Scottish Court of Session Decisions

By Missives dated 26 February 1991, 5/14 of process, the first defenders, as partners and trustees for their firm of R.C. Stewart & Company, Farmers, of Newton Farm, Millerhill, by Dalkeith, agreed to sell to the pursuers, as trustees of Mr G.A. More Nisbett's 1990 No.1 Trust, hereafter referred to as "the 1990 No.1 Trust", and the second named pursuer and John Norris Fergusson, as trustees of Mr G.A. More Nisbett's 1990 No.2 Trust, hereafter referred to as "the 1990 No.2 Trust", and their respective assignees and nominees whomsoever, the field known as the Highfield, part of Edmonstone Farm, Dalkeith, extending to 15 acres or thereby shown delineated in red on the plan annexed thereto on the terms and conditions specified therein. As provided in Condition 1 of the Missives, the consideration for the property was to be the granting by Dunwilco (224) Limited in favour of John Cunningham Stewart of the option to purchase the said Dunwilco (224) Limited, dated of even date therewith. In terms of Condition 2, entry and actual vacant occupation of the property was to be given on 1 March 1991, or such other date as might be mutually agreed in writing. Condition 3 of the Missives was in the following terms:

The Missives to which I have referred, contained a variety of other conditions, with which, at present, I do not require to be concerned.

The summons in the present action, which was signetted on 23 January 1996, contains a total of nine conclusions. Conclusion 1 is for declarator that, by virtue of the Missives dated 26 February 1991, the first defenders entered into and are bound to implement a concluded contract for the sale to the pursuers of the property referred to on the terms and conditions contained therein. Conclusion 2 is for a decree ordaining the first defenders to implement these Missives within one month of the date of the order of the court to follow thereon and to

Conclusion 3, which is stated in the alternative, is for declarator that the second defenders have adopted the obligations of the first defenders in terms of the contract referred to in the first conclusion and are bound to implement its terms. Conclusion 4 is one for decree ordaining the second defenders to implement the Missives, within the time specified, by executing and delivering to the pursuers a validly executed Disposition in favour of the pursuers, and making, executing and delivering or exhibiting such other deeds as might be necessary in order to give the pursuers a valid marketable title to said property within said period. Conclusion 5 is designed to operate, failing implement in terms of the second or fourth conclusions within the period specified; it seeks an order from the court authorising and directing the Clerk of Court to subscribe on behalf of the defenders a Disposition of the property. In Conclusion 6, also stated in the alternative, damages are sought failing implement of the Missives concerned from the defenders jointly and severally or severally. Conclusion 7 is an alternative conclusion for damages stated upon the premise that the pursuers required to conclude for separate sums in respects of damages. Conclusions 8 and 9 are for interdict and expenses respectively.

Before coming to deal with the issues debated before me in the Procedure Roll, it is right that I should record that, although the action was signetted on 23 January 1996, the second pursuer, George Alan More Nisbett, was introduced as a pursuer in the action only on 4 July 1996, by means of an amendment. Furthermore, I should also record that when the case came before me in the Procedure Roll, the second defenders were not represented, although, of course, they have appeared in the action. It was then indicated that the second defenders did not desire to participate in the Procedure Roll debate. Also at the Procedure Roll hearing, it was agreed between the pursuers and the first defenders that, in dealing with the issues which arose, I should take into account all of the productions lodged by these parties.

At the outset of the Procedure Roll hearing, counsel for the first defenders moved me to dismiss the action by sustaining pleas-in-law 1 and 2 for the first defenders, pleas relating to the pursuers' title to sue; it was also indicated that the first defenders' plea-in-law 5, a general relevancy plea, would be supported.

After summarising the averments of the parties and referring to the various deeds relied upon therein, counsel for the first defenders drew my attention to the Note of Arguments prepared on behalf of his clients. He pointed out that paragraphs 1-3 inclusive of that Note related to the issue of title to sue. Paragraph 4 embodied a criticism of the averments made by the pursuers as to the power of the first defenders to secure the granting of the necessary Disposition by the second defenders, who were now the heritable proprietors of the area of land concerned, by virtue of the Notice of Title in their favour, dated and recorded on 16 May 1991. Paragraph 5 of the Note of Arguments contained certain criticisms of the averments of loss which had been made by the pursuers.

Counsel for the first defenders then proceeded to deal in detail with the issue of title to sue. Particularly under reference to the first defenders' plea-in-law 2, he submitted that the action should be dismissed. The basis of this contention was that everyone who was a necessary pursuer in an action such as this had to have been in the position of being a pursuer at the time of the commencement of the action. In that connection reference was made to Donaghy & Another v W. Rollo & Others 1964 S.C. 278. The passage in the judgment of Lord Justice Clerk Grant at p.285 showed that it was essential that a pursuer should have a title to sue at the commencement of and throughout the duration of an action. Reliance was also placed on Symington v Campbell (1894) 21 R. 434. In that case it was held that, at the date of the commencement of the action, the pursuer had had no right to sue for damages in the respects attempted and no title to sue and that a subsequent assignation in his favour did not remedy that defect.

