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Miller Group v. Park's Hamilton (Holdings) [2003] ScotCS 43 (21 February 2003)

OUTER HOUSE, COURT OF SESSION

CA204/01

OPINION OF LORD MACKAY OF DRUMADOON in the cause THE MILLER GROUP LIMITED, a company incorporated under the Companies Acts and having it registered office at 18 South Groathill Avenue, Edinburgh EH4 2LW Pursuers; against PARK'S OF HAMILTON (HOLDINGS) LIMITED, a company incorporated under the Companies Acts and having its registered office at Park House, 14 Bothwell Road, Hamilton ML3 0AY Defenders:   ________________

 

 

Pursuers : O'Neill, QC, McCormack; Boyds

Defenders : Haddow, QC, Francis; Gray Muirhead

21 February 2003

1. During August 2000, the parties concluded missives in terms of which the pursuers agreed to purchase an area of ground at Caird Street/Bothwell Street, Hamilton ("the subjects"), from the defenders, at a price of £2 million. The missives were constituted by a detailed Offer to Purchase, dated 23 August 2000, sent by the pursuers' solicitors, Boyds, to the defenders' solicitors, Holmes McKillop, and an unqualified Acceptance thereto, dated 25 August 2000, sent by the defenders' solicitors to the pursuers' solicitors.
2. Certain of the conditions set out in the Offer are of relevance to the dispute that has now arisen between the parties:

"Definitions and Interpretation

1. In this offer:-

1.1 The Completion Date" means the date occurring 28 days after purification of the last of the suspensive conditions referred to in Condition 4 of this offer or such other date as may be agreed in writing.

......

Price

2.1 The price shall be TWO MILLION POUNDS (£2,000,000)

STERLING (exclusive of all, if any, Value Added Tax thereon) payable on the Completion Day.

......

Entry

1. Entry and vacant possession shall be given on the Completion

Date.

......

Suspensive Conditions

4.1 It shall be a suspensive condition of the Missives that the Purchaser obtains in writing in terms entirely satisfactory to it acting reasonably:-

4.1.1 within 12 weeks after the date of conclusion of the Missives Reports of (a) test bores to be carried out by or on behalf of the Purchaser on the subjects to ascertain that the sub-soil conditions are satisfactory for the Purchaser's Proposed Use (b) chemical site analysis to confirm the absence of contamination and (c) technical reports to confirm that all mains services for drainage, gas, electricity, etc. are available at the boundaries of the Subjects and that connections can be made to the same at reasonable cost.

4.1.2.1 Detailed Planning Permission for the Purchaser's Proposed Use. The Purchaser will be obliged to lodge the application for Detailed Planning Permission within a period of 12 weeks from the date of conclusion of Missives. Such application will be in the joint names of the Purchaser and the Seller (but at the expense of the Purchaser) the Purchaser shall pursue the application with all due diligence and keep the Seller regularly advised on the progress thereof. The Purchaser shall use all reasonable endeavours to procure that the Planning Permission is granted as soon as reasonably possible. In the event of the said application for Detailed Planning Permission as aforesaid being refused, or being deemed to have been refused, or being granted on terms or subject to conditions which are not entirely satisfactory to the Purchaser acting reasonably, the Purchaser shall be bound to appeal such refusal, deemed refusal or unacceptable grant to the Secretary of State and to lodge such appeal within 4 weeks after the date of such refusal, deemed refused (sic) or unacceptable grant provided that in the reasonable opinion of the Purchaser there is a realistic prospect of success of such appeal. Should the Purchaser decide that there is no realistic prospect of success of such appeal and therefore decide within said four week period not to lodge an appeal as aforesaid then the Seller shall be entitled to rescind the missives without penalty.

4.1.2.2 In the event of the Purchaser proceeding with an appeal as aforesaid then the Purchaser shall have a period of eleven months from the date of lodgement of such appeal within which to intimate purification or waiver of this suspensive condition. If the Purchaser has not intimated purification or waiver of this suspensive condition by the expiry of said eleven month period then the Seller will be entitled to resile from the Missives with no expenses due to or by either party; declaring however that if at the expiry of said eleven month period the decision of said appeal is still awaited then the said eleven month period will be extended by such period as is necessary to enable the Purchaser to obtain the decision of said appeal.

4.1.3 Any necessary Road Construction Consent for the Purchaser's Proposed Use.

4.2 The Purchaser shall have the right to rescind the Missives without liability (monetary or otherwise) at any time if it considers that any provision of this Condition has not been or cannot be purified, by giving notice to the Seller to that effect.

