Scottish Court of Session Decisions

This is an appeal by Artbank (Scotland) Limited against an interlocutor of the sheriff principal of Glasgow and Strathkelvin dated 26 January 1999 refusing their motion to be allowed to appeal late against an interlocutor of the sheriff dated 23 December 1998 granting decree in terms of the Initial Writ.

The pursuer, Alexander Goudie, executed a number of paintings which were known as the "Tam O'Shanter Collection". The paintings, fifty-four in number, were stored by the defender, William Mulholland trading as Artlink, in his premises at Oakbank Industrial Estate, Garscube Road, Glasgow. On 16 December 1998 the pursuer raised an action against the defender in Glasgow sheriff court in which he sought, inter alia, (1) declarator that the pursuer was the lawful and truthful owner [sic] of the fifty-four paintings; (2) decree ordaining the defender to deliver the paintings to the pursuer within 48 hours, or such other period as the court deemed appropriate, of intimation to the defender by the pursuer of the court's order for delivery and (3) failing delivery of the paintings, payment to the pursuer by the defender of the sum of £656,065. In the Initial Writ the pursuer averred that he was the painter and lawful owner of the fifty-four paintings and that the defender was storing the paintings for him. The pursuer no longer wished the paintings stored by the defender and had given formal intimation of termination of the storage arrangement. However, the defender's solicitor had intimated that the defender would not release the paintings to the pursuer in the absence of a court order.

The action was not intimated to Artbank (Scotland) Limited ("the minuters") but on or about 21 December the existence of the action came to their attention and on that date they lodged a minute in the sheriff court process in terms of which they sought leave to enter the process as party minuters and to lodge defences. They also craved the court "to grant no orders in the action at the instance of the pursuer against the defender meantime". The minuters averred that they had acted as mercantile agents for the pursuer since January 1995 to exhibit and sell inter alia the fifty-four paintings comprising the "Tam O'Shanter Collection" but the pursuer had terminated the agency agreement with the minuters on 2 December 1998. It was averred in the minute that no contract for the storage of the paintings existed between the pursuer and the defender. On the contrary, a contract existed between the minuters and the defender, in terms of which the defender stored the paintings. The minuters averred that they had a general lien over the paintings and that they were entitled to payment from the pursuer of remuneration for services under the agency agreement, reimbursement of expenses and compensation under the Commercial Agents (Council Directive) Regulations 1993. It was stated that their defence to the action was (1) that the contract of storage was between the minuters and the defender and the defender should hold the paintings and act in accordance with the instructions of the minuters in respect of storage and (2) that the minuters, having a general lien over the paintings, were entitled to retain possession of them until their claim had been resolved.

By interlocutor dated 21 December 1998, the sheriff, having considered the minute, appointed parties to be heard thereon and remitted the cause for that purpose to the motions and hearings court of 21 January 1999. The minuters were ordained to intimate to the parties in the cause a copy of the minute and a copy of the interlocutor. On 23 December the sheriff clerk depute certified that no notice of intention to defend had been lodged by the defender and on that date the pursuer moved for decree in terms of the crave of the Initial Writ and the sheriff granted decree. The interlocutor of 23 December inter alia ordained the defender to deliver the paintings to the pursuer within 48 hours of intimation to the defender by the pursuer of the court's order for delivery and, failing delivery, granted "warrant to Officers of Court to search for and take possession and to deliver to the pursuer the paintings". The defender was interdicted (i) from taking any action to prevent the pursuer obtaining and re-possessing the paintings; (ii) from delivering the paintings to any other party without the pursuer's permission and (iii) from obstructing the implementation of the court order. We were informed by counsel for the pursuer that at the hearing on 23 December the pursuer's solicitor, who had received intimation of the minute, drew the sheriff's attention to the fact that it had been lodged. The pursuer's solicitor also moved for an immediate extract but that motion was refused.

We were informed by counsel for the pursuer that what happened next was that the pursuer's solicitor obtained a certified copy of the interlocutor of 23 December, sent it to sheriff officers and instructed them to serve it on the defender that day at his home in Bearsden. The sheriff officers were also instructed to attend the following day at the defender's premises at Oakbank Industrial Estate and uplift the paintings. Counsel for the pursuer was unsure whether the sheriff officers had gone to Bearsden. But on 31 December 1998 they called at the defender's premises and the defender, having been presented with the certified copy interlocutor, handed over to them all fifty-four paintings and they were returned to the pursuer.

