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Cite as: 2008 GWD 40-592, [2008] CSOH 160, [2008] ScotCS CSOH_160, 2009 SC 151

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OUTER HOUSE, COURT OF SESSION

[2008] CSOH 160

A467/07

OPINION OF LORD BRODIE

in the cause

KHALID PARVAIZ

Pursuer;

against

THRESHER WINES ACQUISITIONS LIMITED

Defender:

________________

Pursuer: Stewart; Drummond Miller LLP

Defender: Connal QC; McGrigors LLP

19 November 2008

[1] The pursuer is designed as a merchant resident in Glasgow. The defender was the heritable proprietor of subjects at 9 Hyndland Street, Glasgow, registered in the Land Register of Scotland under title number GLA82702 and occupied as a shop ("the subjects"). The pursuer concludes, first, for production and reduction of Minute of Preference and Enactment of Sale dated 29 March 2007 relative to the subjects and, second, for the repayment by the defender to the pursuer of the sum of £26, 200 with interest. The pursuer avers that the defender caused the subjects to be exposed for sale by public roup or a uction, that the auction took place in London on 29 March 2007 and that the pursuer's bid of £262,000 was the highest and was accepted by the judge of the roup. In accordance with General Conditions of sale annexed to the Articles of Roup the pursuer paid a deposit of £26, 200. The pursuer further avers that he entered into the purchase of the subjects under essential error as to their extent and it is for that reason that he seeks decree of reduction and repetition. The pursuer explains that when he inspected the subjects on 28 March 2007 he was shown the ground floor shop premises containing a front sales area, a storage area, an extension to the rear with storage space and toilet facilities. The toilets were accessed through the subjects. There was no other means of access to the toilets. They were the only toilets in the subjects. From his inspection the pursuer reasonably believed that the toilets formed part of the subjects and that the defender had heritable title thereto. He reasonably believed the defender was selling the subjects with heritable title to the full extent occupied by it. This has not proved to be the case. The contract of sale of the subjects is, the pursuer avers, accordingly voidable and he is therefore under the necessity of seeking reduction of the Minute of Preference and Enactment of Sale signed by him on 29 March 2007 when his bid was accepted.

[2] The action came before me on 23 October 2008 on the Procedure Roll for debate. Mr Andrew Stewart, advocate, appeared on behalf of the pursuer. Mr Connal QC, solicitor-advocate, appeared on behalf of the defender. Mr Connal's motion was for dismissal on the ground that the pursuer's averments were irrelevant and lacking in specification. Mr Stewart moved me to allow proof before answer.

[3] In developing his submissions Mr Connal began by emphasising the context. The pursuer had purchased a particular title at an auction sale. The nature of an auction is that an item is exposed. The potential buyers make such enquiries as they wish. Once a bid is accepted the successful bidder goes away with the item. The auctioneer gives no guarantee whatsoever. The situation is one of caveat emptor. It is for the purchaser to have made enquiry before he "raises his paddle". Because it is for the purchaser to enquire, he cannot complain if he gets something other than what it is that he wants.

[4] Mr Connal then drew my attention to the central documents. Number 7/1 of process was Land Certificate GLA82702. It was what was carried by that title that the pursuer had agreed to purchase. Number 7/2 of process was the Articles of Roup which incorporated by reference the Minute of Preference and Enactment, the General Conditions and the Special Conditions. Number 7/3 of process was the Minute of Preference and Enactment of Sale which had been executed by the pursuer and the judge of the roup on the pursuer's bid of £262,000 having been accepted. Again that incorporated the General Conditions of Sale and the Special Conditions of Sale. Number 7/4 of process was the General Conditions of Sale. Mr Connal drew my particular attention to conditions 12 and 13. It was Mr Connal's submission that the effect of condition 12 which included the statement that "the subjects are sold tantum et tale as they exist with no warranty as to descriptions, extents, boundaries..." threw onto the purchaser the risk of the title being in any way insufficient to carry the subjects. Number 7/5 of process was the Special Conditions of Sale. Mr Connal drew my particular attention to condition 18 which provided that all statements made in any particulars of sale are made without responsibility on the part of the seller and that any purchaser should be deemed to have satisfied himself by inspection or otherwise as to the correctness of each statement contained in the Particulars. In Mr Connal's submission the whole structure of the contract which was constituted in terms of these documents was that the purchaser contracted to acquire title number GLA82702, whatever that might comprise.

