Scottish Court of Session Decisions

 

OUTER HOUSE, COURT OF SESSION   [2009] CSOH 142
A566/07	OPINION OF LORD BRODIE   in the cause   DAVID McGRADDIE   Pursuer;   against   RODGER JOHN McGRADDIE and LORNA ESTHER GREEN   Defenders:     ­­­­­­­­­­­­­­­­­________________

 

 

Pursuer: Jonathan Brown, McClure Naismith

Defenders: Buchanan; HBM Sayers

3 November 2009

 

Introduction

 

[1] Not every homecoming is free from complications.

[2] The pursuer and first defender are, respectively, father and son. As at the date of proof the pursuer was 73 years old and the first defender 53 years old. The second defender is the long term partner of the first defender. They have been living together for some 30 years. They have a son, Richard McGraddie.

[3] The action concerns disputes relating to two payments of money by the pursuer to the first defender for the purpose, so the pursuer avers, of purchasing two specified heritable properties, the title to be taken in the pursuer's name. Each of the properties, a flat 0/3 23 St Helen's Gardens, Glasgow, and a house at 6 Lochrig Court (formerly Plot 8, Manor Gardens), Stewarton, Ayrshire, had been newly built. The first payment was made by a transfer by the pursuer of £192,703.88 to the first defender's account with Abbey National plc on 8 December 2005. The second payment was made by the delivery by the pursuer to the first defender on or about 19 February 2007 of a cheque payable to the first defender in the sum of £285,000. The defenders do not dispute that these payments were made. They dispute their purpose.

[4] The pursuer avers that the purpose of each payment was to buy the relevant property. He avers in relation to both properties that at no time did he give the first defender any instruction to the effect that title was to be taken other than in the name of the pursuer. Among the remedies for which he concludes is decree ordaining the first defender to deliver a disposition in favour of the pursuer of the flat at 23 St Helen's Gardens and decree ordaining the first and second defenders to deliver a disposition in favour of the pursuer of the house at 6 Lochrig Court. The first defender's defence to the claim in respect of 23 St Helen's Gardens depends on the averment that the pursuer instructed that title be taken in the name of the first defender with the intention that the defenders' family would have an interest therein. As far as the payment of £285,000 which was used in part to purchase 6 Lochrig Court is concerned, the defenders aver that this was a gift for both of them to use as they pleased.

[5] I heard proof on 28 April to 1 May and on 20 to 22 and 25 May. Mr Jonathan Brown, Advocate, appeared for the pursuer. Mr Buchanan, Advocate, appeared for the defenders. The pursuer gave evidence as did both defenders, Mr Bruce Wilson, an accountant, Sheriff Andrew Mackie who when in solicitor's practice had acted for the defenders, and Richard McGraddie.

Uncontroversial facts

The first transaction

[6] The first defender is one of two sons of the pursuer and his late wife, Joyce McGraddie. The pursuer has been estranged from his other son, Daniel, for a long time. The pursuer and his wife were originally from Scotland but they lived in Albuquerque, New Mexico, for a number of years during which period the pursuer acquired a number of properties. Joyce McGraddie underwent heart surgery in 1990 and for the latter part of her life she was an invalid. In October 2005 the defenders and Richard visited the pursuer and his wife in Albuquerque. It was apparent that Joyce McGraddie was in a terminal stage of her illness. It was determined that she and the pursuer would move back to Glasgow. They asked the first defender to find accommodation which would be suitable, having regard to the fact that Mrs Joyce McGraddie was a wheelchair user. The first defender advised the pursuer that he had identified a newly constructed flatted dwelling house, flat 0/3 23 St Helen's Gardens, Glasgow which he considered to be suitable to accommodate both the pursuer and his wife. The pursuer and Mrs Joyce McGraddie returned to Scotland in November 2005. They viewed the flat and agreed that it would indeed be suitable. As I have already indicated, the pursuer arranged for the transfer of the sum of £192,703.88 to the first defender's account with Abbey National plc on 8 December 2005. These funds were sufficient to meet the price of 23 St Helen's Gardens together with the legal fees and outlays required to complete the purchase. The purchase was accordingly entirely funded by the pursuer. It was, however, the first defender who instructed solicitors, Messrs Mackie Thomson & Co, to complete the purchase of the property. Mr Andrew Mackie of that firm, as he then was, took responsibility for the transaction in the absence from business of his partner, Carole Thomson, with whom the defenders had previously dealt.

[7] Messrs Mackie Thomson accepted a disposition in favour of the first defender in implement of the contract for the purchase and sale of the flat at 23 St Helen's Gardens. The first defender instructed submission of an application for registration in the Land Register of Scotland of his interest as proprietor of the subjects.

[8] On 1 January 2006 the pursuer and his wife moved into the flat at 23 St Helen's Gardens. Six days later the pursuer's wife died. Since then the pursuer has continued to live in the flat.

The second transaction

[9] On or about 19 February 2007 the pursuer delivered to the first defender a cheque for £285,000. That cheque was presented for payment on 20 February 2007 and the sum of £285,000 was credited to the first defender's account with Abbey National plc.

