Judge grants reduction of disposition as couple’s occupation of property was ‘an act of possession’ by title holder

A judge in the Court of Session ruled that allowing the couple to take and remain in occupation of the property was an act of possession by the executor’s late father, who had title to the subjects.

The action arose out of a dispute about the ownership of residential property located near Kilmarnock.

Lord Jones heard that the pursuer, Alexander McNaughton, was the son and executor nominate on the estate of the late John McNaughton, who died aged 86 in August 2008.

Throughout his life he lived in a semi-detached cottage, referred to as “number 1”, while the defenders, Scott Major and his wife Caroline Major, lived in the neighbouring property, “number 2”, which was the subject of the dispute.

The court heard that by disposition recorded in the General Register of Sasines on 31 March 1987, the “superiority title” to the subjects was conveyed by Metropolitan Pensions Association Limited to Mr McNaughton.

Mr McNaughton’s mother lived at number 2 until her death in 1991, following which the property lay empty until sometime towards the end of 1992 when, by arrangement with Mr McNaughton and his wife Ruth, the defenders moved in to number 2, where they continued to live.

The defenders paid the sum of £15 per week to the McNaughtons in connection with their occupation of number 2, until about 2006, but the precise basis on which they did so was one of the factual matters in dispute.

By a non domino disposition recorded in the General Register of Sasines on 22 November 2006, number 2 was conveyed to the defenders by the neighbours, Mr and Mrs Burns; Mr Burns being Mrs Major’s brother.

The pursuer discovered the existence of the disposition in favour of the defenders sometime in 2007 and raised an action seeking production and reduction of the disposition in favour of the defenders, together with decree ordaining the defenders to vacate number 2.

The pursuer’s primary submission was that Mr McNaughton obtained good title based on 10 years’ possession as at 31 March 1997, to cover the period both when his mother lived in number 2, when it then lay vacant and then when it was occupied by the defenders.

It was accepted by the pursuer that Mr McNaughton did not have actual possession of number 2 throughout the necessary continuous period of ten years, but it was contended that, if it could be established that the relationship between Mr McNaughton and the defenders in respect of number 2 was that of a landlord and tenant, then this would amount to “civil possession”.

Counsel submitted that, by far the most likely explanation for the payment of £15 per week from the defenders to Mr McNaughton and/or his wife was that it related to payment of rent, and that the defenders’ position that it represented their share of the insurance over the whole building could not be correct, given the amount involved.

It was accepted that there was never any written lease between the parties that would normally be required for a proper landlord and tenant relationship to be established, but a lease could be created verbally if for less than one year and such a lease could continue by “tacit relocation”.

For the defenders it was submitted that the real issue in dispute was as to the nature of the possession of number 2 during the period in which the defenders had been in occupation since 1992.

Possession involved more than physical control and must be accompanied by an intention to hold for one’s self or on one’s own account.

The defenders regarded number 2 as their home and having been told they could do whatever they wanted to it, they did considerable renovation works including a new bathroom, replacement ceilings, rewiring and internal decoration.

Neither Mr McNaughton nor indeed Mrs McNaughton took any interest in that matter and there was no evidence that the defenders ever sought permission for any such work to be done.

However, the judge considered the dispute about whether or not the defenders could properly be regarded as having been tenants under a lease as an “unhelpful and ultimately unnecessary diversion”.

He considered that the defenders’ occupation of number 2 constituted “an act of possession” by Mr McNaughton.

In a written opinion, Lord Jones said: “In describing the payment of £15 a week as “rent”, as Mrs McNaughton did to the pursuer…they were simply reflecting what, in their own mind, was the reality of the arrangement. Mr McNaughton allowed the defenders to occupy number 2 in return for a weekly payment.

“If the defenders had not been prepared to make a weekly payment, which, as the McNaughton’s knew, far exceeded a pro rata contribution to what they paid for insurance, and to agree to carry out any repairs and improvements at their own cost, they would not have been allowed to take possession of number 2.

“Consequently, it is clear that the defenders occupied number 2 only because they had Mr McNaughton’s permission to do so. If he had withdrawn permission, subject to the terms of the agreement between them, they would have had to move out.

“In the circumstances, the defenders’ possession of number 2 was derived from Mr McNaughton’s right to possess number 2. There was no other basis for their occupation… I am satisfied, therefore, that allowing the defenders to take, and remain in, occupation of number 2 was an act of possession by Mr McNaughton.”

The case was put out by order for further discussion on the pursuer’s conclusion for removal of the defenders.