Outer house case concerning the interpretation of conditional missives and a purification letter relating to the sale of property at Great Junction Street in Leith.
The missives were conditional on the results of ground and site examinations and environmental audits. Clause 3.2 allowed for the purchasers to waive the conditions by giving a notice of deemed purification:
"This Condition 3 shall be construed solely for the benefit of the Purchasers and it shall be in the sole option of the Purchasers at any time to intimate to the Sellers in writing that any or all of the suspensive conditions contained in Condition 3.1 is/are waived, in which case the Missives shall be deemed purified to that extent. This condition shall however only be purified or deemed to be purified by the Purchasers giving written notice to the Sellers to that effect."
Condition 3.3 provided that if the conditions hadn’t been purified by 30 July 2011 then either party could resile from the missives without penalty.
On 22 July the Housing Association’s solicitors, TC Young sent Mr and Mrs Akram’s solicitors, Somerville & Russell a letter advising that the conditions could be regarded as purified in terms of clause 3.2.
Mr and Mrs Akram argued that service of the notice was invalid as, in terms of clause 3.2 of the missives, it required to be served on them and not their solicitors. They also contended that the notice was invalid as it referred to an incorrect date of entry.
Lord Hodge did not accept either of these arguments. With regard to service of the notice on the solicitors, the authorities on which Mr and Mrs Akram sought to rely were concerned with more precise provisions on the service of notices than those contained in the missives between the Akrams and the Housing Association. The missives in this case had contained no precise requirements relating to the service of notices and no indication that the parties had intended that service of the purification letter on the sellers' solicitors would not be valid. Moreover, the other provisions of the contract did not suggest that the parties intended to draw a clear distinction between themselves and their agents. Lord Hodge said:
“I have formed the view that the very simplicity of the contractual provisions firmly points against a construction which would allow such a distinction to be drawn. Further, I do not see the practical advantage or business rationale of serving the notice on the sellers rather than on their solicitors; I would have expected the sellers immediately to take the notice to their solicitors to ascertain its validity”.
With regard to the reference to the date of entry in the purification letter, Lord Hodge found that, assuming (there was dispute between the parties as to the correct date of entry which could not be determined at that stage) the date was erroneous; the mistaken statement did not invalidate the letter:
“In my view, the function of the purification letter was simply to intimate that the purchasers had waived the suspensive conditions …. That had the effect of deeming the conditions to be purified, as clause 3.2 provides. The contract fixed the date of entry in the definition section of the missives…. Accordingly, there was no need to specify the date of entry in the purification letter. Either the missives ruled or the parties had agreed to alter the date of entry.”
A separate question as to whether Somerville & Russell had actual or apparent authority to receive the purification letter required to be dealt with by proof.
The full judgement is available here: