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EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
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Lord Carloway
Lord Drummond Young
Lady Dorrian
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[2006] CSIH 67
XA95/07
OPINION OF THE COURT
delivered by LORD CARLOWAY
WALTER CONNELL &c
Pursuers & Respondents
Against
JOHN HART &c
Defenders & Appellants
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Pursuers and Respondents: Bartos; Simpson & Marwick W.S., (for Ness
Gallagher & Co, Wishaw)
Defenders
and Appellants: Ellis QC, Brodies WS (for Ross Rodgers & Co, Rutherglen)
19 December 2008
1.
Agreed Facts
[1] By Missives
dated 13, 21 and 28 June and 7 and 12 July 2005, the pursuers
agreed to sell to the defenders certain subjects in Salsburgh, Shotts,
Lanarkshire, comprising five acres of land upon which, in the year 2000, the
pursuers had constructed Woodlands House. Condition 9 of the missives, so far as
relevant, stipulated:
"...We
[the pursuers' law agents] shall
obtain a Coal Mining Report and you will have a period of ten days from receipt
of same in which to satisfy yourselves [the
defenders' law agents] in relation to the terms of same. In the event that
the report contains anything which in the opinion of the Chartered Surveyor
appointed by your clients to inspect the subjects would adversely affect the
mineral stability of the subjects then your clients will be entitled but not
bound to resile from the bargain...".
A period of ten days was allowed for the defenders to
intimate, in writing, any decision to resile.
[2] A Coal Mining
Report from the Coal Authority dated 15 July was duly obtained by the
pursuers' agents. In relation to past
underground mining it stated that:
"The
property is within the likely zone of influence on the surface from workings in
4 seams of coal at shallow to 60m depth, the last date of working being 1938...".
On the other hand it also reported that the subjects were not
within such a zone of any present or proposed workings. In relation to shafts and adits, the report
continued:
"Within...20
metres of the property there is 1 mine entry...[W]e have no record of what steps,
if any, have been taken to treat the mine entry.
For
an additional fee...the Coal Authority will provide a supplementary Mine Entry
Interpretative Report. The report will
provide a separate assessment for the mine entry... It will give details based on information in
the Coal Authority's possession, together with an opinion on the likelihood of
mining subsistence damage arising from ground movement as a consequence of the
existence of the mine entry...".
A sketch plan showed the location of the mine entry relative
to the House, placing it well within the five acre site. The Report confirmed that: the Coal Authority
records did not disclose any fault or other line weaknesses affecting the
stability of the property; the subjects were not within the boundary of any
past, present or future opencast mining operations; and the records did not
disclose any damage notices or claims over the previous ten years or thereby.
[3] The Coal
Mining Report was sent to the defenders' agents, who received it on 20
July. These agents instructed a Mine
Entry Interpretative Report, but such reports take about ten days to prepare
and it only became available on 1 August. Quantum
valeat, it stated that the House was not at risk from the presence of the
mine entry. Meantime, however, the first
defender had been shown the Coal Mining Report. On the basis of its content, notably the
presence of the four coal seams worked prior to 1938, and without further
enquiry, the first defender decided that he did not wish to proceed with the
purchase.
[4] The Coal
Mining Report was sent to the surveyor instructed by the defenders'
agents. This was Robert Clelland MRICS,
an associate surveyor with Harvey Donaldson & Gibson, Chartered Surveyors,
Glasgow. Mr Clelland produced
written "comments" in a letter dated 28 July as follows:
"We
note the contents of the report and accordingly recommend the points raised are
brought to the attention of the property insurers. An additional report to determine the status
of the mine entry will be required before a full assessment can be made by the
underwriters.
Should
it be determined that the mine entry has not been treated, then this may well
have an adverse bearing on the mineral stability of the subjects. Consolidation
works would then be necessary to render the entry shaft safe...