4.3 Any notice to be given in terms of this Condition shall be validly given if given by informal writing or by fax by or to ourselves as the Purchaser's solicitors and by or to the Seller or its solicitors.

4.4 The Suspensive Conditions shall be construed solely for the benefit of the Purchaser who shall be entitled to waive it in whole or in part to the extent that it is so waived it shall be deemed to be purified.

4.5 The Purchaser shall be entitled to waive all or any of the foregoing suspensive conditions in whole or in part and to the extent that they are waived they shall be deemed to be purified."

It is to be noted that purification of a suspensive condition, which is an integral part of the process of determining the Completion Date, in terms of the Condition 1.1, can occur when the condition is waived under Conditions 4.4 and 4.5. In passing, it should also be noted that there appears to be an element of duplication in the provisions relating to waiver set out in Conditions 4.4 and 4.5, which raises the possibility that the second part of Condition 4.4 may have been included in error. Such a view is reinforced by the fact that the first part of Condition 4.4 refers to suspensive conditions in the plural, whereas the second part of the same Condition appears to proceed on the basis that there is only one suspensive condition. The missives also contain other Conditions dealing with the delivery of a valid progress of title and disposition to the pursuers at the Completion Date in exchange for payment of the price. They are of no relevance to the present dispute.

3. It is also appropriate that I mention certain statutory provisions that form part of the background to the present action. Section 47 of the Town and Country (Scotland) Act 1997 provides:

"47(1) Where a planning authority -

(a) refuse an application for planning permission or grant it subject to conditions,

(b) refuse an application for any consent, agreement or approval of that authority required by a condition imposed on a grant of planning permission or grant it subject to conditions, or

(c) refuse an application for any approval of that authority required under a development order or grant it subject to conditions,

the applicant may appeal to the Secretary of State.

(2) A person who has made such an application may also appeal to the Secretary of State if the planning authority have not given to the applicant -

(a) notice of their decision on the application;

(b) notice that they have exercised their power under section 39 to decline to determine the application, or

(c) notice that the application has been referred to the Secretary of State in accordance with directions given under section 46, within such period as may be prescribed by regulations or a development order or within such extended period as may at any time be agreed upon in writing between the applicant and the authority.

(3) Any appeal under this section shall be made by notice served within such time and in such manner as may be prescribed by regulations or a development order.

(4) The time prescribed for the service of such a notice must not be less than -

(a) 28 days from the date of the notification of the decision, or

(b) in the case of an appeal under subsection (2), 28 days from the end of the period prescribed as mentioned in subsection (2) or, as the case may be, the extended period mentioned in that subsection.

(5) For the purposes of the application of sections 48(1) and 218(1)(b) and paragraph 2(2)(c) of Schedule 16 in relation to an appeal under subsection (2), the authority shall be deemed to have decided to refuse the application in question".

Paragraphs 14 and 23 of the Town and Country Planning (General Development Procedure) (Scotland) Order 1992 (as amended) ("the 1992 Order") provide:

"14.(1) Without prejudice to section 25(3) of the Act and subject to paragraphs (1A) and (1B), an application under any of articles 3 to 6 shall not be determined until the expiry of a period of 14 days beginning with whichever of the following dates is the later -

(a) the date on which the application was received by the planning authority; or

(b) the date on which a notice in accordance with article 12(5) was published by the planning authority.

(2) Where a planning authority has received -

(a) a valid application under any of articles 3 to 6;

(b) an application for its determination that its approval is required as a condition of permission granted by the General Permitted Development Order and the planning authority has determined that its approval is required; or

(c) an application for any other consent, agreement or approval required by a condition attached to a grant of planning permission,

the period within which the authority shall give notice to an applicant of their decision or determination or referral of the application to the Secretary of State or regional planning authority shall be two months commencing on the date of receipt of the application, or (except where the applicant has already given notice of appeal to the Secretary of State) such extended period as may be agreed upon in writing between the applicant and the planning authority.

......

1. (1) Any applicant who desires to appeal -

......

(c) on the failure of a planning authority to give notice of their decision or determination or notice of the referral of the application to the Secretary of State,

shall lodge with the Secretary of State a notice of appeal".

