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Cite as: [2004] ScotCS 69, 2004 SCLR 796

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Urquhart & Anor v. Sweeney & Ors [2004] ScotCS 69 (18 March 2004)

SECOND DIVISION, INNER HOUSE, COURT OF SESSION

Lord Justice Clerk

Lord Kirkwood

Lord McCluskey

XA11/03

OPINION OF THE COURT

delivered by

THE LORD JUSTICE CLERK

Appeal by the First Defender

From the Sheriffdom of Grampian, Highland and Islands at Inverness

in the cause

HUGH McBAIN URQUHART and MRS DEANNA URQUHART (AP)

Pursuers and Respondents;

against

OWEN JAMES SWEENEY

First Defender and Appellant;

LARKIN BRAE HORSE FARM LIMITED

Second Defender;

ANDREW C NORMAND, The Queen's and Lord Treasurer's Remembrancer

Third Defender;

and

VASTLANDS PROPERTIES LIMITED

Fourth Defender:

_______

Act: Forsyth; Drummond Miller, WS (Andrew Merchison, , Inverness) (Pursuers and Respondents)

Alt: Clive; Cannons, Glasgow (First Defender and Appellant)

18 March 2004

The appeal
[1] This is an appeal from an interlocutor of the sheriff principal of Grampian, Highland and Islands at Inverness dated 16 December 2002 in which inter alia he refused an appeal by the present appellant from an interlocutor of Sheriff MacFadyen at Inverness dated 30 August 2002. In that interlocutor Sheriff MacFadyen, having found the first defender to be in default, interdicted him from interfering with the present respondents' peaceable possession of an agricultural holding and from obstructing their right of access thereto. The existence of the respondents' tenancy and their right of access had been established at an earlier stage by summary decree.

[2] This appeal is at the instance of the first defender only. It is presented on the following ground.

"The sheriff and sheriff principal erred in granting summary decree in terms of the declaratory craves. In particular they erred in failing to recognise that the first defender was entitled to challenge the relevancy and sufficiency of the pursuers' averments and to put the pursuers to a proof of their averments. Issues of fact and law clearly arise. More particularly the pursuers have to prove that a valid agricultural tenancy was entered into in the informal manner contended and continues to subsist notwithstanding the averred dissolution of the lessor."

[3] Although this is in form an appeal against the interlocutor dated 16 December 2002, it is in reality an appeal against an interlocutor of the sheriff dated 30 January 2001 by which he granted summary decree, and against the interlocutor of the sheriff principal dated 9 April 2001 by which he amended and restricted that decree.

[4] The agricultural holding claimed by the respondents extends to 9.56 acres or thereby at Woodside Croft, Leachkin Brae, Inverness. This appeal is brought by the first defender with the ulterior motive of vindicating the second defender's claim to vacant possession of the land. If the respondents have an agricultural tenancy, the land is worth perhaps £80,000. It has been valued, with vacant possession and consent for residential development, at about £1.5 million.

The action
[5] The dispute between the parties broke out in 1998. In that year the respondents sued the appellant in Inverness Sheriff Court for interdict relating inter alia to his alleged obstruction of their access to the land. At the proof in that action the appellant asserted that an offer to let dated 29 October 1990, which vouched the respondents' tenancy and to which we shall refer later, had been fabricated several years after its purported date. In his judgment dated 27 September 1999 the sheriff held that the appellant had failed to prove that assertion.

[6] The respondents raised the present action in September 2000. They seek (1) declarator that they are joint tenants of an agricultural holding consisting of the land in question; (2) declarator that, as tenants of the holding, they have a right of access over the road leading from the Leachkin Brae public road to Woodside Croft Cottage for the purpose of gaining vehicular, pedestrian and livestock access from the public road to the holding; and (3) for interdict against the first defender from interfering with the pursuers' peaceable possession of the holding in various specified ways; and for interim interdict.

[7] The respondents aver that by a missive dated 29 October 1990 Vastlands Properties Limited (Vastlands), who were the then proprietors, offered them the tenancy of the subjects in question. Clause 8 of the offer granted access to the holding over the road referred to in crave (2), which at that time was owned by Vastlands. The respondents aver that they accepted the offer by paying the rent and entering upon the subjects. They thereafter used the subjects for agriculture for the purposes of a trade or business. The tenancy has not been brought to an end by notice to quit in terms of the Agricultural Holdings (Scotland) Act 1991.