We
are unable to provide any assurance that the future stability of the property
will not be adversely affected by the presence of the mine entry,
notwithstanding satisfactory execution of works necessary to stabilise the
shaft, should they be required".
No specific mention was made
of the pre-war workings on the four coal seams.
[5] On the same
date as the surveyor's letter, the defenders' agents wrote to the pursuers'
agents formally resiling from the missives:
"and
that on the basis that, in the opinion of our clients' Chartered Surveyor, the
Coal Mining Report discloses matters which could adversely affect the mineral
stability of the subjects".
In a covering letter, the defenders' agents explained that
their instructions had followed discussions between the defenders and the
surveyor concerning the content of the Coal Mining Report.
2.
Pleadings, the Defenders' Evidence and the Objection
[6] Thus far the
facts are not in dispute and they are in accordance with the written pleadings
of the parties, in which the comments in the surveyor's letter are agreed as
amounting to a "written opinion". Having
referred to the content of the Coal Mining Report, the defenders aver:
"Mr
Clelland's opinion was that, based on the coal mining report, he would not,
because he could not, [punctuation added]
provide any assurance on mineral stability nor did he think insurance would be
available nor could he provide any assurance that resale of the property would
not be affected....The defenders had discussed the matter directly with the
surveyor. Further the defenders were not
satisfied by the coal mining report that the property would not be at risk from
mineral instability...".
In so far as these averments refer to the surveyor's opinion,
they reflect the content of the letter.
[7] When the case
came to proof, the defenders elected to adduce Mr Clelland in evidence in
advance of the testimony of the first defender.
Mr Clelland said that he had been engaged to carry out a mortgage
valuation inspection of the subjects (Transcript of Evidence p 197). He accepted that he had been asked to give his
opinion in relation to "mineral stability", which he defined as meaning "a
measure of the risk posed to buildings from past underground mining
activity". But Mr Clelland quickly
said that he did not measure risks and was not an expert in "this field"; not
being a mining surveyor. When asked for
his view on the effect on mineral stability of the content of a Coal Mining
Report, he replied (p 199):
"I
cannot say one way or the other. I can only express an opinion. I cannot give a
specific answer as to whether a site would be affected by mineral stability (sic) and the effect of any mineral
stability on a given site. That is not
really my job. It is outwith my remit".
He explained that the content of the Coal Mining Report had
caused him to form the view that (p 202):
"it had to be referred to the property's
insurers for further consideration... Because
there may have been a risk attached to it.
...once
coal is removed from the ground it leaves a void and that if the void collapses
then it could lead to mineral subsidence on the ground surface and so it is a
factor that has to be taken into account in the property insurer or
underwriter's risk assessment".
Having spoken about mine shafts having, on rare occasions,
caved in on themselves, Mr Clelland was asked the following question (p 204):
"So
you talked about a risk in relation to the seams and you talked about a risk in
relation to the shaft...Is that risk an adverse [or] beneficial effect?"
At this point the pursuers objected to any line of evidence
designed to elicit an opinion from Mr Clelland other than that contained
in his letter. The basis for the
objection was the lack of fair notice given in the defenders' averments (supra). The objection was repelled by the Sheriff
under reservation of all questions of competency and relevancy. Mr Clelland's reply was (p 205):
"I presume that it would have an
adverse effect".
When asked what effect the risk might have other than on
value, he said (p 205):
"I
suppose there could be structural damage if there was collapse or caving in but
that is getting out of my field, my area of expertise, as it were".
Struggling somewhat with the surveyor's answers, the
defenders' counsel pressed on. Mr Clelland
explained that he did not think it would have been a good idea to accept the
terms of the Coal Mining Report without investigating further. He accepted that, standing the terms of the
missives, the defenders had an option of either accepting the risks or
resiling. But when asked what he would
have advised and what his opinion was, he responded (p 210):
"It is not really for me to say. It is not my place really".