4. Following the conclusion of missives, a planning application in respect of the subjects was lodged with South Lanarkshire Council, the local planning authority. As provided for in Condition 4 .1.2.1 of the missives, that planning application was in the joint names of both parties. It is a matter of agreement between the parties that the planning application sought detailed planning permission to re-develop the subjects. The necessary application was lodged with the planning authority on 19 October 2000.
5. During 2001, the planning authority continued with their consideration of the planning application. From correspondence lodged as productions and from the terms of the parties' pleadings, it appears clear that by late May 2001 the planning committee of South Lanarkshire Council had indicated to both parties that they were minded to grant planning consent for the erection of 60 residential units on the subjects, subject to certain planning conditions and the resolution of a planning gain issue. That planning gain issue related to the provision by the parties, as applicants for planning permission, of a financial contribution towards open space play provision. During the months following May 2001, the parties and their respective professional advisers corresponded and held certain discussions. At this stage it is sufficient to record that by 4 September 2001, when the pursuers' solicitors came to dispatch a letter of that date to the defenders' solicitors, the planning gain issue remained unresolved and certain other matters remained in issue between the parties. The letter of 4 September 2001 recorded, in outline, the pursuers' position in relation to all of those issues.
6. On 10 September 2001, the defenders' solicitors responded to the letter of 4 September 2001. They did so in terms of one letter of that date, addressed to the pursuers' solicitors, which dealt with certain of the issues between the parties and had enclosed with it a second letter, also dated 10 September 2001, which was in the following terms:

"We refer to the Missives of Sale/Purchase in respect of the subjects at Caird Street/Bothwell Street, Hamilton constituted by your formal Offer of 23 August 2000 on behalf of your clients, The Miller Group Limited, whose Registered Office is at Miller House, 18 South Groathill Avenue, Edinburgh and our Acceptance of 25 August 2000 on behalf of our clients, Park's of Hamilton (Holdings) Limited, incorporated under the Companies Acts and having their Registered Office at Park House, 14 Bothwell Road, Hamilton, ML3 OAY and on behalf of our clients, the said Park's of Hamilton (Holdings) Limited, hereby rescind the said Missives on the basis that your clients have not lodged an appeal against a refusal or deemed refusal within the four week period specified in clause 4.1.2.1 of your said Offer of 23 August 2000" ("the rescission letter").

7. The pursuers' solicitors responded to the rescission letter the following day. In their letter of 11 September 2001, they disputed that the defenders had any right to rescind the missives. By a letter dated 25 September 2001, the pursuers' solicitors waived on behalf the pursuers the suspensive conditions contained in Condition 4.1.1, 4.1.2.1 and 4.1.2.2 of the Offer ("the first waiver letter"). By a further letter dated 19 October 2001, the pursuers' solicitors waived on behalf the pursuers the suspensive condition contained in Condition 4.1.3 of the Offer ("the second waiver letter").
8. On 19 October 2001 the present proceedings were raised. The summons contains conclusions seeking (1) declarator that the defenders are bound by the contract constituted by the missives, (2) decree ordaining the defenders to implement that contract and (3) interdict against the defenders disponing or selling the subjects to another party.
9. This action came before me on the Procedure Roll to determine whether the pursuers have pled a relevant case that they remain entitled to enforce the missives against the defenders, in face of the admissions by them that they did not appeal the deemed refusal of the planning application and that they received service of the rescission letter dated 10 September 2001. The defenders moved that I should sustain their first and fourth pleas-in-law. They sought dismissal of the action in terms of the first plea-in-law -

"The pursuers' averments in relation to the defenders' agents' formal letter dated 10 September 2001 being irrelevant et seperatim lacking in specification, the action should be dismissed".

They sought decree of absolvitor in terms of the fourth plea-in-law -

"The defenders having effectually exercised a contractual right to rescind and they being thereby freed of further performance should be assoilzied from the Conclusions of the Summons."

The pursuers, for their part, sought a proof before answer on the summons and defences as adjusted.

Submissions for defenders

(8) Senior counsel for the defenders submitted that having regard to the history of events, following the conclusion of the missives, the defenders had been entitled to rescind the missives on 10 September 2001. The planning application had been lodged on 19 October 2000. Having regard to the provisions of Paragraph 14(2)(3) of the 1992 Order, the planning authority had been bound to give notice of their decision or determination or referral of the application within a period of two months, commencing on 19 October 2000. No extension of that period had been agreed in writing. The planning authority's failure to deal with the application within that two month period constituted a deemed refusal, which became appealable on 19 December 2000. Having regard to the provisions of Condition 4.1.2.1 the pursuers had been bound to appeal that deemed refusal within 4 weeks of 19 December 2000. They had not done so. As more than six months had passed since 19 December 2000, such an appeal was no longer competent (paragraph 23(2) of the 1992 Order). The purported waivers came after the contract had been rescinded on 10 September 2001. In these circumstances, the pursuers were unable to plead and had not pled a relevant case against the defenders, who were accordingly entitled to absolvitor, failing which dismissal of the action.

