Scottish Court of Session Decisions

At advising on 12th June 1985,—

LORD JUSTICE-CLERK (Wheatley).—In this action, which was raised in the sheriff court at Elgin, the pursuer craves a decree ordaining the defenders to implement their part of what he maintains were missives of sale entered into by the parties whereby, as he words his crave, the pursuer agreed to sell and the defenders agreed to buy, for £15,000 per acre, the subjects extending to 12 acres known as Bogend Quarry, Bogend, Buckie, presently being quarried by the defenders. There is an alternative crave for damages of £90,000 in the event of the defenders failing to implement as aforesaid. After a debate on relevancy in which the defenders sought to have the action dismissed as irrelevant the sherif issued an interlocutor dated 25th September 1984 in which inter alia he allowed the pursuer three weeks in which to lodge a minute of amendment, if so advised, and the defenders three weeks thereafter within which to lodge answers thereto. In so dealing with the matter, the sheriff rejected the motion by counsel for the defenders to dismiss the action there and then, and granted the opportunity to the pursuer to amend to meet arguments by counsel for the defenders in relation to (1) the absence of certain essential averments in the primary claim, assuming that it was otherwise relevant, and (2) the alternative crave, the averments in support of which were admittedly hopelessly lacking in specification as they stood. The defenders marked this appeal against the said interlocutor and, on the basis that this froze the proceedings, no such amendments have been lodged.

When the case was before the sheriff the parties were agreed that the court could have regard to the purported missives of sale, and this agreement was carried forward into the appeal. The defenders' offer to buy the land was contained in a letter dated 28th February 1983 addressed to the pursuer which was in the following terms. [His Lordship narrated the terms of the letter and continued.]

The pursuer's acceptance was contained in an undated holograph letter which was in these terms:

Bogend, Buckie,

Banffshire.

Mr McKay,

Dear Sir,

I hereby accept offer of 28th Feb. for mineral working at Bogend Quarry as stated in your letter.

Yours faithfully,

J. C. Grant."

The submissions of counsel for the defenders when he was addressing the sheriff appear to have been very much the same as those made in this court. In inviting the sheriff to sustain the first plea-in-law for the defenders, counsel's basic argument was that there was no consensus in idem between the parties in this contract of heritage in that one of the essentials, namely the nature and extent of the subjects, had not been sufficiently defined. In that state of uncertainty as to what the subjects comprised it could not be said that the parties were in agreement on what was being offered for sale and what was being accepted. This was something which had to be determined on the relevant documents, namely the letter of offer and the letter of acceptance, and there was no place in the resolution of the question for extrinsic evidence. In the absence of a specific identification of the subjects a decree of specific implement could not be pronounced, and there was no specific identification of the subjects here.

The solicitor for the pursuer argued before the sheriff that both parties knew full well what the subjects were for which they were contracting, and maintained that it was common practice for subjects to be referred to in missives in general descriptive terms, or by reference to a place or under agreement that boundaries would be adjusted by the parties later. It would accordingly be wrong to dismiss the action at this stage, and there should be a proof whereby any obscurities or ambiguities could be resolved.

The sheriff began his reasons for his decision by a scathing criticism of the draftmanship of the letter of offer, which he described as a singularly sloppy example of the conveyancer's art, which, he said, in itself might be of importance when construing the missives of offer contra proferentes, as he thought it had to be. He went on to offer a hostage to fortune by saying:

"it is quite clear that the subjects of sale could and should have been described and identified with more precision than they are in the missives of offer".

The debate before him had turned on the meaning and effect to be given to the words "and the surroundings thereto" and he proceeded to make certain assumptions in relation thereto which counsel for the defenders justifiably maintained that he was not entitled to do. He then went on to say that in his opinion on a consideration of the arguments and submissions it would be premature at this stage to dismiss the action without some inquiry into the facts. He considered that the cases of Macdonald v. Newall (1898) 1 F. 68 and Houldsworth v. Gordon Camming 1910 S.C. (H.L.) 49 might have some relevance to the present issue. The sheriff concluded his reasoning by saying:

"Construing the missives of offer contra proferentes I am not persuaded that the defenders are entitled to take advantage of and profit from their own sloppiness or ineptitude in having the present action dismissed without inquiry into the facts."

Counsel for the defenders in his submissions to this court challenged the correctness of the sheriffs reasoning. He started from the basis that the issue was whether the description of the subjects in the missives of offer was so lacking in precision that the acceptance of the missives could not constitute a valid contract. It could not be affirmed with assurance that there was consensus between the parties on what heritage was being offered and accepted. That, and not what was comprised in the description of the subjects, being the issue there was no room for the contra proferentes argument. The assumptions previously referred to were not warranted and there was no indication of the facts into which inquiry would be made. The two matters of a subsidiary nature, which, subject to amendment, might warrant an inquiry, were not germane to the basic question whether there was sufficient in the missives of sale to constitute a valid contract. The cases of Macdonald v. Newall and Houldsworth v. Gordon Gumming (supra) were irrelevant to the basic issue here. In Macdonald there was no dispute about What the subject of the sale was, namely the Royal Hotel, and the issue was what was comprised in that. In Houldsworthboth parties claimed that they had made a valid contract and differed only as to the boundary that was sold. In the instant case the defenders maintain that there never was a valid contract, and so there is no relevant ground for a proof.