In the present case, examination of the terms of the Missives, 5/14 of process, showed that the purchasers of the land in question were (1) George Alan More Nisbett, as an individual, (2) Abacus Trustees (Guernsey) Limited as trustees of the 1990 No.1 Trust, and (3) George Alan More Nisbett and John Norris Fergusson, as trustees of the 1990 No.2 Trust. They were designated in the Missives as "the Purchasers". The first defenders were, of course, designated as "the Sellers" therein. The position was that the Sellers had come under an obligation to deliver a Disposition of the property concerned to the Purchasers, which was an indivisible obligation. One of several creditors in such an obligation did not possess a title to sue. That proposition was supported by a passage in Contract, Gloag, 2nd Ed., at pps.202-203. In such a situation as this, no one creditor had a title to sue separately and without the authority of the others. As an example of that principle, counsel for the first defenders relied upon Detrick & Webster v Laing's Patent Overhead Handstitch Sewing Machine Company Limited (1885) 12 R. 416. There it was held that one of the several proprietors of a patent could not insist for the implement of an agreement relative to its exercise. In the light of these authorities, it was necessary that all co-creditors should sue together. That had to be the position at the commencement of the action. In this case, Mr More Nisbett had not become a pursuer until 4 July 1996. He had, of course, been an individual contracting party under the Missives referred to. At the time of their having been concluded, he had not been a trustee under the 1990 No.1 Trust. That was evident from the Trust Deed itself, 5/1 of process. It was averred in Condescendence 1 that the action had been raised with the consent and concurrence of George Alan More Nisbett. It was submitted that that circumstance was irrelevant; there had to be participation as a pursuer, in order to create a title to sue. That was evident from MacRitchie's Trs. v Hislop (1879) 7 R. 384 and (1880) 8 R. (H.L.) 95. In the Second Division it had been held that the consent and concurrence of the superior conferred upon a feuer a title to sue. However, that decision had been overturned in the House of Lords, as appeared from pps.96-98 of the report of those proceedings. In all these circumstances, it was submitted that the action should be dismissed by the sustaining of plea-in-law 2 for the first defenders. It was emphasised that this argument was not merely a technicality, because there existed a question of time bar in relation to the claim for damages.

Counsel for the first defenders next elaborated the subject matter of paragraphs 2 and 3 of his Note of Arguments. This also related to the question of title to sue. The point raised in paragraph 2 was simply that there was a conflict between the pursuers' averments in Condescendence 1, to the effect that the company Abacus Trustees (Guernsey) Limited were trustees acting under the 1990 No.1 Trust, and the terms of the deeds which had been produced and which it was agreed should be considered in the debate. The Trust Deed relating to the No.1 Trust was 5/1 of process. In it, the trustee was designated as Abacus Trust Company Limited. However, on the other hand, there had been produced what was described as Supplemental Deed of Trust, in relation to that Trust, 23/1 of process. In it it was asserted that the trustees under the No.1 Trust were Abacus Trustees (Guernsey) Limited, the first pursuers. Furthermore, it was narrated in that document that they were indeed the Trustees at present acting under the Deed of Trust, in which they had been erroneously designated at "Abacus Trust Company Limited". The situation was pregnant with confusion. In these circumstances the action ought to be dismissed by the sustaining of the first defenders' plea-in-law 1, in part.

Counsel for the first defenders next drew attention to the matter raised in paragraph 3 of his Note of Arguments. It concerned the averment made in Condescendence 1 to the effect that the pursuers were the trustees acting under the 1990 No.2 Trust. The Trust Deed, which created that trust, 5/2 of process, showed that the original trustees thereunder were George Alan More Nisbett and John Norris Fergusson. It had not been made clear, in the first instance, how it was that the pursuers had come to be the trustees acting under that trust. Some light had been cast upon the question by the terms of a Deed of Appointment between Colyb Trust Company Limited, George Alan More Nisbett and John Norris Fergusson and Abacus Trustees (Guernsey) Limited the first named pursuers, dated 11, 12 and 14 March 1991, 5/3 of process. In that deed, Colyb Trust Company Limited, described therein as "the Protector" in terms of the Deed of Trust itself, purported to exercise the power conferred on it by that Deed of Trust and thereby to appoint the first pursuers as the new trustees, the original trustees having resigned. Until very recently, it had not been made clear what was the status of Colyb Trust Company Limited. However, very recently there had been produced a Deed of Appointment, dated 28 December 1990, by which George Alan More Nisbett, the second pursuer, had appointed Colyb Trust Company Limited to be a Protector, as defined in the 1990 No.2 Trust. Accordingly, it was now accepted by the first defenders that the right of the first pursuers to sue as trustees under the 1990 No.2 Trust had been made clear. Thus it was accepted that the matter raised in paragraph 3 of the first defenders' Note of Arguments was no longer a concern.

