St Andrews Forest Lodges Limited Against Jeremy Grieve And Iona Grieve
| Jurisdiction | Scotland |
| Judge | Sheriff S G Collins QC |
| Neutral Citation | [2017] SC DUN 25 |
| Court | Sheriff Court |
| Date | 27 March 2017 |
| Docket Number | A84/16 |
| Published date | 25 April 2017 |
SHERIFFDOM OF TAYSIDE CENTRAL AND FIFE AT DUNDEE
[2017] SC DUN 25
A84/16
JUDGMENT OF SHERIFF SG COLLINS QC
in the cause
ST ANDREWS FOREST LODGES LTD.
Pursuer
against
JEREMY GRIEVE and IONA GRIEVE
Defenders
Act: Upton, Harper Macleod LLP
Alt: Millar, Young & Partners
Dundee, 27 March 2017
The Sheriff, having resumed consideration of the cause,
Finds in Fact:
1. The defenders are spouses. In around 2007 they formed a limited liability partnership, Kincaple Lodge LLP, to buy and run a holiday park business at Kincaple, near St Andrews. The park comprised in particular Kincaple Lodge House (hereinafter “the Lodge”) and a number of holiday cabins located nearby. The defenders ran the business from the Lodge, in which they and their family lived as their home.
2. In around 2014 Kincaple Lodge LLP went into administration. The administrators allowed the defenders to continue to run the business on their behalf, pending sale, and to continue to live in the Lodge. By this time however the first defender was working in the Middle East, and therefore only lived in the Lodge when he returned to Scotland on leave. Nonetheless, it remained his principal home. The second defender continued to occupy the Lodge as her only home. She was now employed by a buy-to-let business, and through this gained some knowledge of assured and short assured tenancies, particularly in relation to student lettings.
3. The pursuer is a limited company. Its business is holiday lettings. In particular it owns a holiday lodge business at Piperdam, near Dundee. Mr Philip Mulholland is the managing director.
4. In early 2015 the pursuer agreed to buy the Kincaple holiday park from the administrators of Kincaple Lodge LLP. The total purchase price was £650,000. It was a condition of the purchase that the pursuer would obtain vacant possession of the Lodge.
5. The defenders wished to continue residing in the Lodge. It had been their family home for more than seven years. They spoke to Mr Mulholland and asked him whether the pursuer would be prepared to sell the Lodge to them after the purchase from the administrators was completed. Mr Mulholland indicated that the pursuer would be prepared to do so. A price was agreed in principle, namely £435,000, subject to survey.
6. However both parties were aware that the Lodge was subject to a planning restriction, limiting occupation of it to employees of the holiday park business. Accordingly purchase of the Lodge by the defenders for purely residential use by them was conditional on an application to discharge the planning restriction being made to and granted by the local authority.
7. The pursuer and the defenders therefore agreed that the defenders would vacate the Lodge so as to allow the pursuer to complete the purchase of the holiday park with vacant possession. They further agreed that following the purchase the defenders could resume occupation of the Lodge.
8. Mr Mulholland drew up a draft agreement, intended to regulate the defenders’ new occupancy of the subjects. This is lodged as production 5/1 for the pursuer. It is an adapted version of the standard holiday letting agreement which the pursuer used in the course of its business at Piperdam. It is headed ‘Holiday Let Agreement’. The parties to the agreement are stated to be the pursuer (designated “the Proprietors”) and the defenders (designated “the Holiday Tenants”). The Lodge is accurately described, and is designated as “the Holiday Accommodation”. The “Holiday Let Period” is specified as being from 27 February 2015 to 26 March 2015. A “Holiday Let Fee” is stated to be £750 per week, to be paid in advance. A “Holiday Deposit” of £1,000 is stated as being required to be paid before entry. Provision is made that “charges for telephone, electricity and gas supplied and used within the Holiday Accommodation during the Period shall be in addition to the rent and, shall be paid (or reimbursed) by the Holiday Tenants on demand either to the Proprietors or to the relevant utility supplier.”
9. This draft agreement was discussed by the defenders and Mr Mulholland, but was not signed by either party. In particular the defenders considered that the rental figure of £750 per week was too high for a residential let. Mr Mulholland agreed to reduce it to £2,000 per calendar month.
