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Scottish Sheriff Court Decisions |
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You are here: BAILII >> Databases >> Scottish Sheriff Court Decisions >> NORTHERN HYDROSEEDING LIMITED v. JAMES MCDONALD [2012] ScotSC 29 (28 February 2012) URL: http://www.bailii.org/scot/cases/ScotSC/2012/29.html Cite as: [2012] ScotSC 29 |
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SHERIFFDOM OF TAYSIDE, CENTRAL & FIFE AT ALLOA
Case Number: A180/08
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Judgment by
JOHN K MUNDY, Esq. Advocate Sheriff of Tayside, Central & Fife
in the cause
NORTHERN HYDROSEEDING LIMITED
Pursuer;
against
JAMES McDONALD Defender:
________________
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Act: Carruthers
Alt: Party
ALLOA, 28 February 2012
The Sheriff, having resumed consideration of the cause:
FINDS IN FACT
1. The pursuers are a company incorporated under the Companies Acts and have their registered office at East Gogar, Blairlogie, Stirling, FK10 2PF. The defender resides at 19 Harvey Wynd, Stirling, FK8 1EU.
2. The pursuers are heritable proprietors of the subjects known as and forming the Auldbrig Filling Station, Bridgend, Tullibody, Alloa, FK10 2PF ("the subjects").
3. In 2006, the defender had discussions with the pursuers with regard to a proposal by the defender to purchase the subjects.
4. By letter addressed to Messrs Graham & Sibbald dated 25 September 2006, agents for the pursuers, the defender on behalf of the Motor Vehicle Protection Association ("MVPA"), an unincorporated association, offered to purchase the subjects at a price of £750,000, with vacant possession being given at the conclusion of missives. The offer was stated to be open for acceptance for one week following the receipt of the offer. The terms of the letter are contained in No. 6/2/1 of process. There was no formal acceptance, qualified or otherwise, of the said offer.
5. By letter dated 12 October 2006 addressed to the defender, Mr Calum Campbell of Messrs Graham & Sibbald, who acted for the pursuers, acknowledged the defender's interest in the subjects and advised that "indicative offers" were invited for the defenders' interest in the subjects. A pro-forma "Site Acquisition Proposal Form" was attached to the said letter and was completed and returned by the defender. The terms of the letter, together with the completed pro-forma, are contained in No. 6/2/2 of process.
6. By letter of 3 November 2006, Mr Campbell wrote to the defender with "Heads of Terms" outlining the basis upon which the defenders would be willing to enter into missives for sale of the subjects to MVPA. The letter stated inter alia: "As always, I would confirm that this letter is neither intended to create nor be relied upon as creating any contractual relationship or commitment. Any contract should only be entered into by means of an exchange of correspondence between the parties' respective solicitors." The terms of the said letter are contained in No. 6/2/3 of process.
7. By letter of 22 November 2006, Dallas McMillan, solicitors acting on behalf of the pursuers sent to the defender on behalf of MVPA a draft offer to sell the subjects to MVPA at a price of £750,000 plus VAT with entry as at 29 December 2006 "or such other date as may be mutually agreed in writing". The terms of the letter and draft offer are contained in 5/4/7 of process.
8. Notwithstanding that no formal missives had been concluded nor settlement effected, the pursuers gave the defender keys to the subjects and the defender occupied the subjects from about the end of November 2006.
9. On 30 November 2006, the pursuers invoiced the defender in the sum of £32,964.26 (inc. VAT) in respect of the supply of fuel stock at the subjects (Invoice Ref: SIN 002742). The defender subsequently settled the account with payments of £30,567.75 and £2,396.51.
10. The defender consulted a solicitor Colin Mackenzie of Kerr Stirling, Stirling in relation to the proposed purchase, who by letter dated 12 December 2006, wrote to the Dallas McMillan confirming he was instructed and indicating that until he had sight of the constitution of MVPA he would be unable to advance matters further. The terms of the letter are contained in No. 5/2/4 of process. Mr Mackenzie was not involved in the proposed transaction to any significant extent.