Counsel for the first defenders then proceeded to elaborate the subject matter of paragraph 4 of his Note of Arguments. The point raised there depended upon certain averments made by the pursuers at p.9 of the Closed Record. It was there averred that:

There then followed certain averments demonstrating the basis on which the second defenders had come to have an interest in the property known as the Highfield. It was there explained that certain Deeds of Assumption and Resignation, a Disposition and Notice of Title had been executed as part of a scheme designed to avoid the payment of Capital Gains Tax. The effect of the scheme was to transfer said property to the second defenders as off-shore trustees. The terms of Conclusion 2 were associated with these averments in respect that, in it, the court was invited to pronounce a decree inter alia directing the second defenders to deliver to the pursuers a validly executed Disposition and valid marketable title to the said subjects in terms of the Missives. The criticism which was made of the pursuers' position was that their averments contained no explanation as to how the direction sought in Conclusion 2 could be given, or what the consequence of such a direction might be. If there was no consequence of a practical kind, a direction could not properly be given. In other words, the pursuers' averments on the matter at p.9 of the Closed Record did not disclose what the pursuers apparently intended to prove. Thus their pleadings did not give fair notice to the first defenders of the nature of their case. In these circumstances the court should sustain plea-in-law 5 for the first defenders and dismiss the action.

Counsel for the first defenders next proceeded to deal with the subject matter of paragraph 5 of his Note of Arguments. This concerned the averments of loss made by the pursuers to support their claim of damages. The averments under consideration were to be found at pps.18-19 of the Closed Record. It was there averred that the pursuers had carried out work on the property, to which they had taken entry, having given to John Cunningham Stewart the option which was the consideration for the property. It was averred that the pursuers had cropped the land. They had ploughed it. They had planted trees. They had raised fences. They had carried out extensive wall maintenance. Against this background, the first defenders' submission was that there was nothing in the pursuers' pleadings to show that the work said to have been done was in the reasonable contemplation of the parties. Accordingly, a claim based upon these activities was too remote to be relevant. In this situation, the averments relating to the pursuers' operations ought to be excluded from probation. In support of this submission reference was made to Lloyd v Stanbury [1971] 1 W.L.R. 535. In particular, reference was made to the observations of Brightman J., at pps.544 and 546-547. In these passages the criterion was seen as being what could be said to be in the reasonable contemplation of the parties to the contract. In the present case there were no averments as to what was in the reasonable contemplation of the parties. Lloyd v Stanbury had been approved in Anglia Television v Reed [1972] 1 Q.B. 60, at p.64, by Lord Denning, M.R.

A separate criticism could be made of the pursuers' averments in Condescendence 7. They had averred that they would lose a chance of developing the property. The property was well positioned in relation to long term strategic planning. A hope value attached to the property. The property was a natural adjunct to other More Nisbett land. The criticism of these averments was that there was no specification relating to the contemplated development or the long term strategic planning relied upon. There was no explanation in averment of the "hope value" said to attach to the property. Equally, there was no explanation as to how the value of the property possessed a value as an adjunct to other More Nisbett land. In all these circumstances, the court should sustain plea-in-law 5 for the first defenders and exclude from probation the averments concerned.

Counsel for the pursuers, in reply, explained the position of the pursuers. Firstly, they contended that the action had been competently raised and accordingly the first defenders' pleas-in-law 1 and 2 should be repelled. Secondly, since the first defenders' plea-in-law 4 had not been supported, it also should be repelled. Thirdly, it was contended that the pursuers' averments of loss were sufficiently relevant and specific to go to proof.

Counsel for the pursuers indicated that, first of all, he would deal with the first defenders' criticisms of the pursuers' averments of loss. He also indicated that he wished to criticise certain averments made by the first defenders, but could not move the court to grant a decree de plano. Nevertheless, the pursuers wished that their plea-in-law 2 should be sustained, to the limited extent of excluding from probation certain averments made by the first defenders.

Turning to consider the pursuers' averments of loss, it was submitted that enough had been averred in the context to allow those averments to stand. It had to be recognised that the pursuers' claim for damages was subsidiary to the claim for implement of the contract concerned. As regards the general criterion to be applied, counsel for the pursuers agreed that, for damages to be recoverable, the claim had to relate to matters which ought to have been in the reasonable contemplation of the parties when the contract was entered into. The case of Lloyd v Stanbury was illustrative of that. It was necessary however to look at the circumstances of the case, including the terms of the contract under consideration. That was, of course, the Missives, 5/14 of process. It was clear from that document that the contract related to a field on a farm. Conditions 8 and 9 of the offer to sell were important. They showed that what was contemplated was the making of a planning application for residential development on the land in question. Condition 9 demonstrated that, in certain circumstances, where part of the land was not sold to a third party developer, depending upon the size of the residual land, it might be annexed to other More Nisbett land, or reconveyed to the Sellers at agricultural value. Further, condition 2 of the Missives provided that entry would be given on 1 March 1991, or such other date as might be agreed. Against this background, it was submitted that it was in the reasonable contemplation of the parties that occupation of the land would be taken and work done upon it. The averments about the ploughing and cropping of the land had been misunderstood by the first defenders. The fact was that these were averments of mitigation of loss. So far as the planting of trees, the raising of fences and the maintenance of walls were concerned, it was plainly within the reasonable contemplation of the parties that such things might be done in the event of occupation being taken. The averment about the position of the land in relation to long-term strategic planning was clear. It would not be difficult to assess the value of the land as regards its development potential. Equally, the value of the land as an adjunct to other More Nisbett land adjacent to it could readily be assessed. The averments criticised by the first defenders should be admitted to probation.

