Scotia Homes (south) Limited V. Mr James Maurice Mclean+mrs Linda Isabella Mclean
| Jurisdiction | Scotland |
| Judge | Sheriff Principal R.A. Dunlop, Q.C. |
| Court | Sheriff Court |
| Date | 30 November 2012 |
| Docket Number | A216/10 |
| Published date | 05 December 2012 |
SHERIFFDOM OF TAYSIDE CENTRAL AND FIFE
A216/10
JUDGMENT OF SHERIFF PRINCIPAL
R A DUNLOP QC
in the cause
SCOTIA HOMES (SOUTH) LIMITED
Pursuers and Respondents
against
MR JAMES MAURICE McLEAN and MRS LINDA ISABELLA McLEAN
Defenders and Appellants
__________________
Alt: Mr Upton, Advocate, instructed by Thorntons Law, Solicitors, Dundee
KIRKCALDY, 30 November 2012. The Sheriff Principal, having resumed consideration of the cause, refuses the appeal and adheres to the sheriff's interlocutor of 11 January 2012 complained of; certifies the appeal as suitable for the employment of junior counsel; finds the defenders and appellants liable to the pursuers and respondents in the expenses of the appeal; allows an account thereof to be given in and remits the same, when lodged, to the auditor of court to tax and report; remits to the sheriff to proceed as accords.
NOTE:
Background
[1] The pursuers are property developers and builders. In 2008 they were seeking purchasers for properties within a development known as Langtoun Maltings, Kirkcaldy. At a meeting on 26 January 2008 between Mrs McLean (the second defender) and a representative of the pursuers, Gill Nisbet, Mrs McLean signed a form requesting the pursuers to reserve a specific property on this development and paying a reservation fee. She agreed to pay a deposit of £5,000 when a contract was signed. Thereafter a contract was concluded between the parties for the sale and purchase of that property in terms of missives dated 28 and 31 March 2008.
[2] The property in question was described in the offer to purchase addressed to the pursuers as "that flatted dwellinghouse being Plot 44 of your development at Langtoun Maltings, Kirkcaldy, on the terms and conditions contained in your pro-forma offer annexed." The pro forma offer included various definitions and further descriptions. Clause 1.1 paragraph (o) of the pro forma offer defined "the Plot" as "the dwellinghouse together with any garden ground, car parking space and/or garage pertaining exclusively thereto known by the Plot number specified in the schedule." "The Dwellinghouse" is defined in paragraph (m) as "the dwellinghouse (and garage, if applicable) of the house type specified in the Schedule and shown on the Company's site layout plan (which plan is demonstrative only and may be varied by the Company as circumstances require) erected or to be erected by the Company as part of the Development and where the context so admits or requires such fixtures and fittings therein as are included in the sale."
[3] The Schedule to the pro forma offer specified the plot number as 44 and the house type as "FT 12 (Second Floor)."
[4] It was a matter of agreement between the parties that the "site layout plan" referred to in the definition of "Dwellinghouse" was number 5/14 of process and that at the time that the contract was concluded plot 44 had not yet been constructed.
[5] In due course the pursuers intimated to the defenders that the property had been completed and that the transaction was ready to settle. However the defenders declined to accept the property and in due course the pursuers intimated to them that they were holding them in material breach of contract. They then went on to sell the property to other purchasers and the present action is directed to recovering their loss and damage arising from the defenders' alleged breach of contract.
[6] The defenders took issue with the proposition that they were in breach of contract and advanced two lines of defence (reflected in their fourth and fifth pleas in law) firstly that the missives were "void from uncertainty" and secondly that, in any event, the defenders had been induced to enter into the missives as a result of misrepresentation by the employee of the pursuers that the property in question was a three bedroomed flat whereas in fact it was a two bedroomed flat. On that ground it was contended that the missives should be reduced ope exceptionis.
[7] The sheriff heard proof on these matters and repelled both pleas in law, allowing a proof before answer restricted to quantum. The defenders have now appealed. They have accepted the sheriff's decision in relation to the question of misrepresentation but they continue to argue that the missives are void from uncertainty on the grounds that they do not give an adequate and sufficiently certain description of the property to be purchased. This note addresses that issue only.