[8] The respondents further aver that the subjects in dispute came into the ownership of Vastlands by a disposition dated 6 June 1988 and recorded on 11 January 1990 along with a contiguous area of 0.44 acres on which there was a house and other buildings. By disposition dated 9 August and recorded on or about 29 October 1993, Vastlands purported to dispone the title to the subjects in dispute to Larkin Brae Horse Farm Limited (Larkin). Larkin was not incorporated, however, until 28 September 1993. Therefore in 1993 it acquired no valid marketable title to the subjects. Title remained with Vastlands. Larkin was struck off the Register of Companies on or about 13 December and dissolved on or about 22 December 1995. It has not been restored to the Register. It therefore has no title or interest to defend. Vastlands was also struck off the Register of Companies and was dissolved with effect from 16 October 1996. It has not been restored to the Register. Any rights of property in the subjects in dispute were therefore vested at all material times in the Queen's and Lord Treasurer's Remembrancer. We understood counsel for the appellant not to dispute these averments, subject to the qualification that the Queen's and Lord Treasurer's Remembrancer has now conveyed the subjects to the second defender in circumstances that we shall describe.

[9] The current proprietor of the contiguous area of 0.44 acres is the appellant. He derived title from Vastlands. His title comprehends the access road referred to in crave (2). In this action the respondents convened Larkin as second defender, the Queen's and Lord Treasurer's Remembrancer as third defender and Vastlands as fourth defender.

[10] In support of the crave for interdict, the respondents aver that the appellant disputes the existence of their tenancy; that he has brought horses onto the subjects, that he has purported to let part of the subjects to certain third parties, and that he has obstructed the respondents' access to the subjects.

The defences to the action
[11] When the action was raised, the appellant was represented by the firm of Levy and Macrae. They lodged defences to the action on behalf of the appellant and on behalf of the second defender. The defences, except in relation to the crave for interdict, were skeletal only and have remained so ever since. The defences for the second defender were of no effect, since the second defender had by that date been struck off the Register and had been formally dissolved. The defences did not disclose these facts. The respondents averred that the second defender had been dissolved, but the defences did not admit that averment.

The summary decree
[12] On 15 December 2000 there was an options hearing at which the respondents moved for summary decree. The sheriff continued consideration of the motion to 11 January 2001 and allowed further adjustment. On that date he heard the parties on the motion. No adjustments had been made on behalf of the appellant or in name of the second defender. Counsel for the present respondents made detailed submissions to the court with extensive references to authority. The sheriff did not receive the same assistance from the solicitor for the appellant, who also purported to represent the second defender. She said that the appellant's principal agents had provided her with instructions in the form of a letter only on the morning of the hearing, a fact that the sheriff considered regrettable. On 30 January 2001 the sheriff granted summary decree in terms of the respondents' craves. In his Note, the sheriff commented on the lack of candour and openness on the part of appellant and the second defender and their failure to take the opportunity given to them for adjustment.

[13] An appeal was taken to the sheriff principal in the names of the appellant and the second defender. On 9 April 2001 the sheriff principal amended the interlocutor of the sheriff on a technical point and recalled the interlocutor to the extent that it granted interdict.

[14] The sheriff principal noted that the second defender had wholly failed to deal with the averments that it had neither title nor interest to defend and that the appellant had not disclosed what title or interest, if any, he claimed to have in relation to the land in dispute. Both had wholly failed to respond to averments of matters within their knowledge. He also noted that no attempt had been made by either the appellant or the second defender to adjust or amend before the appeal or to offer to do so during the hearing of the appeal; nor did they suggest that there were other enquiries to be made, or documents yet to be produced, to amplify, extend or establish their defences. It appears that both the sheriff and the sheriff principal were unaware that the second defender had been dissolved.

[15] The sheriff principal concluded that as to the declaratory conclusions there were no issues to try; but he held that the appellant, the only defender against whom interdict was sought, had averred sufficient to entitle him to enquiry on that question.