[8] The defenders'
counsel moved swiftly on to a different topic and asked Mr Clelland
whether he had had any other contact with the defenders after sending his
letter. He responded (p 212):
"From
the file there is a note asking me to speak to [the first defender] regarding
the Coal [Mining Report]. So I presume I
spoke to him but it is that long ago that I cannot honestly remember the
details of that".
This was not pursued further. Mr McClelland then
confirmed that his view, with regard to mineral stability, remained as stated
in his letter. When it came to the first
defender's evidence, he too was asked if there was further contact with the
surveyor after the letter. He answered (p 225):
"Just
a 'phone call to the surveyor asking him his advice on it. His advice was exactly as I have said it
there. It could affect the mineral
stability and that it would make it harder to resell in the future. Those are the two things that I took from
him".
The first defender said that he could not remember anything
else in the call and confirmed that the advice, which he had received from Mr Clelland,
was the same as was contained in the letter (p 227). The first defender regarded the Coal Mining
Report as demonstrating that there was a "big enough risk for me". The surveyor had advised him that the content
of the Coal Mining Report would have an adverse affect on the resale value of
the subjects.
3.
The Sheriff's Judgment
(a)
OBJECTION
[9] The Sheriff
ultimately repelled the objection to evidence which might have suggested that
the opinion expressed by the surveyor was different from that in his letter. He considered that the objection was based on
too strict a reading of the record. He
explained that (Note para 23):
"Answer 4
does state that the Defenders discussed the matter directly with the surveyor. While it does not cast any light on what the
surveyor may have said in the course of that discussion, the evidence I heard
was to the effect that the surveyor said that the contents of the Coal Mining
Report "could" affect mineral stability.
That...is really what he said in his written report. On that basis...reading the pleadings as a
whole, including those pleadings that deal with the contents of Mr Clelland's
written report, adequate notice was given".
(b)
MERITS
[10] The Sheriff made
a number of findings-in-fact consistent with the more general narrative given
under heading 1 (supra). On the critical issue of the surveyor's
opinion, he quoted from the letter of 28 July ((supra) finding-in-fact 16). He then found as fact that:
"17.
Mr Clelland made no reference in his written opinion of 28th
July to the effect on the subjects of the four seams of coal.
18.
Around the time Mr Clelland issued his written opinion he also had a
telephone conversation with the First...Defender.
In the course of that telephone conversation he expressed the view that
what was disclosed in the Coal Mining Report could affect the mineral stability
of the subjects of sale.
...
"21.
Mr Clelland's opinion was that what was disclosed in the Coal Mining
Report could affect the mineral stability of the subjects of sale. That did not amount to an opinion that it
would affect the mineral stability".
On this basis he found that the defenders had not been
entitled to resile under the provisions of Condition 9. The pursuers were therefore entitled to
damages for breach of contract in that respect and decree was pronounced
accordingly.
[11] The Sheriff's
reasoning is encapsulated in the following extracts from the Note attached to
his interlocutor:
"39.
[The pursuers] submitted that this is
one of those cases where the enquiry starts and finishes by asking what the
ordinary meaning of the words used [in condition 9] is. I am satisfied that this submission is well
founded.
40. ...on a plain reading of condition 9 what
it does is this. It prescribes the
mechanism the purchasers, through their solicitors, can employ to satisfy
themselves in relation to the terms of the Coal Mining Report once that is
obtained. That mechanism is this. The purchasers can show their surveyor the
Coal Mining Report and should that surveyor express the opinion that the report
contains anything that would adversely affect the mineral stability of the
subjects the purchasers are entitled to resile...
41.
...The Chartered Surveyor is not simply being asked to express an opinion as to
whether there is a risk to mineral stability. ...the clause does not say "might"
affect mineral stability. "Would"
carries a meaning of probability, not possibility. The surveyor's task goes beyond simply stating
whether there is a possibility. He is
being asked to quantify the risk and express an opinion as to whether the risk
has moved from possibility to probability...
47.
