Sheriff C.A.L. Scott

 

CA458/05

 

PARK LANE DEVELOPMENTS (GLASGOW HARBOUR) LIMITED v JEFFREY JESNER

 

 

GLASGOW,   3 May 2006.

 

The Sheriff, having resumed consideration of the cause, sustains the defender's first plea-in-law and dismisses the action; finds the pursuers liable to the defender in the expenses of the action; allows an account thereof to be given in and remits same, when lodged, to the Auditor of Court to tax and to report thereon.

 

 

 

Sheriff

 

NOTE

 

Introduction

In this commercial action, the pursuers sought to have the defender ordained to implement his side of the bargain, all in terms of missives entered into between the parties in September of 2003. The missives had provided for the purchase by the defender of a flat known as Flat 1/4, 302 Meadowside Quay Walk, Glasgow. Accordingly, in effect, the pursuers sought payment of the purchase price. The defender declined to make payment on the basis that he had rescinded the contract as a result of the pursuers being in material breach of contract. The defender maintained that the missives, inter alia, provided for the conveyance of a car parking space whereas, in terms of the draft disposition drawn up on behalf of the pursuers, they were only prepared to convey a lesser right, namely, a right of pro indiviso common ownership (in common with the proprietors of all the other dwellinghouses in the relevant development) of the parking space, combined with what was described as "an exclusive right to use" it.

 

Defender's Submissions

Mr Davies, who appeared on behalf of the defender, invited the court to sustain the defender's first plea-in-law, at page 11 in the record, and to dismiss the action.

 

It was submitted that the pursuers required to deliver to the defender a disposition in accordance with the subjects as described in the missives. Having failed to offer such a disposition, they were not entitled to decree for implement as sought by them.

 

There were said to be three parts to the pursuers' line of argument:

 

(1) the disposition matched the description of the property in the missives;

(2) even if a discrepancy existed, the effect of condition 9 in the missives was to vary the pursuers' obligation in terms of the missives in relation to the description of the property to be offered;

(3) furthermore, even if (1) and (2) above were incorrect, and the pursuers were in breach of contract, the defender was barred from rejecting the disposition in the terms tendered. Counsel noted, at this stage, that the pursuers had, in fact, tabled three separate pleas-in-law relating to acquiescence, waiver and personal bar.

 

The essential facts, as characterised on behalf of the defender, were summarised for the benefit of the court. Missives had been concluded by letters dated 11 and 16 September 2003. The terms of those missives were agreed and they formed 5/1 of process. For the purposes of the present action, there was no reference to prior negotiations or discussions.

 

On 18 September 2003 a deposit was paid to the pursuers on behalf of the defender.

 

On 23 December 2004, the pursuers' agents wrote to the defender's conveyancing solicitors, Messrs Dallas McMillan, enclosing a "title pack" for the development in respect of which the subjects under consideration formed part. That letter was sent in respect of an entirely separate individual for whom Dallas McMillan were also instructed to purchase a separate property in the same development.

 

The title pack was said to have included a deed of conditions. However, the deed of conditions lodged in process had not been registered until 24 December 2004. Accordingly, whatever had been sent to Dallas McMillan it could not have included the registered deed of conditions.

 

On 11 January 2005, the pursuers' agents again wrote to Dallas McMillan this time in respect of the defender's purchase. (5/4 of process refers.) The letter included a draft disposition and other draft documentation, but a deed plan was not enclosed. Moreover, that letter was bereft of any "title pack" along the lines sent in connection with Dallas McMillan's other client.

 

The pursuers' agent next wrote to Dallas McMillan on 17 June 2005 enclosing the Construction Completion Notice and confirmed that the date of entry would be 14 days hence i.e. 1 July 2005.

 

(There had been no correspondence in relation to the subjects between 11 January 2005 and 11 June 2005.)

 

On 24 June 2005 Dallas McMillan replied on behalf of the defender. They requested that the draft disposition be amended to comply with the terms of the missives.

 

Thereafter, the pursuers refused to provide an amended disposition and, consequently, the defender resiled from the bargain.

 

Counsel then proceeded to deal with what he understood to be the essentials of the pursuers' argument.

