Outer House case concerning an alleged contract relating to the purchase of a local authority flat at Partick Bridge Street in Glasgow in 1989.

Mr Khosprowpour claimed that he had loaned £8k to Mrs Mackay for the purchase of her flat and that the parties had entered a contract by which Mrs Mackay would remain in the property for the rest of her life without repaying the loan but that Mrs Mackay would make a will transferring it to Mr Khosprowpour on her death. Mrs Mackay also granted a standard security (securing all sums due and which may become due) in favour of Mr Khosprowpour in 1991.

Although Mr Khosprowpour said that Mrs Mackay had originally granted a will passing the property to him, she later executed a new will directing that her executors pay the sale proceeds of the flat to her children (who included Mr Khosprowpour’s former wife).

Mr Khosprowpour sought damages for breach of contract. Mrs Mackay’s executor argued that, as a contract relating to heritage[1], the contract required to be constituted by probative writing (i.e. signed and witnessed) and was consequently not enforceable. On the other hand, Mr Khosprowpour argued that the contract did not relate to heritage but instead was an innominate or unusual contract and, as such, could be proved prout de jure (by any means known to law). Even if that were not the case, Mr Khosprowpour argued that, by virtue of his payment of the funds and Mrs Mackay’s execution of the first will, Mrs Mackay was personally barred[2] from relying on the lack of formalities to resile from the agreement. Conversely, Mrs Mackay’s executor argued the fact that the Standard Security was granted in security of sums due rather than an obligation to include a provision in the will suggested that payment of the funds and execution of the first will were not unequivocally referable to an obligation requiring her to leave the title to the flat to Mr Khosprowpour in her will.

After considering the authorities[3], Lord Turnbull found that the contract related to heritage and, as such, required formal writing for its constitution. However, it was found that Mr Khosprowpour had set out a stateable case regarding personal bar and a proof was allowed to consider whether it could be established.

The full judgement is available from Scottish Courts here.

(NB: see appeal to Inner House here.)

All of our property and conveyancing case summaries are contained in the LKS Property and Conveyancing Casebook here.

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[1] As the alleged contract took place in 1989, the Requirements of Writing (Scotland) Act 1995 did not apply and the situation was governed by the pre-1995 Act common law rules on the requirements of writing.

[2] By virtue of the common law rule of rei interventus (where there are important actings by the party seeking to rely on the agreement which are known to and permitted by the other party and which are unequivocally referable to the purported contract.)

[3] In particular McEleveen v McQuillan’s Executrix 1997 SLT (Sh Ct) 46.