In his written opinion Mr Clelland
makes no mention at all of the effect of the coal seams and former mine
workings on mineral stability. He
focuses entirely on the mine entry and says "should it be determined that the
mine entry has not been treated, this may well have an adverse bearing on the
mineral stability of the subjects". That...falls short of probability. It falls short of an opinion that the mine
entry "would" affect mineral stability.
48.
In [the] telephone call...Mr Clelland...expressed
the view...that what was revealed in the Coal Mining Report could effect (sic) mineral stability. This of course is precisely the expression
used by the Defenders' solicitors when they wrote formally purporting to
resile... "May well" and "could" mean much the same thing. Both mean there is a possibility... [W]hen,
during this telephone conversation, Mr Clelland said there could be an
effect on mineral stability that accurately described his opinion...
50.
Had Mr Clelland stated...that the
seams of coal, the workings or mine entry described in the Coal Mining Report
affected mineral stability or would affect mineral stability that would end the
matter. That however is nothing to the
point. He did not. The opinion expressed by him to the Defenders
fell short of what was required by condition 9. It did not move from the realm of possibility
into that of probability".
4.
Submissions
(a)
DEFENDERS
[12] The defenders moved the court to recall the Sheriff's
interlocutor and to assoilzie the defenders.
The submissions made at the Bar were foreshadowed by a helpful and
detailed written version. The following
paragraphs are an attempt at a composite summary of both written and oral
argument. The fundamental proposition
was that the Sheriff's interpretation of Condition 9 was one which defied
common sense. He had imported into the
required opinion from the surveyor the concept of "probability", which was not
contained in the Condition. The
alternative interpretation, which the defenders sought to apply, was, reduced
to its essentials, that "would" meant "could".
[13] It was appropriate to interpret the Condition looking at the
information available to the parties at the time they entered into the
contract. At that time, it must have
been anticipated that a surveyor might not reasonably be able to express any
view about mineral stability as a matter of probability, given that the
information available, within what was a short timescale, might not have
included the content of a Mine Entry Interpretive Report. Further investigations might have been
required. The interpretation of mining
reports was not the province of a surveyor who inspects and values houses. Such a surveyor would, however, be expected
to have expertise on whether what was raised in a Coal Mining Report would have
an effect on the value or "saleability" of the subjects.
[14] The Sheriff's interpretation defeated the purpose of the
condition. A common sense view of the
Condition was that it was designed to give the purchasers protection in respect
of mining conditions, about which they may have known nothing, whilst at the
same time giving the pursuers comfort in that the defenders could not resile
capriciously or without a reasonable basis. What was intended was that the Surveyor could
say whether any entries in the Coal Mining Report would (unless clarified by
further investigation) have an adverse effect on the value or "saleability" of
the subjects.
[15] It was necessary to consider what was meant by the words
"mineral stability". It could not mean
literally how stable the minerals were.
The best meaning was that it referred to the view which the housing
market would form of the subjects as a result of what was revealed in the Coal
Mining Report in the absence of further investigations. A less attractive alternative was that it
related to the stability of the physical subjects themselves. There was no evidence that "mineral
stability" was a term of art. One of the
background factors which may be of importance was that the risk of instability
may have an effect on the value and "mortgageability" of the subjects.
[16] Another issue was what was meant by the phrase "would adversely
affect". It may simply be that a risk
revealed in the Coal Mining Report would adversely affect the mineral
stability. The use of the word "would",
as opposed to the word "will", must have been intended to introduce some
"conditionality". That raised the
question of what circumstances were intended to fulfill the condition and lead
to instability. Some condition or event
would have to occur before there were an effect on the stability. But the condition or event had not been
defined.