[5] Mr Connal then considered the pursuer's averments with a view to identifying what was his case. Notwithstanding the terms of the contract that he had entered into, the pursuer was seeking reduction and repayment of the deposit on the basis that the defender had no title to the toilet area which had been occupied by it. The nub of the pursuer's case was to be found at page 11C to D of the Closed Record. There it was averred:

"The pursuer entered into the purchase of the subjects under essential error as to the extent of the subjects. From his inspection of them he reasonably believed that the toilets formed part of the subjects and that the defender had heritable title thereto. The pursuer reasonably believed that the defender was selling the subjects with heritable title to the full extent of the subjects occupied. Neither of these has proved to be the case. The contract of sale of the subjects is voidable at the pursuer's instance and he is therefore under the necessity of seeking reduction of the Minute of Preference and Enactment of Sale dated 29 March 2007."

What the pursuer sought, submitted Mr Connal, was precisely what he could not do. He had received the Particulars before the auction. The Particulars referred him to the Conditions on which the subjects were to be sold. Accordingly the basis upon which the roup was conducted was known before the sale and in terms of the Conditions the pursuer is taken to have known everything about the subjects and the title to them in advance. There was accordingly no relevantly averred error. The pursuer's unilateral uninduced error took him nowhere.

[6] Mr Connal then turned to what he submitted were the relevant authorities. As was demonstrated by Carruthers v Stott (1825) 4S 34, the effect of articles of roup in terms such as the Articles of Roup in the present case was to put the purchaser on guard with the result that he had no remedy if things did not turn out well. Mr Connal accepted that the decision in Hamilton v Western Bank of Scotland (1861) 23D 1033 was against him but it was difficult to find any legal proposition in the opinions in that case. In Morton v Smith (1877) 5R 83 more questions were unanswered than answered but it pointed to articles of roup being given effect unless in what was described as "a clear case of injustice". There was no averment of clear injustice in the present case. Davidson v Dalziel (1881) 8R 990 was a case about a burden but it demonstrated that it was perfectly lawful for parties to contract on the basis that the pursuer took the risk that the title was burdened. Young v McKellar 1909 SC 1340 demonstrated that unilateral error, even if material, was not of itself enough to justify reduction of an onerous contract. The recent cases were Steel's Trustee v Bradley Homes (Scotland) Ltd 1972 SC 48 and Royal Bank of Scotland Plc v Purvis 1990 SLT 262. Neither gave support to the proposition that unilateral error by itself could be a basis for reducing a contract.

[7] In conclusion, Mr Connal submitted that here the pursuer got exactly what he knew he would get and exactly what he had contracted for. This was not a case where there was material error. Rather, the pursuer had made certain assumptions. This was clearly a case of uninduced unilateral error. The seller, for its part, specifically did not offer to give more than was set out in the title. It intended to dispose of the subjects on these terms. It was not in error. The sufficiency of the title or extent of the property were not matters with which it had to concern itself. Mr Connal confirmed that his argument did not depend on any speciality to do with auctions but in the auction cases it had been pointed out that the purchaser has the opportunity to inform himself of what is of importance to him. Certainty was of importance in property transactions: Cobb v Yeoman's Row Management Ltd [2008] 1 WLR 1752 at 1775E.