10. Anticipating submissions that he understood would be advanced on behalf of the pursuers, senior counsel for the defenders argued that, on a proper construction, the terms of Conditions 4.1 (in particular 4.1.2.1 and 4.1.2.2), 4.4 and 4.5 made clear provision as to what could happen in the event that the pursuers failed to appeal a deemed refusal, within the four week period referred to in Condition 4.1.2.1. It was observed in passing that in Condition 4 the words "resile" and "rescind" had been used as if they were interchangeable. Senior counsel for the defenders pointed out that, had the pursuers decided not to appeal within the four week period and had they disclosed that decision to the defenders, the defenders would have had the right to rescind the contract, by virtue of the provisions of the last sentence of Condition 4.1.2.1. Senior counsel argued that if, once the four week period had run its course, the pursuers had failed to appeal, then the defenders must be held to have enjoyed a similar right to rescind, unless, prior to the date on which the defenders sought to exercise that right, the pursuers had waived the suspensive condition relating to planning permission. Senior counsel also founded on the fact that in the event that an appeal was taken in connection with the planning application lodged, the pursuers had, by virtue of Condition 4.1.2.2, a period of eleven months to intimate purification or waiver of the suspensive condition relating to planning permission, failing which (and subject to any extension of the eleven month period) the defenders were also entitled to resile from the missives. It followed, so he argued, that in a situation where the pursuers had failed to appeal, the defenders must be entitled to rescind the contract and walk away from it, which they could competently have done, had the pursuers decided not to appeal within the four week period or if, an appeal having been taken, had the pursuers failed to intimate purification or waiver of the suspensive condition, within the eleven month period.
11. Under reference to Khazaka v Drysdale 1995 SLT 1108, Charisma Properties Limited v Grayling (1994) Limited 1996 SC 556 and T. Boland and Co. Ltd v Dundas's Trustees 1975 SLT(N) 81, senior counsel for the defenders submitted that the circumstances of the present dispute were such that the defenders had not required to have recourse to any ultimatum procedure before rescinding the contract. Such an ultimatum procedure, of the type recognised by Lord Sorn in Rodger (Builders) Ltd v Fawdry 1950 SC 1995, was not appropriate in a situation, such as the present, where the party in breach of contract could not remedy the breach. The breach here had been the failure to appeal the deemed refusal within the four week period, commencing on 19 December 2000. Having regard to the provisions of the 1992 Order, it was no longer competent for the pursuers to prosecute such an appeal. That inability on the part of the pursuers to remedy the breach of contract, by now appealing and resetting the timetable for the determination of an appeal, distinguished the facts of the present case from those in Khazaka. Senior counsel submitted that the facts of Charsima Properties were more akin to the facts of the present case, but founded particularly on the opinion of Lord Keith (as he then was) in T. Boland. In T. Boland the parties concluded missives, during 1964, for the purchase of land by the pursuers. Planning permission had been granted in principle in 1962, subject to a condition that no development of the land should take place for four years or until the National Coal Board gave clearance for it to take place, whichever was the earlier. One of the conditions of the contract had been that the defenders, as the sellers of the land, should obtain a clearance certificate from the National Coal Board, to the effect that houses could be built on the land without risk to the pursuers, T. Boland, or the purchasers of the proposed houses. That condition required that the clearance certificate be obtained from the National Coal Board prior to the date of entry, which had been 24 April 1996. In August 1966, the National Coal Board informed the pursuers that they were unwilling to give clearance for the building operations. On 2 October 1973, the pursuers, T. Boland, raised an action against the defenders, Dundas's Trustees, concluding for specific implement of the missives concluded in 1964 and, failing implement, the payment of damages. Following a procedure roll discussion, the Lord Ordinary, Lord Keith granted decree of absolvitor. In his Opinion, Lord Keith stated, between pp. 81(1) and 82(1):-

"I am of opinion in the first place that condition 4 is properly to be construed as suspensive of the binding effect of the contract as respects the mutual obligations to pay the price and to convey the subjects. I consider it clear that so long as that condition was unpurified the defenders would not have been entitled to call upon the pursuers to implement the contract. It may be that it was open to the pursuers to waive the condition as being conceived in their interests solely, in which event performance of the contract on either side might have been enforced, but there was never in fact any waiver. As regards a conditional contract of sale, the Judicial Committee of the Privy Council in Aberfoyle Plantations Limited v Cheng (supra), at p.l24, stated the following general principles:

'(i) where a conditional contract of sale fixes a date for the completion of the sale, then the condition must be fulfilled by that date;

(ii) where a conditional contract of sales fixes no date for completion of the sale, then the condition must be fulfilled within a reasonable time;

(iii) where a conditional contract of sale fixes (whether specifically or by reference to the date fixed for completion) the date by which the condition is to be fulfilled, then the date so fixed must be strictly adhered to, and the time allowed is not to be extended by reference to equitable principles'.