 

In relation to the question of whether the description of the property in the disposition matches what was agreed in terms of the missives, reference was made to 5/1 of process being the missives themselves. Counsel noted, in passing, that the offer to purchase was a standard form document prepared on behalf of the pursuers. It dealt with the flat itself, certain common rights and, importantly, clause 1 of the offer contained the following sentence:

"The purchase price will also include title to an exclusive car parking space or in the case of the penthouse properties two exclusive car parking spaces."

 

It was submitted on behalf of the defender that "title to an exclusive car parking space" meant ownership of the land upon which the space was situated.

 

Counsel accepted that the word "title" could attract differing meanings. However, when it was used in the context of a transaction for the purchase of title to land he contended that it was clearly understood to mean ownership of land.

 

By way of example, were a seller offering title to property, he would never be understood to be offering a lease. Counsel referred to phrases such as "valid marketable title" and "transfer of title" both of which he argued suggested that the use of the word title was characteristic of a right to ownership. In contrast, the offer of a pro indiviso share in the preamble of the offer, meant that the nature and extent of that entitlement was clearly defined. There was no question of outright ownership in the common parts or areas being vested in the defender alone.

 

Item 15 in the defender's list of authorities was an extract from the Concise Oxford Dictionary (9^th Edition). The definition of the word "title" when considered in relation to matters of law was therein described as "the right to ownership of property...". That definition was to be compared with the entry in the shorter Oxford English Dictionary (3^rd Edition) founded upon by the pursuers. In that volume, "title" was defined as a "legal right to the possession of property (esp. real property); the evidence of such right; title deeds." Counsel submitted that the Concise Oxford Dictionary was more modern and that its definition was therefore preferable. The 3^rd Edition of the shorter Oxford English Dictionary had been published in 1944. The first item on the pursuers' list of authorities was, indeed, a revised edition. However, it was unclear as to when it had been brought into publication.

 

It was the defender's contention that the pursuers, in terms of the missives, had offered a heritable title to the car parking space in question. When it came to the draft disposition, No 5/4 of process, all that was offered was an "exclusive right to use..." the parking space. A deed plan had not been forwarded to the defender's solicitors. In the submission of counsel, an exclusive right to use was plainly different from what was contracted for in the missives.

 

Were it to be argued on behalf of the pursuers that what was offered was, broadly speaking, what was on offer in the missives, counsel was, nevertheless, insistent that the pursuers were obliged to convey the property as described in the missives and that the subject of the conveyance required to be in the nature of a heritable title.

 

Counsel also recognised that the pursuers might seek to maintain that the missives ought to be construed under reference to the deed of conditions. In this regard, the defender's response was threefold. Firstly, the missives themselves were unambiguous and did not require reference to be made to other documents. Secondly, should any ambiguity exist, the clause should be interpreted contra proferentem. The pursuers were the authors of the standard form offer and they sought to rely upon its terms for the purposes of this action. Thirdly, the deed of conditions was not in existence as at the date of conclusion of missives.

 

Additionally, were the pursuers to rely upon the background factual matrix, counsel was quick to point out that there were no averments in their pleadings to enable them to do so.

 

Turning to the provisions within clause 9 of the offer, it was the defender's contention that this was plainly being relied upon to avoid the inescapable conclusion that the disposition did not meet the terms of the missives.

 

(At this stage in the debate, Mr Sheridan, for the pursuers, conceded that clause 9 was not to be put in issue as far as the pursuers were concerned, with the result that counsel proceeded, forthwith, to deal with the relevance or otherwise of the pursuers' third, fourth and fifth pleas-in-law.)

 

At the outset, counsel observed that, under the broad heading of "personal bar", the pursuers' argument proceeded upon the assumption that the pursuers were otherwise in breach of contract. Reference was made to article 2 of condescendence and counsel highlighted the undisputed fact that the "title pack" had been exhibited to Dallas McMillan in relation to an entirely separate purchase by an entirely separate individual client. This, he submitted, was a poor starting point as far as the pursuers were concerned. Their case was predicated upon the proposition that the defender was personally barred from resiling because he had failed to respond to information specifically imparted to another third party.

 

There was no averment tabled on behalf of the pursuers to the effect that the defender, or his agents, had, at any stage in time, "uttered" the defender's acceptance of the title proffered. There had been no representation whatsoever on behalf of the defender. The fact that he did not intimate objection to the title could not, submitted counsel, constitute a reasonable belief for the purposes of waiver.