[8] Mr Stewart began by reminding me of the high test to be met if a case is to be dismissed by reason of irrelevancy: Jamieson v Jamieson 1952 SC (HL) 44 at 63. Given the area of law with which it was concerned it would be particularly helpful in this case for the facts to be established. As appeared from Halliday Conveyancing Law and Practice at paragraph 30 - 175, while articles of roup normally provide that offerers will be held to have satisfied themselves as to the validity and sufficiency of the exposer's title which will be accepted as it stands, such a condition will not oblige the pursuer to accept a title which excludes a material or substantial part of the subjects offered: Hamilton v Western Bank of Scotland supra. As far as materiality was concerned in the present case, Mr Stewart pointed me to the surveyor's plan attached to number 6/5 of process showing the toilet area lying outside the line demarcating the superficial area of the subjects. The pursuer's position was as set out at pages 6D to 7A, 9B to 10D (where reference is made to correspondence lodged as numbers 6/4 to 6/7 of process) and 16A of the Closed Record. The pursuer avers that he was in error as to the extent of the subjects comprised within the defender's title. The defender's position on error was unclear. The pursuer's call at page 10D to aver whether, prior to the date of the auction, 29 March 2007, the defender was aware that it had no heritable title to the toilets had gone unanswered. The correspondence between solicitors acting on behalf of the neighbouring proprietor at 11 Hyndland Street and the solicitors acting for the defender, which was referred to on Record, points to it being the impression of the defender's solicitors that what had been sold did include the toilet area. What was averred, once established at proof, would allow the inference that the defender and its solicitors were under the impression that what had been sold was the entire area of the shop as it had been occupied by the defender. The possibilities appeared to be that either the defender and solicitors were not aware of the problem in the title until after the auction and that therefore that this was a case of mutual error or that the defender and its solicitors were aware before the auction that the defender's title did not cover the toilets and yet did nothing whatsoever to draw that to the pursuer's attention or otherwise put him on notice. Mr Connal had submitted that what had been sold was simply the title certificate but whatever his views may be in retrospect, it is quite clear that his conveyancing colleagues thought what they were doing at the relevant time was selling the entire occupational extent of the subjects, including the toilet area. Were it otherwise there would have been no point in the defender's solicitors trying to include the toilet area in the disposition that they proposed to grant to the pursuer, as appeared from the correspondence which was referred to in the pleadings had been their intention.

[9] Mr Stewart turned to consider the law. The kind of error which is relevant here was error as to identity of subjects sold. For the reasons given by McBryde in the Law of Contract in Scotland paragraph 15-02 there are difficulties in explaining the Scots law on consensual error. There is inherent difficulty in the subject. As Grotius said, de pacto errantis perplexa satis tractatio est. Mr Stewart accepted McBryde's characterisation of the present law of error as requiring "error plus" in order to found a reduction, that is error with some other factor: McBryde supra paragraphs 15-23 and 15-34. The effect of error, in Mr Stewart's submission, was that there was no contract by reason of absence of consensus. In other words the contract was void ab initio. In determining whether there had been relevant error one has to have regard to the whole circumstances which here would include the fact of the auction sale as well as the terms of the Particulars of Sale and the state of occupation of the subjects when they were viewed. When the facts had been established this might turn out to be a case of mutual error but Mr Stewart did not commit himself to that alternative only. He was presenting the case as being either one of mutual error or one of unilateral error. He relied on Hamilton v Western Bank of Scotland as still representing the law. Essential error might destroy what would otherwise be a contract notwithstanding any exclusion clause found in the Articles of Roup. Morton v Smith was a case about materiality. Young v McKellar related to supersession of contractual terms by the delivery of a disposition and immaterial inaccuracies but in a part of his opinion which is admittedly obiter, Lord Low discusses examples where error might be relevant. Carruthers v Stott was distinguishable in that it concerned a defect in title and not an error in the identity of the subjects. Again, Davidson v Dalziel was a case about burdens on the title and not about the identity of the subjects. Mr Stewart submitted that there was clear authority in Hamilton v Western Bank of Scotland which was directly in point to the effect that essential error will allow a contract to be reduced notwithstanding any exclusion clause contained in articles of roup. Mr Stewart pointed to the similarities of the articles in Hamilton with the articles in the present case. Here, materiality would depend upon the evidence but there was enough in the averments to indicate that an error as to the inclusion of the toilet area might be material. Mr Stewart accepted that it is difficult to found on unilateral error but something might turn on the state of the defender's knowledge as to whether the title did indeed cover the toilet area in that this might lead to a question as to whether the defender had acted in good faith: cf McBryde supra paragraphs 15-40 and 15-41, Smith Short Commentary on the Law of Scotland at p819, Davidson v Dalziel supra at 994, and Steel's Trs v Bradley Homes (Scotland) Ltd supra at 58. Agreeing, as he understood it, with Mr Connal, Mr Stewart accepted that the law as to the return of a deposit was authoritatively stated in Zemhunt (Holdings) Ltd v Control Securities plc 1992 SC 58. When a contract stands, Mr Stewart would accept that usually a deposit would not be returnable. However, his argument was that because the contract as a whole fell to be reduced a necessary consequence was that any deposit paid in terms of that contract must be returned. As appeared from Gloag On Contract at p59, where a contract is reduced there must be restitution.