[10] In February 2007 George Wimpey West Scotland Limited were marketing a housing development known as Manor Gardens, Stewarton, Ayrshire. They advertised the development in at least two newspapers, the Eastwood Extra and the GSPC (Glasgow Solicitors' Property Centre) newspaper. Both of these newspapers are published weekly. The edition of the Eastwood Extra for 1 February 2007 carried an advertisement for an "Open Day" at the development. The edition for 8 February 2007 carried an advertisement for the house built on plot 8 (described as "4 bed Willow" under the heading "Don't Lose the Plot") at a price of £310,000. Neither the edition of the Eastwood Extra of 15 nor that of 22 February 2007 carried advertisements for the development. However, the edition of the GSPC newspaper of 20 February 2007 did carry an advertisement for "4 & 5 bedroom homes" at the development "from £299,995"

[11] Number 7/6 of process is a George Wimpey Purchasers Incentive Form relating to plot 8 Manor Gardens. It bears the date "24/2/08" but that may be taken to be intended to be a reference to 24 February 2007. It is signed by the first and second defenders. The price is stated as £299,995 subject to a discount of £9995 and various items being included in the purchase, one which is stated to be stamp duty paid at 3 per cent. Number 7/6 of process is a George Wimpey Reservation Form relating to plot 8, dated 24 February 2007 and signed by the first and second defenders. Again the price is stated as £299,995 subject to a discount of £9995 producing a Contract Selling Price of £290,000. A fixed date of entry is stated as 30 March 2007.

[12] Between 3 and 12 April 2007 the first defender transferred the sum of £199,880 from his account with the Abbey National plc to the client account of Messrs Mackie Thomson, solicitors. On 13 April 2007 Messrs Mackie Thomson received on behalf of the defenders a mortgage advance of £90,000 from Halifax plc, subject to deduction of a fee of £30. On 12 April 2007 Messrs Mackie Thomson sent to George Wimpey West Scotland Limited a cheque dated 13 April in the sum of £280,750 in settlement of the purchase by the defenders from George Wimpey of the house at 6 Lochrig Court, Stewarton, Ayrshire, (otherwise Plot 8, Manor Gardens, Stewarton). An application was thereafter presented by Messrs Mackie Thomson for registration in the Land Register of Scotland of the defenders' interest as joint pro indiviso proprietors of the subjects at 6 Lochrig Court.

Evidence on the disputed issues of fact

The first transaction

[13] Parties were agreed that there had been discussion of a proposal that title to the flat at 23 St Helen's Gardens should be taken in the name of the defenders' son, Richard, who was then 17 years of age. This was despite the fact that the flat was intended for the occupation of the pursuer and his wife, Mrs Joyce McGraddie. The flat had been reserved by the first defender in Richard's name (in the sense of paying a small deposit in return for the right to complete missives). However, when taking instructions Andrew Mackie pointed to the risks associated with title to a property intended for the occupation of his grandparents being in the name of a 17 year old. According to the pursuer, he and his late wife discussed the matter and agreed that it was too much responsibility to give to their grandson and, accordingly, they decided that the title should be in "our names". At all events, it was agreed by parties that the proposal to take title to the flat in Richard's name was departed from. Parties were at issue as to what, if anything, was said as to what alternative arrangement should be adopted in relation to the title to the flat. I did not understand that the pursuer claimed that he had ever specifically instructed the first defender that the title should be taken in the pursuer's name. However, he was quite clear that he had never given an instruction for the title to be taken in the first defender's name. When it was put to him in cross-examination that he did not want title in his name because he did not want "the authorities" to know that he had any interest in a property, his response was robust: "This is completely out of order". While at one point he stated "I wanted my house in my name", in a number of other answers, to which Mr Buchanan drew my attention when it came to the stage of submissions, he indicated that he wished title to the flat to be taken in joint names of himself and his wife. Just as I did not understand the pursuer to give evidence to the effect that he had ever explicitly instructed the first defender that title to the flat should be taken in the pursuer's name, I did not understand the first defender when he gave evidence to claim that the pursuer had ever instructed him explicitly to take title in the first defender's name (his evidence was accordingly contrary to his averments). The first defender's position was slightly different. According to him "As long as it was not in [the pursuer's] name he didn't care .... He wanted to be the invisible man". However, notwithstanding what he had said about the pursuer not wishing the flat to be in the pursuer's name, the first defender distanced himself from responsibility for any decision to take title in his own name. He pointed to the involvement of Andrew Mackie in raising a question over the wisdom of title being taken in Richard's name and then offered the explanation: "Better to go into my name, then it ends up in my name". Later in evidence-in-chief he said: "I just left it in the hands of the professionals" and, a little later, "I took nothing to do with it". When it was put to him in cross-examination that what he had done was to implement, as far as he could, what he thought his mother had wished, the first defender appeared to accept that that was the case. At the very end of cross-examination it was put to him as being correct that there had been no discussion about the flat at St Helen's Gardens being a gift. The first defender's response was: "I can't comment on something that was not discussed".

