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Sexton & Anor v. Coia & Anor [2004] ScotCS 19 (27 January 2004)

OUTER HOUSE, COURT OF SESSION

A1616/01

OPINION OF LORD EMSLIE

in the cause

JOHN SEXTON & MAUREEN ALLAN

Pursuers;

against

MARCO COIA & CARMELA ROSINA COIA

Defenders:

________________

Pursuers: Party Litigants

Defenders: Erroch; Allan McDougall & Co

27 January 2004

Introduction

[1] The late Charles Coia died in 1968. Prior to 6 June 1927 he was the heritable proprietor of subjects at 27 and 29 Main Street, Coatbridge. On that date, by way of security for a loan, he granted an ex facie absolute disposition of inter alia these subjects in favour of one Eugenio Coia and his heirs and assignees whomsoever. The deed was duly recorded in the Division of the General Register of Sasines for the county of Lanark on 11 June 1927, but an associated back-letter confirming and regulating the security nature of the transaction remained unrecorded. Against the background of subsequent events, the parties to the present action are in dispute as to the true ownership of the Coatbridge property. In broad terms the pursuers seek to assert the former interest of Eugenio Coia, and the defenders seek to assert the former interest of Charles Coia. Determined steps have been taken on both sides over many years with a view to establishing a preferential right to the disputed subjects.

[2] In this action, the pursuers seek (a) reduction of certain of the steps previously taken in that regard by the defenders or by third parties whom they now represent; (b) declarator that they (the pursuers) are the only true proprietors of the said subjects at 27 and 29 Main Street, Coatbridge, conform to certain dispositions granted in their favour in 1995 and 1996; and (c) interdict against the defenders from disponing, conveying, making over or otherwise transferring or alienating the said subjects to themselves or to certain other members of the Coia family. The pursuers' conclusions for reduction are directed against (i) the confirmation issued by the Sheriff of Lanarkshire at Airdrie in favour of the second defender as executrix nominate of the late Charles Coia in 1969; (ii) the notice of title recorded in favour of the late Mrs Carmina Maffalda Coia or Taylor in 1996 (the first defender being her executor); (iii) the notice of title recorded in favour of the second defender in 1999; and (iv) an as yet unrecorded disposition by the second defender in favour of herself and the first defender dated 3 December 1999. It is clear, however, that the de quo of this action is the pursuers' claim to be the only true proprietors of the subjects. Unless that claim is made out, the pursuers can have no right to seek reduction or interdict in terms of their other conclusions.

[3] When the present action was raised in 1997, Mrs Carmina Maffalda Coia or Taylor was called as defender in her capacity as the sole surviving trustee of Charles Coia under his trust disposition and settlement dated 1 April 1968. Following her death in 1998, the action was transferred against one Mario Coia as her executor nominate. In March 2000, the second defender was brought into the action as executor nominate of Charles Coia by virtue of the confirmation of 1969, and in May 2000 the first defender was sisted as an additional party. Following a procedure roll debate of limited scope in February 2001, a proof before answer was allowed, but after the relative diet was discharged the cause was further appointed to the procedure roll by interlocutor of 15 August 2002. A debate has now taken place before me over three days in January, September and November 2003, the defenders inviting me to dismiss the pursuers' claim under their first and (amended) seventh pleas-in-law directed to relevancy and prescription respectively, and the pursuers moving for the action to be allowed to proceed to further inquiry. In the event of a proof before answer being allowed, the defenders further contended that certain of the pursuers' averments were irrelevant and lacking in specification and should therefore be excluded from probation.

Submissions for the defenders

[4] On the defenders' behalf, counsel advanced two principal arguments. First, by reference to the averments in Condescendence 2, he submitted that the pursuers' title to insist in the present action had not been relevantly set forth. It was acknowledged, however, that no specific plea-in-law directed towards the pursuers' title had been tabled. In summary, the averments with which the defenders took issue were to the effect (i) that Eugenio Coia was the last infeft proprietor of the disputed subjects following the granting and recording of the ex facie absolute disposition in 1927; (ii) that Eugenio Coia's heir, Agostino Coia, did not complete title to the subjects before his death on 8 May 1938; and (iii) that Agostino Coia's last surviving trustee, Gusto Coia, similarly took no steps to complete title to the subjects before purporting to dispone them to the pursuers in 1995 and 1996. Significantly, the pursuers did not relevantly aver that they or their predecessors had possessed the subjects at any time since 1927. The problem was that an individual's heirs, at least where the relevant death occurred before 1964, could not obtain title to heritage by mere survivance, and in order to furnish the pursuers with a valid title it would therefore have been necessary for Agostino Coia, or in his turn Gusto Coia, to obtain special service by petitioning the Sheriff of Chancery under Section 10 of the Conveyancing (Scotland) Act 1874. The need for such a petition in circumstances where the last infeft proprietor died before 1964 was affirmed in Halliday, Conveyancing Law and Practice,1^st ed., at para 45-20, and at page 124 of Meston on the Succession (Scotland) Act 1964, and the current practice was illustrated by cases such as Robertson, Petitioner 1968 SLT 30; Grant, Petitioners 1977 SLT 97; and Fraser, Petitioner 1978 SLT 5. Since ex concessu no such petition had ever been presented, the dispositions in favour of the pursuers had been granted by someone with, at best, a personal right to the subjects, albeit one which was still capable of being converted into a real right by a successful petition under Section 10 of the 1874 Act. These dispositions could of course confer no greater right than their grantor possessed at the time of execution.