11. By letter of 17 January 2007 Dallas McMillan wrote to Kerr Stirling, which letter was sent by fax, referring to the said draft offer, requesting that the keys be returned to the pursuers that day and for full settlement to be effected by 24 January 2007.The terms of the letter are contained in No. 5/2/5 of process.
12. No formal missives were concluded between the defender or MPVA and the pursuers for the sale and purchase of the subjects nor was there any settlement of such a transaction.
13. On 26 January 2007, the defender on behalf of "Motor Vehicle Protection Association Limited", as tenants, signed a document of lease over the subjects in terms of which the pursuers purportedly leased the subjects as landlords. The document bears to have been drafted by Dallas McMillan solicitors. A copy of the document forms 5/1/1 of process. In terms of the document, the period of lease was from 1 January 2007 until 31 March 2007 and three monthly thereafter until terminated by either party giving one month's prior written notice. The rent was stated to be £30,000 per quarter.
14. On 29 January 2007, the pursuers invoiced the defender in the sum of £35,250 (including VAT of £5,250) in name of three months rent (Invoice Ref: SIN002771), which invoice the defender subsequently settled.
15. The pursuers subsequently invoiced Motor Vehicle Protection Association Limited as follows:
(a) On 23 February 2007 in the sum of £35,250 (including VAT of £5,250) in name of rent for the period 1 April 2007 to 30 June 2007 (Invoice Ref. SIN002795).
(b) On 15 March 2007 in the sum of £1,575 in respect of the cost of insuring the subjects from 1 January 2007 to 30 June 2007 (Invoice Ref: SIN002821).
(c) On 18 June 2007 in the sum of £35,250 (including VAT of £5,250) in name of rent for the period 1 July 2007 to 30 September 2007 (Invoice Ref: SIN002890).
The said invoices were settled by the defender. The pursuers issued invoices to the said company for rent for subsequent periods, but these were not paid.
16. The defender occupied the subjects until 15 April 2010 when he was ejected following upon decree being granted in terms of the first crave of this action on 4 March 2010.
17. Over the period of occupation, the defender paid a total of £140,289.26 to the defenders of which £32,964.26 was in respect of the value of fuel stock, £105,750 in name of rent and £1575 for insurance. The total payments excluding that for fuel stock therefore amounted to £107,325, which sum was attributable to the occupation of the subjects. The payments made by the defender in name of rent were the equivalent of nine months rent plus VAT - for the period 1 January to 30 September 2007 - in terms of the document of lease.
18. As at January 2007, the market rent for the subjects was £52,500 per annum. Had the subjects become vacant in January 2007, a marketing period of some three to six months would have been required to achieve a successful letting of the subjects. Such a lease would have been likely to have been around 20 years' duration with rent reviews every five years. A tenant would likely have been found to occupy the subjects on such terms by about 15 July 2007.
FINDS IN FACT AND LAW
FINDS IN LAW
THEREFORE:
Sustains the fourth plea-in-law for the pursuers; grants decree for payment by the defender to the pursuers of the sum of THIRTY SEVEN THOUSAND AND FIFTY POUNDS (£37,050) STERLING with interest thereon at the rate of eight per cent per annum from the date of decree until payment; sustains the fifth plea-in-law for the pursuers to that extent; repels the pleas-in-law for the defender; reserves all questions of expenses and ex proprio motu appoints the cause to a hearing thereon on a date to be afterwards fixed.