That being the stance taken by the defenders, I turn to consider the defenders' submission that the appeal should be allowed, their plea to the relevancy sustained and the action dismissed. The issue turns on the words in the opening paragraph in the missives of offer:

"we hereby offer to purchase from you the ground at present being quarried by our client and the surroundings thereto extending to twelve acres"

(the emphasis is mine). Counsel for the defenders frankly admitted that if these words had stopped at "quarried by our client" the acceptance by the pursuer would have concluded a valid contract. It was the addition of the words "and the surroundings thereto extending to twelve acres" which gave rise to the problem. If it had been the truncated version to which I have referred, an inquiry would have been warranted to ascertain the limits of the ground at present being quarried by the defenders if this was in dispute. The competing interpretations of the introductory paragraph of the missives of offer were these. Counsel for the pursuer argued that what was being; offered was 12 acres consisting of the ground at present being quarried and the surroundings thereto treated as unum quid. Counsel for the defenders maintained that what was being offered was (a) the ground at present being quarried and (b) the surroundings thereto extending to 12 acres, being two separate entities. Counsel maintained that on this interpretation there was insufficiency of identification of what was being offered for sale in (b) which precluded the missives from being the foundation of a valid contract. On that view, there was no ambiguity, merely a lack of proper identification, and that excluded extrinsic evidence, leaving the matter to be determined on the wording of the document.

Counsel for the pursuer argued that there could be a dispute on whether the missives disclosed a concluded agreement regarding an area of ground or whether they revealed that there was no consensus in idembetween the parties. The first step should therefore be to have an inquiry into the facts on the question of consensus and what was contained in the agreement, which is what the sheriff said he would have allowed if he had not deemed it desirable to continue the case to allow a minute of amendment to be lodged by the pursuer to deal with the aforesaid two subsidiary matters. It was submitted by pursuer's counsel that, since there was a dispute on whether the offer related to one or two parcels of land, an inquiry was needed to resolve an apparent ambiguity.

There is no doubt that a definite description of the heritage which is being offered for sale is essential to a valid contract, and must be contained in the missives of offer. The general law on the subject was canvassed at some length by the sheriff and I need not repeat it. At the end of the day the issue turns on the wording of the missives of offer. The sheriff proceeded on the basis that, as there were doubts as to its meaning, it had to be construed contra proferentes, who were the defenders. Obviously the first and basic question is—how should that introductory paragraph be construed? Is it sufficiently clear to identify fully what is being offered, or is there an ambiguity in it which requires extrinsic evidence for its resolution? The pursuer's interpretation means that the 12 acres cover the existing ground on which quarrying operations are being carried on and its surrounds. The interpretation argued for by the defenders means that the 12 acres relate to the surroundings. There is accordingly a substantial area of difference between the two sides. On a purely grammatical construction of the words in issue I would attribute the qualification imposed by the words "extending to twelve acres" to the words immediately preceding that qualification, namely "and the surroundings thereto". That interpretation leads, in my view, to the further construction that what was being offered were two distinct parcels of heritage, namely the ground at present being quarried and the surroundings thereto extending to 12 acres. The first condition attached to the offer was in these terms:

"The actual boundaries will be agreed between you and our client."

Counsel for the defenders laid great stress on this as demonstrating that the actual limits of the ground offered had not been defined, and required an agreement that they should be defined by some future agreement between the parties. That could not constitute the precision required for such an essential factor in a contract of heritage, and acceptance of such an indefinite offer could not constitute a concluded contract of heritage. I agree with that submission, which is determinative of the whole issue. I find confirmation of that in two further points. I consider that it gets support from condition 4 which provides for the defenders having an option to acquire other land adjacent to the quarry at a certain price. Again the emphasis is mine. "Other land adjacent to the quarry" seems to me to relate to land other than the surroundings adjacent to the quarry and places both outside of the area of the quarry where operations are being carried on, and so places them as distinct and separate parcels of land. The second point is that the description of the heritage in the offer should be capable of being reflected in the crave for implement. The first crave of the initial writ here narrates that the subjects of the missives of sale, in relation to which decree of implement is sought, are "the subjects extending to twelve acres known as Bogend Quarry, Bogend, Buckie, and presently being quarried by the defenders". That does not reflect the description of the subjects in the first paragraph of the missives of offer, and has obviously been tailored to accommodate the "unum quid" argument. On a purely technical basis, the pursuer would not be entitled to a decree in the terms stated, since there are no averments to warrant such a decree. From a practical viewpoint, this change of front would indicate a realisation by the pursuer or his advisers that the actual words used in the missives are so lacking in definiteness as to make a decree of implement in those terms impossible of achievement and require alteration before a decree can be obtained.

