Scottish Court of Session Decisions

In this action the pursuers, the City of Glasgow District Council seek production and reduction of two letters, both adopted as holograph, bearing the dates 30 May and 26 June 1989, purporting to be Missives of Sale passing between the pursuers on the one hand and agents acting on behalf of the late Mrs Margaret Hood and the first defender on the other hand, containing an offer by the pursuers to sell to the late Mrs Hood and the first defender the property known as Flat 0/1 12 Maidland Road, Glasgow for the sum of £9,403, and an Acceptance on behalf of the late Mrs Hood and the first defender of that offer. As at 30 May 1989 Flat 0/1 12 Maidland Road, Glasgow ("the flat") was the property of the pursuers and Mrs Margaret Hood was the tenant. Also in the flat lived the second defender, who was Mrs Hood's daughter, and the first defender, with whom she was cohabiting.

The pursuers aver that in 1989 an application to purchase the flat was made by Mrs Hood and the first defender as joint purchaser in terms of the Housing (Scotland) Act 1987. Following upon that application the pursuers, by the letter dated 30 May 1989, offered to sell the flat to Mrs Hood and the first defender, who was described in the letter as her son-in-law, at the price, calculated in terms of section 62 of the Act, of £9,403. In response, agents acting on behalf of Mrs Hood and the first defender sent the pursuers an unsigned letter dated 26 June 1989 which purported to accept the offer of 30 May and to conclude the bargain. The fact that the purported acceptance was unsigned was subsequently noticed by a solicitor in the pursuers' employment and it was returned by the pursuers to the agents acting on behalf of Mrs Hood and the first defender by letter dated 26 July 1989. Thereafter with a letter dated 28 July 1989 the agents for Mrs Hood and the first defender returned the letter dated 26 June 1989 to the pursuers duly signed.

The pursuers aver that at the material time the first defender was not married to the second defender, and so was not a member of Mrs Hood's family in terms of section 83 of the Act. He did not therefore qualify as a joint purchaser in terms of section 61(6) and 83.

The pursuers further aver that Mrs Hood died on 15 July 1989. On about 5 September 1989 a solicitor in the pursuers' Council House Sales Unit was informed of her death. By letter dated 13 September 1989 the pursuers informed the agents for Mrs Hood and the first defender that the pursuers were treating the application as having lapsed and intended to close their file on the case. The defenders aver and the pursuers admit that the pursuers raised an action in Glasgow Sheriff Court in September 1990 for recovery of possession of the flat. That action was sisted in January 1992 and remains so. The pursuers aver that in 1992 the first defender raised an action of implement of the Missives. That action was defended by the pursuers and was subsequently sisted on their motion in order that they might raise the present action.

In their answers the defenders admit that the offer of 30 May 1989 was made and that the agents for Mrs Hood and the first defender sent the pursuers an unsigned letter dated 26 June 1989 purporting to accept the pursuers' offer. They admit that Mrs Hood died on 15 July 1989. The pursuers' averments that the pursuers returned the unsigned acceptance under cover of a letter of 26 July 1989, and that the acceptance was thereafter returned to the pursuers duly signed by the agents are said by the defenders to be not known and not admitted. The pursuers' averments relating to their letter of 13 September 1989 to the agents are also said to be not known and not admitted. The pursuers' averments that the first and second defenders were not married at the material time is covered by a general denial on behalf of the defenders. The defenders make no averment that they are or have been married.

The case came before me on procedure roll when counsel for the pursuers sought decree de plano. Alternatively, he moved that certain averments made on behalf of the defenders in support of their third plea-in-law, a plea of personal bar, should not be remitted to probation. Counsel submitted that the defenders' pleadings lacked candour in respect that the pursuers' averments to the effect that the pursuers returned the unsigned acceptance by letter dated 26 July 1989, and that the agents acting for Mrs Hood and the first defender thereafter returned the formal acceptance duly signed, were said by the defenders to be not known and not admitted. The originals of the agents' letters were lodged in process and could be examined by the defenders. The terms of the letters must have been within the knowledge of the agents who acted for Mrs Hood and the first defender, and so must be taken to be within the first defender's own knowledge. These averments should accordingly be deemed to have been admitted.

Mr Peart, in addressing the court on behalf of the defenders, admitted that the acceptance was signed after Mrs Hood's death. He also accepted that the pursuers' letter of 13 September 1989 had been sent to the agents acting for Mrs Hood and himself, and informed the court that he and the second defender had been married in August 1989. In the light of these admissions by Mr Peart, the defenders' pleadings can be seen to be unsatisfactory, failing, as they do, clearly and frankly to admit the relevant factual situation as known to the defenders. Although Mr Peart himself represented the defenders at the procedure roll hearing, the defenders' pleadings had been framed and amended by counsel. In my view, there was no justification for adopting a position of "not known and not admitted" in relation to the averments in question. In the circumstances I have outlined, the defenders' pleadings, or at any rate the first defender's pleadings, ought to have made it clear that it was accepted that the acceptance of the offer was only signed after Mrs Hood's death, that the contents of the letter of 13 September 1989 had been communicated to the agents for Mrs Hood and the first defender, and that the defenders had not been married until August 1989. It is contrary to the purpose and spirit of our system of pleadings that a party should be able to delay or prevent the determination of an action by failure frankly to admit matters within his knowledge. It would be unfair to the pursuers to allow the determination of this case to be further delayed by requiring a proof in relation to matters which are in fact known to and admitted by the defenders and are material to the determination of the case. In these circumstances, I consider that the averments highlighted by counsel for the pursuers should be deemed to have been admitted. In addition I consider that the pursuers' averments that the defenders were not married at the material time should also be deemed to be admitted.

