Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2011] CSOH NUMBER
A148/04	OPINION OF MORAG WISE, Q.C. (Sitting as a Temporary Judge) in the cause IRENE BRISBANE LAMONT Pursuer; against TERESA MOONEY Defender: ­­­­­­­­­­­­­­­­­________________

Pursuer: A Forsyth; Campbell Smith

Defender: Party

[1] This is an action for Count, Reckoning and Payment, with alternative Conclusions for delivery and damages. The dispute arises out of the death of Robert Lamont ("the deceased") who died aged 45 on 11 January 2002. The pursuer was the sister of the deceased. She was appointed as Executrix Dative of the deceased's estate by interlocutor of the Sheriff of Glasgow and Strathkelvin dated 13 August 2002. The defender was the deceased's partner, having cohabited with him as if husband and wife from the early 1980's. They did not marry formally or have children.

[2] For some months after the deceased's death, the issues of who would administer his estate and who would inherit most of his moveable property were unresolved. His interest in a heritable property at 53 Queen Square, owned jointly with the defender, passed to her under a survivorship destination in the title. There were also certain life policies that paid out to the defender. An issue arose about whether or not the deceased had left a will in relation to the remainder of his estate. He had been sole proprietor of a small business known as Glasgow Audio, which sold Hi Fi and related audio equipment from leased premises at 135 Great Western Road, Glasgow. Prior to his death the deceased had been ill for about two and a half months, although he was not at first thought to have any serious condition. He was in hospital when he died. His death was not expected, albeit that he was more seriously ill from mid December 2001. When he died the cause of death was noted as Septicaemia, pelvic ulcers (see 6/1 of Process)

[3] Between 12 January and 30 August 2002 the defender took over the running of the business of Glasgow Audio pending resolution of the disputes about who should administer the deceased's estate and who should inherit. Ultimately no duly executed will was found and the deceased's estate fell to be divided on intestacy between his parents and his sister. The pursuer claims that the defender has not accounted to her qua Executor for all intromissions with the estate, in particular with Glasgow Audio and she seeks accounting and payment of sums she claims remain due to the estate. As an alternative she claims damages for loss incurred to the estate as a result of the alleged vitious intromissions. In submissions, Mr Forsyth for the pursuer sought to amend his alternative case to one of spulzie. That was opposed by the defender and I indicated that my Opinion would deal with the proposed amendment in addition to determining the issues currently on record.

Evidence led in the Pursuer's case

[4] The pursuer herself gave evidence first. She was 58 years old at the time of proof. She lived in the West Midlands for many years but has moved during the course of the proceedings and now resides in Ayr. Previously she ran her own small business designing and selling jewellery and silverware. She is now a part time tutor. She spoke to her detailed curriculum vitae number 6/89 of process. She said that she had been very close to her brother and had taken an interest in his business when he was alive. She had, she thought, also enjoyed a good relationship with the defender prior to the deceased's death. Mr Lamont's first business had been in Stirling and had been named Stirling Audio, but from 1994 he had operated only in Glasgow, trading as Glasgow Audio. Of that business she said that she knew it had had "ups and downs" but that during the last few years of trading it was very successful. She knew that her brother and the defender had started living together as a couple from about 1982, but that there had been a period of some years after that when the defender was studying in Belfast. She said that there had never been talk of marriage and that the defender was not involved or particularly interested in the deceased's business at all, given that she had employment as a full time head teacher of a primary school in Glasgow.

[5] Miss Lamont had stayed with the deceased and the defender at their home in Glasgow sometime in October 2001. Thereafter she visited him in hospital in the December, by which time he had lost three stones in weight and was weak and dehydrated. She attended her brother's funeral, which she thought had taken place on either the 17 or 18 January 2002. It was Miss Lamont's mother who first raised the issue of what was to happen to the business of Glasgow Audio. Miss Lamont and her mother then asked the defender about it at the funeral. The defender said that Robert had left a will and that she would be running the business in his memory. Miss Lamont and her mother considered that to be an unsatisfactory answer. In mid February while on a trip to Scotland to visit her parents Miss Lamont visited the Defender at Queens Square. She enquired of the defender who was to inherit the deceased's estate. She said that the defender had replied that Robert had left a will and that everything was left to her, with nothing to Miss Lamont or her parents. Miss Lamont was concerned because her parents had lent their son £8,000 when he first set up in business and wanted to know if it would be repaid.

[6] During the period January to May 2002 Miss Lamont kept in regular contact with Matthew Hotchkiss, who had been employed by her brother to manage the shop at Great Western Road. She said that Mr Hotchkiss raised with her a number of concerns about the defender's management of the business. He claimed to Miss Lamont that the defender had "sacked" two employees and brought in her nephew and his friend to work in the business. Miss Lamont said that she had concerns about how the business was being run during this period as reported to her by the staff. It was claimed that the stock in the shop was being sold and not replaced, that deliveries were going to the defender's home address, that sales representatives were not permitted to attend at the shop and that mail was being redirected. Miss Lamont said that when she went into the business on 30 August 2002 the stock rooms which had always been full were "virtually empty".

[7] There was no direct contact between the parties in the months following the deceased's death. Miss Lamont sought to consult Alastair Aitkenhead, solicitor, in relation to the estate but initially he was acting for the defender. She and her parents then consulted a Mr Picken, solicitor of James Black Hay & Co to pursue the issue of who was to administer the estate and the concerns about the way the business was being run meantime. In early July 2002 there was correspondence between Mr Picken and a Miss McKercher of Riddell Breeze Paterson who had taken over acting for the defender. Miss McKercher indicated in a letter of 9 July 2002 (No 6/13 of Process) that she had asked the defender to produce business accounts as a matter of urgency. Miss Lamont said that she knew at that time that the business wasn't in profit because she had been speaking to her late brother's staff. In her agents' letter of 9 July 2002 the defender offered to meet with the pursuer to discuss the running of the business. The pursuer did not want to meet with the defender direct and the meeting never took place.

[8] Miss Lamont did not believe that her brother had left a will leaving everything to his partner the defender. She was annoyed that the defender delayed her appointment as Executrix Dative by asking the sheriff involved for more time to find what she described as "the supposed will".

[9] After she was appointed Executrix Dative on 13 August 2002 the pursuer made plans for the business albeit that she had not yet taken possession of it. She said that the deceased's staff had told her they would come and work for her if she took over. She also had tentative discussions about selling the business. Meantime the defender had raised proceedings in this Court for Declarator of Marriage and Interdict prohibiting the pursuer from taking over the business pending resolution of the dispute. Undertakings were given in terms of which the pursuer agreed not to do so pending an anticipated hearing on 30 August 2002. She was permitted access to books and records in the interim. By 30 August it was clear that Miss Mooney was not persisting in seeking interim interdict and the pursuer took entry to the business after collecting the keys from the defender's agents. She went to the shop accompanied by a Derek Henry, an accountant who, according to the pursuer attended "as a witness and to help me decide whether I could run the business". The pursuer said that there was "practically nothing" in the shop by way of records or paperwork. The deceased's motor vehicle, a Mercedes, which was in the accounts of the business, was not returned.

[10] The pursuer was clear in examination in chief that she sought delivery of the car and of certain items that, according to her, were held at the home of the deceased and Miss Mooney but truly belonged to the business. While the defender had taken steps to register herself as keeper of the vehicle (No 6/2 of Process) the pursuer wanted the Mercedes returned as an asset of the business and the estate.

[11] The pursuer said that on 30 August 2002, she and Mr Henry waited for Mr Hotchkiss, who had been working in Edinburgh since leaving Glasgow Audio in June 2002. He knew how to set the alarm in the shop. Miss Lamont said that there were no price lists in the shop and so no value could be put on the stock. While Mr Henry started to attempt making lists of the stock, she telephoned Gordon Arnot, a former employee, to see if he could assist. She said that Mr Arnot and Mr Hotchkiss between them did what they could to pinpoint figures but that ultimately she relied on Jonathan Turner, who purchased the business, to place a value on the stock. She said that the value he put upon it was checked by Mr Hotchkiss. The pursuer took a number of photographs of the shop on 30 August (No 6/99 of process) and spoke to these at length. She said these showed that the shop was in poor condition, that the stock was much depleted and that some of what was left was damaged.

[12] On 31 August 2002 the pursuer entered into an agreement for sale of the business of Glasgow Audio with Jonathan Turner, who had a business in Aberdeen known as Holburn Hi Fi. There were negotiations on the day that led to Mr Turner paying £50,000 for goodwill including the shop name and transfer of the lease. In addition he agreed to pay for the stock but not until he had valued it. According to the pursuer, Mr Turner insisted that he needed to have the shop immediately to get it going for the pre Christmas trade. The lease could not be transferred because the pursuer had not yet applied for Confirmation.

[13] The pursuer said that she had not received complete records for the business from the pursuer until about October 2005. These records comprised No 6/4 of process. On receipt of the records she instructed accountants, Wylie & Bisset, to review them with a view to supporting her claim for an accounting.

[14] Under cross examination the pursuer acknowledged that she had considered selling the business from about July 2002, before she was appointed Executrix Dative. She had discussed possible figures with an accountant at that time. She said she knew roughly what the profitability of the business had been when the deceased was alive and she based her opening figure in negotiations with Mr Turner on that. She maintained that she and her brother had been close and that although he hadn't shared specific information about his business with her she knew roughly what his turnover had been. She said that she had relied on her late brother's staff for information about how the business was being run by the defender. She had been told that suppliers had taken their business away. When challenged about the speed with which she had agreed to sell the business she said that she didn't think she could delay even for a day or so. She used her "gut instinct "in deciding to sell the business immediately and in agreeing the price. She said it would have been impossible to make any enquiries to ascertain the value of the business independently in the absence of paperwork. Prior to 30 August and in accordance with the agreement noted in the Court proceedings on 16 August (No 7/103 of Process) the Clydesdale Bank had provided her with bank statements for the business. She did not find Cairncross & Cairncross the accountants for the business to be responsive or helpful. She said she had some access to computer records that showed her that the turnover had dropped after June 2002. When asked whether she had considered whether there might be others who would want to buy, she mentioned Colin Mackenzie of Hi Fi Corner, saying that the deceased would not have wanted her to sell to him.

[15] In answer to questions about the period January to June 2002, the pursuer said that she had been told by Mr Hotchkiss and Allan Campbell the two full time members of staff that the defender wouldn't allow them to buy stock other than on certain conditions and had forbidden the sales representatives of the supplier companies from attending at the shop premises. Miss Lamont said she did not go into the shop herself, although she drove past it a few times and noticed there were few lights on and it looked shut.

[16] In relation to the events of 30 August 2002 the pursuer agreed that she had asked the staff engaged in the business by the defender, Nicholas Wearmouth and Gary Young, to leave the premises shortly after she arrived. She had been told that Mr Wearmouth and Mr Young had no knowledge or experience and she didn't want to take them on. She did not consider it appropriate to ask the defender to attend at the premises to effect a handover of the business.

[17] The pursuer was cross examined about an averment in her case (Closed Record p 10A) to the effect that there had never been any will of the deceased. She said that she had in fact discussed with her brother his intentions and that he had said to her that he was going to divide his estate (in unspecified proportions) between her as his sister and the defender as his partner, but that his parents were to have some use of the estate during their lifetime. However, she had not seen any draft will until long after the deceased's death. When shown a draft will the deceased had instructed in 1992 (No 7/7 of process) in terms of which his entire estate was to be left to the defender, the pursuer commented that it was only a draft and that in any event the estate would come to her after the deaths of the defender and the deceased's parents. She thought that her brother might have had a change of heart about the terms of his will. When shown a letter from the deceased's solicitor, Alistair Aitkenhead of AJ & A Graham indicating that Robert Lamont had told Mr Aitkenhead that he had completed a will with other agents, the pursuer suggested that her brother might have just said such a thing to Mr Aitkenhead to stop him (Mr Aitkenhead) "going on" about the matter.

[18] In relation to the issue of what the defender had conveyed about the deceased's intentions after his death, the pursuer said that Mr McEwan of the Clydesdale Bank had told her that he was led to believe that the Defender was the sole beneficiary of Mr Lamont. She accepted that she could not say categorically that it was the defender who had led Mr McEwan to believe that. On being shown a letter from the Clydesdale Bank setting out the terms of business under which the opened a bank account for the defender (No. 6/3 of process) the pursuer accepted that the bank's letter did not state that the defender had told them she was to inherit the estate. A letter to the defender from the bank (No. 7/123 of process) indicated that it was understood that the defender's intention was to continue to run the business, but not the basis on which she was doing so. It was put to the pursuer that another letter, No. 7/106 of process, clarified that the Clydesdale Bank provided a business account for the defender to allow her to continue trading until the matter of Mr Robert Lamont's estate was clarified. The pursuer indicated that that account differed from what she had been told by the Clydesdale Bank manager at the time.

[19] So far as the agreement to sell the business of Glasgow Audio was concerned, the pursuer confirmed under cross-examination that Jonathan Turner had approached her before she took entry to the business at a time when it was clear that she was going to be appointed Executrix Dative. She said that Mr Turner knew the suppliers were unhappy with the situation, that the trading figures were well down and that it was possible there would be a sale. The pursuer said that when she took over the business on 30 August her primary concern was for her brother's staff. Mr Turner had had said he would take those staff back if he took over the business. The pursuer also said that she was concerned that Silas Meridian, one of the main suppliers, was going to withdraw a concession the business had always enjoyed and that that was imminent when she took over. She claimed that two suppliers had been lost to the business already and she was worried that there would be no goodwill left to sell. Her brother had been part of a business organisation called Mountainsnow where concessions were obtained in relation to the supply of high level Hi Fi equipment from various manufacturers. The pursuer said that she knew that Mountainsnow was about to withdraw its concession to Glasgow Audio. She decided on 30 August that it would be impossible for her to run the business and she contacted Mr Turner. She considered that her own experience in business was sufficient for her to make a judgment that it would be better for the estate if she agreed a quick sale rather than trying to either run the business for a period or have it valued. The pursuer was asked a number of questions about the document in terms of which she agreed to sell to Jonathan Turner, No. 7/22 of process. The document was dated 31 August 2002 with the heading "Date of Transfer". Miss Lamont said that the document was a joint effort between her and a Peter Ross, Jonathan Turner and Mr Henry. She described it as an offer to buy with her signature on the document constituting the acceptance. She considered that she had obtained best price for the business.

[20] After the agreement to sell, Mr Picken, who was acting for the estate, advised the pursuer that she would require to have accounts prepared in order to obtain Confirmation. She decided to instruct Cairncross & Cairncross because they held the records. She did not regard the Cairncross & Cairncross accounts as satisfactory but they were used for the purposes of an initial tax return. The pursuer accepted that the stock that she had agreed to sell to Jonathan Turner on 31 August 2002 was not finally valued by him until May 2003, albeit that an earlier estimate and part payment had been made. The pursuer ultimately conceded that she had allowed the purchaser of the business to determine the value that he would put upon the stock although she maintained that the stocktake was to some extent a joint effort between Mr Turner's team and Mr Hotchkiss and Gordon Arnot for Glasgow Audio. The final payment was not made by Mr Turner until December 2003. In relation to the breakdown of the £50,000 paid for the business excluding the stock, the pursuer confirmed that the fixture and fittings in Glasgow Audio were part of that price. She agreed that Mr Turner's offer to buy was subject to the transfer of the lease which could not be effected at the time. It was ultimately assigned to Mr Turner in September or October 2003. While the pursuer accepted that the bargain she had struck with Mr Turner was subject to the transfer of the lease she had been confident that there was a will on both sides to complete the transaction. The pursuer said that she understood that a commercial lease would form a separate asset of the estate but indicated that she regarded the lease as an integral part of the goodwill sold to Mr Turner. By December 2003 the pursuer, as Executrix Dative, had received a total of £113,000 for the business which she regarded as a very good price in the circumstances.

[21] The pursuer agreed under reference to No. 7/15 of process, that Confirmation was obtained in May 2003. Some of the values in the Confirmation were not quite accurate. The figure for Glasgow Audio was overstated. There was less cash in the business because of the way in which the bank had dealt with matters following the deceased's death. The discrepancy was not important given that there was no inheritance tax payable. The pursuer had worked closely on the Confirmation and subsequent engathering of the estate with Mr Picken, the solicitor.

[22] The pursuer was cross-examined at some length about the allegations on record in relation to the alleged diminution of the estate due to the defender's running of the business. The pursuer indicated that the figures claimed in the action were not hers and that Gill Smith, the accountant, would speak to those. The pursuer accepted that there had been changes to the figures claimed during the course of the action. One of the difficulties, she said, had been the lack of stock records. She accepted that much of the claim was based on the fact that the valuation ultimately put upon the stock was far lower than the level usually carried by the deceased. The pursuer indicated that her brother usually had stock levels of about £160,000-£180,000, even in excess of that in the pre Christmas period. The main complaint of the pursuer was that she said she had been unable to get full information from the defender in relation to the books and accounts of the business while the defender had been in control of it. The statement of the executory account, No. 7/54 of process, was put to the pursuer. She confirmed that the realised value of the business (as compared with the inventory value) was correct at £138,433, although she accepted that by May 2003 she knew that the value engathered was £113,578. The stance of the pursuer in relation to the period of the defender's control of the business was that the defender had no power to intromit with the deceased's estate, that her running of the business had caused loss to the estate and that she sought an accounting for that. She disputed that the defender had ever had probable title to the estate and considered that the defender ought to have informed the pursuer and the pursuer's parents within a month to six weeks of the deceased's death that she was not in possession of a signed will. She disputed that such evidence as there was indicated that the deceased probably did make a will. She was of the view that the absence of a will, despite advertisements in The Law Society Journal and various letters to solicitors who might have held a will were an indication that no such will existed. She conceded, however, that the deceased was the sort of man that tended to do that which he said he would do. The pursuer was quite clear that she did not regard it as reasonable for the defender to have carried out extensive searches over a number of weeks to try to find the will that she was convinced existed. The pursuer claimed that the defender had told her categorically that there was a will and that she would be running the business. The pursuer then said that during the course of that conversation she had asked the defender what provision had been made in the will for the staff because her primary concern and that of her parents was for her late brother's staff. Ultimately the pursuer's position was that she felt the defender had been in bad faith by not making clear that the will she held was only a draft will.

[23] Later in cross-examination it became apparent that the final breakdown in communication between the parties came about as early as March 2002. The defender had apparently written a note to the pursuer's mother indicating that she would prefer that they did not contact her meantime and that she would be in touch with them when she was ready. At that point the pursuer and her parents apparently decided they did not want anything more to do with the defender. From that time onwards the pursuer's main point of contact was Matt Hotchkiss who had continued to work in Glasgow Audio.

[24] The pursuer was then asked about an action that had been raised against the defender for non payment of VAT. Commission and diligence procedure had been initiated during those proceedings. A specification of documents had been served on Jonathan Turner who had required to hand over all of the receipt books to the Sheriff Court in Glasgow. According to the pursuer, the Court subsequently mislaid the receipt books. The pursuer's position was that although there were some cash receipt books in the business there were previous years of those missing when she took control of it. The pursuer's understanding of Matt Hotchkiss' role in Glasgow Audio when the deceased was alive was that he was deeply involved in the decision making process and was familiar with the figures for daily, monthly and annual turnover. His official title was shop manager. She had no reason to mistrust Mr Hotchkiss' judgment and believed what he had told her about the way in which the defender ran the business from January to June 2002. Mr Hotchkiss had told the pursuer that the defender had sacked two part time staff of the business shortly after taking over. She accepted, however, that those involved, a David Orry and Andy Fisher, may not have been employees as such but were part time self employed personnel who carried out work for the business from time to time. The pursuer was unwilling to accept that the deceased may have discussed important aspects of the business of Glasgow Audio with the defender. Her position was that the defender was always very busy with her school commitments and that the deceased sometimes found that difficult.

[25] The pursuer accepted that the sudden absence of the deceased as sole proprietor of Glasgow Audio must have had a major detrimental impact on the business. However, her position was that if the defender had allowed Mr Hotchkiss to take control and employ another member of staff that would have helped. She did not consider that Mr Wearmouth and Mr Young were appropriate personnel to be employed in the business. On being shown a reference that Mr Hotchkiss had apparently written for Gary Young (No. 7/24 of process) the pursuer remarked that she had given references for many people that she was happy to see moving on. She did not think that Mr Hotchkiss had anything against Gary Young other than his inexperience. When asked to summarise the complaints she had about the defender's running of the business during the relevant period, the pursuer said these included the redirection of mail, the problems with suppliers, the engaging of inexperienced staff and the refusal to allow sales representatives to visit the shop. In relation to stock, the complaint that Mr Hotchkiss had made was that he was only allowed to order stock if the defender had approved it or if the customer had paid a 50% deposit. She also claimed that the staff had told her that they were no longer allowed to take a part exchange for new products. Mr Hotchkiss had told her that he found it impossible to go on working with the defender and he gave notice towards the end of June 2002. She was not clear about whether Mr Hotchkiss had said that he had informed the defender of his reasons for leaving.

[26] The pursuer was also cross examined in relation to the schedule set out at page 48 of the Closed Record in relation to the assets and items said to belong to Glasgow Audio but situated at 53 Queen Square. The pursuer confirmed that she thought the schedule had been compiled some time in mid to late September 2002 as part of the stock valuation. There was no visit to 53 Queen Square but the staff were well aware, according to Miss Lamont, what items belonging to the business the deceased had taken home with him. The values of what were said to be stock items were values estimated as at the date of death. The pursuer said that she had seen items from Glasgow Audio herself in the home that the deceased shared with the defender on many occasions. She had forgotten that until mid to late September 2002 when the shop staff had said that the deceased had taken a Tact Millennium amplifier home. She accepted that she had not tried to contact the defender in relation to the matter, claiming that there was such negativity in the defender's behaviour that she did not feel able to do so. She said the shop had been stripped of demonstration CDs and DVDs and that was why they were included in the list of items sought to be returned. She did not know whether those items were at Queens Square or not but she regarded the defender, who had been in control of the business, as responsible for them. She had been given an estimate of what the usual amount of CDs and DVDs the business carried and the estimate was based on that. In relation to the action for declarator of marriage that the defender had raised, the pursuer understood that had the declarator been granted the defender would have been entitled to a certain proportion of the deceased's estate. She accepted that until that action had been disposed of the defender had to be regarded as the possible beneficiary of the estate. On that basis the pursuer had not been permitted to disperse the assets of the estate during the course of those proceedings. The relevant Bond of Caution (no.7/48 of process) in relation to the estate had been restricted to take account of the proceedings. The pursuer said that she had received the advice of two solicitors that the defender would not be successful in the action of declarator. The action was ultimately dismissed on 21 May 2004. In relation to the present action, the pursuer confirmed that it had been raised after repeated requests for documentation relative to the period of the defender's control of the business. The pursuer was challenged on whether she considered her actions had brought maximum benefit to the estate and whether she had fulfilled her duties as executrix dative. The pursuer said she thought the business of Glasgow Audio was on a knife edge of going into insolvency and she did what she thought was best for the estate at the time.

[27] In re-examination the pursuer reiterated that she had spoken to Derek Henry about whether he would take over from Cairncross and Cairncross as accountant for the business. He was very involved in the whole process on 30 August 2002. In relation to the sale to Jonathan Turner, the pursuer said that she knew that Mr Turner had found it quite a struggle to bring the business back into profitability after he took over but that she thought he had managed to do so as a result of getting the business as quickly as possible. On the issue of the redirection of mail by the defender during her period of administration, the pursuer said that when she went through the documents in 6/4 of process comprising all of the primary material, she noted that the administration address for the business changed to Queen Square about 5 to 6 weeks after the defender took over but the delivery address for stock continued to be Great Western Road. She had noted some deliveries to Queen Square. She thought it was strange that the defender had chosen to administer the business from Queen Square and equally unusual that she may have chosen to meet with sales representatives in cafes near the school where she worked. She felt it was inappropriate that the defender had, according to the staff, restricted their access to information such as trade magazines, stock sheets and so on. When she took entry to the business on 30 August she thought it was very improper that the essential paperwork had not been left at the business premises. She was very suspicious as a result.

[28] On the question of whether the pursuer had received any advice about whether she had the ability to sell the business in the absence of confirmation, she said that she believed she did have that power, she understood that Mr Picken had no problem with what she did provided that she was receiving good value. Mr Picken had advised, however, that it was best if confirmation was in place before the lease was transferred. She had told Mr Picken that Mr Henry would be the accountant of the business if she was carrying on with it. She had consulted Mr Picken about her prospective duties as Executrix Dative some time prior to her appointment. Finally, an issue relating to cheques written on the bank account of the business of Glasgow Audio, signed by the deceased but not cashed until some time after his death was raised. These cheques comprised no.6/86 of process. The cheques had not been put to the pursuer in cross examination. She gave general evidence in re-examination that she did not know when they were issued but that they had been cashed after her brother's death. The cheques were written to various suppliers and the total sums withdrawn from the account in this way were about £33,300.

[29] Evidence was then led from Mr Anthony Henry, a 61 year old retired chartered accountant. Mr Henry spent the whole of his professional life as an accountant both in private practice and in industry. He had known the pursuer for about 13 years but was not acquainted with the deceased. He confirmed that the pursuer had asked him to attend at her late brother's business premises on a date in August 2002. The pursuer has asked him to go along to the shop and help her with the stocktake. He attended at the premises at Great Western Road, he thought in the afternoon of 30 August 2002. He was there with the pursuer for some hours, probably until about 9pm. There were three young men running the shop when they arrived and the pursuer told them that she was assuming responsibility for the business and asked them to hand over the keys and leave. He had the impression that the staff were expecting this to happen, there was no rancour and they simply got their coats and left. The pursuer then called Matt (Hotchkiss) because she did not know how to close the shop and Mr Henry began to start a stocktake. He found it quite difficult so someone else was called in to help. He could not recall how much cash there was in the till, probably a few hundred pounds. He confirmed that there weren't many records and when Mr Hotchkiss arrived he said that the system that the deceased had established was not being kept. Mr Henry recalled the pursuer asking Mr Hotchkiss what was missing from the business in relation to the time that he was there. Mr Henry could not recall seeing cash books or ledgers in the shop. He could not be certain whether there was a receipt book or not. Mr Henry also attended at the premises on 31 August 2002 for about 4 hours. In relation to the state of the premises Mr Henry noticed no particular problems. He said there was equipment there to be demonstrated. It was clearly a shop being run while the records in the back office were not particularly good he could not say that that meant there weren't any records being kept, simply that the system set up by the deceased was not there. It became apparent that someone who knew the stock would be required to assist and Mr Hotchkiss was to help with that. However he had not been to the business premises for a while prior to the date in question. On 31 August Mr Henry was present when the two gentlemen from Holborn Hi-Fi (Jonathan Turner and his uncle) attended. He recalled that there were two elements to the price agreed on that date. First there was the stock but the price for that had not been established and secondly there was the goodwill. He recalled that the price for goodwill was about £50,000. The prospective purchasers had offered less than the price ultimately fixed and a negotiation had taken place. When he was asked whether the pursuer had considered running the business herself, Mr Henry said that he knew that such a business was not the pursuer's area of expertise and in any event she had her own business to run. He recalled that he and Miss Lamont were unable to give the prospective purchasers turnover figures for the business. His recollection was that the price agreed was based on the deceased's reputation and the reputation of the business generally. While Mr Henry did feel there was a paucity of records available in the shop on the day, from his observation he did not see any difficulty with the way in which the stock rooms had been kept. He was not able to distil anything negative about how the business had been run prior to the pursuer taking entry to it.

[30] Under cross examination Mr Henry confirmed that his remit had been to carry out a stocktake and generally assist the pursuer in assessing what records there should be in the shop, something that she did not know about. His involvement was fairly limited. He had a general conversation with the staff in the shop when he arrived on 30 August. He had little time to speak with them. The pursuer had asked them to leave within 15 to 20 minutes of her arrival. He did not recall any conversations with the outgoing staff about how trading had been that day, whether the shop would remain open or what was going to happen to them. He did not witness the staff taking anything from the shop other than their personal belongings when they left. Mr Henry did not know what had happened to the final stocktake. He had made a list which he assumed was passed on but he could not be sure. He confirmed that he had not been involved in valuing the business as such. He was simply present during the negotiations which were conducted by the pursuer. It was clear that the negotiation was not based on any valuation but was simply the price that the purchaser was willing to pay and the pursuer would take. Mr Henry himself knew nothing of the profitability of the business. The agreement to purchase document signed on 31 August 2002 (No. 7/22 of process) was put to him. He had no specific recollection of it and had not been involved in its drafting. Mr Henry did not recollect the purchaser taking any steps to undertake a stocktake of the day in question. Mr Turner was, he said, fully involved in the negotiations. Mr Henry regarded his role in the proceedings as one of adviser. He had been in business for many years and had some negotiating skills. He had not formed any impression of a lack of interest on the part of the outgoing staff. The young man he had spoken to was clearly enthusiastic about the business.

[31] In re-examination Mr Henry confirmed that he had thought the records of the business would be in the shop when he and the pursuer arrived. He had no recollection of what the purchaser's starting figure in negotiations had been. He was clear, however, that it was an arm's length transaction after negotiation. His specific recollection was that the price ultimately agreed was based on the reputation of the deceased within the hi-fi business. Mr Henry was very clear that he had never had any discussions with the pursuer about him continuing to be involved in any capacity with the business of Glasgow Audio if the pursuer was to take it over rather than sell it.

[32] James Picken, Solicitor was also called in the pursuer's case. Mr Picken is 53 years old and practices as a solicitor in Prestwick. He is a partner in the firm of James Black Hay & Company. He has worked with that firm since he was an apprentice there about 30 years ago. His work involves conveyancing, executries and other general private client work. He confirmed that he was contacted in about May 2002 by the pursuer. He was already the solicitor for the pursuer's parents and agreed to act in the issues arising from the winding up of the deceased's estate. He had been made aware of the dispute about whether or not the deceased had left a will. Under reference to 6/13 of process he confirmed that he must have written to Campbell Riddell Breeze Patterson who were acting for Miss Mooney expressing concern about the business of Glasgow Audio and how it was being run and that this letter was the reply to that. He recalled that, notwithstanding the terms of the letter, the accounts referred to therein were not handed over. Some accounts were handed over later although he could not remember when. He could not remember what had happened in relation to the suggestion by Miss Mooney's solicitors that a meeting take place. He recollected that there was a difficulty with an organisation called Mountainsnow in which the deceased had held shares. He recalled being surprised that a share certificate had been issued to the defender. He was referred to no.6/16 of process in this connection. He noted from that correspondence that there was a concern about stock not being ordered from Mountainsnow as it had been when the deceased was alive. He did not know what had happened to the shares issued to the defender after the deceased's death. He did not regard this as an issue of particular value so far as the estate was concerned. He had engaged in more than one telephone call with Miss McKercher, the defender's solicitor, after which she had understood that records connected with the running of the business would be left on the premises when the pursuer took entry. Mr Picken confirmed that he had made an application on behalf of the pursuer for her to be appointed Executrix Dative. He recalled being advised that there was a note of objections to her appointment and that the sheriff had allowed a period of time to see if a will executed by the deceased turned up. He had some recollection that thereafter there had been a declarator of marriage action although that had been handled for the pursuer by Edinburgh solicitors.

[33] Mr Picken confirmed that an issue had arisen about a Mercedes vehicle thought to belong to the estate but retained by the defenders. He was unsure of the details of that. He was also unclear in his recollection of the issues relating to the value of the stock of Glasgow Audio or the suggestion that there was some stock situated in the defender's home. He did recollect that an issue had arisen about cheques cashed through the Clydesdale Bank. He was shown the cheques that comprised 6/86 of process. Mr Picken's position was that he was told by the pursuer that the cheques had been made out by the defender, albeit that the signature on them was that of the deceased. He recalled that there was some contact with suppliers of the business of Glasgow Audio seeking clarification as to who was responsible to pay their accounts. He confirmed that no inheritance tax had to be paid on the deceased's estate because the business was entitled to business tax relief.

[34] Under cross-examination Mr Picken confirmed that he was initially instructed by the pursuer and her parents but that the pursuer tended to take the lead in instruction. He recalled very little about the basis of the objections to the pursuer's appointment as Executrix Dative other than that there was to be a search for a will. In relation to the marriage by cohabitation with habit and repute case, insofar as he a view, Mr Picken did not consider it likely that the defender's action would be successful, although his Edinburgh agents were dealing with that matter. Mr Picken's focus was on the practicalities of administering the estate. His role was not to form any firm view on the various disputes between the parties after the pursuer was appointed Executrix Dative. He became aware of the pursuer's intention to sell Glasgow Audio shortly after she had possession in August 2002. The pursuer had told Mr Picken of her various concerns about the business. He was not involved in relation to the contract for sale of Glasgow Audio but he acted the subsequent assignation of the lease. He accepted that it was very unusual for an Executrix Dative to agree the sale of an asset such as a business before confirmation. However he regarded the circumstances of the deceased's estate as unusual and to some extent that explained the speed with which the contract appeared to have been entered into. The information Mr Picken was given was that it was thought that Glasgow Audio would be unlikely to sell if not trading, that the purchaser Mr Turner was keen to get into the premises and that although it was unusual not to have a more formal document of sale, it seemed to him that the purchaser was taking more of a risk than the pursuer. When the agreement to sell no. 7/22 of process was put to him, Mr Picken confirmed that he had seen the document within days of it being signed. He thought that the first £50,000 for the stock was paid in December 2002 with the balance of £12,000 to £15,000 being paid the following year. He recalled that there was some issue about the valuation of this stock that delayed matters. He wasn't sure whether the business had been profitable prior to its acquisition by Mr Turner. He had had difficulties in contacting Cairncross & Cairncross, the business accountants. He thought that the pursuer had not spoken to them or obtained much information from them. He confirmed that the inventory for confirmation was drawn up in April or May of 2003. It took longer than he had expected. He required to recover the previous executry file from AJ & A Graham. The valuation for Glasgow Audio for the purposes of the inventory had to be discussed. It was agreed that the sale price including stock less debts would be used. There was no need for a professional valuation. The liabilities were worked out by doing a calculation on the information available at the time. The valuation was not particularly important because of the ability to claim business tax relief. Mr Picken was taken through his detailed workings on the inventory for confirmation no. 7/16 of process. He explained why each figure was in his view reasonable for the purposes of the form. He did recall some accounts being submitted to HMRC for the period up to the deceased's date of death. He was shown the business accounts for the period to date of death no. 7/58 of process. He recalled being in touch with Cairncross & Cairncross and, although his recollection was unclear, he thought that they had been instructed to produce those accounts.

[35] After the business of Glasgow Audio was sold, Mr Picken recalled that the pursuer's main concern was a lack of information for the period during which the defender had been administering the business. The pursuer had indicated to Mr Picken that she felt she had sold the business for far less than it would have been worth in January 2002. That view was based on the knowledge that she indicated to Mr Picken she had about the way in which Glasgow Audio had traded prior to her brother's death. Mr Picken accepted that there was no easy answer to the issue of whether or not the pursuer had been irresponsible to dispose of Glasgow Audio so quickly. He felt that she had her reasons for doing so. The pursuer had not spoken with Mr Picken about having a formal valuation of the business carried out. His recollection was that the business had not been advertised or marketed, something that might have been difficult without out up-to-date accounts being available. Although he had known of the approach from Mr Turner, Mr Picken was clear that by the time he knew about the sale of the business it was a "done deal". Mr Picken's perception of the relationship between the parties was that there was no co-operation. He agreed that it would have been much better if there had been and that a proper administrative handover could have taken place. His perception was that the lack of co-operation was on the defender's part. He based that on the request for information having been given through solicitors and the subsequent lack of that information in the shop when the pursuer took over. The impression he had was that the defender was resisting handing over control of the business. When it was put to Mr Picken that the pursuer's precipitous decision to sell the business was effectively the cause of these proceedings and the dispute between the parties, Mr Picken indicated that he thought the pursuer's view would be that the action had been brought because the business had been run down during the period of stewardship by the defenders.

[36] In re-examination Mr Picken confirmed that AJ & A Graham had started to administer the estate before he had taken over. He did not recall whether there was any suggestion that the defender be present in the shop on 30 August when the pursuer took over. His memory of the circumstances in which the pursuer took over was that the interim interdict hearing within the declarator of marriage case was to be heard at the end of August but that Miss Mooney's motion was dropped shortly beforehand.

[37] Jonathan Turner, the purchaser of Glasgow Audio was also led in evidence in the pursuer's case. He is 32 years old and lives in Aberdeen. He is a company director of a number of companies including Glasgow Audio Limited. When he purchased the business of Glasgow Audio he decided to run the business through the vehicle of a limited liability company. Mr Turner has worked in the retail Hi Fi business since the age of 16. He is a director and shareholder of Holburn Hi Fi Limited. He knew the deceased fairly well. He and Mr Lamont had become friends through being members of the same buying organisation, Mountainsnow. Mr Turner had been recently well acquainted with the business of Glasgow Audio during the deceased's lifetime. While each shop purchased their stock individually, they formed a group to negotiate price with the various suppliers. The aim of the group was to secure the same prices for manufacturers as they offered to the larger franchises. The requirements of membership of Mountainsnow were good payment record and a good payment relationship. Initially no shares were allocated but a decision was then taken that shares would be held in Mountainsnow and transferred to each individual shop in the group. Mr Turner had no recollection of the deceased having been issued with shares in Mountainsnow. The company that was in existence at the date of the deceased's death, Mountainsnow Limited, was dissolved thereafter and Mr Turner and others formed Mountainsnow (UK) Limited. He didn't think that the shareholders received any return when Mountainsnow was dissolved. Under reference to 6/84 of process, Mr Turner confirmed that the shares issued to Miss Mooney after the deceased's death were never returned. One of the reasons that the company was dissolved and a new company set up was to avoid the shares being held by someone who was not in the Hi Fi business. Another person who held shares had emigrated and was in the same position as Miss Mooney. It was a lot easier to start again. Mr Turner was not aware of the defender having been involved in the deceased's business prior to his death. He did become aware of the defender running Glasgow Audio in 2002. She attended meetings of Mountainsnow. The meetings were probably as frequently as one a month at that time. They took place usually in London, occasionally in the Trossachs. When the defender was administering the business of Glasgow Audio, there was some discussion between suppliers about what would happen in the longer term. They found it more difficult to deal with the defender because she was not in the business 100% of the time. Mr Turner was the only other Mountainsnow member from Scotland, the rest being based down south. Mr Turner regarded it as logical that he should consider acquiring Glasgow Audio after the deceased's death. There were a reasonably small number of businesses involved in the specialist high end Hi Fi retailing business. He considered there was a synergy between the two businesses. He confirmed that he acquired the assets of Glasgow Audio on the last day of August 2002. He had been told by Matt Hotchkiss that there was likely to be a change in circumstances and Mr Hotchkiss had raised the issue of whether he would be interested in the looking at the business. Mr Turner confirmed the terms of the deal agreed on 31 August 2002. When he attended the premises of Glasgow Audio on 31 August he noticed that some aspects of the physical displays were different from Mr Lamont's time. He felt it was a matter of opinion whether the changes were better or worse than the deceased's approach. He felt the shop was nicely presented, although there were some items that did not seem to have been looked after to such a high level as he might have expected.

[38] When asked whether the business had been profitable after he took over at the beginning of September 2002, Mr Turner confirmed that the initial trading had been very positive. Between September 2002 and March 2003 the sales figures had been good. Thereafter the profitability had not been as high or consistent. Mr Turner considered that there was some goodwill in the business of Glasgow Audio when he purchased it in August 2002. In that context he felt the goodwill was the difference between setting up a business from scratch in a new location and continuing trading in a shop where the name of the business has been above the door for a number of years. In hindsight, he considered that what he had paid for Glasgow Audio may have been at the high end of reasonable value. What he had paid for was the location of the business and the reputation of the deceased.