I consider that, for the reasons which I have stated, the defenders are well founded in their basic argument that there was no valid contract concluded in this case. There were other subsidiary arguments advanced by the defenders, but in the light of the foregoing I do not find it necessary to deal with them. I accordingly move your Lordships to allow the appeal, to recall the interlocutor of 25th September 1984, and to hold that the action falls to be dismissed by the sustaining of the defenders' first plea-in-law.

In anticipating that such a result might ensue, counsel for the pursuer moved the court to continue the case to enable him to lodge a minute of amendment dealing not just with the matters referred to by the sheriff but with matters which he said would be relevant in a proof to determine the terms of the contract resulting from the exchange of missives. When asked what averments would be contained in such a minute of amendment he was at first at a loss to answer that, but in due course enumerated a number of points. When asked if these were matters of evidence of which he or his solicitors had knowledge, he admitted that these were matters which he himself considered to be relevant to the type of inquiry which he had in mind. Having regard to the decision which we have reached and the reasons therefor, we see no justification for such a minute of amendment being allowed at this stage, and for which, in any event, no good and sufficient reason had been advanced.

LORD HUNTER .—It is agreed on both sides of the bar that one of the essentials of a contract for the sale of heritage is that the parties should be in agreement as to the subjects of the sale. If not, there is no completed contract. Moreover, as was pointed out by Viscount Dunedin in a passage from his speech in May and Butcher Ltd. v. The King [1934] 2 KB 17, quoted in a note to Foley v. Classique Coaches Ltd. [1934] 2 K.B. 1, at p. 21:

"To be a good contract there must be a concluded bargain, and a concluded contract is one which settles everything that is necessary to be settled and leaves nothing to be settled by agreement between the parties. Of course it may leave something which still has to be determined, but then that determination must be a determination which does not depend on the agreement between the parties. In the system of law in which I was brought up, that was expressed in one of those brocards of which perhaps we have been too fond, but which often express very neatly what is wanted: ‘Certum est quod certum reddi potest’."

The question as to what may be the result of the application of this principle to the circumstances of a particular case may sometimes be a matter of difficulty. See, e.g.R. & J. Dempster v. Motherwell Bridge and Engineering Co. 1964 SC 308. However, I am satisfied that in the present case the application of the principle demonstrates that there was no completed contract.

Counsel invited us to have regard to the letters which were exchanged between the parties and which are said by the pursuer and respondent to have resulted in a completed contract of which he seeks implement. It was conceded by counsel for the defenders and appellants that, had the letter of 28th February 1983 stopped short at an offer to purchase "the ground at present being quarried by our client", the subjects of sale would have been sufficiently identified to let in parole evidence to show what had been sold. But the letter contained the following added words:

"and the surroundings thereto extending to twelve acres".

This addition, in my opinion, was in itself sufficiently indeterminate to take the question out of the realm of interpretation into that of absence of consensus on an essential element of a contract for the sale of heritage. But, in any event, the subsequent provision to the effect that the actual boundaries would be the subject of agreement between the parties appears to me to bring the present case clearly within the principle stated by Lord Dunedin in the passage referred to.

The difficulty in which the pursuer found himself is, in my opinion, illustrated and emphasised by the terms in which he has chosen to frame his crave for specific implement. If in the present case there had been an offer to purchase "the subjects extending to twelve acres known as Bogend Quarry, Bogend, Buckie, and presently being quarried by Peter G. Gauld & Company" and if appropriate averments had been made, the present case might have been equiparated to cases such as Macdonald v. Newall and Houldsworth v. Gordon Cumming (supra). But the pursuer's attempt in his crave to put a very considerable gloss on the actual language used in the letter, so fair from assisting him, appears to me simply to demonstrate the difficulty with which he is confronted. In McArthur v. Lowson (1877) 4 E. 1134, Lord President Inglis at p. 1136 observed:

"A contract which cannot be enforced by specific implement, in so far as regards its form and substance, is no contract at all, and cannot form the ground of an action of damages."

I may add that the reliance of the learned sheriff on the contra proferentem rule of construction was in my opinion unsound, in respect that the issue in the present case was not one of interpretation of a concluded contract but one as to whether there was or was not in the circumstances a completed contract.

For the foregoing reasons, I agree that the appeal should be disposed of as proposed by your Lordship in the chair. Possibly dismissal of the action on the particular ground argued on their behalf in this appeal enables the defenders and appellants to escape consequences which, for other reasons, they are anxious to avoid. This will not be the first, nor, probably, the last, occasion on which such an event has happened. I also agree with your Lordship that no adequate or proper grounds were put forward by counsel for the pursuer and respondent in support of his motion for a continuation to enable him to lodge a minute of amendment.

LORD BRAND .—I agree with the opinion of your Lordship in the chair arid that the action should be disposed of as proposed by your Lordship.