[5] Second, counsel for the defenders maintained that since the ex facie absolute disposition granted to Eugenio Coia in 1927 was truly in security of a loan, it was in law a mere encumbrance on Charles Coia's full feudal title which survived intact. The long negative prescription would have begun to run against such an encumbrance as soon as the loan was fully repaid, which according to the defenders' own averments must have occurred between 1931 and 1938, the years in which (i) a reduced balance was shown as outstanding in the inventory of Eugenio Coia's estate following his death, and (ii) no reference to the loan appeared in the inventory of Agostino Coia's estate following his death. Under Section 17 of the Conveyancing (Scotland) Act 1924, the applicable prescriptive period was 20 years. These averments were not formally denied by the pursuers, and accordingly, in counsel's submission, any rights deriving from Eugenio Coia's receipt of the ex facie absolute disposition in 1927 were extinguished by operation of law more than 40 years ago. If that was correct, then Gusto Coia had no surviving right of any kind - personal or otherwise - in the subjects at the time when the purported dispositions of 1995 and 1996 were granted. These dispositions were thus incapable of conferring any valid right, title or interest on the pursuers. In other words the creditor's right, title and interest under the ex facie absolute disposition had long since ceased to exist, notwithstanding the continued presence of that deed on the face of the Register, and notwithstanding the failure of Charles Coia or any of his successors to demand and obtain a reconveyance or discharge since the loan was (according to the defenders) fully repaid in or before 1938.

[6] The last-mentioned argument was founded on a passage in the opinion of Lord Kinnear in the case of Ritchie v Scott & Others 1899 1F 728, at pp.735-6. After discussing an earlier case in which the right of the debtor under an ex facie absolute disposition to grant leases had been founded on the doctrine of implied mandate, his Lordship continued as follows:-

"But there is another ground on which Abbott v Mitchell might be supported irrespective of any mandate by the creditor to the debtor, and that is the familiar doctrine of radical right ....

.... The doctrine is that a security in the form of an absolute disposition but qualified by a back-bond declaring the title to be limited to a definite security is neither more nor less than a heritable security, and therefore that the grantor's title of property remains entire subject to the security. It follows that the grantor of the disposition remaining in possession has a perfectly valid and sufficient title to dispose of the property in any way provided he does not trench on the security. Nothing hinders him to sell, subject of course to the security, or to make an entail, or to grant other postponed securities, either in the same form or in any other. But the principle is that a security in this form, being merely a security after all in substance, although in form a disposition absolute, does not divest the grantor even feudally, and he is therefore in a position to deal with his estate by virtue of his own original title, and requires no other right or authority so long as he leaves his creditor's security unimpaired."

In counsel's submission, this was a complete and accurate statement of the law which had, significantly, been followed by the Inner House in Edinburgh Entertainments Limited v Stevenson 1926 SC 363 (concerning the grant of a lease), and by Lord Thomson in Scobie & Others v William Lind & Co Limited 1967 SLT 9 (concerning interdict against encroachment). On this approach, the grantor of an ex facie absolute disposition remained entitled to exercise all of the rights of a proprietor so long as these did not adversely affect the creditor's security, and in these circumstances it was the creditor's encumbrance, rather than the debtor's radical right, that was liable to be extinguished by prescription. Wood's Lectures on Conveyancing, at p.483, confirmed that the long negative prescription would strike at an encumbrance of this kind, and the general application of that prescription to personal rights over land was further illustrated by cases such as Marr's Executrix v Marr's Trustees 1936 SC 64 and Pettigrew v Harton 1956 SC 67.

