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OUTER HOUSE, COURT OF SESSION
[2007] CSOH 14
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A539/05
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OPINION OF LORD BRODIE
in the cause
JANET STEWART
Pursuer;
against
JAMES HENDERSON
Defender:
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Pursuer:
Young; Dundas & Wilson
Defender: A. J. Carmichael; Jardines
30 January 2007
[1] In
this action where the parties are sister and brother, the pursuer seeks decree
in the following terms:
"For decree
ordaining the defender to implement his obligations in terms of a Deed of Variation
of the Estate of the late George Henderson, by executing and delivering to
the pursuer within fourteen days a valid Disposition of his interest in the
heritable Subjects known as and forming 20 Peebles Road, Penicuik being
the Subjects more particularly described in Disposition by Mrs Janet
Sneddon or Chalmers as Trustee of the late Alexander Sneddon in favour of
Mrs Margaret Henderson, dated 10th and recorded in the
Division of the General Register of Sasines applicable to the County of
Midlothian (formerly Edinburgh) on 15th May, 1980; and failing implement by the defender within
fourteen days for Warrant and authority to the Deputy Principal Clerk of
Session on behalf of the defender to execute and deliver to the pursuer the
Disposition of said Subjects; and for
the expenses of the action."
[2] The
action came before me for discussion on procedure roll on 19 January 2007. The pursuer was represented by Mr Andrew
Young, Advocate. The defender was
represented by Miss Ailsa Carmichael, Advocate. By way of preliminary, I allowed the Closed
Record to be opened up and amended in terms of the Minute of Amendment for the
pursuer and answers for the defender, as adjusted. Counsel then addressed me in support of their
preliminary pleas.
[3] Miss Carmichael
moved me to sustain the defender's first plea-in-law and dismiss the
action. She drew my attention to the
averments on the basis of which the pursuer sought decree of implement. Essentially these were as follows:
"The pursuer is
the daughter of the late George Henderson, who died on 10th October, 1983. The defender is one of the pursuer's brothers. In terms of the Will of the late
George Henderson, dated 23rd February, 1983 the pursuer
was granted the liferent of the property at 20 Peebles Road, Penicuik, the
fee being left to the pursuer, the defender, the pursuer's brother,
Walter Henderson, and the pursuer's son, Gavin Mabon. In or around August, 1985 the pursuer,
as sole surviving Executor of the late George Henderson, entered into a
Deed of Variation with the defender, Gavin Mabon and Walter Henderson
to vary the terms of the Will of George Henderson to convey to the pursuer
as an individual the property at 20 Peebles Road,
Penicuik. In terms of the Deed of
Variation, the pursuer agreed to pay to each of [the defender] and
Walter Henderson the sum of г7,000 in consideration for the transfer
of the property to her. Said sums were
duly paid to [the defender] and Walter Henderson. Following the execution of the Deed of
Variation and in order to complete the pursuer's Title to the property, the
parties to the Deed of Variation required to execute a Disposition in favour of
the pursuer. Owing to an oversight on the part of the Solicitors then acting
for the pursuer as Executor, no steps were thereafter taken to have executed
and recorded a Disposition of the Subjects in the pursuer's favour. With reference to the defender's averments in
answer, admitted that the defender signed a Deed of Variation in exchange for
the sum of г7,000."
[4] Miss Carmichael
emphasised that although the pursuer sought implement of what were referred to
as the defender's "obligations in terms of a Deed of Variation",
notwithstanding the calls in the defender's Answer 2, the pursuer has
neither produced the Deed of Variation nor condescended upon its whole
terms. It was understood that the Deed
has been lost and, in its absence, unless the pursuer can prove its tenor, the
present action cannot proceed further.
Miss Carmichael reminded me that, the alleged obligation being one
that related to heritable right, it required constitution in writing. As appeared from the Answer, the defender
accepted that he had signed a document which he understood to be a Deed of Variation
in exchange for payment of the sum of г7,000. Although this does not appear in terms in the
defender's pleadings, Miss Carmichael expressly conceded on the direct
instructions of the defender that he knew that the purpose of varying the Will
of the late George Henderson was that the pursuer should obtain title to
the property at 20 Peebles Road,
Penicuik. However, it had been his
understanding that by signing the Deed of Variation, he had done everything
that he was required to do and in the absence of the deed or any narrative of
its precise terms, no one is in a position to advise him as to what he is
obliged to do. Miss Carmichael
accepted that her position was unattractive but it did not follow from the
admitted fact that the defender had signed something that was referred to as a
Deed of Variation that he had granted any obligation whatsoever to grant a
further deed. The pursuer was founding
on a deed, which she had not produced and the terms of which she had not
averred. In these circumstances, the
action was irrelevant and should be dismissed.
