Thomas Park And Another For Partial Recall Of Inhibition
| Jurisdiction | Scotland |
| Judge | M.G. Thomson, Q.C. |
| Neutral Citation | [2009] CSOH 122 |
| Date | 25 August 2009 |
| Docket Number | P24/08 |
| Published date | 25 August 2009 |
| Court | Court of Session |
| Year | 2009 |
| OUTER HOUSE, COURT OF SESSION [2009] CSOH 122 | |
| P24/08 | OPINION OF M G THOMSON, QC (Sitting as a Temporary Judge) in the petition of THOMAS PARK AND ANOTHER Petitioners; For Partial Recall of Inhibition ________________ |
Petitioners: Davidson; Wilson Terris & Co
Respondent: Bartos; Balfour + Manson LLP
25 August 2009
Background
[1] The petitioners, who are spouses, are tenants under the long lease of heritable subjects known as "The Grapevine Restaurant", in Bothwell ("the subjects"). The respondent, as pursuer, raised an action against, amongst others, the petitioners, as defenders, in Hamilton Sheriff Court. In that action the respondent sought payment from the defenders jointly and severally of the sum of £204,000. The respondent inhibited the petitioners on the dependence of that action by means of letters of inhibition registered on 18 September 2007 following registration of a notice of inhibition on 31 August 2007.
[2] In the present petition proceedings the petitioners seek recall of that inhibition but insofar only as it relates to the subjects. They do so on the basis first that missives for the sale of the long lease had been concluded before the inhibition became effective, and secondly that if the subjects had been caught by the inhibition they should be released on the ground of oppression. On 2 July 2008 Lady Dorrian heard a debate on the procedure roll on the question of the precise time at which the inhibition became effective. In her Opinion dated 19August 2008 she concluded that the inhibition in question became effective from the conclusion of the day on which the notice of inhibition had been registered, namely 31 August 2007. Thereafter the case was put out for a by order hearing at which time a preliminary proof was allowed.
[3] When the case called before me, parties were agreed that the hearing should be confined to the question of whether the missives for the sale of the long lease of the subjects had been concluded before midnight on 31 August 2007. If the missives had been concluded by that time, parties were agreed that the inhibition would not have been effective to catch these missives but that if the missives had not been concluded until some time after that time, the subjects would have been caught by the inhibition. At the beginning of the hearing parties tendered a joint Minute of Admissions (No 24 of process) in which the relevant facts were agreed. In these circumstances no evidence was lead by either party and the hearing proceeded as a debate.
The Facts
[4] By letter dated 2 August 2007 Messrs Carr Berman Crichton ("CBC") solicitors for a prospective purchaser, Mr Sattar, sent an offer to purchase from the petitioners an assignation of their tenants' interest in the lease of the subjects together with the business carried on therein and the contents thereof. On 10 August 2007 Messrs Sneddon Morrison ("SM"), the petitioners' solicitors, sent an unexecuted draft qualified acceptance to CBC. Over the next few weeks several drafts of the qualified acceptance were adjusted by the respective solicitors.
[5] On 31 August 2007, at about 14.50 hours, SM faxed to CBC a copy of an executed qualified acceptance still bearing the date 10 August 2007. Later that afternoon and during business hours CBC faxed to SM a copy of an executed final letter accepting the qualified acceptance. Thereafter, and prior to 1700 hours on 31 August 2007, SM and CBC posted the original executed qualified acceptance and original executed final letter to each other by Legal Post. The original executed final letter from CBC reached the offices of SM after midnight on 31 August 2007. The original executed qualified acceptance from SM reached the offices of CBC on Monday 3 September 2007.
Statutory provisions
[6] Section 1(2) of the Requirements of Writing (Scotland) Act 1995 provides inter alia:
"Subject to subsection (3) below, a written document complying with section 2 of this Act shall be required for -
(a) the constitution of -
(i) a contract or unilateral obligation for the creation, transfer, variation or extinction of a real right in land;....".