[16] An appeal to the Court of Session was marked in the names of the appellant and the second defender. By interlocutor dated 20 June 2001 this court refused the appeal as incompetent and remitted the cause to the sheriff to proceed as accords. From that point, there were no further procedural steps purportedly on behalf of the second defender.

[17] By interlocutor dated 9 August 2001 the sheriff at Inverness inter alia refused to allow the appellant to lodge late adjustments. In the course of further procedure the sheriff discharged both an options hearing and a diet of proof on the motion of the appellant and continued a hearing, on the motion of the appellant, to enable his agent to take full instructions. During this phase of the litigation two awards of expenses were made against the appellant.

[18] On 1 November 2001 the sheriff, of consent of the third defender, granted decree by default against the third defender in respect of the declaratory craves. That had the effect of establishing the respondents' claim to the agricultural tenancy in a question with the then owner of the land.

[19] On 6 March 2002 Levy and MacRae withdrew from acting for the appellant. After April 2002 he was represented by the firm of O'Donnell Vaughan.

[20] Eventually, a proof was fixed for 30 August 2002 which, in the circumstances, was to be concerned only with the crave for interdict against the appellant. On 21 August 2002 Sheriff Pollock refused a motion by the appellant in person to discharge the diet. On that occasion the appellant told Sheriff Pollock that he was now represented by the firm of Cannons.

[21] On 30 August 2002 the appellant appeared in person before Sheriff MacFadyen. A shorthand writer and six witnesses for the respondents were in attendance. The appellant again sought a discharge of the diet. The appellant told the sheriff that on 13 August 2002 he had learned that O'Donnell Vaughan had withdrawn from acting for him because of the serious illness of the partner concerned. He had since attempted to obtain representation from a number of firms, none of which was willing to take on his case at short notice. He told the sheriff that he had not meant what he told Sheriff Pollock about Cannons on 21 August 2002. Sheriff MacFadyen did not accept this. Having regard to the whole history of the case, he refused to discharge the diet. The appellant at once requested leave to appeal. The sheriff considered that that was a dilatory tactic. He refused leave to appeal. The appellant then left the court. He told the bar officer that he did not intend to return. The sheriff thereupon held that the appellant was in default in terms of the Ordinary Cause Rules (Rule 16.2(1)(c)). Having heard the solicitor for the respondents on the question, he granted interdict as craved.

[22] The appellant's words and actions on that occasion were recommended to him by the firm of Cannons in a text written by them for his use at the proof. This extraordinary document includes the following.

" ... (The Judge will then make his decision and listen carefully to what he says and try and write it down. If he says that he grants your Motion and discharges the date then just listen for the new date being fixed. If he refuses your Motion then that means that the Proof has to proceed in which case you should stand up and say the following)

'Would my Lord grant leave to appeal?'

(If he grants leave to appeal then that is the same thing as discharging the Proof. If he does not grant leave to appeal then that is the end of the matter today and you should then wrap up your papers, bow to the Sheriff and leave the Court.

On no account should you remain in the Court or take part in any further proceedings if the Proof is to proceed today.

If the Judge refuses to put the Proof off (in other words, discharge the Diet of Proof) then by leaving the Court you will force him into a situation of a potential miscarriage of justice which would be the grounds for lodging an appeal once he has reached a decision on the case ... "

[23] On 16 December 2002 the sheriff principal heard an appeal by the appellant against the interlocutor of 30 August 2002. The solicitor for the appellant, Mr Cannon, conceded that the decree by default could not be challenged, but he submitted that the sheriff had exercised his discretion unreasonably in refusing to discharge the diet of proof. He also sought to challenge Sheriff Pollock's interlocutor of 21 August 2002 to the same effect. The sheriff principal refused to allow him to challenge Sheriff Pollock's interlocutor. He held that Sheriff MacFadyen in refusing to discharge the diet had not misapprehended material facts or reached an unreasonable decision. He therefore refused the appeal.