 

As regards the requirements of the doctrine of personal bar, counsel made reference to McBryde on Contract (2^nd Edition) at para 25-06. Three elements were therein identified by the learned author and counsel maintained that the pursuers' pleadings were bereft of all three. Personal bar, according to Professor McBryde, required (1) words or conduct by the defender; (2) giving rise to a justifiable belief in the pursuers; and (3) actions by the pursuers to the pursuers' prejudice.

 

The letter of 11 January 2005 was incomplete. No plan was included nor was there any "title pack". In any event, esto the words or conduct of the defender had somehow given rise to a justifiable belief as far as the pursuers were concerned, no actions had been taken by the pursuers on the basis of that belief. The pursuers' position, on record, was encapsulated within one sentence, in article 2, at page 6, lines 4-6, viz "in all of the circumstances the defender's agents led the pursuers to believe that the defender was satisfied with the extent of the title and disposition and the pursuers relied upon this to their prejudice."

 

Counsel queried the way in which any issue of reasonable belief might have arisen given that the overriding position adopted by the pursuers was that they were not in breach of contract.

 

Reference was made to the case of William Grant & Sons Ltd & Others v Glen Catrine Bonded Warehouse Ltd & Others 2001 SC 901 in which the First Division of the Inner House held that it was essential to the doctrine of personal bar that the defender should have been induced to act and change their position by their reasonable belief that the pursuers were consenting, and that the defenders in that case had accepted that they had used the name "Grant" because they believed they were entitled to do so, not in reliance on a belief induced by the pursuers. Accordingly, as far as personal bar was concerned, there was an absence of all three elements identified by Professor McBryde and, whatever else, the court was invited to repel the pursuers' fifth plea-in-law and to excise any related averments.

 

The phrase "engendered the belief" was adopted on behalf of the pursuers in connection with their "waiver argument". This was to be found in the final sentence of article 2. Once again, counsel maintained that the pursuers were, in effect, founding upon the silence of the defender/purchaser. As with personal bar, the pursuers' approach to this aspect of the case did not square with their principal position to the effect that the disposition, as framed, was what they were entitled to offer under the missives.

 

The well known case of Armia Ltd v Daejan Developments Ltd 1979 SC (HL) 56 was cited by counsel and he referred specifically to a passage in the opinion of Lord Fraser at pp 68-69. From that passage counsel identified two broad elements which fell to be applied in the present action. Firstly, there had to be words or conduct by the defender indicating that he was abandoning some right. Secondly, the sellers/pursuers had to have conducted their own affairs on the basis that the defender had abandoned that right.

 

There was no indication whatsoever from the defender that he was abandoning any right. In addition, there was no indication that the pursuers had conducted their affairs on the basis that the right had been abandoned. They merely continued with the transaction because (and this is what was said on their behalf on record) they were entitled to do so.

 

In Miller v Dixon 2002 SC (PC) 30 the expression "waiver" had been considered albeit in an entirely different context. At p 43, Lord Bingham of Cornhill stated that:

 

"In most litigious situations the expression "waiver" is used to describe a voluntary, informed and unequivocal election by a party not to claim a right or raise an objection which it is open to that party to claim or raise."

 

In that regard, counsel argued that the pursuers' pleadings were woefully short of what Lord Bingham seemed to consider was required.

 

As far as the pursuers' third plea-in-law was concerned, counsel pointed out that the plea, in its proper terms, should embrace mora, taciturnity and acquiescence. This was a plea which was rarely sustained. The classic statement of the law was to be found in the case of Assets Company Ltd v William Bain and Others (1904) 6F 692 at 705 where the Lord President, as part of the majority of a Court of Seven Judges made it clear that "...the plea of mora cannot be successfully maintained merely on account of a lapse of time, but that the person stating it must also be able to shew that his position has been materially altered, or that he has been materially prejudiced, by the delay alleged".

 

In counsel's submission, no conduct by the purchaser/defender had been averred by the pursuers which had been designed to mislead the pursuers in any way. In any event, nothing approaching an excessive or unreasonable delay could be founded upon in the present action. The matter of the title had been raised by the defender before anything else in the transaction was to be done and, in particular, prior to the settlement date.