The second transaction

[14] As far as delivery of the cheque for £285,000 payable to the first defender was concerned, the pursuer's explanation was as follows. In January 2007 he had completed a period of one year's mourning for his late wife. The flat at St Helen's Gardens had too many memories. He wanted a house closer to the size that he had been used to in the United States with no immediate neighbours. He asked the first defender to look for such a property on his behalf. The first defender found a property and told the pursuer about it. He told the pursuer how much it would cost. This was the property at Plot 8, Manor Gardens, Stewarton. The pursuer said that he went down to Stewarton to view the show house. He talked to the sales staff and said that he would take the property if they deducted £10,000 from what he understood to have been the price previously discussed with the first defender. The member of the sales staff did not agree immediately but telephoned the next day agreeing to the pursuer's proposed deduction. The deal was struck on the telephone when the representatives of the builders said that they "could do it with a discount of £10,000". The pursuer was aware that the builders were presenting this particular house as having been upgraded in the sense that it had additional fixtures and fittings. He knew that the builders were offering to pay the stamp duty. He knew that the builders were offering £500 of Marks & Spencers vouchers as part of the incentives to purchase. He advised the first defender what he had done and instructed him to go ahead and buy it on his behalf. He understood that the first defender would deal with any legalities that were required. The first defender had not thought that the pursuer would be able to obtain any further discount and, according to the pursuer, he was not too happy when told that the pursuer had secured the additional discount of £10,000. The pursuer did not know about the need for a reservation fee. He had not signed anything. He accepted in cross-examination that the price agreed with the builders was £285,000. The price therefore "had to be" £295,000 before he secured the discount. However, although he accepted that the price of £285,000 had been discussed with the builder's representative, the pursuer also explained that he wrote a cheque for £285,000 payable to the first defender because he had been told by the first defender that that is what the property would cost.

[15] The pursuer said he knew nothing about inheritance tax planning. There had been no discussion about that with him. He denied encouraging the defenders to invest in a house in Stewarton (as is averred on their behalf and as was put to him on two separate occasions in cross-examination). The house at Stewarton was for him. He had paid for it. The payment of £285,000 was not a gift. It was not acknowledged as such by the second defender: not even a handshake.

[16] The pursuer did not move in to the Stewarton house. It was not ready. He understood that the defenders had moved in in May or June 2007. He went to a lawyer in July 2007 and learned about the details then. He had then gone to speak to the first defender about matters and been told that he would be "better off dead".

[17] On the pursuer's evidence the sequence of events that led to the purchase of 6 Lochrig Court began sometime in January 2007. That would be consistent with Lorna Green having noticed an advertisement for the development which appeared in Eastwood Extra either in the edition published on 1 February 2007 or that published on 8 February 2007. However, on the evidence of the first defender, essentially corroborated by the second defender, the sequence of events which led to them acquiring the property began later. According to the defenders there had been discussions in relation to inheritance tax saving involving Bruce Wilson (whom the pursuer had met) and Andrew Mackie (whom he had not met). The defenders spoke to the pursuer coming to their house at 42 Burnhead Road, Glasgow on what must have been Monday 19 February 2007 and giving the first defender a cheque in the sum of £285,000 with which to do whatever he wanted. The second defender was present. Both the first and second defender were surprised. According to him, the first defender said "Thanks very much" when given the cheque. It was a gift. It was "absolutely not" the position that the true position was that the pursuer wished the Stewarton house bought for him. The first defender presented the cheque for payment at his bank on 20 February 2007. According to the second defender, two days later she noticed an advertisement for the development at Manor Gardens at Stewarton. In cross-examination she identified the Eastwood Extra as the newspaper in which the advertisement had appeared. As previously indicated, parties are agreed that no advertisement for the Manor Gardens development appeared in that week's Eastwood Extra. On the other hand, an advertisement for the development did appear in the newspaper published by the Glasgow Solicitors' Property Centre on 20 February 2007 which mentioned "4 & 5 bedroom homes from £299,995." It is therefore possible that it was when reading that newspaper rather than an edition of the Eastwood Extra that the second defender first saw an advertisement for the development at Manor Gardens. It was the defenders' evidence that they went down to the site on Saturday 24 February 2007, saw the house, decided that they wished to buy it and completed the reservation form, 7/7 of process.

Assessment of witnesses

[18] Turning to my assessment of the witnesses, my impression of the pursuer was of a retired businessman for whom making money, as he had done, was important and an indication not simply of competence but also of worth as a person. He appeared to look down on the first defender as less able in that regard than himself. A feature of his account of the second transaction was that he had secured a better a deal than that offered to the first defender. He appeared pleased about that. I discerned nothing to suggest that the pursuer would be particularly generous. Despite an occasional loss of composure when talking of his late wife and his explanation that "I have not been right since my wife died", I found him to be a confident witness, capable of being firm and even robust in the face of cross-examination. There was an energy in his responses that had an air of conviction about it. When cross-examined about the receipt of sums of £3,000 paid to him after he had given the cheque to the first defender, having accepted that he had received three such payments into his account but not the seven payments in cash spoken to by the defenders, he offered to give Mr Buchanan a detailed explanation which Mr Buchanan declined to hear. It was true, as Mr Buchanan came to submit, that the pursuer's evidence lacked much in the way of specifics or circumstantial detail beyond his account of obtaining a discount of £10,000 on the sale price of Plot 8, Manor Gardens. He had forgotten about the first defender's involvement in property transactions in New Mexico. He did not remember a meeting with the accountant, Bruce Wilson. He appeared to contradict himself as to why he had paid £285,000 to the first defender. At one point he indicated that this was the price that he had been advised by the builder's sales representative. At other points he emphasised that this was the price that the first defender had told him was required for the purchase of the property. Mr Brown invited me to construe the evidence as indicating that the discount spoken to by the pursuer was a discount from the advertised price £299,950 to the sale price of £290,000 (prior to the deduction equivalent to the stamp duty), so accepting that the pursuer's recollection was not entirely accurate. I was left with the impression that the pursuer's financial affairs were perhaps more complicated than was disclosed in the evidence but on the central issue of whether the pursuer had made two substantial gifts to the first and second defenders, the demeanour of the pursuer and the content of his answers to questions did not suggest someone who was telling other than the truth.