[39] Mr Turner reemployed Matt Hotchkiss after he acquired the business in September 2002. He explained that Mr Hotchkiss' performance had been somewhat variable. He had coped reasonably well with his shop management role but he did not do much by way of promoting the business. In fairness, Mr Turner considered that Mr Hotchkiss could not be regarded as a replacement for the deceased. So far as the opening stock when he purchased the business was concerned, Mr Turner confirmed that the deceased had not been computerised in his record keeping and Mr Turner's business was so it was thought best to ask someone in the Aberdeen shop to attend in Glasgow and use the Holborn Hi Fi system of feeding in the information and valuing it. The pursuer had no particular involvement in the process of valuing the stock. This was done by Jonathan Turner and his employee James Sharp. Mr Hotchkiss was not involved in the process.

[40] Mr Turner had been somewhat concerned for the defender when she had taken on the role of administering the business. He felt it would have been a struggle for anyone to replace the deceased's experience and he had considered approaching the defender while she was looking after the business with the intention of saying that he would like to offer for it. However, he had never expressed that intention directly to the defender. Mr Turner confirmed that when took over the Glasgow shop some mail items were being sent to the defender's address and some direct to the shop, so redirection was organised. So far as the stocktake was concerned, Mr Turner had no recollection of either the pursuer or Mr Hotchkiss being present in the shop. What he and his employee did was to value the stock by taking the cost price and discounting for any item that had been display or damaged or where for any other reason the item would not sell for as much as had been paid for it.

[41] Under cross-examination Mr Turner confirmed that he had admired the deceased's business ability and that he had regarded him as a friend. He thought the deceased was successful in business but he did not have detailed knowledge of his figures. He knew broadly the purchasing levels of each of the members of Mountainsnow. That would have given him a broad idea of the level of the deceased's turnover but he was unaware of the profit margin. He recalled becoming aware through Mr Hotchkiss that Mr Lamont had been ill. He had been shocked by the unexpected death. He had understood that Mr Hotchkiss was running the shop when the deceased had been ill, although he knew that only the deceased dealt with documentation or legal requirements and assumed that the defender may have been dealing with these if he was not able to do so. Mr Turner confirmed that he had had telephone discussions with the pursuer about his interest in purchasing the business. During one telephone call she explained that she was in a position to be in control of the business and she made it apparent that Mr Turner could negotiate with her in relation to him acquiring the business. His best recollection of when he had first been made aware by the pursuer that the business was for sale was that it was a matter of days or weeks at most before 30 August 2002. Mr Turner confirmed again the details of the negotiation on 31 August 2002. He regarded himself as having purchased the goodwill, the name of the business and its assets. He wasn't prepared to take on any undetermined liabilities. The stock was regarded as a separate issue that he would pay for once it was valued. His intention had been to be fair to the estate in terms of price. He was asked when the stock had been valued and he said it was very soon after he bought the business at the beginning of September 2002. Mr Turner confirmed that there were handwritten stock sheets available to assist with the process. Mr Turner had no recollection of their being stock held at the deceased's house, although he knew that there had been talk of that later. The agreement he reached with the pursuer related to the stock available to him as purchaser. Mr Turner agreed that the nature of the trading of a Hi Fi retail business was that November, December and January would be months of very high turnover and profitability in comparison with the summer months June, July and August. So far as staff were concerned Mr Turner had had some discussion with Mr Hotchkiss about the possibility of reemploying Allan Campbell but the reemployment of previous staff was not a particular issue in negotiations with the pursuer. He had wanted to make sure that Mr Hotchkiss would be available but he did so on his own account rather than through the pursuer. He recalled having contact with Nicholas Wearmouth and Gary Young when they were involved in the business of Glasgow Audio. He had nothing particularly adverse to say about the way in which they had operated the business. He was "neutral" on the matter.

[42] In re-examination Mr Turner confirmed that Gary Young did not seem to be the type of individual that he personally would wish to employ. On the stock valuation issue, while he recalled the pursuer having asked a Gordon Arnot to do a stock list independent of the one being carried out for Holborn Hi Fi, those two exercises were not parallel in time. Mr Turner did not have sight of or study any list made by Mr Arnot. The price he paid for the stock was purely based on the list prepared by his own employee. He reiterated that he could not say whether the deceased had held any stock items at home when he died. As a generality, however, many Hi Fi retailers took items home to test them where they would have more time and where the sound could better be tested.

[43] The next witness led in the pursuer's case was Matthew Hotchkiss. Mr Hotchkiss was 53 years old at the date of proof. He is a sales manager with Holborn Hi Fi, also trading as Glasgow Audio. He has worked in the Hi Fi business for 29 or 30 years. He met the deceased when they were both working at Hi Fi Corner. Mr Hotchkiss had not worked for the deceased in Stirling Audio but had been employed from the outset at Glasgow Audio. He had never had any proprietorial share of the business but indicated that he was very involved and committed. He knew the defender as the deceased's partner. When Robert was alive, she would be involved in the launch of new equipment by making a buffet for evening events at the shop. Some of the equipment sold by Glasgow Audio was quite exclusive. The defender was not involved in the technical side at all, more the business socialising. Mr Hotchkiss was involved in training new staff on different aspects of the job. He would sit down with Robert Lamont once a month to discuss staff issues and in relation to new equipment. So far as Mr Hotchkiss could recall the defender was present in the shop very infrequently, perhaps once a month. On those occasions she would visit and ask in very general terms how the business was getting on. Mr Hotchkiss confirmed that the deceased maintained all of the records and systems of the business. Mr Hotchkiss was not involved other than detailing what was being sold and for what price. The deceased had a system of receipt books, the details of which he would transfer to his computer at home. When Mr Hotchkiss left Glasgow Audio in June 2002 there were still a lot of receipt books in the shop. When equipment was being purchased, the purchase order was put onto the computer. The supplier would then issue a pro forma invoice. A settlement discount was given for early payment. So far as the delivery notes that came with the goods were concerned, these were stored manually by Mr Hotchkiss.

[44] When the deceased was alive and involved in the business, both he and Mr Hotchkiss spoke to suppliers. Mr Hotchkiss would speak to the deceased about how many of any particular item of equipment she should order. The deceased dealt with all bill payments, PAYE, VAT and dealings with the accountants. Mr Hotchkiss was never trained or involved in any of that. Mr Hotchkiss said that he had a very close relationship with the deceased, that he regarded him as a friend as well as the person who had taught him his trade. He indicated that he and the deceased spent long periods of time discussing audio equipment and that they both loved the business. He said that Glasgow Audio had a high level of repeat custom and that it was thought of as the best Hi Fi shop in Scotland at one time. There was a good cross section of equipment and customers were offered a trade in allowance if they had looked after the goods they had purchased. Mr Hotchkiss' particular duties involved looking after stock, stock control, presenting invoices to the deceased having checked those against the order, teaching staff on product knowledge and assisting with marketing. He indicated that he used to run the shop "almost as if it was my own". He was well acquainted with the deceased's involvement in Mountainsnow Ltd and with important suppliers such as Cyrus, Arcam and Roksan. When asked what financial level of stock was usually carried within Glasgow Audio, however, Mr Hotchkiss indicated that he did not know. He was aware, however, that certain levels of sales were required to avoid concessions being withdrawn by particular suppliers. Prior to the deceased's death, the staff comprised the deceased, Mr Hotchkiss, and Allan Campbell on a full time basis. There were three part time or casual workers including Andy Fisher who was involved in deliveries, David Orry and a Gordon Arnot. All staff were excellent and Mr Hotchkiss had no problem with any of them. In addition to equipment located within the shop, there was a "lockup" facility but it was primarily used for storing empty stock boxes. There were numerous CDs and DVDs in the shop which were used to demonstrate the equipment.

[45] Mr Hotchkiss' recollection of when the deceased had stopped working was that on 11 September 2001, the day of the terrorist attack in New York, the deceased left the shop with a sore tooth. Although his health deteriorated thereafter, Mr Hotchkiss confirmed that nobody considered that Robert Lamont was likely to die. In fact when he was in hospital, he seemed to be improving. During the period of the deceased's illness, Mr Hotchkiss said that he was running the shop. He gave packing notes and invoices to the defender who dealt with the paperwork together with Mr Lamont when he was still alive. On 11 January 2002 the defender phoned the shop and said that Mr Lamont had passed away. When shown the bundle of cheques number 6/86 of process, Mr Hotchkiss confirmed that the signature on those appeared to be that of the deceased. He confirmed that the cheques were written to suppliers such as Harman from whom equipment had been purchased. He indicated that it was unusual for cheques written in December not to be cashed until, for example, March. However, as he had not been involved in that side of the business, he could not confirm when cheques would normally be sent or received or how long suppliers took to cash them. He considered it strange that Mr Lamont was writing cheques the day before he died. He had no recollection of there being any pressure by suppliers for payment while the deceased was ill. He had handed over invoices to the defender regularly and he had assumed they were being paid. In contrast, he was aware of pressure from suppliers after Mr Lamont's death. He said that there were major differences in the way things were run after Mr Lamont died. Mail was redirected to the defender's home. He said there were problems because of diminishing stock. The defender had told him to stop ordering stock. Customers were being asked to pay a deposit of 50% before stock would be ordered for them. It was quite different from the way they had traded prior to the deceased's death. He said that he and the other staff were allowed no communication with the sales reps of the supplier companies. He was unable to check delivery notes against invoices. He had no price lists. Mr Hotchkiss had assured the defender immediately after the deceased's death that the shop could carry on as before. However, the direction changed very quickly and he said that it was within days of the deceased's death that they were not allowed to order stock. The defender told the staff that the way they had done things before "sitting around drinking tea and coffee" was going to change. According to Mr Hotchkiss, sales reps quickly saw that stock was not being replenished and a few of them walked away from the business. Mr Hotchkiss was instructed to terminate the arrangements with Mr Orry and Mr Fisher. Meantime, the defender organised meetings with sales reps in a coffee shop on the south side of Glasgow closer to her place of work. Contact with her was through a mobile telephone rather than by calling her place of work. Mr Hotchkiss said that part exchange of goods was not allowed from a couple of weeks after the deceased's death. He described the effect of that change as crippling. It alienated existing customers. No reason was given for the change. Mr Hotchkiss claimed that January was normally a very good month trading wise for Glasgow Audio and that it would be in late February that business started to taper off a little. He was concerned about the loss of part time staff. The shop required a minimum of two people on the shop floor at any given time. The business operated seven days a week. The defender replaced the previous staff with Nicholas Wearmouth and Gary Young. Mr Wearmouth was a relative of the defender. Mr Hotchkiss described Mr Wearmouth and Mr Young as "a total waste of time". They had no knowledge about the business and while they were nice enough young men, they were unable to put the simplest connection on when they first came into the shop. They consistently asked for weekends off which hampered the way in which the business was run. Mr Hotchkiss felt that his role had diminished completely following the deceased's death. He was being treated as a sales assistant rather than a shop manager.

[46] When the defender took control of the business, Mr Hotchkiss carried out a stock check to show what the opening stock would be. He wrote down the name of each item in the shop and then used the information he had to confirm what the trade price would have been. He carried out the task manually. He confirmed that the figure he came to was the trade price of each item less VAT. This produced a figure for the cost of the stock in the shop. The task was carried out within days of the deceased's death. He was unable to access the computer for information as he said it was no longer in the shop. He confirmed that the deceased had carried out a similar stocktake once a year in mid-January after the end of the busy Christmas period. On being shown Appendix 3 of 6/87, a letter from the defender to the accountant, Mr Cairncross about the stock take, he said that he had not seen the letter before but that in so far as it related to a stocktake done by him in January 2002 it would relate to the exercise he had just spoken to. However, he could not recall whether or not the figure in the letter was accurate. According to Mr Hotchkiss there was no strategic direction for the shop or for the staff when the defender was in charge. Miss Mooney seemed adamant to run the business on her terms, this led to a loss of suppliers such as Arcam, Meridian and Cyrus. After a few months there was no specialist equipment left and what had been acquired was mass market equipment rather than the specialist high end product that the defender tended to sell. Mr Hotchkiss described himself as "standing in a shop selling what was left". Under reference number 6/16 of process, a letter from Mountainsnow dated 22 August 2002, Mr Hotchkiss confirmed that the letter illustrated what was happening in terms of the concerns about the level of sales. Mr Hotchkiss had other complaints. He said there were numerous occasions on which no payslips had been handed out. While this had been to some extent rectified later, Mr Hotchkiss said he was still missing a few of these. He had tried to contact the accountants about the matter but the defender had objected to that. Ultimately Mr Hotchkiss had found the situation to be intolerable. He felt Mr Wearmouth was watching him and reporting back to the defender. He felt the defender had no understanding of what the business was about. Increasingly he could see that the shop was failing. He went off to work as a designer for a bedroom company. He did so on a part time basis from April 2002. About 6 weeks thereafter he left Glasgow Audio. He was contacted by Hi Fi Corner. He went to work for them on 26 June 2002 until he returned to Glasgow Audio to work as a sales manager for Jonathan Turner in September.

[47] Mr Hotchkiss said he knew something of the defender's search for a duly executed Will. He said that prior to the deceased's funeral he was in the hallway of the property at Queen Square. The defender was distraught and her father said to Mr Hotchkiss that she had been running about all night looking for a Will. He thought this took place "a few days" before the funeral.

[48] After Mr Hotchkiss left Glasgow Audio in June 2002 he was in regular contact with the pursuer, Irene Lamont. He had been friendly with Miss Lamont for a number of years and when she asked him whether he would return to run the shop and work for her if she was to do so, he confirmed that he would. In examination in chief, Mr Hotchkiss was quite clear that the first time returned to Glasgow Audio after 22 June was on 3 September, the evening he handed in his notice to Hi Fi Corner. He said he was not involved in any stock check. He was aware that Allan Campbell, James Sharp and Jonathan Turner had carried out some stocktake. He said that on 3 September the pursuer had telephoned him saying she had been appointed the right to be in the shop. He went to the shop and found it to be "a shambles". The stock was in a terrible state, it was damaged and there was quite a bit less of it than when he had been there in June 2002. By the time Mr Hotchkiss went back to work in the shop, for Mr Turner, a new system was being introduced. He did not know what had happened to certain documentation such as the carbon receipt books which he said were of great value to the business. He did not see any stock sheets left in the shop. Mr Hotchkiss had no recollection of any photographs being taken while he was at the shop on 3 September 2002. On being shown the photographs number 6/99 of process, he confirmed that these illustrated how he found the shop on that date. He felt that the way in which the equipment was being demonstrated was "a mess". The speakers were not demonstrated the way they should have been. There was a television that had been damaged when Mr Wearmouth and Mr Young had been "larking about". Mr Hotchkiss remembered that incident and had been furious about it at the time. Mr Hotchkiss recalled that he was never asked to look at the values of the stock in the premises that day. By the time he returned to the shop, the stocktake had been done. In his view, however, Mr Turner had bought a lot of stock that he should not have. Mr Hotchkiss had no idea what Mr Turner had paid for the stock until much later. On being shown Appendix 10 of 6/87, Mr Hotchkiss confirmed that the names of the stock listed there seemed familiar but that the prices meant nothing to him.

[49] Mr Hotchkiss was asked about the issue of the deceased having kept stock away from the premises. He said that there was equipment at Queen Square belonging to the business which he had seen at the funeral. The defender had arranged music to be piped in to the garden outside. Stock was taken from the business to the house so that that could be done. Mr Hotchkiss recalled that there was a particular piece of equipment, a Tact Millennium digital amplifier which the deceased had wanted to take home and try out. That was something he did frequently so that he could evaluate the quality of an item. Mr Hotchkiss was also invited by the deceased to take equipment home from time to time to try it out. When shown the list at page 48 of the Closed Record, Mr Hotchkiss confirmed that he was familiar with it and that it comprised a list of stock the deceased had had at home before he died. He had been involved in making up the list and assigning values to each item. He said they were trade values. He took the prices for the computers from the computer shop near to Glasgow Audio's premises. So far as the CDs and DVDs were concerned, the deceased would have them in the shop but sometimes had them at home as well. He had simply guessed as to a quantity and price of those. So far as he knew, the items of equipment he saw at the funeral at Queen Square were the exclusive property of Glasgow Audio. The CDs and DVDs were not for sale. Sometimes they would be given away when unwanted. So far as the camera was concerned, Mr Hotchkiss thought that the deceased used to take photographs for advertising. He knew that the deceased had purchased a Mercedes A Class motor vehicle in about 2000. If the staff ever wanted to use the vehicle the deceased gave them the keys. They were all insured to drive the deceased's car if they were over 25 and employed in the business. Mr Hotchkiss thought the Mercedes was a "company car". The defender drove a Peugeot 205. Mr Hotchkiss never saw the defender driving the Mercedes prior to the deceased's death. He did recall her driving it thereafter.

[50] Under cross-examination Mr Hotchkiss confirmed that he had been aware of the serious and committed relationship between the defender and the deceased. He was unaware of the extent to which the deceased may have discussed business matters with her. He knew that she had attended to catering for business functions and that she had been present on the stand of the business at the Hi Fi show in Glasgow. Mr Hotchkiss accepted that he had not been involved in any form of financial planning for the business when the deceased was alive. He was, however, in charge of purchasing stock from the outset, although he accepted that if a large order was to be placed he would discuss it first with the deceased. He knew nothing of the profit level of the business. The deceased would talk in general terms about whether they were doing well or badly at any particular time. He had visited the deceased three times during his stay in hospital. He had the impression that the deceased was still running the business when he was ill but giving the defender directions so that she could attend to mail and invoicing. Mr Hotchkiss accepted that he had been in regular communication with the pursuer after the deceased's death. He said he was missing the deceased and found a comfort in speaking with the pursuer. He said that when he told the pursuer of the difficulties with the way in which the defender was running the shop she wanted to see if she could help. He was aware of the uncertainty as to who had control of the shop between January and June 2002. Mr Hotchkiss claimed that he was unsure as to what his role was during that period. He wasn't instructed to achieve any particular level of sales. He didn't know whether in fact profit had been achieved during that period. He claimed that the defender didn't allow the staff to have price lists or to contact manufacturers although he said that he knew what the prices were in any event. Sales were recorded in the same manner after the deceased's death as they had been prior to January 2002. Sales receipt books were used and cash would be banked on a daily basis. Mr Hotchkiss had never seen bank statements relative to the business prior to the deceased's death. He claimed that the defender did not allow any customers to trade in old equipment when buying new during her period of stewardship.

[51] Mr Hotchkiss described the deceased's business from the shop as "devastating". Sales reduced in the absence of someone of the deceased's selling ability. He rejected the contention that the part time work he took on while still employed at Glasgow Audio adversely affected his performance there. He said that people would ask whether the business was for sale during the period leading up to June 2002. He named a Bill Hutcheson who had a shop in Hope Street in Glasgow who asked that question on numerous occasions. In relation to the issue of the schedule of stock said to have been held in the home the deceased shared with the defender, Mr Hotchkiss accepted that he had never seen invoices, receipts or other documentation for items said to be stock but not held in the shop. During the course of his cross-examination and after an overnight break, Mr Hotchkiss volunteered that he had gone home the previous evening and checked notes that he had about the dates of his employment. He said that his evidence the previous day had been wrong and that when he said he attended Glasgow Audio on 3 September it was on 30 August. He said he was also wrong to say that he handed in his notice on the same day as he attended at Glasgow Audio's premises. He said he had just thought to check his notes the previous evening and that he had not discussed the case with anyone overnight. The pursuer was transporting Mr Hotchkiss to and from Court each day.

[52] The list of items said to have been at Queen Square but belonging to the business of Glasgow Audio was compiled by Mr Hotchkiss prior to 22 June 2002 when he was still in employment. He said it had not been done at Irene Lamont's request. He said he had been invited to the home at Queen Square on numerous occasions and had compiled the list from memory. The first list he had compiled is reproduced at number 6/5 of process, Appendix 4. Discrepancies between that schedule and later versions were put to Mr Hotchkiss. He accepted that he didn't know whether each and every item on the list was present in Queen Square on 11 January 2002. On the matter of whether all business mail for Glasgow Audio had been redirected to Queen Square shortly after the deceased's death, Mr Hotchkiss' position was that the business premises only received junk mail by a certain stage but that he couldn't remember clearly as so many years had passed. A number of primary documents were put to Mr Hotchkiss that indicated some invoices were being sent to the business premises. Those documents are contained within the folders of 6/4 of process.

[53] So far as Mr Wearmouth and Mr Young were concerned, Mr Hotchkiss said that he tried to show them what should be done and not done so far as equipment in the shop was concerned. There was no formal training procedure. He said he was trying to survive in an impossible environment. He and Allan Campbell tried to help and guide Nick Wearmouth and Gary Young but he regarded himself as effectively no longer shop manager. By the time he left he described Nick Wearmouth and Gary Young as having "picked up a bit". On being shown number 7/124 of process which appeared to be a reference written by Mr Hotchkiss for Mr Young, Mr Hotchkiss said he had no recollection of writing such a reference although he accepted that the printing of the signature looked like his. He did not deny that he could have written the reference although he didn't agree with all of its content. When Mr Hotchkiss left Glasgow Audio in late June 2002 he said that Allan Campbell had said, "If you are going I am not staying" and the two handed in their notices at the same time. He said that Mr Campbell had also communicated unhappiness about the situation to him daily. He knew nothing of how the shop had been run after 22 June 2002. He wasn't interested and was "glad to be away". He continued to have discussions with the pursuer who told him that if she was appointed Executrix Dative she would like him to come back and run the shop for her. On being challenged about the statement apparently made to him by the defender's father prior to the funeral, Mr Hotchkiss said that he didn't know that there was any witness to that conversation and he could not remember who else had been in the house at Queen Square that day.

[54] Mr Hotchkiss was challenged about the nature of his relationship with the deceased. He rejected the contention that the deceased did not regard him as a close friend, just as an employee. While was working at Hi Fi Corner in the summer of 2002 Mr Hotchkiss said that it was Jonathan Turner who contacted him directly with a proposal that he purchase the business of Glasgow Audio. Mr Hotchkiss then contacted the pursuer who said that he could give Jonathan Turner her phone number. Reverting to the events of 30 August 2002 Mr Hotchkiss confirmed that he had attended at the premises of Glasgow Audio that day at about 6.00pm after he had finished working in Hi Fi Corner. His recollection was that he was just there to look at the shop and its general condition. He couldn't recall what time he left the shop. He did not close or lock up the shop. He presumed that had been done by the pursuer after he left. His next visit to Glasgow Audio was on 19 September 2002 when he started work for Jonathan Turner. He confirmed Mr Turner was very well regarded in the Hi Fi business. He had spoken to the pursuer in suitably positive terms about Mr Turner. He told the pursuer that Jonathan Turner would look after the business better than Bill Hutcheson who had also been interested.

[55] In re-examination Mr Hotchkiss reiterated that he had no recollection of being approached to send a reference for Gary Young while he was at Glasgow Audio. He did not think he would have used the expression "I would not hesitate to re-employ Mr Young" in late June 2002 as he was himself leaving and had never been in a position to employ anyone at the business of Glasgow Audio. In relation to the documents that formed part of the primary documentation of the business at 6/4 of process Mr Hotchkiss could not say whether or not these documents had been posted to the shop or delivered there. On the issue of stock removed from the business to take home and try, Mr Hotchkiss confirmed there would always be a record of that in the receipt books of the business.

[56] James Sharp, a former employee of Jonathan Turner was also called as a witness for the pursuer. Mr Sharp was 29 years old and at the time of the proof was employed by Electrosonic Limited. He had been involved in the Hi Fi business for a total of about five to six years first on a part time basis and then full time. He had worked for Mr Turner both in Aberdeen at Holborn Hi Fi and also at Glasgow Audio. He left the business in 2005. He met the pursuer in 2002 when he understood she was the owner of the business and was selling it to Jonathan Turner. He had been asked to move to Glasgow and work in the business of Glasgow Audio there. When he arrived he was involved in a stocktake. He confirmed that the pursuer had played no part in that stocktake. The process had involved Mr Turner sitting in a room with a laptop while Mr Sharp went through the whole shop reading out the make, model and serial number of each item. Mr Turner would then enter those details into a laptop. Once a full list on an Excel spreadsheet had been prepared, Mr Sharp was charged with putting a value on each item. He confirmed that the value was the price Holborn would pay for each item and a deduction was made for damaged stock. Effectively the price was trade price less VAT less discount. The prices used were Holborn Hi Fi prices. His instruction was to be fair in assessing value and his recollection is that he was indeed as fair as he could possibly be. Mr Sharp had no knowledge of whether or not the spreadsheet he had prepared and passed to Mr Turner was ultimately used to fix the price for the stock as between the pursuer and Mr Turner. He confirmed that Appendix 10 of number 6/87 of process looked like the form of document he had prepared. He had no recollection of the figures. The description of stock looked similar to that he had been looking at. He confirmed the references to used or discounted stock as being those he had noted when he was carrying out the stocktake. The only other person that may have been involved in the stocktake carried out by Mr Sharp was a part time employee of Holborn Hi Fi. He didn't know Mr Hotchkiss at the time but he knew that he was employed by Hi Fi Corner. He confirmed that Mr Hotchkiss was not present during the stocktake. Mr Sharp confirmed that it had taken him a few days to complete the valuation and that he had understood the pricing of each item was complete within that period. He did remember a subsequent trip to some lock ups but he couldn't remember whether he had recorded anything kept there. Mr Sharp confirmed that the stocktake had been done from scratch and that no other stocktake or valuation was discussed. When Jonathan Turner first requested that he attend at Glasgow Audio, Mr Sharp did so as an employee of the Aberdeen shop. The business premises in Glasgow were not open for business when he first went there. They then opened and he was appointed assistant manager. He worked with Matt Hotchkiss thereafter. After Holborn Hi Fi took over Glasgow Audio Mr Sharp remembered a general increase in sales over time. His reasons for leaving the business in 2005 related primarily to his having sustained a neck injury in a car accident in 2004 and wanting to change direction. When Mr Sharp left Glasgow Audio there were four full time members of staff who worked weekends between them. One of those was Allan Campbell who had returned to the business.

[57] Gill Smith, an accountant with Wylie & Bisset in Glasgow also gave evidence for the pursuer. She is a 57 year old chartered accountant who has effectively worked in general practice for most of her professional life. She qualified in 1977. She has been with Wylie & Bisset since 1996. She was first given paperwork relating to Glasgow Audio in the autumn of either 2004 or 2005. She was given three folders of bank statements, invoices and other primary documentation. Her initial instructions were to work through those. She then received further paperwork and worked through it. She confirmed that the boxes of documents number 6/4 and 6/5 of process were the documents sent to her. Miss Smith spoke to her report of 20 January 2010 number 6/87 of process. Her remit was to look at the accounts of Glasgow Audio prepared by Cairncross & Cairncross Accountants for the period leading up to the deceased's death. She was also then asked to prepare her own figures for the accounts for the period during which the defender had control of the business from January to August 2002 and to compare her figures with those produced by Cairncross & Cairncross. Miss Smith said that from the paperwork she had gleaned that the business had been run down during the period of Miss Mooney's control. There was far less stock and erratic payment of creditors. She had no conversations with Mr Cairncross, junior. She had spoken once with Mr Cairncross, senior by telephone. He had not been able to assist with the production of records. She had been requesting the computerised version of the link between the bank statements and the accounts but was told that this had been lost. She was able to confirm that all the items in the bank statements of the business during the period January to September 2002 had been posted but she did not know how each cheque had been categorised. She had received payroll records from 6 April 2002 but not for the three months before that. In her report 6/87 of process, Appendix 18, she had compiled a spreadsheet listing all monies going through the business from the end of January through to September 2002. Turning to the first exercise, that of considering the Cairncross & Cairncross accounts for the business to the date of death, Appendix 5 of 6/87 refers. There was a slight discrepancy in the stock figures but it was accepted that Mr Hotchkiss had carried out a stocktake shortly after the date of death. The balance sheet prepared by Miss Smith also added to stock the sum of £9,221 for items she was told belonged to Glasgow Audio but were situated at Queen Square. Adding that to Mr Hotchkiss' figure of £133,308 gave a total of £142,529 for stock. Miss Smith had had some discussions with an accountant with BDO Stoy Hayward who had been acting for the defender at one time. She had agreed with BDO Stoy Hayward that some bank transactions in relation to sales after 11 January had gone through the bank account because a new bank account wasn't opened until 2 February. She had taken that into account. She had separated out pre-death and post-death transactions. So far as trade creditors were concerned there were a number of invoices that predated the date of death where cheques were not cashed until about April 2002. She could more or less reconcile all of the figures from the documentation she had. It was clear from Appendix 5 that the differences between the Cairncross & Cairncross accounts to the date of death and the Wylie & Bisset revisals were effectively de minimis.

[58] Some evidence was given about the way in which the deceased had dealt with a stock figure for his accounts. Mr Cairncross apparently said to Miss Smith that the stock figure was worked backwards so that the gross profit figure was consistent. In other words it wasn't based on a stocktake, rather the practice was to use whatever stock figure would give a gross profit of £65,000 or so. Miss Smith said that was the impression given to her by Mr Cairncross.

[59] Appendix 6 of 6/87 contained a profit and loss account and a separate balance sheet illustrating the differences between the accounts for the period of Miss Mooney's trading prepared by Cairncross & Cairncross and Wylie & Bisset's own figures. In essence the difference was that Cairncross & Cairncross had recorded a loss for the period of Miss Mooney's trading of £18,185 while Wylie & Bisset found that to be £65,143. So far as the balance sheet was concerned the actual accounts prepared by Cairncross & Cairncross (Appendix 2 of 6/87) had a net asset figure of £108,135. Miss Smith disagreed with their approach, however, and using her own approach she obtained a net liability figure using Cairncross & Cairncross figures of £24,435 as opposed to her own net liability figure of £80,738. Some of the differences in the two sets of figures had, according to Miss Smith, been agreed with Stoy Hayward at the time of their involvement. For example, it had been agreed that Miss Mooney had achieved sales of £177,170 during the period of her control rather than the £162,486 recorded by Cairncross & Cairncross. The difference appeared to relate to the sales banked in Robert Lamont's account but effected by Miss Mooney. The most significant difference between the two sets of figures in the balance sheet related to the figure for closing stock. Wylie & Bisset's figure as at 30 August 2002 was £63,579 as opposed to the £127,225 contained within the Cairncross accounts. Miss Smith also raised issues about wages and VAT. So far as the latter was concerned she understood that a new VAT registration had been commenced by Miss Mooney and that VAT would be due for the eight month period. An estimate of £17,639 was issued as a VAT assessment to Miss Mooney. However that was a speculative figure as it had not been based on a return. Doing the best she could Miss Smith had come out with a figure of £12,605 for VAT.

[60] The general approach of Miss Smith was to incorporate parts of the deceased's balance sheet into the new business to reflect items taken over or retained by the defender. In particular these included the Mercedes motor vehicle and the opening stock. The net book value of the car when the deceased died was £10,000. Miss Smith had initially assumed it had been sold but then was advised it had been retained by Miss Mooney. The deceased had claimed that capital allowances in respect of the car for tax purposes. 6/103 of process was a tax return of the deceased which reflected that. So far as Miss Smith was concerned if the car had been jointly owned with the defender the deceased couldn't have had it as a business asset in his accounts. The car had been purchased in 2000 (see 6/85 of process).

[61] Miss Smith had created a graph based on the sales figures of the business both historically and during Miss Mooney's period of trading to show what happened to turnover during 2002. That graph is reproduced at Appendix 15 of 6/87. In essence she said that the sales were consistently lower in 2002 than in the two preceding years. She thought that the cause of the reduction was that the stock wasn't being replaced, suppliers were lost so there was less variety of goods to sell. She said there was also possible damage to some of the stock and less proactive selling by the staff. She said she had not been able to verify that all sales had been recorded because apparently sales books deposited in the sheriff court in Glasgow had gone missing. Miss Smith's position was that the gross profit percentage of the business had dropped radically during the period of the defender's control. On the basis of the accounts produced by Cairncross & Cairncross gross profit had reduced to 31% as compared with an average of 38.5% achieved by the deceased. On her own recalculated accounts, Miss Smith concluded that gross profit percentage was in fact down to 1.5%. The main reason for this huge discrepancy was the stock figure provided to Miss Smith for the purpose of her exercise (Appendix 10 of 6/87). Miss Smith had carried out a calculation of what could be expected had the gross profit remained at the level it was when the deceased was alive. She made very clear that she was not a valuation expert and that loss of profit/loss of value was not a matter in which she had any experience or expertise. Her role in the matter was to prepare a set out accounts based on documentation provided to her and to compare those with someone else's accounts. Miss Smith was uncertain as to what the VAT position normally was if a business was transferred on death.

[62] Miss Smith was quite critical of the Clydesdale Bank's failure to freeze the business account from February 2002. That had led to the encashment of over £30,000 in cheques in April 2002 relative to the business of Glasgow Audio prior to the deceased's death. She thought was exceptional that suppliers had hung onto the cheques from the time of the deceased's death until April, although she did not seem to have any knowledge of the circumstances in which the cheques were signed or when they were sent.

[63] Under cross examination Miss Smith confirmed that she had taken over the remit of reviewing the accounts of Glasgow Audio after the retirement of a colleague. Some of the work on Appendix 6 of 6/87 of process had been carried out before that colleague retired. Miss Smith was challenged on her conclusion that the business was effectively no longer going concern by August 2002. She said that Miss Lamont's view that the business could not carry on was borne out by the figures in the accounts. She indicated that the business lacked the ability to meet its liabilities or at least that it had little to meet its liabilities with. She did not know in fact whether liabilities were being met at the time the business was handed over in August 2002. On the face of Appendix 6 of 6/87 of process the liabilities of the business amounted to £155,251 and the net assets were in the region of £130,000, thus liabilities exceeded assets by about £25,000. In relation to Appendix 17 of 6/87 of process Miss Smith confirmed that the purpose of the schedule therein was to show that the fact that the stock take had not been carried out for two weeks after the deceased's death made no real difference to the figures. So far as the items said to belong to the business and alleged to be held at 53 Queens Square were concerned, Miss Smith was asked about Appendix 4 of 6/87. She confirmed that she had been provided with the schedule and although there had been several versions of it they were all in similar form and did not differ much. She confirmed that it was Irene Lamont who had provided her with the schedule. Miss Smith had never been provided with any code numbers or other documentation tying the items on the schedule to stock of the business. In relation to Appendix 15 of 6/87, the graph, Miss Smith was challenged about the reasons she gave for the variation in sales. She accepted that there had been reasonably significant sales in July and August 2002. Miss Smith indicated that what she was trying to consider was a trend. She accepted that historically the business had the largest number of its sales in October, November and December each year, months during which Miss Mooney had not traded. So far as the important figure for stock was concerned, Miss Smith confirmed that Appendix 10 of 6/87 had been given to her by the pursuer. She had understood that it had been prepared both by Jonathan Turner and by someone on Irene Lamont's behalf. She was unaware of the basis of valuation within the stock sheets. She had just been given them. Miss Smith accepted that she had made an assumption about changes in the suppliers of goods to the business. She took the view that the number of overdue invoices from suppliers was not a good sign in terms of the health of the business. Miss Smith explained that when she had prepared her report she expected there to be a claim for goodwill lost through Miss Mooney's actings. However, as Fiona Martin of Tenon had prepared her report indicating that following the death of the deceased as a sole trader there was no goodwill in the business she understood that no claim for that was being made. Miss Smith reiterated that she was not an expert in business valuation. Miss Smith's summary of what, on the face of the accounts she had prepared, would be due by the defender to account to the pursuer as Executrix Dative was summarised in Appendix 14 of 6/87. However, she was clear that the figures in Appendix 14 were not intended to be a definitive valuation and went so far as to say that she did not regard her role in court as to speak to the value of a claim but simply to explain the figures in the accounts. A previous version of her report was put to Miss Smith, number 6/5 of process. A version of Appendix 14 appeared therein. Miss Smith confirmed that when those figures were put together "we decided we weren't happy with them". On more than one occasion the witness reiterated "...I wasn't happy about giving a valuation. I didn't have the experience." Returning to the issue of the items said to be stock for the business and situated at 53 Queens Square Miss Smith confirmed that she had been instructed to include that as stock in the accounts. She accepted that the claim being made by the pursuer was increased by the inclusion of those items as stock. Her view was that a claim for loss in the pursuer's situation was always going to be subjective and not necessarily accurate. Miss Smith had no idea of the specific assertions in relation to the items in the house. She had seen no documentation to vouch the claim that they were business assets and ultimately included the figure because she was told to do so by the pursuer.

[64] Miss Smith did not know whether Glasgow Audio traded the same number of days per week during Miss Mooney's period of control as it did when the deceased was alive. She thought it might have traded for six days per week although that was a guess. It was put to her that there had been a change from seven day trading to five day trading but she could not say on the material she had had with her that was the case. On the trading pattern generally she accepted that trading appeared to be going up slightly in July and August 2002. She confirmed that she did not know what had happened after that. She accepted it was possible that the upward trend shown in August 2002 could have continued if there had been no change of ownership at the beginning of September. She accepted that her views on why business had dropped between April and June 2002 were based on speculation rather than fact. Miss Smith confirmed she had been aware of the court action raised against the defender in relation to unpaid VAT. She had not seen any paperwork in relation to that litigation. Under reference to the stock figure used in Appendix 14 for the stock handed back to the business (£63,579) Miss Smith confirmed that she understood that stock had been valued at the lower of cost and net realisable value. The cost price had been written down due to damage or goods used for demonstration and so on. There had been a slight adjustment to the figure for stock as a result of information about purchasers who had already paid a deposit. When asked to compare the basis used for closing stock with that used for opening stock as listed by Mr Hotchkiss (£133,308) at first Miss Smith confirmed that she understood Mr Hotchkiss' figure to be cost price but was then unsure as to what the position was, which she had taken from a statement of Mr Hotchkiss. The normal accounting procedure was to value stock at the lower of cost and net realisable value. Miss Smith then confirmed that the headline figure in Appendix 14 of £133,985 included a bank balance that had gone to the estate and she confirmed that required to be deducted. It then transpired that Miss Smith wished to depart from the version of Appendix 14 that was lodged in process. After a meeting with an expert instructed by the defender, Bob Crawford CA, Miss Smith explained that she had decided to revise her figures having accepted a couple of points that he had raised. The meeting had taken place in April 2010. Miss Smith tried to raise the issue of a possible revisal of Appendix 14 but she had been told it was too late to do so. Ultimately, after an adjournment, I allowed Miss Smith to tender and rely upon her revised version of Appendix 14 and that document now forms 6/104 of process. It reflected further deductions from any sum due by Miss Mooney in respect of a bank balance that had been double counted, a creditor's figure and a VAT adjustment.

[65] There was considerable focus on the heading of "loss on profit of business" of £60,000. Miss Smith confirmed that that was a gross profit figure calculated on the basis that, had the gross profit percentage (represented by the difference between sales and purchases) continued to be about 35% that is the sum the business would have made as profit between January and August 2002. When challenged about whether the figure for loss was gross profit rather than net profit, Miss Smith said that gross profit would go "straight to the bottom line figure" and would not be affected by expenses. Miss Smith had taken unexpected gross profit percentage of 35% because in previous years when the deceased was alive the average gross profit was about 36‑38%. She accepted that no account had been taken of the far higher sales in the last three months of the year achieved by the deceased but said that would not change the percentage overall.