[7] Counsel finally challenged the relevancy, specification and intelligibility of the major part of the pursuers' pleadings from page 15 onwards, maintaining that they should not in any event be remitted to probation. His principal complaints were to the effect (a) that particular passages were unintelligible, notably the lists of land certificates alleged to have been issued in the pursuers' favour; (b) that legal arguments and authorities should not have been pled; (c) that the pursuers' claim to be bona fide purchasers of the subjects was irrelevant; (d) that their attempt to found on the positive prescription was similarly irrelevant; (e) that the averments regarding the charter of novodamus and related dispositions were irrelevant; and (f) that the same applied to the various averments as to the opinions and impressions of counsel and others. In addition, counsel pointed out that the pursuers had pled no general denial of the defenders' factual averments regarding inter alia (i) the true character of the transaction in 1927 as evidenced by the back-letter; (ii) the repayment of the loan at some stage between 1931 and 1938; and (iii) the possession and enjoyment of the subjects by Charles Coia and his family throughout the period from 1927 to date. In counsel's submission the pursuers were experienced party litigants, and there was no reason why the Court should not apply the usual rules with ordinary strictness in considering the relevancy and specification of their pleadings in this case.

Submissions for the pursuers

[8] In response, the first pursuer submitted on several grounds that his pleadings were relevant to go to inquiry. First, the pursuers did not accept that a petition under Section 10 of the 1874 Act was essential to the validity of the dispositions which had been granted in their favour. The first pursuer acknowledged that Gusto Coia could have proceeded by way of such a petition, and indeed could still do so, but went on to explain that for reasons of cost this step had not been taken. Instead, the pursuers had acquired the relevant superiority title in 1995, and on the strength of that had granted to Gusto Coia a charter of novodamus to re-establish the original title "lost" by non-exercise of the Section 10 procedure. Thereupon, Gusto Coia was willing to grant to the pursuers whatever dispositions they requested, and duly disponed to them his interest in the subjects in 1995 and 1996. The terms of these dispositions were not incorporated in the pleadings, but on several occasions during the debate the first pursuer confirmed (in line with the pursuers' averments at page 26A-B) that they carried to the pursuers such rights in the disputed subjects as had been conferred on Gusto Coia by the charter of novodamus. I did not understand the first pursuer to contend that the pursuers' entitlement to the vassal's interest in the disputed subjects was derived, directly or indirectly, from any source independent of that charter.

[9] Second, the defenders' argument under Section 10 of the 1874 Act could not succeed where, as here, missives had been concluded between Gusto Coia and the pursuers in advance of the relevant dispositions being granted. The Keeper of the Registers of Scotland had issued land certificates in the pursuers' favour relative to the disputed subjects without seeking confirmation of prior links in title and, in the first pursuer's words, "....The Keeper must be right - he has all the law books before him".

[10] Third, according to the first pursuer, the passage from Lord Kinnear's opinion in the case of Ritchie did not correctly represent the law of Scotland. This was convincingly demonstrated by a series of articles by Professor G. L. Gretton (1979 Journal of the Law Society of Scotland, p.462; 1986 Juridical Review, pp. 51 and 192), and by the fact that Lord Kinnear himself had later expressed the opposite view in Inglis & Others v Wilson 1909 SC 1393, at pp.1402 - 3. The defenders were therefore not well-founded in treating the ex facie absolute disposition as if it were a mere encumbrance on the continuing feudal title of the debtor Charles Coia. On the contrary, while for certain purposes a recorded ex facie absolute disposition might fall to be treated as, in substance, a security in a question between debtor and creditor, it was emphatically not a mere encumbrance on the debtor's feudal title. On a true analysis, the debtor's right was limited to demanding a formal reconveyance from the creditor once the loan had been paid off, and until such a reconveyance was granted the creditor enjoyed a real right of property in the subjects which could not be lost by operation of the long negative prescription. In other words, it was the debtor to an ex facie absolute disposition who was left with a personal right susceptible to prescription, and the debtor's non-exercise of his right to demand a re-conveyance for more than 20 years after the original loan was repaid would be fatal to the continued existence of that right and of the creditor's corresponding obligation.

[11] Fourth, even if the long negative prescription could in theory apply, it would not begin to run against the creditor's interest until the underlying loan was fully repaid. As appeared from the pleadings at pages 23A-B and 24A-B, the pursuers' position was that the loan remained outstanding, or at least that there was no firm evidence of repayment. Further, as averred at pages 6D, 15D-E, 17A-C and 20C-E, the back-letter covered properties in Airdrie and a life policy as well as the subjects in Coatbridge, and the defenders' position in that regard was obscure and inconsistent. At pages 16D and 24C-D, the pursuers went on to aver that the ex facie absolute disposition of 1927, the original debt itself, and the creditor's obligation to reconvey had all been extinguished by the long negative prescription. No reconveyance of the subjects in favour of Charles Coia or his successors had been sought or granted at any time, and the unqualified feudal title to the subjects had stood in Eugenio Coia's name throughout the whole period since 1927. In these circumstances, since the subjects did not form part of Charles Coia's estate on his death, they should not have been included in the relevant confirmation, and the defenders could accordingly claim no valid right, title or interest therein.