[7] Section 2 of the 1995 Act provides inter alia:
"(1) No document required by section 1(2) of this Act shall be valid in respect of the formalities of execution unless it is subscribed by the granter of it or, if there is more than one granter, by each granter, but nothing apart from such subscription shall be required for the document to be valid as aforesaid.
(2) A contract mentioned in section 1(2)(a)(i) of this Act may be regarded as constituted or varied (as the case may be) if the offer is contained in one or more documents and the acceptance is contained in another document or other documents, and each document is subscribed by the granter or granters thereof.....".
Submissions for the Petitioners
[8] Counsel for the petitioners submitted that missives for the sale of the subjects had been concluded in the course of 31 August 2007, that the transaction had not been caught by the inhibition and accordingly that it should be partially recalled in terms of the prayer of the petition. There were two strands to his submission; first, the postal acceptance rule, and secondly, the existing authorities on writings transmitted by fax. He relied on both strands equally.
[9 Counsel referred to Lord Hodge's explanation of the postal acceptance rule in Carmarthen Developments Limited v Pennington [2008] CSOH 139. At paragraph 12 Lord Hodge explained:
"The postal acceptance rule is an established part of the law of contract in both Scots law and English law. But it is an exception to the general rule that the acceptance of a contractual offer has no effect until it is communicated to the offeror. See McBryde, para.6.901 and Chitty, para.2.043. The postal acceptance rule has its place in both legal systems as the court in those systems ascertains objectively when parties have reached consensus in idem and thereby entered into a contract. This ascertainment occurs in the context that once the offeror has made his offer he may withdraw the offer only by communicating that withdrawal to the offeree. The offer may also fall through the lapse of a reasonable time or a time limit in the offer. Until the occurrence of one of those events, the offeree may accept the offer. Where an offeror by his actions is taken to have contemplated that the offeree might use the post to send his letter of acceptance, the posting of that letter brings the contract into existence before the offeror is aware that his offer has been accepted. This is clear from the Opinion of the Lord President (McNeill) in Thomson v James as p.11 he stated:
'By putting the letter of acceptance into the post office, the offeree did just what he had been invited to do, and all that it was incumbent on him or possible for him to do by way of acceptance, by the mode of communication which he was authorised, if not invited by the offeror to adopt.'
Lord Deas approached the matter similarly at p.25 in that case".
Lord Hodge also observed (at paragraph 13) that counsel had been unable to point to any authority in Scots law in which the postal acceptance rule had been applied to communications other than the acceptance of a contractual offer.
[10] Counsel for the petitioners also referred to Stamfield's Creditors v Scott (1696) Br.Supp.IV 344. That case concerned the assignation of a share of a cloth-manufactory erected at Newmilns. The assignation was executed by the granter the day before he was murdered. Shortly before his death the granter had met the assignee and had told him that the assignation had been "subscribed and directed for him, and lying on his table". The morning after the death of the granter the assignation was found lying on his table with a direction for the assignee. The assignee argued that the circumstances were the equivalent to a delivery or a clause dispensing. The creditors of the deceased granter contended that the assignation was not effective. It was revocable and alterable at the will of the granter because it remained in his possession. The Court preferred the creditors apparently on the basis that the assignation remained undelivered at the date of the granter's death.
[11] Reference was also made to Cusine & Rennie on Missives, 2nd ed., at para.3.14 for a modern statement of the postal acceptance rule. It was submitted that the postal rule applied to the third of the three letters comprising the missives in the present case.
[12] Counsel for the petitioners then turned to three cases on the status of communication by fax. The most directly analogous was the decision of Sheriff Sir Stephen Young in McIntosh v Alam 1998 SLT (Sh.Ct.) 19. That case concerned an attempt to enforce missives for the sale of heritable property. Those missives consisted of an offer and a qualified acceptance, both of which had been sent by post, and an unconditional acceptance which had been transmitted by fax only. The question was whether there was a binding contract. The sheriff held that the faxed copy of the acceptance letter did not itself constitute a duly subscribed written document within the...
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