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For heritable property, possession is not always nine tenths of the law

A recent Sheriff Court judgement has highlighted the importance of formally recording any agreement when it comes to ownership and possession of heritable property and the operation of the doctrine of personal bar in such circumstances.

Facts of the case

The facts of the case, Mridu Marwhaha v Pamela Kumra, can be summarised as follows. The Pursuer was the wife of the son of Mr and Mrs Marwaha. The Defender is the daughter of Mr and Mrs Marwaha. At one point the Pursuer, the Pursuer’s husband, the Defender and Mr and Mrs Marwaha all lived in the same property. As a result of debts owed by Mr Marwaha the family home had to be sold. The family had to find alternative accommodation. The only parties able to obtain a mortgage in respect of the new property were the Pursuer and the Defender. They agreed to take title to the property in both their names and obtained a mortgage between them in order to finance the purchase of the property.

The Pursuer and her husband vacated the property leaving the Defender, her mother and her father in sole occupation of the property. Whilst title to the property was in the name of the Pursuer and the Defender, who were also the parties liable for payment in terms of the mortgage, it was Mr Marwaha and (following his death) Mrs Marwaha who paid the mortgage payments and running costs of the property. It appeared that the intention of the parties was that the Defender would not in fact occupy the property but instead live with her husband in due course. For various reasons, immaterial to the case, this did not occur.

The Pursuer subsequently wished to purchase a further property to live in with her children but was unable to do so whilst still being joint owner of the previous property and jointly liable for payment of that mortgage. After various failed negotiation, over a period of over eight years, the Pursuer finally raised proceedings for division and sale of the property. The Defender defended these proceedings.

The Defender’s defence was based upon three separate arguments; i) there was an express agreement that the Pursuer had agreed not to seek the sale of property, or (ii) it was an implied term of the agreement between the parties that the Pursuer would not seek to sell the property whilst either Mr or Mrs Marwaha were alive, or (iii) the Pursuer was personally barred from seeking the remedy of division and sale due to her words and actings relative to the property.

The Pursuer denied that any agreement had been entered into by her. The Pursuer also claimed that the only reason she had left the property was due to threatening behaviour by the Defender. During the course of the case, as the evidence unfolded, the Defender appeared to change the focus of her defence from the existence of express or implied agreements to that of the Pursuer being personally barred from insisting upon her remedy of division and sale.

The difficulty with the Defender’s case was that the courts have consistently held that an action of division and sale is, in the Pursuer’s words, an “absolute remedy” (Upper Crathes Fishing Ltd v Baileys Executors 1991 SLT 747. The case of Baileys Executors was, however, a double edged sword to the Pursuer. Lord Hope, at 749 paragraph D stated;

“the right to insist on an action for division and sale is no different from any other right of an absolute nature which an individual may enjoy. It is always open to a person to deprive himself of his rights by contract, and I think that he may also be deprived of them, according to the ordinary principles of law, by the operation of personal bar.”

Accordingly whilst the starting positon was that the Pursuer had an absolute right to insist upon division and sale the door was left open that the Pursuer may have in some way compromised this absolute right via her actions or agreements. It was this qualification that the Defender’s case was based on.

The Sheriff’s decision

In order to overcome this absolute right the Defender at first sought to prove that the Pursuer had contracted out of her right to insist on selling the property, and/or that the pursuer was personally barred from being allowed to raise the action. However, during the course of the proof the Defender’s position became more and more difficult. The Defender’s credibility was found to be dubious by the court. In particular she was reluctant to answer some questions (saying she could not remember about discussions in 2015 to reach an agreement, but was adamant she could accurately recall events in 1995 regarding the purchase), failed to clarify why in eight years of correspondence she had never referred to the alleged agreement and her oral evidence departed markedly from her written case. The Sheriff held that no evidence had been placed before the court that would justify the finding that there was an agreement, express or implied, as to any sale of the property. The Defender therefore changed tack and focussed, during her submissions, that the fundamental basis of her case was that of personal bar.

The Sheriff referred to the definition of personal bar within Gloag & Henderson, the Law of Scotland as being:

“the capacity of controlling the rights of others either in the exercise of a real right in property or as the creditor in an obligation, may be in particular circumstances be limited or abrogated …”

The Defender relied on the following features of the case in support of her plea of personal bar: (a) the absence of payments by the Pursuer towards the mortgage and other outgoings for the property; (b) the absence of any offer by the Pursuer to make such payments; (c) the Pursuer’s knowledge about the intention of who would live in the property, and for whose benefit the property was being acquired; (d) that the Pursuer had never lived in the property, and lastly, (e) a more general averment as to the absence of any attempts to exercise rights of ownership by the Pursuer.

At paragraph 66 of her judgement the Sheriff held that when pleading personal bar “there must be both inconsistency and unfairness; the inconsistency is by the person now seeking to exercise the right, and as a result of now exercising the right, there would be a resulting unfairness.” It was also held that “inconsistency” could be by the Pursuer’s words, action or inaction when she knew of the right to seek division and sale.

The Sheriff was not persuaded that the proven facts and circumstances referred to by the Defender justified a finding that the Pursuer had acted inconsistently with her right to divide and sell the property. In particular, the Defender’s position was that by the Pursuer failing to pay the mortgage she had in some way compromised her ability to insist upon her right to divide and sell the property. The Sheriff took the opposite view in that if the Pursuer had made mortgage payments this might have been viewed as acquiescence with the status quo and contradictory to her insistence of wishing the property sold. The Sheriff identified that the Defender was claiming, in the absence of sufficient evidence pointing to such inconsistency, that the operation of personal bar could apply solely in instances of unfairness. The Sheriff rejected this submission. In particular the Sheriff at paragraph 82 of her judgement referred to paragraph 3.07 of Gloag & Henderson in support of her assessment of both factors being required on a sliding scale in that “where the inconsistency is failure to speak up or assert a right (inaction as opposed to action), then indicators of unfairness must be stronger.”

Finally the Sheriff was of the view that, in addition to the foregoing points, the Defender had failed to demonstrate that she had suffered prejudice being one of the requirements of establishing personal bar. An interesting point that arose, but was not considered in great detail, was whether the Defender could rely upon prejudice suffered by her mother as a result of the actions/inaction of the Pursuer in order to establish personal bar. The Sheriff was not persuaded that either the Defender or the Defender’s mother had suffered such prejudice and accordingly the issue was not considered in detail but the Sheriff appeared to indicate that the authority relied upon for this proposition by the Defender (Lord Birkenhead’s judgement in Gatty v Maclaine 1920 [SLR 334]) was open to interpretation and may open the door to future litigation on this point.

In summary, Sheriff McCartney held that the Defender’s defence had not been made out and accordingly repelled her plea in law and ordered that a surveyor be instructed to commence the process of division and sale of the property. This case highlighted that even where a situation may appear to be “unfair”; if parties in occupation of a property which is jointly owned by another party wish to protect themselves from an action of division and sale, a formal agreement dispensing with this remedy ought to be prepared and they should be advised accordingly.

If you require advice or assistance with any of the issues raised in this article, please get in touch with a member of our team.


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