[24] On 23 December 2002 the appellant appealed to this court. The diet for the hearing of the appeal was fixed at least seven months in advance. At a By Order hearing on 8 January 2004 counsel for the appellant intimated to the court that he was ready to proceed. No mention was made of any proposal to amend. On 5 February 2004, five days before the hearing, the appellant enrolled a motion in the following terms:

"On behalf of the First Defender and Appellant, to allow the Minute of Amendment No. 41 of Process to be received and to allow Answers within 28 days; to allow the Inventory of Productions No. 42 of Process to be received; to recall the Interlocutors of the Sheriff dated 30th January 2001 and 30th August 2002 and of the Sheriff Principal dated 9th April 2001; to discharge the Summar Roll Hearing fixed for 10th and 11th February 2004; quoad ultra to remit the case to the Sheriff to proceed as accords and to dispense with full intimation of this motion required by Rule of Court 23.3(3) in respect of the proximity of the Summar Roll Hearing."

At the hearing of the appeal, counsel for the appellant amended the motion to seek recall also of the interlocutor of the sheriff principal dated 16 December 2002. The minute of amendment to which the motion refers is the first intimation by the appellant of a substantive defence to the first and second craves. In it he proposes a line of defence to the effect that the offer of the lease was fabricated during the latter half of 1998 by persons unknown to him. He also proposes to add averments that by disposition dated 23 April 2003 the third defender disponed the subjects to the second defender, which has changed its name to West Larkin Limited, and that an application for first registration in the Land Register "is in progression." The minute also sets out calls upon the respondents to give "fair specification" of the trade or business that was carried on from the subjects and to produce various documents. There is also an averment, the significance of which is not obvious, that the subjects were de-crofted in 1982.

The current ownership of the subjects in dispute
[25] To add to this complicated picture, the appellant has lodged documents showing that on 12 September 2001 the sheriff at Glasgow ordered that the name of the second defender should be restored to the Register of Companies and restored the second defender "to the same position as if its name had not been struck off" and that on 29 November 2001 the name of the second defender was changed to West Larkin Limited. The appellant has also lodged the disposition by the third defender in favour of the second defender dated 23 April 2003. The disposition is granted "subject to and excepting the current tack and rights of possession whether statutory written notice or verbal (sic) of the tenants of (sic) possessors of the said subjects or otherwise ... "

Submissions for the appellant
[26] Counsel for the appellant accepted that the appellant had been rightly held to be in default. He submitted that in terms of section 29 of the Sheriff Courts (Scotland) Act 1907 (the 1907 Act) the appeal submitted to review the whole interlocutors in the cause and was available to, and could be insisted in, by all the parties to the cause. The appeal was competent. In any event, the court had a super-eminent jurisdiction to entertain it in its discretion (Macphail, Sheriff Court Practice, 2nd ed, para. 18.92). Since the second defender had the primary title and interest on the central issue of vacant possession, he sought to have that title and interest represented by the appellant.

[27] The minute of amendment should be allowed so that the appellant could raise in these proceedings the possibility that the offer of the lease was fabricated; and prove that the respondents had not entered into possession, had not carried on an agricultural trade or business, and had ceased to carry out agricultural operations on the land. Counsel accepted that he had insufficient evidence to seek reduction of the offer document ope exceptionis.

[28] Counsel for the appellant submitted that if the appeal were to be decided on the basis of the existing pleadings, the appellant was entitled to put the respondents to the proof of their averments. The true interest in the claim to vacant possession lay with the second defender; but the appellant had title and interest by virtue of being convened as a defender and as owner of the land over which access was claimed. The onus was on the respondents to establish that the lease was valid and that it continued despite the dissolution of the second defender. The sheriff principal had applied the correct test to the question of summary decree, namely whether there was an issue to try. The court had to be satisfied that there was no defence to the action (OCR 17.2(4)). The defences disclosed the following issues: (1) whether the offer was made in 1990; (2) whether it was impliedly accepted by the taking of possession and the payment of rent; (3) whether the land was used for agriculture for the purposes of a trade or business (Agricultural Holdings (Scotland) Act 1991, s. 1), and (4) whether the respondents' use of it was in conformity with the conditions of the offer. The appellant's general denials were sufficient to make these issues to try (Gray v Boyd, 1996 SLT 60). Summary decree against the appellant prejudiced the second defender's rights of appeal. It was undesirable that valuable rights of property should be settled in this way.