[10] We have the authority of Grotius for the proposition that the law of error in relation to contract is difficult. No doubt wisely, Mr Connal and Mr Stewart skirted round its edges in their respective submissions, confining themselves to the question as to whether the remedy of reduction was available on the ground of error as to the extent of the subjects held under the title which the seller has undertaken to sell. The principle founded on by the pursuer is that a contract is an agreement, a coming together of the respective free wills of the parties or consensus in relation to certain essentials of which, in sale, the identity of the subjects is one. Where at least one of the parties enters into the contract with a subjective belief about an essential matter, which turns out to be materially wrong, there can be no agreement and therefore no contract, hence the categorisation of this as consensual error: McBryde supra paragraph 15-01. Outward appearances may suggest that there is a contract but because in truth there has been no coming together of wills in relation to all the essentials, there is no contract. Mr Stewart described a contract as being "destroyed" by error and that is an expression found in the authorities. By seeking decree of reduction in the present case the pursuer is saying there was never a contract but that nevertheless there is a deed apparently to contrary effect and he wishes that deed annulled.

[11] Now, it was clear from parties' submissions and the authorities to which I was referred that, whatever may be the theory, what I have referred to as the principle founded on by the pursuer would not translate into an accurate rule of Scots law without considerable refinement: see e.g. Steel's Tr v Bradley Homes 1972 SC 48 at 56. That said, I did not see it as a matter of controversy between the parties that there are circumstances where in the event of material error in respect of something essential, Scots law allows the remedy of reduction of what on the face of it is a concluded contract. If a rule of thumb were required it would be difficult to improve on Professor McBryde's suggestion that for error to be relevant there must be some other factor in addition. Professor McBryde describes this as "error plus": McBryde supra paragraph 15-23. Mr Connal's attack on the relevancy of the pursuer's pleadings was less to do with the effect of error (or "error plus") as a matter of generality than with the fact of error in the present case or, which was to look at the same thing slightly differently, the effect of the Articles of Roup as contracting out of what would otherwise be the effect of error. It was his submission that the pursuer simply could not assert that he (and Mr Connal's approach was that the case was only concerned with the pursuer's belief) had entered into the contract under error as to the physical extent of the subjects. The pursuer did not aver that he was not to be held to be aware of the terms of the defender's General Conditions and Special Conditions. This was a contract for a specified title. That is what the pursuer must be taken to have intended to acquire. That is what he had contracted for and that is what he was offered in implement of the contract. The pursuer took the risk of the title not being sufficient to cover what he wished to acquire. In the language of Lord President Hope in Carruthers v Stott supra at 37: "[the articles of roup] required purchasers to satisfy themselves not only as to the validity of the titles, but also as to the right to the property; and therefore they were put fully on their guard." Mr Connal's argument was not unpersuasive. Competing with the underlying theory that a contract requires a true consensus between the parties is the consideration expressed by Lord Dunpark in Steel's Tr v Bradley Homes supra at 57: "it is essential for business efficacy that the ordinary rule should be that an onerous contract reduced to writing in plain terms should bind the parties thereto." However, I have come to the conclusion that Mr Connal's argument does not survive a review of the authorities to which my attention was drawn. On the contrary, it is Mr Stewart's analysis that is supported by the case-law and it is Mr Stewart's motion to which I intend to give effect.