[66] When asked about the £50,000 received for the business in the sale by the pursuer over and above the stock figure Miss Smith confirmed that she thought that sum had been for goodwill. When challenged on an earlier assertion that there was no goodwill in the business, Miss Smith confirmed that the opinion that the business had no goodwill was that of Fiona Martin and not her own. In any event she thought what she had done was to take the first eight months of the deceased's annual figures and compare them with the eight months of trading of the defender although she could not confirm with confidence that was the approach she had taken. Miss Smith went on to explain that on her own initiative and without instructions she had carried out a calculation of what might be termed "additional gross profit" based on a loss of turnover. Miss Smith had considered that had Miss Mooney achieved a turnover at the same level as the deceased, additional gross profit would have been made. Ultimately that claim was not insisted in by the pursuer and the evidence in relation to it was accordingly not relevant to the claim itself.

[67] Miss Smith was shown a tax return no 6/103 of process. She confirmed that this had been sent to her firm by Mr Cairncross. Someone in her firm had added additional information to it and processed it. She did not know why, in the version revised by her firm it was indicated that the figures were no longer provisional. As far as she was aware the figures ultimately submitted were accepted by HMRC. The figures in the return were based on the accounts prepared by Cairncross & Cairncross. Miss Smith's understanding was that HMRC regarded the accounts as "open" pending the resolution of the current dispute. While Wylie & Bisset had apparently submitted a further revised return based on other figures which was not before the court, Miss Smith did not think that they had done so as agents for the Estate.

[68] So far as the counterclaim was concerned, Miss Smith was unaware what had happened to the debt to Yell for advertising of £4,042. She was also unaware as to what had happened to the Clydesdale Bank overdraft of £4,716. She confirmed that the overdraft had been generated through trading but that any purchases made by overdrawing the account would have been included in the stock which had been accounted for. Miss Smith was shown the various versions of Appendix 14 that she prepared, including schedules in 7/56, 7/57 and 7/84. She had revised her figures over a long period of time.

[69] In re-examination Miss Smith reiterated that the 35% gross profit figures used in Appendix 14 revised was simply based on an estimate of the gross profit percentage achieved by the deceased. In relation to the revisal of her figures, she confirmed that it was the meeting with Mr Crawford that triggered that revisal. Miss Smith's general instructions had been to prepare a set of accounts. The question of looking at loss came very much later. She did so because she was asked by the pursuer and the pursuer's solicitors to see if she could prepare something about that. She had only been asked to consider gross profit in making her calculations and not net profit. In any event she thought that it was appropriate to calculate loss according to gross profit because where business overheads are closely related to the sales, she thought it was better to do so. Where costs are effectively static and don't fluctuate with the sales she considered that net profit was inappropriate. The expenses of Glasgow Audio remained the same both prior to and after the deceased's death, albeit there was an increase in staff to allow for his absence. Miss Smith accepted that she had not shared her final figures with the defender prior to giving evidence. She had in fact never spoken with the defender other than briefly during a previous mediation process.

[70] Miss Smith was firmly of the view that Cairncross & Cairncross had been incorrect to include the deceased's capital account in the trading accounts for the defender. Her position was that it could not be transferred and this was an error in the Cairncross accounts. Miss Smith's exercise was, she said, hampered by having no opening stock reconciliation as the sales book had been mislaid by the administration of Glasgow Sheriff Court. On the issue of the loss of discounts, Miss Smith confirmed that it was important to make prompt payment in a business such as that of Glasgow Audio in order to receive a discount. A higher price is paid for late payment.

[71] Miss Smith was further cross examined briefly in relation to the issue of her dealings with Judith Scott of BDO Stoy Hayward. Miss Smith confirmed that the discussions with Miss Scott had not led to any formal agreement and that closing stock was mentioned only in passing.

[72] The last witness for the pursuer was Fiona Martin, a 43 year old Chartered Accountant with RSM Tennon. Miss Martin was instructed to look at the goodwill position of Glasgow Audio. She had access to Gill Smith's report. By the time she gave evidence she had been provided with the revised version of Appendix 14, No. 6/104. She was unable to comment on the calculations themselves but could confirm that the general approach taken by Miss Smith appeared to be methodical. On the face of the figures provided to her Miss Martin agreed with Miss Smith that the business had severe financial trading difficulties at the end of August 2002. She accepted that the main differences related to the stock figure. On the issue of the transfer of the capital account, Miss Martin confirmed that, short of a specific gift being made, the capital account would not normally transfer to someone looking after the business.

[73] Miss Martin confirmed that as a general rule when one was looking at loss of profit in a retail business the main costs are fixed and the calculation of loss would be made using the gross profit level. There were other situations, such as in manufacturing businesses, where net profit percentage would be more appropriate. There were situations in the retail business where a net profit percentage would be used. For example if there was a variation in trading days, or more staff were taken on, or additional advertising was incurred or there was a change in the way the business was operating then in all of these using a net profit figure would be considered. In the case of Glasgow Audio there additional staff had been taken on to replace Mr Lamont. There had also been some change in the trading pattern in that the percentage achieved in the period after death was lower than it had been prior to death. However, Miss Martin did not consider that these might be exceptional enough reasons to use a net profit percentage in calculating any loss. It was the absence of the proprietor that made a difference to the business of Glasgow Audio. That would affect turnover and profit margins. If the business was being run less efficiently and less attractive deals were being negotiated with suppliers, then these would all be factors. However she still considered that it would be more appropriate to use a gross profit percentage in calculating any loss.

[74] Under cross examination Miss Martin confirmed that she had been given information from Miss Smith and from the pursuers. She had not checked any primary material she had been given. She had no access to source documentation. Miss Martin reiterated that her conclusion in relation to goodwill was that it attached to the proprietor of this particular business, that it had "died with him" and that accordingly from January 2002 onwards there was no goodwill in the business. Miss Martin had not considered the issue of any loss of profit herself. She had simply looked at Gill Smith's approach. She confirmed that Miss Smith had made the calculation on an assumption that the profits had remained at the same level as when the deceased was alive. Miss Martin confirmed that the gross profit margin does not include any allowance for a proprietor's time. Miss Martin's overall view was that, had the business continued in exactly the same way as it had prior to Mr Lamont's death, then Gill Smith's figures were reasonable.

[75] Miss Martin had been given some information about the price at which Glasgow Audio had been sold. She was aware that there was separate figures for stock and then a payment of £50,000. She had not seen a copy of the sale and purchase agreement. She was told that the £50,000 was an additional amount and negotiated in the sale. She was not told what it related to. She agreed that it would be surprising if the purchaser of such a business had not carried out some "homework" on the trading position of the business. Normally the seller would of course know the business intricately and be able to provide that information. She confirmed that the marketing of a business might affect price but there were different strategies for selling different businesses and she could not be specific about the present case. She did not accept that the only way of achieving best price was to market a business. Miss Martin accepted that the sort of issue that might justify her looking a net profit percentage rather than gross profit percentage in calculating any loss was a change in the number of days trading. This was relevant for overheads. So far as the absence of the deceased from the business was concerned, Miss Martin confirmed that the effect of that would depend on what actions were taken by the individual taking over. There might be differences in dealing with staff and if the business was not being run in the same way as it had been when the deceased was alive that would certainly have an impact. Miss Martin was aware that there could be seasonal fluctuations in sales in the Hi Fi Business but had not been asked to consider that matter.

[76] In re-examination Miss Martin confirmed that she had thought the overheads of Glasgow Audio had remained the same and nothing had presented itself that might have led her, had she been carrying out the exercise, to apply a net profit percentage. She did not consider that there was a significant difference in the overheads, including any change in the number of trading days. She thought that the price achieved by Miss Lamont on the sale appeared to be a very good deal. It appeared to have been fortunate that Mr Turner saw "synergy" in the two businesses. If the business was in a situation where the liabilities exceeded the assets then there would have been an urgent need to see whether it should be closed down or sold. However, any deficit could be resolved by refinancing and turning the business back to profitability. It depended on the particular case. If the staff were co-operative and working towards profitability then that would be a reason to see if one could continue with a business. As a purchaser, one would look to see whether there were key individuals who would co-operate with the purchase. Miss Martin agreed that an actual sale was the best guide to the value of a business at any given time. Where a business loses its proprietor and any replacement does not have the expertise of their predecessor, that would likely to affect profitability. It would be very difficult for anyone with no experience in the Hi Fi sector to walk in and take over a business such as Glasgow Audio.

[77] Following Miss Martin's evidence, a motion was made for the pursuer to lodge handwritten stock sheets with a view to reconciling these and the stock valuation prepared by Mr Turner. The pursuer had not hitherto lodged these documents which were in her possession. The defender did not oppose the motion and the pursuer was accordingly recalled to speak to them.

[78] The pursuer confirmed that documents 6/100 and 6/101 were the handwritten stock documents produced by Derek Henry and Gordon Arnott at the end of August 2002 as the beginning of a stock take. 6/101 was primarily Mr Henry's document and 6/100 was compiled by Gordon Arnott. Miss Lamont's position was that there had been no time to complete the stock take on the first day she had been in the premises of Glasgow Audio on 30 August 2002. The following morning she realised that she required someone with more experience to attend to the stocktake. Gordon Arnott had offered to help and attended at the shop to follow on from where Mr Henry had finished. The pursuer accepted that 6/100 and 6/101 had no prices for stock indicated on them. She agreed that the only valuation that had been carried out was by Jonathan Turner and that her own stock check was simply a list done independently of Mr Turner's. She said that it was impossible for her to obtain prices without the price lists. She had thought that the lists would be there, she had been advised by Mr Picken that that had been agreed. Mr Turner had never seen the pursuer's handwritten stock sheets. She said that sometime after the agreement to sell, Mr Turner had indicated to her that many of the items in the shop were damaged. She said that she, Mr Hotchkiss, Gordon Arnott and Mr Turner all met in the shop on a trading day and compared the lists at 6/100 and 6/101 with 6/87 of Appendix 10. She claimed that the two lists were checked against each other and that every item was accounted for. She said that further extra items were identified. She had been assured that the prices were fair. She had later prepared a document 6/106 of process during the proof. This was when she realised that there were items extra to the handwritten lists. She was aware of a rough value of the items before. Document 6/106 began with the list prepared by Jonathan Turner, then the handwritten list, and was a summary of the items on Mr Turner's list but not on Mr Arnott's or Mr Henry's list. There were in addition a handful of what she described as "very low value items" that did not appear on Jonathan Turner's list but they were on Mr Henry's and Mr Arnott's lists. She had place reliance on Mr Turner who seemed to carry out the exercise very thoroughly and she said that he had never seen her lists at the time.

[79] Under cross-examination the pursuer was asked why she had not produced Mr Henry and Mr Arnott's lists when called upon to do so in the Commission and Diligence Procedure in 2004. The pursuer said that she had not done so because they had no values attributed to them and it was decided to put forward Mr Turner's valuation as if it was her own stock list. Her justification for that was that it had been impossible for her to value the stock. The pursuer's averment in the closed record (page 55) was put to her where it is said "a stock take carried out by the pursuer..." and she was asked whether that averment related to the handwritten sheets or Mr Turner's stock takes. The pursuer confirmed that it related to Mr Turner's stock valuation less the value of some items where deposits of 50% had been paid for goods and it was agreed that Mr Turner should not have to pay for those. The pursuer was asked whether there were price tickets on the items that Mr Henry and Mr Arnott had been listing in the shop and she said she could not remember. She confirmed that there were references to damage stock both in the handwritten stock lists and Mr Turner's lists. The pursuer accepted that Mr Turner had found at least £4,000 of stock addition to that which appeared on the handwritten sheets. When challenged that she had instructed the purchaser of the business to carry out a stock valuation which she then used to substantiate her claim against the defender, the pursuer confirmed that Mr Turner had offered to help her and she agreed to take his help. As there were no stock lists or price information in the shop she had been unable to carry out the exercise herself. She confirmed that the comparison that took place between the handwritten lists and Mr Turner's valuation was in the Spring of 2003. She accepted that she had not shared her handwritten stock sheets with Mr Turner as such. They were for her own personal check. When she carried out the check in Spring 2003 some of the handwritten notes had gone astray so she made a list. She trusted Mr Turner to treat the estate as fairly as he could. When asked whether there was a possibility that stock had been missed by Mr Turner the pursuer said that the exercise had been carried out over 5 to 6 months but the listing of the stock was done before the shop opened. She accepted that she had not known the value of the stock when she sold the business. She felt she had done the best she could in relation to the matter.

[80] In re-examination the pursuer's position was that all relevant documentation she held for the business had been handed over to her previous agents in the context of commission and diligence in the case against the defender in the Sheriff Court. She had mislaid a couple of handwritten sheets of her own. She did not receive everything back from the Sheriff Court but she had photocopied everything. Her position was that she took advice on the specification of documents and that the decision not to lodge the handwritten sheets was based on that advice.

Evidence led in the Defender's Case

[81] In her case, the defender first called Colin John MacKenzie. Mr MacKenzie, aged 55, is the Managing Director of Hi Fi Corner based in Edinburgh. He is also a business consultant. He has been in business since the 1970's and has post graduate qualifications in that area. In his time at Hi Fi Corner he had acquired premises in Haddington Place and Rose Street in Edinburgh and a branch in Falkirk. He had also run a branch of Hi Fi Corner in Glasgow until about 2009. He had been a friend of the deceased for many years. The deceased had originally worked for Mr MacKenzie in Hi Fi Corner in the late 1970's and was a Director of the business by the time he left. Mr MacKenzie knew the defender well as the deceased's "common law wife". He had seen her supporting the deceased by helping out at the Scottish Hi Fi Exhibition. In 1985/86 she had worked in the office at Hi Fi Corner. That would have given her a broad awareness of the nature of the business and a certain amount of product knowledge at the time. Mr MacKenzie had been aware of the deceased forming Stirling Audio and later Glasgow Audio. He regarded Mr Lamont as a very successful businessman, who had taken a considerable amount of business away from Hi Fi Corner and had an excellent reputation. Mr MacKenzie's recollection was that all of the sales representatives of the business would know the defender as she had consistently attended Hi Fi shows. Mr MacKenzie also knew Mr Hotchkiss reasonably well. He confirmed that Mr Hotchkiss had been a Manager in one of the Branches of Hi Fi Corner in Glasgow. He had left to work for the deceased and then returned later to work with Mr MacKenzie's business. He was aware that Matt Hotchkiss was an employee who had not been involved in business decisions about Glasgow Audio. In the summer of 2002 Matt Hotchkiss left Glasgow Audio to work again for Hi Fi Corner. At that time Mr MacKenzie had complaints about Mr Hotchkiss' selling ability. He appeared not to have moved forward in terms of his attitude and was too "laid back" for Mr MacKenzie's business. When Mr Hotchkiss left Hi Fi Corner to return to Glasgow Audio, Mr MacKenzie recalled that he had been somewhat sheepish about handing in his notice.

[82] In late August/early September 2002, Mr MacKenzie found out that Glasgow Audio had been sold to Jonathan Turner of Holborn Hi Fi. The news of the sale surprised him. He knew Mr Turner who had been a junior member of staff at Hi Fi Corner. Mr MacKenzie would have been interested in acquiring the business of Glasgow Audio. He felt that the norm would have been for it to be advertised and for bidders to be invited. He had the capacity and no financial difficulties at the time. He would have been interested in Glasgow Audio because of its reputation, the likelihood that it would be profitable and its location. Mr MacKenzie knew that the defender was running the business after the deceased died. During that period, Mr Hotchkiss had taken to phoning Mr MacKenzie and telling him how unhappy he was at Glasgow Audio. Mr MacKenzie had never been told by any of his trade contacts that manufacturers were threatening to withdraw products from Glasgow Audio or indeed that they had been withdrawn. He would have expected to have heard that. Mr MacKenzie dealt with Cyrus Meridian, Roksan and Arcam at the time and had not heard of no such threats from them. Mr MacKenzie confirmed that it would be normal to have extensive information about a business such as Glasgow Audio before offering to buy. As a basic minimum he would expect to have had profit and loss accounts and balance sheets.

[83] Under cross examination Mr MacKenzie agreed that he would not necessarily know if other businesses were playing paying their accounts timeously, just if they were not being paid at all. He thought that Hi Fi Corner was probably the only business in the industry who always paid on time and always achieved settlement discounts. He felt that it was not uncommon for suppliers to be pressing for payment in relation to other businesses. Certainly he would want to know whether a business was paying on time before he offered to buy it. When it was put to him that the value of a Hi Fi business was in the suppliers, Mr MacKenzie responded that the value in such a business was in the customers. He did not think it would be difficult to obtain profit and loss account information about a business although he would not rule out buying a business that was unprofitable. While he had no detailed knowledge of Glasgow Audio's books, he had discussed the costings of the business with the defender. He had prepared an Excel spreadsheet and his view was that it looked as if it should be a profitable business. He thought it was a going concern.

[84] Mr MacKenzie did not consider that it was strange that the defender had met suppliers at a Coffee Shop. He had done so himself. He did not consider that there was anything wrong with meeting suppliers away from the business premises. When asked whether it was important that staff had literature on upto date trends in the Hi Fi business Mr MacKenzie said that in Hi Fi Corner they had stopped at taking some of the trade magazines. He did not consider they were adding value and he wanted more control over what was sold. In his business the management decided what would be sold and then trained the staff in those products.

[85] In relation to Mr Hotchkiss, one of Mr MacKenzie's concerns was that Mr Hotchkiss did not bring any pool of customers with him when he moved. Mr MacKenzie was asked whether the defender had ever come to him with a view to selling Glasgow Audio. Mr MacKenzie confirmed that she had not, although he knew that there was a long dispute in relation to a will and he had been asked whether he would be interested in supporting something jointly with her depending on the outcome of that dispute.

[86] Mr MacKenzie was asked about the way in which stock was demonstrated within the premises of Glasgow Audio. He had no particular difficulty with the way in which this was illustrated in the photographs 6/99 of process. It was put to Mr MacKenzie that he felt a considerable amount of goodwill towards the defender and felt that she should have inherited the business. He agreed with that.

[87] Mr MacKenzie agreed that the Hi Fi business was a fast moving one, although much depended on the particular products and brands. He confirmed that Nicholas Wearmouth and Gary Young had come to work for him. While the defender had introduced them, it was his decision to take them on. While they had not been particularly experienced he regarded them as very good employees. Gary Young stayed for 7 years and Nicholas Wearmouth also remained with Hi Fi Corner until he set up as a competitor. Mr Wearmouth was the most successful Manager he had employed for many years. He would have been made a Director in Hi Fi Corner had he not left. Both Mr Young and Mr Wearmouth achieved a level within his organisation that Mr Hotchkiss would never had been promoted to. He regarded Mr Hotchkiss as a "plodder" who was not completely committed to the business. His second job as a Bathroom Fitter illustrated that. Mr Wearmouth was much more ambitious.

[88] Mr MacKenzie had found it peculiar that Miss Mooney was removed from Glasgow Audio. He felt this was not something that the deceased would have wanted. He wasn't a close friend of the defender, but respected her. In relation to the photographs No 6/99 of process he felt there was a considerable amount of stock in the stockroom, more than at one of his own branches in Falkirk. His Falkirk Branch carried about £70,000 to £80,000 worth of stock and it was of a lower quality and value of that illustrated in the photographs. Looking at the stockroom exhibited in those photographs his gut feeling was that there was stock of considerably more value than that in his Falkirk Branch. He agreed that a factor in stock valuation was its condition and that a proper valuation would involve more variables than just looking at photographs.

[89] Under re-examination Mr MacKenzie confirmed that Glasgow Audio had continued to trade since Mr Turner took over, presumably profitably. Reverting to the issue of how seriously Mr MacKenzie had taken Mr Hotchkiss' complaints about the defender, Mr MacKenzie confirmed that he regarded Mr Hotchkiss as someone who preferred working for men. He had not liked Mr MacKenzie's co-director because she was a woman. Accordingly, Mr MacKenzie did not take Mr Hotchkiss' complaints seriously. Mr MacKenzie didn't regard the inexperience of Mr Young and Mr Wearmouth when they were taken on as a particular problem. He himself had been only 18 when he took over his first shop. Mr Wearmouth and Mr Young had motivation and passion for the business. Mr Wearmouth had done particularly well. In contrast with Mr Hotchkiss both of those young men were receptive to change.

[90] Allan Campbell was also called as a witness in the defender's case. Mr Campbell is 37 years old and currently works as a landscape gardener. He had worked for many years for the deceased first at Stirling Audio and then at Glasgow Audio. He was a sales assistant. Throughout his time at Glasgow Audio the deceased had worked full time in the shop as well as owning the business. Mr Campbell's recollection of the time when the deceased was ill and subsequently died was vague. After Mr Lamont died Mr Campbell confirmed that he assumed the business would carry on as normal under the charge of the defender. He had been assured that his job was safe, the shop continued to trade and payment of wages also continued. He was well aware of the committed nature of the defender's relationship with the deceased and he had also met the pursuer when she had popped into the shop from time to time prior to the deceased's death. During the period when the defender was in charge of the business of Glasgow Audio in 2002 Mr Campbell recalled that sales representatives would attend at the business premises to ply their trade although he couldn't be specific as to dates. He did recall that some of the sales reps stopped attending at the business premises some time after the deceased's death. He remembered that the defender had attended at the shop on Saturdays and once or twice per week in addition to check that the business was operating effectively. He confirmed that the defender had herself conducted meetings with sales representatives shortly after Mr Lamont's death. His recollection of the level of sales between January and June 2002 was that these appeared to him to be at much the same level as when the deceased was alive. There were no hard and fast targets for sales. Mr Campbell knew in broad terms what level of discount from full price he might be able to offer to secure a sale. Receipt books were kept recording all the details of sales and he and Mr Hotchkiss attended to the banking of the takings. He reiterated that sales in the month after the deceased's death followed the same pattern as before. People tend to buy Hi Fi equipment less in the summer where they will be involved in outdoor activities. Christmas was traditionally a very busy time although the defender was not in charge during any Christmas period. Mr Campbell felt that Mr Lamont's absence from the business made a difference to it. He had been a likeable person and it was well known that customers wished to deal with people that they like and respond well to. Mr Campbell recalled no instruction from the defender or anyone else not to continue the practice of taking good quality second hand goods in part exchange for new equipment after the deceased's death. All items in the shop had price tickets on them. There was a change to the trading days. The shop had been open seven days a week when the deceased was alive but he thought it had reduced to six days after his death.

[91] Mr Campbell confirmed that there was always stock in the shop during the period of the defender's control. He tended not to order it but he knew that someone must have done so. On occasions Mr Campbell would order stock himself and examples of delivery notes confirming his orders were put to him. Mail continued to be delivered to the shop and he was never asked not to deal with the mail. While he was unclear as to details, Mr Campbell's general impression was that there was no significant change in the way the business was run after the deceased's death. He had worked with Mr Wearmouth and Mr Young after they started. Their knowledge had been basic at the beginning but they were pleasant and enthusiastic. During the period in question Mr Campbell felt that the deceased was sorely missed. He had had so much product knowledge and a good feel for what would sell.

[92] Mr Campbell left Glasgow Audio because he had married and was looking to buy property. He decided that he could increase his income by working as a driving instructor and through a landscaping business. However the driving school had not worked out and when Mr Campbell was contacted by Jonathan Turner he agreed to return to work in the shop. He had no particular recollection of the list of items said to belong to the business of Glasgow Audio. He recognised some of the equipment as being items stocked in the past by Glasgow Audio. He certainly had no involvement in making any list of items said to be at 53 Queen Square. While he did recollect that the deceased took things home from time to time to try out he had never assisted the deceased with that.

[93] Under cross-examination Mr Campbell confirmed that prior to Mr Lamont's death the defender wasn't particularly involved in the business. Mr Campbell had tended to report to Mr Hotchkiss who ran the shop quite well and was good at sales. He did feel that Mr Wearmouth and Mr Young had been very inexperienced when they started although he acknowledged that Mr Wearmouth was certainly clever enough to be a manager. He did have some recollection that the defender might have met sales representatives in a café. He personally had no involvement in meeting with suppliers or representatives. On being pressed about whether sales representatives came to the shop after the deceased's death, Mr Campbell's position was that while the number of visits slowed down he could not say that no such visits took place. After the departure of a Mr Fisher and a Mr Orry who were involved in installations of equipment sometimes at customers' houses, Mr Campbell or Mr Hotchkiss undertook that work. He didn't know whether those part time members of staff had left voluntarily or not. He had been inconvenienced at the time when Nicholas Wearmouth and Gary Young were given weekends off. This affected both him and Mr Hotchkiss. During the relevant period he was always paid on time by the defender. There was no formal training in the business although if new equipment was being set up it would be discussed. He found Mr Wearmouth and Mr Young responsive and happy to take any advice on board. Mr Campbell thought he recalled vaguely an incident where Nicholas Wearmouth and Gary Young had dropped a television set. He thought Mr Hotchkiss had been angry as he always was if stock was damaged. On being shown the photographs at 6/99 of process Mr Campbell was far less critical than Mr Hotchkiss of the way in which the equipment appeared to be being demonstrated. The stockroom didn't look any different to him in the photographs than it was in all the years he worked at Glasgow Audio. He felt the amount of stock was consistent with what the business usually carried. He went so far as to say that if he walked in and saw the shop and stockroom as it was in the photographs 6/99 of process, "... it would seem to be quite a well stocked shop".

[94] Mr Campbell confirmed that he was not involved in the initial stock take undertaken by Jonathan Turner when he took over the business in August 2002. However he had been involved in numerous stock takes over the years that he worked for Glasgow Audio. He didn't see anything untoward about the level or condition of the stock in Glasgow Audio when he returned to work there in 2002. There was some damaged stock but that always happened from time to time. On the issue of the deceased having taken stock of the business home to test Mr Campbell said that the only pieces of equipment he had seen at the deceased's home were those items of Hi Fi equipment used for the funeral. Mr Campbell agreed that CDs and DVDs had been kept in the shop in a rack holding about 100 of each and piled high. He reiterated that while sales representatives seemed to come to the shop less after the deceased's death he couldn't say they disappeared completely. He agreed that there was certainly less stock in the shop after the deceased's death than before but not materially less, "just a little". After he was working for Jonathan Turner Mr Campbell felt there was less stock in the shop than was in the photograph 6/99 of process. On being shown Appendix 10 of 6/87 of process the stock valuation carried out by Jonathan Turner, Mr Campbell indicated he hadn't seen that document before, at least not in the form in which it was lodged. However, the stock listed in the valuation was familiar to him. It did not appear to be any stock take in which he had been involved. Historically Mr Hotchkiss had been responsible for the stock take of the business. Mr Campbell confirmed that he knew the deceased had driven a Mercedes motor vehicle. He had never used it although he thought other staff might have used it occasionally for deliveries. He did not consider that Gary Young and Nicholas Wearmouth had been treated preferentially other than that they had been given some weekends off. Mr Campbell was questioned further in some detail about the issue of the CDs and DVDs and where they were stored. He thought that CDs could go missing and that members of the public might take them from time to time.

[95] In re-examination Mr Campbell confirmed that while the deceased and Mr Hotchkiss had worked well together so far as selling to customers were concerned there was no doubt that the deceased was the owner and had the final say in any decisions. He thought that the deceased valued Mr Hotchkiss' services and that they had become reasonably close. Mr Campbell clarified that when he carried out a stock count it was with James Sharp who stayed at his home one evening. His recollection was that Jonathan Turner was trading in the shop at the time and that the stock take was done in the evening. Mr Campbell confirmed that the system for recording sales was manual when the deceased was alive. Sales receipts were kept until the end of the week and handed to the deceased. He couldn't specifically recall the Mercedes car being driven for business purposes by anyone in particular. He thought the vehicle was owned by the deceased.

[96] The third witness for the defender was Nicholas Wearmouth. Mr Wearmouth is 34 years old and is a director of a home cinema centre in Edinburgh. Prior to that he had been in the Hi Fi business. He confirmed his employment with Glasgow Audio in 2002. He was out of work when the deceased was ill and was asked to help out in the business. He agreed to do so. Mr Wearmouth had no recollection of Matthew Hotchkiss ever expressing dissatisfaction with his performance while at Glasgow Audio. He felt that he and Mr Hotchkiss and Allan Campbell all worked well together. He was never instructed to refuse to accept second hand goods in part exchange for new. He recalled a deposit system but said there was no fixed amount. He recalled sales representatives attending at the shop in Glasgow. He was able to name a Clive Atkins of Henley and a Bill Lee of Mission who he had dealt with at that time and with whom he still has a business relationship. Mr Wearmouth confirmed that while he was at Glasgow Audio in 2002 mail was delivered to the shop. There were price lists in the business premises which were used to determine the sale price. There were price tickets on the items in the shop. When invoices arrived for payment they were set aside for the defender to deal with. Mr Wearmouth knew Gordon Arnott who worked in the shop on a Saturday and who did the deliveries. He was a casual worker. Mr Wearmouth did recollect Andy Fisher and David Orry leaving but he couldn't remember the circumstances of that. There were no sales targets when Mr Wearmouth was at Glasgow Audio. The business relied on people coming through the door. There was considerable guidance on pricing from the manufacturers to which the sales staff stuck closely. Nicholas Wearmouth did recall Mr Hotchkiss saying that the volume of business was quieter than when the deceased was alive, but no information was given about the level of sales achieved on a daily or weekly basis. Stock was ordered by Mr Hotchkiss. There was no question of stock not being ordered as the business couldn't function without it. Mr Wearmouth was quite clear that suppliers such as Cyrus and Meridian did not demand return of demonstration models during the relevant period in 2002. Neither did Roksan or Arcam and he had heard of no threats of such a withdrawal. There was no significant change in the suppliers of the business and felt that the way in which the business was run was pretty static.

[97] With hindsight Mr Wearmouth felt that Mr Hotchkiss hadn't been the best shop manager in light of the lack of sales targets for the staff. Although he knew that the pursuer was the deceased's sister, Mr Wearmouth had had few dealings with her over the years. At some point during the first half of 2002 Mr Hotchkiss and Mr Campbell had indicated to Nicholas Wearmouth that they weren't particularly happy in the business. Mr Hotchkiss had his part time work as a fitter. Both colleagues went off to do other things. No one ever mentioned to Nicholas Wearmouth that there might be stock of the business held anywhere other than on the premises or in two lock ups. After Mr Allan Campbell and Matthew Hotchkiss had left the business the defender made an offer to Nicholas Wearmouth and Gary Young that they became manager and assistant manager respectively. He and Mr Young effectively ran the shop from 22 June to 30 August 2002. On 30 August the pursuer arrived in the shop with a gentleman. She said she was taking control and that he and Mr Young were to leave. There was a heated discussion during which the pursuer said that the business wasn't being run properly and that it would be better run by people the deceased had trusted. Mr Wearmouth was quite put out by that. He told the pursuer that specific customers were due to come into the shop that afternoon and suggested to her that closing would be unwise. He wanted to keep his job at Glasgow Audio. He remained on the premises only for about ten minutes after the pursuer arrived. He handed over the keys and the petty cash and the pursuer insisted that they left. The customer he anticipated would have come to the shop that afternoon had it not closed was a lady who had indicated he was going to buy a very expensive television for over £2,000. Mr Wearmouth confirmed that there were would have been a number of CDs and DVDs in the shop, probably less than 50 in total. No formal handover took place. The computer was in the shop and there was information stored on that. About two weeks later Mr Wearmouth discovered that the business was sold. He had not been back since. During the two months that he and Gary Young were in charge of the shop he felt there was an increase in sales. Although they had reduced the trading days from six days down to five that didn't seem to affect the level of sales and they didn't feel they needed to open the extra day. Nicholas Wearmouth knew that the average gross profit on an item such as an expensive speaker would be 35% or more.

[98] Under cross-examination Mr Wearmouth confirmed that he had been about 26 years old when he started working in Glasgow Audio. He had discussed his interest in audio equipment with the deceased when he was alive but it was ultimately the defender who approached him asking him to help out. Mr Lamont was in hospital at the time. On being pressed about the issue of the DVDs and CDs Mr Wearmouth confirmed that Glasgow Audio held fewer of these than Hi Fi Corner where he went to work subsequently. He had not paid close attention to the number of CDs which were a minor issue so far as he was concerned. He was clear that the number was more in the region of 40 to 50 than 100 to 150. On the day he left, Mr Wearmouth confirmed that that the sales receipt books for a 12 to 24 month period were all present in the shop. He hadn't been aware of any stock take. Otherwise all of the material that would show the trading since the deceased's death was on the premises when he left on 30 August. He had no reason to think they weren't there. They were kept in the storeroom and he hadn't removed them. The computer was on the desk when he left. He agreed that he could be mistaken that the shop had opened six days a week rather than seven prior to June 2002.

[99] Mr Wearmouth confirmed that he and Mr Young had been friends and had a mutual interest in disc jockeying which they had done together. That was the main reason he didn't want to work weekends. During the period he was running the shop Mr Wearmouth gave general reports to the defender about what was going on. His remit was to keep the shop going and achieve sales. He felt he was successful in that. The shop was busy when he was managing it. He personally held meetings with sales representatives and recalled no reticence on their part about coming to the shop. Any business mail that came to the shop he tended to pass to the defender. He knew of no pressure from suppliers and thought sales were at a decent level. He was aware of the organisation Mountainsnow, the buying group and he knew that it was important to be profitable to continue in that. He was not aware that there was any problem with the level of purchases being made through Mountainsnow. On being shown number 6/16 of process he agreed that the figures stated therein showed a drop but he hadn't previously been aware of the figures. He thought it was to be expected that the sales figures would drop after the deceased's death. Mr Wearmouth specifically recalled the sales representatives coming to the shop and bringing stock because he had been keen to interact with them and learn as much as he could about the business. While the defender was a full time teacher at the time she had operated a system of messages being left so that she could telephone at a suitable interval. There was regular contact with her. By August 2002 Mr Wearmouth knew that there was a dispute with Miss Lamont and that there was an application in Court for her to take over. The defender had told him about that in general terms. Nonetheless it was a bit of a surprise to him when the pursuer suddenly took over the business. Mr Wearmouth had general knowledge of there being discounts for prompt payment to suppliers but, as shop manager, he didn't expect to have full details of that. He recalled there being brochures in relation to equipment that was being sold in the shop. These would be delivered with the equipment. He regularly checked the brochures and price lists. There was a folder in the front of the shop with all the price lists held in it. There was no problem getting price lists when he was manager and there were racks and racks of brochures relating to equipment in the shop Mr Wearmouth seemed surprised at the suggestion being made to him that there were no brochures in the shop. He was aware that the defender had some meetings with sales representatives away from the business premises and didn't regard that as unusual. Mr Wearmouth was taken to the photographs at 6/99 of process in some detail. He identified some pictures of brochures in the shop at 6/99(iv)(3).

[100] When it was suggested to Mr Wearmouth that there had been evidence from the pursuer that there were no price lists in the shop on 30 August, Mr Wearmouth sounded surprised. He said that he and Mr Young were using the price lists that morning, that it was impossible to do the job without them and that up until the pursuer appeared in the shop he fully expected to be doing his job the next day. He specifically recalled having spoken to the customer who was thinking of buying an expensive television that morning. He was clear that the pursuer had arrived about lunchtime. When he handed the keys over to the pursuer on 30 August the relevant accounts and records were in the shop. He had been working on one sales receipt book at the time but there were 12 to 24 months of receipt books in the shop. Mr Wearmouth was surprised to hear that there had been a stocktake done in January 2002. He had not been made aware of that by Mr Hotchkiss. Indeed, he recalled Mr Hotchkiss suggesting that stocktakes were not done as a matter of course. The deceased had done all the ordering and knew what there was. Mr Wearmouth remembered finding it curious that there was no proper record of stock. It was put to Mr Wearmouth that during the period of the defender's control of the business deposits of 50% were sought from customers. He thought that unlikely, that level of deposit would put too high an obstacle in the way of a sale. So far as part exchange was concerned there was always an option to trade second hand items against new items although it played a relatively small part in the business operation. While there may have been an instruction from the defender to be cautious about the price for such trade-ins it was not stopped.

[101] On the issue of stock, Mr Wearmouth did not accept that the stock was run down by the defender. He felt there was too much stock in the shop in the period January to March 2002. The volume was adjusted appropriately thereafter. It was suggested to Mr Wearmouth that the Christmas stock would be ordered as early as July or August but he disagreed with that and was clear that it would be September before such ordering took place. He accepted that he and Gary Young had been involved in an accident in which a television set was broken. He recalled the incident and rejected the suggestion that Mr Hotchkiss had not been happy with him. The incident took place after 22 June when Mr Hotchkiss had left. Mr Wearmouth remembered phoning the defender with some trepidation. In the time he worked for Glasgow Audio he had only damaged one other item, an amplifier. On being shown appendix 10 of 6/87 of process, Mr Wearmouth was able to recognise the manufacturers and the stock listed but could not speak to quantities some 8 years after the event. Mr Wearmouth conceded that with hindsight he had not done a perfect job on all of the demonstration of items in the shop in 2002. However, he maintained that everything he dealt with had been properly labelled and that the shop was clean and tidy. On the trend of sales, Mr Wearmouth said that his recollection was that April and June were particularly quiet months but that in the last 2 months, those in which he and Mr Young were running the business, they had achieved sales levels only £6,000 or so short of the 2001 figures and that with fewer staff. He felt that he and Mr Young had performed well during that period. Mr Wearmouth did not have the details of all of the figures earned during the period January to August 2002 and could not comment on the accounting details. Matt Hotchkiss never discussed with Nicholas Wearmouth a complaint that responsibilities had been taken away from him. He accepted that after Mr Hotchkiss left the defender had retained people that were loyal to her and that she could trust.

[102] In re-examination Mr Wearmouth confirmed that he had some experience as the manager of a food outlet prior to working for Glasgow Audio. He felt he had gained good communication skills and was able to take on the job given to him in 2002. While he was with Glasgow Audio there were a number of key brands including Arcam and Meridian but there were many other suppliers. On the issue of the change to the opening hours, Mr Wearmouth confirmed that he had thought the shop was open 5 days out of 7 but accepted it could be 6. He was very clear that the shop was closed on a Sunday. He did not recall any particular pattern of days off and knew that he had worked on some Saturdays prior to June 2002. He felt he had had a good relationship with Mr Hotchkiss during the first few months of that year. There had been no suggestion from any of the sales representatives he came into contact with that Glasgow Audio was in any sort of financial difficulty. Neither Mr Hotchkiss or Alan Campbell had told Mr Wearmouth that they had resigned because of something the defender had done. Now when the pursuer had arrived in the business on 30 August she had not asked Mr Wearmouth to show her any other paperwork than the books being used that day, the cash, the keys and the till.

[103] The defender called Fiona McKeracher solicitor. Miss McKeracher is a 49 year old solicitor with Brechin Tindall Oatts. She qualified in 1984 and has worked exclusively in private practice. She is experienced in civil court litigation. In 2002 she was with Campbell Riddell Breeze Paterson and was consulted by the defender in relation to a potential medical negligence claim arising out of the deceased's death. She had been made aware that the defender and the deceased had cohabited for a long time. On issues relative to the current dispute, Miss McKerachar recalled that the defender's position had always been that there was a Will executed by the deceased in her favour. She had been instructed by the defender to assist in finding a Will, efforts had been made to find a Will and she recalled that there had been a copy Will available. Miss McKeracher had been the principal solicitor involved when an action of declarator of marriage was raised. On being shown the Summons No.6/12 of process Miss McKeracher did recall an issue of interim interdict had been raised but had no memory of the details. Her view was that the ongoing declarator of marriage action might have imposed a duty on the executrix dative not to intromit with the estate pending its conclusion. She could not remember if that was the clear advice given at the time. She did recall that the defender had asked for her advice on whether she could run the business of Glasgow Audio pending resolution of the dispute. Miss McKeracher had been unsure of the answer and had sought counsel's advice. The advice received from counsel was that there was no difficulty with the defender running the business in the circumstances but that would be subject to any duty to account that may subsequently arise. Miss McKeracher was shown correspondence between herself and Mr Picken. Her memory of the detail was vague given the passage of time. What she was clear about was that in the letter she sent to Mr Picken which forms No.6/13 of process, there had been an offer of a meeting written on the defender's instructions. She was clear that no such meeting had ultimately occurred. She thought she would remember if it had. Her general recollection was there had been no resolution at all of the dispute between the parties. She recollected that the dispute was vitriolic in character but she had no recollection of an allegation being made that the defender was in bad faith.