[19] The content of the first defender's evidence and the manner in which he gave it raised sharp questions as to whether he was a witness in whom the court could have confidence. Apparently appreciating this, on 20 May 2009 Mr Buchanan intimated that he would wish to lead the evidence of a clinical psychologist, Professor Mackay, who had recently carried out an assessment of the first defender with a view to determining whether he exhibited Asperger's syndrome. On 21 May Mr Buchanan tendered a Minute of Amendment which sought to add averments on a number of matters, one being that the first defender had Asperger's syndrome. This condition was described in the Minute of Amendment as an autistic spectrum disorder associated with literal thinking and difficulties in communication and in comprehension of contexts. It was further averred that the first defender had problems in communication including "relative failure to sustain a conversational interchange in which there is a reciprocal responsiveness to the communications of the other person". Mr Brown opposed receipt of the Minute of Amendment and I refused it. It appeared to me that the admissibility of evidence such as I understood Mr Buchanan to propose to lead was problematic albeit that any issues arising could only be dealt with in the course of the leading of the evidence once the precise line was identified. It was not obvious to me that pleadings were necessarily required but to have received the Minute of Amendment would have meant giving the pursuer the opportunity to investigate the points made there and the inevitable consequence that the proof would not be concluded within the time available. I did not consider that such delay was justifiable in the circumstances. It remained open to Mr Buchanan to lead Professor Mackay but, in the event, the proposal to lead Professor Mackay foundered on his unavailability. Accordingly I heard nothing from him. I did, however, have the suggestion made by the second defender in the course of her evidence that she wondered whether the first defender exhibited Asperger's syndrome, given that a diagnosis of Asperger's syndrome had been made in respect of his son Richard and her understanding that it is thought that the condition has a genetic component. On that admittedly rather fragile evidential basis, I have seen it as being appropriate when considering the first defender's evidence to have regard to the possibility that he may have an autistic spectrum disorder. I understood from Mr Brown that he took no issue with that as an approach but he questioned how in the end this would assist me in coming to a view as to the first defender's credibility and reliability. That is not an easy question to answer in a way favourable to the first defender. In explaining why he wished to lead the evidence of Professor Mackay, Mr Buchanan described some of the passages in the first defender's evidence as "notable". He instanced the occasion when the first defender was nonplussed by the error in the date on Purchasers Incentive Form 7/6 of process (as indeed the first defender appeared to be). That might indicate a difficulty in appreciating that the person filling in the form had made a mistake in the date. When it came to submissions Mr Buchanan drew my attention to the difficulty that the first defender had appeared to have in giving his address. Mr Buchanan said that there were other examples. I agree. Overall, the first defender's presentation was casual, even when talking about his mother's terminal illness. He referred to the pursuer as "David McGraddie" rather than his father. This presumably reflected the antipathy that he clearly felt towards the pursuer and, apparently, had felt from a time preceding the events which were relevant to the litigation. He did not appear to engage with his counsel's questioning. He was abrupt. He gave the impression of being wearily exasperated at the questions he was being asked. Perhaps to his credit, he did not seem overly concerned to present himself in a favourable light. In the context of his mother's wish that the family's assets should go to Richard he said: "I said 'what do I get?'. He was always the golden eyed boy." He did not always seem to understand his counsel's questions. Sometimes he failed to answer them. At points his presentation suggested that his abilities might be impaired by medication, although I have no reason to believe that the first defender was in fact taking medication. On one occasion he used the less than ceremonious formulation when responding to counsel: "Say that so I can understand what you've just said". He gave conflicting evidence on the important matter as to whether the pursuer had given a specific instruction to him that title to the flat at 23 St Helen's Gardens should be taken in the first defender's name. When asked: "What did David say about it?" he gave the answer: "It was to go into my name" but, immediately following that, when he was asked whether there had been a direct conversation between him and the pursuer he said "No". When then asked why he had answered in the way he had, he referred to Andrew Mackie being under the impression that it would be better that the flat go into his name and went on to say "it ends up in my name". It is true that the first defender reiterated that the pursuer did not want the title to be taken in the pursuer's name but, at least in relation to the first transaction, I was left with the impression that the first defender did not fully appreciate the central importance of the pursuer's wishes in the matter and whether the pursuer had communicated his wishes to him. Indeed, he seemed to suggest that the pursuer's wishes were irrelevant. When asked, by his own counsel, "Why not now transfer [the flat at 23 St Helen's Gardens] back to David?" he gave the answer: "My mother's wishes should be respected". I would not ascribe that to any lack of intellectual ability on the part of the first defender. I would ascribe it to a complete inability to come to a view as to what would be reasonable in particular circumstances. I would see that as underlined by the position that he has taken in the litigation, at least as far as the first transaction is concerned, in that while he did not assert an intention on the part of the pursuer to make a gift to him of the flat at 23 St Helen's Gardens, his stance has been very stubbornly to resist the title being transferred into the pursuer's name. I did not hear evidence as to what is comprehended by Asperger's syndrome but, looking to the Minute of Amendment which I refused to receive, there were aspects of the first defender's presentation which would be consistent with him having difficulty in communication and in comprehension of context and having difficulty in sustaining a conversational interchange in which there is reciprocal responsiveness to the communication of the other person (to use the language of the Minute of Amendment). If this is so in court it is presumably also so in other social contexts. Asperger's syndrome may be the explanation for the way in which the first defender gave his evidence. It may not. However, whatever the reason for the first defender responding to questions in the way that he did, taking his responses as a whole I have felt bound to conclude that he was not a witness upon whom I could rely. This is particularly so when it came to his accounts of interactions with other people and the inferences to be drawn from these interactions. To an extent this case is about the reasonable interpretation of what was said and done in a particular social context. I have no confidence in the first defender's ability to come to such a reasonable interpretation.