[12] Carruthers v Stott does not support the proposition that a sale under articles of roup cannot be reduced in the event of error as to the extent of the subjects. The case was not concerned with error as to the extent of the subjects. Rather, it was concerned with what was said by the pursuer to be a defect in the title which the majority of the Court considered could be cured. On that view, in the opinion of Lord Balgray, with whom Lord President Hope concurred, "the question just resolved into this, whether or not the purchaser was bound to be at this expense?", in other words whether the pursuer was entitled to damages (which he does not appear to have sued for). Moreover, having made the remark which was founded on by Mr Connal, the Lord President went on:

"It would, no doubt be different, if the titles referred to another estate, from which that had been exposed for sale - to that of B, instead of A. But here the objection was not that the estate was different from that which had been exposed for sale, but merely that a mid couple of the titles was wanting, which might be supplied."

Now it may be that the Lord President had in mind a more significant difference between the subjects exposed and the subjects to which the seller offered a title than the absence of a toilet area, but the materiality of such a difference is a matter of fact and degree for assessment after proof and not for determination at the stage of consideration of relevancy. Here I consider that there is enough averred to allow it be concluded that the distinction between a shop with the specified toilet area and a shop without that area is a difference which may be so material as to bear on the identity of what was exposed.

[13] Mr Connal conceded that Hamilton v Western Bank of Scotland was against him. As a decision of the Inner House its ratio is of course binding on me. Mr Connal submitted that a ratio was not apparent. I disagree. In Hamilton the pursuer averred that subjects purchased by him from the Bank were understood by both parties to include the whole of a tenement block. That is what was disponed to him but it was later discovered that the Bank had not had title to the whole of the tenement. The pursuer accordingly sued for reduction, repayment of the price and damages in respect money outlaid in repair and improvement. The Lord Ordinary (Jerviswoode) found the facts relevant to infer reduction and repetition and the articles of roup insufficient to bar the pursuer from insisting in his conclusions. For the Lord Ordinary the question turned "upon the matter of fact as to whether or not the pursuer has got the subject for which he contracted? If he has, there is an end of the case. If he has got only a portion of it, he got something different from that for which he contracted, and he is therefore entitled to be free" (supra at 1038). As far as the articles of roup were concerned, Lord Jerviswood said this: "where there is a flaw which strikes at the contract itself, and which would suffice to annul it, nothing short of a positive declaration that the purchaser shall be held to have no remedy in such a case can bar his right to restoration against it" (supra at 1037). The Inner House gave short shrift to the appeal against the Lord Ordinary's decision. His interlocutor was held to be right. The Inner House did not specifically adopt the Lord Ordinary's opinion but they briefly paraphrased it. The Lord President (McNeill), with whom Lords Ivory and Curriehill concurred, put it this way:

"I think the pursuer was in error as to the identity of the subjects which were the matter of this transaction. I cannot hold that an error as to one-fourth of one-fifth part of the whole building was not a material error particularly considering the nature of the subject. As to the purchaser satisfying himself as to the extent of the subject, I think that if the measurement had turned out to be thirty-four ells, instead of thirty-five ells, as he may have supposed it to be, or if there had been some such difference between the actual and the supposed extent, the articles of roup would have covered a case of that kind. But the issues before us is not as to an error in mensuration, but as to the identity of the subject. I am therefore of the opinion that the interlocutor of the Lord Ordinary is right."

According to Lord Deas, "[this] is the clearest case of essential error I have ever seen. The clause in the articles of roup was never intended to cover a case of this kind." Now, it may be that the members of the Inner House did not consider it necessary to provide elaborated reasoning. That is because, to their minds, the averred facts so clearly pointed to a case of essential error as to the identity of what was being sold which in turn opened the remedy of reduction. Elaboration was unnecessary. The articles of roup were "never intended" to exclude the remedy of reduction where there was essential error (cf Halliday supra at paragraph 30-175). I agree with Mr Connal on this: Hamilton is against him. It may be a stronger case on the facts than the present case but otherwise it appears to me to be entirely on point and capable of yielding the ratio that at least where there is mutual error as to the identity of the subjects to which the seller has title, a purchaser is entitled to have the contract and indeed a disposition following on that contract reduced as a nullity.