In support of his motion for decree de plano, counsel argued that a binding contract for the sale of the flat, as of any other heritable subjects, required to be constituted by probative writing on both sides. The purported acceptance of 26 June 1989, in its original form, was invalid, in respect that it was unsigned. As at the date of Mrs Hood's death there was accordingly no contract. The subsequent attempt to validate the acceptance by the adhibition of the agents' signature and the words "adopted as holograph" to the unsigned letter, was futile, since by that time the agents' mandate to act on behalf of Mrs Hood had been terminated by her death. In these circumstances no valid acceptance was ever made to the offer dated 30 May 1989.

Mr Peart, who appeared on behalf of both defenders, explained that the pursuers had delayed beyond the statutory period of two months in responding to the application to purchase by Mrs Hood and himself. The delay was in the region of three weeks. The acceptance was signed 11 days after Mrs Hood's death. Had the pursuers responded on time, the acceptance would have been validated. He further submitted that the unsigned acceptance should be deemed to be validated by the fact that the agent's letter which accompanied it was signed by them.

In my opinion the pursuers' submissions are well founded and require to be given effect to. A binding contract for the sale of a council house under the provisions of the Housing (Scotland) Act 1987, like a contract for the sale of any other heritable property, requires to be constituted by probative writing on both sides. At the time of Mrs Hood's death no contract had been entered into. There was no signed acceptance of the offer, probative or otherwise. The letter which accompanied the unsigned letter was not adopted as holograph, nor could its terms, in my view, be construed as constituting an acceptance of the offer. The terms of the letter were,

"Mrs M Hood and Mr R Peart

12 Maidland Road, Glasgow.

After Mrs Hood's death, the offer to sell to her and the first defender as it stood was no longer capable of acceptance. Any acceptance required to meet the terms of the offer, and that could not be done. The pursuers' offer was not an offer to sell to the first defender alone. So an acceptance by him would not have met the offer. In any event, a contract cannot be made with a deceased person, see Thomson v James (1855) 18 D1 at page 10. Moreover, the agency of Mrs Hood's agents was terminated by her death, and accordingly the acceptance signed by them purporting to act on her behalf after her death was invalid. In these circumstances the acceptance which bears the date 26 June 1989 falls to be reduced. The reduction of the acceptance is sufficient for the pursuers' purpose, since as I have already indicated, the offer is now incapable of acceptance. In any event, in terms of Condition 15 of the offer, in the absence of a valid acceptance within 2 months of its date, it lapsed by virtue of the provisions of section 66(1) of the Act.

The conclusion of the summons seeks reduction of both the offer and the acceptance, as the documents constituting the contract. The pursuers' pleas-in-law or at least some of them, on the other hand seek reduction of the purported contract. The object of a decree of reduction is the annulment of a deed, decree or other writing, (see Walker's Civil Remedies, page 138). In these circumstances there has to be ground for reduction of both the offer and the acceptance. As I have indicated, I am satisfied on the basis of the parties' pleadings (subject to the deemed admissions dealt with above that the acceptance falls to be reduced. It does not however follow that decree of reduction of the pursuers' offer can also be pronounced at this stage. While there may be an argument that it was outwith the power of the pursuers to make an offer in the terms they did. I did not hear sufficient argument to enable me to reach a conclusion on that question. The principal argument advanced by the pursuers for the reduction of the offer was that it was induced by the misrepresentation that the first defender was Mrs Hood's son-in-law. To succeed in that argument the pursuers require to prove their averments to the effect that the representation was made and that they would not have made the offer had they known the truth. While it may be that they would have little difficulty in proving these averments, in the present state of the pleadings, I am unable to grant decree of reduction of the offer on these grounds without such proof. As I have indicated, however, I consider that the reduction of the offer is now unnecessary.

Counsel also advanced an attack on the relevancy of the defenders' pleadings in support of the plea of personal bar. It is not now necessary for me to set out these arguments in detail, since the principles of homologation and rei interventus relied upon can only be effective to validate an informal contract which is capable of validation. In my opinion, in the present case, no contract was ever entered into which was capable of validation, and accordingly the question of personal bar cannot arise. Had it been necessary for me to do so, I would have held the defenders' averments of personal bar to be irrelevant. The pursuers' letter of 13 September 1989 which I understood now to be admitted by Mr Peart, indicated clearly that the pursuers did not consider themselves bound by an agreement. On the defenders' own averments, in September 1990 the pursuers raised an action for recovery of possession of the flat. Against that background, it cannot be asserted that the pursuers made any statement or perpetrated any action which was consistent with an acceptance by them that there was an agreement binding upon them. It cannot even be asserted that they neglected to assert their right. In the absence of any averment that the pursuers had departed from their repudiation of any agreement, the defenders' averments of steps taken by them on the faith of such departure are in my view irrelevant.

In the result I shall sustain the first and sixth pleas-in-law for the pursuers and their second plea-in-law so far as it relates to the pretended acceptance dated 26 June 1989. I shall repel the pleas-in-law for the defenders, and grant decree of reduction of the said pretended acceptance.