[12] In any event, fifth, the pursuers were not concerned with the competing rights of the original debtor and creditor with respect to the ex facie absolute disposition of 1927. This was because they were bona fide purchasers of the subjects, as averred at pages 16A, 22B, 23E-F and 25F-26A of the Closed Record, and it was settled law that bona fide acquirers of subjects from the creditor under an ex facie absolute disposition would receive an unchallengeable title, leaving the debtor with no more than a personal right of redress against the creditor.

[13] Sixth, by reference to the averments at pages 21F - 22B, the first pursuer maintained that if the creditor possessed under an ex facie absolute disposition for the period of the positive prescription, that would not only render his title unchallengeable, but also cause the debtor's reversionary right to fly off. On this matter, reference was made to Section 34 of the Conveyancing (Scotland) Act 1874, and to various textbooks. According to the pursuers' averments in this case, Eugenio Coia had set up a company to carry on business from the disputed subjects. He and his successors ran the company until at least 1974, and any possession by Charles Coia and his family in the period after 1927 was (a) by way of concession or licence from the company and (b) in respect of only part of the subjects. This was made clear, it was said, at pages 15D-E, 16E and 17A-D of the Closed Record, and the defenders' contrary averments were neither admitted nor accepted.

Discussion

[14] Before I turn to consider the merits of the parties' competing arguments, it has to be said that the pursuers' pleadings in this case leave a great deal to be desired. In places they are rambling and discursive; in places I find them obscure and difficult to follow; and notwithstanding the opportunities given to the pursuers, and an amendment in the course of the debate, they have pled no general denial of the defenders' substantive averments. Moreover, none of the apparently significant charters, dispositions, deeds and documents is incorporated brevitatis causa in the pleadings, and neither party sought to refer me to the terms of any of them at any stage of the debate. Accordingly, such documentary productions as may exist in this case are not before me for consideration, and my decision must therefore be based on an assessment of the parties' averments as they stand. All in all, the form and content of the pleadings in this case makes it hard to apply normal criteria to an assessment of their relevancy and specification. In addition, the fact that the pursuers have chosen to conduct these proceedings as party litigants, albeit with the appearance of outside help from academic and professional sources, compounds the difficulty which I now face in reaching fair and sound conclusions on the unusual and controversial issues which have been raised. Both sides of the argument were affected. Counsel for the defenders, mindful no doubt of the unqualified status of his opponents, was at pains to keep the technicality of his arguments, and his citation of authority, to a minimum. Understandably, perhaps, he developed no detailed response to the first pursuer's largely unfocused allusion to the contents of articles in legal journals. For his part, the first pursuer did not seek to analyse fundamental legal issues in any great depth, and as already mentioned he made only passing reference, in some areas, to authorities of apparent potential significance. Against that background, I propose to consider the pursuers' pleadings from as non-technical a standpoint as I reasonably can, for example treating contrary assertion as equivalent to denial, and taking account of such material explanations and concessions as were made by the first pursuer in open Court. As regards legal matters, I shall endeavour to take account of all of the arguments and authorities that I can identify as having been referred to, directly or indirectly, during the debate.

[15] With these limitations in mind, I start by looking at the defenders' primary substantive argument to the effect that the ex facie absolute disposition granted in 1927 did not divest Eugenio Coia of any part of his feudal title, but constituted a mere personal encumbrance on that title which was extinguished by prescription following repayment of the underlying loan. Having given careful consideration to that argument in light of the pursuers' reply, I am satisfied that I cannot give effect to it in present circumstances. At a practical level, I have not seen either the ex facie absolute disposition of 1927 or, perhaps more importantly, the relative back-letter, and therefore have no knowledge of the precise extent of the transaction or of the terms on which the creditor/debtor relationship in that transaction was regulated. Moreover, I am faced with conflicting averments on Record regarding the alleged repayment or otherwise of the original debt. It is true that the pursuers do not technically deny the defenders' assertions on this matter, but on the other hand they do refer to the loan still being outstanding, failing which to the absence of firm evidence of its ever having been repaid. The defenders assertions on this score are in any event somewhat inspecific and speculative, inviting the Court to draw inferences from executry documents, the terms of which have not been explained in evidence and the accuracy of which cannot in my view be assumed. Accordingly, even if I were to be in the defenders' favour on the fundamental legal issue as to the incidents of an ex facie absolute disposition accompanied by an unrecorded back-letter, I do not see how I could properly sustain an argument on prescription which critically depends on the loan having been fully repaid by a certain date. In other words, the factual basis essential to the validity of the defenders' argument on prescription is entirely lacking, and in any event I am unwilling to make any judgment on that issue without knowledge of the precise terms of the relative disposition and back-letter. Something may also turn, as it seems to me, on the outcome of the parties' dispute on Record regarding the possession of the subjects since 1927. Even without these difficulties, I would have been reluctant to decide an important question of prescription on the strength of a single unvouched statement in Wood's Lectures on Conveyancing, and would have been inclined to call for further legal argument in that connection. It is not, for example, self-evident that the right of an heir to complete title to heritage is by its nature prescriptible at all.