[17] The authorities on the interpretation of contracts made it
clear that the court is not bound to take a "literalist" approach. Indeed House of Lords' guidance, which has
been followed in Scotland,
urges a common sense approach. Lord Hoffman's
first principle in Investors Compensation
Scheme v. West Bromwich Building
Society [1998] 1 WLR 896 (at p 912) is that proper interpretation
involves adopting the meaning that words used would convey to a reasonable
person having all the background knowledge which would be available to the
parties. His fourth principle is that
the meaning which the words would convey to a reasonable person is not the same
as the meaning of the words. His fifth
principle is that a detailed semantic analysis may need to yield to a common
sense view (see also Antaios Campania
Naviera v Salen [1985] 1 AC 191, Lord Diplock at pp 200 -
201). Background can have a very great
effect on correct interpretation (Mannai
Investment Co v Eagle Star Life
Assurance Co [1997] AC 749, Lord Steyn at pp 770 - 771, Lord Hoffman
at pp 773 - 775; see also Sirius
International Insurance Co v FAI General Insurance [2004] 1 WLR 3251,
Lord Steyn at pp 3257 - 3258). Circumstances may be important in rejecting an
interpretation which is "uncommercial and literalistic". These methods of interpretation have been
received into Scots law (Bank of Scotland
v. Dunedin Property Investment Co 1998
SC 657, Lord President (Rodger) at p 661, Lord Kirkwood at
p 670, Lord Caplan at p677; City
Wall Properties (Scotland) v Pearl
Assurance [2007] CSIH 79, Lord Philip at para 23). A commercially sensible interpretation will
be favoured. Where there is a choice of
meanings, the most reasonable in context, will be adopted. However, it was conceded that if the plain
words point to a particular meaning, then that may be an end of the matter
whatever the result.
[18] On the evidence, the defenders had been entitled to resile. The evidence was clear that the matters in the
Coal Mining Report had demonstrated a risk to the physical stability of the
surface of the property. They also,
without further investigation, affected the "saleability" of the subjects. They would have affected the saleability of
the subjects in the future even if further investigation had revealed that the
old mine shaft had been properly stabilised.
[19] Based on the evidence, certain alterations required to be made
to the findings- in-fact. In particular,
findings 17 and 21 should have read as follows:
"17.
Mr Clelland
was of the view that the reference to the four seams of coal could also affect
the stability of the subjects. Mr Clelland
made no specific reference in his
written opinion of 28th July to the effect on the subjects of the
four seams of coal"; and
21.
Mr Clelland's opinion was that what
was disclosed in the Coal Mining Report could affect the mineral stability of
the subjects of sale. That did not
amount to an opinion that it would affect the mineral stability In
his view what was revealed could cause structural damage. This is because where coal is removed it
leaves a void and if the void collapses it could lead to mineral subsidence on
the ground surface. The risk of
structural damage would be an effect on "mineral stability". It would be an adverse effect. The matter would need to be referred to the
purchasers' insurers. He could not
provide any assurance to the purchaser about mineral stability. He advised the purchasers not to accept the
terms of the Coal Mining Report without further investigations. The saleability of the subjects may well have
been affected by the presence of the mine entry. Such an effect may not have been removed by
satisfactory execution of stabilisation works".
[20] In relation to the objection, the Sheriff
had been correct in repelling it, standing the defenders' averments. In any event, even if the evidence were
excluded, it would not prevent the defenders succeeding in the appeal on their
principal argument, that the Sheriff's interpretation of Condition 9 was
wrong.
(b)
PURSUERS
[21] The pursuers
moved the court to refuse the appeal and to adhere to the interlocutor of the
Sheriff. First, the Sheriff had reached
the correct construction of Condition 9.
So far as the law was concerned, it remained the case that the primary
source of understanding what parties mean in a contract is their language
interpreted according to conventional usage. The language
was of paramount importance (Glasgow City
Council v. Caststop 2003 S.L.T. 526,
Lord Kirkwood (delivering the Opinion of the Court) at para [21]),
approving the approach of Lord Macfadyen (2002 S.L.T. 47 at para [33]),
where he reconciled the approaches of the Lord President (Rodger) in Bank of Scotland v. Dunedin Property Investments Co (supra) and Lord Hoffman in Investors
Compensation Scheme v West Bromwich
Building Society (supra). This was because (a) the meaning conveyed by
the words to the reasonable person having all the background knowledge
available to both parties at the time of the contract and (b) the ordinary
meaning of the words, are substantially the same; with the qualification that Lord Hoffman's
formulation allows for parties using words in a specialised sense.