[14] I do not find Morton v Smith, on which Mr Connal founded, to be inconsistent with Hamilton. On the facts it was not found to be a case of error at all, let alone material error, hence, no doubt, Lord Justice-Clerk Moncrieff's observation that: "I know no case where reduction or rectification of the contract has been allowed, unless the error was material." Mr Connal relied on the Lord Justice-Clerk's statement of opinion that "the articles of roup, although they might not prevail against a clear case of injustice, are sufficient to protect the sellers where there is a doubt whether there is any error at all." Mr Connal sought to extract from that the proposition that articles of roup will prevail unless there is averred to be "a clear case of injustice". With all respect to Mr Connal the Lord Justice-Clerk's remark does not support that construction. It is true that in the debate before me the exact terms of the articles of roup were not examined very carefully, it being common ground between Mr Stewart and Mr Connal that the articles in the present case were remarkably similar to their nineteenth century predecessors. One nevertheless has to consider the effect of the particular articles in a particular case. However, I see no special virtue in the phrase "a clear case of injustice". I would expect Lord Justice-Clerk Moncrieff to have considered it "a clear case of injustice" where parties found themselves bound by a contract despite having both been mistaken as to what it was that the seller title to. I do not read his opinion as requiring more for reduction than material error.

[15] As Mr Connal recognised, Davidson v Dalziel was a case about a real burden or, rather, a case where the Lord Justice-Clerk considered that there was no real burden and Lords Young and Craighill considered that that was not a question which could be answered as between the parties to the bill of suspension. It was not a case of error as to the identity of the subjects of sale. Nor was it maintained that the contract was void. The sixth head of the articles of roup had provided that the subjects were purchased under the "burdens, conditions, provisions, restrictions, reservations, and declarations specified and contained or referred to herein, or in the title-deeds thereof". As the will creating what was said to be the burden had been exhibited the Lord Ordinary had held that the purchaser had purchased under the burden, if it was a burden, and therefore could not withhold the price until the title was cleared. It was in that context that Lord Justice-Clerk Moncrieff observed, supra at 994:

"Now, there is no doubt that a man may expose his property for sale under any condition that he pleases, provided that condition is legal and clearly expressed, and if a purchaser purchases on the footing on which the exposure is made, he is bound, and cannot complain. If property was exposed on the express condition that the purchaser shall take his chance of the title, I am not prepared to say that that would not be a legal stipulation. But then it must be clearly expressed."

As Lord Moncrieff did not find there to be a real burden his decision that there was no ground for the suspension brought by the purchaser did not depend on the sixth head of the articles of roup. Lords Young and Craighill, on the other hand, proceeded on the basis that there may have been a real burden and decided the case similarly to the way it had been dealt with by the Lord Ordinary: the purchaser had bought with express notice of the will and its contents, "and that with whatever burdens it saddled the property"; he had accordingly taken "the risk of such burdens as there might be as a condition of his bargain" (Lord Young supra at 995). Notwithstanding the difficulty over determining whether there was in fact a real burden, Davidson is simply about construction of the contract constituted by the articles of roup, it being open to a seller to contract for the sale of a property subject to such burdens as may be imposed by the disclosed title. The relevant contractual provision must of course be clearly expressed if the seller is to exclude what would otherwise be his obligation to grant a title free from onerous burdens but there is no question but that the obligation can be qualified or excluded. Contracting out of material error is another matter. I took it to be Mr Stewart's position that this was simply not possible. Lord Jerviswoode would seem to have expressed a different opinion in Hamilton v Western Bank but this is not a question I need enter into. Notwithstanding anything said in Davidson, I am satisfied that the Articles of Roup here, as was the case with the articles of roup in Hamilton v Western Bank, were "never intended" to exclude the remedy of reduction where there was error as to something as fundamental as the identity of the subjects of sale.