[16] In these circumstances, it is perhaps not strictly necessary for me to express a concluded opinion on the parties' fundamental dispute as to the correctness or otherwise of Lord Kinnear's analysis, in the case of Ritchie, of the respective rights of creditor and debtor under an ex facie absolute disposition. However, in case I am thought to be wrong on the foregoing question of prescription, it is appropriate that I should briefly indicate the decision that I would have reached on that issue had I required to do so. It goes without saying that Lord Kinnear is a judge whose opinions deserve the very greatest deference and respect, especially in matters of this kind, but I am not at present persuaded that I should treat his remarks in the Ritchie case as authoritative even though they have subsequently been followed on more than one occasion. There are a number of reasons for this. First, what Lord Kinnear said was strictly obiter in the circumstances of the case in question. Second, his remarks were to the opposite effect of what his Lordship himself said some years earlier in National Bank of Scotland Limited v Union Bank of Scotland Limited 1885 13R 380, at p.405 in the following terms:-

"There is no question as to the effect in law of a disposition ex facie absolute, qualified by a separate writing which has not been recorded in the register of sasines. It does not operate as a burden upon the grantor's title, leaving a real right in him; but completely divests him in favour of his disponee, and leaves him no other right but that of creditor in the disponee's obligation to re-convey....... This is perfectly well settled law; and I do not understand it to be called in question."

In the latter case, the whole Court was sharply divided as to the effect of an intimated assignation of the debtor's reversionary interest on the future entitlement of the original creditor to make further advances on the same security. Nevertheless there was no disagreement among the members of the Court on the issue focused in the above quotation from Lord Kinnear's judgment, and the confident opinions which were expressed reflected the decision of the majority of the whole Court in Gardyne v Royal Bank 1851 13D 912. As the Lord President put it at p.413:-

"....what is left in the debtor is not a real right of any kind, is not a right of property of any kind, not even a right of redemption or reversion in any proper sense, but a mere personal right to enforce a pactum de retrovendendo, or, in other words, to demand a re-conveyance of the estate upon tendering to the infeft proprietor payment of everything that is due to him at the date of the demand."

[17] Significantly, third, when the Union Bank case reached the House of Lords (1886 14R HL 1), Lord Watson's speech contained the following passages at pp.3-4:-

"The execution and recording of an absolute disposition of heritage, qualified by a personal contract in the form of an unrecorded back-letter, for the purpose of creating a security, has the effect of vesting the full feudal estate in the disponee, and the disponer's interest is thereby reduced to a personal right to have the estate, or the proceeds of its sale, as the case may be, reconveyed or paid to him, on payment or under deduction of the secured debts. As regards third parties who transact with him on the face of the public records, the powers of the disponee are not affected by the private contract, and he can sell or burden the estate, and can give a valid title to the purchaser or encumbrancer, although the creation of these rights should be in direct violation of the terms of the back-letter. But in a question with the disponer himself, or with persons who through him have acquired an interest in the estate or in the personal contract, the disponee is affected by the back-letter, and is treated as the holder of a mere security. In all such cases the rights of parties must be determined, not according to the form of the disponee's title, but according to the substance of the transaction....

....In some of the judgments in the Court below there is a great deal of learned discussion as to the nature of the disponer's right under an unrecorded back-letter, but I do not think there is any real difference of opinion upon that point. In form it is a personal right consisting in obligatione, and it has been frequently described with perfect accuracy as a jus actionis. The right of a beneficiary under a proper trust constituted by an ex facie absolute disposition - the disponee acknowledging by a separate writing which does not enter the records the trust-purposes for which he holds - is a right of precisely the same quality. It is not, strictly speaking, a radical right, that being an expression which in the language of the feudal law is used to denote the right of a proprietor who, without divesting himself of his feudal estate, creates an incumbrance upon it, e.g. by means of a trust-conveyance bearing to be granted for payment of debt."