The importance of background circumstances is a matter of degree (Glasgow City
Council v. Caststop (supra); and see Lord Hoffman in Bank of Credit and Commerce International v Ali [2002] 1 AC 251 at para 39, explaining
his dicta in Investors
Compensation Scheme v West Bromwich Building Society (supra) at pp 912 - 913). If the ordinary meaning of the words used is
clear, then there is no need to refine them (Melanesian Mission Trust Board v
Australian Mutual Provident Society (1997) P&CR 297, Lord Hope
of Craighead (delivering the judgment of the Board) at p 301).
[22] Both parties were aware at
the time of contracting that there was a possibility of mineral instability,
however remote. This explained the
provision for the obtaining of the Coal Mining Report in Condition 9. The parties decided that there would be a
right to the defenders to resile only if the surveyor reached a particular opinion. The parties took the view that the surveyor
would be able to reach such an opinion within ten days of receipt of the Report;
notably that he could state whether it contained anything that would adversely
affect mineral stability. In other words,
the
parties settled on the solution that there would have to be more than
the mere possibility, however remote, of mineral instability. The Condition was there for both parties'
benefit. Unless there were something which
would genuinely affect stability, the contract would continue to apply. The Condition attempted to strike a balance
between the two parties, and was negotiated by them in that context.
[23] As in Glasgow City Council v.
Caststop (supra) the importance
of the surrounding circumstances was relatively low. The parties could have chosen any solution
they thought fit as the touchstone of the right to resile. The wording of the solution was paramount and
was clear in its meaning. What the
surveyor required to do was judge whether there was anything in the Coal Mining
Report which would affect the mineral stability of the subjects; meaning the
physical stability of the ground and not any issue of value or "saleability". No refinement of the words, including the
introduction of probability, was necessary;
although the Sheriff's probability refinement was not an unreasonable
one.
[24] The sheriff's construction
yielded a reasonable result and did not offend common sense. It was the surveyor's opinion which counted
and the burden was put upon him to reach a determination within a reasonable
time. It was a matter for the defenders
to select an appropriate surveyor. All
that the surveyor had to do was express an opinion on likely adverse
affect. He did not have to express a
view that damage would occur. But the
surveyor selected by the defenders appeared unable to make the required
assessment. His judgment was that the
content of the Coal Mining Report could affect the mineral stability, but he
was unable to go any further than that.
He did not have to repeat the express words of the Condition for that
Condition to be satisfied, but he did have to say something from which it could
reasonably be inferred that he meant that the stability would be adversely
affected.
[25] The
construction suggested by the defenders was not available on the words used. If the Defenders had wished to have the right
to resile dependent on the mere possibility of adverse effect, then they should
not have accepted the wording which they did. The Sheriff had not erred in concluding that
what the surveyor had written in his letter did not meet the test in the
Condition. Indeed the letter of
recission itself did not do so and used only the word "could".
[26] In relation the objection, if there were evidence to justify
the proposed alterations to the findings-in-fact, then the Sheriff had erred in
sustaining the objection; thereby allowing that evidence to be led. The evidence concerning the telephone call was
not a problem if it did not disclose, as the Sheriff held it did not, a
different opinion from that expressed by the surveyor in his letter. The defenders' proposed amendments to the
findings-in-fact added to the content of that written opinion.
5.
