Argyll landowner who persuaded ex-partner to pay him for land she never received ordered to pay back full sum

Lorraine Ludman, a Scot living and working in Dubai, argued she and the defender, Andrew McIlvride, an architectural illustrator, had made an informal but binding contract for the transfer of funds in exchange for the land. In addition, she sought repayment of funds she claimed the defender had embezzled from a business bank account that she had made him a signatory to.

The case was heard by Sheriff Patrick Hughes in Oban Sheriff Court. Michael Upton, advocate, appeared for the pursuer and Wojciech Jajdelski, advocate, appeared for the defender.

Romantic relationship

The pursuer and the defender met in 2006 through the latter’s older brother Graeme, who also lived in Dubai. After they met, the three made an agreement whereby the defender would convey a plot of land he owned near Argyll to his brother for a house designed by him to be built on it at the expense of his brother and the pursuer. This house was to be sold and the proceeds divided between them, avoiding capital gains tax due to Graeme’s expatriate status.

After plans for that development fell through, another party expressed interest in buying the plot. It was agreed by the parties that, rather than accept this offer, the pursuer would purchase the plot for £140,000 and thereafter build a house on it. By this time, the pursuer and defender had entered a romantic relationship which lasted until 2015. The pursuer paid the funds to the defender over several instalments from 2010 to 2015, however title to the land was never transferred to her.

During their relationship, the defender was given access to the bank account the pursuer operated in respect of a shop she owned in Scotland in order to pay contractors for work on her Scottish properties. In addition to these funds, the pursuer claimed that the defender took over £56,000 from her account without her consent.

It was submitted for the pursuer that the parties had an informal, binding contract for the sale of the land, or failing that she had a case in unjustified enrichment. The pursuer’s case was also said to meet the conditions for “Melville monument liability” in that monies had been advanced on the implied assurance of a binding contract. In relation to the embezzlement, it was submitted that the evidence of the pursuer that the defender was only authorised to use the account for nominated purposes should be accepted.

Counsel for the defender submitted that his evidence ought to be preferred over that of the pursuer and her witnesses. The agreement between the parties was for transfer of title, not for sale, and it was “incredible” that an experienced businesswoman such as the pursuer would pay £140,000 over several years for a piece of land without fully investigating the reasons for any delays in the process with her lawyer.

In reliance of contract

In his decision, Sheriff Hughes said of the evidence: “I have no doubt whatsoever that the parties made the agreement described by the pursuer in her evidence. The pursuer presented well in the witness box and I have no difficulty in accepting her as a credible and reliable witness.”

He later added: “The pursuer’s idiosyncratic approach to this transaction has proven to be ill-advised, but it is understandable given that she was transacting with her own partner.”

In contrast, he described the defender as “an unsatisfactory witness whose evidence was characterised by vagueness, contradiction and implausibility,” and also added that he was “unburdened by any scruple about lying”.

On the existence of a contract, the sheriff said: “In terms of subsections 1(3) and (4) of the Requirements of Writing (Scotland) Act 1995 the pursuer has acted in reliance of the contract, most saliently by paying the agreed price of £140,000, and has been affected to a material extent by doing so. The defender has known of and acquiesced in these matters.”

He continued: “If he were entitled to withdraw, her position would be adversely affected to a material extent. Therefore he ought not to be allowed to withdraw; the agreement is valid, binding, and enforceable as a contract. Had I not come to these conclusions, the pursuer would nevertheless have succeeded on the alternative basis of unjustified enrichment.”

For completeness, Sheriff Hughes added: “Had there been no binding contract the pursuer could succeed on the basis of ‘Melville monument liability’. [For this] there must be an agreement, with representations or assurances rather than expressions of opinion, and no contractual remedy. All of these conditions would be satisfied here had no binding contract been formed.”

In relation to the embezzled funds, the sheriff concluded: “Having regard to the defender’s attitude to identifiable entries and his obvious abuse of the limited authority which he had been given, I am satisfied that on the balance of probabilities that all of the sums claimed [with a handful of exceptions] were taken without authority.” He also accepted that around £5000 of cash withdrawals were taken in connection with the pursuer’s business.

Sheriff Hughes therefore granted decree for the sum of £140,000 in respect of the pursuer’s first claim and of £47,693.62 in respect of the embezzlement claim.