[104] Under cross examination Miss McKeracher recalled the defender being very upset when she started acting after the death of the deceased. She had arranged for an advert to be taken out in either the Law Society Journal or a newspaper. She had also written to a large number of organisations including solicitors in an attempt to find the Will. She had no recollection of accounts requested by the pursuer's agents ever having been sent. It was put to her that the understanding between the parties was that accounts would be produced before the meeting offered by the defender. Miss McKeracher had no such recollection. There had been a consultation with counsel before the raising of the declarator of marriage proceedings but without her file and relative file notes it was difficult for her to put in context the chronology of events. There was a change of agency in about 2003 when Miss Mooney consulted another solicitor. Before that, Miss McKeracher could not recall seeing any accounts of the business although she thought she must have asked for them. Her recollection in relation to the action of declarator of marriage was that the advice given was that there was a problem with proving the necessary repute. She thought that ultimately counsel had advised that there was no reasonable prospect of success. Miss McKeracher had no recollection of there being an issue about stock allegedly belonging to Glasgow Audio but held in the deceased's home. She did remember something about a car. She thought it was an old car but had no recollection of who had owned it or what the issue was. She was clear that she had not found the defender to be resistant to co-operating. She was aware that an impasse was reached with the other side and that the dispute was far from amicable, but she thought that the offer of a meeting at the defender's instigation suggested that she was willing to negotiate. She had not found the defender to be intransigent in relation to the issues and she had instructed Miss McKeracher to find a way forward. When it was again suggested that the pursuer would expect information and accounts before agreeing to such a meeting, Miss McKeracher indicated that it was not her recollection that there was any such intention. The impression she had was that the defender felt very strongly and genuinely that a Will existed. Miss McKeracher had written to the Sheriff Clerk objecting to the pursuer being appointed as executrix dative. She was shown No.6/107 of process in this respect. She did not recall the defender's response to allegations being made by the pursuer's agents in relation to the trading position of the business.

[105] In re-examination Miss McKeracher recalled that there were consultations with counsel about the effect of an interim interdict in the declarator of marriage action if granted. After it was decided that the defender could no longer sustain an argument that she should be running the business she agreed to remove from it and to hand over the keys. Other than that she was unclear as to the mechanics. She did recall that the defender was co-operative in the process of handing over once she had agreed to do so.

[106] The defender also called Gary Young to give evidence. Mr Young is 30 years old and is now a recruitment consultant. In the past he had managed two

hi-fi shops and assisted in another. He had first helped in the business of Glasgow Audio when the deceased was ill. He was asked to help because he had some previous experience in a hi-fi shop in Edinburgh. He was given some informal training by Mr Hotchkiss who would listen to him selling products and then discuss the process. He recalled that sales representatives would come into the shop to present a new product range and that they would assist with training in setting up the equipment. He completed all his informal training successfully. He felt he got on very well with Mr Hotchkiss who gave him a good reference. He did not recall Mr Hotchkiss ever expressing dissatisfaction with his work. He recalled being instructed by Mr Hotchkiss to ask for a deposit. It would be about 10% of the price although it depended on the item and could be more than that. There was no fixed rule. There was no instruction not to sell an item if there was no deposit in place. He was sure that he had been involved in taking second hand items or used goods in part exchange for new. He was never instructed not to speak to company representatives. He recalled mail being delivered to the shop while he was there in 2002. He had no recollection of being given sales targets by Mr Hotchkiss. Everyone who worked in the shop had responsibility for trying to generate sales. If he required to order stock he would be given authority for that by Mr Hotchkiss. His memory of Glasgow Audio was that it was a good business and he was not surprised that Jonathan Turner of Holburn Hi-Fi wanted to buy it. He had heard rumours that Mr Turner wanted to buy while he was still working in Glasgow Audio. In relation to CDs and DVDs being held in the shop Mr Young did recall that there might have been 100 or so of those. He recollected the day he was asked to leave the business. The pursuer was there and he thought Mr Turner was too. He could not remember exactly at what point this had taken place. Mr Young explained that he suffered from epilepsy and to some extent this had affected his memory for detail.

[107] Under cross examination Mr Young agreed that while he did not have any recollection of stock being damaged in the shop that could be attributable to the difficulty he had with detailed recall because of his condition. He did not have a permanent general memory loss but there were some aspects of events and places that he could not recall. His general recollection was that Glasgow Audio was a good place to work in as was Hi-Fi Corner where he worked subsequently for some years. When he and Mr Wearmouth were working at Glasgow Audio he recalled that they would both open mail, he did not have a clear memory of invoices coming to the shop but he did not consider that to be unusual. It was the practice at Hi-Fi Corner that invoices were not sent to the shop. He did remember Mr Hotchkiss always sitting down with sales representatives when they were in the shop and that he and Alan Campbell had the opportunity to speak with them after that. He was clear that while he needed approval before he could order stock that approval was given fairly readily. The ultimate decision lay with the defender who wrote the cheques.

[108] In re-examination Mr Young confirmed that Mr Hotchkiss had given him a reference when he went to work for Hi Fi Corner, albeit that Mr Hotchkiss was no longer working at Glasgow Audio. He had kept contact with some of the sales representatives that he had first met at Glasgow Audio when he went to work at Hi Fi Corner. Although Hi Fi Corner dealt with mid-range products and was one level down from Glasgow Audio which dealt with high-end products there was an overlap between the items sold in both.

[109] The defender also called James Alistair Aitkenhead, a 59 year old solicitor from Glasgow. Mr Aitkenhead has practised as a solicitor for about 35 years. He had professional dealings with the deceased for many years prior to Mr Lamont's death. He had been aware that the defender was the deceased's partner. In 1992 Mr Aitkenhead had suggested to Mr Lamont that it would be appropriate for him to have a Will. Mr Lamont duly instructed Mr Aitkenhead to prepare a draft. Relative file notes of Mr Aitkenhead, No.6/53 and 6/64 of process were confirmed as relating to those instructions. The draft Will, No.6/57 of process was put to Mr Aitkenhead who confirmed its terms as being in accordance with Mr Lamont's instructions. Mr Aitkenhead sent the draft Will to Mr Lamont together with a covering letter, No.6/55 of process. However, despite two letters of reminder Mr Lamont had never completed that Will. In about September 2000 Mr Aitkenhead raised the issue of a Will again. Mr Lamont told him that he had a Will and that it was held with another firm of domestic conveyancing solicitors. Mr Lamont indicated that those solicitors held Wills for both him and the defender. The terms of the discussion appear in a file note No.6/58 of process.

[110] After Mr Lamont died Mr Aitkenhead acted for the defender until about April 2002 when a clear conflict of interest arose. Mr Aitkenhead had professional dealings with Miss Lamont also. As it seemed litigation might ensue he suggested to the defender that she would require to have alternative legal representation. During the period he was acting for the defender after the deceased's death, Mr Aitkenhead advised her that pending resolution of the issue about a Will there were duties owed to the estate. He considered the best way of resolving matters ad interim was to involve the accountant of the business in the decision making process, to keep the Clydesdale Bank informed and to have them set up a facility to enable matters to continue. Those matters were all attended to either by Mr Aitkenhead or his colleague Mr Hay. The defender accepted all advice tendered to her. Mr Cairncross attended a meeting at Mr Aitkenhead's office. An issue arose in relation to due to an insistence on the part of HMRC that the defender register as a new trader. Mr Aitkenhead did not consider that the defender was acting unlawfully. He felt the advice he gave was appropriate. He recognised that the lack of a signed Will presented a problem. He was comforted by the support of the Bank and the accountant. No question of the defender being in bad faith arose. When time passed and no Will turned up the option of an action of declarator of marriage was discussed. The defender had advised Mr Aitkenhead that she thought she was able to keep the business going. Although he was aware she had a full time job as a teacher she was willing to devote time to the business as well and the situation was satisfactory.

[111] Under cross examination Mr Aitkenhead agreed that there had been an issue between Mr Lamont and a colleague of his at the time his firm acted in the lease of the premises of Stirling Audio. Mr Lamont had taken that business elsewhere but had returned to see Mr Aitkenhead. In advising Mr Lamont to make a Will, Mr Aitkenhead had been mindful that, in the absence of a Will, it might be difficult to resolve the succession to the business. Mr Aitkenhead did not know why Mr Lamont had not signed the particular Will that he had drafted. He had sent a follow-up letter after four weeks and a further one four weeks after that. He then dropped the matter but took the opportunity when his client was in the office some years later to raise the issue again. That was when Mr Lamont had explained that he had made a Will that was being held by another firm of domestic conveyancing solicitors. There was no discussion about the terms of those Wills. After Mr Lamont died and Mr Aitkenhead saw the defender, it was agreed that he would write to a firm of Edinburgh solicitors named by Miss Mooney as the firm likely to have the Will. The Clydesdale Bank had also been asked if they had a testamentary writing. A large number of documents were put to Mr Aitkenhead which he confirmed comprised the various correspondence he had written in an attempt to find the Will mentioned by the deceased in the meeting of September 2000. Mr Aitkenhead could not recall asking the defender whether she held a Will with a firm of solicitors. He asked her for names of all solicitors that she and Mr Lamont had had dealings with. Particular inquiry was made of Barton and Hendry, Solicitors in Stirling. The solicitor from that firm had moved to a different firm by the time of Mr Aitkenhead's investigations. The solicitor had been quite vague but there was reference to a fee note which referred to advice given to the defender and the deceased in relation to the preparation of Wills for both of them. The solicitor who had acted when he was at Barton and Hendry but had moved firms was a Roderick Stewart. 6/42 of process was a file note of a conversation between Mr Aitkenhead's colleague, Mr Hay, and Mr Stewart. Mr Stewart appeared to have confirmed to Mr Hay that he held no Will for the deceased. Mr Aitkenhead was concerned and surprised that no Will had turned up. After eight weeks or so he felt it would be appropriate to advertise to see if a Will would turn up. An advert was placed in the Journal of the Law Society of Scotland. By the summer of 2002 Mr Aitkenhead had made clear to the pursuer, Irene Lamont, that it would not be appropriate for him to deal with either party given the likelihood that litigation would ensue. Mr Aitkenhead did not think he had advised the defender to keep the Lamont family informed of the outcome of the search for the Will until after the advertisement period.

[112] Mr Aitkenhead had been comforted by the fact that Mr Cairncross the accountant knew the business well and was in a position to keep an eye on it if necessary and deal with the bank manager. At the meeting in Mr Aitkenhead's office Mr Cairncross had been able to give an approximate figure for the profits of the business prior to the date of death. So far as the Mercedes motor vehicle was concerned, this had come up in conversation but Mr Aitkenhead could not recall what was discussed other than the type of car. He was unaware that the defender had transferred the car so that she was the registered keeper of it. . So far as he was concerned the main assets of the estate were the house, the life policies and the business. Mr Aitkenhead was shown two file notes 6/71 and 6/72 of process. The second of these recorded that there had been a family meeting that was not helpful. It was thought that the pursuer was likely to be difficult. In February 2002 Mr Aitkenhead had had no reason to think there was any difficulty in the various family relationships prior to the deceased's death. By March 2002 (Mr Aitkenhead's file note 6/75 of process) Mr Aitkenhead was concerned that problems were going to arise if no Will was found. However he placed some reliance on the conversation he had had with the deceased who had confirmed to him that such a Will existed. Mr Aitkenhead believed the deceased when he had said that he had made a Will. When it became clear that no principal Will was likely to turn up, the issue of declarator of marriage proceedings was raised but Mr Aitkenhead's firm were not prepared to take that matter on and advise Miss Mooney to seek separate legal advice.

[113] Mr Aitkenhead confirmed that he had undertaken certain matters for the pursuer prior to her brother's death and he continued to do so for a short period thereafter. There was never any question of Mr Aitkenhead acting for both Miss Lamont and Miss Mooney in relation to the issue in dispute between them. Mr Aitkenhead was quite clear that he had explained to the defender that she should maintain and run the business until matters were resolved. Mr Aitkenhead had no particular knowledge of Mountainsnow or of the issue of shares in that buyer's group. Mr Aitkenhead agreed that the most likely person to hold a Will for the deceased was Mr Stewart who had been with Barton and Henry in Stirling. His colleague Mr Hay had been surprised that Mr Stewart was so vague about Mr Lamont when they spoke by telephone. When pressed about whether the deceased was lying to him when he said he had a Will, Mr Aitkenhead was clear that he did not doubt it at the time and that he still did not doubt it. He considered that a Will was in existence and was surprised it had never turned up. Mr Aitkenhead was not particularly surprised that the deceased might not have shared the details of where the Will was kept with the defender. He had a number of clients in a similar situation. When the defender had come to see him after the deceased's death she was distraught. She told Mr Aitkenhead that she thought that Mr Lamont would have wanted him to deal with the executry. While the defender was determined that there was a Will, she was aware that if it turned out that none could be found it would be for the pursuer and her family to take over the administration of the estate. Mr Aitkenhead had no reason to think that the deceased had anything other than a good relationship with his sister and with his parents.

[114] Mr Aitkenhead recalled that the summer before the deceased died his business had increased in profitability. At the time of his death he was interested in acquiring a further branch. He was told that the defender had effectively run the business for some weeks prior to the deceased's death and albeit that he was concerned because of her recent bereavement, he reiterated that he felt with the accountants on board the arrangements in place were appropriate.

[115] In re-examination Mr Aitkenhead agreed that if the Mercedes vehicle had been transferred immediately after the deceased died, then that would be before the defender had consulted him. He did not recall seeing any DVLA documents at all in relation to the car. He was not aware of any dispute about the assets of the business including the car or any stock said to be held other than on the business premises Mr Aitkenhead confirmed that a party who has de facto possession of an estate's assets holds them in a fiduciary capacity, as an agent of necessity, for the beneficiaries. He agreed that there was often an overlap between the executors and beneficiaries in this context.

[116] The defender also called Ronald Cairncross in her case. Mr Cairncross is a 73 year old retired chartered accountant. He practised as a CA for about 46 years. He was introduced to the deceased by a mutual friend and attended to the accounts of Glasgow Audio. He was aware of the committed relationship had with the defender. He had had a discussion with Mr Lamont about the terms of a will. The deceased told Mr Cairncross that everything would be left to the defender.

[117] After the deceased died, Mr Cairncross was instructed to produce accounts to the date of death and then to produce a set of accounts for the period of Miss Mooney's administration of the business. On being shown a letter to Mr Picken of Black Hay & Co of 19 December 2002 enclosing accounts. Mr Cairncross recalled that he had sent the accounts to the date of death to that firm. Thereafter he understood that the accounts he had prepared had been accepted so far as the estate and HMRC were concerned. When he prepared the accounts Mr Cairncross had a trial balance. He couldn't recall how the stock figure was arrived at. He thought it would be relevant to the level of purchases. His trial balance came from all the documents of prime entry that he had had access to. So far as the accounts for the period of the defender's control were concerned, these were those produced at Appendix 2 of 6/87 of process. Again these were prepared from documents of prime entry albeit that one or two of the figures were estimates of expenses to be clarified. The reason there was no accurate stock figure for that period was because the defender was unable to prepare one, having been denied access to the premises at Great Western Road from the end of August 2002. The defender had given Mr Cairncross the best estimate she had of the stock she carried in the shop. He was content that it seemed reasonable. Mr Cairncross had never had any reason to amend either the accounts he had prepared to the date of the deceased's death or those for the period of the defender's control of the business. The accounts he prepared for that period illustrated a surplus of net assets and no liabilities at the end of the period. The business seemed to be in a healthy condition. Mr Cairncross himself had prepared the tax return for the tax year to 5 April 2002. A copy was produced to the Sheriff Court in the action in respect of VAT. Those documents are contained within No 13 of process. The tax return had subsequently been altered by a note on box 23.5 that the executors wanted to have the accounts independently examined. Mr Cairncross had never had any dealings with the pursuer.

[118] Mr Cairncross used an organisation called Office Bureau Services, operated by his son, Brian Cairncross, to prepare the trial balance. He had complete confidence in his son's organisation. He used the trial balance provided by them to prepare the accounts. At no time was he required to carry out an audit. Mr Cairncross was asked a number of questions about the detail of the accounts. He confirmed that he had been preparing the accounts for Glasgow Audio since 1995. His recollection was that there were no significant variations in the average gross profit percentage in each year's account, and that he recalled that it was in the region of 31-32 per cent. During the period of the defender's control it was slightly lower. He could not remember the precise figures. He was asked to look at 7/89, 7/90, 7/91, 7/92 and 7/93 of process which were all the previous years' accounts for the business. He was asked to confirm from those what the gross profit percentage was in each year. In fact the range was from 35.9% to 38%. The last period of trading, that immediately prior to the deceased's death had shown a drop in gross profit percentage of about 4%. This was a sizeable drop which might be attributed to the fact that the deceased hadn't been available to make sales for two to three months prior to his death. He was not at all surprised to find that the gross profit percentage had reduced further during the period of the defender's control. The deceased had been the "principal mover" in the business when he was alive. The expectation was that in his absence the business would not do so well.

[119] Under cross-examination Mr Cairncross was again taken through the accounts he prepared at the date of the deceased's death which appeared at Appendix 1 of 6/77 of process. He was also shown some explanatory notes to the accounts for the defender's period of control. He did not prepare those explanatory notes. Some time after the accounts had been prepared he recalled that questions about the accounts had been raised by a third party but he couldn't remember the details. Mr Cairncross accepted that he had delegated the task of preparing a trial balance from the source documentation to a third party, namely his son's organisation. He was clear that Office Bureau Systems had processed every relevant piece of paper. Office Bureau Services had been formed by Mr Cairncross splitting his business in two. His son attended to the book-keeping side of the business and Mr Cairncross dealt with the aspects for which a chartered accountant's qualification was required. And book-keeping for Glasgow Audio was probably done three-monthly when the deceased was alive. This would coincide with the need for a VAT return each quarter. Office Bureau Services also assisted with processing wages through the PAYE system and various other matters. Mr Cairncross could not recall the detail of the transition from the PAYE system used prior to the deceased's death and that used by the defender. And Mr Cairncross had no doubt that the book-keeping operated by his son's business was full and accurate. Mr Cairncross was challenged about some of the figures in the balance sheet for the date of the deceased's death including the figure for VAT and stock. He was unable to comment further on how each figure had been calculated given the lapse of time. What he did know was that he always sought vouching of each figure to be inserted in the accounts. Everything was processed up to the date of death but some documents came in after the date of Mr Lamont's death. So far as the Mercedes motor vehicle was concerned, Mr Cairncross had a recollection that the deceased had traded one vehicle and bought another. On the issue of the defender being registered for VAT during her period of stewardship, Mr Cairncross recalled that an issue had arisen about whether or not she should have been so registered. For that reason no VAT quarterly returns were submitted pending resolution of that issue. There had been at least one VAT return prepared. Mr Cairncross did not take responsibility for submitting VAT returns, simply in assisting in their preparation. Some documentation had not been submitted until quite some time after the defender ceased running the business. Mr Cairncross attributed that to the manner in which she had been removed from the business in August 2002. The accounts for the period of Miss Mooney's stewardship were eventually prepared in 2004. While Mr Cairncross had probably held some documentation before that, it was difficult to prepare the accounts without all the documents of prime entry. The defender had not been in a position to conduct a stock take. When he prepared the accounts for the period of the defender's control Mr Cairncross included figures from the deceased's capital account into the defender's accounts. All of the assets and liabilities at the date of death were included in the opening account for the defender. Mr Cairncross considered that was the correct approach. It was the same business with someone else operating it. His understanding at the time had been that the defender was the "rightful owner" of all of the deceased's estate. That accorded with what the deceased had told him would happen. He accepted that others would take a different view on whether it was appropriate to transfer the capital account of the deceased to the defender into the defender's accounts in those circumstances. He had some recollection of the deceased having taken stock from the business home. He didn't see anything irregular about that. He wasn't aware of any stock having been held in the house at the date of death.

[120] It was again suggested to Mr Cairncross that the figures provided by Office Bureau Services from the source documents might be inaccurate. Mr Cairncross was clear that the trial balance reflected the documentation supplied by the business. The figures were entered on a computer by his son and his staff. Mr Cairncross was pressed again on the issue of his having transferred the capital account of the deceased into the defender's accounts. He reiterated that he did what he believed to be correct. It had been his clear understanding that the business had been left to the defender in the deceased's will. In December 2001 shortly before the deceased's death he told Mr Cairncross that in the event of anything happening to him everything was going to the defender. The discussion took place in the evening at the deceased's home which at that time was round the corner from Mr Cairncross' office. The conversation took place when Mr Cairncross had been picking up some documents for processing from the deceased's home. The deceased had spoken to Mr Cairncross as a friend. Mr Cairncross understood that the deceased's wishes were as stated in his will. When it was put to Mr Cairncross that he was lying about that conversation, he confirmed that his son could verify the position as he had gone to meet him afterwards. He had subsequently told the defender of the conversation he had with the deceased. The context of the conversation had been that the deceased was ill. Mr Cairncross was clear that the deceased had mentioned a will in which everything was left to the defender, his "common law wife". Mr Lamont was visibly unwell during the visit, he had lost weight and his pallor was unhealthy. When challenged about the date, Mr Cairncross said that he thought it was December, that it was certainly not long before the deceased died and that while some eight or nine years after the event he could not be certain about the date, he was clear that the meeting had taken place. Mr Cairncross fully accepted that he felt the defender had been unfairly treated. As he had been made aware of the deceased's intentions, he felt strongly that these should have been honoured.

[121] Mr Cairncross accepted that the normal rule was that when a sole trader died anyone taking over the business did so as a new business rather than a continuation unless it was being run by the executors on behalf of the estate. However, Mr Cairncross reiterated that because he thought the business had been left to the defender in a will, he thought that the assets in the deceased's capital account would transfer to the defender's capital account. He thought that the defender was the deceased's legal representative. The accountant's report in the accounts was in standard form and made clear that the responsibility lay with the proprietor. As it happened Mr Cairncross had retired from the Institute of Chartered Accountants when he was 65 in March 2002. The last accounts he prepared were not done by him as a practising chartered accountant. Mr Cairncross had moved to Fife I March 2002 but maintained an office in Glasgow for a period thereafter. Mr Cairncross did not accept that by 30 August 2002 on the face of the accounts the business was insolvent. While it was not profitable during the period of the defender's trading, the business had assets. Mr Cairncross agreed that a drop in the gross profit percentage down to 1.2% would call for explanation and would be wholly unacceptable. However, whether or not that was the gross profit percentage would depend on whether the figure for stock was that used by him or that used by Wylie and Bissett. He did recollect a conversation he had had with Gill Smith about the accounts. She had asked him for an explanation of his figures but didn't give him hers. Insofar as there were differences in the figures for purchases and sales, Miss Smith may have taken a different view on the invoices produced. Mr Cairncross had ascertained that the figures in his accounts reconciled to the bank statements.

[122] Reverting to the car, some capital allowances had been claimed although these were reduced to reflect the fact that the car was sued privately by the deceased. Mr Cairncross was taken in detail through the accounts of the business to see how the car had been reflected in those. The accounts prepared for the period of the defender's control assumed that the car would be handed back to the estate at the end of August 2002. Mr Cairncross recollected that he had attended part of a meeting that took place in Mr Aitkenhead's office in February 2002. He could not recall the specific details of what had been discussed that day.

[123] During the period that the defender ran the business, Mr Cairncross had not been involved in its day to day running but he had talked with the defender regularly. He believed at the time that the defender had the skills to run the business. She had held a responsible position as a head teacher and she had been involved in the business side of Glasgow Audio when the deceased was ill. Of course she had little or no experience of audio equipment but she had experience of management. He was unaware of any pressure from creditors during the period January to August 2002. He had not been given any final demand notice from creditors when the accounts were being prepared. He had never seen the documentation relating to the level of trading through Mountainsnow. On being shown the cheques that formed 6/86 of process, Mr Cairncross confirmed that the signatures on all of these appeared to be that of the deceased. Any cheques written by the deceased but not honoured by the bank at the date of death, it wouldn't necessarily be picked up when preparing the accounts and the figure would be included in the entry for creditors.

[124] In re-examination, Mr Cairncross agreed that he may have had some discussion with the defender about the explanatory notes prepared by her to Appendix 2 of 6/86/87. He had never been asked to revise the figure for VAT in the accounts for the period to 30 August 2002. In relation to the delay in producing the accounts for the period of the defender's control, Mr Cairncross confirmed that there had been a great deal of confusion about ownership of the business and he hadn't understood there was a pressing need to finalise the accounts for that period. Insofar as the deceased taking stock home to test was concerned, if any items had been taken and not returned, Mr Cairncross confirmed that those should be treated as drawings and should be accounted for in the business accounts in that way. When his attention was drawn to the figure of £63,579 in the revised balance sheet prepared by Miss Smith at Appendix 6 of 6/87 of process, Mr Cairncross confirmed that if that was the figure counted by the purchaser it seemed extremely low. He could not say why from his own knowledge it would be so low but felt that it must be either because some stock hadn't been counted or some stock had been removed. It was certainly an abnormally now figure compared with the previous six or seven years. Mr Cairncross agreed that he had been asked to write a letter confirming that he regarded the defender as a fit person to run the business. He had written an open letter and that appeared at 6/90 of process. Mr Cairncross agreed that the definition of a business manager would not require that person to be on the business premises on a full-time basis.

[125] The defender also lead evidence from Crawford Herald. Mr Herald is a 60 year old tax consultant with Jeffrey Crawford & Co in Edinburgh. He had long experience as an employee of the Capital Taxes Office (as it then was) of the Inland Revenue. He was instructed in the summer of 2003 by the defender's former agents to deal with a VAT problem that had arisen. HMRC had raised some assessments against the defender that were centrally generated in the absence of VAT returns. There were two periods for which HMRC indicated that quarterly returns were due. Their view was that the defender should have been registered for VAT from January 2002 onwards and two returns were due for the period year that she had had control.

[126] Mr Herald had become involved on the defender's behalf in the Sheriff Court action raised by the Advocate General for payment of £17.639 for unpaid VAT. When he was instructed he contacted HMRC and said that he would be lodging an appeal on the defender's behalf and asked them to desist from recovery pending that. The appeal was taken on the basis that there was no requirement on the defender to register for VAT. Mr Herald's view was that the representatives of a deceased can carry on the obligations of the deceased in terms of submitting VAT returns and paying the VAT due. Accordingly he regarded that the deceased's registration was sufficient pending the resolution of the dispute about ownership. Ultimately it was agreed with HMRC that the Sheriff Court action would be sisted pending the outcome of the present action. The appeal before the first tier tribunal was also sisted. Mr Herald's understanding was that the business of Glasgow Audio had continued after January 2002 in the same form at least until August of that year. Mr Herald had also looked at the tax return for the period to April 2002. He confirmed that 6/103 of process is the document he had been asked to consider. He had noticed that an additional page 9 of the tax return had been prepared by the representatives of the estate with a completely different narrative to that originally submitted. He thought perhaps the estates representatives had in mind issuing an amended tax return and that this would be part of the submissions. The deceased's representatives would be responsible for the tax return.

[127] Under cross-examination Mr Herald confirmed that this position was that the defender ought to have to no requirement to register for VAT and that the VAT liability for the period of her control should attach to the representatives of the estate. If the defender had been advised to register for VAT then that was an error. There is provision for someone to de-register in such circumstances. A fairly informal written application is made. The argument being run in the appeal with HMRC was that the defender should be allowed to de-register. Even where the defender was carrying on the business it would still be the representatives of the estate who would be liable for VAT in Mr Herald's view. Mr Herald referred to Regulation 9 of the 1995 VAT Regulations. This regulation, he said, was governed by section 46 of the 1994 Act. Regulation 9 deals with registration matters and Regulation 30 deals with accounting for VAT. It is clear from those that it is the personal representative of a deceased who registers for VAT. The regulations allow a year for representatives to be appointed. A liberal view is taken by HMRC. It doesn't depend on who had control. There is a degree of latitude but HMRC would expect to see a piece of paper formally appointing a personal representative. They would look for evidence of who was appointed as representative but would not insist on a new registration. It was not uncommon for mistakes to be made in terms of HMRC insisting on a new registration when none was necessary. It was put to Mr Herald that his interpretation of the regulations was wrong and that Mr Aitkenhead had been correct to advise the defender that she required to register for VAT. Mr Herald disagreed with that. If his appeal was successful the effect would be to absolve the defender from any VAT liability. Mr Herald confirmed that any purchaser of Glasgow Audio would of course require to register the business for VAT if it had been sold as a going concern. He agreed that had the business been left to the defender in terms of a will she would require to have registered for VAT but not in the circumstances as they turned out to be. Mr Herald clarified that it wasn't the Sheriff Court action against the defender that was sisted but the first tier VAT Tribunal appeal.

[128] In re-examination Mr Herald confirmed that in terms of a retail outlet the requirement to register for VAT or otherwise would be the same whether the business had been in sole tradership or an incorporated entity.

[129] Robert (Bob) Crawford was then called by the defender. Mr Crawford is a 58 year old chartered accountant and tax adviser. He has been a member of the Institute of Chartered Accounts since 1977 and has been instructed in various disputes relating to business valuation and tax. He was instructed by the defender in December 2009 to consider whether the claims made by the pursuer as presented by Gill Smith were well-founded. He also considered a report from Fiona Martin of Tenon. He had seen a number of documents including the sale agreement between the pursuer and Jonathan Turner, the various reports from Gill Smith and ultimately No 6/104 of process, the revised Appendix 14. He had produced his own report, No 7/108 of process. After the various revisals made by Gill Smith he had produced 7/131 which was a summary response to what he understood to be Gill Smith's revised position. He had had one meeting with her. At that meeting the accountants looked together in detail at the claims being made. They discussed Miss Smith's workings, and how she had come up with her original figure of £60,000 for the claim.

[130] Looking at Appendix 14 of 6/87 it was clear that the £133,985 was used as the figure for the assets of the business taken over by the defender during her period of control. That figure included the items alleged to have been in the deceased's home but said to be stock of the business. Mr Crawford had pointed out that if these items, said to be worth £9,221 were assets of the business they couldn't also be included as a separate claim. Further, the motor vehicle, the Mercedes appeared to be in Miss Smith's calculation three times. It was in the original £133,985 figure and then claimed separately in the calculation of loss. Thirdly, Gill Smith had failed to notice that the bank account of the business was not taken over by the defender but was closed and the sum of £6,994 was returned. Fourthly, the creditor's figure was higher than that allowed by Gill Smith.

[131] Of more significant concern was the issue of the figures for stock. Mr Crawford said that the estate's position had to be that the defender should account to it for the stock she had taken over and used immediately following the deceased's death. The figure for the stock taken over by her was about £130,000. That was the cost of stock bought by the deceased. The defender had not been a party to the decision of the pursuer's executrix dative to sell that stock. There was no indication that the correct figure for the stock sold by the pursuer, used by Miss Smith was correct. Further, in relation to the "loss of profit" for the period of the defender's control this appears to have been made up by taking the defender's turnover of £177,170 and then assume that she ought to have made the same gross profit percentage on the deceased as he had done when alive. To achieve the alleged loss, Miss Smith deduced what she said was the gross profit earned by the defender from the gross profit that the deceased would have earned on his gross profit percentage. As a general rule if a gross profit figure changes by more than 5-6% serious questions would be asked. Miss Smith alleged that the gross profit was 1.2%. This would indicate that something had gone seriously wrong such as stock being sold at too low a figure or damaged or stolen. Mr Crawford was not aware of any such explanation for the figures being available. It was important to understand that the figure used by Gill Smith for closing stock was the sale price not the cost. Accordingly a different basis was used in estimating a value for opening stock and closing stock for the period of the defender's control. Mr Crawford analysed what a claim of £60,000 for "loss of profit" meant. He noted that by working for a year in his business the deceased had received £45,301, £72,721 and £65,977 for the three previous years trading. The sum Miss Smith originally said should have been earned as gross profit by the defender was accordingly not far off what the deceased's business earned in a whole year when he was alive. On an average annual turnover of £424,470 the deceased's net profit had been £61,333 per annum. This was a margin of 14%. Only net profit would be available to the business, not gross profit. Further, Miss Smith's calculation assumed that the business after the deceased's death was the same in terms of overheads as it was prior to his death. In fact additional staff were required. In summary, Mr Crawford considered that, even on the basis that the business ought to have made roughly the same amount of money at maximum "loss" for the period of the defender's control would be £15,337.

[132] During his discussions with Gill Smith, Mr Crawford suggested that, so far as the moveable estate said to belong to Glasgow Audio but be situated at the deceased's home were concerned, there were clearly problems in identifying the items as belonging to Glasgow Audio and there could be further debate about the value of the items depending on how old they were at the time of death. He considered that the matter ought to be compromised by agreement rather than litigated and he suggested (with the defender's approval) that one half of the figure being claimed by the pursuer should be agreed. He said that Miss Smith considered that to be reasonable but that she was unable to get instructions from the pursuer to take the matter forward.

[133] Mr Crawford's conclusion was that there was no sustainable claim against the defender and that there would in fact be an amount a due to her given some of the outlays she had made in respect of the business. No allowance was made by the estate for the fact that they did get return of the fixtures and fittings which were worth about £5,000 and had been returned to the estate. After the meeting between the accountants in February 2010, Mr Crawford produced his report. He agreed that in the revised Appendix 14 (6/104 of process) Miss Smith seems to have taken on board a number of his concerns and revised her figures accordingly. He had seen the idea Miss Smith had for adding £23,000 to "lost turnover" but had been advised that this was not being insisted in.

[134] On the all important stock issue, Mr Crawford presented a rough calculation of why he considered the figure difficult to reconcile. The defender started with opening stock to a value of about £130,000. She made purchases that cost £100,000. Adding those two together gave a total of £233,000 for stock over the period. She made sales of about £170-£177,000. Assuming a gross profit margin of 35% the cost of the stock sold would be about £130,000. Accordingly, the closing stock should have been in the region of £125-£130,000. Looking at Appendix 10 of 6/87 of process, it was clear that the figure there did not represent the cost of stock but was the value put upon it by the purchaser. Even if one accepted the list as a comprehensive list of what was in the shop when Mr Turner took over, the cost column alone added up to almost £75,000. Miss Smith's view that the business was technically insolvent arose only because of the way in which she presented the accounts. If the accounts prepared by Cairncross & Cairncross for the period of the defender's control were used, it was clear that the gross profit figure had not changed by more than 6%. It was only when the stock was inserted at the price paid by Mr Turner that the figures looked very different.

[135] In relation to the sale to Holborn Hi-Fi, Mr Crawford had managed to trace a sum of £45,000 as a goodwill figure in the Holborn Hi-Fi account as being purchased at the time of acquisition. However, he wondered whether the parties had simply reached agreement as to a figure and then divided it between payment for goodwill and a payment for stock because this would be better for CGT purposes than a higher global purchase of assets. It was clear from an analysis of Glasgow Audio's accounts that the business was "year end loaded". In September to December each year the business earned far more than in other months. Mr Crawford had calculated that in the accounts for the year 2000 52% of annual turnover had been made in the last four months of the calendar year. In 2001 42% of the annual turnover had been made in those months. If the expenses of the business are consistent, then where turnover increases much greater net profit will be made. Accordingly more of the annual net profit was made in the last four months of each year. Mr Crawford found it difficult to see how on that basis it could be said that £60,000 of net profit could be made in the first eight months of the year when sales were traditionally lower. The so-called loss of £60,000 calculated by Gill Smith was not a real loss in Mr Crawford's view. It was an arithmetical calculation that Miss Smith had compared with her own view of the accounts. He disagreed in principle.

[136] On the issue of the Mercedes vehicle, Mr Crawford agreed that it was possible that a vehicle would be included by someone in their business accounts even if it was used exclusively for personal use. This was not something HMRC would approve of by Mr Crawford had seen it happen. On the issue of the loss of the deceased to the business Mr Crawford's clear view was that if the main driver was taken out of a sole trading business then that would be likely to damage the business. Much would depend on the calibre of the staff left behind. Despite the amended version of Appendix 14 being produced by Miss Smith in evidence, Mr Crawford considered there were still substantial questions in relation to the closing stock, the alleged stock items said to be held in Queen's Square and the claim for "loss of profit".

[137] Under cross-examination Mr Crawford clarified that his starting point was that he regarded the estate as asking for an accounting of assets alleged to be owned by the deceased at the date of death. Those assets were taken into the defender's custody in January 2002. What return, if any, could the estate expect on the use of those assets for an eight month period on top of their return at the end of it. Effectively it was a calculation of what might reasonably have been earned by the business when Miss Mooney was in charge. On one view the business should have made £25,600 during that period. That would assume broadly the same level of profit that the deceased earned annually. That calculation presupposed that the Wylie and Bissett figures for the accounts were correct and there was a question about that. On the issue of whether it was appropriate to calculate any loss of profit using the gross profit percentage rather than net profit, Mr Crawford said that it had to be understood that the estate would never have had £60,000 in its bank account had the profit earned had been the same as in the time of the deceased. What the estate would have earned would be a net sum after expenses. He criticised Miss Smith for having taken no account whatsoever of the fact that, had the executrix run the business, she would have incurred costs during the eight months in question. In calculating the net profit Mr Crawford had not taken into account that most net profit would be generated in the last four months of the year. Accordingly he felt he had been more than fair to the pursuer in his calculations. On the issue of stock, the important point was that the deceased's stock figure was always in at cost, not at the lower of cost and net realisable value. The problem with Appendix 10 was that provided the figure that combined the concept of cost and value. Some of the items reduced because they were old stock might well have been purchased during the deceased's lifetime. It was important to understand that if there was a policy of running the stock of the business down a little, that wouldn't normally affect the gross margin. It simply answered whether the closing stock was the same as the opening stock. He did not understand why the pursuer would not have carried out a proper closing stock when she was selling over the business. Mr Crawford maintained that it had been wholly inappropriate for Miss Smith to look at the gross profit percentage in trying to assess what was due to the estate. One would have to know what it cost the business to make the sum of £62,000 before including what the loss was if the business didn't make that sum. On the issue of stock in the house, Mr Crawford's view was that if someone takes stock from their business to their home never intending to return it then at some point it ceases to be stock of the business. In his experience HMRC took a fairly strict line that if stock of a business was taken to the house of the proprietor then it was no longer stock of the business. Further, Mr Crawford had seen an invoice for the purchase of the computer on the list. It appeared it had been purchased by the defender. He confirmed that the defender had given him a mandate to try and resolve that particular matter but for the reasons explained it could not be agreed. Mr Crawford accepted that one way of resolving he issue about whether any "loss of profit" should be calculated using the gross profit percentage or net profit was to take the gross profit figure and then deduct the annual costs pro rata for the eight month period. That would produce a much lower figure than Miss Smith had calculated. Taking the average net profit figure was a simply reasonable way of approaching the matter on the basis of the available information. He agreed that there were many instances in which one might use a gross profit percentage in calculating loss of profit. However, in the circumstances of this case, where the assets of an estate have been used by someone else for a defined period did not consider it would produce the correct result.