[16] Young v McKellar was an action for breach of warrandice. The property to which the purchaser was granted title was 25 square yards less than the 383 square yards that had been referred to in the disposition in his favour and the pursuer accordingly sought damages. Reversing the Lord Ordinary, the Inner House held that the disposition had not superseded the full terms of the articles of roup. The articles provided that the purchaser was taken to have satisfied himself "with respect to the extent, condition, and description of the subjects." Lord Low, with whom the other members of the court concurred, held that the pursuer must be held to be barred from founding on the fact that there was an error in the alleged extent of the ground. As it appears to me, the key to understanding the distinction between Young and Hamilton v Western Bank and why Young does not support Mr Connal's argument as to the effect that should be given to the Articles of Roup in the present case, lies in the alleged materiality of the discrepancy and, flowing from that, the remedy sought. Lord Low explains the matter as follows, supra at 1347 to 1348:

"It was said that the object of such conditions in articles of roup was merely to prevent the purchaser throwing up his bargain on account of immaterial inaccuracies of description or measurement. I think that is the case to this extent, that if the inaccuracies are not material the purchaser will be barred from founding upon them to any effect, The conditions here (and they are very much in the usual form) are quite general in their terms and make no distinction between inaccuracies which are material and those which are not. Its seems to me that it really comes to be a question of remedy. If the inaccuracy was small and immaterial, I think that the conditions would bar the purchaser from taking objection in any form, but if the inaccuracy were material, and if there was anything of the nature of deliberate misrepresentations on the seller's part, or if the inaccuracy were of a kind which the purchaser could not reasonably be expected to discover, or if the parties had been under mutual error in regard to the subjects, the conditions of roup would not prevent the purchaser from reducing the sale, and it may be also claiming damages, But if the purchaser elects to abide by his purchase, I think that he must also be held to the conditions upon which the purchase was made."

Thus, a party suing on a contract must take into account all the terms of the contract and it may be that these terms, properly construed, will exclude his claim (or not, as the case may be). However, the party who seeks to have the contract reduced on the ground of material error as to the essentials and who can establish circumstances in which the remedy of reduction will be granted, will not be barred by an exclusion provision in the contract which, ex hypothesi, was never intended for such a purpose and which, in any event, it is proposed should be set aside together with everything else in the contract.

[17] Independent of his argument that the pursuer's claims for reduction and repetition were barred by the terms of the Articles of Roup was Mr Connal's contention that this was a case of unilateral error and that Scots law did not permit the remedy of reduction in a case of the uninduced error of one party alone.

[18] Before looking at the two recent cases which were cited in support of the proposition that unilateral error was irrelevant except in the most exceptional of circumstances, Steel's Trustee v Bradley Homes (Scotland) Ltd supra and Royal Bank of Scotland Plc v Purvis, it is convenient to return to McBryde's formulation of "error plus" (McBryde supra at paragraph 15-23). What I understand by that formulation is that McBryde is talking about material error as to the essentials of the contract (of which the subject matter of a contract of sale would be one) and that he takes as a starting point the proposition that one party's error, even if material and essential, will not allow that party to reduce the contract. There must also be something else. A clear example of "something else" is that the other party was also in error as to the same matter, in other words that there was mutual error. McBryde points out that there is difficulty in determining exactly what situations are comprehended by the expression mutual error: supra paragraph 15-34, but I do not understand there to be any doubt but that a situation where both parties erroneously thought that the seller had title to property of extent A and was offering to sell all of that property whereas the reality was that all he had title to and therefore all he had to sell was A - B is properly described as a situation of mutual error and that in that situation the purchaser can seek to reduce the contract. That was the factual situation in Hamilton v Western Bank and in Young v McKellar mutual error in regard to the subjects is one of the examples given by Lord Low as to where a purchaser might reduce a sale. McBryde supra at paragraph 15-34 quotes Lord Trayner in Dornan v Allan & Son (1900) 3 F 112 at 117:

"Mutual error may be pleaded in support of the contention that there is no contract binding on the parties in respect that by reason of their mutual error they were never agreed in idem."

and at paragraph 15-35 he quotes Lord Moncrieff in Sutherland v Bremner's Trs (1903) 10 SLT 565 at 568:

"Pure cases of mutual or common error in essentials are rare. The only cases in which the plea is sustained are those in which the error goes to the root of and destroys the contract, such as a mistake as to the identity of the subject sold (Hamilton v Western Bank 23 D 1033)."

