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Scottish Sheriff Court Decisions |
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You are here: BAILII >> Databases >> Scottish Sheriff Court Decisions >> Murdock & Anor v McQueen [2004] ScotSC 72 (08 November 2004) URL: http://www.bailii.org/scot/cases/ScotSC/2004/72.html Cite as: [2004] ScotSC 72 |
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A228/2002
SHERIFFDOM OF TAYSIDE, CENTRAL AND FIFE AT CUPAR
JUDGEMENT OF SHERIFF G J EVANS
IN CAUSA
Mr Brian Murdock and Dr Nicola Kim Murdock
spouses, residing formerly at
Feddinch House, By St Andrews, Fife and now at
PO Box 213, Yeppoon, Queensland 4703, Australia
PURSUERS
against
Mrs Heather McQueen
residing formerly at
Burness House, 1 Murray Park, St Andrews, Fife
and now presently care of Murray, Donald and Caithness, Solicitors
Kinburn Castle, St Andrews, Fife, KY16 9DR
DEFENDER
CUPAR, 8 November 2004. The Sheriff, having heard parties in debate and having resumed consideration of the cause, of consent, Repels the Defender's sixth plea-in-law for want of insistence; Sustains the Pursuers' third plea-in-law to the extent of excluding from probation the passage in the Defender's pleadings in the Closed Record, No 15 of Process at page 10, line 17 thereof beginning "In relation to the Pursuers' qualification of condition 12 of the said offer ..." down to and including the words "and she was not bound to perform her obligations thereunder." at line 26 thereof; Repels the Defender's second plea-in-law to competency and the Defender's third and fourth pleas-in-law insofar as preliminary, reserving their effect on the merits; quoad ultra Allows parties a Proof Before Answer of their respective averments, the date thereof to be assigned at the Rule 18 Hearing to follow hereon (providing that at said hearing neither party requires or requests further debate on the pleadings as subsequently amended); Allows the Pursuers' Motion to amend by lodging a Minute of Amendment within 21 days hereof and Allows the Defender 21 days thereafter for Answers if so advised and Fixes 12 January 2005 at 10.00am as a Rule 18 Hearing thereon; Reserves meantime the question of expenses occasioned by the debate and Allows a hearing thereon at said Rule 18 Hearing.
Sheriff
NOTE:-
BACKGROUND
This was a debate on both parties' preliminary pleas in the Record No 15 of Process. Mr Stewart, Advocate, appeared for the Pursuers and Mr Blane, Solicitor, for the Defender. The action is brought by a husband and wife as Pursuers against the Defender as an individual in respect of the Defender's failure to implement the Missives of sale relating to the subjects forming Feddinch House, St Andrews. Parties had reached the stage of Missives having been concluded and an engrossed Disposition signed by the Pursuers and ready for delivery on settlement. The Defender was given the keys for certain purposes but before settlement could be effected, however, the Defender's agents sent a formal letter to the Pusuers' agents intimating that the Defender was "rescinding" the contract and returning the keys. The Pursuers now seek damages arising out of their having to put the property back on the market and their ultimate re-sale of it at a lesser price than that contained in the Missives.
SUBMISSIONS FOR DEFENDER
The debate turned principally on a question of whether the Defender had put forward any valid ground for her decision to rescind the contract. Each party, however, sought to attack the state of the other parties' pleadings and the debate was opened by Mr Blane, who sought to have me sustain the Defender's second and third pleas-in-law and Dismiss the action or alternatively, Sustain the Defender's fourth and fifth pleas-in-law and restrict the scope of the proof accordingly. There were six different submissions he made to me:-
"Said breach resulted in the Pursuer being delayed in Scotland in order to re-sell the property as hereinbefore condescended upon and consequently being separated from his family in Australia for a substantial duration."
The law on the matter was quite clear: each party should have separate craves where the basis of their claims were different. I was referred to the cases Buchan and Others v Thomson 1974 SLT124 at 128 and McGillivray v Davidson 1993 SLT693 at 696. As there was no competent crave, the action should be dismissed.
"This condition will be deleted, under explanation that all documentation in connection with our clients' alteration of the Subjects to provide en suite bathrooms etc for the property and to obtain a Fire Certificate to include the change of use from private dwelling house to a Guest House is exhibited in full satisfaction of this Clause. Your client will require to satisfy herself as to the position beyond what is contained in the documentation exhibited."
Condition 22 gave the Pursuers a time limit of 14 days to implement their obligation under the Missives, a period which was extended to 21 days under the subsequent qualified acceptance. As it turned out, the Defender was unable to satisfy herself under condition 12 as there was no listed building consent at the material time for the en suite bathrooms installed after 1974. It was an odd response to the ground of rescission for the Pursuers to plead (at page 6 of the Record) that:-
"... the Missives do not provide that if the Defender is not satisfied she has the right to rescind. Her remedy would have been to refuse to conclude the Missives."