[20] The second defender is a graduate and professional accountant. She presented as an intelligent woman accustomed to business and careful about financial matters. She kept an account of expenditures made on behalf of the pursuer and his late wife. She appears to have generally taken the lead on behalf of herself and the first defender. It was she who instructed Andrew Mackie and, as she put it, "I handled all the money". She had heard the evidence of the pursuer and the first defender before giving her own evidence. As with the other parties she has a financial interest in the outcome of the litigation. Her demeanour and use of language were indicative of a robust personality. I cannot say that I detected anything in her demeanour that either supported or undermined her credibility. However, and this applied equally to the first defender, in a material respect her evidence was not consistent with the averments made on her behalf. I refer to what appears at page 20B to D of the Closed Record. These are averments that can only have been based on precognitions of the first and second defenders. They include the averment that: "[the] pursuer suggested that the money he had given the defenders could be used to buy the house at Stewarton". However, on the account given by both defenders in evidence it was they who identified the house at Stewarton, not the pursuer, and that only after the money had, as they would have it, been gifted to them. On the timing they spoke to in their respective evidence there was no opportunity for the pursuer to contribute to the decision-making process. In all the circumstances of this case I consider it legitimate to conclude that the defenders departed from precognition when giving evidence and that that reflects adversely on their credibility. As far as the second defender is concerned I have also thought it appropriate to have regard to the evidence about the newspaper advertisement for the Manor Gardens development. The second defender was prepared to accede to the proposition that she had seen an advertisement in the Eastwood Extra until it was demonstrated that that could not be so on her timing of events. Only then did she explain that she must have read the advertisement in the GSPC newspaper published on 20 February 2007. Given her initial apparent confidence that the advertisement had been in the Eastwood Extra I see this passage as undermining her credibility or if not that at least her reliability (in saying that I recognise that what would seem principally to be in issue in relation to the second transaction is credibility).

[21] As for Andrew Mackie, Mr Brown described him as a very impressive witness who was plainly entirely credible and likely to be entirely reliable. Mr Brown went on to say that Sheriff Mackie had given the clear impression of thinking carefully about his answers before he gave them and had taken considerable care to answer fully, clearly and accurately. He had been candid and forthcoming about any gaps in his recollection. He had made good quality contemporaneous notes. The advice that he had given was impeccable. The transaction for which he was responsible had been well conducted; particularly having regard to the fact that he was only carrying it out because his partner was not available. He had an eye for detail. He was aware of the provisions in relation to money laundering and careful to comply with them. Where there was any conflict between his evidence and that of any other witness, Mr Brown invited me to prefer him without hesitation. Mr Buchanan did not demur to this assessment and I am entirely content to adopt it.

[22] There is nothing to suggest that Bruce Wilson was other than credible and reliable. He was not cross-examined.

[23] My impression of Richard McGraddie was that he was to be regarded as an honest but not necessarily reliable witness. In very large part he was recounting what he had been told by parents. It was not clear to me that he was able clearly to distinguish what he believed to be the case and what he was able to speak to from actual experience. He accepted that he had given an erroneous answer because he had felt under pressure in the witness box. I see his evidence as adding little or nothing to the case.

Submissions

The pursuer

[24] Mr Brown affirmed that it was the pursuer's position that in respect of each transaction the first defender was instructed to act as the pursuer's agent in arranging the purchase of the relevant property on behalf of the pursuer. Notwithstanding that agency the first defender wrongly and without authority took title in his own name in the case of St Helen's Gardens, and took title jointly between him and the second defender in the case of Lochrig Court. The pursuer should be accepted as credible and reliable and where the defenders' evidence conflicted with the evidence of the pursuer that of the defenders should be rejected as not being credible. It was clear on authority that an agent so acting holds the property on behalf of his principal notwithstanding the terms of the title and may be compelled to convey it: Bank of Scotland v Liquidators of Hutchison, Main & Co Ltd 1914 SC (HL) 1 at 15-17, Forbes' Trustees v Macleod (1898) 25R 1012, Pallant v Morgan [1953] 1 Ch 43 and (in the context of partnership) Longmuir v Moffat (No. 2) [2009] CSIH 19. Mr Brown submitted that there were two alternative routes to the same result. Either the agency obligation is analysed contractually with the agent liable to decree of implement of his obligations, or, and in any event, he is found to hold the property in trust for his principal. The result is the same on either analysis: the agent is obliged to convey on demand.