On 13 January 1999 the minuters lodged a note of appeal. The appeal should have been lodged within 14 days after 23 December and the minuters moved the sheriff principal to allow the appeal to be lodged although it was late. The motion was heard on 26 January 1999 and was refused by the sheriff principal, who took the view that the right of lien which the minuters sought to assert had been lost and was incapable of resurrection so that the appeal would serve no useful purpose. In his Note the sheriff principal stated that when the sheriff officers had attended at the defender's premises the defender had handed the paintings over to them voluntarily. The sheriff principal observed that he was wholly unpersuaded that any power which he had, whether at common law or in the exercise of a right to regulate interim possession, extended to the creation or re-creation of a right of property which had been lost. The lien had terminated by loss of possession and would not be revived if the paintings were recovered from the pursuer. The pursuer's solicitor also submitted to the sheriff principal that the motion to mark an appeal late was incompetent as the minuters had not been permitted to enter the process as party minuters and therefore had not reached the stage of being parties to the action, the exercise of the court's discretion to allow an appeal to be lodged late only being available on the application of a "party" in terms of Rule 2.1 of the Ordinary Cause Rules. The sheriff principal stated that he would have been disposed to hold that the reference to "a party" in Rule 2.1 covered persons seeking to become a party or parties and that he would also have been disposed to exercise his discretion to allow the appeal to be lodged late. However, no satisfactory argument had been advanced to him that an appeal would serve any useful purpose and he refused the minuters' motion. The minuters have now sought to appeal against the sheriff principal's refusal to allow their appeal against the sheriff's interlocutor of 23 December to be lodged late.

At the hearing before us counsel for the minuters and appellants submitted that in the particular circumstances of this case the interlocutor of 23 December 1998 should never have been pronounced by the sheriff as the minute, in terms of which the minuters sought leave to enter the process as party minuters, had been lodged on 21 December and a hearing on the minute had been fixed for 21 January 1999. Decree in favour of the pursuer had been granted on 23 December before the minuters had had an opportunity of being heard in relation to their minute. The position had been made worse by the fact that the pursuer's solicitor had instructed sheriff officers, sent them a certified copy of the interlocutor of 23 December and told them to attend at the defender's premises and uplift the paintings. The pursuer's motion for immediate extract had been refused on 23 December and the pursuer's solicitor must therefore have known that the pursuer was not in a position to enforce the decree for delivery until it had been extracted and that could only have taken place after the expiry of 14 days. In the circumstances the defender, who had been faced on 31 December with sheriff officers in possession of a certified copy interlocutor, could not properly be regarded as having given up possession of the paintings voluntarily. The minuters averred that they had arranged for the paintings to be stored by the defender and that they had a general lien over the paintings. They had been legally in possession of the paintings, although they were in the hands of the defender with whom the minuters had deposited them for safe custody. A right of lien would not be lost if possession was given up in error or in consequence of undue means and it was clear in this case that the defender had relinquished possession in the mistaken belief that the sheriff officers were entitled to enforce the decree of delivery which had been pronounced on 23 December (Graham Stewart on Diligence page 173; Bell's Principles (10th edition) paras. 1415-6; Bell's Commentaries (7th edition) pages 87-90). In the circumstances the minuters were entitled to be restored to possession of the paintings pending the determination of the disputed issue between them and the pursuer as to whether or not they had a right of lien.

With regard to the pursuer's cross-appeal to the effect that the motion for leave to appeal late had been incompetent as the minuters had not been a "party" to the action, the minuters had lodged a minute in terms of Rule 13.1 seeking leave to enter the process as party minuters and were entitled to be heard on the minute and a hearing had been fixed for 21 January. However, the court never had the opportunity to consider the minuters' application as decree had been granted to the pursuer while the hearing on the minute was pending. By presenting the minute the minuters had attached themselves to the process and they were entitled to enrol the motion to lodge an appeal late. In any event, it was clear that the minuters had an interest to be sisted as party minuters and at common law it was pars iudicis to give them an opportunity of appearing and asserting their claim (Lord Blantyre v. Lord Advocate (1876) 13 S.L.R. 213). On the whole matter the minuters were entitled to have possession of the paintings restored to them and, if they were now in the possession of the pursuer, the minuters wished to seek an order for interim possession in terms of section 47(2) of the Court of Session Act 1988 pending the determination of the dispute in relation to the right of lien which they were claiming. Further, as there was, in effect, a judicial declarator that the minuters did not have a right of lien, the interlocutor of the sheriff dated 23 December 1998 and the interlocutor of the sheriff principal dated 19 January 1999 should both be recalled.