NOTE:
Introduction
[1] This is an action of ejection and damages in respect of subjects known as and forming the Auld Brig Filling Station, Bridgend, Tullibody, Alloa ("the subjects") owned by the pursuers. On 4 March 2010, following a diet of debate before Sheriff Gilchrist, decree granting summary warrant to eject the defender from the subjects as sought in the first crave of the Writ was pronounced in this court, a proof being allowed on the second crave (payment). The matter came before me for proof on that issue. Evidence was led over two days - 29 August and 5 December 2011. Mr Carruthers, solicitor, appeared on behalf of the pursuers. The defender, Mr McDonald, represented himself. At the outset of the proof the pursuers were seeking decree for payment of £265,925 in name of violent profits. As shall be seen, after the conclusion of the first day of proof and after sundry procedure, the pursuers' amended the claim to one of damages and that in the sum of £47,550, the amendment being given effect to at the beginning of the second and final day of proof on 5 December.
The pleadings
[2] The pleadings are short and, on the defender's side, confusing. The basis for the pursuer's claim for damages is unlawful occupation of the subjects by the defender. The contention of unlawful occupation stems directly from grounds upon which ejection was sought. The pursuers' case on the pleadings on the merits has undergone a number of changes since the action was raised. However, ultimately the pursuers' position is a simple one - that the defender had no right or title to occupy the subjects and that the defender's possession of the subjects was precarious - vi clam aut precario - and it was on that basis, in the absence of a relevant defence on the merits, that the pursuers sought and obtained decree of ejection at the stage of debate, the court sustaining the first, second and third pleas-in-law for the pursuers. That left the pursuer's fourth and fifth pleas-in-law to be disposed of. At that stage, the pursuers' fourth plea was in the following terms: "The Pursuer (sic) being entitled to violent profits as reparation for the Defender's unlawful occupation of the Subjects Decree as second craved should be granted". The fifth plea related to quantum stating that the sum sued for was a reasonable estimate of violent profits.
[3] Sheriff Gilchrist found the defence on the merits of ejection as averred to be irrelevant. He observed in his Judgement (at page 11): "As presently framed, the defender's averments are clearly irrelevant, if not incomprehensible. No doubt this is in part a consequence of the fact that he has represented himself throughout these proceedings." The essential line of defence was that the pursuers had agreed to sell the subjects to the defender under reference to documents passing between the parties and also the common law rules of rei interventus and homolgation. As noted at the debate those rules were replaced by the provisions of the Requirements of Writing (Scotland) Act 1995 relating to reliance and personal bar which are not referred to in the pleadings. The Sheriff also referred to Answers by the defender to a Minute of Amendment containing some material in relation to the defender's account of events, but they had not been incorporated in the pleadings. They still had not when the case called before me. In response to the defender's averments, the pursuers make reference to a proposal by the defender on behalf of Motor Vehicle Protection Association ("MVPA") to purchase the subjects and that they were subsequently made aware that this was an unincorporated association. They aver that such entities cannot contract. Reference is also made in the pleadings to a lease or purported lease (upon which neither party founds) and the pursuers aver that such was entered into between the pursuers and a company Motor Vehicle Protection Association Limited but that no such company exists, a point with which, on the defender's averments, he is in agreement. At the debate, the Sheriff did not allow the defender to amend but did not rule out the defender subsequently seeking leave to amend to make the arguments in defence to the claim for violent profits that could have been presented in defending the merits (page 13). As the pleadings stood however, his view was that the issues for proof would be restricted to quantum. In the event, the defender did not in fact seek to amend his pleadings.
[4] The pursuers' position on quantum of violent profits was simple. The starting point was the amount they could have let the subjects for during the period of unlawful occupation. Violent profits would be, customarily, twice that figure.
The proof
[5] The witnesses for the pursuer were (1) Stephen Grant, Chartered Accountant and (2) Calum Campbell, Chartered Surveyor. Mr Grant gave evidence on the first day of the proof and was recalled to give evidence (without objection) on the second day. Mr Campbell's evidence straddled both days. The defender Mr McDonald gave evidence on his own behalf on the second day and called no further witnesses.