10. The purchase of Kincaple holiday park was completed on around 27 February 2015. Shortly beforehand the defenders left the Lodge and went to stay in rented accommodation nearby, in order that the pursuer would obtain vacant possession at the date of purchase. However all the defenders’ furniture and belongings remained in the Lodge, in anticipation of their resuming occupancy pursuant to their said agreement with the pursuer. On or around 7 March 2015, the defenders resumed occupancy of the Lodge.
11. Throughout the whole period since 7 March 2015 the Lodge has continued to be the first defender’s principal home, and the second defender’s only home. It has continued to be a separate dwelling. The defenders have had exclusive possession of it.
12. On 19 March 2015 Mr Mulholland emailed the first defender. A copy of this email is lodged as production 5/2 for the pursuer. It states, in particular:
“There are two separate issues here and they must be kept apart.
1 The Lodge hire and
2 The possible purchase of the lodge house at Kincaple
We are willing to hire the lodge to you on a standard holiday lodge hire agreement based on the one we use at Piperdam, with some exclusions and some on trust from both sides and will be made up of three separate periods:
One from 7th March to 31st March 2015 for £1,500
Period two from 1st April to 30th April 2015 for £2000.00
Period Three from 1st May to 31st May 2015 for £2000.00
A refundable security deposit of £1000.00 less electricity costs. The rent shall be paid on the first day of the letting month…”
To this email the first defender replied, the same day, agreeing its terms.
13. Parties were accordingly agreed that the defenders would be permitted to occupy the Lodge from 7 March 2015, as a separate dwelling, with exclusive possession, in return for payment of £2,000 per month. Parties were also agreed that the defenders’ occupancy of the property would continue on a month to month basis. They also agreed that the defenders’ occupancy would continue on this same basis after May 2015, should the defenders not have purchased the Lodge by that time.
14. Mr Mulholland’s intention was the defenders’ occupancy of the Lodge would have the legal status of a holiday let. The defenders did not agree to this. In any event the defenders’ occupation of the Lodge from 7 March 2015 was not for the purpose of a holiday. It was the first defender’s principal home, and the second defender’s only home, as it had been for the previous seven years, and was occupied by them for this purpose.
15. Both parties anticipated that the defenders would leave the Lodge if their proposed purchase of it did not or could not proceed. But parties did not agree that the defenders’ right to continue to occupy the Lodge was conditional on the proposed purchase proceeding. Nor did they agree that this right would terminate in the event that it became clear that the proposed purchase would not proceed.
16. The £1,000 deposit referred to in Mr Mulholland’s email of 19 March 2015 was not paid. However the defenders paid the sum of £1,500 in relation to their occupancy of the subjects from 7 March 2015. Thereafter and until December 2015 they paid the pursuer the sum of £2,000 each calendar month. These payments were made promptly, by bank transfer.
17. The pursuer returned the monthly payment in respect of December 2015 to the defenders. It did so on legal advice. No sums have since been accepted by the pursuer from the defenders in respect of their occupation of the subjects. The defenders have repeatedly offered payment at the rate of £2,000 per month since December 2015. They have put this sum on deposit each month since then. They remain willing and able to pay the total sum due since then. The pursuer continues to refuse to accept it.
18. At around the end of November 2015 the application to discharge the planning restriction in relation to occupation of the Lodge was granted. Thereafter the parties entered into and concluded missives for the sale and purchase of the Lodge. By solicitors’ letters dated 24 December 2015 and associated documents (productions 5/4 to 5/7) agreement was reached that the defenders would purchase the Lodge for £435,000 with date of entry on 15 February 2016. The missives provided for a non-refundable deposit of £20,000 to be paid by 30 December 2015.
19. The said deposit was paid by the defenders, but they were to pay the balance of the purchase price on the said settlement date. The first defender had moved the defenders’ capital offshore due to interest rate fluctuations, and he found that he was unable to return it to the UK by the settlement date. Accordingly the purchase did not complete on that date.
20. Further missives were subsequently exchanged between parties (productions 5/7 – 5/8). By these missives the parties agreed, in effect, that the purchase would proceed on the same terms as previously agreed, subject to the settlement day now being 18 March 2016, and to a further non refundable deposit of £20,000 being paid by 7 March 2016.
21. This further deposit was paid by the defenders, but again they were unable to pay the balance of the purchase price on the new settlement date. Shortly prior to this date the defenders had discovered that they remained liable under a guarantee relating to Kincaple LLP, which they had earlier believed had been discharged. They were therefore required to pay a substantial sum to the administrators and no longer had sufficient savings to pay the purchase price of the Lodge. Accordingly the purchase did not complete.
22. In the light of this the pursuer...
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