Scottish Court of Session Decisions

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Cite as: [2000] ScotCS 156

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OUTER HOUSE, COURT OF SESSION

0/54/16/97

OPINION OF LORD REED

in the cause

MISS OLIVE DONALD

Pursuer;

against

MRS VIOLET INSCH OR HUTCHINSON AND OTHERS

Defenders:

________________

Pursuer: Mure, Q.C.; Blacklock Thorley, (Peden and Patrick)

Defender: Boyd; Drummond Miller, W.S., (Dykes Glass & Co)

Third Party: Arthurson; Simpson & Marwick, W.S.

9 June 2000

[1] This is an action of damages for breach of contract. The facts relevant to the alleged breach of contract are not in dispute and can be summarised as follows.

[2] By letter dated 11 August 1995 the pursuer offered to buy from the defender a flat in Dumbarton Road, Glasgow. The offer was subject to various conditions which included the following:

"7. There are no matters affecting the subjects or the larger premises of which the subjects form part which would require any form of repair, maintenance or attention known to the seller whether formally intimated or not affecting the subjects of sale or the premises of which the subjects of sale form part."

That offer received a qualified acceptance dated 15 August 1995. The conditions attached to the acceptance have no bearing on the issue in the present case. That qualified acceptance was in turn accepted by the pursuer in a letter dated 16 August 1995, and the contract was then concluded. The pursuer thereafter took entry to the property on 22 September 1995, when she paid the purchase price and received a disposition. The disposition provided that the missives were to remain in force. On 23 October 1995 the City of Glasgow District Council passed a draft resolution under Section 90 of the Housing (Scotland) Act 1987 declaring the area in which the flat is situated to be a housing action area for improvement. The defender had been aware of the possibility of such a housing action area for improvement being declared prior to the conclusion of the missives. The present action proceeds on the basis that her failure to disclose her awareness of that possibility constituted a breach of her obligation under condition 7 quoted above.

[3] On behalf of the pursuer, Mr Mure submitted that clause 7 was an all-encompassing provision, the purpose of which was to place the purchaser in the same state of knowledge as the seller. The word "matter", giving it its ordinary meaning, was a word of limitless definition. It extended to everything of whatsoever nature, even if only a matter in contemplation, including the possible exercise of statutory powers by the local authority. It was apt to include the possible declaration of the housing action area. The word "attention", giving it its ordinary meaning, was also of wide scope. Anything of significance or importance would require "attention". The possible declaration of the housing action area was undoubtedly within the scope of the phrase "matters ,... which would require .... attention."

[4] I reject this contention. As Lord Hoffmann observed in Charter Reinsurance Co Ltd v Fagan [1997] A.C. 313, 391:

"I think that in some cases the notion of words having a natural meaning is not a very helpful one. Because the meaning of words is so sensitive to syntax and context the natural meaning of words in one sentence may be quite unnatural in another. Thus a statement that words have a particular natural meaning may mean no more that in many contexts they will have that meaning. In other contexts their meaning will be different but no less natural."

[5] In the present case, condition 7 has to be construed as a whole, and in the context of the contract as a whole. It forms one of a number of conditions in the letter of 11 August 1995 which are in the following terms:

"6. In the event of any repairs having been instructed on or before the date of entry, either to the subjects of offer or the subjects of which the subjects of offer form part, the seller will be responsible for his share of any cost thereanent and the purchaser will be entitled to retain from the purchase price a sum equal to the cost of the said repairs.

7. There are no matters affecting the subjects or the larger premises of which the subjects form part which would require any form of repair, maintenance or attention known to the seller whether formally intimated or not affecting the subjects of sale or the premises of which the subjects of sale form part.

8. It is understood that the roads, footpaths and sewers ex adverso the subjects of sale are public and are maintained by the Local Authority and that there are no motorway or road proposals adversely affecting the subjects of sale or the larger subjects of which they form part, if applicable. It is accepted however that the seller does not warrant the position but the appropriate confirmatory letters from the appropriate Local Authority will be delivered at or before settlement and should they disclose anything contrary to the above the purchaser will be entitled to resile from the missives on condition that intimation thereof is made by the purchaser's agents within seven days of their receipt of the said confirmatory letter and no damages or expenses are claimed.

9. It is understood that there are no Orders, Notices or other matters under the Town & Country Planning (Scotland) Acts, Housing (Scotland) Acts or any other Acts, Orders or proposals adversely affecting the subjects or the larger property of which the subjects form part, if applicable. It is accepted that the seller gives no warranty as to the position, but the appropriate confirmatory letters from the appropriate Local Authority will be delivered at or before settlement and if the position is not as stated herein the purchaser will be entitled to resile from the bargain provided the purchaser's agents write reserving their right to resile within seven days and no damages or expenses are claimed.

10. In respect of any development or material change of use which has not taken place at the date of this offer, the seller (a) has not received in terms of planning legislation a copy of any application for Planning Permission, (b) is not aware of any application for such permission in respect of a neighbouring property having been advertised under the Planning Acts and (c) is not aware of any other proposals by neighbouring proprietors which may adversely affect the value, privacy or amenity of the subjects."

In this context, it appears to me that condition 7 is to be read along with condition 6, and is concerned with repairs and maintenance. Conditions 8, 9, and 10 are concerned with the statutory powers of local authorities. Condition 9 specifically deals with "orders, notices or other matters" under the Housing (Scotland) Acts. In terms of that condition, it is expressly accepted that the seller gives no warranty as to the position. The pursuer does not suggest that the defender's failure to disclose the possibility of the declaring of a housing action area constituted a breach of the first sentence of condition 9. That, as I understood, was on the basis that the scope of the first sentence was considered to be the same as the scope of the confirmatory letters which would be obtained from the local authority; and such letters would not cover (and did not cover in the present case) the mere possibility of a housing action area being declared.

[6] In the circumstances, the defender's and third party's pleas to the relevancy of the pursuer's averments of breach of contract are in my opinion well founded, and the action falls to be dismissed. Criticism was also directed at the pursuer's averments of loss, but Mr Mure offered to amend in that regard, and I would have allowed him an opportunity to do so if that had been the only difficulty with his case.

[7] This action also involves a claim by the defender against the solicitors who acted for her in the sale, who have been convened as a third party. She seeks to be indemnified by the third party for any liability to the pursuer, on the basis that she disclosed her knowledge of the possibility of the housing action area to the third party and was guided by the third party in making no disclosure of that to the pursuer. The defenders claim against the third party is therefore conditional upon the success of the pursuer's claim against the defender. Since the pursuer's action falls to be dismissed, so also does the defender's claim against the third party.

[8] In the circumstances, I shall sustain the defender's first plea-in-law and the third party's first and second pleas-in-law, and dismiss the action and the third party notice.