Day 1: 29 August 2011
[6] The first day's evidence proceeded on the basis of the "Further Amended Closed Record" forming No. 26 of process and the claim for £265,925 for violent profits. The first witness was Mr Grant, a partner in the firm of Tindell, Grant & Co, Chartered Accountants, Glasgow, who spoke to the sums invoiced to the defender in terms, he said, of a lease. The document 5/3 of process, a spreadsheet prepared from his firm's system, indicated that period to 11 October 2008, £248,325 was due against which £72,075 had been paid, leaving a balance due to the pursuers of £176,250. The defender cross-examined on the basis that further payments had been made by him but Mr Grant was unaware at that stage of further payments.
[7] In examination-in-chief, Mr Campbell spoke to his valuation report dated 2 June 2011 (5/11), his opinion being that the rental value of the subjects as at 26 January 2007 was £52,500 per annum and that as at January 2007 the subjects could have been successfully let in three to six months. In cross-examination, he was asked by the defender about his involvement with the proposed sale of the subjects and was referred to the defender's offer (6/2/1) addressed to his firm Graham & Sibbald. The proposition being put was that the defender had been proposing to purchase the subjects. At this point, Mr Carruthers for the pursuers objected to a line of questioning directed at establishing an agreement to purchase the subjects on the basis that the proof did not concern such an issue, the point being that he was attempting to run his defence on the merits of ejection when the only true remaining issue was one of damages. In the course of discussing the objection, Mr Carruthers now conceded that the pursuers were not contending that the defender had occupied in bad faith and so would not be seeking violent profits, but reparation for damages only. He sought leave to amend the pursuers' pleadings to reflect this change. The defender argued that the line of questioning was permissible and that the question of whether there had been an agreement had been left open by Sheriff Gilchrist. He opposed the amendment even though it would result in a substantially reduced sum sued for.
[8] I concluded that the proposed change was a fairly radical one but not likely to be unfairly prejudicial to the defender. However, I considered that the amendment should not be allowed at the bar, but that the pursuers should be appointed to lodge a minute of amendment with the defender being given time to answer. This would also give the opportunity to the defender consider his position, bad faith no longer being alleged. I urged the defender to consider whether he should in the meantime seek legal representation. The proof was adjourned and after sundry procedure convened again on 5 December 2011.
Day 2: 5 December 2011
[9] On the second day of the proof, the pursuers' Minute of Amendment (no. 27 of process) was before the court. It sought, firstly, to modify the claim from violent profits to one of damages, and secondly, to introduce averments acknowledging that the defender had made further payments to the pursuers. The amendment sought to reduce the sum sued for from £265,925 to £47,550. The defender, who again represented himself, had decided not to lodge answers. He objected to the amendment being allowed. I decided that the amendment was not unfairly prejudicial to the defender and allowed the record to be amended in terms thereof. The pleadings were now encapsulated in the "Final Amended Closed Record" (no.28 of process). I found the pursuers liable to the defender in the expenses of the amendment procedure.
[10] Thereafter, Mr Campbell resumed his evidence. He was taken by the defender, without objection this time, through the correspondence referred to in my findings relating to the proposed purchase of the subjects. Mr Campbell was not aware of any concluded missives or contract for the sale of the subjects to the defender. The documents referred to suggested, he said, that that there was a draft contract (6/2/4) but no concluded missives.
[11] Mr Grant was recalled without objection and indicated, under reference to a document entitled "Trading History" (5/12) that in fact further payments totalling £68,214.26 had been paid, confusion having stemmed from the fact that there were two separate account names - one for the defender and one for MVPA. Accordingly, taking account of the sum paid of £72,075 spoken to on the first day, payments totalled £140,289.26. Of that sum £32,964.26 related for payment for fuel supplied to the defender (5/13). In cross examination, the defender suggested that further payments had been made but Mr Grant indicated that there was no record of any further payments.