[18] Fourth, in the period after the case of Ritchie was decided, Lord Kinnear himself, in Inglis & Others v Wilson 1909 SC 1393, at pp.1402 - 3, bore to follow the majority of the whole Court in the Gardyne case in affirming the complete feudal divestiture of the debtor under an ex facie absolute disposition where the back-letter was not recorded. Forty years later, in Aberdeen Trades Council v Shipconstructors & Shipwrights Association 1949 SC HL 45, the House of Lords found it unnecessary to go beyond Lord Watson's views in the Union Bank case, even though Lord Kinnear's dicta in Ritchie, and the subsequent decision of the Inner House in Edinburgh Entertainments, had been cited in argument before their Lordships. Fifth, with the greatest respect to those judges who decided the cases of Edinburgh Entertainments and Scobie, it is far from clear that, in doing so, they had the benefit of a full argument or a comprehensive citation of the relevant authorities. Moreover, the claim in Scobie was for interdict against encroachments, which might be thought compatible with a limited reversionary right in the debtor. In such circumstances, I feel unable to accord to these decisions the weight which counsel for the defenders invited me to place upon them. Sixth, I have to say that in my respectful opinion the approach taken by Lord Kinnear in Ritchie seems difficult to reconcile with (i) the continued presence, on the face of the public records, of an ex facie absolute title in the creditor's favour, and (ii) the apparent acceptance by the House of Lords in the Union Bank case that assignation was the appropriate mode of transmission of the debtors' reversionary right.

[19] For these reasons, if I had required to determine this matter for the purposes of the present case, my inclination would have been to reject the defenders' argument founded on Lord Kinnear's obiter remarks in Ritchie. Indeed, I would have regarded myself as bound to follow the contrary approach taken by the House of Lords in the Union Bank and Aberdeen Trades cases, by the whole Court (including Lord Kinnear) at an earlier stage of the former, and by the majority of the whole Court in the earlier case of Gardyne - a decision which Lord Kinnear himself bore to follow in 1911. The long-standing controversy on these matters is discussed at considerable length in the learned articles to which the first pursuer alluded by reference during the debate, and I consider that the various authorities to which I have referred are properly before the Court even though, when I raised them with counsel for the defenders during his final reply speech, he merely confirmed his position that Lord Kinnear's approach in Ritchie should be seen as a development of ground already prepared by Lord Watson in the Union Bank case, and that the decisions in Ritchie and Edinburgh Entertainments were now binding upon me.

[20] Having heard no detailed argument as to the precise nature and extent of the reversionary interest which, by contract or otherwise, remains with the debtor in a case of this kind, it is neither necessary nor desirable for me to attempt any discussion of that issue at the present time. Suffice it to say that, notwithstanding the feudal divestiture reflected in the foregoing authorities, the debtor clearly retains some rights and interests in the affected property. Many attempts to analyse the true nature of such rights and interests have been made over the last century or so; judicial observations continue to appear in cases such as Sharp v Thomson 1995 SC 66; 1997 SC HL 455; and in my view these matters would require to be fully argued in an appropriate case before any confident conclusion could be drawn.

[21] I now turn to the defenders' attack on the relevancy and specification of the pursuers' averments regarding their title and interest to pursue the present action of declarator, reduction and interdict. As previously indicated, the defenders have no plea specifically directed to lack of title, but from the standpoint of principle I consider that counsel was well-founded in presenting his argument as a matter of relevancy only. Put shortly, the validity or otherwise of the pursuers' title to the subjects is the de quo of the present litigation, and in my judgment the pursuers cannot logically be required to establish the same disputed title in limine before being permitted to enter upon the merits of the real controversy between the parties. In any event, even in a case where a pursuer's title requires to be established in limine, purely formal steps to complete an existing right, such as by infeftment on a personal right to land, may legitimately be taken pendente processu and do not require to precede the raising of the action:- see for example Welsh v Ross 1857 19D 404; Bentley v Macfarlane 1964 SC 76. On the other hand, as Lord Maxwell pointed out in analogous circumstances in Luss Estates Co. v BP Oil Grangemouth Refinery Limited 1981 SLT 97, pursuers must still plead a relevant and sufficiently specific case if they wish to avoid dismissal of an action at the stage of debate. The question here is thus whether a relevant and sufficiently specific case has been set forth by the pursuers on Record.