[138] Mr Crawford was not critical of Mr Cairncross' approach of including the capital account balance of the deceased in the accounts for the business as operated by the defender. It seemed to him that on one view the business was continuing and the assets were being used by the defender. If she was holding the business for the estate during 2002 then she must have been holding the capital account as well.

[139] In re-examination Mr Crawford confirmed that his role had been to look at the significant figures in the claim and to provide an opinion on the issues of principle. It was not part of his remit to check the vouching for all the figures in the account.

[140] The defender concluded her case by giving evidence herself. She is 57 years old and continues to reside at 53 Queen Square, the property she had owned jointly with the deceased. She qualified as a teacher in the early 1980s. She became a head teacher in about 1998. From May 2010 she has worked as an Access to Education Officer for Clackmannanshire Council. This is a relatively new post, dealing with the management of looked after and accommodated children in mainstream education.

[141] The defender explained that she met the deceased in late 1978 through her sister, although they did not commence a relationship until 1980. At that time the defender was studying at Queen's University in Belfast. Her relationship with the deceased developed quickly. Although the defender returned to Belfast to university, her relationship with the deceased was a committed one from the Autum of 1980. From 1981 onwards, they rented property together. They had permanent homes at 33 Queen Square and latterly at 53 Queen Square in Glasgow. They had made a conscious choice not to go through a formal ceremony of marriage, although no decision was taken in relation to children, that just never happened. The defender described a close, loving and supportive relationship with the deceased. She had required to teach for a short period in Northern Ireland because her teaching qualification was not recognised by the General Teaching Council of this country. It was not until about 1987 that she obtained permanent work in Glasgow. By 1998 she was the head of Arden Primary School in Glasgow. She remained there until 2006 when she took up the headship at Park Primary School. She had lived with the deceased when he worked as a sales person in Hi Fi Corner. He then became a manager there. The defender worked for a short period at Hi Fi Corner. She and Robert socialised with Colin Mackenzie and his wife and family. She met many people in the hi fi industry through the deceased. She was involved in various discussions and in looking at business premises together with Mr Lamont when he started business initially in Stirling. She was involved in discussions about borrowing over their home to fund the business. In 1992 the parties moved to 53 Queen Square. At that point the deceased was looking for premises in Glasgow and the defender was involved in helping to choose those and to design the layout for the shop. She recalled particularly the opening of Glasgow Audio on 1 August 1994. There was an event to advertise the opening of the business. The defender organised the catering. She recalled that the deceased had made a speech and thanked her for everything she had done. It had been a struggle for the deceased to keep the two businesses going and he subsequently disposed of the Stirling business. The defender and the deceased enjoyed many common interests and socialised together. Robert had very quickly become a member of the defender's family. In contrast, the defender said that he did not feel emotionally close to his own immediate family. The defender never really felt she was accepted as part of the Lamont family. According to the defender, the deceased did not trust his sister, the pursuer. The two sets of parents did not meet until the deceased's funeral. During the period of the defender's co-habitation with Robert Lamont, his sister, the pursuer, was often out of the country. She did come to visit from time to time but the defender did not see a great deal of her. The defender disputed the suggestion that had been made in the pursuer's case that she had had little to do with the deceased's business or that the deceased had not spoken to her about it.

[142] The defender recalled that it was not until the last week of October that the deceased became ill. It was thought to be some sort of viral infection at first but the symptoms persisted. On 29 October 2001 the deceased had come home ill from work and never returned to business thereafter. The defender recalled all of the details of the deceased's deteriorating health, including his being in hospital from 3 December to the date of his death in January 2002. She recalled one visit by members of the deceased's family to the hospital. The pursuer and her mother had been at the hospital but the deceased's father never visited. The deceased had undergone serious surgery in late December 2001. He told the defender that he did not want anyone other than her to visit at that time.

[143] The defender was devastated by the deceased's death. A post mortem had been carried out because the death was so unexpected. She had still been helping with the paperwork for the business throughout the time Mr Lamont was in hospital. She had regularly assisted with invoices and cheques. On 10 January, she had taken various invoices into Mr Lamont for payment and he had signed a number of cheques for that purpose. On 12 January the defender and her sister attended at the shop at Great Western Road. She knew the staff would be anxious and upset. She indicated to him that the shop would remain open. She organised a secular service in the garden at the parties home for the deceased which took place on 19 January 2002. The defender disputed that on that day she had had any conversation with the pursuer or her mother in relation to the business.

[144] The defender explained that Robert had told her that he had a Will, leaving everything to her. The first discussion they had about that was in 1992, the time it subsequent transpired the draft Will had been prepared. The defender had always been convinced that the deceased had made a Will. Like Mr Aitkenhead, she still thought the Will existed but simply had not been located. The defender had never asked the deceased where his Will was kept. Her initial thought when he died was that it would be with Mr Aitkenhead at AJ & A Graham. When she was told of the discussion the deceased had had with Mr Aitkenhead in 2000 (file note No. 6/58 of process) she realised the Will must be held by a firm of solicitors known to her and Mr Lamont. The defender was clear that if the deceased had told Mr Aitkenhead that he had made a Will, then he must have done so. On that basis the defender had instructed opposition to the appointment of the pursuer's executrix dative and the sheriff had allowed for some time for the Will to be located. Under reference to 6/11 of process, a file note recording details of a visit by the pursuer to the defender in February 2002, the defender said that the pursuer had not raised any issues about her parents' concerns at that time. The defender sensed that the pursuer had another agenda when she brought a gift for her that day. The defender was deeply distressed at the time but did recall telling the pursuer that her understanding was that the deceased had left everything to her. The pursuer seemed keen to explore the issue of the deceased's Will at that time. The defender said that she did not make a conscious decision to take over the business of Glasgow Audio because she understood it had been left to her by the deceased. She wanted to keep things going as best as she could. She had started running the business before Mr Aitkenhead explained to her that while he held a draft Will, he was not the solicitor who had the executed Will of the deceased. Under reference to item 6/20 to 6/38 of process, the defender confirmed, as Mr Aitkenhead had, the efforts made to locate a Will.

[145] So far as the arrangements for running the business were concerned, the defender had attended the Clydesdale Bank and asked for an account to be opened so that she could run the business. She referred to letters from the Clydesdale Bank to her, Nos. 7/104 and 7/106 of process. Those confirmed the basis on which Glasgow Audio could continue trading. That correspondence made no reference to the defender having claimed she would inherit the estate. The defender's position was that she administered the business while there was a search for the deceased's Will and that she acted in good faith in doing so. And by the time she had been stewarding the business for 71/2 months and no Will had been located, she raised the declarator of marriage proceedings. She sought interim interdict to prevent the pursuer from intromitting with the estate and distributing it pending conclusion of that action. However, the defender had to concede during those proceedings that, absent any Will, the pursuer's appointment as executrix dative was valid and ultimately it was agreed that the business would be handed over to the pursuer on 30 August 2002. The defender offered to run the business on behalf of the estate for no remuneration pending the conclusion of the declarator of marriage action. She also offered to meet with the pursuer and discuss matters but the pursuer never agreed to that. The legal advice the defender had received prior to August 2002 was that neither she nor the pursuer had any greater right than the other to run the business and that she could continue doing so. As the deceased had been a sole trader, the only way in which the business could be run was to continue it on the same basis as before. At a court hearing on 16 August 2002 in connection with the interim interdict sought by the defender in the declarator of marriage action, the defender was given leave by the court to continue to intromit with the business and the pursuer was requested not to intromit with any of the assets of the estate for the period until 30 August. During the last two weeks of August 2002 the pursuer had been given permission to examine the books and documents of the business with a view to deciding whether or not she would continue to oppose an interim interdict. There had been discussion by the Lord Ordinary dealing with the interim interdict hearing that the parties should consider whether a factor or other third party should be brought in to run the business pending the outcome of the proceedings. Ultimately the defender had been advised that there was insufficient evidence to succeed with the claim for interim interdict pending the outcome of the action and it should be dropped. The defender took that advice. The pursuer had requested keys and these were handed in to the solicitor's office. The defender did not attend at the shop. She telephoned the staff to say that the pursuer should be given everything she requested. She was advised by her solicitors and counsel at the time to let the utility companies and the bank know that she would cease to be responsible for the business. It was anticipated that there would be an administrative handover but the pursuer did not want her involved in that. The defender felt strongly that it was the lack of an administrative handover that had led to the subsequent dispute. She had anticipated that there would be a period of about two weeks after the pursuer took over to deal with all the documentation. The pursuer had given no information through solicitors about her actings with the business and the defender was unaware at the time of the acquisition by Jonathan Turner. Given that the transfer of the lease did not take place until October 2003, it appeared that the pursuer had retained legal control of the business but had relinquished possession and actual control to Mr Turner. The defender's position was that the pursuer should be held responsible for any loss caused by her own incompetent actings. She had sold the business without Confirmation which was not obtained until July 2003. She put the estate at risk, the action for declarator of marriage was ongoing, the Will was still being searched for and her actions were precipitate. She chose not to co-operate with the defender or her representatives to try to clear up any matters that she claimed she had insufficient information about. She let Mr Turner have the benefit of the stock without knowing the value of that. She had said in evidence that the main reason she took the action that she did, was to secure employment for her late brother's staff. This failed to recognise that she was duty bound to act in the interests of the estate rather to third party employees.

[146] The defender drew attention to the confirmation No. 7/15 of process and relative inventory. She noted that item 4 on the inventory of the estate was the business of Glasgow Audio which was detailed as having a value of £219,908. That figure included bank balances. It was difficult to know how the figure was broken down. The two bank balances themselves amounted to £81,274. That would leave a figure of £138,434 as the value of the business which did not equate with the sum received from Mr Turner, which was slightly lower. On the issue of the stock of the business, the defender's position was that many of the difficulties in this process had arisen because of the pursuer's decision not to value the stock herself, independently or on conjunction with the defender. The defender also criticised the pursuer for having held out Mr Turner's stock valuation as her own. She had withheld such lists of stock as had been prepared on her behalf until during the diet of proof. Further, the pursuer had not appreciated the efforts of the defender and staff to preserve the assets of the estate and keep the business continuing prior to August 2002. The estate had benefited from the business having been kept running by the defender during that period. The defender had secured a VAT repayment from Customs & Excise to the business and a repayment from Arcam. There had also been a payment from Mountainsnow to the estate of £3,715 (see 7/41 of process). The defender also referred to No. 6/16 of process, a letter from Mountainsnow dated 22 August 2002 which confirmed that the business of Glasgow Audio was in a credit situation with that organisation on that date.

[147] The defender was critical of the pursuer's rush to sell the business to Jonathan Turner, given that there were other parties potentially interested such as a Bill Hutchison mentioned by Mr Hotchkiss. Colin Mackenzie would also have been interested despite the pursuer's contention that the deceased would not have wanted that. Competition would have led to a better sale price. The defender felt that the pursuer failed to maximise the benefit to the estate by securing best price. In essence, the defender saw the pursuer's trying to recover through these proceedings the price she thought she should have obtained for the business. If the pursuer was being truthful when she said she had absolutely no documentation available to her, it was all the more incredible that she would have sold the business in that context at that time. Reference was made to a letter from Mr Picken to the solicitors acting for Jonathan Turner, No. 7/23 of process where on the fact of it the lease had ultimately been transferred for a nominal figure of £1. The occupation of the premises by Mr Turner from 31 August to the transfer of the lease the following year, put the estate at risk. And Mr Turner had the benefit of the earnings of the business while the pursuer retained ownership of some of the assets. The defender disputed that she had been unwilling to provide information or documentation to the pursuer. She had offered the meeting in July 2002 and had given an undertaking to the court in August (see Minute of Proceedings No. 7/13 of process) to allow the defender to contact the bankers and accountants involved. It was clear from certain correspondence included within No. 13 of process (the file from the sheriff court proceedings in respect of recover of VAT) that the pursuer had access to accounts. There was correspondence from Mr Picken on 12 September 2002 confirming that he had received accounts for 1999 and 2000 and sent them to the pursuer. The defender contended that the pursuer had left many debts of the business unpaid notwithstanding that she had taken control of all the assets in August 2002. Until the declarator of marriage proceedings were dismissed in May 2004, the defender continued to have a potential claim on the estate. It was for that reason that the pursuer was allowed only copies not principles of the relevant documentation. Her solicitors had been made aware of this. The pursuer had gone ahead and raised the present proceedings prior to dismissal of the declarator of marriage action.

[148] The defender disputed that the schedule of items listed at page 48 of the Closed Record belonged solely to the estate. The pursuer had led no evidence illustrating that these items were stock of the business. No code items had been produced. There had been no access to 53 Queen Square to compile the list. In any event, there were different versions of the list and there were some anomalies. The pursuer had not attempted to make enquiries of the defender about the items on the list. The defender went through the schedule of items said to belong to Glasgow Audio. The sound system referred to was situated in the kitchen of the home she had shared with the deceased and had been there since the summer of 1998 when it had been purchased from the business. The rosewood speakers had been in the house since about 1996 or 1997. The defender was unsure of the circumstances of purchase. The Tact Millennium amplifier was quite a new item and had been in the house for a few months. The deceased had brought it home for personal use. The Meridian CD player had been in the house from 1998. The Panasonic video player and TV had been in the house from 1998 and had been purchased from Excel, not through Glasgow Audio. The Rotel preamp and power amp were not in the property and had never been there. The target audio stands for the speakers had been in the house since 1998 as had the Target audio equipment rack. The defender had no knowledge of the DVD player in the list. The Aviva midi system had been bought by her in 1995/96 but was not in the house when Mr Lamont died. It had been donated into a school raffle in 2000. The computer iMac DV Grape was a gift to the defender from the deceased. It was bought from a computer shop. The laptop zip drive and IBM computer were bought for home use by her and Mr Lamont. She had no idea why it was said that there were CDs and DVDs belonging to the business at 53 Queen Square when there were not. She and Mr Lamont had more than one digital camera which they had purchased for personal use. She noted that at page 3 of the Confirmation (No. 7/15 of process) the deceased's share of household contents was given a value of £1,500. It seemed to her that the items the pursuer was claiming belonged to Glasgow Audio were mostly personal items that would be included in the contents figure.

[149] So far as the Mercedes motor vehicle was concerned, the defender confirmed that this had been situated at Queen Square where she and the deceased had two parking spaces. Different figures had been given for the value of the vehicle. In any event the defender's position was that the car was joint property of her and Mr Lamont. They both used the car, they both maintained it and they both drove it. To that extent, she did not accept it was a business asset.

[150] The defender addressed the counterclaim made by her at pages 36-44 of the Closed Record. These were debts of Glasgow Audio that had been left with her. These were (1) the debt to Yell of £4,042, (2) the Clydesdale Bank overdraft of £5,261, (3) the VAT liability of £17.639 and an income tax debt of £3,107. The defender's position was that those debts are debts of the business and should be paid by the pursuer as executrix dative. They were incurred reasonably by the business. The position with Yell is unclear, the Clydesdale Bank have not been paid. They have assigned the debt and the matter is being pursued in Glasgow Sheriff Court. The Inland Revenue have not been paid. The tax debt relates to PAYE and national insurance payments. HMRC do not appear to be pursuing that particular debt. The defender confirmed the advice she had received from Mr Herald in relation to VAT. She considered she had acted in a reasonable and responsible fashion during the period of her control of the business. She kept the business going. She dealt with a number of creditors. She worked for the business early in the morning, after school each day and at weekends. She attended at the shop 2-3 times a week. She worked on the administrative and management side away from the business. She met sales representatives at the shop but also at other places. She had given Mr Hotchkiss sufficient direction and resources to generate income for the business. She disputed that she had told Mr Hotchkiss that she was the sole beneficiary under the Will. There were no such discussions. When she appointed Mr Young and Mr Wearmouth on a trial basis, Mr Hotchkiss seemed content with that. He made no complaints about their performance. The defender disputed that only junk mail was being sent to the business premises at Great Western Road. While for administrative convenience she had some invoices sent to Queen's Square, there was no blanket redirection of mail. The defender disputed that staff were told that they could not buy stock. On any view there were over £100,000 of purchases during the relevant period. The staff were authorised to purchase and there were a number of examples of that within the primary documentation. There was no instruction not to accept hi fi equipment in part exchange. There was an example of that in the bundle of documents 6/4 of process at 39/3. There had been no termination of employment of any of the staff. Some left of their own accord. There was a period when Andy Fisher was working at the same time as Mr Wearmouth and Mr Young. There was no question of inexperienced staff being preferred over those who had been previously employed in the business. On the pattern of sales during the period of her control, the defender noted that there was a dip in sales in April and in June 2002. She attributed that to the lack of motivation of Mr Hotchkiss and of course the absence of Robert Lamont. She noted that sales were back up in July and August and that when the pursuer took over the business, the turnover figures were close to those of the year 2000. It had been expected that sales would have risen considerably in the month leading up to December 2002. The defender disputed the pursuer's evidence that Arcam and Meridian had taken their custom elsewhere. The business continued trade with both those suppliers. No suppliers ever withdrew from the business. There were some problems with a range that had not performed even when the deceased was alive. As a result, one particular concession was withdrawn but Arcam continued to supply other products. It was noteworthy that sales had increased almost immediately after Mr Hotchkiss and Mr Campbell left the business. The defender considered she had sufficient experience, time and knowledge to administer the business and employ staff who dealt with issues as they arose. The defender referred to a document within 6/4 of process (No. 36/4) which illustrated that the television damaged in the accident involving Nicholas Wearmouth was duly reported to the insurers and a claim made. This was the damaged television that appeared in the photograph 6/99 of process. The defender's response to the accident was reasonable and she sought to minimise any loss to the business. The defender's position was that she had accounted for all of her intromissions during the period of her control. She arranged for accounts to be made up. She had offered to do that prior to this action being raised in March 2004

[151] The defender gave more information about the chronology of events after proceedings were raised. The accounts Cairncross & Cairncross prepared for the period to August 2002 were given informally to the pursuer in June 2005. Thereafter the defender had offered mediation but that was rejected by the pursuer. Although the pursuer had offered a joint accounting, it was an extremely narrow remit and would have unduly prejudiced the defender. The defender had never been asked by the court to produce a set of accounts. There was a meeting between Miss Smith for the pursuer and Judith Scott of BDO Stoy Hayward who had been instructed at that time for the defender. They met in September 2005. All documents for prime entry were handed over to Jill Smith at that meeting. These are the documents which now form 6/4 of process. There was discussion at that time about the issue of opening and closing stock. There was no agreement, particularly on that issue. The defender's contention had always been that because she was not allowed to undertake a stock take on 31 August 2002, she could not accept that the figures being produced by the pursuer (which she now knew to be Jonathan Turner's valuation) could be accepted. The defender's best estimate of the stock in the business when she left was that it would not be much below £120,000. In 2006 the pursuer changed agents and there was a period of delay. It became apparent that the pursuer had had possession of the receipt books in August of the business in August 2002 because they were produced in the case raised by the Advocate General against the defender in 2004. The defender pointed out that the pursuer had produced many documents at that time under commission and diligence procedure. She could have used those to check the accounts. In the years leading up to proof, the defender felt she had accounted for everything and could not add more to the documentation she had produced in 2005. The defender was concerned about the inhibition over 53 Queen Square that had been obtained by the pursuer when this action was raised. The inhibition was recalled in January 2007 in return for an undertaking by the defender that she would not sell the property or secure it for more than £100,000. The defender felt that the effect of the inhibition had been to damage her financially.

[152] The defender referred to her third conclusion in the counterclaim in which she sought £10,000 as a sum that would reasonably have been due to her for remuneration for the period in which she ran the business. She stated that she had benefited the estate during that period by preserving the asset of Glasgow Audio so that it could be sold on. There was no established representation for the estate until 13 august August 2002.

[153] In summary, the defender concluded her evidence in chief by reiterating that she had been open and honest in these proceedings, that she had sought to be co-operative and had produced information and documentation. She had no doubt that the deceased had made a Will. She considered that through actions and averments the pursuer had cast doubt on her character, conduct and relationship with Mr Lamont. The only diminution to the deceased's stated that had occurred related to actings of the pursuer not the defender.

[154] Under cross-examination the defender agreed that she had returned from Belfast permanently in 1987. The first property that had been taken in the joint names of herself and the deceased was the property at 53 Queen Square which they had purchased in 1992. Previous properties had been held by the deceased. However, the defender and the deceased had operated a joint bank account since the late 1980s. The defender also agreed that the deceased had borrowed both from his parents and by securing the property at 33 Queen Square when he set up in business. On being challenged about the nature of her relationship with the pursuer the defender confirmed that she didn't feel comfortable with Miss Lamont or indeed her parents. She did not articulate that to them. She just accepted the position and the social niceties were observed. On being challenged about the issue of whether she had been involved in the business of Glasgow Audio prior to the deceased's death. The defender confirmed that she had not been involved on a daily basis but that the deceased had spoken to her about business decisions and she was involved in finding business premises and the like. She disputed that Mr Hotchkiss would know about the figures and cash flow of the business than she did.

[155] The defender was cross-examined at length on the issue of the conversations she had had about Wills with the deceased. She recollected a conversation sometime between 1990 and 1992 at home, then 33 Queen Square. The deceased said that he would require to make a Will. It was anticipated at the time that mutual Wills would be required because the parties were not formally married. There was a subsequent discussion after 53 Queen Square was purchased. The matter had been raised by Barton and Hendry, Solicitors who had attended to the conveyancing for the purchase of 53 Queen Square. When the matter was raised the defender and the deceased had agreed that they should get something done about making mutual Wills. At some point in 1992 the deceased had told the defender that he had instructed a draft Will and that everything was to be left to her. At that stage the defender had not made a Will herself but she was aware that she should do so. In fact she did not attend to instructing a Will herself until about 1997. Her own Will left everything to the deceased. She didn't recall whether she had told Mr Lamont that she had made a Will and thought she probably hadn't. In early 2001 the defender Robert Lamont had a further conversation about Wills. She raised the matter because she was going to change one of the executors in her Will. She joked with the deceased that she was leaving him five pence in her Will. In reply Mr Lamont had said to her that he was leaving everything he had to her. The defender was shown an affidavit she had previously sworn, number 6102 of process, in which she referred to having a Will drafted in 1992. She confirmed that that was not correct as far as she was concerned as she had not made up a Will at that time. The defender said that she was sure the deceased had made a Will because he wouldn't have said that he had left everything to her if he hadn't done so. She and Mr Lamont had never used the same firm of solicitors other than when Barton and Hendry attended to their conveyancing. The defender agreed that the file note 6/58 of process couldn't be quite accurate insofar as it may indicate that the same firm of solicitors held Wills for both herself and Mr Lamont. Other than that it reflected what she understood, namely that the deceased had made a Will making appropriate provision for her. Now when asked why she had not told the pursuer that the deceased had intended she be an executrix, at least in the draft Will, the defender said that she didn't trust the pursuer or her parents. Although she didn't conceal anything she had good reason to think that there was an executed Will and that would clarify matters. It was her understanding that the deceased had left everything to her and that was what she told the pursuer when asked what the deceased's wishes were. The defender disputed that the copy letter, 6/7 of process dated 8 March 2002, in which she had asked the deceased's mother for space and time before answering requests for information was in any way misleading.

[156] The issue of the Mercedes motor vehicle was explored at length. The defender confirmed that when the deceased was alive she had shared with him the maintenance costs of the car and paid for some petrol. She did not know what costs for the vehicle were being put through the business. She had understood the car was for personal use. She did not know this was an asset of Glasgow Audio. The car had been bought using a personal cheque. She had been with Mr Lamont when he bought the car. Her understanding had been that the car was a joint asset belonging to her and the deceased for personal and social use. After Mr Lamont died the defender thought that because of the way in which the car had been used and for emotional reasons, she thought she would be able to keep it. The defender explained that she had taken no steps to transfer ownership of the vehicle. She became the registered keeper in April 2002 and the issue of the car had been in dispute ever since. She did not seek legal advice about the matter. On the issue of items alleged to be stock of Glasgow Audio and held at Queen Square, the defender explained that she had a receipt for the computer which she had given to Mr Crawford. She had seen nothing to suggest that any of the items were assets of the business. The CDs and DVDs on the schedule were not held at 53 Queen Square. So far as the other items were concerned these had been held by her and Mr Lamont for personal use. While there was an amplifier that had only been in the house for a few months, the other items had been in the household for much longer. One or two items such as the Panasonic television had been replaced since the deceased's death. Mr Hotchkiss said she was wrong when he indicated that that television or the AIWA midi system were ever sold by Glasgow Audio. She did not think that the deceased would have signed out items taken from the business as staff were required to do. In any event, the receipt books for the business were in the premises when Glasgow Audio was taken over by the pursuers. They were passed to Jonathan Turner who in turn passed them to Glasgow Sheriff Court under commission and diligence procedure.

[157] When asked why she had not left all the paperwork for the business on the premises when the pursuer took over, the defender said that there was no agreement as to what would be left. The legal process was continuing and although her solicitor had discussed with her a request that she produce certain things there was no agreement as such. The defender had not known until the evening of 29 August that the pursuer was going to take over the shop. There was some documentation on the premises when the pursuer took over and it was made clear at the interim interdict hearings in the declarator of marriage process that some documentation was at the accountants and the pursuer could access it. While there had been correspondence in July and early August in which requests were made for all paperwork there was no agreement reached. After the business was handed over the defender agreed that she had been advised that she had a legal obligation to account to the estate. She accepted that it had taken two to three years for that to be completed. She attributed the delay to the way in which the pursuer had removed her from the business and subsequently sold it. She had been unable to carry out a stock take. It was agreed that she would produce accounts and they would be considered by both sides. Cairncross & Cairncross had not produced the formal accounts until 2005. There was active correspondence during that period. She had left the stock sheets in the premises of Glasgow Audio and that had hampered her. She had not anticipated that the handover would be so rapid without the ability to organise the paperwork. The closing stock figure in the Cairncross & Cairncross accounts was based on previous years and was an estimate based on the trend of purchases and sales. The defender disputed that there was a general policy of stock reduction during the period that she was in charge. There might have been a drive to sell certain items that were being held in stock but that was a different matter. Had she not been removed from the business the defender anticipated that she would have been ordering for the busiest time of year in September in advance of the Christmas period. When Mr Lamont was alive there had always been high level ordering in the autumn. Miss Moonie continued to dispute that the closing stock figure offered by the pursuer was accurate. Jonathan Turner and James Sharp had based their figures on realisable value not cost, unlike the practice of the business in previous year's accounts. The defender disputed there was anything inappropriate about meeting sales representatives away from the shop. The deceased had occasionally done so. During the period of her control no sales representative was ever told not to attend at the business premises. There was no blanket redirection of mail although it was convenient for her to attend to business invoices at home in the evenings and weekends and she redirected some of those. She disputed saying to the staff that she would run the business her way. She had only one recollection of being pressed for payment and that related to invoices in the period prior to the deceased's death. She noted that Miss Smith had given no specific examples of suppliers pressing for payment. The defender did accept that there had been occasions when she had stopped paying early enough to attract an early payment discount. Some examples of that were shown to her from number 6/4 of process. Of the various invoices put to her the defender confirmed that she had paid each of these but that in many cases they had been settled outwith the early payment discount period.

[158] The defender disagreed with the assertion that she had stopped trading with any of the existing suppliers of the business. Certain products such as the FMJ line from Arcam was withdrawn because of low trading covering a period in late 2001, early 2002. Also there were a couple of suppliers involved in the insufficient ordering issue with Mountainsnow. One of the reasons that the defender was not always able to take use of the early repayment discounts was that she had to keep an eye on cash flow. It was not always prudent to pay invoices early where there was insufficient cash flow. Accordingly they would be paid within a reasonable time but not late. The defender said that the deceased didn't always take advantage of the early repayment discount if cash flow didn't permit. While the defender accepted that failing to use early payment discount might affect gross product by a very small amount, it still might be a prudent course of action for cash flow reasons. She had obtained a working overdraft on the business account of £10,000 during her period of control and she took a decision not to use it more than necessary. Had she exceeded the overdraft limit the charges would far outweigh the advantage of any early payment discount.

[159] On the issue of the cheques that had been signed by the deceased but not cashed until some time after his death, the defender's recollection was that she had probably failed to post the signed cheques for a number of weeks after his death. The defender also confirmed that she had handed over the Mountainsnow share certificate with the boxes of documents delivered in 2005. She maintained that she had not held herself out as proprietor or owner of Glasgow Audio to Mountainsnow. She had attended meetings as a representative of the business. On being questioned in relation to the issues in her counter-claim, the defender confirmed that she did not understand there would now be tax or VAT payments due as she considered that if these debts required to be paid then the pursuer would require to deal with it. She explained that what she thought was an order that the pursuer pay any sums due. She also confirmed that Yell were not pursuing their debt at present. In relation to the drawings she had taken from the business she confirmed that she had drawn £750 per month but that she sought an additional payment as negotiorum gestor.

[160] The defender reiterated that she regarded the pursuers as having been unreasonable as having refused to attend mediation early in the proceedings. Ultimately mediation had taken place in 2008 at the defender's instigation. The defender was taken through the various points from the account that had been covered by Miss Smith in her evidence. She reiterated the problem that had arisen with closing stock which accounted for the major difference. So far as the discrepancies between the accounts prepared by Mr Cairncross and those prepared by Wylie and Bissett were concerned the defender accepted that insofar as Mr Cairncross may not have examined all of the vouching she could not dispute that where Miss Smith had done so that might explain some of the differences. She was, however, surprised that Miss Smith had indicated that the float in the till at zero in Miss Smith's accounts. She recalled that Mr Hendry had said there was money in the till. She also considered that Miss Smith's figure of £374 for trade creditors seemed low and referred to her own explanation at Appendix 2 of 6/87 of process.

[161] The defender disputed that she ran the business as if she was entitled to the deceased's estate, that she transferred assets into her name and that she was not in good faith. She maintained that no deficiency in stock was created by her or that she had failed to leave necessary documentation for the pursuer. She explained that she had been co-operative since June 2002, that she taken legal advice and that what she had said about the Mercedes vehicle was the truth.

[162] When given the opportunity to clarify any matters she wished by way of her own re-examination, the defender added that the method of accounting used by Miss Smith particularly in respect of liabilities was being used to produce an artificially high loss in the accounts. In particular, there continued to be double counting on the issues of stock and the motor vehicle.

Submissions for the pursuer

[163] A formal note of written submissions was submitted on behalf of the pursuer and forms number 66 of process. Those submissions summarise the evidence on which the pursuer sought to rely. There was some focus on the events prior to the death of Robert Lamont. The submissions then deal with each of the issues arising from the date of death. They detail the pursuer's case on the issues of (1) the Mercedes motor vehicle, (2) the items alleged to be stock of Glasgow Audio and held at 53 Queen Square, (3) the running of the business at Glasgow Audio by the defender, (4) the issue of the valuation of opening and closing stock, the period of the defender's trading, (5) issues about the conduct of the defender during the period of her control, (6) the legal issues arising from the pursuer's claim, including the outstanding motion to amend the case on vitious intromission to one of Spuilzie, and (7) the defender's counter-claim.

[164] The tenor of the pursuer's submission on the facts was that there was no evidence that the deceased had left a Will. It was claimed that the defender was in bad faith and lacked credibility in her evidence about the discussions she had with the deceased in relation to a Will and that the deceased could not have been telling the truth to Alistair Aitkenhead when he said that a firm of domestic conveyancing solicitors held Wills for himself and the defender.

[165] On the issue of the Mercedes motor vehicle, given that the evidence squarely pointed to it being a business asset the defender should be ordered to make a payment of the value of the car at the date of death to the pursuer failing for delivery of it. It was claimed that the defender was not being candid about stock said to belong to the business and held at Queen Square. It was submitted that the evidence of Mr Hotchkiss should be accepted on the matter.

[166] The running of the business Glasgow Audio in 2002 again it was suggested that Mr Hotchkiss' evidence should be accepted. It was suggested that there was no evidence and that the defender had been involved in the business before the deceased's death. The defender was criticised for recruiting her nephew and his friend as staff. It was suggested that the existing staff understandably saw this as a control issue on the part of the defender. It was submitted that the way in which the business was run after the deceased's death was markedly different from the way it had been run before, that stock was being run down and that suppliers were withdrawing from the business.

[167] On the key issue of the value of the opening and closing stock for the period of the defender's stewardship. It was submitted that the defender had never at any stage produced vouching in the way of stock sheets. It was asserted that the stock figure put forward by the pursuer was accurate because it was consistent with the evidence that stock was being sold without being replaced. Also Nicholas Waremack himself had said that he had been surprised at the high volumes of stock held in the business and that he had reduced it to levels required for off-peak periods. Jonathan Turner had valued the stock fairly and that was corroborated by James Sharp. The pursuer had the stock physically checked albeit not valued.

[168] On the issue of conduct it was claimed that the defender ran the business without lawful title during the period January to August 2002. It was accepted that whether there was ever a Will was a moot point depending on how a survivor to ship destination is viewed, given that there was one in the title of 53 Queen Square. However, there was no formal executed Will and it was said that it should have been plain to the defender that the likelihood of a Will emerging was, by February 2002, "a low chance". Accordingly the defender should not have run the business and retain possession of assets in the way that she did.

[169] On the central issue of the accounting to be made, there was a difference in approach between the accountants called for both sides. The pursuer's submissions summarise the areas of disagreement as including stock, growth in net profit percentage on "loss of profit", overall calculation of loss and the introduction of the capital account of the deceased's business into the balance sheet. The first of these had to be determined in accordance with the evidence. It was submitted that only the stock figure put forward by the pursuer was accurate. On the issue of whether to use a gross or net profit percentage approach in calculating any "loss of profit" it was submitted that the evidence of Gill Smith and the general evidence of Fiona Martin should be accepted, namely, that for a retail concern with relatively fixed costs, as opposed to a manufacturing plant with variable costs, the gross profit percentage represented the standard accounting approach. The business had already paid the expenses involved in creating the profit and so the value of the business had already been diminished by those having been incurred. On the third issue of the method of calculating any profit or loss it was submitted that Mr Crawford's approach was in error because it was projected from a base line of nil where according to the Cairncross accounts there was an actual net loss for the period of the defender's control of £18,500. Thus the profit which ought to have been earned of £15,337 ought to be added to that loss to achieve a total loss figure of £33,837. The issue of the treatment of the deceased's capital account was dealt with in Miss Smith's criticism of the way in which Mr Cairncross prepared his accounts. This evidence should again be preferred over, in this instance, Mr Cairncross. While it was not suggested that every entry in the Cairncross accounts should be corrected by every entry in Miss Smith's accounts it was submitted that substantial correction to the Cairncross figures was required. Mr Cairncross was criticised for having not consulted the books of prime entry, a task he had deleted to his son.

[170] On the applicable law, it was clear that the obligation to account had been admitted by the defender. The question was how much, if any sum, the defender justly owns the pursuer, not whether the books were properly kept. Reference was made to Walker on Civil Remedies at page 306. The first task of the court is to draw up an account. On the evidence in the case it was submitted that decree for payment should be made in the sum of £41,823. That whole sum was not thought to be due. Orders in respect of the car and the stock allegedly in Queen Square could be granted. The conclusion for delivery was a separate and alternative remedy if payment was not awarded in terms of the first conclusion.

[171] The third conclusion is a conclusion for damages which was sought as an alternative to conclusions 1 and 2. It was only if this alternative award was being made that the issue of the amendment arose. The pursuer now sought damages under the nominate delect of Spuilzie. It was submitted that the essence of Spuilzie was that it was the wrong of doing any act in relation to goods which denies the complainer's title to own or possess them (Walker on Delict, page 1005). The remedy for Spuilzie is restitution and damages which can include violent profit. Reference was made to John Norman Mackinnon v Avonside Homes Ltd 1993 SCLR 976. In essence Spuilzie was compensatory rather than restitutionary and it could be used for the "loss of profit" element if it was not appropriate to award that under the count reckoning and payment part of the claim. The central issue for this part of the claim was whether not the defender had been in good faith. The pursuer claimed that she had not. It was not correct for her to say that during the periods where there was no executrix appointed there was no representative of the deceased. From the date of death the pursuer was the legal representative of the deceased as her appointment was retrospective.

[172] So far as the counter-claim was concerned the pursuer's submission was that the counter-claim was irrelevant and should be dismissed and the claim for salary should not be granted given that the defender had already received £750 for each month she was running the business. That was more than enough for a part-time job. The Inland Revenue claim was said to have been withdrawn and the HM Customs and Excise claim was on one view not due by the defender at all. The pursuer should have been sisted into the action at their instance. The Yell claim was eight years old and had not been pursued at the time and was likely time barred. It was not clear what items the Clydesdale Bank overdraft of £5,261 related to. Given the eight year passage of time it was also not clear whether this debt could be insisted on.

Submissions for the defender

[173] The defender made her submissions orally. She made a number of general preliminary remarks relating to her role in the deceased's life and her knowledge of his business. She disputed the picture the pursuer had attempted to paint of her own relationship with her late brother. She said that the evidence indicated that the pursuer had been aware that the deceased had made a will. This should cast doubt on her assertion that there had never been a will. Emphasis should be placed on Mr Cairncross' evidence about what the deceased had said to him just before he went into hospital in December 2001. It was clear that the deceased intended that the defender inherit his whole estate. The defender's position was that she had never held herself out as sole beneficiary of the deceased's estate. She had looked after the business pending resolution of the dispute. The professional advisers were not misled. None of the witnesses directly corroborated the pursuer's claim in that respect.

[174] On the central issues relating to the claims made by the pursuer the defender listed the seven complaints that appeared to be made against her. First, the pursuer claimed that the defender had redirected business mail to her home when she took control of the business and that thereafter only junk mail was going to the business premises. The defender said this was untrue and not corroborated by others who were working in the shop. No evidence of any Royal Mail redirection was produced. Secondly, that the pursuer claimed that staff were instructed not to order any further stock when the defender was in control. Only Mr Hotchkiss spoke to this. Mr Young, Mr Wearmouth and Mr Campbell said otherwise. Mr Hotchkiss should not be believed. Thirdly, the pursuer's case was that the defender was selling stock and not replacing it. The defender noted that there were lots of invoices in the primary documentation (No. 6/4 of process) relating to purchases during her time of stewardship. There was nothing to support the assertion that stock was not being purchased. Fourthly, the pursuer claimed that staff were instructed not to accept part-exchange as part of a sale. In fact both Mr Wearmouth and Mr Campbell said that they had undertaken part-exchange transactions during the relevant period. Again only Mr Hotchkiss supported the pursuer's position. The defender had pointed in her evidence to a cheque stub in the bundle of documents (No. 6/4 of process) that showed that the practice had not ceased. Fifthly, it was claimed that the defender had terminated the employment of experienced personnel. Again this was not corroborated. There was no documentary evidence or witnesses to speak to the defender terminating the employment of any staff. The sixth matter about which the pursuer claimed was the drop in sales figures during the relevant period. However, the defender asserted that Appendix 15 of 6/87 of process illustrated that while there were two dips in trading in April and June 2002, by July and August sales figures were increasing substantially. Finally, there was an allegation by the pursuer that suppliers had taken their custom elsewhere. The defender said that there was no proof to back up this assertion. There was documentation confirming that Meridian, Cyrus, Arcam and Roksan all supplied items to the business during the relevant period.

[175] The defender had a number of criticisms to make of the pursuer's actions. In particular she argued that the evidence had illustrated that the pursuer had sold, or attempted to sell, the business on 31 August 2002 without taking due care of the legal responsibilities she had at that point. She had had no intention of being co-operative in relation to an administrative handover. A reasonable person would have exercised a high degree of caution which she had failed to do. The purported transfer to Jonathan Turner was described by the defender as a "back of a fag packet" deal. If the pursuer's assertions were correct it was entered into without any documentation or access to figures. Confirmation was not obtained until October 2003 and there was no Bond of Caution in place.