Counsel for the pursuer began by submitting that it was not disputed that the pursuer was the owner of the paintings in question. The paintings were being stored by the defender and the storage fees were being paid by the pursuer (as to two-thirds) and the minuters (as to one-third). They had been shown at an exhibition in Edinburgh in 1995 and the National Gallery had expressed an interest in purchasing them all and they had therefore been put into storage, although in the event the proposed purchase had not gone ahead. The pursuer's solicitor had received a copy of the minute shortly before the hearing on 23 December and it had been drawn to the attention of the sheriff. Counsel assumed that the sheriff was informed by the pursuer's solicitor, Mr. Lloyd, that the averments in the minute were not correct. Mr. Lloyd had told the sheriff that, notwithstanding the fact that the minute had been lodged and a hearing fixed, he was still moving for decree as the minuters were not parties in the process. He had moved for immediate extract to enable the paintings to be recovered quickly but that motion had been refused. The paintings had been in storage for about three years and counsel did not know why the pursuer was anxious to recover them as soon as possible. On 29 December Ms. Keith, who was an associate of the firm representing the pursuer, and who was aware that the motion for immediate extract had been refused, had written to sheriff officers enclosing a certified copy of the interlocutor of 23 December and instructed them to serve it on the defender that day and uplift the paintings on 30 December. In the event, the sheriff officers had gone to the defender's premises on 31 December taking with them the certified copy interlocutor. Counsel accepted that on 30 December the minuters' solicitors had informed the pursuer's solicitor that the decree had been granted in error and could not be enforced. At one stage in his submissions counsel conceded that Ms. Keith knew that the decree could not be enforced prior to extract but at a later stage he said that the view was taken that the certified copy interlocutor was sufficient authority to enable the sheriff officers to uplift the paintings.

Counsel submitted that in the particular circumstances of this case any lien which the minuters may have had had terminated when the defender gave up possession of the paintings and the sheriff principal had been right to hold that the minuters' appeal would serve no useful purpose. The minuters have now raised separate proceedings against the pursuer in Glasgow sheriff court seeking to recover the commission, remuneration and expenses allegedly due to them and that action was being defended by the pursuer. The pursuer disputed the minuters' claim that they had a lien over the paintings and counsel submitted that the defender had relinquished possession of the paintings voluntarily and, that being so, any right of lien which the minuters may have had had been terminated and could not be restored by a court order returning possession of the paintings to the defender or to the minuters. Counsel accepted that a right of lien does not terminate in a case where possession is given up in consequence of fraud or error, but that had not happened in this case. In any event, in the circumstances of this case the status quo ante could not be restored. Counsel for the pursuer went on to submit that the motion to be allowed to appeal late was not competent as the minuters had never been granted leave to enter the process and accordingly they were not parties to the action and had no title to enrol the motion. It was now too late for the minuters to be given leave to enter the process. Counsel referred to Rules 2.1, 4.1, and 5.2 to 5.9. It might be that the minuters could have sought reduction of the interlocutor of 23 December but they had not made any attempt to do so. Even if the appeal had been marked timeously it would have been incompetent.

Counsel for the pursuer was asked where the paintings are now and, in particular, whether they are in the possession and control of the pursuer. He told us that the pursuer no longer owns them and that he does not now have title to them. Counsel stated that he was not prepared to give us any information as to the circumstances in which the pursuer gave up his title to the paintings as there were confidential matters involved. He would not say whether or not the paintings had been sold or who had them. If, however, the minuters formulated and enrolled a motion in terms of section 47(2) of the 1988 Act, then he would wish to consider his position. The paintings were very valuable and the cost of storing them was high.