Submissions for the respondents
[29] Counsel for the respondents submitted that the appeal was incompetent because the final interlocutor of 30 August 2002 disposing of the cause was a decree by default in terms of Ordinary Cause Rule 16.2 (1)(c). An appeal against a decree by default differs from other appeals because in such an appeal interlocutors pronounced before the default cannot be submitted to review (Winning v Napier, Son and Co Ltd, 1963 SC 293; Macphail, op cit, para 14.11). The only effect of a successful appeal against a decree by default is to restore the appellant to the procedural position that he was in immediately before the decree by default was pronounced. The proposed amendment should be refused in view of the appellant's inordinate delay; the lodging of it at the last minute; its reliance on matters known to the appellant from the start; the appellant's previous conduct of the defence, and the inevitable prejudice to the respondents if it were allowed. If the appeal was to be decided on the present pleadings, it should be refused. No proper defence was pled.

Decision
(1) The competency of the appeal
[30] In our view, this appeal is incompetent. The appellant suffered decree by default. He acknowledges that the decree by default was properly granted. There is no ground of appeal in relation to that decree. The appeal is directed solely at the summary decree interlocutors. The effect of the appellant's default, in our view, is that he may not subject such prior interlocutors to review (Winning v Napier, Son and Co Ltd, supra, Lord President Clyde at p. 298; Lord Guthrie at pp 299-300). Winning v Napier, Son and Co Ltd was a case where the defenders were dissatisfied with an interlocutor allowing proof. They deliberately allowed decree to pass by default and reclaimed in order to open up the prior interlocutor to review. That was refused. It may be that a similar motive underlay the solicitors' advice to the appellant. In any event the result, in our view, is the same.

[31] Counsel for the appellant has attempted to distinguish Winning v Napier, Son and Co Ltd (supra) on the grounds inter alia that this appeal is concerned with the statutory right of appeal under the 1907 Act and that the default of the appellant should not prejudice the second defender's right of appeal. We do not accept that that is a material ground of distinction. The decision in Winning did not depend on any specialty in the Rules of the Court of Session. The same principle underlies both cases. Moreover, the default of the appellant cannot be said to prejudice the second defender's rights of appeal. The second defender was never validly in the process. It ceased to exist before the action was raised. Since it was restored to the Register of Companies, it has not applied to be sisted to the process.

[32] In any event, we cannot see how we could reopen the summary decree interlocutors while the decree by default remained unchallenged. To recall the summary decree interlocutors would effectively recall the interlocutor allowing proof.

[33] We conclude therefore that the appeal is incompetent. If, notwithstanding the default, we have a super-eminent jurisdiction to entertain the appeal, we consider that we should not exercise it in the light of the appellant's conduct of the defence.

(2) The Minute of Amendment
[34] If we had held that the appeal was competent, we would have refused to allow the minute of amendment to be received. This action demonstrates Scottish litigation at its worst. The action has been in dependence for almost three and a half years. The case for the appellant has been conducted reprehensibly throughout. In our view, the defence to this action has shown a complete lack of candour from the outset. The defences in relation to the substantive craves were skeletal when lodged and have remained so. The parties were allowed a period of adjustment. Thereafter, when the respondents moved for summary decree, the sheriff gave a further opportunity for adjustment. In the course of the repeated appeals, delays and postponements, the appellant made only one attempt to amend. We cannot understand why, after the summary decree was granted, the appellant did not tender a minute of amendment at the hearing of the appeal to the sheriff principal. The proposed amendment is the first attempt to adjust the appellant's pleadings since 9 August 2001. The minute of amendment was tendered more than a year after the present appeal was lodged; more than seven months after the hearing in the appeal was fixed; more than one month after counsel for the appellant confirmed to the court that the appeal was ready to proceed, and only five days before the hearing of the appeal. It comes far too late.

[35] Moreover, the proposed amendment seeks to raise a defence of fabrication that has been known to the appellant from the outset. He raised it in 1999 in the earlier action to which we have referred. We doubt the propriety of its being pled. It is obvious that the appellant has no documentary evidence to substantiate this serious allegation and counsel accepts that he has no evidence sufficient to found a case for reduction. The averments on this point are seriously lacking in specification.

[36] If the amendment were allowed, the case would go back to square one, and three and a half years of attritional procedure, with the associated time and expense, would be rendered futile. The respondents would suffer serious prejudice for which no award of expenses could provide adequate compensation.