuers reclaimed, the reclaiming motion calling before the First Division, comprising the Lord President (Hope), Lord Weir and Lord Coulsfield, for a hearing.
At advising, on 18th March 1994
LORD PRESIDENT (Hope)The pursuers in this action seek the reduction in part of a disposition which they granted in the defenders' favour of heritable subjects in Aberdeen. There is an alternative conclusion for the rectification of the disposition to the same effect under sec. 8 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985. The basis on which they say they are entitled to one or other of these remedies is that, as a result of an error on the part of
their solicitors, the disposition conveyed the heritable subjects described (Third) therein which the pursuers had not agreed to sell to the defenders and which it was not intended by the parties that the defenders should receive. The defenders aver that the terms of the disposition accurately reflect the common intention of the parties, which they say was that the subjects to be included in the conveyance should comprise all the ground which it describes to which the pursuers had title. When the case came before the Lord Ordinary on the procedure roll the pursuers submitted that the defences were irrelevant and they invited the Lord Ordinary to pronounce decree of declarator and reduction in terms of the first three conclusions of the summons. The Lord Ordinary decided to allow a proof before answer on the whole matter, and it is against that decision that the pursuers have now reclaimed.
The facts of the case are for the most part not in dispute. The history of the transaction is all admitted, and counsel for both parties were agreed that the various documents which had been shown to us are what they bear to be. The parties are agreed that the disposition differs from the missives which preceded it in respect that the subjects as described in the disposition included more land than the pursuers agreed to sell to the defenders in terms of the missives. The only question of fact which is in dispute between them is whether there was an error in the disposition in this regard. Not only do the defenders make no admission on this point, they seek to show that, contrary to what the pursuers say about this, the terms of the disposition accurately reflect the common intention of the parties as disclosed by prior informal correspondence between the parties' solicitors. Now this correspondence was not made part of the bargain between the parties when the missives of sale were concluded between them. But the defenders aver that the missives were superseded by the disposition, and they contend that they are entitled in any event to make reference to the correspondence to show what the parties' intention was and that there was no error. They submit that there is an issue here which requires all the facts to be investigated and that a proof before answer is appropriate, while the pursuers contend that the defences are irrelevant and that, in the light of the documents, nothing more needs to be established to entitle them to their remedy.
The documents which provide the background to the argument are the missives, the informal correspondence and the disposition. The order of events is...
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