Buying a house is anecdotally one of the most stressful events in a person’s life – so spare a thought for the Pursuers in Anwar and Another v Britton and Another [2018] SC FAL 31. Mr. and Mrs. Anwar not only had to go through the stress of buying a house, but the subsequent stress of finding out that the sellers appeared to have not told them the truth (whether on purpose, or otherwise) regarding a flood that had taken place whilst the sellers owned the property, and then having to raise a court action.
The court case centred on the correct interpretation of a set of terms and conditions that are incorporated into nearly all purchases of residential properties in Scotland – the “Combined Standard Clauses”. Two particular clauses were in issue.
Firstly, clause 2.1.3 provides that as far as the seller is aware, the property being sold “is not affected by…flooding from any river or watercourse which has taken place within the last 5 years”. At first glance, the wording does appear slightly strange. The present tense “is not affected by” flooding arguably leaves open the interpretation that the property has to currently be affected by flooding in order to trigger the clause – i.e. that, at the time of conclusion of the contract, the property was wet, as it were. This was the interpretation that the sellers said was correct. The purchasers, on the other hand, said that the correct interpretation of the clause was ascertained with reference to “business common sense”, namely to flush out whether the property had been subject to flooding within the last five years.
The purchasers (Pursuers in the court action) won this argument. Accordingly, when a person is selling a residential property and clause 2.1.3 is engaged, the seller should be careful to consider the recent history of the house (and indeed the garden etc., if that is included within the various defined terms in the contract) to ensure that they do not find themselves involved in a court action later.
Secondly, clause 27.1 provides that the contract is the entire agreement of the purchaser and seller, which supersedes all other things that might have been said – a “complete agreement” clause. The sellers argued that an email from their solicitor, which said that the property had not suffered flooding within the key five year period, should not be allowed to be used in evidence. The purchasers argued that the clause should not be interpreted to exclude any evidence of misrepresentations (as, for example, they say that the email from the seller’s solicitor was).
The purchasers won this argument also. The court held that although the clause was an “entire agreement” clause, it was a basic one that aimed to ensure that the terms of the contract for the sale were all clearly contained within the written contract.
Nothing in this article should be taken as legal advice. If you find yourself involved in a missive dispute, or other contractual dispute, our litigation solicitors can give you expert advice.