Decision
[27] There is no difficulty in
identifying the appropriate method of construing Condition 9. The principles are set out clearly and
succinctly by Lord Macfadyen, sitting in the Outer House, in Glasgow City Council v Caststop (supra). There is little
purpose in attempting to rephrase, to refine or to put a gloss on the words he
used (at para [33]), which were that:
"On the one hand, the approach
adopted by the Lord President in Bank of
Scotland v Dunedin Property
Investment Co Ltd involved first inquiring as to the ordinary meaning of
the words used, then, having reached a conclusion on that matter, considering
the surrounding circumstances in which the contract was entered into to see
whether they affected the result of the original inquiry. On the other hand, the approach advocated by
Lord Hoffman in Investors
Compensation Scheme Ltd runs those two stages together, by regarding the
task of construction as the ascertainment of the meaning which the document
would convey to a reasonable person having all the background knowledge
reasonably available to the parties in the situation in which they were at the
time of the contract. Whichever of these
approaches is adopted,...the result should be the same. The language of the contract is of paramount
importance. As Lord Mustill said in Charter
Reinsurance Co Ltd v Fagan
[[1997] AC 313] at 384B, in a passage quoted with approval by the Lord
President in Bank of Scotland v Dunedin Property Investment Co Ltd at
661G: "the inquiry will start, and usually finish, by asking what is the ordinary
meaning of the words used".
That is the approach which was
expressly adopted by the Sheriff (supra,
Note para 39). The issue then
becomes whether what he maintains is the ordinary meaning of the words used is
correct.
[28] The Sheriff's interpretation of the words used in Condition 9
as expressed in his Note is faultless, with perhaps one minor exception. The Condition was inserted to protect the
defenders against the risk that the subjects might be adversely affected by
mineral workings. But it contained
elements that operated for the benefit of both parties. First, it gave the defenders the right to
resile if it transpired that there was a problem with the mineral stability. Secondly, it protected the pursuers in that it
required a professional, and hence independent, judgment on whether there was
such a problem. Giving the words their
ordinary meaning, whether in the context of the surrounding circumstances or
otherwise, they required, for rescission to be merited, the surveyor to express
an opinion which went beyond there being a mere possibility of an adverse
affect on the mineral stability of the subjects as a result of the content of
the Coal Mining Report. Had a
possibility been sufficient then the Condition would have to have said "could"
rather than "would". Had it done so then
the surveyor's comments in his letter might have justified rescission on the
basis that they did express such a potential.
[29] The Sheriff goes on to express a view that "would" conveys a
notion of "probability". The use of the
word "would" indicates that, for rescission to be possible, the surveyor had to
form a professional judgment that there was something contained in the Coal
Mining Report relating to mine workings that was of such materiality that it affected
the stability of the subjects; the
"subjects" being the whole area of land for sale. In that context, the Sheriff did not, perhaps,
have to travel the distance he did in relation to "probability". But what is certain, and ultimately
determinative, is that "would" in its context in Condition 9 means more
than "could".
[30] Before considering what the surveyor's opinion was, the
objection ought to be determined. A
reasonable reading of the defenders' pleadings is that the defenders were
relying on the written comments in the surveyor's letter, and on nothing else,
as being the expressed opinion upon which the decision to resile was based. The averments do mention that there was
discussion between the defenders and the surveyor, but there is no averment of
the content of that discussion. If the
defenders were founding upon something other than the wording in the letter as
being the opinion of the surveyor expressed at the time, they would have been
bound to make appropriate averments stating what the different or further
opinion had been and how it had been expressed.
This is not just a technical matter. Had fair notice been given that, for example,
a different or further opinion had been expressed in a telephone conversation
between the surveyor and the first defender, the content of that notice could
have been put to the surveyor for his comment when he was giving evidence. As it was, he simply said that he could not
remember the conversation and matters were left at that until the first
defender was invited to give what was effectively hearsay evidence of what the
surveyor had said. Accordingly, the
objection ought to have been sustained although, as matters transpired, this
would have had no effect on the Sheriff's judgment since he held that the
surveyor's opinion as expressed at the time did not go beyond the content of
the letter.