In the case in hand the third of these principles was held to be applicable, with the result that, the material condition precedent (which related to procurement by the vendor of the renewal of certain leases) not having been fulfilled by the date fixed for completion of the contract, the purchaser was entitled to treat the contract as at an end. In Re Langlands Farm (supra) the second of the principles laid down in the Aberfoyle Plantations case was applied. A contract for the purchase and sale of land was subject to the condition that the purchasers should obtain planning permission for building development, and that completion should take place within eight weeks of such permission being granted. Application for planning permission was made on the vendor's insistence, about three years after the date of the contract and was refused. The vendor claimed to treat the contract as at an end. Cross J. held that he was entitled to do so, in respect that the purchasers had had more than a reasonable period of time in which to obtain planning permission. In my opinion the principles laid down and applied in these cases are in consonance with the law of Scotland and are properly applicable to the present case. Where a contract for the sale of heritage is subject to a suspensive condition, I consider it plainly unreasonable and undesirable that the parties should continue to be bound indefinitely in a situation where the condition, without any failure by either party, has not been and cannot by reasonably steps be purified, and that the contract is not to be construed as having this effect unless it is shown by very clear language that such is the parties' intention. Further, I am of opinion that the ultimatum procedure described by Lord Sorn in Rodger (Builders) Limited v Fawdry (supra) at p.492 (which, as his Lordship mentioned, is itself of English origin) has no application to situations where neither party is in default of performance of an obligation incumbent upon him. It is appropriate only to the case where a party has unnecessarily or unjustifiably delayed in implementing an obligation which in terms of the contract is currently due to be performed by him. It was argued here for the pursuers that if time were not of the essence of the contract as regards the obligation to take entry and pay the purchase price, it was similarly not of the essence as regards a suspensive condition which required to be purified before entry fell to be taken or the price to be paid. But where, as in this case, the condition is not one which it lies within the power of a party to purify by his own act, the fact that the condition is not purified infers no default on his part, and there can be no question of requiring him to implement an obligation within a reasonable time, under sanction that his failure to do so will be treated as a breach of contract entitling the other party to rescind. It was also said that if in this case the defenders had delivered an ultimatum to the pursuers the latter might either have waived condition 4 or themselves have taken steps to obtain a clearance from the National Coal Board. There is, however, no general principle or authority which, in my view, warrants the proposition that the defenders were obliged to do this as a pre-requisite of treating the contract as at an end by reason of the non-fulfilment, within due time, of condition 4. Nor is there any provision to this effect in the contract. The question ultimately comes to be one of construction of the contract".

Senior counsel submitted that the last few sentences in that excerpt supported his submissions that there was no scope for the use of an ultimatum procedure where there could be no rectification of the breach and that the ultimatum procedure had no application to the exercise of a right to waive the benefit of a suspensive condition. It followed, therefore, that as the pursuers had failed to appeal the deemed refusal within four weeks and that any such appeal had become incompetent by 19 June 2001, thereafter it had no longer been possible for the pursuers to remedy their breach and thus the defenders had been entitled to rescind the missives on 10 September 2001. Whilst it would have been possible for the pursuers to waive any or all of the suspensive conditions before 10 September 2001, they had not done so. The defenders having been entitled to rescind the contract, the pursuers no longer had any rights under the contract that they could enforce. For those reasons, the defenders' first and fourth pleas-in-law should be sustained.