[25] The pursuer's case is that he had no direct dealings with the second defender and at no time did he authorise her to act on his behalf. That, submitted Mr Brown, corresponded with the defender's case on record if not with parts of their oral evidence. That being so, Mr Brown accepted that the pursuer had no direct recourse against the second defender on the basis of the agency relationship. Decree was sought against the first defender requiring him to deliver a disposition and the other supporting documents in relation to 6 Lochrig Court, but Mr Brown recognised that it was at least conceivable that he will be unable to do so, hence the pursuer's wish to have decree enforceable against the second defender. The basis of the claim was as set out on record: on the hypothesis that the purpose of the payment made by the pursuer was for the purpose asserted by him the second defender would be enriched were she to be permitted to retain a one half pro indiviso interest. There is no justification for her retention of the enrichment. The enrichment is at the pursuer's expense. The requirements set out in the restatement of principle contained in Shilliday v Smith 1998 S.C. 725 were satisfied.

[26] Turning to what he saw as the defence to the action, Mr Brown described it as straightforward. In respect of both transactions the defenders allege a gift. There is a presumption against donation: Brownless's Executrix v Brownlee 1908 S.C. 232 at 242, and Grant's Trustees v McDonald 1939 S.C. 448 at 460-461 and 471. Mr Brown acknowledged that there is some authority to the effect that the presumption may be reversed when the parties are near relatives: Malcolm v Campbell (1889) 17 R. 255 but it is apparent that the facts of that case were very different from those of the present. Notwithstanding what was pled, the first defender in evidence seemed to assert that, while accepting that there was no gift, he had general authority from the pursuer to take title in the name of whomsoever he chose. That is not a position open to him on the pleading but if it is, he is a bare trustee holding on behalf of the pursuer and as such may be compelled to denude in the pursuer's favour: Wilson & Duncan Trustees and Executors at paras. 11-05 and 12-15 and Menzies Trusts at p. 439-440.

 

The defenders

[27] The defenders' defence to that aspect of the action relating to 23 St Helen's Gardens is premised on the following averments: "The pursuer expressed reservations about taking title to the flat in the name of his grandson. The pursuer instructed that title be taken in the name of the first defender instead but with the intention remaining that the defenders' family would have an interest therein. The first defender therefore, in accordance with the pursuer's instructions, himself instructed solicitors to take title in the name of the first defender. The pursuer wanted title to the flat at St Helens Gardens to be taken in his grandson and then his son's name so as to provide a means by which his grandson would benefit from its value." The averments go on: "The pursuer wanted to avoid third parties from linking him with its title; including Revenue and Customs both in the UK and USA." Mr Brown read that as an assertion of gift. That was not how Mr Buchanan presented this aspect of the defenders' case. He reminded me that the pursuer had said, in relation to St Helens Gardens, "[we] wanted the house in my name and my wife's name." He submitted that a decree ad factum praestandum, which is what the pursuer was concluding for is a judicial order to do or perform some act, other than to pay money, which the defender should have done in implement of a legal duty incumbent on him, whether by statute, common law or by contractual undertaking: Walker Civil Remedies at page 269. It must be clear what the person who is made subject to such an order should have done before the court will order him to do it: Walker on Civil Remedies at page 276. The court will not be prepared to grant an order which innovates on the terms of the contract between the parties: Retail Parks Investments v Royal Bank plc 1996 SC 227. Mr Buchanan submitted that, accordingly, where a mandant instructs the mandatary to act in procuring heritable title in the name of the mandant, an action ad factum praestandum to implement that contract can only conclude for implement of that contract and cannot conclude for a variation of that contract. Thus where the pursuer and his late wife instructed the first defender to procure heritable title in their name, the only relevant conclusion would be a conclusion for an order ad factum praestandum to implement that contract and not one for conclusion for an order ad factum praestandum to implement a contract into the pursuer's sole name. Moreover, as Mr Buchanan suggested was the case here, where a mandant instructs the mandatary to act in procuring heritable title in the name of the mandant and his wife, and the wife knows about the instruction, a jus quaesitum tertio may be created giving rise to an interest to enforce the contact on the part of the wife. Such right as Joyce McGraddie had to receive title to the property would devolve to her executor on confirmation. There was no evidence that the pursuer had confirmed as executor to his late wife and, accordingly, there was no proof that he was entitled to insist on the acquisition of title to St Helens Gardens in respect of her pro indiviso interest and in the absence of evidence as to her testamentary intentions it was not safe to assume that the pursuer had a beneficial interest in the whole of the property at St Helens Gardens. Further, if the mandatory has an interest in the performance of the contract over and above the interest of the mandant, the contract is known as a procuratory in rem suam and the consent of the mandatary is necessary before mandate can be revoked. That, suggested Mr Buchanan, would be the situation here on the view of the facts put forward on averment: that title was to be taken in such a way as to benefit the first defender's family. Again, if the inference available from the evidence of the first defender was that the object of the instruction was to put the mandant's estate beyond the reach of his creditors, and as this object could be achieved only by irrevocable divestiture it should be concluded that the intention was to make the mandate in favour of the first defender irrevocable.

