Facts
In the case of Fullarton v Smith the defenders had entered into missives to purchase a house from the pursuer, with a date of entry of 4 July 2008. The missives contained a non-payment clause that stated the defenders would be in material breach of contract if payment was not received on the entry date and, in this event, interest would accrue until full payment was made. A further clause provided that the missives would be legally enforceable for two years from the date of entry.
The defenders did not in fact take entry, or make settlement, until 28 November 2008. On 18 November 2008 the defenders' solicitors wrote to the pursuer's solicitors asking him to agree to an entry date of 28 November 2008. The pursuer responded to that saying that he was prepared to settle on 28 November 2008, and reserved his right to recover his losses for the delay between entry dates.
The pursuer raised an action for breach of missives on 24 November 2010, more than two years after the original date of entry, but less than two years from the date the defenders actually took entry.
Argument
The defenders submitted that the case was time-barred. The date of entry was the 4 July 2008, and thereby the two year period would have expired on 3 July 2010. As no change in writing was ever made to the missives (required by the Requirements of Writing (Scotland) Act 1995) (the "Act"), the date of entry remained the same, ie 4 July 2008. The defenders also contended that even if the pursuer successfully argued that the date of entry had been moved to 28 November 2008, they could not be in breach of missives as they had made payment on that date of entry.
The pursuer, on the other hand, argued that the date of entry had been changed to 28 November 2008 and the pursuer had reserved his right to claim damages arising from the delay. He contended that the defenders' correspondence had revised the agreed date of entry to 28 November 2008 and reliance could be placed on that in terms of the Act, which can allow for unsigned documents to be used as evidence.
Decision
The Sheriff found in favour of the defenders. Any change would need to adhere to certain formalities, and although the defenders had asked the pursuer to agree to a new date of entry in their letters, the pursuer had never accepted. The pursuer had only agreed to settle on 28 November 2008, and this could not constitute agreement to a new date of entry. As the date of entry had not been amended in the terms of the missives, the date remained as 4 July 2008, and therefore the action was time-barred.
Even if that was not the case, and the date of entry was 28 November 2008, there was no breach by the defenders. For the pursuer to have had an entitlement to damages following upon a new date of entry being agreed, a separate agreement ought to have been entered into.
Comment
This case serves as a clear reminder of just how important it is to have the correct date of entry stated in the missives (and to make it clear what will happen to any claim for losses for delay). Agreement to a later settlement date will not suffice to imply a different date of entry, nor in this case did reliance on the date of entry stated in the disposition. The missives were key. It also highlights the importance of erring on the side of caution regarding time limits for enforcing rights and obligations.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