Submissions for pursuers

12. Senior counsel for the pursuers moved me to repel the first and fourth pleas-in-law for the defenders and to allow parties a proof before answer on the whole pleadings. His principal submission was that, having regard to the terms of Condition 4, the defenders required to invoke an ultimatum or notice procedure, before purporting to rescind the missives. As the pursuers had failed to adopt any such procedure, their purported rescission of the missives had been ineffective. The missives accordingly remained binding on the parties and had been binding on the two dates when the first and second waiver letters had been sent.
13. Senior counsel for the pursuers argued that the defenders had required to follow an ultimatum procedure, because the pursuers' failure to appeal the deemed refusal of the planning application within four weeks, as provided for in Condition 4.1.2.1, had not constituted a material breach of contract. As a subsidiary submission, senior counsel for the pursuers also argued that the requirement that the pursuers should appeal a deemed refusal, within four weeks, could not be said to be a condition suspensive of the whole contract between the parties, in the sense that if the condition was not adhered to the contract would automatically terminate, without any further action on the part of either of the parties. It was conceded that the subsidiary submission added little, if anything, to the primary one.
14. Senior counsel stressed that it was only the breach of a condition that the parties had agreed to be material or one that went to the essence or root of the contract, which allowed the innocent party to bring the contract to an end. Brief reference was made to the opinions of Lord President Dunedin and Lord M'Laren in Wade v Waldon 1909 SC 571. It was argued that the provisions relating to the timetable for applying for, and appealing against the refusal of, planning permission, set out in Condition 4.1.2.1, did not go the root of the contract. It was also important to bear in mind that the suspensive conditions in Condition 4 fell to be construed solely for the benefit of the pursuers (Condition 4.4) and that the pursuers could waive those suspensive conditions (Condition 4.5). He stressed that the terms of Condition 4 should be construed to give effect to the intention of the parties. The provision relating to the timescale for appealing against a deemed refusal was not a material term of the contract. Before breach of that condition could entitle the defenders to rescind the contract, the defenders would require to follow an ultimatum procedure capable of turning a breach of a non-material condition into a material breach of contract. Senior counsel for the pursuers acknowledged that, in the event that an ultimatum to bring about completion of the contract within a reasonable period of time had run its course, without being met, it would be then be competent for the defenders to rescind the contract. He argued, however, that the pursuers were entitled to notice that the defenders intended to treat the breach of the requirement to appeal within 4 weeks as being material and that the defenders intended to found upon the breach as justifying rescission of the contract. As the original breach of contract could not have been cured, as at the date that the defenders had sought to rescind the contract, what the pursuers had been entitled to had been notice that something required to be done by them, to bring about the resolution of the contract, otherwise the pursuers would terminate that contract. The invoking of such an ultimatum would not have involved the imposition of a new condition on the pursuers, rather the making of time as being of the essence of the contract. Had the pursuers been given such notice, it would have been for them to decide what to do. Anything they might have done would not have cured their breach of their obligation to appeal, within four weeks, against the deemed refusal of planning permission. But the pursuers could, nevertheless, have brought the contract to a final resolution. That would have been the purpose of the notice, namely to bring matters to a conclusion, by bringing about completion of the contract, failing which the breach of contract that had occurred would be translated into a material breach of contract, warranting rescission of the contract. Waiver of the suspensive condition relating to planning would have been one option available to the pursuers. Had that been done, the suspensive conditions would have been deemed to be purified, the completion date would have been determined and the purchase price would have become immediately payable, by the pursuers to the defenders. Invoking such an ultimatum procedure would have been consistent with the duty on the defenders to act in good faith and seek completion of the contract.