First of all the right to rescind did not require to be stated in the Missives - vide McBryde on Contract (Second Edition) at para 20-104 - and secondly it was only once Missives were concluded that the Defender would be in a position to resile from the contract. It was clearly the position that the party in material breach could not bring an action for damages against the innocent party and the action was accordingly fundamentally irrelevant and should be dismissed.
"The Defender did not break off negotiating the Missives once she knew that the Subjects were listed. She continued to negotiate the purchase notwithstanding that she knew that Subjects were listed. She concluded Missives containing clause 14.6 and took actual occupation thereunder notwithstanding that she knew the Subjects were listed. By said conduct the Defender justified the Pursuers in believing that she accepted that the Subjects were listed and she would not seek to resile from the Missives on the ground that the Subjects were listed. The Pursuers acted on said belief by continuing to negotiate with the Defender. The Pursuers acted on said belief by concluding Missives. The Pursuers acted on said belief by allowing the Defender to take actual occupation."
The Defender needed to know what the Pursuers did, why they did it and that they would not have done it but for the conduct of the Defender. This was not clear from the pleadings. For that reason the action should be dismissed. Even if valid, they could not be used to justify the breach in terms of the restatement of condition 12. Nor was there any specific plea-in-law directed to either waiver or personal bar.
SUBMISSIONS FOR PURSUERS
In reply, Mr Stewart for the Pursuers attacked the two grounds for rescission. He first of all directed my attention to certain of the documents incorporated into the pleadings. The starting point was the letter from Fife Council to the Pursuers dated 28 June 2001 which made clear that the issue of lack of listed building consent had nothing to do with a change in use of the premises but related purely to the question of whether listed building consent had been obtained for work previously completed under an existing building warrant. It was clear from the Record and the sales particulars mentioned at page 3 thereof that the sales particulars were issued to persons such as the Defender who showed an interest in purchasing the property and these particulars contained information that the property was Grade C listed (vide paragraph headed "Description" and the paragraph headed "General Remarks" under "Listing"). It was also specifically brought to the Defender's attention by the terms of the letter from the Pursuers' solicitors to the Defender's solicitors dated 19 March 2001 mentioned at page 4 of the Record. Thus it was abundantly clear that from a very early stage of the proceedings both before and after the making of the offer, the Defender had had the true situation about the listed category of the property brought to her attention. Pages 8 and 9 of the Record usefully set out the terms of conditions 14.6, 12, 22 and 29 and the qualification to condition 12 made on behalf of the Pursuers (vide foot of page 9 and top of page 10). Page 10 set out the Defender's position on breach as follows:-
"The Subjects at Feddinch House, St Andrews, were at the time of the said Missives listed as being of special or historic interest. Listing Building Consent was therefore required in respect of the use of the Subjects by the Pursuers as a Guest House. The Pursuers were accordingly in material breach of the Missives under reference to condition 14.6 of the said offer. In terms of condition 29 of the said offer, condition 14.6 was a material condition. In terms of condition 22 of the said offer as qualified on behalf of the Pursuers, the Pursuers were not in a position to implement the Seller's obligations under the Missives within 21 days after the date of entry. The Defender was entitled to rescind the Contract between the parties. In relation to the Pursuers' qualification of condition 12 of the said offer, the Defender was unable to satisfy herself because there was no Listed Building Consent at the material time. The Pursuers had installed en suite bathrooms after 1974. The Pursuers had installed said bathrooms without first obtaining Listed Building Consent. The alterations required Listed Building Consent. The Defender rescinded the Contract with the Pursuers by letter dated 23 May 2001 from her solicitors to the Pursuers' solicitors. In the circumstances, the Defender was entitled to repudiate the bargain and she was not bound to perform her obligations thereunder."
Mr Stewart submitted that the Pursuers were not in material breach in relation to condition 14.6. The question of whether the property was or was not listed was a matter of fact and did not relate to any of the seller's obligations under condition 22. The contractual remedy under condition 22 entitling the Defender to rescind in the event of a failure to obtemper an obligation within a set period did not therefore apply to condition 14.6. The first ground therefore failed. The second ground raised the question of the structure of the Missives and the wording of the Pursuers' deletion of condition 12 was of significance. All it meant was that the Pursuers were providing the Defender with certain information for the Defender to look at and then take a decision whether or not she wished to proceed. Nothing further should be read into it. Its purpose was to provide information and allow the Defender to take a view. That was all. As Mr Stewart was then about to attack the Defender's sixth plea-in-law, Mr Blane intervened to confirm that he was quite content for this plea to be repelled as he was no longer insisting on it. Mr Stewart then reiterated that as both grounds for rescission were irrelevant, I should find in favour of the Pursuers and repel the defences on the merits, restricting any proof to a Proof Before Answer on the matter of quantum.