[12] The defender then gave evidence of setting up a new business MVPA, an unincorporated association, and his interest in purchasing the subjects on behalf of the business. His offer was for £750,000 (6/2/1). He referred to the letter from Graham & Sibbald in response (6/2/2) and the draft offer to sell for that sum on behalf of the pursuers from Dallas McMillan (6/2/4) to which VAT was to be added, meaning that the defender required to find additional finance. In the meantime, with the agreement of Euan Snowie, one of the directors of the pursuers, he was given entry to the subjects at the end of November 2006 and he referred to the invoice for the stock of fuel on the premises referred to in my finding in fact number 9. His position was that he agreed to pay £10,000 per month and that notwithstanding the invoices bore to be in respect of rent (see Findings in Fact 14 and 15), the reality was that the payments due were to be regarded as instalments towards the purchase. As appeared from the correspondence of 12 December 2006 and 17 January 2007 (5/2/4 and 5) the defender had instructed a solicitor, Mr Colin Mackenzie of Kerr Stirling. After receiving the letter of 17 January 2007 from Dallas McMillan, which called for the return of the keys, Mr Mackenzie called the defender into his office and asked why he was receiving such a letter. The defender spoke to having a meeting with the Snowie brothers (four in number including Euan Snowie, the directors of the pursuers, shortly thereafter and within a few days of that Euan Snowie came to him with a lease document "to keep his brothers happy". A copy of the lease appears as 5/1/1 of process and bears to have been signed by the defender on 26 January 2007. Mr Carruthers objected at this juncture on the basis of lack of record for this line. I think that this is the material referred to by Sheriff Gilchrist as being contained in the defender's Answers to a Minute of Amendment, the Answers never being incorporated in the pleadings (page 10 of his Judgement). I allowed the line under reservation of all questions of relevancy and competency. The defender indicated that he got the subjects valued and referred to a report addressed to him from CRGP Robertson dated 2 May 2007. This was, as I understand it, connected with financing his proposed purchase of the subjects and was copied to Mr Snowie. The defender stated that Ewan Snowie came to see him some time between the 23 and 30 May 2007 indicating that the pursuers no longer wished to sell to the defender and would prefer to rent. The defender's response was that it was too late for the pursuers to take that position and that he wanted to buy. The defender said he had arranged finance for the purchase. However, as he was getting nowhere with the pursuers he stopped making payments in around October 2007. He did not accept the pursuer's figure as to what sums had been paid by him. He thought that he had paid £35,250 more but was unable to give more details or produce vouching.
[13] In cross-examination, the defender accepted that he had been convicted on two occasions of crimes of dishonesty - counterfeiting - the first in 1985 for which he had received a sentence of six years imprisonment and the second in 1992 for which he had received a further term of seven years. He repeated his explanation for signing the lease. He did not accept that there was no contract to purchase. He indicated that the only other person who could confirm the existence of a contract was Mr Snowie but he had not cited him as a witness as he thought that he would be at court. In concluding his evidence, the defender stated that the facts supported the view that there was some arrangement between the parties.
Submissions
[14] Mr Carruthers submitted that this was a straight-forward case. The defender had had ample opportunity to amend his pleadings to put up a defence that his occupation of the property was not unlawful. He had not done so. Mr Carruthers did not specifically address me on the objections he had made in the course of the proof However, it was I think implicit in his submission that the defender was bound by the record and that it was not permissible for me to have regard to evidence about an agreement to purchase given the outcome of the debate. Following on from Sheriff Gilchrist's decision, he submitted that the only question was quantum of damages. The evidence of Mr Grant, which I was invited to accept, was that the defender had made payments of £140,289.26 - taking the totals of £72,075 (5/3/6) and £68,214.26 (5/7/12). From this figure, he deducted the sum of £32,964.26 in respect of the fuel stock (presumably used by the defender)(5/7/13). This would leave a net figure of sums paid of £107,325. He also added in (to the advantage of the defender) a further sum of £2,396.51 (5/7/14) in respect of a payment made by the defender to make a total of £109,722. I will return to that. He submitted that damages should be assessed under reference to what market rent was likely while the defender was in unlawful occupation less payments made. He chose the 26 January 2007 as the starting point of unlawful occupation on the basis that that was the date the defender signed the lease document. On the basis of Mr Campbell's evidence, which I was invited to accept, the subject would have been successfully marketed in three to six months at a rent of £52,500 per annum. I was asked to hold that the subjects would have been let in three months (from 15 April 2007) the total period of unlawful occupation was 35 months and 20 days resulting, he calculated, in a total figure of £154,875, less payments of £109,722, rendering the sum due in damages at £45,143 (slightly less than the amended sum sued for) and invited me to grant decree in that sum.