Counsel for the pursuers then turned to the question of title to sue. He pointed out that the first pursuers, who were seeking the enforcement of the contract, had themselves been parties to it. As regards the position of the second pursuer, it was submitted that there had been no requirement in law for him to have been a pursuer at the outset of the proceedings. It was suggested that two questions arose: (1) Did all parties need to be parties at the outset of the proceedings; (2) Could an omission in that respect be cured subsequently. There were different types of case. In some cases all creditors had to be pursuers at the outset. In others, it was sufficient if one creditor was the pursuer and had the authority of the others. In the present instance, it had been claimed that all parties under the contract had to sue at once; one creditor could not sue alone; furthermore, it was contended that all relevant parties required to be pursuers in the action from the outset; a party could not be added by amendment. So far as the pursuers were concerned, it was accepted that all parties to the contract required to pursue the action. However, the second contention, to the effect that there could not be the addition of a pursuer by amendment, was not accepted. The powers of the court were now so wide as to authorise what had been done in this case. Rule of Court 24.1.(2)(b)(iv) and (v) authorised an amendment which might be necessary

It was quite clear that the second pursuer was an "additional pursuer". Furthermore, the addition of the second pursuer to the action following its commencement by amendment was also authorised by the terms of paragraph (v). The matter of the amendment adding the second pursuer's name to the action had been one for the discretion of the court.

The modern powers of amendment of the court, in this respect, had their Genesis in the Codifying Act of Sederunt of 1913. Its significance was demonstrated in Rackstraw v Douglas 1919 S.C. 354. In that case, the pursuer in an action for reduction of a decree of disentail sued as one of the heirs of the entail. Having discovered in the course of the proceedings that his position as an heir of entail might be open to challenge, he obtained an assignation of the rights of a nearer heir. It was held that under the provisions of the Codifying Act of Sederunt of 1913, it was competent for the court to allow the pursuer to amend the instance by adding his title as assignee. It was made clear by the Lord Justice Clerk that the recent changes made by the Act of Sederunt had completely altered the position in relation to the addition of pursuers following the commencement of an action. The foregoing position had been affirmed in Donaghy v Rollo, where, at p.287 it was made clear that cases on the matter in issue arising prior to the enactment of the Codifying Act of Sederunt of 1913 were no longer of any assistance. A similar view as taken in A.C. Stewart & Partners v Coleman 1989 S.L.T. 430.

Counsel for the pursuers next commented upon certain specific authorities relied upon by the first defenders. As regards Symington v Campbell it was submitted that the case no longer possessed authority, having been superseded by the provisions of the Codifying Act of Sederunt of 1913 and subsequent versions of the Rules of Court. In relation to Dettrick & Webster v Laing's Patent Overhead Handstitch Sewing Machine Company Limited, a similar position was adopted. The problem which existed in that case could now be cured by amendment if the other interested parties consented to becoming pursuers. In relation to Hyslop v MacRitchie's Trs., and it was evident that it had been decided that the co-feuers had no right to pursue as a consequence of the law of property. However, had the situation arisen after 1913, the superior could have taken over the conduct of the action following upon amendment.

In summarising his position on this aspect of the case, counsel for the pursuers submitted that it had been entirely competent to add the name of the second pursuer by amendment. The effect of the amendment was to cure any defect in the title of the original pursuers to sue the action on the agreement concerned. Accordingly, in these circumstances, plea-in-law 2 for the first defenders should be repelled. Furthermore, plea-in-law 3 for the first defenders had not been insisted upon. Accordingly it also should be repelled.

Turning to the issues raised by the first defenders' plea-in-law 1, the position was that the contract for the sale and purchase of heritage under consideration entailed multiple purchasers. These were the 1990 No.1 Trust, the 1990 No.2 Trust and Mr More Nisbett himself. Two criticisms had been made of the situation focused by the first defenders' plea-in-law 1. In the first instance it was pointed out that the Deed of Trust by the second pursuer relating to the 1990 No.1 Trust, stated that the trustees were Abacus Trust Company Limited. The explanation for this discrepancy was quite simply that the designation of the trustees in that document was erroneous; it ought to have been that of the first pursuers. However, for the present purposes, it mattered not. The first pursuers had averred that they were trustees under this trust, as appeared from Condescendence 1. Furthermore, it was evident from the Missives, 5/14 of process, that they were designed as trustees under the 1990 No.1 Trust in that document. Thus the contracting party was now suing to implement the contract. The position was that this criticism was not a point of relevancy. It raised a question of fact.

The second matter raised on the basis of the first defenders' plea-in-law 1 was that described in paragraph 3 of their Note of Arguments. The position of the first pursuers as trustees under the 1990 No.2 Trust had been demonstrated on the basis of the documents produced. In that connection reference was made to the Deed of Appointment, 5/3 of process, which demonstrated that a change of trustees had occurred. The right of Colyb Trust Company Limited to effect the change had been demonstrated by reference to the supplemental Deed of Trust, 23/1 of process, and the Deed of Appointment, 23/2 of process. In summary, it was evident from the averments made in Condescendence 1, in association with the documentation to which reference could be made, that the first pursuers had been appointed as trustees under the 1990 No.2 Trust. In these circumstances, this particular criticism disappeared.