 

On a separate point, counsel referred the court to clause 15 within the missives. That, in itself, made it clear that there was to be no deviation from or amendment to the missives.

 

Pursuers' Submissions

The agent for the pursuers, Mr Sheridan, invited the court to sustain the pursuers' second plea-in-law and to grant decree de plano. That, he submitted, followed from a proper construction of the missives. Should the court not find favour with that argument, then Mr Sheridan contended that a proof before answer should be allowed.

 

There were 2 parts to his submission, namely,

 

(a) that the missives, when properly construed, had been met by the draft disposition offered; and

(b) that if the foregoing proposition were incorrect, the defender could not now assert that what he had been offered was insufficient and could not resile as a consequence of the application of the "principles" of personal bar, waiver or acquiescence.

 

The court was reminded, that in terms of the well-known case of Jamieson v Jamieson 1952 SC (HL) 44 averments should only be excluded from probation where they were found to be clearly irrelevant and Mr Sheridan submitted that, whatever else, the pursuers' averments regarding personal bar and the like could not be characterised in that way.

 

In recognition of the central issue in the case, namely, the question of construction of the contract between the parties, Mr Sheridan turned to the missives. Understandably, he posed the question, "what do the words mean?" He revisited the second sentence in clause 1 of the offer and described that sentence as "the kernel of the case".

 

In seeking to attribute appropriate meaning to what had been agreed, Mr Sheridan made reference to passages from Gloag on Contract at pages 399-400, regarding the words in question being read in their ordinary sense. The learned author had declared that the rule was too wide to be of much use in practice. "Very few terms are unambiguous, and disputes commonly arise because expressions have been made use of which may legitimately be construed in more than one way. Perhaps as a general rule it is more useful to say that "a business sense will be given to business documents".

 

More recently, the matter had been considered by Professor McBryde in his work on contract at paragraph 8-03 of the second edition. "Leaving aside exceptional cases - such as when the contract contains a clerical error - a contract is construed according to what the parties have said, not what they intended to say. As it has been put: "the question to be answered always is, "What is the meaning of what the parties have said?" not, "What did the parties mean to say?"". Lord President Dunedin observed any famous dictum in Muirhead & Turnbull v Dickson (1905) 7F 686 that, although both parties to a contract might have thought they were contracting on a particular basis, "commercial contracts cannot be arranged by what people think in their inmost minds. Commercial contracts are made according to what people say".

 

Mr Sheridan also referred to the case of Bank of Scotland v Dunedin Property Investment Co Ltd 1998 SC 657 and, in particular, a passage at p661E-G within the opinion of Lord President Rodger. "For my part, however, in the present case I am content to follow Lord Steyn's general guidance that in interpreting a commercial document of this kind the court should apply the "commercially sensible construction" of the condition in question: Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1998] AC 749 at p771A. I also find it helpful to start where Lord Mustill began when interpreting the reinsurance contracts in Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at p384B-C: "I believe that most expressions do have a natural meaning, in the sense of their primary meaning in ordinary speech. Certainly, there are occasions where direct recourse to such a meaning is inappropriate. Thus, the word may come from a specialist vocabulary and have no significance in ordinary speech. Or it may have one meaning in common speech and another in a specialist vocabulary; and the content may show that the author of the document in which it appears intended it to be understood in the latter sense. Subject to this, however, the inquiry will start, and usually finish, by asking what is the ordinary meaning of the words used." I begin therefore, not by enquiring into the state of the knowledge of the parties to the contract, but by asking myself what is the ordinary meaning of the words "in connection with" in Condition 3."

 

A passage in Rennie & Cusine on Missives (2^nd Edition) at para 4.109, seemed to be founded upon by Mr Sheridan in support of the proposition that, in the present case, it would be open to the court to look to the deed of conditions as an aid to construction. Reference was made to that deed, being 5/10 of process. Mr Sheridan highlighted those aspects of the "definitions and interpretations" section relating to "basement car park" and "basement car park common parts" where they appeared at p1 of the deed. He also invited the court to take notice of what was said regarding the "exclusive car parking space" (see p4) together with the clause dealing with an "owner's rights of common property" (see p6).