[15] I found the defender's submissions to be unfocussed and difficult to follow but I took him to argue that, in all the circumstances, there was a contract of sale, whether by written contact or agreement and actings of the parties. He was, he said, not due to pay a penny to the pursuers because there was no lease. He asked for absolvitor.
[16] In a brief reply, Mr Carruthers said that there was no lawful occupation either by contract of sale or lease.
Discussion
[17] At the outset, I feel it pertinent to observe that a defender, in representing himself in a case such as this, runs the risk of placing himself at a considerable disadvantage in the presentation of his case. As already noted, Sheriff Gilchrist observed in his Judgement (at page 11): "As presently framed, the defender's averments are clearly irrelevant, if not incomprehensible. No doubt this is in part a consequence of the fact that he has represented himself throughout these proceedings." The pleadings had not been improved upon by the time of the proof and this created difficulties, not only for the defender, but also for the pursuers and for the court in knowing what the defender's position was. I did however extend a considerable degree of latitude to the defender in the course of the proof in order that he could present his case, and also in considering my decision
[18] As indicated, Sheriff Gilchrist expressed the view that the proof, in the absence of further amendment by the defender, was restricted to quantum. I can see the force in the Sheriff's observations. However, the defender's averments in Answer 3 to the claim for violent profits (now damages) refer back to Answer 1 which represented the defence on the merits, however inelegantly framed, and those averments had not been excluded from probation, nor the defender's pleas-in-law repelled. Further, as noted above, the fourth plea-in-law having been left standing, there was on one view an issue as to entitlement to violent profits on the basis of unlawful possession. It seems to me therefore, making due allowance for the fact that we were dealing with a party defender, that it was open to the defender to lead evidence of an agreement to purchase in defence to the claim for violent profits (now damages) based on the assertion of unlawful possession. Sheriff Gilchrist appeared to consider that this to be open to the defender in principle, albeit subject to his making an amendment (page 13 of the Judgement). Further, at the commencement of the proof, violent profits at that stage being claimed, it was in my view legitimate, at least at that stage, for the defender to set forth a basis for occupation that negated bad faith on his part.
[19] Accordingly, I have come to the view that I should have regard to evidence relating to the alleged purchase of the subjects by the defender and the background to that and I have made findings in fact accordingly. In any event, the objection taken on the first day during the cross-examination of Mr Campbell appeared not to insisted upon come the second day when he resumed giving evidence. Further, the objection taken during the evidence in chief of the defender came at a point where he had been discussing the proposal to purchase at some length and in my view came too late.
[20] I was not addressed by either party on the law, but think it appropriate to briefly mention certain aspects of relevance to my decision. The only basis suggested by the defender for his entitlement to occupation was a contract to purchase the subjects. The lease document was not relied upon by either party. Contracts relating to heritage must be created in writing (section 1(2)(a)(i) of the Requirements of Writing (Scotland) Act 1995) subject to the principle of reliance and personal bar (section 1(3) and (4)). In this case there is no concluded agreement in writing. There are for example no concluded missives. The defender appears to rely on rei interventus or homologation at common law but does not mention the Act. There was a full discussion of this aspect at the debate, suffice to say that there requires as a pre-requisite to be an agreement which entails an intention on the part of both parties to be bound. As to damages, it is stated in the Stair Memorial Encyclopaedia, Vol. 13 at para 505, that violent profits are due for violent or illegal possession of property. The author also states (at para 511) that a "tenant is liable for violent profits only for such time as he is fully aware that he has no title to remain. If and so long as he possesses in good faith, he is not liable for more than the rent."