[176] The issue with the value of the closing stock on 30 August 2002 was a major issue. The pursuer did not involve the defender in any stock take. She did not know the value of the stock that she asked the defender to account for. She attempted to rely on the purchaser's valuation which was, in any event, not carried out on 31 August 2002. It was pointed out that the pursuer asserts and records that she carried out a stock take when she either did not do so or did not rely on it. She held Jonathan Turner's valuation out as her own. On any view the figure of £63,579 was incorrect. The cost value of the items listed by Jonathan Turner was £74,511. The reduced amount related to the damage or outdated stock. As there was no reliable stock record Jonathan Turner's valuation could not be relied upon for the purposes of an accounting.

[177] So far as the schedule of assets said to belong to Glasgow Audio were concerned, the defender pointed out that neither Mr Hotchkiss nor Mr Campbell were able to confirm that the items definitely came from the business, or at least that they were owned by the business at the date of the deceased's death. The pursuer said she had code numbers for them, but none had ever been produced. There was nothing to substantiate her claims.

[178] In terms of the obligations on her, the defender's position was that she had been asked to account for her intromissions and that she had done so. From very early in the dispute she had offered a meeting a full discussion. It was the pursuer who chose not to take up such offers. It was clear that the pursuer had had access to the accounts to the date of death by September or October 2002. In February 2004, shortly before these proceedings were raised, a considerable amount of paperwork was produced in the sheriff court action relating to the VAT claim. That documentation was in the hands of the pursuer who had handed it to Jonathan Turner. The pursuer's claim that she had no documentation was accordingly unreasonable. By way of explanation for the period 2003/2005, the defender pointed out that she remained a potential beneficiary of the estate until the declarator of marriage action was dismissed. In any event, no requests for formal accounts for the period of her control were made while that action was ongoing. Mr Cairncross completed the accounts in July 2004. They were never demanded by the court but were produced informally. It was not until late 2004 that notification was given that the pursuer was to rely on a stock valuation of £63,579 which she claimed as her own. At that point it became clear that the figure could not be agreed. In relation to the evidence of Miss Smith, the defender submitted that her report and revised accounts were unreliable for a number of reasons. It was clear from her evidence that she was not willing to speak to the version of Appendix 14 that was attached to 6/87 of process. Her revised figures required to be produced during her evidence. This was at least the fourth version of her calculations. Miss Smith did not purport to support the claims on record as such. She made clear that her job was to carry out arithmetical calculations. Even with those, she had to be corrected on a number of matters by Mr Crawford. The accountants had met at the defender's instigation. It was Mr Crawford who noted the double-counting of the items allegedly belonging to the business at held a Queen Square. Miss Smith's figures had reduced during the course of her evidence. There was triple-counting of the value of the car. This represented one of many basic errors by Miss Smith. The errors in Miss Smith's methodology included (1) taking the figure of £9,221 as having anything to do with the business, (2) using a market value figure for stock rather than a historic cost figure which had always been used in previous accounts, (3) the reallocation of the capital account of the deceased. It was said this was used by Miss Smith to portray Glasgow Audio as insolvent when it was not. Mr Cairncross said in evidence that the legal inheritor of Glasgow Audio inherited the capital account and balance. When the defender was in control it was understood that that would be hers. The defender's position was that she had simply continued the business using his assets and so they could not be introduced as a liability.

[179] The defender made the point that the business had been sold by the pursuer just before its most profitable period of the year. It was clear that she was trying to obtain monies as quickly as she could. In the event that there was any loss, it was attributable to the pursuer not the defender. The gross profit percentages used in Miss Smith's report were ludicrous according to the defender. The whole issue of alleged loss of profit was created by the use of Mr Turner's stock valuation as a closing stock figure. Mr Crawford said in evidence that a 5% reduction in the gross profit percentage required explanation. There was no rigorous intellectual analysis by Miss Smith of the supposed fall from 35% to 6.2% in her workings. Both Mr Crawford and Mr Cairncross said that the stock would have had to have been sold at purchase price or stolen or damaged on a massive scale for the gross profit percentage figure used by the pursuer to be correct. What the defender required to account for was the stock of the business as at 30 August. It had not been listed or valued at that date. Mr Crawford's evidence was correct in pointing out that the estate could not lose a gross profit. The way of looking at the action was that the estate had assets of £133,983 at the date of death. Those are the assets to be accounted for. They were the only assets that the estate had to take in at the date of death. The defender accepted that she had stewarded those assets and that she would have to account for them. The court should look at what those assets would return to the estate. At best for the estate they would achieve a net profit by using those assets during the relevant period. Miss Smith had failed to take into account anywhere the cost of producing profit. It was never explained by Miss Smith (or Miss Martin) how the costs would go "straight to the bottom line". As the goodwill of the business had died with the deceased, the profit that he earned would not necessarily be sustained.

[180] The defender agreed with a statement made by counsel for the pursuer that the proof had been long and difficult and that the cost now far outweighed the level of the claim. The defender argued that the action was a waste of time and/or was completely unnecessary. On the detail of Miss Smith's final figures for the accounting she had failed to deduct the £5,000 fixtures and fittings which were taken over by Jonathan Turner. If the car was to be delivered its value would require to be deducted. In so far as loss of profit was relevant, Mr Crawford's figure of £15,333 should be preferred. On the defender's calculations if these matters were taken into account, the items alleged to be in the house were deducted and the closing stock was taken at a basic minimum value of £74,511 (the cost value of the stock listed by Jonathan Turner) the net effect would be a payment due to the defender of £27,993. Therefore there was no loss to the estate even if some of Miss Smith's figures were accepted.

[181] On the allegation that she had not been in good faith, the defender pointed out that there was no clear averment that she was in bad faith. The only clear assertion against her related to the Mercedes motor vehicle. The defender reiterated her position that this was a joint asset that she held with the deceased that now belonged to her. She accepted that it might be regarded as belong half to the estate and half to her, which was a pragmatic suggestion made by her accountant. She was not in bad faith as she had not sold the car and had never accepted that it belonged wholly to the estate. Miss McKercher, who had acted for the defender during the relevant period, had failed to support any contention that she had been in bad faith.

[182] So far as the counterclaim was concerned and the debts referred to therein, the defender submitted that these were incurred in the proper and reasonable management of Glasgow Audio. The defender is being sued for payment of VAT and while there was a claim that she was erroneously registered for VAT the outcome was unknown. She accepted, however, that if that part of the counterclaim was dismissed, but without absolvitor in the pursuer's favour, her right of relief would be preserved. The level of the Clydesdale Bank overdraft was not as averred by her, but was in the primary document 6/4 of process at an agreed figure of £4,716. However, as it remained unpaid, the balance outstanding increased and by January 2004 was standing at £5,261. The defender accepted that Yell had not pursued their debt actively for a number of years and may yet not do so. What she sought was an indemnity against any other claim. As a result of the manner in which the pursuer took over the business the defender had been prevented from winding down her stewardship and paying off the relevant debts.

[183] The defender argued that the pursuer had failed to separate her personal feelings about the defender from her responsibilities in her capacity as executrix dative.

[184] The defender concluded by address the legal issues, in particular the pursuer's attempt to amend her alternative case to one of spulzie. The defender argued against the amendment on the basis that counsel for the pursuer was wrong to say that it was a simple substitution for the claim of vitious intromissions. Spulzie could more properly be described as vitious dispossession rather than intromission (Walker on Delict, Chapter 28 para 1). It was necessary for the delict of spulzie to show that someone had taken possession from someone else without consent or judicial warrant. The term "possession" should be used strictly. The pursuer had not been in legal or physical possession of the business when the defender took over. Reference was also made to the Stair Memorial Encyclopaedia Vol 21 para 10-59. The defender argued that prior to confirmation the pursuer could not be regarded as having been in lawful possession of a type that would give rise to the delict of spulzie. For all these reasons the minute of amendment was opposed. In the event that it was allowed, the defender argued that the requirements for spulzie were in any event not fulfilled.

Reply for the pursuer

[185] In reply, counsel for the pursuer's position was that assets had been removed by the defender from the estate of the deceased, who had shown a lack of bona fides from the outset. The nature of the delict of spulzie is removal without consent or warrant. The business was only partially restored to the estate at the end of the period. There was no candid accounting in respect of the stock. There was a discrepancy of missing stock. The defender should be regarded as having taken the estate away and only partially returned it. If the defender was a negotiorum gestor she was entitled to defend an action of vitious intromissions by creditors or spulzie by the estate. Probable title was not a separate argument and the only argument available to the defender was that she was bona fide. It was argued that there was a presumption of fraud and that the issue was whether or not that presumption was rebutted. Mr Forsyth reiterated his submissions about the defender's alleged bad faith.

[186] So far as the counterclaim was concerned, the defender's submissions were without foundation, other than in relation to the Clydesdale Bank overdraft which was accepted. Mr Forsyth confirmed that he sought asbolvitor in relation to the claim for payment for services but would be content with dismissal in respect of the others. On the issue of whether the costs of running the business had been taken into account in using a gross profit percentage for calculating alleged loss, Mr Forsyth argued that the costs of the business were static and in that sense they had been taken into account. He claimed that Mr Crawford was massaging the figures by saying that the expenses were not accounted for. The issue with the value of closing stock was a factual issue, although he accepted that the purchaser valued the stock and that the pursuer was relying on that valuation for her closing stock figure. As there was no rule of law relating to the method of valuing the closing stock, the figure could be anything from £63,000 to £127,000 depending on what evidence was accepted.

Discussion

[187] The parties are agreed in this case that the Defender has an obligation to account to the Pursuer for her intromissions with the business of Glasgow Audio for the period 12 January to 30 August 2002. She has produced accounts for that period. She did so voluntarily rather than by order of court, although full vouching was not produced until 2005. The obligation having been accepted and accounts produced, the issue becomes one of what payment, if any should be made by the Defender to the Pursuer. Certain entries in the accounts are not accepted by the Pursuer. However, the scope of the proof extended far beyond an examination of objections to the accounts produced. What is at the heart of the dispute is the breakdown of a previously civil relationship between the parties whose common interest was the deceased. The consequence of the breakdown of that relationship was a 25 day proof that was used by each party as an opportunity to air her grievances about the way in which the other had conducted herself during the events of 2002-2004. Neither party appeared to have any sense of proportion in relation to the amount of time spent on each issue relative to its monetary worth. There were no concessions on the issues in dispute until the proof was well advanced, nor was there any agreement on matters of lower value, although in fairness to the defender she had made some attempt to reach such agreement. Perhaps the best example of the lack of agreement on lower value issues is that of the items said to belong to the business but held by the defender at Queens' Square. Ignoring the motor vehicle which the defender accepted she had retained, the items in question had been given a total estimated value of £9,221. A number of witnesses were questioned at length about these items. No documentary evidence of them having been stock of the business was produced, there was some general evidence that the deceased would take equipment home but no satisfactory evidence of whether and if so how that would be accounted for in the books if the items were not returned. The defender's position was that these were household items belonging to her and the deceased jointly. On that basis she offered to include one half of the value of them in the accounting. Miss Smith was unable to get instructions from the pursuer to agree to that when the issue was raised by Mr Crawford on the defender's behalf. It was clear that she had included the estimated value of the items in her workings on instructions and not because she was satisfied that there was any vouched basis for it. The failure to compromise this issue was one of the many factors that prolonged the proof. Before turning to the detail of the accounting I intend to address the more general issues of contention in relation to the circumstances in which the defender took control of the business of Glasgow Audio between January and August 2002. I am in no doubt that that the defender and Robert Lamont enjoyed a close and committed relationship for 20 years. They were life partners. It was the defender to whom Mr Lamont turned for support with the business paperwork and invoicing during the illness that led to his untimely death. No member of staff had ever been entrusted with invoicing or accounting matters and that did not change. I am sure that Mr Lamont valued Mr Hotchkiss as a member of staff but there is no question of his having entrusted Mr Hotchkiss to run the business, only the shop. I accept the defender's evidence that Mr Lamont discussed his business regularly and that he shared information about it with her. Of course she was not physically involved in the business to any great extent prior to his death, as she had her own professional commitments. There was evidence that Mr Lamont intended the Defender to inherit his estate. When he first gave consideration to making a will, in 1992, he instructed his solicitor Mr Aitkenhead to make the defender the sole beneficiary of his estate. I accept Mr Carincross' evidence that near the end of the deceased's life he told his accountant that everything he had would be left to the defender. While there was some evidence that he had made a will, no will could be found after his death. As a result, his estate fell to be distributed according to intestate succession and as he and the defender had not married she could not inherit. What is important, however, is not the ultimate outcome of the search for a will but the reasonableness or otherwise of the defender's position. In my view, her determination that a will existed under which she would inherit was entirely reasonable in the circumstances. The professional she went to for assistance shortly after Mr Lamont's death was Mr Aitkenhead, the solicitor. Mr Aitkenhead had been told by Mr Lamont in 2000 that a will had been made but was held by another firm. A number of witnesses confirmed that the deceased had been an honest man. Mr Aitkenhead had no reason to doubt his word that he had made a will. Importantly, even at the proof, many years after Mr Lamont's death, Mr Aitkenhead remained of the view that a will existed but had never been found. Thus the Defender had support for the existence of a will from an experienced professional who had known her deceased partner. Although Mr Aitkenhead realised by March or April 2002 that a real problem existed as the will could not be found, he was unable to represent either party once it became clear that the issue had become contentious and the Defender required to instruct a new solicitor, Fiona McKeracher, in connection with the issue of who should administer the deceased's estate. Miss McKeracher agreed to object to the Pursuer's application to be appointed executrix dative on the basis that continued efforts could be made to locate a will. The sheriff at Glasgow gave the Defender time to do that. So at least until13 August 2002 there was no certainty about who would administer Mr Lamont's estate and the defender had no reason to alter her view that a will existed. When it became clear that a will could not be located and the pursuer was thus entitled to be appointed executrix dative, proceedings for declarator of marriage were raised. That was done after a consultation with counsel. There was no suggestion that the defender instructed the raising of the proceedings against advice. Between 16 and 30 August 2002 matters were regulated on an interim basis through court procedure pending a decision on the interim interdict sought by the defender in the action of declarator to prevent intromissions with the estate. It was not until the eve of the continued hearing that was to take place on 29 August that the defender accepted, on advice, that she was unlikely to succeed in preventing the pursuer from entering the business and intromitting with the deceased's estate pending the outcome of the action. It was in those circumstances that the defender agreed to cede control to the pursuer. While the action for declarator was not dismissed until 2004, it appears that there was a real concern about the extent of the necessary repute from the outset and while the defender's advisers must have considered the case to be stateable when it was raised, there seems no doubt that she was advised thereafter that the prospects of success were poor. What I conclude on this chapter is that the defender had reasonable cause to believe that a will existed leaving everything to her, that she acted upon that belief, that she took legal advice and that she did not act contrary to the advice received. In my view she was exhibited no bad faith in relation to the controversy about the matter of a will. While she might be criticised for failing to keep the pursuer fully informed of the problem that had arisen in the absence of an executed will during the first two months or so, it is noteworthy that the pursuer and her parents were keen to focus the issue of inheritance within a short period of Mr Lamont's death. No account seems to have been taken of the shock and grief from which the defender was undoubtedly suffering. The impression I was left with was that, while the pursuer had also suffered a significant bereavement her efforts were concentrated on the issue of inheritance in a manner than indicated far less emotional involvement than that of the defender.

[188] In any event there was a practical reason that favoured the defender having control of the business during the period of uncertainty. She was in Glasgow, she had assisted the deceased with invoicing and other paperwork prior to his death and there was no other person in a position to manage the business. The pursuer lived in the West Midlands. While she had visited her brother reasonably regularly when in the country, she had lived abroad for certain periods. The defender was keen to keep the business going if she could in difficult circumstances. She was advised by her then solicitor that she was entitled to do so pending resolution of the problem that had arisen in the absence of an executed will.

[188189] The pursuer made various criticisms of the defender's running of the business during the relevant period. The source of the criticisms was Mr Hotchkiss, with whom she had been in regular contact when he was working at Glasgow Audio prior to 22 June 2002. However, there was little, if any, support from others involved in the business during that period for those criticisms. I found Allan Campbell to be an honest and reliable witness on these matters. He did not profess to recall specific detail so many years after the event, but his general evidence was to the effect that little changed in the day to day operations of the business in the months after Mr Lamont's death. Of course the loss of the proprietor who had devoted himself to the running and development of the business had a detrimental impact, both in terms of staff morale and customer links. However, all of the pursuer's claims about redirection of all but junk mail, lack of stock being ordered, no part exchange for goods, termination of staff employment and suppliers withdrawing from the business were all spoken to only by Mr Hotchkiss, whose evidence was inconsistent with the other staff, Nicholas Wearmouth, Allan Campbell and Gary Young. It was in my view perfectly understandable that the defender would attend to invoicing at home in the evenings and at weekends and that she would arrange meetings with sales representatives at a location that allowed her to combine this with her other work commitments. I formed the view that Mr Hotchkiss was unhappy with the defender having control of the business from the outset and that his efforts reduced. It is interesting to consider the sales figures for the period when Nicholas Wearmouth and Gary Young were in charge after Mr Hotchkiss left with the months preceding his departure. There was undisputed evidence that the Summer is the quietest period for Hi Fi sales, but under Mr Wearmouth's management the sales figures picked up during that time so that when Mr Turner acquired the business they were running at a level just below that achieved by Mr Lamont in the year 2000(see 6/87 Appendix 15). I will comment further on Mr Hotchkiss' reliability in due course but on this chapter I find the evidence of the other former employees far more reliable and I do not find it established that the Defender deliberately ran down the business during the period of her control. Having regard to her lack of experience, all of the steps she took to try to keep control of the financial side of the business are explicable. She had to take a view on whether she could exceed an overdraft limit in order to take advantage of prompt payment discounts and often found that she could not. She ordered stock at a level commensurate with the trading levels. She met with sales representatives and she attended meetings of the buying group Mountainsnow. At the end of her period of trading Mr Turner bought the business as a going concern and continued trading with it. He made profits over the busy Christmas period just after he took over. He paid a price that reflected what he thought the business was worth having regard to what he knew of it when it was being run by the deceased. All of these factors require to be borne in mind when considering whether the estate lost money as a result of the defender having control of the business for seven and a half months. Of course the figures illustrate that there was a net loss rather than a profit for the relevant period. But, as I discuss below, the Defender was willing to agree that some "lost profit" figure be inserted, only the quantum of that was in dispute. It is also important that during the relevant period the defender offered to meet with the pursuer and discuss the business and its trading. That offer was rejected by the pursuer, who as a result knew little of what had been going on in the business prior to taking it over.

Turning to the figures, the evidence disclosed four main disputes on issues that require to be resolved in principle before the accounting can be done. These are (i) the items held at Queens' Square and said to belong to the business, (ii) the figure for closing stock on 31 August 2002 (iii) the loss of profit issue and (iv) the Mercedes motor vehicle.

(i) Items held at Queen's Square.

[189190] I have already recorded that this was an issue on which compromise had been suggested by the defender and rejected by the pursuer. The list of the items in question appears at page 48 of the Closed Record No 61 of Process although there had been more than one version of the document. The list was compiled by Mr Hotchkiss, effectively from memory. There was no clear picture in the pursuer's case of how long the items had been at the home of the deceased and the defender prior to Mr Lamont's death. As indicated no documentation was produced matching the items listed with stock of the business. Although Glasgow Audio undoubtedly stocked some of the Hi Fi equipment on the list some of the items, such as the television, DVD player and camera, seem likely to have been acquired for domestic use. The defender was able to recall approximately how long she and Mr Lamont had held each item and I accept her evidence on that. There was some evidence that the Tact Millennium Amplifier was in the property because it was used for the deceased's funeral service in the garden. Overall, while there was insufficient evidence to conclude with confidence that any of the items were stock of Glasgow Audio at the time of Mr Lamont's death, there was ample information to suggest that they were items held by him and the defender for domestic use. As Mr Crawford pointed out, where stock is taken from a business to the proprietor's home, after a while it no longer belongs to the business and should be accounted for as drawings. Some of the time may be in that category. Others were purchased by the deceased and Miss Mooney for their own use. One or two items, such as the Rotel pr amp and power amp and the Aviva Midi system had never been or were no longer held by them at all when Mr Lamont died. The pursuer is entitled, as executrix dative to look to the defender to account for all items belonging to the estate, not just those that formed part of the business. The suggestion that one half of the estimated value of the items should be included in the accounting may have been designed meet a claim that even if the items were joint personal possessions one half would belong to the estate, or it may have been a compromise to take account of the risk to each side on the matter. In any event it accords with the conclusion I have reached on this matter, namely that at best for the pursuer, one half of these jointly held items belonged to the deceased. In the absence of clear evidence that they were stock of the business at the time of death, I cannot include them as belonging to Glasgow Audio. However, taking a broad view, I find that the defender should account to the pursuer for approximately one half of their value, not as part of the accounting for Glasgow Audio but because there appear to have been some items which ought to have formed part of the deceased's estate. I do not intend to take into account the estimated figure for demonstration DVD's CD's of the business. There was no satisfactory evidence that these were retained by the Defender or even that they were missing from the shop on 30 August. They might have reduced in number over time, but there was no reliable evidence that they were all missing from the shop.

(ii) Closing Stock of Glasgow Audio at 30 August 2002.

[190191] When the Defender accepted advice that she was unlikely to be able to prevent the Pursuer controlling the business now that she was Executrix Dative, there was no discussion about how to effect a transition between the Defender ceasing to run the business and the Pursuer taking over. The keys were handed over and Nicholas Wearmouth and Gary Young were summarily dismissed. The defender had no opportunity to do a stock take. The pursuer sought the assistance of Mr Hendry and subsequently Mr Arnott who were going to carry out the task for her. It was difficult for them to do so without full information about the cost of each item. While I accept the evidence of Nicholas Wearmouth that he had been using price lists that day and that the items on display had price labels, it is undoubtedly the case that much of the documentation that would have made the stock take easier was still with the defender, who did not hand over the bulk of the primary documentation until 2005 when the action for declarator had been dismissed and the accounts for this action produced. The discrepancy between the defender's estimate of closing stock ( £127,060) and the figure relied on by the pursuer (£63,579) impacts not just on the figure for assets handed over to the pursuer but also on the whole "loss of profit" argument. It is regrettable that the pursuer chose not to have a stock take done on her behalf for the estate. Instead she relied on a valuation prepared by the purchaser of the business. It is even more regrettable that she effectively sought to pass this valuation off as her own stock take until challenged about its provenance at proof. That led to her being recalled after she produced the sheets prepared by Mr Hendry and Mr Arnott which she had always held but had chosen not to produce under commission and diligence procedure. The only acceptable evidence about the method used for calculating the opening stock in January 2002 was that it was the cost of all items exclusive of VAT. That was the basis on which Mr Hotchkiss had done a stock take ten days after Mr Lamont died. The figure he reached was £133,308. The same exercise was not carried out by the pursuer when she took control of the business. A stock valuation was carried out by Jonathan Turner and ultimately agreed and the figure paid in two instalments. That valuation is produced at No 6/87 of process, Appendix 10. The list of items valued had a total cost price, exclusive of VAT of just under £75,000. A few items that had been listed by Mr Hendry and Mr Arnott do not appear on Mr Turner's list. The price of those is unknown but there was no real challenge to the pursuer's claim that were very low cost items such as cabling. Accordingly, the only evidence of the level of stock left in the business using the cost exclusive of VAT method, results in a figure of £75,000. In some ways it might be unfair to the defender to conclude that this was the level of stock left by her. Using the figures for the stock she stared with, the purchases made and sales achieved, the figure should have been higher, as Mr Crawford pointed out. However, the lists compiled by Mr Hendry and Mr Arnott at the end of August 2002 and eventually produced do appear to correlate broadly with the items valued shortly thereafter by Jonathan Turner. There was no evidence of theft from the shop or of significant items being ignored in the lists. There was some, slightly unsatisfactory, evidence to suggest that the deceased may not have undertaken a formal stock take to achieve the figure or each year's accounts, but it was vague and not supported by Mr Cairncross and I not consider I can rely on it. I have considered rejecting Mr Turner's valuation completely given the circumstances in which it was prepared. However, as the list is to some extent corroborated by the lists made by Mr Hendry and Mr Arnott and as Mr Turner's staff noted the cost price of each item, I have taken the view that there is sufficient material to include the figure of £75,000 for closing stock, using the same method as Mr Hotchkiss in January 2002 rather then the valuation put upon the stock by Mr Turner and his staff. That is the figure that I will use in my accounting.

(iii) Loss of Profit.

[191192] This was probably the single biggest issue of principle at proof. The pursuer claims that the accounting should include a figure for the profit that would have been earned by the defender had she made approximately the same gross profit percentage as the deceased had when alive and running the business. The defender claims that the business was profitable and well run by her and that any loss was caused by the precipitate manner in which the pursuer sold it at the end of August 2002.

[192193] Dealing first with Miss Smith's evidence on the matter, it was clear that she was not an expert in valuing loss and did not attempt to hold herself out as such. Although the revised version (No 6/104 of process) of her original schedule was headed "Due by T A Mooney for Loss on Business" Miss Smith was very clear that her role in the action was to check the accounts prepared by Cairncross & Cairncross for the period to January 2002 and to prepare her own figures for the period of the defender's control from the primary source material. Her experience is as an accountant used to preparing and checking business accounts. She does not have valuation experience. Her remit was to carry out calculations, not to assess the pursuer's claim from a valuation perspective. On that remit she made a number of errors, which she accepted after her meeting with Mr Crawford and tried to rectify. Having been told it was too late to do so, she was left in the embarrassing position of being asked to give evidence in support of a schedule of loss she knew to be inaccurate. She was uncomfortable when giving evidence as a result. However, on the issue of her calculation of "loss of profit" she had been consistent. Her position was that, if one took the annual gross profit percentage made by Mr Lamont (rounded down to the lowest of three years figures) and applied it to the defender's turnover a gross profit figure of £62,010 should have been achieved, as opposed to the £2,050 achieved by Miss Mooney on her calculations. Of course, Miss Smith's calculation of the gross profit made by the defender relied on her the figure for stock of £63,579 being accurate. Using the figure of £75,000 that I found to be the most accurate one to be used on the evidence, would increase her calculation of gross profit made by Miss Mooney by £11,421 to £13,471. In turn that would reduce her calculation of lost gross profit from £60,000 to £ 48,539. However, the issue does not end there. Leaving aside for the moment the assumption that the defender could be expected to make the same gross profit during the few months she traded as Mr Lamont had when he was alive, in my view it cannot be ignored that the deceased made about 47% of his annual profit in the last four months of the calendar year, the very period during which the defender did not trade. Further, Miss Smith did not address the issue of why the defender would be due to account to the estate for gross profit rather than the sum she ought to have handed to the estate on the assumptions made. Miss Smith's view that "loss" in this respect should be calculated by reference to gross profit percentage was based on the idea that because the costs of the business were relatively static, all profit went "straight to the bottom line". While she was supported in that contention by Fiona Martin CA, Ms Martin's evidence related to the way in which loss of profit would be calculated generally rather than with reference to the specific nature of the claim being made in this case. In any event, she accepted that some of the factors that existed in this case, such as changes in the number of staff and in opening hours would in principle be reasons that could result in looking at loss of profit on a net rather than gross profit percentage basis. Only Mr Crawford, the independent expert called by the defender explained why the calculation based on gross profit percentage was flawed. He pointed out that £60,000 was, broadly, the level of net profit Mr Lamont tended to achieve for a whole year's trading. It was inconceivable that someone running the business for seven and a half months of non peak season trading could be expected to have that sum to hand over to the estate at the end of it. No account had been taken by Miss Smith of the fact that costs were incurred in order to earn profit. There were two ways of trying to calculate what the estate had lost by not having the use of the business in order to generate profit during the relevant period. One was to calculate what net profit might reasonably have been earned using historic net profit figures for the business. The other would be to take the gross profit figure and deduct the costs actually incurred by Miss Mooney for the relevant period. Mr Crawford adopted the former approach in the absence of detailed figures about costs. In my view, Mr Crawford's approach to this matter is to be preferred. He was an impressive witness who was able to explain his thinking in a clear and helpful manner. He was able to point out to Miss Smith various errors in her calculations after only a brief analysis of her work. Having worked on the figures for a long time, Miss Smith accepted his corrections. I was left with far more confidence in Mr Crawford's ability to put calculations into context and to test them against information about the business from the agreed historic figures. It seems to me that the exercise I am embarking on is one designed to decide whether or not the defender has properly accounted to the pursuer for assets of the business and the transactions it carried out between 12 January and 30 August 2002. Had she made profits and failed to remit the net sum after deduction of costs (including reasonable drawings) to the pursuer, she could have been called upon to pay over the relevant profits. As it happened she did not make a profit, but a loss. She did not dispute in principle that the calculations ought to take into account such sum as could reasonably have been earned and paid over had the business continued to earn at approximately the level it had when Robert Lamont was alive. As I have already indicated, the defender was the only person in a position to run the business after Mr Lamont died. That she could not do as successfully as he did is not surprising. The net loss she made was not sustained by the estate as such, it was not a debt that required to be paid. However, had she made a profit at broadly the level enjoyed in previous years, the estate would have benefitted. Mr Crawford's net profit percentage calculations were based on figures that I have not relied on entirely. While I accept his approach based on net profit as correct, I consider that a broad view should be taken of the profit that might have been achieved. I have taken into account that the deceased achieved annual net profit of about £60,000, but that the Defender did not trade for the four months of the year that usually generated well over 40% of the sales and that the business was detrimentally affected by the loss of Mr Lamont. In these circumstances I consider that a figure of £22,500 would be reasonable for loss of net profit to the estate . I agree with the defender's submission that it was never properly explained by Miss Smith how the gross profit could go "straight to the bottom line" when Miss Mooney had actually required to make payment of all rent, wages and other expenses for the period of her control. It seems to me that taking account of those costs and having regard both to the difficult personal circumstances in which the Defender took over and the particular months during which she traded, the maximum reasonable sum representing loss of profit she could be said to be responsible for is that £22,500 That is the figure I will use in my accounting.

(iv) Mercedes Motor Vehicle.

[193194] There was ample evidence to support the pursuer's contention that this was a business asset and as such ought to have been delivered to her by the defender in August 2002. The car had been entered as an asset of the business in his accounts, as had previous vehicles he had had. It had been treated as a depreciating asset and capital allowances had been claimed, albeit that these had been reduced to reflect that the car was used privately. Mr Cairncross who had prepared the accounts for years did not dispute that the deceased had included his car as an asset of the business. The estimated value of the car at the date of death was £10,000. The Defender regarded the car as a joint asset, belonging to her and the deceased as a couple. However, the treatment of the car in the accounts clearly contradicted that. The relevant remaining issues relating to the car were whether it had been double or even triple counted by Miss Smith in her calculations and whether or not the defender's actings in relation to it were illustrative of bad faith on her part. So far as the first of these is concerned, it is clear that Miss Smith's figure of £133,985 for the value of the business as it existed at the time of Mr Lamont's death includes a figure of £10,000 for the car. Thus in calculating what sum, if any, is due by the defender it should be assumed that she will retain the car. If it is to be delivered, the sum of £10,000 would fall to be deducted from any such sum due. On the question of bona or mala fides I have reached the view that, while on the issue of the car the defender was clearly wrong, she was misguided rather than in bad faith. It is important that there was no evidence that she had sought any advice before taking steps to register herself as keeper of the car. She did not ask Mr Aitkenhead whether or not the car had to be regarded as a business asset. So far as she was concerned it was the car used by her and the deceased as a couple, it was the "family car." She described an emotional attachment to it. In the absence of legal advice on the matter, I can readily understand why she regarded it as an item in dispute, like the items in the house that the pursuer was alleging belonged to Glasgow Audio. By the time the pursuer was appointed executrix dative a number of issues were in dispute and remained so at the time of proof. The defender has not disposed of the car pending the outcome of the dispute. There was some evidence that it was now off the road but it was and is available pending determination. In all the circumstances I do not consider that the Defender's position on the car exemplifies general bad faith on her part. However, I conclude that she is not entitled to retain the car and it must be delivered or its estimated value paid to the pursuer.

Credibility and Reliability.

[194195] Some of the issues I have required to determine in this matter depend on the credibility and reliability of the various witnesses. I have already touched on my concerns about the way in which the pursuer presented the stock information but I have more general concerns about her evidence. A striking feature of the evidence on issues such as the defender's style of running the business and the alleged running down of its stock was the similarity between the evidence of the pursuer and Mr Hotchkiss and the contrast between their evidence and that of other witness. In relation to the condition of the shop and the goods being demonstrated there on 30 August 2002, the pursuer spoke to the photographs No 6/99 of process as a record of the shop being n a poor condition with little stock. Mr Hotchkiss agreed with that. But less partial witnesses such as Mr Hendry and Mr Campbell had a different view. They thought the shop looked well stocked and well kept, Mr Hendry having been present and Mr Campbell comparing the photographs with his knowledge of the shop for the period of his employment. Mr Hotchkiss changed his evidence completely on when he had attended at the shop relative to handing in his notice to Hi Fi Corner when the pursuer took over Glasgow Audio. He did so overnight, having been transported to and from court by the Pursuer personally. Further Mr Hotchkiss exaggerated his role in the business and spoke as if he had run not just the shop sales but the business itself. Yet he had no knowledge of the turnover or profitability of the business and had never seen the accounts. The pursuer and Mr Hotchkiss gave the impression of being united in their animosity towards the defender and their determination to portray her actings in the worst possible light. Other witnesses such as Mr Wearmouth and Mr Campbell seemed much more measured in their evidence of how the business was run. Mr Wearmouth was noticeably willing to take on board some criticisms and he struck me as an honest witness. Mr Hotchkiss and the pursuer placed great emphasis on Mr Wearmouth's inexperience when he was taken on by the defender, as if that was sufficient to justify Mr Hotchkiss' view that he and Mr Young were a "waste of space". Yet it was Mr Hotchkiss' performance that was called into question by Mr Turner and Mr Mackenzie, the latter speaking very highly of Mr Wearmouth's ability. I have been left with significant concerns about the evidence of the pursuer and Mr Hotchkiss and I have relied on it only where it is corroborated by another witness or by documentation or is otherwise uncontroversial. I found the defender to be a generally honest and reliable witness. She had a good recall for dates and events. She remained emotional about the death of her partner and the subsequent events but her response to the various criticisms made of her was largely backed up by documentary material or through the evidence of reliable witnesses. She was unfailingly courteous to the court in presenting her own case. While she displayed considerable antipathy to the Pursuer she did not strike me as someone who would exaggerate or mislead to present her case in the best possible light.

The Accounting

[195196] I now turn to the figures to calculate what sum, if any, is due by the defender to the pursuer in terms of the First Conclusion. I intend to use the format adopted by Miss Smith in her revised schedule (No 6/104 of Process) and used for comment by Mr Crawford. I have accepted Miss Smith's figures on the detail that she checked against the primary source material. While I do not consider that Mr Cairncross can be criticised for adopting a system of delegation that resulted in his not having carried out such a check I accept that Miss Smith actually carried out that exercise. Accordingly, the accounts produced by Wylie & Bisset ( No 6/87 of process Appendices 5 and 6) can in broad terms be used, subject to the alterations for items in Queens Square, stock and loss of profit dealt with above. The starting point is to assess what assets of the business came into the hands of the Defender that she requires to account for. Miss Smith calculates that to be £133,985 before deductions and I accept that figure. From that I intednintend to deduct the estimated value of the household items for the reasons explained, together with the figures for the bank balance, creditors and accruals that Miss Smith ultimately accepted. Thereafter I have made provision for VAT on the basis of Miss Smith's calculation. Regardless of the arguments in the action for VAT against the Defender, account has to be taken of it. The insertion of Miss Smith's figure at this stage results in the Defender having no further liability, as between her and the Pursuer, for payment of VAT. Should decree be taken against her for any sum, she should have a right of relief against the Pursuer as Executrix Dative. That leaves a net sum of £121,639 due to the estate. The Defender handed back the business, including the stock. The estate then received monies due to the Defender but has, as I have indicated, an undisputed claim for the level of profit that might have been made from the assets over the period of the Defender's control. Taking those into account and then deducting the stock handed back and the sum realised by the Pursuer for the business, a sum due to ( or by) the Pursuer can be calculated.

The following summarise the accounting exercise I have carried out:-

		£
Adjusted balance on accounts to 11 Jan 2002		133,985
Less
(i)	Personal items in Queens Square	(9,221)
(ii)	Bank balance	(1,336)
(iii)	Creditors	(6,822)
(iv)	Accruals	(32)
Add
Provision for VAT		5.065
Sum of accounting		121,639
Less
Received by Estate but due to Defender		(30,146) _______ 91,493
Add loss of Profit		22,500
		113,993
Less
(a)	Stock delivered	(75000)
(b)	Proceeds of sale	(50000)
(c)	Balance of RML business account	(5,312)
Total sum due		(16,319)()

This calculation illustrates, using Miss Smith's format, that having accepted Mr Crawford's methodology on calculation of loss of profit and taking into account that the stock delivered should be inserted at cost price in the interest of consistency, there is no sum due to the pursuer. On the face it, it might be thought that a sum is due to the Defender. However, account requires to be taken of the moveable property of the deceased, or the deceased and the defender jointly that has been retained by the defender. That would involve a payment by the defender to the pursuer of £4,610, which, offset against the sum nominally due to the Defender would reduce that sum to £11,709. Further, while I consider it accurate and consistent to regard the defender as having handed over stock of £75,000 in the accounting, in fact the pursuer received only £63,579 for that stock when she sold the business. The extent to which account requires to be taken of that depends on whether the pursuer was rightly criticised for the speed and manner of the sale of the business, I have reached the view that, while the pursuer sold the business with some alacrity, she did so with the intention of securing the best price she could for it. I do not accept that the business was not a going concern when sold. It was sold to Mr Turner as a viable business and he paid at least £45,000 (£50,000 less £5,000 for fixtures and fittings) more for it than the stock and assets purchased. A business may be loss making for a short period and still be regarded as a going concern. There was continuity of trading and Mr Turner made a good profit during the busy Christmas period shortly after he took over. The pursuer was faced with a difficult choice when she took over. She believed the reports from Mr Hotchkiss about the way in which the business was run. While I have been critical of her decision not to have the stock independently assessed I do not think that the pursuer can be criticised for her decision to sell the business immediately. I am not convinced that she seriously considered running Glasgow Audio herself. She had a willing buyer before she took entry. She secured a reasonable price. I have found that Miss Smith was in error in using a valuation figure rather than a cost price figure in assessing what closing stock was handed back by the defender, but I cannot say that it was unreasonable of the pursuer to accept a lower valuation figure in the sale. Looking at the sale contract as a whole, there was support for the pursuer's contention that she obtained the best possible price in the circumstances. While she was in my view wrong to regard the Defender as the author of her problems, the pursuer was not in an easy situation when she took over. She followed her instincts and she was probably right to do so. In those circumstances there should be no question of her being required to pay the defender the difference between the cost price of the stock delivered and the price received on sale. Accordingly, while in the strict accounting exercise the defender has accounted for £75,000 of stock, in reality the estate obtained the benefit of only £63,579 of that in circumstances where it would have been difficult to realise more.

[196197] In conclusion, , when regard is had to the retention by the defender of the household items and account taken of , the actual price received by the pursuer for the stock, I consider that the fairest result on the figures available to me is for there to be no sum due to or by either party in terms of the first conclusion. As a separate matter however, as indicated above the Mercedes motor vehicle belongs to the estate and should be retuned, which failing the Defender will require to pay the sum of £10,000 to the Pursuer.