[31] Proceeding on the basis that the opinion of the surveyor is,
one way or the other, confined to what he wrote in his letter, it is
significant that he did not seem to address squarely whether the terms of
Condition 9 had been met. His
comments were upon matters such as insurance and "saleability". The only direct comment of relevance was his
view that, if the mine entry had not been treated (and no steps appear to have
been taken to check whether that was so in advance), then that "may well have"
an adverse effect on the mineral stability of the subjects.
[32] The submission that the meaning of an adverse affect on
"mineral stability" was in some way related to the value or "saleability" of
the subjects is rejected. Whatever may
have been argued at the appeal stage, before the Sheriff it appears to have
been accepted that "mineral stability" related to the physical stability of the
ground relative to past underground mineral workings; no doubt in particular in
relation to buildings, actual or proposed. There is no reason to depart from that
accepted position now, since it too appears to give the words a "common sense"
ordinary meaning.
[33] Equally, the proposition that the parties must have anticipated
that the surveyor would not have been able to reach a judgment on the issue
focused in Condition 9 cannot be accepted.
On the contrary, the terms of the Condition make it plain that the
parties thought that a surveyor would be able to form the relevant judgment in
the time allocated. The fact that the
surveyor selected felt unable to do so is beside the point. There appears to be no reason to suppose that
a properly qualified surveyor, perhaps one with experience in the many areas of
Lanarkshire blighted by coal workings, could not have reached an appropriate
view within the selected time-scale.
Indeed, it may even be that such a surveyor could have expressed an
opinion that the content of the particular Coal Mining Report was such that the
mineral stability of the subjects would indeed be adversely affected.
[34] What is clear, however, is that this particular surveyor did
not express such a view, either at the time or when giving evidence. As the Sheriff has found, the content of the
letter does not contain an opinion that there was anything in the Coal Mining
Report that "would" adversely affect the mineral stability of the subjects. It follows that the Sheriff's finding-in-fact
number 21 must be adhered to in its current form and the appeal must fail.
6.
Interlocutor
and Findings in Fact
[35] There were a number of other proposed alterations to the
findings in fact. The first was an
alteration to finding 6, by substituting "sixty" for "sixteen". This was agreed as appropriate and seems only
to have been a typographical error. It
will be allowed. Secondly, the defenders
proposed to add to finding 13 material to the effect that it was known at
the time of the Missives that a Mine Entry Interpretive Report was not likely
to be available within the ten day period and that such a Report would be
required for a full assessment of the effect of the mine shaft. However, as the pursuers correctly submitted,
there was no evidence that the parties had even considered the desirability of
a Mine Entry Interpretative Report at the time of entering into the
Missives. Accordingly the proposed
addition is rejected. Thirdly, the
defenders proposed that the rehearsal of the surveyor's letter in finding 16
should have included the ending quoted above, viz:
"We are unable to provide any assurance that the future stability of
the property will not be adversely affected by the presence of the mine entry,
notwithstanding satisfactory execution of works necessary to stabilise the shaft,
should they be required".
That was not objected to and will be added. Fourthly, the proposed alterations to finding 17
(supra) will also be allowed as they
were not opposed and do not add anything to the issue. Fifthly, the appellants proposed that the word
"mineral" prior to "stability" ought to be deleted from findings 18 and 21. Such a deletion is not in accordance with the
evidence that, whatever it meant, the surveyor was expressing a view on the
"mineral stability" of the subjects.
These findings, also for the reasons advanced above, will remain
unaltered. In short the only changes
will be to findings-in-fact 6, 16 and 17 and, in accordance with the decision
to sustain the objection, the second sentence of finding-in-fact 18 will
be deleted.
[36] The appeal in accordingly refused and, other than in relation
to the objection (supra) and the
alterations to the findings-in-fact, the Court adheres to the interlocutor of
the Sheriff dated 21 May 2007.