He then turned to respond to the six matters raised by Mr Blane.
"Said breach resulted in the Pursuer being delayed in Scotland in order to re-sell the property as herein condescended upon and consequently being separated from his family in Australia for a substantial period."
There was however no claim for any particular loss resulting from that averment. The case was properly pled in having only one crave.
In conclusion, Mr Stewart drew my attention to paragraph 2 of the Pursuers' Rule 22 Note, No 9 of Process which stated:-
"The Defender does not aver that she was in a position to settle the transaction on the date of entry. In these circumstances, she was herself in breach of contract prior to the purported recision on 23 May 2001."
That point raised the question of the mutuality of obligations in contract. The Defender had to come to Court with clean hands and not be herself in breach of contract. There were no averments in the Defender's case to the effect that she had been in a position to settle. The Pursuers had had from an early stage in the pleadings put in a call on her to aver whether she was in funds to settle the transaction on the date of entry (vide page 6 of the Record).
DECISION
I propose to deal with the issues raised at the debate by reference to the six points raised by Mr Blane as they also encompass the issues raised by Mr Stewart.
"Where Pursuers have suffered the same wrong by the Defender's breaches as is averred in the present case, they may sue together in the same action, provided the claims for damages are separately stated. That may be done by a separate conclusion for each Pursuer, but I can see no reason why it cannot also competently be done by one conclusion in which the claim of each Pursuer is separately stated, as has happened here. I can see no problems in extracting a decree in favour of each Pursuer on the basis of that conclusion."
While I respectfully agree with that view, I do not see how any of this assists the Defender in the instant case. The Pursuers in the instant case have no such crave for payment to each of them in any event. The crave says "decree against the Defender for payment to the Pursuers of the sum etc", ie the type of conclusion argued for in the reported case of payment to both Pursuers of one sum. If any loss was found to be personal to any one Pursuer, it would simply be discarded from the amount awarded or not allowed to go to proof. It does not seem to me to raise a matter of competency.
"Breach of a statement about facts is a breach of contract. Breach of a warranty in a commercial contract can be a breach of contract, even although what has happened is a misrepresentation about the past, and no question of implement arises."
Thus the Pursuers' 'misrepresentation' about the past within the Missives, viz that the property had not been listed, could amount to a breach of contract and the materiality of that breach would of course be guaranteed by virtue of condition 29 in the Missives. It is generally recognised that "A material breach by one party gives to the other party an option to be free from future performance of obligations" (ibid para 20-108). The first ground for rescission is thus a valid one, unless of course it is plain that it has been waived or personal bar has intervened to prevent it being exercised. It is thus essential to the Pursuers to succeed on the first ground that they establish waiver or personal bar and I disagree with Mr Stewart's assessment that these are subsidiary matters.
I do, however, agree with Mr Stewart's submission on the Pursuers' qualified deletion of condition 12. The Defender's averment at page 10 of the Record that she "was unable to satisfy herself because there was no listed building consent at the material time" misinterprets the use of the word "satisfy" in the qualified deletion by giving it too positive a meaning whereas it was, in my view, being used in context in a more neutral way. When the qualified deletion provided that "your client will require to satisfy herself as to the position beyond what is contained in the documentation exhibited", it means no more than that the Defender will have to make her own inquiries - full stop. It does not mean that in addition the result of those inquiries has to be to her positive satisfaction. All that the Pursuers are providing for in the Missives is that the only documentation which the Defender will be entitled to have exhibited to her in respect of the obtaining of all necessary consents and warrants for the property in terms of the deleted condition 12 will be restricted to "all documentation in connection with our clients' alteration of the Subjects to provide en suite bathrooms, etc for the property and to obtain a fire certificate to include the change of use from private dwellinghouse to a guest house". The Pursuers give no guarantee about the position beyond those documents and if the Defender wishes to find out what the position is, she will have to do so for herself. That is how I read the qualified deletion. In that situation, the Defender could have responded by providing that while she accepted the qualified deletion of condition 12, she only did so on the footing that she would require X days to satisfy herself thereon and she reserved the right to resile if at the end of that time, she was satisfied that certain items of such erection, work undertaken or change of use since 1974 as was mentioned in condition 12 were not covered by the documentation so far produced. She did not do so, however. The formal acceptance of 24 April 2001 containing the qualified deletion of condition 12 was accepted without any such qualification by the Defender's solicitors' formal letter of acceptance of 30 April 2001. It is only in that sense that I would accept the Pursuers' averment that the Defender's remedy would have been to refuse to conclude the Missives (vide page 6 of the Record), ie only if she had made specific provision for such a course of action in the Missives. In the absence of such a response, the Pursuers were entitled to assume that she was satisfied with the documentation exhibited to her. I conclude therefore that the second ground of recision is not well founded and that the averments relating to at page 10 of the Record should not be allowed to go to probation.