[197] Vitious Intromissions or Spulzie

[198] The Pursuer's third conclusion is for damages and is sought as an alternative to the first and second conclusions. The argument was that if the sum of £41,823 could not be granted in whole or in part in terms of the first conclusion then it could be granted as compensatory damages under the nominate delict of spulzie if the Pursuer was allowed to amend. It was submitted that it would be particularly appropriate for the "loss of profit" element if it was thought inappropriate to include that in the count reckoning and payment aspect of the case. While the proof had been conducted on the basis that what was sought was damages following vitious intromissions the Minute of Amendment was designed to acknowledge that the passive title of vitious intromission was the more appropriate remedy for a creditor whilst spulzie was more apt at the hand of the executrix. As the defence of holding and acting in good faith is available for both vitious intromissions and spulzie I accept that the timing of the motion to amend did not affect the evidence that either party would have led had it been moved earlier. The Defender did very well in addressing the legal requirements of the new claim and was able to give a detailed response to the submissions made on behalf of the Pursuer in relation to it. Accordingly, I intend to allow the Pursuer to amend to make the alternative claim one of spulzie.

[199] As I have already included an element for loss of profit in the accounting and as this is an alternative claim, I do not intend to award anything under this conclusion. However, it may be appropriate to comment on the issue of contention between the parties on the law. The essence of the wrong of spulzie is that it requires the wrongdoer to deprive the complainer of her title to own or possess the goods in question - Walker on Delict, p 1005. The legal issue in dispute was whether the necessary act of dispossession could have occurred in this case as there was no executrix appointed until August 2002, thus no one was the representative of the deceased with title to intromit. It was submitted for the Pursuer that, as the Pursuer's appointment was retrospective she was the legal representative from the date of death as the next of kin and thus entitled to be executrix dative - Currie on Confirmation of Executors 8^th ed p216 para 6.22. The Defender submitted that she had started looking after the business at a time when she had probable title to the estate and there was no reason to think the Pursuer had title, thus the Pursuer couldn't be dispossessed. In my view the Defender's submission is to be preferred, given the circumstances in which she came into possession. An action of spulzie is grounded, as Erskine put it " ... on the plain principle that no man is to be stripped of his possession but by the order of law." ( Erskine, IV, 1,15.) The pursuer in such an action requires to prove that they had lawful entitlement to physical possession at the time he or she was dispossessed. The business of Glasgow Audio was in the possession of Robert Lamont until his death. When he was ill it was the Defender he trusted with the paperwork of the business. There was evidence to suggest that he intended anyone other than the Defender to inherit his estate as I have already found. She was effectively in physical possession from the day he died. The Pursuer had a claim to be executrix dative and the Defender had, she understood, a claim to be executrix nominate. It is difficult to see how the Pursuer could be regarded as in possession of the business prior to her indicating that she intended to go ahead and seek an appointment as Executrix Dative. In my view there is no inconsistency between a rule that her appointment is retrospective administratively and a finding that she was not in possession for the purpose of the delict of spulzie. The necessary requirements for the wromg wrong are not present in the particular circumstances of this case.

[200] In any event, even had I found that they were so present, the Defender's answer to the claim is that she was in good faith, partly because she had probable title to intromit with the business pending resolution of the will issue and partly because she was willing to steward the business pending resolution of that issue regardless of whether her probable title would ultimately hold good. I have already found that the Defender was in good faith in her actings at the time and I consider that she had reasonable expectation that a will would be found. Had I not found that, in the absence of it ebingbeing disputed in principle, the Defender should account to the Pursuer for the level foof net profit that might reasonably have been made during the period of her control, I would not have been minded to make any award in terms of the third conclusion.

[198] The Defender's Counterclaim.

[201] The Defender makes five claims against the Pursuer. The first is to compensate her for her unremunerated administration and management of the business. I do not think this claim is sound. The Defender drew £750 per month form the business when she was running it. There was no suggestion that she ought not to have done so in principle, although it was said that the amount was " more than enough for a part time job." In my view the amount drawn by the Defender was sufficient remuneration for the work she carried out for the business. The second claim, that by HMRC, has not been insisted in by them. The VAT claim is being defended by the Defender. She could bring the Pursuer into that action. In any event she can claim a right of relief against the Pursuer if she is unsuccessful. On that basis she is not prejudiced by dismissal of this aspect of the Counterclaim. The YELL debt is eight years old and has not been pursued. The Defender has no suffered loss in this respect and there was no real suggestion that she was likely to have to settle the debt now. The overdraft on the Clydesdale bank account is in a different situation. The debt has been assigned and proceedings raised. However, again the Defender could bring the Pursuer into that action or claim a right of relief if she is unsuccessful in defending it. I have come to the conclusion that the Defender has been unable to establish that there are debts she has actually incurred for which she is at this stage entitled to reimbursement. While on the one hand it seems unsatisfactory to leave the possibility of any future claims between the parties open, on the other there seems to me to be force in the Pursuer's position that the proper course is for the Defender to bring the Pursuer into the separate proceedings that have been raised in relation to those debts. I cannot predict the outcome of those proceedings. Accordingly, I intend to dismiss the claims in the Counterclaim but not grant decree of abolvitor in relation to the subject matter thereof.

[199] Decision

[202] For the reasons discussed above, I consider that the Pursuer has not established that the Defender is due any payment to her following the accounting exercise. However, I have found that she should return to the Pursuer the motor vehicle belonging to the estate. Should she fail to do so she will require to make payment of the sum of £10,000. The Defender's Counterclaim will be dismissed. In these circumstances I intend to bring the case out By Order to see whether the Defender has delivered the vehicle voluntarily, which would affect the formal disposal of the Conclusions. All question of expenses will also be addressed at that hearing. ;

OUTER HOUSE, COURT OF SESSION [2011] CSOH NUMBER82
A148/04	OPINION OF MORAG WISE, Q.C. (Sitting as a Temporary Judge) in the cause IRENE BRISBANE LAMONT Pursuer; against TERESA MOONEY Defender: ­­­­­­­­­­­­­­­­­________________

Pursuer: A Forsyth; Campbell Smith

Defender: Party

13 May 2011

[1] This is an action for Count, Reckoning and Payment, with alternative Conclusions for delivery and damages. The dispute arises out of the death of Robert Lamont ("the deceased") who died aged 45 on 11 January 2002. The pursuer was the sister of the deceased. She was appointed as Executrix Dative of the deceased's estate by interlocutor of the Sheriff of Glasgow and Strathkelvin dated 13 August 2002. The defender was the deceased's partner, having cohabited with him as if husband and wife from the early 1980's. They did not marry formally or have children.

[2] For some months after the deceased's death, the issues of who would administer his estate and who would inherit most of his moveable property were unresolved. His interest in a heritable property at 53 Queen Square, owned jointly with the defender, passed to her under a survivorship destination in the title. There were also certain life policies that paid out to the defender. An issue arose about whether or not the deceased had left a Will in relation to the remainder of his estate. He had been sole proprietor of a small business known as Glasgow Audio, which sold Hi Fi and related audio equipment from leased premises at 135 Great Western Road, Glasgow. Prior to his death the deceased had been ill for about two and a half months, although he was not at first thought to have any serious condition. He was in hospital when he died. He had pelvic ulcers and septicaemia. His death was not expected, albeit that he was more seriously ill from mid December 2001.

[3] Between 12 January and 30 August 2002 the defender took over the running of the business of Glasgow Audio pending resolution of the disputes about who should administer the deceased's estate and who should inherit. Ultimately no duly executed Will was found and the deceased's estate fell to be divided on intestacy between his parents and his sister. The pursuer claims that the defender has not accounted to her qua Executor for all intromissions with the estate, in particular with Glasgow Audio and she seeks accounting and payment of sums she claims remain due to the estate. As an alternative she claims damages for loss incurred to the estate as a result of the alleged vitious intromissions. In submissions, Mr Forsyth for the pursuer sought to amend his alternative case to one of spulzie. That was opposed by the defender and I indicated that my Opinion would deal with the proposed amendment in addition to determining the issues currently on record.

Evidence led in the Pursuer's case

[4] The pursuer herself gave evidence first. She was 58 years old at the time of proof. She lived in the West Midlands for many years but has moved during the course of the proceedings and now resides in Ayr. Previously she ran her own small business designing and selling jewellery and silverware. She is now a part time tutor. She spoke to her detailed curriculum vitae number 6/89 of process. She said that she had been very close to her brother and had taken an interest in his business when he was alive. She had, she thought, also enjoyed a good relationship with the defender prior to the deceased's death. Mr Lamont's first business had been in Stirling and had been named Stirling Audio, but from 1994 he had operated only in Glasgow, trading as Glasgow Audio. Of that business she said that she knew it had "ups and downs" but that during the last few years of trading it was very successful. She knew that her brother and the defender had started living together as a couple from about 1982, but that there had been a period of some years after that when the defender was studying in Belfast. She said that there had never been talk of marriage and that the defender was not involved or particularly interested in the deceased's business at all, given that she had employment as a full time head teacher of a primary school in Glasgow.

[5] Miss Lamont had stayed with the deceased and the defender at their home in Glasgow sometime in October 2001. Thereafter she visited her brother in hospital in the December, by which time he had lost three stones in weight and was weak and dehydrated. She attended her brother's funeral, which she thought had taken place on either the 17 or 18 January 2002. It was Miss Lamont's mother who first raised the issue of what was to happen to the business of Glasgow Audio. Miss Lamont and her mother then asked the defender about it at the funeral. The defender said that Robert had left a Will and that she would be running the business in his memory. Miss Lamont and her mother considered that to be an unsatisfactory answer. In mid February while on a trip to Scotland Miss Lamont visited the defender at Queens Square. She enquired of the defender who was to inherit the deceased's estate. She said that the defender had replied that Robert had left a Will and that everything was left to her, with nothing to Miss Lamont or her parents. Miss Lamont was concerned because her parents had lent their son £8,000 when he first set up in business and wanted to know if it would be repaid.

[6] During the period January to May 2002 the pursuer kept in regular contact with Matthew Hotchkiss, who had been employed by her brother to manage the shop at Great Western Road. She said that Mr Hotchkiss raised with her a number of concerns about the defender's management of the business. He claimed to Miss Lamont that the defender had "sacked" two employees and brought in her nephew and his friend to work in the business. Miss Lamont said that she had concerns about how the business was being run during this period as reported to her by the staff. It was claimed that the stock in the shop was being sold and not replaced, that deliveries were going to the defender's home address, that sales representatives were not permitted to attend at the shop and that mail was being redirected. Miss Lamont said that when she went into the business on 30 August 2002 the stock rooms which had always been full were "virtually empty".

[7] There was no direct contact between the parties in the months following the deceased's death. Miss Lamont sought to consult Alastair Aitkenhead, solicitor, in relation to the estate but initially he was acting for the defender. She and her parents then consulted a Mr Picken, solicitor of James Black Hay & Co to pursue the issue of who was to administer the estate and the concerns about the way the business was being run meantime. In early July 2002 there was correspondence between Mr Picken and a Miss McKeracher of Riddell Breeze Paterson who had taken over acting for the defender. Miss McKeracher indicated in a letter of 9 July 2002 (No. 6/13 of Process) that she had asked the defender to produce business accounts as a matter of urgency. Miss Lamont said that she knew at that time that the business wasn't in profit because she had been speaking to her late brother's staff. In her agents' letter of 9 July 2002 the defender offered to meet with the pursuer to discuss the running of the business. The pursuer did not want to meet with the defender direct and the meeting never took place.

[8] Miss Lamont did not believe that her brother had left a Will leaving everything to his partner the defender. She was annoyed that the defender delayed her appointment as Executrix Dative by asking the sheriff involved for more time to find what she described as "the supposed Will".

[9] After she was appointed Executrix Dative on 13 August 2002 the pursuer made plans for the business albeit that she had not yet taken possession of it. She said that the deceased's staff had told her they would come and work for her if she took over. She also had tentative discussions about selling the business. Meantime the defender had raised proceedings in this Court for Declarator of Marriage and Interdict prohibiting the pursuer from taking over the business pending resolution of the dispute. Undertakings were given in terms of which the pursuer agreed not to do so pending an anticipated hearing on 30 August 2002. She was permitted access to books and records in the interim. By 30 August it was clear that Miss Mooney was not persisting in her application for interim interdict and the pursuer took entry to the business after collecting the keys from the defender's agents. She went to the shop accompanied by a Derek Henry, an accountant who, according to the pursuer attended "as a witness and to help me decide whether I could run the business". The pursuer said that there was "practically nothing" in the shop by way of records or paperwork. The deceased's motor vehicle, a Mercedes, which was in the accounts of the business, was not returned.

[10] The pursuer was clear in examination in chief that she sought delivery of the car and of certain items that, according to her, were held at the home of the deceased and Miss Mooney but truly belonged to the business. While the defender had taken steps to register herself as keeper of the vehicle (No. 6/2 of Process) the pursuer wanted the Mercedes returned as an asset of the business and the estate.

[11] The pursuer said that on 30 August 2002, she and Mr Henry waited for Mr Hotchkiss, who had been working in Edinburgh since leaving Glasgow Audio in June 2002. He knew how to set the alarm in the shop. Miss Lamont said that there were no price lists in the shop and so no value could be put on the stock. While Mr Henry started to attempt making lists of the stock, she telephoned Gordon Arnot, a former employee, to see if he could assist. She said that Mr Arnot and Mr Hotchkiss between them did what they could to pinpoint figures but that ultimately she relied on Jonathan Turner, who purchased the business, to place a value on the stock. She said that the value he put upon it was checked by Mr Hotchkiss. The pursuer took a number of photographs of the shop on 30 August (No. 6/99 of process) and spoke to these at length. She said these showed that the shop was in poor condition, that the stock was much depleted and that some of what was left was damaged.

[12] On 31 August 2002 the pursuer entered into an agreement for sale of the business of Glasgow Audio with Jonathan Turner, who had a business in Aberdeen known as Holburn Hi Fi. There were negotiations on the day that led to Mr Turner paying £50,000 for goodwill including the shop name and transfer of the lease. In addition he agreed to pay for the stock but not until he had valued it. According to the pursuer, Mr Turner insisted that he needed to have the shop immediately to get it going for the pre Christmas trade. The lease could not be transferred because the pursuer had not yet applied for Confirmation.

[13] The pursuer said that she had not received complete records for the business from the pursuer until about October 2005. These records comprised No. 6/4 of process. On receipt of the records she instructed accountants, Wylie & Bisset, to review them with a view to supporting her claim for an accounting.

[14] Under cross examination the pursuer acknowledged that she had considered selling the business from about July 2002, before she was appointed Executrix Dative. She had discussed possible figures with an accountant at that time. She said she knew roughly what the profitability of the business had been when the deceased was alive and she based her opening figure in negotiations with Mr Turner on that. She maintained that she and her brother had been close and that although he hadn't shared specific information about his business with her she knew roughly what his turnover had been. She said that she had relied on her late brother's staff for information about how the business was being run by the defender. She had been told that suppliers had taken their business away. When challenged about the speed with which she had agreed to sell the business she said that she didn't think she could delay even for a day or so. She used her "gut instinct "in deciding to sell the business immediately and in agreeing the price. She said it would have been impossible to make any enquiries to ascertain the value of the business independently in the absence of paperwork. Prior to 30 August and in accordance with the agreement noted in the Court proceedings on 16 August (No. 7/103 of Process) the Clydesdale Bank had provided her with bank statements for the business. She did not find Cairncross & Cairncross the accountants for the business to be responsive or helpful. She said she had some access to computer records that showed her that the turnover had dropped after June 2002. When asked whether she had considered whether there might be others who would want to buy, she mentioned Colin MacKenzie of Hi Fi Corner, saying that the deceased would not have wanted her to sell to him.

[15] In answer to questions about the period January to June 2002, the pursuer said that she had been told by Mr Hotchkiss and Allan Campbell the two full time members of staff that the defender wouldn't allow them to buy stock other than on certain conditions and had forbidden the sales representatives of the supplier companies from attending at the shop premises. Miss Lamont said she did not go into the shop herself, although she drove past it a few times and noticed there were few lights on and it looked shut.

[16] In relation to the events of 30 August 2002 the pursuer agreed that she had asked the staff engaged in the business by the defender, Nicholas Wearmouth and Gary Young, to leave the premises shortly after she arrived. She had been told that Mr Wearmouth and Mr Young had no knowledge or experience and she didn't want to take them on. She did not consider it appropriate to ask the defender to attend at the premises to effect a handover of the business.

[17] The pursuer was cross examined about an averment in her case (Closed Record p 10A) to the effect that there had never been any Will of the deceased. She said that she had in fact discussed with her brother his intentions and that he had said to her that he was going to divide his estate (in unspecified proportions) between her as his sister and the defender as his partner, but that his parents were to have some use of the estate during their lifetime. However, she had not seen any draft Will until long after the deceased's death. When shown a draft Will the deceased had instructed in 1992 (No. 7/7 of process) in terms of which his entire estate was to be left to the defender, the pursuer commented that it was only a draft and that in any event the estate would come to her after the deaths of the defender and the deceased's parents. She thought that her brother might have had a change of heart about the terms of his Will. When shown a letter from the deceased's solicitor, Alistair Aitkenhead of AJ & A Graham indicating that Robert Lamont had told Mr Aitkenhead that he had completed a Will with other agents, the pursuer suggested that her brother might have just said such a thing to Mr Aitkenhead to stop him (Mr Aitkenhead) "going on" about the matter.

[18] In relation to the issue of what the defender had conveyed about the deceased's intentions after his death, the pursuer said that Mr McEwan of the Clydesdale Bank had told her that he was led to believe that the defender was the sole beneficiary of Mr Lamont. She accepted that she could not say categorically that it was the defender who had led Mr McEwan to believe that. On being shown a letter from the Clydesdale Bank setting out the terms of business under which they opened a bank account for the defender (No. 6/3 of process) the pursuer accepted that the bank's letter did not state that the defender had told them she was to inherit the estate. A letter to the defender from the bank (No. 7/123 of process) indicated that it was understood that the defender's intention was to continue to run the business, but not the basis on which she was doing so. It was put to the pursuer that another letter (No. 7/106 of process) clarified that the Clydesdale Bank provided a business account for the defender to allow her to continue trading until the matter of Mr Robert Lamont's estate was clarified. The pursuer indicated that the terms of the letter differed from what she had been told by the Clydesdale Bank manager at the time.

[19] So far as the agreement to sell the business of Glasgow Audio was concerned, the pursuer confirmed under cross-examination that Jonathan Turner had approached her before she took entry to the business at a time when it was clear that she was going to be appointed Executrix Dative. She said that Mr Turner knew the suppliers were unhappy with the situation, that the trading figures were well down and that it was possible there would be a sale. The pursuer said that when she took over the business on 30 August her primary concern was for her brother's staff. Mr Turner had said he would take those staff back if he took over the business. The pursuer also said that she was concerned that Silas Meridian, one of the main suppliers, was going to withdraw a concession the business had always enjoyed and that that was imminent when she took over. She claimed that two suppliers had been lost to the business already and she was worried that there would be no goodwill left to sell. Her brother had been part of a business organisation called Mountainsnow where concessions were obtained in relation to the supply of high level Hi Fi equipment from various manufacturers. The pursuer said that she knew that Mountainsnow was about to withdraw its concession to Glasgow Audio. She decided on 30 August that it would be impossible for her to run the business and she contacted Mr Turner. She considered that her own experience in business was sufficient for her to make a judgment that it would be better for the estate if she agreed a quick sale rather than trying to either run the business for a period or have it valued. The pursuer was asked a number of questions about the document in terms of which she agreed to sell to Jonathan Turner (No. 7/22 of process). The document was dated 31 August 2002 with the heading "Date of Transfer". Miss Lamont said that the document was a joint effort between her and a Peter Ross, Jonathan Turner and Mr Henry. She described it as an offer to buy with her signature on the document constituting the acceptance. She considered that she had obtained best price for the business.

[20] After the agreement to sell, Mr Picken, who was acting for the estate, advised the pursuer that she would require to have accounts prepared in order to obtain Confirmation. She decided to instruct Cairncross & Cairncross because they held the records. She did not regard the Cairncross & Cairncross accounts as satisfactory but they were used for the purposes of an initial tax return. The pursuer accepted that the stock that she had agreed to sell to Jonathan Turner on 31 August 2002 was not finally valued by him until May 2003, albeit that an earlier estimate and part payment had been made. The pursuer ultimately conceded that she had allowed the purchaser of the business to determine the value that he would put upon the stock although she maintained that the stocktake was to some extent a joint effort between Mr Turner's team and Mr Hotchkiss and Gordon Arnot for Glasgow Audio. The final payment was not made by Mr Turner until December 2003. In relation to the breakdown of the £50,000 paid for the business excluding the stock, the pursuer confirmed that the fixture and fittings in Glasgow Audio were part of that price. She agreed that Mr Turner's offer to buy was subject to the transfer of the lease which could not be effected at the time. It was ultimately assigned to Mr Turner in September or October 2003. While the pursuer accepted that the bargain she had struck with Mr Turner was subject to the transfer of the lease she had been confident that there was a mutual desire on both sides to complete the transaction. The pursuer said that she understood that a commercial lease would form a separate asset of the estate but indicated that she regarded the lease as an integral part of the goodwill sold to Mr Turner. By December 2003 the pursuer, as Executrix Dative, had received a total of £113,000 for the business which she regarded as a very good price in the circumstances.

[21] The pursuer agreed under reference to No. 7/15 of process, that Confirmation was obtained in May 2003. Some of the values in the Confirmation were not quite accurate. The figure for Glasgow Audio was overstated. There was less cash in the business because of the way in which the bank had dealt with matters following the deceased's death. The discrepancy was not important given that there was no inheritance tax payable. The pursuer had worked closely on the Confirmation and subsequent engathering of the estate with Mr Picken, the solicitor.

[22] The pursuer was cross-examined at some length about the allegations on record in relation to the alleged diminution of the estate due to the defender's running of the business. The pursuer indicated that the figures claimed in the action were not hers and that Gill Smith, the accountant, would speak to those. The pursuer accepted that there had been changes to the figures claimed during the course of the action. One of the difficulties, she said, had been the lack of stock records. She accepted that much of the claim was based on the fact that the valuation ultimately put upon the stock was far lower than the level usually carried by the deceased. The pursuer indicated that her brother usually had stock levels of about £160,000-£180,000, even in excess of that in the pre Christmas period. The main complaint of the pursuer was that she said she had been unable to get full information from the defender in relation to the books and accounts of the business while the defender had been in control of it. The statement of the executory account (No. 7/54 of process) was put to the pursuer. She confirmed that the realised value of the business (as compared with the inventory value) was correct at £138,433, although she accepted that by May 2003 she knew that the value engathered was £113,578. The stance of the pursuer in relation to the period of the defender's control of the business was that the defender had no power to intromit with the deceased's estate, that her running of the business had caused loss to the estate and that she sought an accounting for that. She disputed that the defender had ever had probable title to the estate and considered that the defender ought to have informed the pursuer and the pursuer's parents within a month to six weeks of the deceased's death that she was not in possession of a signed Will. She disputed that such evidence as there was indicated that the deceased probably did make a Will. She was of the view that the absence of a Will, despite advertisements in The Law Society Journal and various letters to solicitors who might have held a Will were an indication that no such Will existed. She conceded, however, that the deceased was the sort of man that tended to do that which he said he would do. The pursuer was quite clear that she did not regard it as reasonable for the defender to have carried out extensive searches over a number of weeks to try to find the Will that she was convinced existed. The pursuer claimed that the defender had told her categorically that there was a Will and that she would be running the business. The pursuer then said that during the course of that conversation she had asked the defender what provision had been made in the Will for the staff because her primary concern and that of her parents was for her late brother's staff. Ultimately the pursuer's position was that she felt the defender had been in bad faith by not making clear that the Will she held was only a draft Will.

[23] Later in cross-examination it became apparent that the final breakdown in communication between the parties came about as early as March 2002. The defender had apparently written a note to the pursuer's mother indicating that she would prefer that they did not contact her meantime and that she would be in touch with them when she was ready. At that point the pursuer and her parents apparently decided they did not want anything more to do with the defender. From that time onwards the pursuer's main point of contact was Matt Hotchkiss who had continued to work in Glasgow Audio.

[24] The pursuer was then asked about a sheriff court action that had been raised against the defender for non payment of VAT. Commission and diligence procedure had been initiated during those proceedings. A specification of documents had been served on Jonathan Turner who had required to hand over all of the receipt books to the Sheriff Court in Glasgow. According to the pursuer, the Court subsequently mislaid the receipt books. The pursuer's position was that although there were some cash receipt books in the business there were previous years of those missing when she took control of it. The pursuer's understanding of Matt Hotchkiss' role in Glasgow Audio when the deceased was alive was that he was deeply involved in the decision making process and was familiar with the figures for daily, monthly and annual turnover. His official title was shop manager. She had no reason to mistrust Mr Hotchkiss' judgment and believed what he had told her about the way in which the defender ran the business from January to June 2002. Mr Hotchkiss had told the pursuer that the defender had sacked two part time staff of the business shortly after taking over. She accepted, however, that those involved, a David Orry and Andy Fisher, may not have been employees as such but were part time self employed personnel who carried out work for the business from time to time. The pursuer was unwilling to accept that the deceased may have discussed important aspects of the business of Glasgow Audio with the defender. Her position was that the defender was always very busy with her school commitments and that the deceased sometimes found that difficult.

[25] The pursuer accepted that the sudden absence of the deceased as sole proprietor of Glasgow Audio must have had a major detrimental impact on the business. However, her position was that if the defender had allowed Mr Hotchkiss to take control and employ another member of staff that would have helped. She did not consider that Mr Wearmouth and Mr Young were appropriate personnel to be employed in the business. On being shown a reference that Mr Hotchkiss had apparently written for Gary Young (No. 7/24 of process) the pursuer remarked that she had given references for many people that she was happy to see moving on. She did not think that Mr Hotchkiss had anything against Gary Young other than his inexperience. When asked to summarise the complaints she had about the defender's running of the business during the relevant period, the pursuer said these included the redirection of mail, the problems with suppliers, the engaging of inexperienced staff and the refusal to allow sales representatives to visit the shop. In relation to stock, the complaint that Mr Hotchkiss had made was that he was only allowed to order stock if the defender had approved it or if the customer had paid a 50% deposit. She also claimed that the staff had told her that they were no longer allowed to take a part exchange for new products. Mr Hotchkiss had told her that he found it impossible to go on working with the defender and he gave notice towards the end of June 2002. She was not clear about whether Mr Hotchkiss had said that he had informed the defender of his reasons for leaving.

[26] The pursuer was also cross examined in relation to the schedule set out at page 48 of the Closed Record in relation to the assets and items said to belong to Glasgow Audio but situated at 53 Queen Square. The pursuer confirmed that she thought the schedule had been compiled some time in mid to late September 2002 as part of the stock valuation. There was no visit to 53 Queen Square but the staff were well aware, according to Miss Lamont, what items belonging to the business the deceased had taken home with him. The values of what were said to be stock items were values estimated as at the date of death. The pursuer said that she had seen items from Glasgow Audio herself in the home that the deceased shared with the defender on many occasions. She had forgotten that until mid to late September 2002 when the shop staff had said that the deceased had taken a Tact Millennium amplifier home. She accepted that she had not tried to contact the defender in relation to the matter, claiming that there was such negativity in the defender's behaviour that she did not feel able to do so. She said the shop had been stripped of demonstration CDs and DVDs and that was why they were included in the list of items sought to be returned. She did not know whether those items were at Queens Square or not but she regarded the defender, who had been in control of the business, as responsible for them. She had been given an estimate of what the usual amount of CDs and DVDs the business carried and the estimate was based on that. In relation to the action for declarator of marriage that the defender had raised, the pursuer understood that had the declarator been granted the defender would have been entitled to a certain proportion of the deceased's estate. She accepted that until that action had been disposed of the defender had to be regarded as the possible beneficiary of the estate. On that basis the pursuer had not been permitted to disperse the assets of the estate during the course of those proceedings. The relevant Bond of Caution (No. 7/48 of Process) in relation to the estate had been restricted to take account of the proceedings. The pursuer said that she had received the advice of two solicitors that the defender would not be successful in the action of declarator. The action was ultimately dismissed on 21 May 2004. In relation to the present action, the pursuer confirmed that it had been raised after repeated requests for documentation relative to the period of the defender's control of the business. The pursuer was challenged on whether she considered her actions had brought maximum benefit to the estate and whether she had fulfilled her duties as Executrix Dative. The pursuer said she thought the business of Glasgow Audio was on a knife edge of going into insolvency and she did what she thought was best for the estate at the time.

[27] In re-examination the pursuer reiterated that she had spoken to Derek Henry about whether he would take over from Cairncross & Cairncross as accountant for the business. In relation to the sale to Jonathan Turner, the pursuer said that she knew that Mr Turner had found it quite a struggle to bring the business back into profitability after he took over but that she thought he had managed to do so as a result of getting the business as quickly as possible. On the issue of the redirection of mail by the defender during her period of administration, the pursuer said that when she went through the documents in 6/4 of process comprising all of the primary material, she noted that the administration address for the business changed to Queen Square about 5 to 6 weeks after the defender took over but the delivery address for stock continued to be Great Western Road. She had noted some deliveries to Queen Square. She thought it was strange that the defender had chosen to administer the business from Queen Square and equally unusual that she may have chosen to meet with sales representatives in cafes near the school where she worked. She felt it was inappropriate that the defender had, according to the staff, restricted their access to information such as trade magazines, stock sheets and so on. When she took entry to the business on 30 August she thought it was very improper that the essential paperwork had not been left at the business premises. She was very suspicious as a result.

[28] On the question of whether the pursuer had received any advice about whether she had the ability to sell the business in the absence of Confirmation, she said that she believed she did have that power, she understood that Mr Picken had no problem with what she did provided that she was receiving good value. Mr Picken had advised, however, that it was best if Confirmation was in place before the lease was transferred. She had told Mr Picken that Mr Henry would be the accountant of the business if she was carrying on with it. She had consulted Mr Picken about her prospective duties as Executrix Dative some time prior to her appointment. Finally, an issue relating to cheques written on the bank account of the business of Glasgow Audio, signed by the deceased but not cashed until some time after his death was raised. These cheques comprised No. 6/86 of process. The cheques had not been put to the pursuer in cross examination. She gave general evidence in re-examination that she did not know when they were issued but that they had been cashed after her brother's death. The cheques were written to various suppliers and the total sums withdrawn from the account in this way were about £33,300.

[29] Evidence was then led from Mr Anthony Henry, a 61 year old retired chartered accountant. Mr Henry spent the whole of his professional life as an accountant both in private practice and in industry. He had known the pursuer for about 13 years but was not acquainted with the deceased. He confirmed that the pursuer had asked him to attend at her late brother's business premises on a date in August 2002. She had asked him to go along to the shop and help her with the stocktake. He attended at the premises at Great Western Road, he thought in the afternoon of 30 August 2002. He was there with the pursuer for some hours, probably until about 9pm. There were three young men running the shop when they arrived and the pursuer told them that she was assuming responsibility for the business and asked them to hand over the keys and leave. He had the impression that the staff were expecting this to happen, there was no rancour and they simply got their coats and left. The pursuer then called Matt (Hotchkiss) because she did not know how to close the shop and Mr Henry began to start a stocktake. He found it quite difficult so someone else was called in to help. He could not recall how much cash there was in the till, probably a few hundred pounds. He confirmed that there weren't many records and when Mr Hotchkiss arrived he said that the system that the deceased had established was not being kept. Mr Henry could not recall seeing cash books or ledgers in the shop. He could not be certain whether there was a receipt book or not. Mr Henry also attended at the premises on 31 August 2002 for about 4 hours. In relation to the state of the premises Mr Henry noticed no particular problems. He said there was equipment there to be demonstrated. It was clearly a shop being run while the records in the back office were not particularly good he could not say that that meant there weren't any records being kept, simply that the system set up by the deceased was not there. It became apparent that someone who knew the stock would be required to assist and Mr Hotchkiss was to help with that. However he had not been to the business premises for a while prior to the date in question. On 31 August Mr Henry was present when the two gentlemen from Holborn Hi-Fi (Jonathan Turner and his uncle) attended. He recalled that there were two elements to the price agreed on that date. First there was the stock but the price for that had not been established and secondly there was the goodwill. He recalled that the price for goodwill was about £50,000. The prospective purchasers had offered less than the price ultimately fixed and a negotiation had taken place. When he was asked whether the pursuer had considered running the business herself, Mr Henry said that he knew that such a business was not the pursuer's area of expertise and in any event she had her own business to run. He recalled that he and Miss Lamont were unable to give the prospective purchasers turnover figures for the business. His recollection was that the price agreed was based on the deceased's reputation and the reputation of the business generally. While Mr Henry did feel there was a paucity of records available in the shop on the day, from his observation he did not see any difficulty with the way in which the stock rooms had been kept. He was not able to distil anything negative about how the business had been run prior to the pursuer taking entry to it.

[30] Under cross examination Mr Henry confirmed that his remit had been to carry out a stocktake and generally assist the pursuer in assessing what records there should be in the shop, something that she did not know about. His involvement was fairly limited. He did not recall any conversations with the outgoing staff about how trading had been that day, whether the shop would remain open or what was going to happen to them. He did not witness the staff taking anything from the shop other than their personal belongings when they left. Mr Henry did not know what had happened to the final stocktake. He had made a list which he assumed was passed on but he could not be sure. He confirmed that he had not been involved in valuing the business as such. He was simply present during the negotiations which were conducted by the pursuer. It was clear that the negotiation was not based on any valuation but was simply the price that the purchaser was willing to pay and the pursuer would take. Mr Henry himself knew nothing of the profitability of the business. The agreement to purchase document signed on 31 August 2002 (No. 7/22 of process) was put to him. He had no specific recollection of it and had not been involved in its drafting. Mr Henry did not recollect the purchaser taking any steps to undertake a stocktake on the day in question. Mr Turner was, he said, fully involved in the negotiations. Mr Henry regarded his role in the proceedings as one of adviser. He had been in business for many years and had some negotiating skills. He had not formed any impression of a lack of interest on the part of the outgoing staff. The young man he had spoken to was clearly enthusiastic about the business.

[31] In re-examination Mr Henry confirmed that he had thought the records of the business would be in the shop when he and the pursuer arrived. He had no recollection of what the purchaser's starting figure in negotiations had been. He was clear, however, that it was an arm's length transaction after negotiation. His specific recollection was that the price ultimately agreed was based on the reputation of the deceased within the hi-fi business. Mr Henry was very clear that he had never had any discussions with the pursuer about him continuing to be involved in any capacity with the business of Glasgow Audio if the pursuer was to take it over rather than sell it.

[32] James Picken was also called in the pursuer's case. Mr Picken is 53 years old and practices as a solicitor in Prestwick. He is a partner in the firm of James Black Hay & Company. He has worked with that firm since he was an apprentice there about 30 years ago. His work involves conveyancing, executries and other general private client work. He confirmed that he was contacted in about May 2002 by the pursuer. He was already the solicitor for the pursuer's parents and agreed to act in the issues arising from the winding up of the deceased's estate. He had been made aware of the dispute about whether or not the deceased had left a Will. Under reference to 6/13 of process he confirmed that he must have written to Campbell Riddell Breeze Patterson who were acting for Miss Mooney expressing concern about the business of Glasgow Audio and how it was being run and that this letter was the reply to that. He recalled that, notwithstanding the terms of the letter, the accounts referred to therein were not handed over. Some accounts were handed over later although he could not remember when. He could not remember what had happened in relation to the suggestion by Miss Mooney's solicitors that a meeting take place. He recollected that there was a difficulty with an organisation called Mountainsnow in which the deceased had held shares. He recalled being surprised that a share certificate had been issued to the defender. He was referred to no.6/16 of process in this connection. He noted from that correspondence that there was a concern about stock not being ordered from Mountainsnow as it had been when the deceased was alive. He did not know what had happened to the shares issued to the defender after the deceased's death. He did not regard this as an issue of particular value so far as the estate was concerned. He had engaged in more than one telephone call with Miss McKeracher, the defender's solicitor, after which he had understood that records connected with the running of the business would be left on the premises when the pursuer took entry. Mr Picken confirmed that he had made an application on behalf of the pursuer for her to be appointed Executrix Dative. He recalled being advised that there was a note of objections to her appointment and that the sheriff had allowed a period of time to see if a Will executed by the deceased turned up. He had some recollection that thereafter there had been a declarator of marriage action although that had been handled for the pursuer by Edinburgh solicitors.

[33] Mr Picken confirmed that an issue had arisen about a Mercedes vehicle thought to belong to the estate but retained by the defender. He was unsure of the details of that. He was also unclear in his recollection of the issues relating to the value of the stock of Glasgow Audio or the suggestion that there was some stock situated in the defender's home. He did recollect that an issue had arisen about cheques cashed through the Clydesdale Bank. He was shown the cheques that comprised 6/86 of process. Mr Picken's position was that he was told by the pursuer that the cheques had been made out by the defender, albeit that the signature on them was that of the deceased. He recalled that there was some contact with suppliers of the business of Glasgow Audio seeking clarification as to who was responsible to pay their accounts. He confirmed that no inheritance tax had to be paid on the deceased's estate because the business was entitled to business tax relief.

[34] Under cross-examination Mr Picken confirmed that he was initially instructed by the pursuer and her parents but that the pursuer tended to take the lead in instruction. He recalled very little about the basis of the objections to the pursuer's appointment as Executrix Dative other than that there was to be a search for a Will. In relation to the marriage by cohabitation with habit and repute case, insofar as he had a view, Mr Picken did not consider it likely that the defender's action would be successful, although his Edinburgh agents were dealing with that matter. Mr Picken's focus was on the practicalities of administering the estate. He became aware of the pursuer's intention to sell Glasgow Audio shortly after she had possession in August 2002. The pursuer had told Mr Picken of her various concerns about the business. He was not involved in relation to the contract for sale of Glasgow Audio but he acted in the subsequent assignation of the lease. He accepted that it was very unusual for an Executrix Dative to agree the sale of an asset such as a business before Confirmation. However he regarded the circumstances of the deceased's estate as unusual and to some extent that explained the speed with which the contract appeared to have been entered into. The information Mr Picken had been given was that it was thought that Glasgow Audio would be unlikely to sell if not trading, that the purchaser Mr Turner was keen to get into the premises and that although it was unusual not to have a more formal document of sale, it seemed to him that the purchaser was taking more of a risk than the pursuer. When the agreement to sell (No. 7/22 of process) was put to him, Mr Picken confirmed that he had seen the document within days of it being signed. He recalled that there was some issue about the valuation of this stock that delayed matters. He wasn't sure whether the business had been profitable prior to its acquisition by Mr Turner. He had had difficulties in contacting Cairncross & Cairncross, the business accountants. He thought that the pursuer had not spoken to them or obtained much information from them. He confirmed that the inventory for confirmation was drawn up in April or May of 2003. It took longer than he had expected. He required to recover the previous executry file from AJ & A Graham. The valuation for Glasgow Audio for the purposes of the inventory had to be discussed. It was agreed that the sale price including stock less debts would be used. There was no need for a professional valuation. The liabilities were worked out by doing a calculation on the information available at the time. The valuation was not particularly important because of the ability to claim business tax relief. Mr Picken was taken through his detailed workings on the inventory for Confirmation (No. 7/16 of process). He explained why each figure was in his view reasonable for the purposes of the form. He did recall some accounts being submitted to HMRC for the period up to the deceased's date of death. He was shown the business accounts for the period to date of death (No. 7/58 of process). He recalled being in touch with Cairncross & Cairncross and, although his recollection was unclear, he thought that they had been instructed to produce those accounts.

