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FIRST DIVISION, INNER HOUSE, COURT OF SESSION
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Lord President
Lord Macfadyen
Lord Kingarth
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[2006] CSIH 53
A1952/02
OPINION OF THE COURT
(NO. 2)
delivered by
THE LORD PRESIDENT
in causa
SHEILA CAMERON (AP)
AS EXECUTIVE NOMINATE OF
THE LATE ALEXANDER CAMERON FORMERLY KNOWN AS ALEXANDER CAMERON
MACINTRYE
Pursuer and Reclaimer;
against
IAIN MACINTRYE GIBSON and
ANOTHER
Defenders and Respondents:
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J.H.S. Scott; Anderson Strathern (Pursuer and Reclaimer)
J.J. Mitchell, Q.C.; Morton
Fraser (Defenders and Respondents)
9 November 2006
[1] Alexander Cameron,
formerly known as Alexander Cameron MacIntyre ("the deceased"), raised an
action for production and reduction of a decree of the Sheriff
Court at Fort William dated 26 February 1951 by which
Mary Ferris or Cameron was granted authority to adopt him and a relative
adoption order was made. He called as
defenders the executor dative of Dugald MacIntyre, who had died on 25 May 1999, and the
Lord Advocate. The executor dative
entered the process and defended the action.
In the course of the proceedings the deceased died. The action was continued by the present
pursuer, his widow and executor nominate.
[2] The
deceased and Dugald MacIntyre were brothers by birth but, by virtue of the
adoption order, the deceased had no claim to Dugald MacIntyre's
estate. The persons who, standing that
order, were Dugald MacIntyre's successors on intestacy were, we
understand, remoter relatives of Dugald MacIntyre.
[3] After
sundry procedure, including a procedure roll discussion and a reclaiming
motion, decree de plano was
pronounced reducing the adoption order.
The issue before us is one of expenses.
Mrs Scott on behalf of the successful pursuer and reclaimer moved
us to find the pursuer entitled to expenses against the defender and respondent
and to find that the latter was not entitled to charge the expenses for which
he had been found liable or his own expenses against the share of the estate
due to the pursuer. That share, it
appears, amounts to the whole of the estate, subject to any debts otherwise
due. In support of that motion she
referred us to McLaren on Expenses at
pages 193-4, together with Easson's
Trustees v Mailer (1901)
3F 778, Anderson v Anderson Trustees (1901) 4F 96
and Cameron v Anderson (1844) 7D 92, all referred to there. Reference was also made to McLaren on Wills and Succession at
paras. 2328 and 2332 and to Mackenzie
Stuart on Trusts at page 325.
The litigation had essentially been a competition between the pursuer
(and her deceased husband) and those who, if decree of reduction was refused,
would be entitled to succeed to Dugald McIntyre's estate; these persons included the executor as an
individual. It would be wrong that a
person who had defended the action for that purpose should obtain, to the
detriment of the successful pursuer, expenses out of the intestate estate. While he had been called for such interest as
he might have as executor dative, his proper course, if he was positively to
oppose decree being granted, was to secure indemnity from the persons,
including himself as an individual, who had a financial interest in such
opposition. Indeed, it was understood
that he had entered into an agreement to secure such an indemnity.
[4] Mr Mitchell
for the defender submitted that in the circumstances of this case the executor
dative could have had no knowledge that the deceased had a good claim qua "brother" unless and until decree of
reduction was granted. Until that event,
his duties as administrator were to the remoter beneficiaries. It was plain that a contradictor was required
before the difficult and novel issue raised by this action could properly be
resolved. The Lord Advocate had not
entered appearance. The executor dative,
having been as such properly called as a defender and having defended the
action reasonably and in good faith, was entitled to expenses out of the
estate. Reference was made to Watson v Watson Trustees (1875) 2R 344 and Barrie v Barrie's Trustees 1933
SC 132, especially per Lord Justice-Clerk Alness at pages 138‑9. Certain passages in McLaren on Wills and Succession and in McLaren on Expenses had there been disapproved. In any event the executor dative should not
be found liable as an individual as well as not being found entitled to his own
expenses out of the estate.
[5] The
general rule is that expenses follow success.
The pursuer and reclaimer has in this litigation been successful and, if
the general rule is to be applied, should obtain her expenses and, in
principle, should not have the value of the intestate estate to which she is
consequentially entitled diminished by it being charged with the expenses of
her opponent. The general rule is
subject to certain exceptions where trusts are concerned. One of these may be where, as in Barrie v Barrie's Trustee, the trustee has entered the process to defend a
testator's settlement (challenged in that case by a claim that the testator was
not at the relevant time of sound disposing mind); in such circumstances the court held, by a
majority, that there was no general rule as to expenses, the matter being
wholly one of circumstances. Similarly,
in Watson's Trustees v Watson it was held that, where trustees
in good faith had entered into a process to defend the deed which they had the
responsibility of administering, they were, as a general rule, entitled to
their expenses.
[6] In
the present case there is no deed or settlement to defend, the deceased having
died intestate and the executor dative being required to administer the estate
in accordance with the general law.
Moreover, if one addresses the matter more widely, it can be said that
the present litigation was truly a competition between the person who, if the
adoption order was reduced, was entitled to the intestate estate and those who
were entitled to it if the order was not reduced. The proposition in McLaren on Expenses criticised by Lord Justice-Clerk Alness in Barrie v Barrie's
Trustees (the reference there is to page 197, but the relative
propositions appear to be at page 196) is said to be unwarranted on the
authorities cited. That may be so, but
the case particularly relied on by McLaren
(Graham v Marshall (1860) 23D 41) appears to be analogous to the
present. There the litigation was
characterised as one between the creditors under an antenuptial contract of
marriage and parties (trustees acting under a trust assignation) who sought to
defeat the rights of those creditors.
The trustees were unsuccessful and, albeit trustees, were held bound to
account for the trust funds without any deduction of expenses. The authorities cited by Mrs Scott,
although strictly related to issues between trustees and beneficiaries, also
appear to us more analogous to the present case than those cases in which the
litigating trustees have been held entitled to recover their expenses out of the
trust fund. We are not persuaded that
the circumstance that the pursuer's claim depended upon matters of which at the
outset of the litigation the defender could have no knowledge warrants him
being held immune from personal liability for the expenses of the contested
litigation.
[7] While
the distinctions in this field can be somewhat narrow, we are satisfied for the
above reasons that the pursuer and reclaimer is entitled to the expenses of the
action in the Inner House and in the Outer House (insofar as not already dealt
with) and to a finding that the defender and respondent is not entitled to
charge expenses for which he has been found liable, or his own expenses,
against the share of the estate due to the pursuer and reclaimer. We should add, for the avoidance of doubt,
that we were not addressed on any question of charging "watching fees" to the intestate
estate.