Sheriff's decision
[8] In his judgment the sheriff expressed the opinion that, looking merely to the terms of the missives and the site layout plan, "plot 44" was not completely and sufficiently described (paragraph 50). He took the view however that he was entitled to have regard to extrinsic evidence about what was comprised within the description "plot 44". He found in fact (FF8) that at the meeting on 26 January 2008 Gill Nisbet had handed over a plan (no 5/12 of process) which was an architect's drawing showing the proposed layout of plot 44 and that, when read along with this plan and the site layout plan, the missives gave an adequate and sufficiently certain description of the property being purchased (FF14).
[9] At the appeal counsel for the parties helpfully produced written outline submissions to which I refer for their terms.
Submissions for appellants
[10] Counsel for the defenders and appellants took as his starting point the propositions, firstly, that in order to have an enforceable contract there must be agreement on all the essentials necessary to constitute a contract (May & Butcher Ltd v The King Itd [1934] 2KB 17, Gloag on Contract 2nd edn. page 11, McBryde on Contract 3rd edn. paras. 5.19 - 5.20, R&J Dempster Ltd v Motherwell Bridge & Engineering Ltd 1964 SC 308), secondly, that one of the essentials of a contract for the sale of heritage was a definite description of the subjects of sale (Grant v Peter G Gauld & Co 1985 SC 251, Bogie v Forestry Commission 2002 SCLR 278, McClymont v McCubbin 1994 SC 573, NJ&J MacFarlane (Developments) Ltd v MacSween's Trs. 1999 SLT 619, Gretton & Reid Conveyancing 4th edn. para. 4.03 and Halliday Conveyancing 2nd edn. 2/30.28) and, thirdly, that the test as to whether a contract was or was not sufficiently specific was whether or not it was possible to enforce the contract by specific implement (McArthur v Lawson 1877 4R 1134).
[11] Against that background and looking at the matter broadly the primary contention for the appellants was that the sheriff was not entitled to have regard to the plan (5/12 of process) for the purpose of interpreting the missives or of providing a contractual description of the subjects. He offered three reasons for that contention. Firstly he referred to clauses 9 and 14 of the missives which in his submission amounted to an "entire agreement clause" which excluded reliance on any document not specifically referred to in the body of the missives. Clause 9 of the offer provided that:
"The Purchaser acknowledges that none of the visual depictions contained in any sales brochure or any note of materials to be used or any verbal descriptions provided by the Company or the Company's representatives can be relied upon save insofar as they are contained in the Contract. The Company's sales brochures are general illustrations and may be subject to change from time to time and as a result their accuracy is not guaranteed by the Company and is not to be relied upon by the Purchaser."
[12] Clause 14 of the offer provided that:
"It is expressly declared and agreed that the Contract forms the agreement entered into between the Company and the Purchaser and no reliance has been or will be placed by either the Company or the Purchaser in any manner or way whatsoever upon any representation, warranty or undertaking given by or on behalf of either the Company or the Purchaser whether written or verbal which is not specified in or does not form part of the Contract."
[13] In elaborating upon the purpose and effect of an entire agreement clause counsel referred to Inntrepreneur Pub Co (GL) v East Crown Limited 1999 HC 0491O, Exxon Mobil Sales and Supply Corporation v Texaco Limited 2003 EWHC 1964 and Macdonald Estates plc v Regenesis (2005) Dunfermline Limited 2007 SLT 791. In the first of these cases Lightman J described such a clause as constituting "a binding agreement between the parties that the full contractual terms are to be found in the document containing the clause and not elsewhere, and that accordingly any promises or assurances made in the course of the negotiations ..... shall have no contractual force, save insofar as they are reflected and given effect in that document." Counsel recognised that such a clause does not prevent terms being implied on the basis of business efficacy nor does it prevent the court from relying on evidence of the surrounding circumstances as an aid to the interpretation of the contract, however it did prevent a party seeking to imply a term based on representation during the course of the prior negotiations. The plan (5/12 of process) was plainly a representation as to what the subjects would be and was accordingly excluded by the entire agreement clause.
[14] The second reason advanced for the sheriff not being entitled to consider the plan was that reference to prior negotiations as an aid to the interpretation of contracts was excluded. In this regard reference was made to Prenn v Simmonds 1971 1WLR 1381, Investors Compensation Scheme Limited v West Bromwich Building Society (No 1) 1998 1WLR 896 and Chartbrook Limited v Persimmon Homes Limited 2009 1AC 1101. Counsel submitted that the plan had been produced in the course of the parties' discussions about the purchase of the property and that it therefore formed part of the negotiations. It was a statement merely of a possible layout for the property and was not objective...
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