In our opinion the submissions advanced on behalf of the minuters were well-founded. It was common ground that the paintings were in the custody of the defender for safe storage, although there is apparently a dispute as to who had contracted with him for the storage and whether or not the minuters had a general lien over them. These are matters which will require to be resolved in due course. However, at the hearing before us there was no dispute as to the circumstances in which the interlocutor of 23 December came to be pronounced. The pursuer's solicitor moved for decree on 23 December and the sheriff granted decree in spite of the fact that the minuters had already lodged their minute seeking to enter the process, averring that they had a general lien over the paintings and craving that no orders should be pronounced meantime. A hearing on the minute had been fixed for 21 January. In these circumstances we find it difficult indeed to understand why the sheriff decided to grant decree and we are satisfied that he erred in deciding to do so when a hearing on the minute had already been fixed for 21 January.

It is also clear that the pursuer's motion for immediate extract had been refused on 23 December and the pursuer's legal advisers should have been aware of the fact that the decree could not competently be enforced until it had been extracted and that it could not be extracted until 14 days had elapsed. In spite of that, sheriff officers were sent a certified copy of the interlocutor and instructed to serve it on the defender and then to uplift the paintings from his premises at Oakbank Industrial Estate. The minuters aver that the defender was holding the paintings on their behalf and that they had a general lien over them. The pursuer avers that the defender's solicitors had stated that the defender would not release the paintings to the pursuer in the absence of a court order. If the defender was storing the paintings for the minuters and had relinquished possession voluntarily, then it was common ground that any lien which the minuters possessed would be terminated and could not be regained by recovery of possession. On the other hand, if the defender had handed over the paintings in error or as a result of fraud or undue means, then any right of lien would not thereby have been lost. On the basis of the information which was made available to us in the course of the hearing, particularly information provided by counsel for the pursuer, there was no dispute as to the circumstances in which the defender did hand over the paintings. The pursuer was not entitled on 31 December to enforce the decree granted on 23 December, as it had not been extracted. Nevertheless, the pursuer's solicitor sent the sheriff officers a certified copy of the interlocutor and instructed them to serve it on the defender and then to uplift the paintings from the premises where they were stored. We can well understand why the defender, faced with sheriff officers armed with a certified copy interlocutor, handed over the paintings but in our opinion his action in doing so cannot properly be regarded as being voluntary. On the contrary, it can clearly be inferred that he handed them over because he was presented with a court order which had been deliberately sought on 23 December in order to prevent the minuters from exercising their right to seek to enter the process and contest the action. By raising the action, not intimating it to the minuters and proceeding to uplift the paintings in this way the pursuer and his agents were engaged in a stratagem to outflank the minuters and get the paintings. That being so, the defender was induced to part with possession by improper means and any lien which the minuters had had would not have been terminated by that loss of possession. Counsel for the pursuer submitted that the sheriff principal had been right to conclude that the appeal would serve no useful purpose but, if that is so, it is difficult to understand what interest the pursuer has to resist it.

We are also satisfied that there is no merit in the contention advanced on behalf of the pursuer that the motion for leave to appeal late was incompetent as the minuters had not been given leave to enter the process and therefore were not parties to the action. The fact of the matter is that, by successfully moving for decree after the minute had been lodged and a date set down for a hearing on the minute, the pursuer's solicitor had effectively prevented the minuters' application from being considered by the court, and so had denied them the opportunity to become parties, before the decree which they were seeking to prevent had been granted.

On the basis of the information made available to us in the course of the hearing we are satisfied that the steps which were taken on the pursuer's behalf to recover the paintings at the end of December reeked of irregularity and we are surprised that an attempt was made to defend the course of action which was adopted. Further, we were not impressed by the pursuer's deliberate and calculated lack of frankness in relation to the question of the present whereabouts of the paintings and the circumstances in which he allegedly lost his title to them.

On the whole matter we shall recall the interlocutor of the sheriff dated 23 December 1998 and the interlocutor of the sheriff principal dated 26 January 1999 and quoad ultra we continue the appeal to enable the minuters and appellants, if so advised, to formulate and lodge an application for an order for interim possession of the paintings in terms of section 47(2) of the Court of Session Act 1988.