[5] Miss Carmichael
also drew my attention to the defender's fourth plea which is a plea of
prescription. It proceeded on the
assumption that the pursuer could be taken to have pled a relevant case to the
effect that the defender had become bound to grant a disposition in favour of
the pursuer by virtue of his being a party to a Deed of Variation executed in
August 1985. The defender had
averred that he had returned the signed document to solicitors acting on behalf
of George Henderson's executors on or about 9 August 1985 and, in any event, by, at latest, 14 August 1985. The present action had been served on 17 August 2005. Accordingly, it was the defender's position
that any obligation that may have been incumbent upon him by virtue of the Deed
of Variation had prescribed by the vicennial prescription provided by
Section 7 of the Prescription and Limitation (Scotland)
Act 1973. By way of response, the
pursuer has averred that it was only after 23 August 1985 that she and her son,
Gavin Mabon, signed the Deed of Variation, and accordingly, no obligation
was incumbent upon the defender prior to that date. Miss Carmichael did not dispute the
principle that, generally speaking, unless all parties to a contract are bound
then none are bound, but something might turn on the exact terms of the Deed of
Variation and therefore the pursuer was not in a position to invoke that
principle when she had neither produced the Deed of Variation nor condescended
upon its terms.
[6] On
behalf of the pursuer, Mr Young sought to persuade me to grant decree de plano, in terms
of his second plea-in-law. Although the
conclusion was for decree ordaining the defender to execute and deliver a valid
disposition, it was clear from the terms of Article 3 of Condescendence, that
what was looked for was for the defender to sign, as consenter, the disposition
which had previously been executed by Gavin Mabon and
Walter Henderson. If, however, the
court was not satisfied that the defences were irrelevant, then Mr Young sought
allowance of proof before answer. He
accepted that prior to any proof, he would require to establish the terms of
the Deed of Variation by way of action of proving the tenor.
[7] Mr Young
drew my attention to the pursuer's averments in Article 2 of
Condescendence. As appeared from these
averments, what the pursuer was saying was that the purpose of the Deed of
Variation was that the pursuer should get sole title to the property. It was not said that the Deed of Variation
imposed an express obligation on the defender to grant a disposition. Where one has an acceptance that the property
was to be transferred to the pursuer as an individual, the precise mechanisms
for achieving that might vary. However,
it was a necessary consequence of the deal which had been done among family
members that each would take such steps as were necessary to give effect to the
substance of the Deed. Mr Young
accepted that as the defender's interest in the fee of the property was heritable
in nature, any obligation in relation to it would have to be constituted in
writing. However, in his Answers the
defender accepts that he did execute a Deed of Variation and that he received
payment of the sum of г7,000 for having done so. He does not aver what, in substance, were the
terms of the Deed. He does not say why
he was paid for executing it. He
nevertheless avers that he has performed all and any obligations incumbent upon
him. To aver that and yet to claim not
to know what his obligations were was inconsistent. Mr Young referred to the decision in Gray v Boyd 1996 SLT 60.
In that case (supra
at 53) the Lord Justice Clerk had stated that there is no warrant in
principle or practice to the effect that where a party denies a fact which is
within his knowledge, that denial should be held to constitute an implied
admission merely because it is considered that he has been less than
candid. However, there may be cases
where a defence will be held to be irrelevant if there are admissions made of
certain facts which, in the absence of explanation, give rise to presumption,
coupled with a general denial but no such explanation. Thus, submitted Mr Young, there are
cases, of which this was one, where a party's admissions went sufficiently far
to render the pleadings irrelevant, in the absence of explanation displacing
what would otherwise be the inference to be drawn from the admissions. Mr Young also drew attention to the Opinion
of Lord McCluskey in Gray v Boyd supra at 64L to 65A where
he approved the statement by the Sheriff in Lossie
Hydraulic Co v Ecosse Transport Ltd 1980
SLT (Sh Ct) 94 at 97: if
a defender chooses to rely on a skeleton defence which is clearly evasive and
incomplete, he can expect defence to be construed very strictly against him on
relevancy questions. By adopting that
approach, Mr Young invited me to find that the defences in the present
case should be read to include an implied admission that the effect of the Deed
of Variation was as had been averred by the pursuer. The question for the court was whether enough
had been admitted by the defender to cut through the need for the action to go
to proof, with the incidental need to prove the tenor of the Deed of
Variation. If it were considered that
there was insufficient by way of admission to allow decree de plano
to be granted, it would be necessary to sist the action in order to allow for
the proving of the tenor of the Deed of Variation.
[8] It
was Mr Young's submission that the defender's averments in relation to
prescription were irrelevant. The onus
was on the defender to make out a prescription defence. Any variation of the Will of the late
George Henderson required agreement among all those having an
interest. Accordingly, until the Deed of
Variation was signed by everyone, no one was bound. As had been indicated by
Miss Carmichael, the action here was served on 17 August 2005.
To make a case that the defender's obligations had prescribed by the
passage of 20 years, it was necessary for the defender to aver that all
those having an interest had executed the Deed of Variation 20 years prior
to that date. The defender had not done
so. Accordingly, his averments were
insufficient to support his plea of prescription, and that plea having been
repelled, there was no reason not to grant decree de plano.
[9] In
a second speech, Miss Carmichael responded to Mr Young's submission
that the defender's averments, including his averments in relation to
prescription were irrelevant.
