Bradford Property Trust Ltd v Hunter and Another

JurisdictionEngland & Wales
JudgeLord Reid,Lord Morton of Henryton,Lord Cohen,Lord Keith of Avonholm,Lord Denning
Judgment Date10 March 1960
Judgment citation (vLex)[1960] UKHL J0310-1
Date10 March 1960
CourtHouse of Lords

[1960] UKHL J0310-1

House of Lords

Lord Reid

Lord Morton of Henryton

Lord Cohen

Lord Keith of Avonholm

Lord Denning

Bradford Property Trust Limited
and
Hunter and Another

Upon Report from the Appellate Committee, to whom was referred the Cause Bradford Property Trust Limited against Hunter and another, that the Committee had heard Counsel, as well on Monday the 25th, as on Tuesday the 26th, Wednesday the 27th and Thursday the 28th, days of January last upon the Petition and Appeal of the Bradford Property Trust Limited, having their registered office at 69 Market Street, Bradford, Yorkshire, praying. That the matter of the Interlocutors set forth in the Schedule thereto, namely, two Interlocutors of the Lord Ordinary in Scotland (Lord Migdale) of the 8th of August and the 8th of October 1958 respectively and also an Interlocutor of the Lords of Session there of the First Division of the 24th of July 1959, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Interlocutors might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Case of Janet Cumming Hunter and Mary Mitchell Hunter lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Interlocutors of the 8th day of August 1958. the 8th day of October 1958 and the 24th day of July 1959, complained of in the said Appeal, be, and the same are hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments: And it is also further Ordered, That unless the Costs, certified as aforesaid, shall be paid to the parties entitled to the same within one calendar month from the date of the certificate thereof, the Cause shall be, and the same is hereby, remitted back to the Court of Session in Scotland, or to the Judge acting as Vacation Judge, to issue such Summary Process or Diligence for the recovery of such Costs as shall be lawful and necessary.

Lord Reid

My Lords,

1

This is an action brought by the Respondents for reduction of an agreement entered into early in the morning of 14th February, 1951. They had for some years carried on various businesses left to them by their father, but by 1950 they were in financial difficulties. Through a chartered accountant in Glasgow they were put in touch with Mr. A. Denham, the chairman of the Appellant company. The Respondents owned a number of properties in Alloa, some of which they had tried to sell without success: they owed £19,000 to the Halifax Building Society secured on these properties by ex facie absolute disposition and also some £9,000 of other debts. With a view to making some proposal Mr. J. H. Denham, a director, and Mr. Gresswell, the managing director of the Appellants, went to Alloa and inspected the properties. The Appellants then made a proposal in a letter to the Respondents of 28th August, 1950.

2

This proposal was that the Appellants should "acquire the whole of your properties in mortgage", should "accept full responsibility for your mortgage debt and pay to you the sum of £7,500", and should "inaugurate a sales programme of the properties and pay over to you one half of the net profits (if any) on realisation The letter then recommended the Respondents to take advice on this offer, but they did not do so.

3

On 1st September the Respondents sent a detailed reply: this was written out by one of the Respondents. They said that they "have pleasure in accepting in general your suggestions with a few variations subject to your approval". The first was that they should be paid £9,500 or £9,000 instead of £7,500, and the third was:

"You will, without undue delay, inaugurate a sales programme of the Properties and pay over to us one half of the net profits on realisation."

4

The parties met in Alloa on 11th September: there were present Mr. A. Denham, Mr. J. H. Denham, the Respondents, Mr. King, who had been asked to factor the properties, and Mr. Jarvis, a solicitor who was acting for both parties. Thereafter the parties signed on 20th and 22nd September a minute of agreement which had been prepared by Mr. Jarvis. This provided:

"FIRST The First Party agrees to sell to the Second Party and the Second Party agrees to purchase from the First Party a one half proindiviso share of ( a) the heritable properties conveyed ex facie absolutely by the First Party to the Halifax Building Society … ( b) the heritable property Numbers Twenty and Twenty-two Candleriggs, Alloa, ( c) the furniture and fittings belonging to the First Party within the Mayfair Ballroom and the Atlantique Restaurant, Alloa.