[22] After carefully weighing up the parties' competing contentions, I have reached the conclusion that the pursuers' claim to be the only true proprietors of the subjects has not been relevantly averred. As already indicated, the first pursuer rested that claim squarely upon the charter of novodamus and related dispositions in 1995 and 1996, but I am unable to accept that these deeds were capable of conferring any immediate real right on the pursuers. Nor can it in my view be said, on the basis of the pursuers' averments, that these deeds will ever be effective to confer such a right, whether in a question with the defenders alone or with the world at large. As the first pursuer readily accepted during the debate, Agostino Coia died in 1938 vested in no more than a personal right to the creditor's interest in the subjects under the ex facie absolute disposition. His sole surviving testamentary trustee, Gusto Coia, to whom that personal right devolved, has so far taken no steps to convert it into a real right of property by means of a petition under Section 10 of the Conveyancing (Scotland) Act 1874. Charters of novodamus were, the first pursuer said, deeds with which he had developed some familiarity and expertise, and the pursuers had decided to circumvent the problem by this means. In the first pursuer's submission, the charter of novodamus was effective in such circumstances to confer the full and unrestricted feudal title to the dominium utile of the subjects which Gusto Coia did not otherwise hold. Further, the conclusion of missives prior to the dispositions of 1995 and 1996 put their validity beyond challenge. According to counsel for the defenders, however, these arguments were fundamentally flawed. Unless Gusto Coia had a valid feudal title capable of being resigned, actually or notionally, to the superior, he was not a vassal to whom a fresh charter could competently be granted. In such circumstances, the new charter was analogous to a grant a non domino which could have no validity unless fortified by open and peaceable possession for the period of the positive prescription. There was, however, no suggestion on Record that the pursuers had possessed the subjects at any time since 1995, or would ever be in a position to do so. Accordingly, the charter of novodamus could not avail the pursuers in the context of the present dispute, and the reference to missives was not understood.

[23] In my opinion the defenders' contentions on this aspect of the matter are well-founded, and I regard the pursuers' attempt to rely on the charter of novodamus and related dispositions in 1995 and 1996 as fundamentally unsound. Unless fortified by the positive prescription, I do not see how the charter could have had the effect contended for by the first pursuer, namely to render Gusto Coia fully infeft in the subjects when he had previously enjoyed no more than a personal right to complete title as Agostino Coia's heir. The limitation on Gusto Coia's right was not, to my mind, susceptible of being cured by such means, at least in a question with third parties such as the defenders who maintain an adverse claim to the subjects. I am therefore unable to accept that the charter of novodamus provides a relevant foundation for the pursuers' claims in this action. Nor do I think that the conclusion of missives (of which no mention appears on Record) assists the pursuers here either. As it seems to me, the first pursuer's argument in this regard was based on a misunderstanding of certain decided cases on the subject of interdict.

[24] Different questions might perhaps have arisen if either of the two dispositions granted to the pursuers by Gusto Coia in 1995 and 1996 had expressly conveyed rights derived from the succession to Eugenio Coia as the last infeft proprietor in the subjects. But there is no suggestion in the pursuers' averments to that effect, and the matter was put beyond doubt by the first pursuer's repeated confirmation during the debate (in line with the pursuers' averments at page 26A-B) that both dispositions flowed from the charter of novodamus as part of the pursuers' efforts to circumvent the pre-existing limitation on Gusto Coia's right. In these circumstances, I do not consider that any relevant question arises as to what might have been the effect of a successful petition by Gusto Coia, or conceivably by the pursuers themselves, under Section 10 of the Conveyancing (Scotland) Act 1874.

[25] The pursuers also contend on Record (i) that they are bona fide purchasers of the subjects, and thus free of any antecedent title restrictions; and (ii) that the creditor's right to the subjects under the ex facie absolute disposition was fortified by operation of the positive prescription. In my opinion, neither of these contentions is capable of salvaging the pursuers' claim to be the only true proprietors of the disputed subjects. Dealing first with the pursuers' claim to be bona fide purchasers of the subjects, there are two principal reasons why I regard it as being without merit. To begin with, the claim is founded on dispositions by Gusto Coia of those rights which the pursuers themselves (in their capacity as superiors) granted by charter of novodamus, and I do not see how any question of good or bad faith could relevantly arise in that context. The law's protection extends to persons who, in good faith, purchase subjects from the holder of an ex facie absolute disposition in ignorance of the existence of a back-letter restricting the transaction to one of security only. As I understood the pursuers' argument, however, the rights acquired by them in 1995 and 1996 were not those derived from the original holder of the ex facie absolute disposition, but new and distinct rights recently conferred by the charter of novodamus. In any event, even if this had not been so, the first pursuer expressly conceded in open Court that, at the material time, he and the second pursuer were well aware of the existence and terms of the relevant back-letter. There is no reason for me to ignore that concession in present circumstances, and I regard it as entirely destructive of any claim by the pursuers to be bona fide purchasers of the creditor's interest in the subjects, in just the same way as I would have treated a frank admission to the same effect on Record. At present, of course, the pursuers merely fail to deny the defenders' averment regarding their agents' possession of a copy of the back-letter from 1993 onwards.