"If it was so important to the purchaser not to buy a listed building, why did she go ahead and complete the Missives when she was made aware at the outset that it was indeed a listed building?"
The only two legally satisfactory responses to such a question are as follows (both of which are in my view contained within the pleadings):-
"She decided it was not that important and waived it as a condition of the Missives, if not expressly, then impliedly from the way she behaved throughout the negotiations and up to the point of settlement such that the purchasers placed reliance on that behaviour". (ie = waiver)
or
"She did not waive it as a condition of the Missives but nonetheless must accept that from the way she behaved during that period and the way she let the sellers behave, the sellers would have been entitled to conclude that she had waived it as a condition of the Missives, especially as they had acted to their prejudice on the strength of that conclusion and that was known to and permitted by the purchaser." (= personal bar both at common law and (?) under Section 1(6) of the Requirements of Writing (Scotland) Act 1995)
It is evident from this analysis that (one) the same behaviour of the Defender may perform a dual function, laying a basis both for the implication that waiver has taken place and also for the creation of personal bar and (two) prejudice is not required for waiver, only for personal bar. The averments of the Pursuers on both these matters have to be read together, as suggested by Mr Stewart. The behaviour of the Defender is averred to be that she continued with negotiations and concluded Missives having known throughout that the property was listed. She took actual possession of the property on 1 May 2001 without making any objection about the status of the building. The Pursuers relied on the belief that she had waived the condition by allowing her into the property. There are sufficiently relevant averments here to allow the matter to go to a Proof Before Answer, the Defender putting a different gloss on the question of whether or not she took actual occupation (vide pages 10 and 11 of the Record). As Lord Keith of Kinkell stated in Armia Ltd v Daejan Developments Ltd supra at page 72, the question of whether or not there has been waiver of a right is a question of fact "to be determined objectively upon the consideration of all the relevant evidence." The averments on personal bar merely flesh out the averments on waiver. Referring to the same kind of conduct as stated above, they go on "by said conduct the Defender justified the Pursuers in believing that she accepted that the Subjects were listed and that she would not seek to resile from the Missives on the ground that the Subjects were listed. The Pursuers acted on said belief by continuing to negotiate with the Defender. The Pursuers acted on said belief by concluding Missives. The Pursuers acted on said belief by allowing the Defender to take actual occupation. As a result the Pursuers suffered prejudice." (vide top of page 6 of the Record) One has also got to take into account the further averments at the bottom of page 6 "prior to the date of entry the Defender stored furniture and personal effects on the premises and commenced works on the fabric of the premises." In my view all the elements of personal bar outlined above are present in these averments looked at collectively and again this is something that requires to go to a Proof Before Answer.
"Prior to the date of entry specified in the Missives, the Pursuers permitted tradesmen employed by the Defender to go into the Subjects. The Defender had instructed the tradesmen to commence redecoration. Said tradesmen attended at the property and carried out some minor works. During that period, the Defender did not reside in the Subjects." (vide foot of page 10 and top of page 11 of the Record)
show that she is well aware of this aspect of the Pursuers' case.
On the matter of the call on the Defender at page 6 of the Record to aver whether she was in funds to settle the transaction on the date of entry, I consider that the significance of that is purely evidential if it remains unanswered. If at any subsequent proof the Defender seeks to deny waiver of condition 14.6 in the Missives, the Pursuers will be able to put forward as a reason for that being a false denial the suggestion that when she realised that she had insufficient funds to go through with the transaction, she required a pretext to pull out of the Missives and that pretext was that she had not departed from condition 14.6. To that extent, the call and the fact that it has not been answered may be relevant in such a context and I am not prepared to exclude it from probation.
I have accordingly allowed all matters to go to a Proof Before Answer with the exception of the Defender's averments justifying her second ground for rescission set out at page 10 of the Record. I will also allow the Pursuers an opportunity to amend their pleadings quoad quantum. They will also be allowed the opportunity to add a plea-in-law relating to waiver and personal bar which, as was pointed out by Mr Blane, they have so far omitted to make. To add something along the lines of: "The Defender, having waived, et separatim being personally barred from denying that she has waived, condition 14.6 of said Missives, is not entitled to rescind said Missives on the basis of the Pursuers' alleged failure to obtemper said condition." is only a matter of technical importance and may be made without any real prejudice to the Defender. I have accordingly allowed amendment at large in the context of permitting a Proof Before Answer and have fixed a Rule 18 Hearing to deal with that aspect. Only if the Defender is still not satisfied with the proposed amendments would she seek to discharge the Proof Before Answer and have the Court fix a further debate on the Record as amended. I have also reserved the question of expenses of the debate to the Rule 18 Hearing.