SECOND The Second Party undertakes in respect thereof to pay to the First Party on the date of the signing of this Agreement the sum of EIGHT THOUSAND FIVE HUNDRED POUNDS and to pay to the Halifax Building Society all capital sums due and to become due by the First Party in connection with the said advances.

THIRD The Second Party will endeavour to realise the said heritable properties, with the exception of Number Ten Church Street, Alloa, as early as possible and that either by public roup or by private bargain. In the event of a sale the Halifax Building Society will be repaid by the Second Party such amount as the Halifax Building Society may require.

……

NINTH It is agreed that nothing herein contained shall constitute the First Party to be a partner with the Second Party in the retention or realisation of the said properties heritable or moveable."

5

It is obvious that this was a radical departure from the proposal made by the Appellants in August and accepted "in general" by the Respondents. Under the proposal the whole of the properties was to be conveyed to the Appellants and the sum due to the Halifax Building Society together with the sum to be paid to the Respondents would have been deducted from the whole proceeds of the sale, the balance less expenses being divided between the parties. Under the agreement as signed the Respondents would get one half the net proceeds of the sale without any part of the debt or the sum of £8,500 payable to them being payable out of their share: the Appellants would have to pay the whole of this out of their half share of the proceeds and would be out of pocket if their half share proved to be less than £27,500. To illustrate the difference, if the properties realised £40,000, as they did, the Respondents would get under the signed agreement £20,000 less only expenses; but the Appellants would only get £20,000 gross, although they would have to pay out £27,500 as well as expenses, so they would have lost more than £8,000 on the transaction. But under the original proposal there would have been a surplus of something like £10,000 to divide equally between the parties. I shall have to deal later with the way in which this change was made, but before doing so I must explain why it is necessary to look behind the written agreement.

6

In due course it was agreed that the properties should be exposed for sale on 14th February, 1951, and Articles of Roup were agreed. The parties then met on the evening of 13th February to settle upset prices and other matters. This case turns on the proper conclusions to be drawn from what took place at that meeting. For the moment it is sufficient to say that at an early stage it became evident that the parties had very different views about the earlier agreement. There were present Mr. J. H. Denham, the Respondents, Mr. Jarvis and Mr. King, and for part of the time the auctioneer. When the meaning of the written agreement was explained to Mr. Denham by Mr. Jarvis he was very surprised. He maintained vehemently that it did not carry out the oral agreement made on 11th September, that it had then been agreed, on the lines of the original proposal, that the sums of £19,000 and £8.500 should be deducted from the whole of the proceeds of the sale of the properties, and that the Respondents knew perfectly well that this was so. The Respondents did not agree. At one stage Mr. Denham went out to consult Mr. A. Denham by telephone and on his return he made it plain that they would not consent to the sale going on unless the Respondents agreed to alter the written agreement of September and make it conform to the bargain which he asserted had been made on 11th September and to what they both knew to be right. The Respondents persistently refused to do this. After several hours he insisted that they must consent then and there or the sale would be off. They then consented. Mr. Jarvis then endorsed the second agreement on the written agreement of September and this was signed. Mr. Denham then consented to the sale proceeding. This second agreement which the Respondents now seek to reduce is in these terms:

"The parties referred to and designed in the foregoing Agreement hereby further agree that the undertaking referred to in Article Second thereof is hereby revoked and in lieu thereof it is hereby agreed that the sum of Eight thousand five hundred pounds and the payments of capital to the Halifax Building Society referred to therein shall be treated as an expense of the sale and shall be deducted from the gross proceeds before division: It is further agreed that after the net proceeds of the sale are ascertained the same will be divided in the following proportions, in the event of the gross price of the respective sales not exceeding Fifty thousand...

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1 cases
  • Dooneen Ltd (t/a McGinness Associates) and Another v Mond
    • United Kingdom
    • Supreme Court
    • 31 October 2018
    ...the House of Lords in Dundee General Hospitals Board of Management v Bell's Trustees 1952 SC (HL) 78; [1952] 1 All ER 896 and Hunter v Bradford Property Trust Ltd 1970 SLT 173, to which one might add the case of Whyte v Knox (1858) 20 D 970. In the event, the parties declined to make submi......

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