Executor to pay £141,000 from father’s estate after losing damages claim over fish and chip shop

John Gray was awarded damages for loss of profits in his action against Father Roderick MacNeil, after the Sheriff Appeal Court ruled that the verbal agreement gave rise to “personal rights and obligations between” the parties and the deceased had breached the terms of the deal.

Sheriff Principal Mhairi Stephen QC, Sheriff Principal Ian Abercrombie QC and Sheriff Principal Duncan Murray heard that the appellant Mr Gray and deceased had verbally agreed a 15-year lease in 2005 of what was then the forecourt shop of a petrol station on South Uist, which was to be converted to a chip shop and run by Mr Gray and his wife Michelle.

The late Mr MacNeil, who died in 2015, was the owner of the petrol station and the respondent Father MacNeil – who was suspended from his parish in 2006 after his married cousin became pregnant by him – was executor nominate on his father’s estate.

The court was told that the relationship between the deceased and the appellant had been deteriorating for several years and by the end of 2008 was “hostile”.

In 2012 the appellant reported the deceased to the police for a number of sexual offences alleged to have been committed against certain named persons.

In October 2012 the deceased alleged to his daughter, Mrs Gray, that a female who had previously worked in the chip shop was staying with her husband.

Following a telephone call between the couple, the appellant went to see the deceased to confront him about the allegation.

The day after the confrontation, the deceased cut the electricity supply to the chip shop and refused to let the appellant into the premises.

As a result, the appellant was not able to manage the chip shop or petrol station business, and the chip shop was forced to cease trading.

Following a proof at Lochmaddy Sheriff Court, the sheriff found that the appellant and deceased had reached a verbal agreement which covered the four essentials for a lease at common law: the parties, the premises to be leased, the rent and the duration of the lease, the terms of which were set out in finding in fact 8.

It was accepted that a lease for more than one year required to be in writing, and in considering whether the verbal lease fell within section (1)(2)(a)(i) or section (1)(2)(b) of the Requirements of Writing (Scotland) Act 1995, the sheriff said there was “a single agreement which was, on the one hand, a contract for the creation of a real right in land (section 1(2)(a)(i)) and, on the other hand, was capable of creating a real right in land (section 1(2)(b)) In such circumstances, the verbal lease could not be described as creating purely personal rights…”

The appellant’s challenge was to the sheriff’s conclusion that the verbal lease could have no other effect.

It was submitted that although “ineffective” in constituting a lease, which creates a real right in land, as opposed to personal rights in land, the verbal agreement between the parties was effective to create “purely personal rights and obligations” between the pursuer and the deceased.

On this analysis, the pursuer would have no right against any third party to whom the property was disponed, but would retain rights against the deceased for the breach by the deceased of his personal obligations, which would sound in damages.

The respondent was eadem persona cum defuncto so the appellant’s personal rights transmit against him, it was submitted.

The appeal sheriffs agreed with the submission made by the appellant that it was possible for the terms of the agreement as found by the sheriff to give rise to personal rights and corresponding obligations.

Delivering the opinion of the court, Sheriff Principal Murray said: “We conclude that the terms of the agreement established by the sheriff in finding in fact 8 give rise to personal rights and obligations between the parties even though they could not constitute a lease without being reduced to writing.

“We further conclude that breach of the terms of the agreement encompassed within finding in fact 8 is sufficient to give the appellant a right in damages for the sums calculated by the sheriff in paragraph 85 of the judgment.

“In light of senior counsel’s concession that interest should run from the date of citation, we propose to recall the sheriff’s interlocutor of 15 January 2016; substitutes the findings-in-fact-and-law sought by the appellant and thereafter to grant decree in favour of the appellant in the sum of £141,117 with interest due from the date of citation until payment.”