Scottish Court of Session Decisions

Lord President.—I quite agree with the words of Lord President Boyle in the case of Carricks v. Saunders, which has been cited to us, that it is a very delicate matter to interfere with a written contract expressed in clear terms, and that parole proof should not be rashly allowed in such a case. But there are cases in which it would be truly a disgrace to any system of jurisprudence if there was no way available of rectifying what would otherwise be a gross injustice. I do not prejudge this case, but take it on the averments of the defenders. According to these averments the pursuers, Mr and Mrs Krupp, were by their contract, in addition to a cumulo salary of £200 per annum, to receive a proportion of the net profits earned by the hotel at Mallaig which they were to manage for the defenders, viz., 5 per cent. This condition was similar to that in an agreement existing between the manager of the Palace Hotel, Inverness, and the defenders, save that in the case of Inverness the proportion of profits coming to the manager was 10 per cent. This difference was explained to the pursuers as being based on the fact that the gross receipts at Mallaig were larger. The Inverness agreement was given to a clerk that from it he might draft the agreement with the pursuers, and he was instructed to follow the Inverness agreement, but to halve the percentage of the profits. This clerk somewhat carelessly miscalculated one-fifth as a half of 10 per cent, and inserted that figure in the agreement between the pursuers and the defenders in place of 5 per cent. The error remained undiscovered by either party, and the pursuers received a share of the profits on a 5 per cent basis until the parties eventually quarrelled as to the amount due. Then the pursuers demanded a settlement on the basis of 20 per cent, or one-fifth of the net profit, as the proportion allotted to them under the agreement. This case seems to me to have nothing to do with the avoidance or re-formation of the contract. The only question is whether proof is admissible that a document which in ordinary circumstances would be held to express the intentions of the parties does not in fact do so.

I am clearly of opinion that proof should be allowed.

Lord M'Laren.—It must be kept in view that it is a condition of the pursuers' case that neither party was under error as to the terms of the contract intended. That being so, we are not at all in the region of rescinding or re-forming a written contract where one of the parties has been led into error by the fault or negligence of the other party.

What it is proposed to prove is that the fraction, one-fifth, was inserted in the agreement in place of 5 per cent, the true quantity. This was either a clerical or an arithmetical error, and is prima facie subject to correction. We know, for example, that a misnomer is always subject to correction, for on proof of the true name of the person or thing effect is always given to that proof. Then in deeds of conveyance arithmetical errors are subject to correction when it appears on the face of the deed that they are arithmetical errors. In such cases we do not vary the terms of the contract at all, but merely seek to give expression to the true contract as agreed to by the parties.

While I have a strong opinion that such a power of correction is inherent in the Supreme Court, the first step in the operation evidently is to ascertain the facts of the case and the considerations raised by these facts. I concur with your Lordship that proof should be allowed.

Lord Kinnear and Lord Pearson concurred.