[21] Considering the evidence then, the manner in which the defender gained occupation of the subjects is somewhat obscure. In 2006, there appear to have been discussions between the defender and a Mr Euan Snowie, a director of the pursuers and there arose a proposal by the defender to purchase the subjects. The first document we have is the letter from the defender to Graham & Sibbald dated 25 September 2006 offering to purchase the subjects on behalf of MVPA for £750,000 (6/2/1 of process). MVPA are an unincorporated association set up by the defender. Thereafter it appears that correspondence passed between the parties or their agents which I have referred to in my findings in fact. At some point in November 2006, notwithstanding that no missives had been concluded, the defender was given the keys to the subjects and took occupation of it. No missives were ever concluded nor did any settlement take place in furtherance of any agreement to purchase. Instead a lease document was signed by the defender on 26 January 2007 and by the pursuers at around about the same time, the defender signing on behalf of "Motor Vehicle Protection Association Limited" [my emphasis] who are described as the tenants. It seems that no such company in fact existed. How the signing of the lease document came about was a matter of dispute, suffice to say that neither of the parties in this action founded upon it, the pursuers contending that the lease was void by reason of their being no tenant, the defender contending that he had contracted to purchase the subjects, not to take them on a lease, explaining that he had signed a lease to keep the fellow directors of Mr Snowie happy. That notwithstanding, the defender continued to occupy the property and he paid sums of money in response to invoices for inter alia rent. The payments are referred to in my Findings in Fact 9, 14 and 15. On the evidence of the documents, the defender made his last payment in respect of an invoice for rent for the three month period to 30 September 2007. However, the defender remained in occupation of the subjects until ejected by virtue of the decree granted following the debate and left the subjects on 15 April 2010. How that situation was allowed to continue is a mystery.
[21] The only person to speak to there being an agreement to purchase was the defender. He did so under reference to the documents referred to in my findings in fact, as supporting an oral agreement. In my opinion, his evidence amounted at best to their being an understanding with the pursuers, and Mr Euan Snowie in particular, that he, on behalf of MVPA, would purchase the subjects from the pursuers. The furthest the proposal got appeared to be the preparation by Dallas McMillan of a draft offer to sell to MVPA in November 2006 which was not responded to but which seemed to form the basis of some form of understanding between the pursuers and MVPA. Having said that, it is notable from the preamble to the draft contract that the pursuers' solicitors were unsure of the status of MVPA and in particular whether or not they were an incorporated company. The general understanding is evidenced by the letter from the said firm to Mr Colin Mackenzie of 17 January 2007 in which reference is made to the "draft Contract", requesting the return of the keys that day and for full settlement to be effected by 24 January 2007 otherwise the pursuers would "deal with other parties in connection with the sale". On the defender's evidence, the reaction of his solicitor Mr Mackenzie appears to have been to call in the defender to have him explain why he would receive such a letter, implying that his solicitor did not know what was going on. On the evidence, Mr Mackenzie's last involvement is that indicated in his letter to Dallas McMillan dated 12 December 2006 indicating that he was awaiting sight of the constitution of MVPA. As indicated this was an unincorporated association. As such, it would, as asserted in the pleadings of the pursuers not have the capacity to contract. This further muddies the waters.