Counsel for the pursuers next turned to consider the matters raised in paragraph 4 of the first defenders' Note of Arguments. The background to the matter was that the Missives had been entered into with the first defenders as partners and trustees of the firm R.C. Stewart & Company. As appeared from Condescendences 4 and 5, the Missives had been concluded on 26 February 1991 but it was averred that, on or about 19 February 1991 the first defenders had disponed the subjects concerned to the second defenders. What the pursuers were doing in the averments in Condescendence 2 which had been criticised was to provide an explanation of the position of the second defenders in relation to the first defenders. That explanation was consistent with the terms of the second conclusion, in which a decree ordaining the first defenders to implement the Missives and to direct the second defenders to deliver to the pursuers a validly executed Disposition was sought. The situation was quite straightforward. The obligation of the first defenders was founded upon the contract embodied in the Missives. Provided that the obligation undertaken by the first defenders was sufficiently precise to be capable of identification, which it was, then the court could grant an order for implement of that obligation. The pursuers were not seeking to prove that the first defenders actually possessed the power to control the actions of the second defenders. Nevertheless, the pursuers were entitled to seek to enforce the terms of their contract with the first defenders. The first and second conclusions of the summons simply sought to do that.

Counsel for the pursuers next focused attention upon the contract itself, the admissions relating to it and the averments of the first defenders, which were contrary to the provisions of the contract, with a view to persuading me that those averments should not be admitted to probation and that plea-in-law 7 for the first defenders should be repelled. In this connection counsel for the pursuers pointed out that the pursuers averred in condescendence 2 that the second defenders had an interest in the Highfield by virtue of certain specified deeds, which were executed as part of a scheme designed to avoid the payment of Capital Gains Tax. The effect of the scheme was to transfer the property to the second defenders' qua off-shore trustees. As appeared from Answer 2 for the first defenders those averments were admitted. It was to be observed that, at the end of Answer 2 for the first defenders it was averred that:

It was submitted that those averments were irrelevant and ought to be excluded from probation. The pursuers were not founding on any power said to be possessed by the first defenders.

Next, in this same connection, attention was drawn to certain averments in Condescendence and Answer 4 for the first defender. In Condescendence 4, the pursuers averred that Condition 3 of the Missives provided that the Sellers would deliver a validly executed Disposition and valid marketable title to the property in favour of the Purchasers. It did not specify by whom the Disposition and title would be granted. In Answer 4 for the first defenders it was averred as follows:

It was submitted on behalf of the pursuers that that averment was irrelevant being in conflict with a proper construction of the Missives, and ought to be excluded from probation by the sustaining of the pursuers' first plea-in-law to that extent.

Counsel for the pursuers next drew attention to the averments in Condescendence and Answer 5, relating to the background to the series of transactions concerned, which was associated with a purpose to reduce tax liability. In particular reference was made to the letters which were the subject of averment, dated 21 December 1990 and 11 and 19 February 1991, 20/1-3 of process, which were incorporated into the pleadings. The averments at the end of Answer 5 for the first defenders relating to the knowledge of the pursuers and their agents, Messrs Dundas & Wilson, concerning the fact that the first defenders had executed a Disposition of the property on 19 February 1991, as part of a tax avoidance scheme, were plainly relevant to the construction of Condition 3 of the contract. That Condition was also referred to in Condescendence and Answer 6 for the first defenders. In that Answer, there was an averment to the effect that:

That averment also should be excluded from probation.

Counsel for the pursuers then focused attention upon the detailed provisions of the Missives, which were admitted and which had been incorporated into the pleadings. It was interesting to note that the terms of Condition 7 thereof provided for the delivery or exhibition to the pursuers of a valid marketable title to the property but did not specify by whom that was to be done. Condition 9 of the Missives, as already observed, provided for the reconveyance of parts of the property to the Sellers, in certain circumstances. In considering the question of the interpretation of the contract, the court ought to have regard to those provisions in the factual context that, by the time that the Missives were concluded, the Sellers had already passed the property out of their own hands into those of their off-shore trustees. Once again, that made it plain that there was no intention that the first defenders themselves would be granting the Disposition.

Some criticism had been focused on the terms of Conclusion 2. That criticism was misconceived. The basis for that part of Conclusion 2 which sought an order on the first defenders to direct the second defenders to do certain things, was not based upon the averment in Condescendence 2, to the effect that the second defenders held the title to the property on behalf of others and might be required to exercise rights and powers on the direction of others; rather it was based upon the terms of the contract itself. There were two aspects to that. Firstly, the first defenders had to deliver the Disposition to the Purchasers. Secondly, it was implicit in the bargain that the first defenders would do what they could to deliver it by procuring their off-shore trustees to do what was necessary. The basis for the terms of Conclusion 2 was to be found in the admitted circumstances that the second defenders had come to hold the title to the property.