Decision

15. begin by considering the question as to whether, on a proper construction of the contract, constituted by the missives, time was of the essence in respect of the obligation placed upon the pursuers, as the Purchaser of the subjects, to appeal a deemed refusal of a planning application, within four weeks after the date of such deemed refusal (Condition 4.2.1.1). The first point to be made is that it is not a matter of express stipulation in the missives that time should be of the essence of that condition. Such a provision could have included in Condition 4, to the effect that the obligation to appeal a deemed refusal, within four weeks, was of the essence of the contract and that any breach of that obligation could be treated as being a material breach of contract. Nor, for that matter, was it expressly provided that, irrespective of the four week period, the pursuers would also be under an obligation to appeal any deemed refusal within the statutory time-limit laid down by paragraph 23(2)(b) of the 1992 Order and that such an obligation would also be a material condition of the contract. For these reasons, it is necessary to consider whether it is appropriate to infer from the provisions of Condition 4 as a whole, and indeed from the provisions of the missives as a whole, that the parties intended that time was to be of the essence, in respect of the obligation upon the pursuers to appeal a deemed refusal within four weeks, and that any breach of that obligation could immediately be treated, by the defenders, as a material breach of contract on the part of the pursuers.
16. In submitting that I should adopt such a construction, senior counsel for the defenders founded on the terms of the last sentence of Condition 4.1.2.1. They provide that the defenders can resile from the contract, if the pursuers decide (a) that an appeal against the refusal of planning permission or a deemed refusal of planning permission or a planning consent subject to unsatisfactory conditions has no realistic prospects of success and (b), within the four week period, "therefore decide" not to lodge an appeal (and presumably communicate that decision to the defenders). Those provisions do not, in my opinion, support the construction contended for by the defenders, namely that the parties intended that if the pursuers did not appeal a deemed refusal, within four weeks of their being in a position to do so, the defenders would forthwith be entitled to bring the contract to an end. On the contrary, the fact that those provisions refer to the defenders having a right to rescind, in certain specified circumstances, rather suggests that it was the intention of the parties that in circumstances other than those specified such a absolute right to rescind would not exist.
17. In seeking to persuade me to adopt the construction he contended for, senior counsel for the defenders also founded on the provisions of Condition 4.1.2.2. Those particular provisions deal with the situation where an appeal relating to the planning application has been taken by the pursuers. Those provisions also lay down a period of eleven months from the lodgement of an appeal, within which the pursuers have to intimate purification or waiver of the suspensive condition relating to planning permission. They provide that, if no such intimation is given, the defenders are entitled to resile from the missives, subject to the qualification that if the appeal has not been decided within the eleven month period, then it will be extended by such period as is necessary to enable the pursuers to obtain a decision on the appeal. As with the last sentence in Condition 4.1.2.1, I do not consider that the provisions of Condition 4.1.2.2 support the construction that the defenders seek to place on provisions relating to the obligation on the pursuers to appeal a deemed refusal within four weeks. On the contrary, I consider that those particular provisions also point in the opposite direction from that of inferring that the parties intended that time was to be of the essence, in respect of the obligation upon the pursuers to appeal a deemed refusal within four weeks. Such a view is further reinforced when account is taken of the terms of Condition 4.2, which grant the pursuers (as the Purchaser) a right to rescind the missives, without liability, at any time, if they consider that any provision of Condition 4 has not been or cannot be purified. Condition 4 does not contain any similar provision granting to the defenders a corresponding right of rescission.
18. Looking at the matter more broadly, it may be instructive to consider the context in which the missives fall to be construed, a context that is apparent on reading through the terms of the missives as a whole. It is reasonable to proceed on the basis that the subjects owned by the defenders was surplus to their requirements and that they wished to dispose of them at an acceptable price. The pursuers for their part are in the business of acquiring plots of land, which they develop by erecting property for onward sale. Such development depends on the granting of planning permission, in terms that allow the pursuers to proceed in a manner acceptable to them. The pursuers' willingness to pay the agreed purchase price to the defenders is explicitly dependent upon such planning consent being obtained. That is recognised by the defenders agreeing to a suspensive condition relating to granting of planning consent. Whilst that suspensive condition (Condition 4.1.2.1) is to be construed "solely for the benefit of the Purchaser", the realities are that when the missives were concluded it was in the interests of both parties that planning consent be granted. On the assumption that both parties were acting in good faith, any other view as to their intentions would be perverse. The parties had concluded a contract that, subject to the issue of waiver, could not be completed until planning consent had been granted to allow the subjects to be redeveloped on a basis acceptable to the pursuers. To facilitate that happening, the planning application to re-develop the land was to run in the name of both parties. Furthermore, as the parties had agreed on the price for the subjects, without any provision for interest, it would also appear to have been in the interests of the defenders, at least, that the planning consent should be granted as soon as possible. It is also reasonable to infer that the pursuers, when they concluded the missives, had some interest in planning consent being granted as soon as possible, albeit that the terms of any consent would also clearly be of importance to them.

In the event, when concluding missives, the pursuers agreed to certain provisions that imposed a measure of control over the timescale for applying for and being granted planning consent. The granting of a planning consent, in acceptable terms, at as early a date as possible might not necessarily be achieved, if any deemed refusal of the planning application were to be appealed by the pursuers within four weeks of it having become competent for them to do so. Indeed, the granting of planning consent at the earliest possible date might not necessarily be assisted by the appealing of a deemed refusal within the six month statutory time-limit, laid down by paragraph 23(2)(b) of the 1992 Order. That is because the application for planning consent remained live, notwithstanding that it became competent to appeal against a deemed refusal on 19 December 2000. For these reasons, when one considers the position of the parties at the time when missives were concluded, as disclosed by the whole terms of the missives, it is reasonable to infer that it was not their intention that the obligation on the pursuers to appeal a deemed refusal within four weeks should be regarded as one in which time was of the essence.