 

When all these various features were taken into account, Mr Sheridan returned to his original submission which was, of course, to the effect that when properly construed, the missives did not, in fact, provide for a title, in the sense of ownership to any exclusive car parking space. The particular sentence in clause 1 of the offer merely embraced an entitlement to exclusive use of such a parking space and nothing more. That was a construction which, in Mr Sheridan's submission, coincided with commercial sense and, accordingly, he urged the court to adopt such a construction.

 

Utilising the same broad heading of "personal bar", Mr Sheridan accepted that the court in Gatty v Maclaine 1921 SC (HL) 1 had set out the definitive test for the application of the doctrine of personal bar. Moreover, he also recognised that the case of Armia Ltd v Daejan Developments Ltd laid down the appropriate test for the application of waiver. Nevertheless, Mr Sheridan maintained that silence could constitute personal bar and in this regard he made reference to the case of James Howden & Co Ltd v Taylor Wood Property Co Ltd 1998 SC 853. Indeed, he refined his line of argument in such a way as to suggest that the pursuers were founding upon "an absence of change" in so far as the circumstances following upon the missives were concerned. It was argued that the defender ought to have resiled from the contract within a reasonable period of time. Whatever else, even if the court took the view that the pursuers' averments in relation to personal bar were of doubtful relevancy a proof before answer should nevertheless be allowed.

 

In a short reply, counsel for the defender observed that whilst it now seemed that the pursuers were purporting to rely upon an implied term regarding rescission within a reasonable time, there were, of course, no pleadings to that effect. Consequently, counsel submitted that that line of argument should simply be disregarded.

 

In the case of James Howden & Co, the missives had specifically provided that either party might resile from the contract without liability in the event that "the necessary waiver, consents and discharges" had not been obtained by a particular date. Counsel, therefore, sought to distinguish that decision from the circumstances in the present case.

 

Returning to the fundamental issue of construction, counsel submitted that were the court to find to favour with the pursuers' submissions, that would amount to the imposition of the commercial intentions of the developer (viz. the pursuers). In seeking to arrive at a commercially sensible construction, counsel maintained that the court required to base its decision upon commercial factors which were both relevant to and known by both parties to the contract. However, in the final analysis, the court had to construe the contract according to what had been stated in the missives not what either party intended to say.

 

Decision

In my opinion, the defender's submissions are to be preferred. As far as the principal construction point is concerned I am satisfied that the second sentence in clause 1 of the offer provides for a "title to an exclusive car parking space" in the sense of ownership of the land in question. The construction favoured by the pursuers was that the solum of the car park would be the subject of common ownership. That may have been their intention, but, to my mind, that is not what the missives say. Indeed, the use of the word "exclusive" tends to contradict any notion of common property.

 

Equally, in my view, it is inappropriate to utilise the provisions contained within the deed of conditions for the purposes of construing what had been agreed in the missives. The missives themselves were entered into long before the deed of condition had been registered and, in any event, I was not persuaded that, in the present case, the consideration of extraneous documentation was merited. I have concluded that there was little or no ambiguity attaching to the relevant clause in the missives. In any event, whatever may or not appear within the deed of conditions, it seemed to me that its terms did not, in fact, assist in construing what had been agreed between the parties.

 

I have also given effect to the defender's submission regarding what was referred to, in broad terms, as the pursuers' "personal bar argument". I regret to say that Mr Sheridan seemed to have no answer to the various criticisms levelled by counsel for the defender. These criticisms were, in my opinion, substantial and, in the absence of cogent contradiction, justify the dismissal of the entire action. In so far as I understood the pursuers' ultimate position, they founded upon "an absence of change". However, I was left unclear as to which of pleas third, fourth and fifth the pursuers sought to associate with such a feature. That may, in any event, be academic, since I consider that the pursuers' averments are, indeed, sufficiently irrelevant and unspecific to preclude any of these pleas being sustained by the court.

 

For the avoidance of doubt, in so far as the pursuers sought to found upon an implied term regarding rescission within a reasonable time, I have disregarded that line of argument on the basis that there is no proper foundation for it within their pleadings.

 

Accordingly, the action has been dismissed with expenses in favour of the defender thereby reflecting complete success on his part.

 

 

SHScott.LD.P Lane.2303