Miss Carmichael submitted that the defender had done enough to
raise the prescription point. It was for
the pursuer to answer it.
Miss Carmichael did not dispute the principle that unless all
parties to a contract are bound, then none are bound, but the pursuer's
averments to the effect that she and her son had not executed the Deed of Variation
until after 23 August 1985
had to go to proof. Even leaving aside
the defence of prescription, this was not a case where the court could grant
decree de plano. Whereas the conclusion seeks to ordain the
defender to implement his obligations in terms of a Deed of Variation, the
pursuer's averments do not identify any specific obligation incumbent upon
him. Rather, what is averred is that
following the execution of the Deed of Variation, the parties to the Deed
"required" to execute a disposition in favour of the pursuer. The pleadings are silent as to why that
should be so. This was a fundamental irrelevancy
at the heart of the pursuer's action.
The defender was being asked to implement an obligation when the basis
of that obligation was not made clear in the pleadings. Mr Young had made much of what he had
described as the defender's lack of candour.
The defender accepted that he knew that the purpose of his executing the
Deed was that the pursuer should obtain title to the property. What he does not know is precisely what he
bound himself to do by executing the Deed.
Moreover, he does not know whether any other party in fact executed the
Deed. The defender's position is that he
asks the pursuer to show him why he is bound to do what the pursuer says he is
bound to do. This is not a case where
the defender is hiding behind bare denials of matters within his
knowledge. As matters stood, the pursuer
had put forward nothing which demonstrated why, as a matter of law, the
defender should be held to be obliged to grant a disposition in her favour.
[10] Miss Carmichael accepted that the position adopted by the
defender (which has necessitated this litigation between sister and brother) is
unattractive. Miss Carmichael could
hardly do otherwise. The defender admits
that in terms of the Will of the late George Henderson, the fee of the
property at 20 Peebles Road,
Penicuik was bequeathed to the pursuer, the defender, their brother,
Walter Henderson and the pursuer's son, subject to a liferent in favour of
the pursuer. He avers that he signed a
deed, the admitted purpose of which was to vary the Will with the object that
the pursuer should obtain sole title.
The defender admits that he received the sum of г7,000 for
executing that Deed. I see that as an
acceptance by the defender that he was party to a family arrangement in terms
of which he agreed to give up all interest he had in the heritable property in
return for a sum of cash. It is
difficult to envisage such an arrangement that did not include, either as an
express or implied term, an obligation upon the defender to convey to or
renounce in favour of the pursuer all right, title and interest he may have had
in the property, whether in terms of the Will or otherwise, subject, perhaps,
to his legal costs being met by the pursuer.
The defender, however, disputes that.
He maintains that the pursuer must establish her entitlement to require
him to consent to the disposition which is a necessary step in her obtaining
title and, moreover, establish why any entitlement that she may have had has
not prescribed. By withholding his
co-operation he is, as it were, standing on his rights or, more precisely, what
may be his rights if the pursuer cannot establish the contrary.
[11] At this stage in the proceedings I cannot say that, as a matter
of law, the defender is not entitled to maintain this position. The pursuer's case, as presently pled, relies
on the terms of the Deed of Variation and yet she is not in a position to aver
what these terms may have been. I
understood Mr Young to accept that if he is unable to prove the tenor of
the Deed of Variation, he may not be able to proceed further with this action. I can see why that might be so. While an obligation to do everything
reasonably necessary to
secure good title to the pursuer might readily be inferred, I do not consider
that it can be asserted, simply on the basis of the pleadings, that such an
obligation would necessarily arise in the circumstances, irrespective of the
express terms of the Deed. As the terms
of the Deed of Variation are not known, it cannot be said what was its
effect. That was the substance of
Miss Carmichael's submissions and I agree with that, however sympathetic I
might be to the position adopted by Mr Young on behalf of the
pursuer. Moreover, I do not consider
this to be an example of a case where the defender's pleadings display a lack
of candour. If anything, they appear to
me to demonstrate a brutal frankness. He
puts his sister to her proof. There is
no reason, in law, why he should not do that.
[12] In
relation to prescription, I am also with Miss Carmichael. I consider that by averring the date at which
the defender signed the Deed of Variation, she has done enough to set out a
basis for her prescription plea. She
does not dispute the principle relied on by Mr Young: that until all parties to a contract are
bound, no party is bound. What she does
is to aver that the defender does not know when other parties signed the
Deed. Again, he puts the pursuer to her
proof. It is therefore for her to
establish why such obligation as the defender may have undertaken by signing
the Deed of Variation has not prescribed.
[13] I shall
accordingly allow both parties proof of their respective averments. In the course of his submissions,
Mr Young indicated that if I were to allow a proof he would wish this
action sisted in order that he might proceed with an action for proving the
tenor of the Deed of Variation, which appears to have been lost. I did not understand Miss Carmichael to
offer opposition to that proposal but she expressed a preference for the
question of sist of these proceedings to be left over until I had determined
the other issues raised at debate. I
propose to follow Miss Carmichael's suggestion. The case will be brought out By Order for
discussion of future procedure in the light of this Opinion.