Counsel for the first named defenders replied. First of all he dealt with the issue of Conclusion 2. In Condescendence 6, in relation to the Missives, there were averments about their express and implied terms. The averments relating to the implied terms were founded upon the circumstance that the title to the property had recently passed to the second defenders. These matters were all pertinent to the terms of Conclusion 2. It was premature to reach any conclusion relating to these matters. Counsel for the first defenders said that, now that he appreciated that a decree de plano was not being sought by the pursuers, his criticisms of the terms of Conclusion 2 were not of immediate concern. Nevertheless, the letter from the second defenders, dated 14 October 1994, 22 of process, disclosed that the second defenders were not prepared to convey the property to the pursuers. In the whole circumstances, the deletions from the first defenders' averments suggested on behalf of the pursuers should not be made; the whole matter could not be resolved at this stage.

Counsel for the first defenders next returned to the subject of the pursuers' averments of loss in Condescendence 7. As regards the matter of the expenditure laid out by the pursuers on the property, the submission of the first defenders was that it was not within the reasonable contemplation of the parties that occupation of the land would be taken and expenditure incurred before a Disposition was delivered. In relation to the pursuers' averments concerning loss of and opportunity to develop the property, the argument was that there would be difficulty in a valuation of that loss unless more specification as to the contemplated development was given.

Reverting to the question of title to sue, the question was whether the introduction of Mr George Alan More Nisbett to the action as a pursuer some months after it had been raised was sufficient to cure the problem. On reconsideration of the situation, counsel for the first defenders indicated that he did not now insist upon the first defenders' plea-in-law 2. As regards the first defenders' plea-in-law 3, counsel for the first defenders altered his position. He indicated that he considered that that plea ought to be reserved, since it was not clear from the pursuers' pleadings when they claimed to have sustained loss and damage. As regards the other aspect of the problem of title to sue, relating to the identity of the trustees under the 1990 No.1 Trust, that problem remained. There was a conflict between the terms of the Deed of Trust in relation to the 1990 No.1 Trust, 5/1 of process, and the averments made in the action by the pursuers. If there had been an error made in the drafting of that deed, the matter could have been the subject of rectification. The recital in the Supplemental Deed of Trust, 23/1 of process, was not an explanation of the pursuers' position. Accordingly plea-in-law 1 for the first defenders should be sustained. If that were not done, it could be reserved, pending a factual investigation regarding the identity of the trustees.

Having narrated the submissions made to me, I propose to deal with them in the same order as they were canvassed by counsel for the first defenders at the procedure roll debate. The first chapter of the submissions for the first defenders was focused upon their plea-in-law 2. The contention was that the pursuers had no title to sue because the action had been raised in the absence of and without the concurrence of the third creditor having a right to performance of an indivisible obligation under the Missives, namely Mr G.A. More Nisbett, and accordingly the action should be dismissed. In the initial stages of the debate, this matter was the subject of a quite elaborate citation of authorities. However, at a later stage, counsel for the first defenders indicated that, after all, he did not insist on his plea-in-law 2. I consider that he was wise to adopt that posture. In my opinion, the submission made on this aspect of the case by counsel for the pursuers, to the effect that the older authorities originally relied upon by the first defenders had been superseded by changes to the Rules of Court since the date of those authorities, is correct. It seems to me quite clear that the earlier position described in such authorities as Symington v Campbell, was radically changed by the enactment of the Codifying Act of Sederunt, 1913, B.i, the effect of which was explained by Lord Justice Clerk Scott Dickson in Rackstraw v Douglas, at p.357. The current provisions of Rule of Court 24.1.(2)(b)(iv) and (v), although not in identical terms to those of the Codifying Act of Sederunt of 1913, plainly have the same effect as regards this point. In these circumstances plea-in-law 2 for the first defenders must be repelled. As regards plea-in-law 3 for the first defenders, while the initial position of counsel for the first defenders was that he did not insist in that plea-in-law, I understood his final position upon it to be that it might possess significance in the context of the pursuers' alternative claim for damages and should accordingly be reserved. This contention was made upon the basis that the pursuers' present pleadings relating to loss, failing implement, did not make clear when the loss was said to have been sustained. It appears to me that there is some force in that argument and accordingly plea-in-law 3 for the first defenders will be reserved.

I turn now to consider the issue focused in paragraph 2 of the first defenders' Note of Arguments. The basis of the first defenders' argument on this matter is the designation of the trustees under the 1990 No.1 Trust as Abacus Trust Company Limited, as appears from the relevant Deed of Trust, 5/1 of process. However, the position in the pursuers' averments relating to the matter is this. In Condescendence 1, it is averred that the pursuers are Abacus Trustees (Guernsey) Limited qua trustees acting under (1) Deed of Trust by George Alan More Nisbett dated 28 December 1990 and registered in the Books of Council and Session 23 January 1991 (the1990 No.1 Trust) and (2) Deed of Trust by George Alan More Nisbett dated 28 December 1990 and registered in the Books of Council and Session 23 January 1991 (the 1990 No.2 Trust) and George Alan More Nisbett. Furthermore, it is to be observed that, in the Missives, on the basis of which a series of remedies is sought in this action, among the contracting parties, who were the purchasers of the property concerned, were said to be

