Manheath Ltd v H J Banks & Company Ltd
| Jurisdiction | Scotland |
| Judgment Date | 22 November 1995 |
| Date | 22 November 1995 |
| Docket Number | No 8 |
| Court | Court of Session (Inner House - First Division) |
FIRST DIVISION
Lord Gill
ContractConstructionHeritable property and conveyancingSale of heritageContract conditional on ground of planning permission by a certain date which had not been timeously purifiedWhether condition conceived for benefit of one partyWhether party entitled to waive conditionWhether condition severable from remainder of contract
The parties entered into missives for the purchase and sale of heritable subjects which the purchasers proposed to use as an open cast mine. The contract was subject to a suspensive condition in regard to the obtaining of planning permission for the proposed use which had not been timeously purified. The sellers brought an action seeking declarator that, in those circumstances, the contract was at an end. The purchasers, however, argued that the contract had been concluded as they had written to the sellers stating that the condition was purified. They also argued that, as that condition had been conceived only for their benefit, they had both been entitled to waive and had in fact waived it. The Lord Ordinary (Gill) held that the suspensive condition disclosed a real and substantial interest on the part of the sellers in the obtaining of the planning permission which was sufficient to exclude the purchasers' right to waive it. His Lordship also held that even if that condition had been conceived solely in the purchasers' interest, it was not capable of being severed from the other provisions of the contract. In those circumstances, the Lord Ordinary granted decree de plano. The purchasers reclaimed.
Held (aff judgment of Lord Gill) (1) that the question whether a stipulation was for the sole benefit of a party seeking to waive it was a question to be decided on the terms of the contract; (2) that it was not legitimate to conduct an inquiry outside the terms of the contract so as to determine parties' intentions; but (3) that there was no reason in principle to confine the examination of the contract to the condition which was sought to be waived, as it might be necessary to examine the whole contract in order to test the argument that the condition was intended to be for the exclusive benefit of the party who sought to waive it and enforce the contract; and (4) that, looking at the contract as a whole, it was clear that both parties had an interest in the obtaining of planning permission so that the purchasers' right to waive the condition was excluded; and reclaiming motionrefused.Dewar & Finlay Ltd v Blackwood1968 SLT 196 disapproved.
Manheath Limited brought an action of declarator again HJ Banks and Company Ltd. The parties had entered into missives for the purchase and sale of subjects at Niddrie near Edinburgh which the defenders proposed to use as an open case mine. The defenders offer to purchase contained, inter alia, the following conditions:
1. The purchase price will beSEVENTY SEVEN THOUSAND FOUR HUNDRED POUNDS STERLING(77,400) payable at the settlement date hereinafter mentioned.
2. Entry and actual occupation to the whole property subject only to condition 7 hereof will be given on the day occurring six weeks after written intimation is given by or on behalf of the purchasers that the terms of condition 7 hereof have been implemented to the entire satisfaction on the purchasers (as to which matter they shall be the sole judges) or on such other date as may be mutually agreed (the settlement date) ....
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5. Until the settlement date the seller will, in questions with the purchasers, keep or cause to be kept the property in its present condition and accept the liability for damage however caused. If at the settlement date the property is not in substantially the same condition as at the date of this offer (as to which the purchasers shall be the sole judges) the purchasers will be entitled to resile without penalty ....
7.1. The missives of which this offer forms part shall remain conditional until written intimation is given by or on behalf of the purchasers that they have received all necessary planning and other permissions (including any necessary permission from British Coal Corporation) for use of the property as an open-cast mine in terms satisfactory to the purchasers (as to which matter the purchasers will be the sole judges).
7.2. The purchasers undertake the they shall lodge as soon as reasonably practicable after the date of conclusion of any bargain to follow hereon with the local authority a completed application for such planning permission as aforesaid and shall initiate applications for all other necessary permission as aforesaid and they shall prosecute such applications diligently and shall keep the sellers informed as to progress with such application from time to time.
7.3. In the event that the said permission is not obtained from the local authority, then the sellers will be entitled to prosecute an application to the Secretary of State for Scotland against any refusal or deemed refusal by the local authority as planning authority for the district. The purchasers shall not, however, be compelled to prosecute such an appeal and may, following upon any such refusal by the local authority, intimated [sic] in writing to the sellers that they wish to proceed no further with the purchase.
7.4. If intimation in terms of condition 7.1 hereof is not made within two years of the date of conclusion of any bargain to follow hereon, the missives will fall with neither party being liable to the other in any manner of way save in respect of any antecedent breach.
8. The sellers will assist the purchasers with such access, information and items as may be reasonably required to enable the purchasers to satisfy the terms of condition 7 hereof, subject to the purchasers indemnifying the sellers in respect of any damage occasioned by the exercise of any such rights of access.
The cause called in procedure roll before the Lord Ordinary (Gill) for a hearing on parties' preliminary pleas-in-law.
At advising, the Lord Ordinary granted decree de plano.
The defenders reclaimed.
Cases referred to:
Bennett v FowlerENR (1840) 2 Beav 302
Dewar & Finlay Ltd v Blackwood 1968 SLT 196
Ellis & Sons Second Amaigamated Properties Ltd v PringleSC 1974 SC 200
Gilchrist v PaytonSC 1979 SC 380
Hawksley v OutramELR [1892] 3 Ch 359
Heron Garage Properties Ltd v MossWLR [1974] 1 WLR 148
Imry Property Holdings Ltd v Glasgow Young Men's Christian Association 1979 SLT 261
Zebmmon Ltd v Akinbook Investment Developments LtdSC1987 SC 252
Textbook referred to:
Gloag on Contract (2nd edn), pp 42 and 398ff
The cause called before the First Division, comprising the Lord President (Hope), Lord Sutherland and Lord Cameron of Lochbroom for a hearing.
At advising, on 22 November 1995
LORD PRESIDENT (Hope)This case relates to a contract for the purchase and sale of subjects at Niddrie near Edinburgh, which the defenders proposed to use as an open cast mine. The pursuers, who were the sellers of the property, sought declarator that the contract was at an end and that the parties were no longer bound by it. They did so on the ground that it was subject to a suspensive condition in regard to obtaining planning permission for this use which...
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