[22] On the evidence I am unable to conclude on the balance of probabilities that there was a concluded agreement between the parties by which the defender agreed to purchase the subjects. We did not hear from Mr Snowie on the matter. I do not accept as credible the evidence of the defender that there was such an agreement, nor do I accept as credible his explanation for the signing of the document of lease. There were undoubtedly discussions between the parties regarding a proposal to purchase and that is evident from the documents. However, that is far from establishing that there was a consensus between the parties. The furthest the parties got was the draft offer to sell of November 2006 at a price of £750,000 plus VAT, the original offer from the defender not having been responded to with any form of acceptance, qualified or otherwise. The lack of involvement of Mr Mackenzie, the defender's solicitor, would support the view that there was no concluded agreement. This is all apart from the obvious difficulty for the defender that any agreement, at least on the documents, was with an unincorporated association rather than the pursuer himself. The proposal to purchase appears to have given way to an intention, on the part of both parties to enter into a lease. As it turned out, a lease was entered into between the pursuers and Motor Vehicle Protection Association Limited, a company that apparently did not exist, although the pursuers must have assumed otherwise at the outset, discovering the truth later. This confuses the situation even further but at least indicates an intention on the part of the pursuers to lease the subjects and abandon the idea of selling the subjects to the defender (or rather MVPA). The defender then paid invoices issued by the pursuers to him and to the non-existent company for rent and insurance which appear to be directly referable to the terms of the lease document. One of the provisions of the document is that the tenant is liable for insurance payments (pages 5 and 6 of 5/1/1). Of course, neither party now relies on the document of lease, but the circumstances surrounding it are in my view instructive of the intention of the parties at the time.
[23] It is clear that there was no written contract to purchase the subjects and in the absence of a concluded agreement to purchase, then any argument based on personal bar and reliance to get over the lack of a written agreement simply does not get off the ground. A contract to purchase was the only basis put forward by the defender in defence to the assertion of unlawful possession. He did not suggest any alternative as affording a basis legal basis for occupying the subjects. I have accordingly concluded that his occupation of the subjects had no legal basis, was precarious and in that sense unlawful. In these circumstances, the pursuers have an entitlement to damages.
[24] As to quantum of damages, it is appropriate to assess these on the basis of what the pursuers would have obtained by way of rent had they been let to a third party over the period of the defender's unlawful occupation less any money paid which can be attributed to the occupation. The pursuers have selected, both in averment and argument, 26 January 2007 as a starting point from which to calculate the period of loss. I see no objection to this in principle. This was the date the document of lease was signed and so is indicative on the face of it of an intention to put the defender's occupation on a proper footing by way of a let. I accept as credible and reliable Mr Campbell's evidence (which was not disputed on these points) as to the timescale of successfully renting the subjects and the rent that would have been achieved. Erring on the cautious side, I think it reasonable to assess a likely tenant being found and in place towards the end of the three to six month estimate, say 15 July 2007. The period of loss between 15 July 2007 and 15 April 2010 is 2 years and 9 months. I accept as credible and reliable the evidence of Mr Grant as to the payments made to the pursuers. He spoke to documents vouching what had been paid and I had no reason to doubt his evidence on the matter. I do not accept as credible or reliable the defender's contention that further payments were made. He produced no vouching. He had plenty of time to do so and would have appreciated the need at the very latest following the evidence of Mr Grant on the first day of the proof.
[25] As regards payments made by the defender, to add back the sum of £2,396.51 as suggested on behalf of the pursuers would in my view appear to be double counting as that sum is included in the total payment of £32,964.26 for fuel - that comprising two payments - one of £30,567.75 and £2,396.51. The total paid is therefore £107,325 rather than £109,722.
[26] On the foregoing basis, I assess damages as follows:
£52,500 (annual rent) x 2 = £105,000 + £39,375 (9 months) = £144,375
less £107,325 (sums paid) = £37,050.
Accordingly, I have found damages in the sum of £37,050 to which I have added interest from the date of decree at the court rate as sought in the crave.
[27] I have reserved all questions of expenses and appointed the cause to hearing for submissions on that issue.
John K Mundy, Esq. Advocate
Sheriff of Tayside, Central & Fife