Thus in this action, the first pursuers seek to enforce a contract to which they were indisuptably parties. In both the pursuers' averments and the Missives themselves, 5/14 of process, the first pursuers are described as being the trustees under the 1990 No.1 Trust. In their answers to Condescendence 1, the first defenders treat the averments to which I have just referred on the basis that they are not known and not admitted. They go on to make reference to the designation of the trustees in the Deed of Trust creating the 1990 No.1 Trust as being Abacus Trust Company Limited. In this situation, as I see it, the position is that a contracting party to the Missives, in this action, seeks to enforce that contract. On the basis of these averments made by the pursuers and the first defenders, there appears to be a factual issue as to whether the first named pursuers are indeed the trustees acting under the 1990 No.1 Trust. In these circumstances, in my view, it cannot be said at this stage that the first named pursuers have no title to sue this action. However, it is, I suppose, conceivable that, in the last resort, the first named pursuers may fail to establish as a fact that they are the trustees acting under the 1990 No.1 Trust. It is not obvious to me that, if that situation came into being, it would necessarily result in the first named pursuers having no title to sue. However, so as not to foreclose argument on the matter, after investigation of the facts, I consider that the first defenders' plea-in-law 1 should be reserved, in so far as it relates to the 1990 No.1 Trust.

I pass now to the matter raised in paragraph 3 of the first defenders' Note of Arguments and in the second part of their plea-in-law 1. This amounts to a challenge to the first named pursuers' title to sue as trustees acting under the 1990 No.2 Trust, of which the original trustees were George Alan More Nisbett and John Norris Fergusson, as appears from the relevant Deed of Trust, 5/2 of process. I can deal with this matter shortly, since it was accepted by counsel for the first defenders that, with the production of the deeds which show how the first pursuers come to be trustees acting under the 1990 No.2 Trust, the challenge disappears. The documents concerned are the Deed of Appointment of Colyb Trust Company Limited as a Protector, as defined in the 1990 No.2 Deed of Trust, and the Deed of Appointment, 5/3 of process. These demonstrate the validity of the claim of the first pursuers to be trustees acting under the 1990 No.2 Trust. In these circumstances I shall repel plea-in-law 1 for the first defenders, in so far as it relates to the 1990 No.2 Trust.

I propose now to consider the matters focused in paragraph 4 of the first defenders' Note of Arguments. In association with that, I shall also consider the submissions made on behalf of the pursuers concerning firstly the relevance of certain averments made by the first defenders and secondly, the legal merits of the first defenders' plea-in-law 7, since these various matters appear to me to be associated. The background to this matter is that it is agreed between the parties, as appears from averments in Condescendence and Answer 2, that the property which features in this dispute, the Highfield, has been transferred by the first defenders to the second defenders as off-shore trustees in pursuance of a scheme designed to avoid the payment of Capital Gains Tax. The transfer is agreed to have been effected on 19 February 1991, prior to the conclusion of the Missives relating to that property, which are dated 26 February 1991. Criticism was directed on behalf of the first defenders to the pursuers' averments at page 9 of the Closed Record where it is averred by the pursuers:

The basic criticism was that this averment was fatally lacking in specification because it did not explain the basis of the alleged power. On this basis, counsel for the first defenders invited me to sustain plea-in-law 5 for the first defenders and dismiss the action. In my judgment, this submission of the first defenders is unsound and betrays a misunderstanding of the nature of the pursuers' case. I consider that counsel for the pursuers was correct in representing the averments in question as simply providing an explanation of the position of the second defenders in this case. It is the undisputed position that what has happened in the series of transactions with which I am dealing, is that on 26 February 1991, the first defenders entered into a contract with the pursuers and another, to sell to them the property concerned. That was done at a time when the first defenders had already disposed of the property in terms of the Disposition to which I have referred, dated 19 February 1991. The fact that, at the time of the Missives and at the present time the first defenders did and do not hold a title to the property concerned is, in my opinion, of no relevance. What is sought to be done in this action is, inter alia, to obtain decree of declarator and implement against the first defenders, with a view to their performing the terms of the contract into which they have entered. In the event that decree of declarator and implement is pronounced against the first defenders, no doubt, if it is within their power to do so, they will obtemper that decree. However, if they are not in a position to do so, by virtue of the fact that they do not hold the title to the property in question and cannot engineer the granting of a disposition by others who do, then, no doubt, one or other of the alternative decrees sought in the action might be pronounced. However, the uncertainty which surrounds the issue of whether the first defenders will be able to perform the contract into which they have entered does not appear to me to constitute an objection to the court pronouncing, in the first instance, a decree ordaining them so to do. As counsel for the pursuers put it, the court is not interested in the ultimate result of the procedure in this action. Putting it another way, the remedy to which the pursuers say that they are entitled, on the basis of the Missives, does not depend upon the position of the first defenders in relation to the property, but simply upon the terms of the contract concerned. In this connection, I consider that it is of interest to note the terms of Condition 3 of the Missives, already quoted. While it might be thought that there is some ambiguity in the terms of that condition, I consider that, interpreting it in the context of the agreed background to the transaction, it requires that there should be delivery of a validly executed Disposition and valid marketable title of the property by the Sellers in favour of the purchasers, but it does not require that the Disposition should be granted by the Sellers themselves. Such latter requirement could make no sense whatever in the agreed factual context in which this contract was made, that is to say, in a situation in which the first defenders had, prior to its conclusion, disposed of the title to the property.