[26] I now turn, second, to the pursuers' argument that the creditor's ex facie absolute title to the subjects was rendered unchallengeable by operation of the positive prescription. In my view, it is extremely doubtful whether the positive prescription could ever operate, as between debtor and creditor, where their relationship was regulated by a formal back-letter confirming that the apparent conveyance of the subjects was in security only. It is just conceivable, I suppose, that in a given case the terms of the relevant back-letter might facilitate the operation of the prescription in the creditor's favour, but of course in this instance I have no information as to what the back-letter may relevantly provide. Moreover, as previously indicated, there is a clear dispute on Record on the critical issue of possession of the subjects from 1927 onwards. It might have been necessary to allow a proof before answer on such issues if they had been live for determination, but in my view they are all rendered academic by the adverse view which I have formed on the relevancy of the pursuers' averments of title. If the pursuers do not claim to derive right from anything other than the charter of novodamus, and if Gusto Coia was (and is) otherwise unable to confer a valid feudal title on the pursuers, then in my judgment nothing turns on the precise character and strength of the creditor's interest in the subjects following the ex facie absolute disposition of 1927.

[27] In the foregoing circumstances, applying the well-known test set forth by Lord Normand in Jamieson v Jamieson 1952 SC HL 44, at p. 50, I consider that the pursuers' pleadings are fundamentally irrelevant and that the defenders' motion for dismissal of this action is well-founded. On the final day of the debate, however, I refused in hoc statu all but one aspect of the pursuers' motion to have a Minute of Amendment received. I did so on the basis that, depending on the view which I formed on the relevancy of the existing pleadings, amendment by the pursuers at the debate stage, with all its attendant difficulties and delays, might prove unnecessary. I indicated, however, that in the event of my holding that the pursuers' pleadings were irrelevant as they stood, I would put the case out By Order, (i) to give the pursuers an opportunity of persuading me that some or all of the balance of their Minute of Amendment should now be allowed; and (ii) if the pursuers were successful in that regard, to enable parties to submit further argument as to the significance, if any, of the new averments. I therefore propose to follow that course, but wish to make two things clear for the avoidance of any misunderstanding. First, my judgment on the relevancy of the pursuers' pleadings as they currently stand is final, with no further argument on that matter being entertained; and second, only the Minute of Amendment tendered by the pursuers in November 2003 may be the subject of any motion for receipt at this time. Dismissal of the action will thus automatically follow, on the basis of this opinion, if the pursuers' proposed amendment is not allowed, or alternatively if any new averments added by amendment are held irrelevant to go to inquiry.

[28] For completeness, I should add that since the debate before me was wholly at the defenders' instance, with the pursuers having no preliminary plea, it is unnecessary for me to reach any conclusion on such arguments as the pursuers directed against the validity of the titles claimed by the defenders. Similarly, given the adverse view which I have formed on the relevancy of the pursuers' claim to be the only true proprietors of the subjects, it is not strictly necessary for me to deal with the defenders' contention that, in the event of a proof before answer being allowed, certain of the pursuers' averments should in any event be excluded from probation. But in case I am thought to be wrong on the foregoing question of relevancy, it is appropriate that I should briefly indicate the decision which I would have reached had the exclusion of particular averments from probation been a live issue. In the event of my allowing a proof before answer on the pursuers' claim to be the only true proprietors of the subjects, I would have excluded the following arguments from probation:-

(a) The pursuers' claim to be bona fide purchasers of the subjects, at pages 16A, 22B, 23E - F and 25F - 26A of the Closed Record;

(b) The pursuers' averments at pages 16E - 17A, 22B and 26A concerning legal opinions and advice received by them; and

Quoad ultra I would have left the pursuers' averments standing. To some extent, these averments form part of the narrative of the pursuers' factual situation; to some extent they unnecessarily (but without prejudice to the defenders) disclose legal authorities on which the pursuers seek to found; they also identify a wide range of land certificates which the pursuers allege to be relevant to the disputed issues between the parties; and there are of course averments which seek to challenge the merits of the defenders' claimed entitlement to the disputed subjects. For the reasons given earlier in this opinion, I would not have been prepared to take too technical a view of these aspects of the pursuers' pleadings, and would not have regarded them as necessarily irrelevant for the purposes of any proof.

Conclusion

[29] In the result, I find that the pursuers' claimed entitlement as the only true proprietors of the subjects has not been relevantly averred, and consider that the defenders' motion for dismissal of the action is well-founded. However, before any final interlocutor to that effect is pronounced, the case will be put out By Order for the purposes identified in paragraph 27 above.