[28] Turning to the second transaction, Mr Buchanan explained that the first defender's position was straightforward. As he had said in evidence, speaking of the pursuer: "he gave me a cheque as a gift and said do what I want with it". This was confirmed by the second defender who was present: "When he spoke he was looking at me as well and the impression I got was that he was gifting it to both of us". Mr Buchanan accepted that there was a general presumption against donation. He referred to Walkers on Evidence page 23. When moveable property has passed from one person to another the onus was on the person alleging donation to prove it by evidence which is reasonably convincing and which is so clear as to displace all the other explanations put forward in evidence as being reasonable in the known circumstances of the case. However, when payments are made by a parent there may be a presumption contrary to the general presumption that the payments are gifts made ex pietate (by reason of family devotion) in which event the onus is upon the person seeking repayment to prove the contrary. Whether or not such a presumption arises must depend on the exact relationship of the parties and the whole surrounding circumstances.

Discussion and decision

The first transaction

[29] Leaving aside, for the moment, what may be the impact of the respective cases made by the parties on record, I would see the relevant facts here as being essentially uncontroversial and the consequential legal analysis straightforward. Parties are agreed that the pursuer instructed the first defender to make all necessary arrangements for the acquisition of the flat at 23 St Helen's Gardens for the purpose of occupation by the pursuer and his wife. The pursuer provided the purchase price and met all other necessary expenses. The first defender did everything necessary to obtain good title to the property. Title has been obtained. That title stands in name of the first defender. Neither party claims that there was any intention on the part of the pursuer to make a gift to the first defender. It was originally proposed that the gift should be made to Richard but parties are agreed that that proposal was departed from. Thus, on both the pursuer's and first defender's accounts, the pursuer paid the first defender a sum of money for the specific purpose of purchasing a specified property. In the absence of any indication that the pursuer intended to make the first defender the beneficial proprietor of that property, or, putting it otherwise, make a gift of that property to the first defender, in a sense it does not matter in whose name the pursuer instructed that title should be taken. When an agent obtains money for the specific purchase of purchasing a property for a principal and takes title in his own name then his title will be taken to be that of trustee only, the beneficial owner being his principal: Bank of Scotland v Liquidators of Hutchison Main & Co (1940) S.C. (H.L.) 1, Lord Shaw of Dunfermline at 15. On the first defender's account of events, he is not the beneficial owner of the flat at 23 St Helen's Gardens, he is no more than a trustee holding on a bare trust or, putting it slightly differently, the pursuer's nominee. The pursuer is accordingly entitled to call upon the first defender to divest in his favour: Wilson & Duncan on Trusts and Executors, paragraph 11-05 et seq and Menzies on Trustees, paragraph 754. That, essentially, is the pursuer's case on record and I would see that case as established by the evidence. True, the pursuer spoke of wishing the title to be taken in the joint name of him and his late wife. That was an option available to the pursuer but, notwithstanding Mr Buchanan's valiant efforts, this does not, in my opinion, provide a defence to the pursuer's claims in relation to the first transaction. However sound may be the propositions that Mr Buchanan advanced in relation to mandate, jus quaesitum tertio and procuratory in rem suam, they are not supported by the evidence and they do not relate to the defenders' case on record. I have quoted what I see to be the defenders' key averments in relation to the first transaction. On a strict reading I would question their relevance, but in order to take the defenders anywhere they must be construed as asserting that the pursuer intended that the first defender or Richard should take at least a beneficial interest in the flat at St Helens Gardens and that he so instructed or advised the first defender. That was not the evidence of the pursuer and it was not the evidence of the first defender. Taking the first defender's evidence at its highest he claimed to have had freedom to determine in whose name title was taken. He also made reference to his late mother's wishes. He did not claim that the pursuer intended to make a gift of the property either to him or to Richard. I would see there to be a difference, even on the first defender's evidence, as between taking title and acquiring beneficial ownership. Thus, even on that account, this is not a case of procuratory in rem suam. However, were it necessary for me to decide as between the pursuer's account of his implied or express instructions in relation to taking title to the flat at St Helens Gardens and that given by the first defender, I would prefer the pursuer as the more reliable witness for the reasons given above. Just as I do not regard the evidence as establishing a case of procuratory in rem suam I do not regard it as establishing the creation of a jus quaesitum tertio in favour of the late Joyce McGraddie or (to the extent that this is a different point) an irrevocable mandate to take title in joint names. In any event, no such case is made on record and I would reject as having no basis in the pleadings.

[30] Thus, as far as the first transaction is concerned I consider that the pursuer is entitled to a disposition of the subjects forming the flat 0/3, 23 St Helens Gardens, Glasgow.

Second transaction

[31] Whereas in relation to the first transaction I see the parties as essentially at one on the material facts, this is not so when it comes to the second transaction. In relation to the second transaction the respective accounts of the parties are diametrically apart. On the approach that the parties have taken to the litigation this is not to be explained by mistake or misunderstanding. The position is much starker. Each side accuses the other of lying. In his evidence the pursuer used the word "fraud" to describe the behaviour of his son and whether or not "embezzlement" might be the more apposite expression, he is correct to the extent that what he is alleging is criminal conduct. What the defenders allege against the pursuer is hardly more attractive: a father reneging on a gift of a substantial sum of money to his son and the mother of his grandchild once that gift had been spent, and then taking them to court to deprive them of their home. Thus, on either side there are allegations of discreditable behaviour which are not lightly to be inferred but upon which I require to make a decision in order to determine the issue between the parties.