In the present case I accept that enough is averred, if proved, to allow the inference that what is said to have been the pursuer's error was shared by the defender and that therefore this was a case of mutual error as to the subjects of sale (cf the analysis of Earl of Wemyss v Campbell (1858) 20 D 1090 by Lord Dunpark in Steel's Tr v Bradley Homes supra at 58). As Mr Stewart pointed out, the defender has not answered the call at page 10D of the Record to aver whether the defender was aware that it had no heritable title to the toilet area. Accordingly the possibilities seem to be that either the defender and its solicitors were not aware of the problem in the title until after the auction and that therefore this was a case of mutual error or that the defender and its solicitors were aware before the auction that the defender's title did not cover the toilets and yet did nothing whatsoever to draw that to the pursuer's attention or otherwise put him on notice.

[19] I recognise that there is a question over the materiality of the error founded on here but, having regard to the authorities mentioned above, I would see the pursuer's case in its first alternative, mutual error as to the extent of the subjects, to be relevant for enquiry. However, Mr Stewart also puts his case on the alternative basis of unilateral error on the part of the pursuer. That raises the question as to whether uninduced unilateral error, even where material and in relation to an essential matter, can ever provide the basis for reduction of an onerous contract.

[20] In Steel's Tr v Bradley Homes supra at 57, Lord Dunpark notes dicta by Lord Reid and by Lord President Clyde respectively in Hunter and Anor v Bradford Property Trust Ltd 1970 SLT 173 at 184 and 176 reiterating the general rule that uninduced unilateral error will not per se found reduction of an onerous contract. Although careful to describe these dicta as obiter and to point to Lord Watson's apparent allowance for the possibility of exceptional cases in Stewart v Kennedy (1890) 17 R (HL) 25 at 29, Lord Dunpark comes close simply to endorsing the general rule by his observation (supra at 58) that no such exceptional case has found its way into the law reports. Steel's Tr was a case of error as to price. Royal Bank of Scotland Plc v Purvis was a case of alleged error as to the nature of the contract. In the latter, again without absolutely ruling out the possibility of an exception, Lord McCluskey had difficulty in imagining a case where the general rule would not simply be applied. However, Lord Dunpark's formulation of the general rule is that uninduced unilateral error will not per se found reduction. His inclusion of "per se" is suggestive of McBryde's requirement of "error plus". Here, the "plus", that is the additional factor over and above the pursuer's error, which is relied on by Mr Stewart is the possibility, left open by its failure to answer the call at page 10D, that the defender did not act in good faith. That would be on the factual hypothesis that the defender (through its responsible employees or agents) knew that it did not have title to the toilet area, knew that the appearance of the subjects indicated that the toilet area was included, did nothing to draw this to the pursuer's attention, but, rather, relied on the exclusion provisions in the Conditions incorporated in the Articles of Roup to throw the risk of eviction from what is averred to be a material part of the subjects of sale onto the purchaser. Mr Stewart did not develop this branch of his argument in any detail. He did not go the distance of suggesting that this could be regarded as a case of misrepresentation or one where the defender knew of the pursuer's error and took advantage of it: cf Steuart's Trs v Hart supra and McBryde supra at paragraphs 15-30 to 15-33. I see that there may be difficult questions as to what is required by way of good faith in a sale of heritage by public roup (that something is required is at least suggested by the Lord Justice-Clerk's unhappiness over the seller's failure to disclose what might have been a burden in Davidson v Dalziel at 994). I am nevertheless prepared to allow this aspect of the pursuer's case to go forward to enquiry. In my opinion, its relevance can better be judged once all the facts are known.

[21] As I have already indicated, I shall allow proof before answer on all of parties' averments, with all pleas being reserved.