At this point, it is appropriate that I should deal with the pursuers' submissions to the effect that certain averments of the first defenders should be excluded from probation, since that submission is related to the matter with which I have just dealt. The averments concerned are (1) the last two sentences of Answer 2 for the first defenders on p.10 of the Closed Record, (2) the last sentence of Answer 4 for the first defenders on p.12 of the Closed Record, and (3) the sentence in Answer 6 for the first defenders upon p.18 of the Closed Record which reads as follows:

In my opinion, counsel for the pursuers was well founded in arguing that these averments were irrelevant and should be excluded from probation. As regards the averment in question in Answer 2 for the second defenders, it appears to me that the matters dealt with there have no bearing on the issue of whether decrees are pronounced in terms of Conclusions 1 and 2 of the Summons, for the reasons that I hope I have already made clear. As regards the averment concerned in Answer 4 for the first defenders, in my opinion, it proceeds upon an erroneous interpretation of Condition 3 of the Missives. For reasons which I have already given, I consider that that condition should be interpreted in the manner which I have described. As regards the averment in Answer 6 for the first defenders at p.18 of the Closed Record, it is merely a repetition of part of the averments in Answer 2, with which I have already dealt. Accordingly I shall sustain plea-in-law 2 for the pursuers, to the extent of excluding from probation the averments which I have mentioned. I shall also repel plea-in-law 7 for the first defenders, since I consider that it is unsupported by relevant averments and embodies an erroneous legal proposition.

Finally, I now pass to consider the criticisms which were directed towards the pursuers' averments relating to their alleged loss in Condescendence 7. These criticisms are expressed in paragraph 5 of the first defenders' Note of Arguments. As I understood the position both of the pursuers and the first defenders, it was accepted that, before damages could be recovered in a situation such as the present, the loss concerned had to be capable of being regarded as having been within the reasonable contemplation of the parties to the contract at the time it was made. That emerges from Lloyd v Stanbury, at p.546, which was approved in Anglia Television v Reed. In my opinion, in relation to this matter, significance lies in the circumstances in which the contract was made and the terms of the contract itself. It appears from the contract itself that the property involved in the transaction, the Highfield, was part of Edmonstone Farm, situated at Dalkeith. Furthermore, it is evident from the terms of Conditions 8 and 9 of the Missives, 5/14 of process, that it was contemplated by the parties that endeavours would be made to obtain planning consent for residential development on the land concerned as soon as possible after the date of entry. Accordingly, it must then have been in contemplation of both parties that development of the land in that way could have been an outcome of the transaction. Furthermore, Condition 9, already mentioned, contemplates a projected return of the land or part of it in certain circumstances. It also contemplates that, in the circumstances there described, undeveloped parts of the land might be assimilated with other More Nisbett land. Plainly, it follows from this situation, as I see it, that, if the transaction were to fail, the chance of development would disappear so far as the pursuers were concerned. It is averred that "The property is well positioned in relation to long-term strategic planning." In my view that averment is sufficiently specific and relevant to be admitted to probation. That appears to me to be the result of the location of the land in the neighbourhood of a large city such as Edinburgh, which must have been well-known to the parties. It is averred that "A hope value attaches to the property". Once again I consider that that averment may be admitted to probation. It would not justify a detailed valuation of the land in relation to some particular projected development. However, it appears to me that it would give fair notice of a broad assessment of a potential development value. So far as the averment to the effect that the property is a natural adjunct to other More Nisbett land is concerned, I consider that that proposition demonstrates something which must have been in the contemplation of the parties at the material time, having regard to the location of the land in question. I also consider that it was in the reasonable contemplation of the parties that the pursuers would take entry to the land, the Missives providing, in Condition 2, that entry and actual vacant occupation would be given on 1 March 1991, or such other date as might be mutually agreed in writing. If I am right about that, it appears to me to follow that it could reasonably be expected that the pursuers would carry out work on the property, which is agricultural land. It would have been remiss of them to have failed to make beneficial use of the land in question. Had they done so, they would have been open to criticism upon the basis that, in the event that their claim for damages became a live one, they had failed to mitigate their loss. That circumstance appears to me to justify the averments made in the early part of condescendence 7. In summary, I consider that the pursuers' averments of loss may properly be admitted to probation.

In the whole circumstances, I shall pronounce an interlocutor giving effect to the decisions which I have made. I shall also repel plea-in-law 1 for the pursuers and plea-in-law 4 for the first defenders, since they were not supported. Plea-in-law 5 for the first defenders will be reserved, as was agreed to be appropriate. The result is that a proof before answer will be allowed, subject to the exclusion from probation of the averments with which I have already dealt.