19. In these circumstances, I reject the submissions on behalf of the defenders to the effect that the defenders were entitled to rescind the contract by founding, as they did in the rescission letter of 10 September 2001, solely on the fact that the pursuers had not appealed within four weeks against the deemed refusal of the planning application. In my opinion, the pursuers' admitted failure to pursue such an appeal did not constitute a breach of a contractual obligation going to the root of the contract.
20. also reject the submissions on behalf of the defenders that an ultimatum procedure, of the nature discussed in Rodgers (Builders) Limited, did not require to be invoked by them, before they could rescind the contract. As Lord Penrose observed in Khazaka v Drysdale, at page 1114H, Lord Keith's Opinion in T Boland and Co Ltd clearly envisages the application of the principles on which the defenders relied in that case (and on which the defenders seek to rely in the present case) to a situation in which the suspensive character of the particular condition, alleged to have been breached, has been identified. Thus, when the provisions of a contract make clear, either expressly or as a matter of sound construction, that breach of a particular condition will be regarded as a material breach of contract, the ultimatum procedure is not applicable, a situation illustrated by Charisma Properties. On the other hand, where the materiality of a particular provision of a contract, requiring the performance of some obligation within a stipulated period, is not established, then the expiry of the period can operate as the trigger for an ultimatum procedure, should the party not in breach choose to invoke it.
21. Furthermore, the present case is not one in which any delay in purifying the suspensive condition relating to planning permission has arisen without any fault on the part of either party. Likewise it is not a situation, in which the suspensive condition relating to planning permission could not have been purified, by the taking of reasonable steps by the party in breach of contract. In the present case, the defenders do not seek to argue that in the absence of rescission of the contract, the parties will be required to wait indefinitely for implementation of their contract, pending the action of a third party, namely the planning authority. The pursuers' admitted failure to appeal against the deemed refusal of the planning application, within the four week period specified in Condition 4.1.2.1, gave rise to some potential for delay in the completion of the contract. When the breach of contract arose, however, that potential for delay was remediable at the hands of the pursuers. Although the four week period specified in Condition 4.2.1.1 had expired, until 18 June 2001 it would still have been competent for an appeal against a deemed refusal to have been marked. Had the rescission letter been served within six months of 19 December 2000, that would have been one option available to the pursuers. In the event, of course, the rescission letter was not served until 10 September 2001. At that stage, the suspensive condition relating to planning permission could have been purified by the pursuers negotiating or otherwise obtaining, by decision of the planning authority, the grant of planning permission, in terms that were, in the circumstances which the pursuers by then faced, acceptable to them. Furthermore, as Condition 4.4 and 4.5 expressly provide, the pursuers could have waived the suspensive condition relating to planning permission, which suspensive condition would then "be deemed to be purified", a necessary event for the determination of the Completion Date for the contract. In my opinion, as the parties had agreed to express contractual provisions that link the waiver of the suspensive conditions to their purification for the purposes of fixing the Completion Date, I see no reason why the existence of those provisions should be excluded from the options available to the pursuers for remedying their breach of contract.
22. In my opinion, it certainly cannot be said at this stage of the proceedings that had an ultimatum procedure been followed, the suspensive condition relating to planning permission could not have been purified, removing that particular bar to the fixing of the Completion Date, long before the date by which any appeal against a deemed refusal would have been determined. There are also the slightly curious provisions of Condition 4.4 that provide that the suspensive conditions in the contract shall be construed solely for the benefit of the pursuers. However those particular provisions fall to be construed, they reinforce construing Condition 4.1.2.1 along the lines I have outlined. In these and indeed in other respects, the factual circumstances of the present case differ from those that existed in T Boland and Co Ltd, on which senior counsel for the defenders founded. Indeed, requiring that an ultimatum procedure be employed in such a situation, is, in my opinion, entirely consistent with the views expressed by Lord Keith in T. Boland, at p.81(2).
23. Once it became apparent that the pursuers did not intend to appeal against a deemed refusal within four weeks of 19 December 2000, it would have been perfectly possible for the defenders to have framed and served an ultimatum procedure letter on the pursuers, calling upon the pursuers, in light of the breach of contract that had occurred, to bring the contract to completion within a reasonable period of time. Although there was some discussions, during counsel's submissions, as to the precise terms that such a letter might have adopted, I do not consider that it would be appropriate for me to go further than to indicate that I am satisfied that such a letter could be framed, giving the pursuers notice that their breach of contract was to be regarded as a material breach of contract and giving the pursuers a reasonable period of time to bring about completion of the contract.
24. In these circumstances, I am not prepared to accede to the motion made on behalf of the defenders that I should either dismiss the action, by sustaining the defenders' first plea-in-law, or grant absolvitor, by sustaining the defenders' fourth plea-in-law. Accordingly I repel the defenders' fourth plea-in-law. The case will be put out, By Order, for a further preliminary hearing at which I am minded to allow parties a proof before answer on their whole pleadings.