[32] Here the pursuer has established that he handed a cheque to the first defender in the sum of £285,000 and that the first defender appropriated the proceeds of the cheque to his use and that of the second defender. That having been done, I understood Mr Buchanan to accept that in order to resist a claim for a return of the money or a conveyance of the property purchased with it, it was for the defenders to make out their averment that the payment of the cheque had been by way of gift rather than for some purpose of the pursuer, as averred by him. I see that as being the correct starting point, although, as is often said, questions of onus of proof assume less importance once evidence is led in that then it becomes a matter of what the evidence discloses. That said, regard must be had to the uncontroversial adminicle of evidence that the pursuer handed over to the first defender a cheque payable to the first defender and to such presumptions as the law applies in relation to allegations of gift. Mr Buchanan cited Walkers, The Law of Evidence in Scotland (3^rd edit) page 23 for the proposition that there is a general presumption against gift. The passage cited begins as follows:

"When moveable property has passed from one person to another the onus placed by the presumption on the person alleging donation is to prove by evidence which is reasonably convincing and which is so clear as to displace all other explanations put forward in evidence as being reasonable in the known circumstances of the case."

However, as Mr Buchanan pointed out, that is only a general presumption. Further down the same page there is this:

"When payment is made by a parent ...there may be a presumption contrary to the general presumption that the payments are gifts ex pietate (family devotion) in which event the onus is on the person seeking repayment to prove the contrary. Whether or not such a presumption arises must depend on the exact relationship of the parties and the whole circumstances of the case."

I have no reason to doubt the soundness of that latter proposition. It was not challenged by Mr Brown. It of course begs the question as to what are the relationship and circumstances which are sufficient to reverse the general presumption. In addition to Dickson On Evidence, Walkers cite two decisions in support of the proposition: Malcolm v Campbell (1889) 17 R 255 and 257, 259 and Macalister's Trs v Macalister (1827) 5S 219. These cases and the cases of M'Dougall's Creditors v M'Dougall, 31 January 1804, Mor, Bankruptcy, App No 21 and Nisbet's Trs v Nisbet (1868) 6M 567, which are referred to in the decisions cited, relate to payments which it was accepted were made either to educate or set up the recipients in a profession or trade (in Malcolm the payment was made to a prospective son-in-law on the occasion of a daughter's marriage). They are therefore quite strong examples of situations where it might be thought that the father is a making a provision ex pietate. In each case the only alternative suggested was that the transaction was of the nature of a loan where the father could look for repayment. I do not see the uncontroversial circumstances here to be similarly suggestive of gift and, accordingly, I do not consider that the general presumption is displaced. That is not to say that the circumstances favourable to an inference of gift: the family relationship of purported donor and donee and the inheritance tax implications are to be ignored but, by themselves I would not regard them as sufficiently compelling to point to gift as the most likely underlying explanation for the transaction. However, it is to the whole circumstances of the case disclosed by the evidence, given such weight as they respectively merit, that I must have regard to in determining what Sedley LJ in Karanakaran v Secretary of State for the Home Department [2000] 3 All ER 449 describes at 477 as the "probable factuality" of the event in issue. I have already pointed to the serious nature of the allegations made by the parties against each other and the absence of any suggestion that the situation arose through error or misunderstanding. I have also had regard to might be seen as the inherently unlikely nature of the deceit which the pursuer alleges was practised on him by the defenders. Unlike the first transaction, the second transaction had the result that the defenders and not the pursuer took occupation of the property. It is conceivable that the fact that title had been taken in the first defender's name might never have come to the pursuer's attention, provided that he did not attempt to sell 23 St Helen's Gardens. That is not the position with 6 Lochrig Court, assuming that it was always the defenders' intention to occupy the house themselves. There is also the point, made by Mr Buchanan, that it is not entirely clear why the pursuer should have found it necessary, after having been re-established in Scotland for a year, to employ the first defender to arrange for the purchase of 6 Lochrig Court. On the other hand, it is accepted that he was so employed in relation to 23 St Helen's Gardens. Moreover, I have found the first defender to have acted in breach of trust in taking 23 St Helen's Gardens in his own name and that fact and his resisting the pursuer's call that he divest in the pursuer's favour are, in my opinion, relevant to the question as to whether he acted dishonestly in relation to 6 Lochrig Court. Critically, there is the matter of whose evidence I find more likely to be credible and reliable. For the reasons given above I prefer the pursuer over both the first and the second defender. I do not find any of the other evidence materially to undermine the specifics of the pursuer's account or his evidence more generally. I accordingly find that the defenders have failed to prove that the pursuer made a gift to them of the sum of £285,000. Rather, I find it more probable that the cheque in that sum was handed over by the pursuer to the first defender for, as the pursuer avers, the purpose of purchasing the house which became known as 6 Lochrig Gardens, Stewarton, with a view to the pursuer occupying that property. Thus, even if I am wrong on where the initial onus of proof lay or on the effect of the legal presumptions relating to gift, it would be my view that the pursuer is entitled to succeed on the basis that the relevant averments made by him have been shown probably to be correct.

Remedies and disposal

[33] With the agreement of both counsel I propose that following issue of this Opinion I shall have the case brought out By Order with a view to discussing how best my decision should be reflected in an interlocutor. Questions of unjust enrichment may arise. I therefore do not intend to discuss remedy or any of the submissions made on that topic at this stage.