Ex-civil partner of suddenly deceased woman allowed proof in respect of breach of contract claim

Sheriff Court
Sheriff Court

A woman who had contracted with her former civil partner, now deceased, to contribute towards the repayment of a mortgage on her home in exchange for acquiring joint title to the property has been allowed a proof before answer in respect of her case.

Lynn Slight raised an action against Jean Hope, the sister and executor of the estate of the late Margaret Tait, seeking declarator of the contract between herself and the deceased regarding the property they lived in until their separation as well as damages for breach of contract.

The case was heard in Edinburgh Sheriff Court by Sheriff Kenneth McGowan. The pursuer was represented by MacColl, advocate, and the defender by Ennis, advocate.

Suddenly died

The pursuer and the deceased purchased a property on Cleuch Avenue in North Middleton in 2003. The property was originally purchased in joint names but later was transferred to the deceased during a break in their relationship. In 2007, following the couple’s reconciliation, they entered into a verbal contract in terms of which they would both contribute to paying off the loan secured over the property and transfer it into joint names again. They later became civil partners in August 2012.

In June 2018, the couple separated. The deceased intimated to the pursuer that she no longer had any intention of reverting to joint title and executed a new will that disinherited the pursuer and named the defender as her executor and beneficiary. The deceased died suddenly the next month. At the time of her death, she remained the sole proprietor of the Cleuch Avenue property, and neither she nor the pursuer had raised an action to dissolve their civil partnership.

The pursuer averred that the contract obliged the deceased to transfer heritage to her upon the event of the mortgage being totally paid off, and that she no longer intended to do this. The deceased was therefore in breach of the contract between them. There was no bar preventing civil partners from contracting with each other, and as she could no longer seek dissolution of the partnership her only remaining remedies were contractual.

Alternatively, it was submitted that the pursuer had a claim in unjust enrichment even if there was no breach of contract. There was no legal basis justifying the retention of the payments she made to the deceased if she did not intend to restore joint title to the property.

It was submitted for the defender that there could be no breach of contract where the essential requirement for its implementation, the full repayment of the mortgage, had not yet occurred. The deceased had therefore not yet breached a material term of the contract. Further, the pursuer’s claim was regulated wholly within the scope of the Family Law (Scotland) Act 1985, as amended, as it would fall under claims for financial provision on termination of a civil partnership.

In respect of the unjustified enrichment argument, it was submitted that unjust enrichment could not be relevantly pled against the executors of the deceased’s estate, who were a third party incidentally enriched by the payments.

Competent against the deceased

In his decision, Sheriff McGowan noted of the breach of contract claim: “Ms MacColl made it clear that the pursuer’s case was based on anticipatory breach so I need say nothing further about Ms Ennis’ argument about the time for performance (the repayment of the loan) not having been reached. It is clear that that never happened and so breach of contract cannot arise in that way.”

On whether there had been frustration of contract, he said: “Neither party has any averments about frustration of the contract. This is a debate and primarily concerned with the content of the pursuer’s pleadings. There is no reference to frustration therein. No point about the non-implementation of the putative contract due to frustration rather than breach of contract is mentioned in the defender’s pleadings nor is there any plea-in-law directed to that issue.”

Addressing whether there was a valid contract in the first place that was not covered by the part of the 1985 Act covering financial provisions, Sheriff McGowan said: “While the couple’s relationship had ended by the time of these negotiations, their civil partnership had not. It ended on the deceased’s death, but for that reason, no claims could be made by the pursuer under the mechanism provided in the 1985 Act. So at the time of the negotiations, the claims were prospective ones which had still to be agreed and finalised, but in the event never were.”

He explained further: “No doubt where there is a breakdown of a civil partnership (or a marriage), as a matter of efficiency and practicality, the parties thereto will often utilise the mechanisms set out in the 1985 Act to resolve all financial questions that arise between them as a result of the breakdown of the relationship. This will often including those arising out of collateral matters, e.g. a separate employment contract or business agreement, where those too have or are to come to an end. But they are not bound to do so, absent express legal provision to that effect.”

Sheriff McGowan concluded on this issue: “The pursuer’s arguments on the question of competency are preferred. She is seeking to bring a claim for damages for breach of contract et separatim of recompense for unjustified enrichment. Both these claims would have been competent against the deceased when she was still alive. As such, they are competent claims against the deceased’s estate.”

Turning briefly to the unjust enrichment case, Sheriff McGowan said: “That right of action arose when the deceased was still alive –and at that stage it was the deceased who had been unjustifiably and directly enriched, not any third party. That right of action survives the death of the deceased and may be brought against the executor who is sued in a representative capacity; and it is the estate which must meet the claim, if successful.”

For these reasons, the sheriff allowed a proof before answer and repelled all but one of the defender’s pleas-in-law. Part of an averment relating to the effect of the sale of the property was refused admission.

© Scottish Legal News Ltd 2021

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