[35] After the business of Glasgow Audio was sold, Mr Picken recalled that the pursuer's main concern was a lack of information for the period during which the defender had been administering the business. The pursuer had indicated to Mr Picken that she felt she had sold the business for far less than it would have been worth in January 2002. That view was based on the information she had about the way in which Glasgow Audio had traded prior to her brother's death. Mr Picken accepted that there was no easy answer to the issue of whether or not the pursuer had been irresponsible to dispose of Glasgow Audio so quickly. He felt that she had her reasons for doing so. The pursuer had not spoken with Mr Picken about having a formal valuation of the business carried out. His recollection was that the business had not been advertised or marketed, something that might have been difficult without up-to-date accounts being available. Although he had known of the approach from Mr Turner, Mr Picken was clear that by the time he knew about the sale of the business it was a "done deal". Mr Picken's perception of the relationship between the parties was that there was no co-operation. He agreed that it would have been much better if there had been and that a proper administrative handover could have taken place. His perception was that the lack of co-operation was on the defender's part. He based that on the request for information having been given through solicitors and the subsequent lack of that information in the shop when the pursuer took over. The impression he had was that the defender was resisting handing over control of the business. When it was put to Mr Picken that the pursuer's precipitous decision to sell the business was effectively the cause of these proceedings and the dispute between the parties, Mr Picken indicated that he thought the pursuer's view would be that the action had been brought because the business had been run down during the period of stewardship by the defender.

[36] In re-examination Mr Picken confirmed that AJ & A Graham had started to administer the estate before he had taken over. He did not recall whether there was any suggestion that the defender be present in the shop on 30 August when the pursuer took over. His memory of the circumstances in which the pursuer took over was that the interim interdict hearing within the declarator of marriage case was to be heard at the end of August but that Miss Mooney's motion was dropped shortly beforehand.

[37] Jonathan Turner, the purchaser of Glasgow Audio was also led in evidence in the pursuer's case. He is 33 years old and lives in Aberdeen. He is a company director of a number of companies including Glasgow Audio Limited. When he purchased the business of Glasgow Audio he decided to run the business through the vehicle of a limited liability company. Mr Turner has worked in the retail Hi Fi business since the age of 16. He is a director and shareholder of Holburn Hi Fi Limited. He knew the deceased fairly well. He and Mr Lamont had become friends through being members of the same buying organisation, Mountainsnow. Mr Turner had been reasonably well acquainted with the business of Glasgow Audio during the deceased's lifetime. While each shop purchased their stock individually, they formed a group to negotiate price with the various suppliers. The aim of the group was to secure the same prices from manufacturers as they offered to the larger franchises. The requirements of membership of Mountainsnow were a good payment record and a good payment relationship. Initially no shares were allocated but a decision was then taken that shares would be held in Mountainsnow and transferred to each individual shop in the group. Mr Turner had no recollection of the deceased having been issued with shares in Mountainsnow. The company that was in existence at the date of the deceased's death, Mountainsnow Limited, was dissolved thereafter and Mr Turner and others formed Mountainsnow (UK) Limited. He didn't think that the shareholders received any return when Mountainsnow was dissolved. Under reference to 6/84 of process, Mr Turner confirmed that the shares issued to Miss Mooney after the deceased's death were never returned. One of the reasons that the company was dissolved and a new company set up was to avoid the shares being held by someone who was not in the Hi Fi business. Another person who held shares had emigrated and was in the same position as Miss Mooney. It was a lot easier to start again. Mr Turner was not aware of the defender having been involved in the deceased's business prior to his death. He did become aware of the defender running Glasgow Audio in 2002. She attended meetings of Mountainsnow. The meetings were probably as frequently as one a month at that time. They took place usually in London, occasionally in the Trossachs. When the defender was administering the business of Glasgow Audio, there was some discussion between suppliers about what would happen in the longer term. They found it more difficult to deal with the defender because she was not in the business 100% of the time. Mr Turner was the only other Mountainsnow member from Scotland, the rest being based down south. Mr Turner regarded it as logical that he should consider acquiring Glasgow Audio after the deceased's death. There were a reasonably small number of businesses involved in the specialist high end Hi Fi retailing business. He considered there was a synergy between the two businesses. He confirmed that he acquired the assets of Glasgow Audio on the last day of August 2002. He had been told by Matt Hotchkiss that there was likely to be a change in circumstances and Mr Hotchkiss had raised the issue of whether he would be interested in the looking at the business. Mr Turner confirmed the terms of the deal agreed on 31 August 2002. When he attended the premises of Glasgow Audio on 31 August he noticed that some aspects of the physical displays were different from Mr Lamont's time. He felt it was a matter of opinion whether the changes were better or worse than the deceased's approach. He felt the shop was nicely presented, although there were some items that did not seem to have been looked after to such a high level as he might have expected.

[38] When asked whether the business had been profitable after he took over at the beginning of September 2002, Mr Turner confirmed that the initial trading had been very positive. Between September 2002 and March 2003 the sales figures had been good. Thereafter the profitability had not been as high or consistent. Mr Turner considered that there was some goodwill in the business of Glasgow Audio when he purchased it in August 2002. In that context he felt the goodwill was the difference between setting up a business from scratch in a new location and continuing trading in a shop where the name of the business has been above the door for a number of years. In hindsight, he considered that what he had paid for Glasgow Audio may have been at the high end of reasonable value. What he had paid for was the location of the business and the reputation of the deceased.

[39] Mr Turner reemployed Matt Hotchkiss after he acquired the business in September 2002. He explained that Mr Hotchkiss' performance had been somewhat variable. He had coped reasonably well with his shop management role but he did not do much by way of promoting the business. In fairness, Mr Turner considered that Mr Hotchkiss could not be regarded as a replacement for the deceased. So far as the opening stock when he purchased the business was concerned, Mr Turner confirmed that the deceased had not been computerised in his record keeping and Mr Turner's business was so it was thought best to ask someone in the Aberdeen shop to attend in Glasgow and use the Holborn Hi Fi system of feeding in the information and valuing it. The pursuer had no particular involvement in the process of valuing the stock. This was done by Jonathan Turner and his employee James Sharp. Mr Hotchkiss was not involved in the process.

[40] Mr Turner had been somewhat concerned for the defender when she had taken on the role of administering the business. He felt it would have been a struggle for anyone to replace the deceased's experience and he had considered approaching the defender while she was looking after the business with the intention of saying that he would like to offer for it. However, he had never expressed that intention directly to the defender. Mr Turner confirmed that when took over the Glasgow shop some mail items were being sent to the defender's address and some direct to the shop, so redirection was organised. So far as the stocktake was concerned, Mr Turner had no recollection of either the pursuer or Mr Hotchkiss being present in the shop. What he and his employee did was to value the stock by taking the cost price and discounting for any item that had been on display or damaged or where for any other reason the item would not sell for as much as had been paid for it.

[41] Under cross-examination Mr Turner confirmed that he had admired the deceased's business ability and that he had regarded him as a friend. He thought the deceased was successful in business but he did not have detailed knowledge of his figures. He knew broadly the purchasing levels of each of the members of Mountainsnow. That would have given him an idea of the level of the deceased's turnover but he was unaware of the profit margin. He recalled becoming aware through Mr Hotchkiss that Mr Lamont had been ill. He had been shocked by the unexpected death. He had understood that Mr Hotchkiss was running the shop when the deceased had been ill, although he knew that only the deceased dealt with documentation or legal requirements and assumed that the defender may have been dealing with these if he was not able to do so. Mr Turner confirmed that he had had telephone discussions with the pursuer about his interest in purchasing the business. During one telephone call she explained that she was in a position to be in control of the business and she made it apparent that Mr Turner could negotiate with her in relation to him acquiring the business. His best recollection of when he had first been made aware by the pursuer that the business was for sale was that it was a matter of days or weeks at most before 30 August 2002. Mr Turner confirmed again the details of the negotiation on 31 August 2002. He regarded himself as having purchased the goodwill, the name of the business and its assets. He wasn't prepared to take on any undetermined liabilities. The stock was regarded as a separate issue that he would pay for once it was valued. His intention had been to be fair to the estate in terms of price. He was asked when the stock had been valued and he said it was very soon after he bought the business at the beginning of September 2002. Mr Turner confirmed that there were handwritten stock sheets available to assist with the process. Mr Turner had no recollection of there being stock held at the deceased's house, although he knew that there had been talk of that later. The agreement he reached with the pursuer related to the stock available to him as purchaser. Mr Turner agreed that the nature of the trading of a Hi Fi retail business was that November, December and January would be months of very high turnover and profitability in comparison with the summer months June, July and August. So far as staff were concerned Mr Turner had had some discussion with Mr Hotchkiss about the possibility of reemploying Allan Campbell but the reemployment of previous staff was not a particular issue in negotiations with the pursuer. He had wanted to make sure that Mr Hotchkiss would be available but he did so on his own account rather than through the pursuer. He recalled having contact with Nicholas Wearmouth and Gary Young when they were involved in the business of Glasgow Audio. He had nothing particularly adverse to say about the way in which they had operated the business. He was "neutral" on the matter.

[42] In re-examination Mr Turner confirmed that Gary Young did not seem to be the type of individual that he personally would wish to employ. On the stock valuation issue, while he recalled the pursuer having asked a Gordon Arnot to do a stock list independent of the one being carried out for Holborn Hi Fi, those two exercises were not parallel in time. Mr Turner did not have sight of or study any list made by Mr Arnot. The price he paid for the stock was purely based on the list prepared by his own employee. He reiterated that he could not say whether the deceased had held any stock items at home when he died. As a generality, however, many Hi Fi retailers took items home to test them where they would have more time and where the sound could better be tested.

[43] The next witness led in the pursuer's case was Matthew Hotchkiss. Mr Hotchkiss was 53 years old at the date of proof. He is a sales manager with Holborn Hi Fi, also trading as Glasgow Audio. He has worked in the Hi Fi business for 29 or 30 years. He met the deceased when they were both working at Hi Fi Corner. Mr Hotchkiss had not worked for the deceased in Stirling Audio but had been employed from the outset at Glasgow Audio. He had never had any proprietorial share of the business but indicated that he was very involved and committed. He knew the defender as the deceased's partner. When Robert was alive, she would be involved in the launch of new equipment by making a buffet for evening events at the shop. Some of the equipment sold by Glasgow Audio was quite exclusive. The defender was not involved in the technical side at all, more the business socialising. Mr Hotchkiss was involved in training new staff on different aspects of the job. He would sit down with Robert Lamont once a month to discuss staff issues and new equipment. So far as Mr Hotchkiss could recall the defender was present in the shop very infrequently, perhaps once a month. On those occasions she would visit and ask in very general terms how the business was getting on. Mr Hotchkiss confirmed that the deceased maintained all of the records and systems of the business. Mr Hotchkiss was not involved other than detailing what was being sold and for what price. The deceased had a system of receipt books, the details of which he would transfer to his computer at home. When Mr Hotchkiss left Glasgow Audio in June 2002 there were still a lot of receipt books in the shop. When equipment was being purchased, the purchase order was put onto the computer. The supplier would then issue a pro forma invoice. A settlement discount was given for early payment. So far as the delivery notes that came with the goods were concerned, these were stored manually by Mr Hotchkiss.

[44] When the deceased was alive and involved in the business, both he and Mr Hotchkiss spoke to suppliers. Mr Hotchkiss would speak to the deceased about how many of any particular item of equipment he should order. The deceased dealt with all bill payments, PAYE, VAT and dealings with the accountants. Mr Hotchkiss was never trained or involved in any of that. Mr Hotchkiss said that he had a very close relationship with the deceased, that he regarded him as a friend as well as the person who had taught him his trade. He indicated that he and the deceased spent long periods of time discussing audio equipment and that they both loved the business. He said that Glasgow Audio had a high level of repeat custom and that it was thought of as the best Hi Fi shop in Scotland at one time. There was a good cross section of equipment and customers were offered a trade in allowance if they had looked after the goods they had purchased. Mr Hotchkiss' particular duties involved looking after stock, stock control, presenting invoices to the deceased having checked those against the order, teaching staff on product knowledge and assisting with marketing. He indicated that he used to run the shop "almost as if it was my own". He was well acquainted with the deceased's involvement in Mountainsnow Ltd and with important suppliers such as Cyrus, Arcam and Roksan. When asked what financial level of stock was usually carried within Glasgow Audio, however, Mr Hotchkiss indicated that he did not know. He was aware that certain levels of sales were required to avoid concessions being withdrawn by particular suppliers. Prior to the deceased's death, the staff comprised the deceased, Mr Hotchkiss, and Allan Campbell on a full time basis. There were three part time or casual workers including Andy Fisher who was involved in deliveries, David Orry and a Gordon Arnot. All staff were excellent and Mr Hotchkiss had no problem with any of them. In addition to equipment located within the shop, there was a "lockup" facility but it was primarily used for storing empty stock boxes. There were numerous CDs and DVDs in the shop which were used to demonstrate the equipment.

[45] Mr Hotchkiss' recollection of when the deceased had stopped working was that on 11 September 2001, the day of the terrorist attack in New York, the deceased left the shop with a sore tooth. Although his health deteriorated thereafter, Mr Hotchkiss confirmed that nobody considered that Robert Lamont was likely to die. In fact when he was in hospital, he seemed to be improving. During the period of the deceased's illness, Mr Hotchkiss said that he was running the shop. He gave packing notes and invoices to the defender who dealt with the paperwork together with Mr Lamont when he was still alive. On 11 January 2002 the defender phoned the shop and said that Mr Lamont had passed away. When shown the bundle of cheques (No. 6/86 of process), Mr Hotchkiss confirmed that the signature on those appeared to be that of the deceased. He confirmed that the cheques were written to suppliers such as Harman from whom equipment had been purchased. He indicated that it was unusual for cheques written in December not to be cashed until, for example, March. However, as he had not been involved in that side of the business, he could not confirm when cheques would normally be sent or received or how long suppliers took to cash them. He considered it strange that Mr Lamont was writing cheques the day before he died. He had no recollection of there being any pressure by suppliers for payment while the deceased was ill. He had handed over invoices to the defender regularly and he had assumed they were being paid. In contrast, he was aware of pressure from suppliers after Mr Lamont's death. He said that there were major differences in the way things were run after Mr Lamont died. Mail was redirected to the defender's home. He said there were problems because of diminishing stock. The defender had told him to stop ordering stock. Customers were being asked to pay a deposit of 50% before stock would be ordered for them. It was quite different from the way they had traded prior to the deceased's death. He said that he and the other staff were allowed no communication with the sales reps of the supplier companies. He was unable to check delivery notes against invoices. He had no price lists. Mr Hotchkiss had assured the defender immediately after the deceased's death that the shop could carry on as before. However, the direction changed very quickly and he said that it was within days of the deceased's death that they were not allowed to order stock. The defender told the staff that the way they had done things before "sitting around drinking tea and coffee" was going to change. According to Mr Hotchkiss, sales reps quickly saw that stock was not being replenished and a few of them walked away from the business. Mr Hotchkiss was instructed to terminate the arrangements with Mr Orry and Mr Fisher. Meantime, the defender organised meetings with sales reps in a coffee shop on the south side of Glasgow closer to her place of work. Contact with her was through a mobile telephone rather than by calling her place of work. Mr Hotchkiss said that part exchange of goods was not allowed from a couple of weeks after the deceased's death. He described the effect of that change as crippling. It alienated existing customers. No reason was given for the change. Mr Hotchkiss claimed that January was normally a very good month trading wise for Glasgow Audio and that it would be in late February that business started to taper off a little. He was concerned about the loss of part time staff. The shop required a minimum of two people on the shop floor at any given time. The business operated seven days a week. The defender replaced the previous staff with Nicholas Wearmouth and Gary Young. Mr Wearmouth was a relative of the defender. Mr Hotchkiss described Mr Wearmouth and Mr Young as "a total waste of time". They had no knowledge about the business and while they were nice enough young men, they were unable to put the simplest connection on when they first came into the shop. They consistently asked for weekends off which hampered the way in which the business was run. Mr Hotchkiss felt that his role had diminished completely following the deceased's death. He was being treated as a sales assistant rather than a shop manager.

[46] When the defender took control of the business, Mr Hotchkiss carried out a stock check to show what the opening stock would be. He wrote down the name of each item in the shop and then used the information he had to confirm what the trade price would have been. He carried out the task manually. He confirmed that the figure he came to was the trade price of each item less VAT. This produced a figure for the cost of the stock in the shop. The task was carried out within days of the deceased's death. He was unable to access the computer for information as he said it was no longer in the shop. He confirmed that the deceased had carried out a similar stocktake once a year in mid-January after the end of the busy Christmas period. On being shown Appendix 3 of 6/87, a letter from the defender to the accountant, Mr Cairncross about the stocktake, he said that he had not seen the letter before but that insofar as it related to a stocktake done by him in January 2002 it would relate to the exercise he had just spoken to. However, he could not recall whether or not the figure in the letter was accurate. According to Mr Hotchkiss there was no strategic direction for the shop or for the staff when the defender was in charge. Miss Mooney seemed adamant to run the business on her terms, this led to a loss of suppliers such as Arcam, Meridian and Cyrus. After a few months there was no specialist equipment left and what had been acquired was mass market equipment rather than the specialist high end product that the deceased tended to sell. Mr Hotchkiss described himself as "standing in a shop selling what was left". Under reference to number 6/16 of process, a letter from Mountainsnow dated 22 August 2002, Mr Hotchkiss confirmed that the letter illustrated what was happening in terms of the concerns about the level of sales. Mr Hotchkiss had other complaints. He said there were numerous occasions on which no payslips had been handed out. While this had been to some extent rectified later, Mr Hotchkiss said he was still missing a few of these. He had tried to contact the accountants about the matter but the defender had objected to that. Ultimately Mr Hotchkiss had found the situation to be intolerable. He felt Mr Wearmouth was watching him and reporting back to the defender. He felt the defender had no understanding of what the business was about. Increasingly he could see that the shop was failing. He went off to work as a fitter for a bedroom design company. He did so on a part time basis from April 2002. About 6 weeks thereafter he left Glasgow Audio. He was contacted by Hi Fi Corner. He went to work for them on 26 June 2002 until he returned to Glasgow Audio to work as a sales manager for Jonathan Turner in September.

[47] Mr Hotchkiss said he knew something of the defender's search for a duly executed Will. He said that prior to the deceased's funeral he was in the hallway of the property at Queen Square. The defender was distraught and her father said to Mr Hotchkiss that she had been running about all night looking for a Will. He thought this took place "a few days" before the funeral.

[48] After Mr Hotchkiss left Glasgow Audio in June 2002 he was in regular contact with the pursuer, Irene Lamont. He had been friendly with Miss Lamont for a number of years and when she asked him whether he would return to run the shop and work for her if she was to do so, he confirmed that he would. In examination in chief, Mr Hotchkiss was quite clear that the first time he returned to Glasgow Audio after 22 June was on 3 September, the evening he handed in his notice to Hi Fi Corner. He said he was not involved in any stock check. He was aware that Allan Campbell, James Sharp and Jonathan Turner had carried out some stocktake. He said that on 3 September the pursuer had telephoned him saying she had been appointed the right to be in the shop. He went to the shop and found it to be "a shambles". The stock was in a terrible state, it was damaged and there was quite a bit less of it than when he had been there in June 2002. By the time Mr Hotchkiss went back to work in the shop, for Mr Turner, a new system was being introduced. He did not know what had happened to certain documentation such as the carbon receipt books which he said were of great value to the business. He did not see any stock sheets left in the shop. Mr Hotchkiss had no recollection of any photographs being taken while he was at the shop on 3 September 2002. On being shown the photographs number 6/99 of process, he confirmed that these illustrated how he found the shop on that date. He felt that the way in which the equipment was being demonstrated was "a mess". The speakers were not demonstrated the way they should have been. There was a television that had been damaged when Mr Wearmouth and Mr Young had been "larking about". Mr Hotchkiss remembered that incident and had been furious about it at the time. Mr Hotchkiss recalled that he was never asked to look at the values of the stock in the premises that day. By the time he returned to the shop, the stocktake had been done. In his view, however, Mr Turner had bought a lot of stock that he should not have. Mr Hotchkiss had no idea what Mr Turner had paid for the stock until much later. On being shown Appendix 10 of 6/87, Mr Hotchkiss confirmed that the names of the stock listed there seemed familiar but that the prices meant nothing to him.

[49] Mr Hotchkiss was asked about the issue of the deceased having kept stock away from the premises. He said that there was equipment at Queen Square belonging to the business which he had seen at the funeral. The defender had arranged music to be piped in to the garden outside. Stock was taken from the business to the house so that that could be done. Mr Hotchkiss recalled that there was a particular piece of equipment, a Tact Millennium digital amplifier which the deceased had wanted to take home and try out. That was something he did frequently so that he could evaluate the quality of an item. Mr Hotchkiss was also invited by the deceased to take equipment home from time to time to try it out. When shown the list at page 48 of the Closed Record, Mr Hotchkiss confirmed that he was familiar with it and that it comprised a list of stock the deceased had had at home before he died. He had been involved in making up the list and assigning values to each item. He said they were trade values. He took the prices for the computers from the computer shop near to Glasgow Audio's premises. So far as the CDs and DVDs were concerned, the deceased would have them in the shop but sometimes had them at home as well. He had simply guessed as to a quantity and price of those. So far as he knew, the items of equipment he saw at the funeral at Queen Square were the exclusive property of Glasgow Audio. The CDs and DVDs were not for sale. Sometimes they would be given away when unwanted. So far as the camera was concerned, Mr Hotchkiss thought that the deceased used to take photographs for advertising. He knew that the deceased had purchased a Mercedes A Class motor vehicle in about 2000. If the staff ever wanted to use the vehicle the deceased gave them the keys. They were all insured to drive the deceased's car if they were over 25 and employed in the business. Mr Hotchkiss thought the Mercedes was a "company car". The defender drove a Peugeot 205. Mr Hotchkiss never saw the defender driving the Mercedes prior to the deceased's death. He did recall her driving it thereafter.

[50] Under cross-examination Mr Hotchkiss confirmed that he had been aware of the serious and committed relationship between the defender and the deceased. He was unaware of the extent to which the deceased may have discussed business matters with her. He knew that she had attended to catering for business functions and that she had been present on the stand of the business at the Hi Fi show in Glasgow. Mr Hotchkiss accepted that he had not been involved in any form of financial planning for the business when the deceased was alive. He was, however, in charge of purchasing stock from the outset, although he accepted that if a large order was to be placed he would discuss it first with the deceased. He knew nothing of the profit level of the business. The deceased would talk in general terms about whether they were doing well or badly at any particular time. He had visited the deceased three times during his stay in hospital. He had the impression that the deceased was still running the business when he was ill but giving the defender directions so that she could attend to mail and invoicing. Mr Hotchkiss accepted that he had been in regular communication with the pursuer after the deceased's death. He said he was missing the deceased and found a comfort in speaking with the pursuer. He said that when he told the pursuer of the difficulties with the way in which the defender was running the shop she wanted to see if she could help. Mr Hotchkiss claimed that he was unsure as to what his role was during the period of the defender's control. He wasn't instructed to achieve any particular level of sales. He didn't know whether in fact profit had been achieved during that period. He claimed that the defender didn't allow the staff to have price lists or to contact manufacturers although he said that he knew what the prices were in any event. Sales were recorded in the same manner after the deceased's death as they had been prior to January 2002. Sales receipt books were used and cash would be banked on a daily basis. Mr Hotchkiss had never seen bank statements relative to the business prior to the deceased's death. He claimed that the defender did not allow any customers to trade in old equipment when buying new during her period of stewardship.

[51] Mr Hotchkiss described the deceased's absence from the shop as "devastating". Sales reduced in the absence of someone of the deceased's selling ability. He rejected the contention that the part time work he took on while still employed at Glasgow Audio adversely affected his performance there. He said that people would ask whether the business was for sale during the period leading up to June 2002. He named a Bill Hutcheson who had a shop in Hope Street in Glasgow who asked that question on numerous occasions. In relation to the issue of the schedule of stock said to have been held in the home the deceased shared with the defender, Mr Hotchkiss accepted that he had never seen invoices, receipts or other documentation for items said to be stock but not held in the shop. During the course of his cross-examination and after an overnight break, Mr Hotchkiss volunteered that he had gone home the previous evening and checked notes that he had about the dates of his employment. He said that his evidence the previous day had been wrong and that when he said he attended Glasgow Audio on 3 September it was on 30 August. He said he was also wrong to say that he handed in his notice on the same day as he attended at Glasgow Audio's premises. He said he had just thought to check his notes the previous evening and that he had not discussed the case with anyone overnight. The pursuer was transporting Mr Hotchkiss to and from Court each day.

[52] The list of items said to have been at Queen Square but belonging to the business of Glasgow Audio was compiled by Mr Hotchkiss prior to 22 June 2002 when he was still in employment. He said it had not been done at Irene Lamont's request. He said he had been invited to the home at Queen Square on numerous occasions and had compiled the list from memory. The first list he had compiled is reproduced at number 6/5 of process, Appendix 4. Discrepancies between that schedule and later versions were put to Mr Hotchkiss. He accepted that he didn't know whether each and every item on the list was present in Queen Square on 11 January 2002. On the matter of whether all business mail for Glasgow Audio had been redirected to Queen Square shortly after the deceased's death, Mr Hotchkiss' position was that the business premises only received junk mail by a certain stage but that he couldn't remember clearly as so many years had passed. A number of primary documents were put to Mr Hotchkiss that indicated some invoices were being sent to the business premises. Those documents are contained within the folders of 6/4 of process.

[53] So far as Mr Wearmouth and Mr Young were concerned, Mr Hotchkiss said that he tried to show them what should be done and not done so far as equipment in the shop was concerned. There was no formal training procedure. He said he was trying to survive in an impossible environment. He and Allan Campbell tried to help and guide Nick Wearmouth and Gary Young but he regarded himself as effectively no longer shop manager. By the time he left he described Nick Wearmouth and Gary Young as having "picked up a bit". On being shown number 7/124 of process which appeared to be a reference written by Mr Hotchkiss for Mr Young, Mr Hotchkiss said he had no recollection of writing such a reference although he accepted that the printing of the signature looked like his. He did not deny that he could have written the reference although he didn't agree with all of its content. When Mr Hotchkiss left Glasgow Audio in late June 2002 he said that Allan Campbell had said, "If you are going I am not staying" and the two handed in their notices at the same time. He said that Mr Campbell had also communicated unhappiness about the situation to him daily. He knew nothing of how the shop had been run after 22 June 2002. He wasn't interested and was "glad to be away". He continued to have discussions with the pursuer who told him that if she was appointed Executrix Dative she would like him to come back and run the shop for her. On being challenged about the statement apparently made to him by the defender's father prior to the funeral, Mr Hotchkiss said that he didn't know whether there was any witness to that conversation and he could not remember who else had been in the house at Queen Square that day.

[54] Mr Hotchkiss was challenged about the nature of his relationship with the deceased. He rejected the contention that the deceased did not regard him as a close friend, just as an employee. While he was working at Hi Fi Corner in the summer of 2002 Mr Hotchkiss said that it was Jonathan Turner who contacted him directly with a proposal that he purchase the business of Glasgow Audio. Mr Hotchkiss then contacted the pursuer who said that he could give Jonathan Turner her phone number. Reverting to the events of 30 August 2002 Mr Hotchkiss confirmed that he had attended at the premises of Glasgow Audio that day at about 6.00pm after he had finished working in Hi Fi Corner. His recollection was that he was just there to look at the shop and its general condition. He couldn't recall what time he left the shop. He did not close or lock up the shop. He presumed that had been done by the pursuer after he left. His next visit to Glasgow Audio was on 19 September 2002 when he started work for Jonathan Turner. He confirmed Mr Turner was very well regarded in the Hi Fi business. He had spoken to the pursuer in suitably positive terms about Mr Turner. He told the pursuer that Jonathan Turner would look after the business better than Bill Hutcheson who had also been interested.

[55] In re-examination Mr Hotchkiss reiterated that he had no recollection of being approached to send a reference for Gary Young while he was at Glasgow Audio. He did not think he would have used the expression "I would not hesitate to re-employ Mr Young" in late June 2002 as he was himself leaving and had never been in a position to employ anyone at the business of Glasgow Audio. In relation to the documents that formed part of the primary documentation of the business at 6/4 of process Mr Hotchkiss could not say whether or not these documents had been posted to the shop or delivered there. On the issue of stock removed from the business to take home and try, Mr Hotchkiss confirmed there would always be a record of that in the receipt books of the business.

[56] James Sharp, a former employee of Jonathan Turner was also called as a witness for the pursuer. Mr Sharp was 29 years old and at the time of the proof was employed by Electrosonic Limited. He had been involved in the Hi Fi business for a total of about five to six years first on a part time basis and then full time. He had worked for Mr Turner both in Aberdeen at Holborn Hi Fi and also at Glasgow Audio. He left the business in 2005. He met the pursuer in 2002 when he understood she was the owner of the business and was selling it to Jonathan Turner. He had been asked to move to Glasgow and work in the business of Glasgow Audio there. When he arrived he was involved in a stocktake. He confirmed that the pursuer had played no part in that stocktake. The process had involved Mr Turner sitting in a room with a laptop while Mr Sharp went through the whole shop reading out the make, model and serial number of each item. Mr Turner would then enter those details into a laptop. Once a full list on an Excel spreadsheet had been prepared, Mr Sharp was charged with putting a value on each item. He confirmed that the value was the price Holborn would pay for each item and a deduction was made for damaged stock. Effectively the price was trade price less VAT less discount. The prices used were Holborn Hi Fi prices. His instruction was to be fair in assessing value and his recollection is that he was indeed as fair as he could possibly be. Mr Sharp had no knowledge of whether or not the spreadsheet he had prepared and passed to Mr Turner was ultimately used to fix the price for the stock as between the pursuer and Mr Turner. He confirmed that Appendix 10 of number 6/87 of process looked like the form of document he had prepared. He had no recollection of the figures. The description of stock looked similar to that he had been looking at. He confirmed the references to used or discounted stock as being those he had noted when he was carrying out the stocktake. The only other person that may have been involved in the stocktake carried out by Mr Sharp was a part time employee of Holborn Hi Fi. He didn't know Mr Hotchkiss at the time but he knew that he was employed by Hi Fi Corner. He confirmed that Mr Hotchkiss was not present during the stocktake. Mr Sharp confirmed that it had taken him a few days to complete the valuation and that he had understood the pricing of each item was complete within that period. He confirmed that the stocktake had been done from scratch and that no other stocktake or valuation was discussed. When Jonathan Turner first requested that he attend at Glasgow Audio, Mr Sharp did so as an employee of the Aberdeen shop. The business premises in Glasgow were not open for business when he first went there. They then opened and he was appointed assistant manager. He worked with Matt Hotchkiss thereafter. After Holborn Hi Fi took over Glasgow Audio Mr Sharp remembered a general increase in sales over time. His reasons for leaving the business in 2005 related primarily to his having sustained a neck injury in a car accident in 2004 and wanting to change direction. When Mr Sharp left Glasgow Audio there were four full time members of staff who worked weekends between them. One of those was Allan Campbell who had returned to the business.

[57] Gill Smith, an accountant with Wylie & Bisset in Glasgow also gave evidence for the pursuer. She is a 57 year old chartered accountant who has effectively worked in general practice for most of her professional life. She qualified in 1977. She has been with Wylie & Bisset since 1996. She was first given paperwork relating to Glasgow Audio in the autumn of either 2004 or 2005. She was given three folders of bank statements, invoices and other primary documentation. Her initial instructions were to work through those. She then received further paperwork and worked through it. She confirmed that the boxes of documents number 6/4 and 6/5 of process were the documents sent to her. Miss Smith spoke to her report of 20 January 2010 No. 6/87 of process. Her remit was to look at the accounts of Glasgow Audio prepared by Cairncross & Cairncross accountants for the period leading up to the deceased's death. She was also then asked to prepare her own figures for the accounts for the period during which the defender had control of the business from January to August 2002 and to compare her figures with those produced by Cairncross & Cairncross. Miss Smith said that from the paperwork she had gleaned that the business had been run down during the period of Miss Mooney's control. There was far less stock and erratic payment of creditors. She had no conversations with Mr Cairncross, junior. She had spoken once with Mr Cairncross, senior by telephone. He had not been able to assist with the production of records. She had been requesting the computerised version of the link between the bank statements and the accounts but was told that this had been lost. She was able to confirm that all the items in the bank statements of the business during the period January to September 2002 had been posted but she did not know how each cheque had been categorised. She had received payroll records from 6 April 2002 but not for the three months before that. In her report 6/87 of process, Appendix 18, she had compiled a spreadsheet listing all monies going through the business from the end of January through to September 2002. Turning to the first exercise, that of considering the Cairncross & Cairncross accounts for the business to the date of death, Appendix 5 of 6/87 refers. There was a slight discrepancy in the stock figures but it was accepted that Mr Hotchkiss had carried out a stocktake shortly after the date of death. The balance sheet prepared by Miss Smith also added to stock the sum of £9,221 for items she was told belonged to Glasgow Audio but were situated at Queen Square. Adding that to Mr Hotchkiss' figure of £133,308 gave a total of £142,529 for stock. Miss Smith had had some discussions with an accountant with BDO Stoy Hayward who had been acting for the defender at one time. She had agreed with BDO Stoy Hayward that some bank transactions in relation to sales after 11 January had gone through the bank account because a new bank account wasn't opened until 2 February. She had taken that into account. She had separated out pre-death and post-death transactions. So far as trade creditors were concerned there were a number of invoices that predated the date of death where cheques were not cashed until about April 2002. She could more or less reconcile all of the figures from the documentation she had. It was clear from Appendix 5 that the differences between the Cairncross & Cairncross accounts to the date of death and the Wylie & Bisset revisals were effectively de minimis.

[58] Some evidence was given about the way in which the deceased had dealt with a stock figure for his accounts. Mr Cairncross apparently said to Miss Smith that the stock figure was worked backwards so that the gross profit figure was consistent. In other words it wasn't based on a stocktake, rather the practice was to use whatever stock figure would give a gross profit of £65,000 or so. Miss Smith said that was the impression given to her by Mr Cairncross.

[59] Appendix 6 of 6/87 contained a profit and loss account and a separate balance sheet illustrating the differences between the accounts for the period of Miss Mooney's trading prepared by Cairncross & Cairncross and Wylie & Bisset's own figures. In essence the difference was that Cairncross & Cairncross had recorded a loss for the period of Miss Mooney's trading of £18,185 while Wylie & Bisset found that to be £65,143. So far as the balance sheet was concerned the actual accounts prepared by Cairncross & Cairncross (Appendix 2 of 6/87) had a net asset figure of £108,135. Miss Smith disagreed with their approach, however, and using her own approach she obtained a net liability figure using Cairncross & Cairncross figures of £24,435 as opposed to her own net liability figure of £80,738. Some of the differences in the two sets of figures had, according to Miss Smith, been agreed with Stoy Hayward at the time of their involvement. For example, it had been agreed that Miss Mooney had achieved sales of £177,170 during the period of her control rather than the £162,486 recorded by Cairncross & Cairncross. The difference appeared to relate to the sales banked in Robert Lamont's account but effected by Miss Mooney. The most significant difference between the two sets of figures in the balance sheet related to the figure for closing stock. Wylie & Bisset's figure as at 30 August 2002 was £63,579 as opposed to the £127,225 contained within the Cairncross accounts. Miss Smith also raised issues about wages and VAT. So far as the latter was concerned she understood that a new VAT registration had been commenced by Miss Mooney and that VAT would be due for the eight month period. An estimate of £17,639 was issued as a VAT assessment to Miss Mooney. However that was a speculative figure as it had not been based on a return. Doing the best she could Miss Smith had come out with a figure of £12,605 for VAT.

[60] The general approach of Miss Smith was to incorporate parts of the deceased's balance sheet into the new business to reflect items taken over or retained by the defender. In particular these included the Mercedes motor vehicle and the opening stock. The net book value of the car when the deceased died was £10,000. Miss Smith had initially assumed it had been sold but then was advised it had been retained by Miss Mooney. The deceased had claimed capital allowances in respect of the car for tax purposes. 6/103 of process was a tax return of the deceased which reflected that. So far as Miss Smith was concerned if the car had been jointly owned with the defender the deceased couldn't have had it as a business asset in his accounts. The car had been purchased in 2000 (see 6/85 of process).

[61] Miss Smith had created a graph based on the sales figures of the business both historically and during Miss Mooney's period of trading to show what happened to turnover during 2002. That graph is reproduced at Appendix 15 of 6/87. In essence she said that the sales were consistently lower in 2002 than in the two preceding years. She thought that the cause of the reduction was that the stock wasn't being replaced, suppliers were lost so there was less variety of goods to sell. She said there was also possible damage to some of the stock and less proactive selling by the staff. She said she had not been able to verify that all sales had been recorded because apparently sales books deposited in the sheriff court in Glasgow had gone missing. Miss Smith's position was that the gross profit percentage of the business had dropped radically during the period of the defender's control. On the basis of the accounts produced by Cairncross & Cairncross gross profit had reduced to 31% as compared with an average of 38.5% achieved by the deceased. On her own recalculated accounts, Miss Smith concluded that gross profit percentage was in fact down to 1.5%. The main reason for this huge discrepancy was the stock figure provided to Miss Smith for the purpose of her exercise (Appendix 10 of 6/87). Miss Smith had carried out a calculation of what could be expected had the gross profit remained at the level it was when the deceased was alive. She made very clear that she was not a valuation expert and that loss of profit/loss of value was not a matter in which she had any experience or expertise. Her role in the matter was to prepare a set of accounts based on documentation provided to her and to compare those with someone else's accounts. Miss Smith was uncertain as to what the VAT position normally was if a business was transferred on death.

[62] Miss Smith was quite critical of the Clydesdale Bank's failure to freeze the business account from February 2002. That had led to the encashment of over £30,000 in cheques in April 2002 relative to the business of Glasgow Audio prior to the deceased's death. She thought it exceptional that suppliers had hung onto the cheques from the time of the deceased's death until April, although she did not seem to have any knowledge of the circumstances in which the cheques were signed or when they were sent.

[63] Under cross examination Miss Smith confirmed that she had taken over the remit of reviewing the accounts of Glasgow Audio after the retirement of a colleague. Some of the work on Appendix 6 of 6/87 of process had been carried out before that colleague retired. Miss Smith was challenged on her conclusion that the business was effectively no longer a going concern by August 2002. She said that Miss Lamont's view that the business could not carry on was borne out by the figures in the accounts. She indicated that the business lacked the ability to meet its liabilities or at least that it had little to meet its liabilities with. She did not know in fact whether liabilities were being met at the time the business was handed over in August 2002. On the face of Appendix 6 of 6/87 of process the liabilities of the business amounted to £155,251 and the net assets were in the region of £130,000, thus liabilities exceeded assets by about £25,000. In relation to Appendix 17 of 6/87 of process Miss Smith confirmed that the purpose of the schedule therein was to show that the fact that the stocktake had not been carried out for two weeks after the deceased's death made no real difference to the figures. So far as the items said to belong to the business and alleged to be held at 53 Queens Square were concerned, Miss Smith was asked about Appendix 4 of 6/87. She confirmed that she had been provided with the schedule and although there had been several versions of it they were all in similar form and did not differ much. She confirmed that it was Irene Lamont who had provided her with the schedule. Miss Smith had never been provided with any code numbers or other documentation tying the items on the schedule to stock of the business. In relation to Appendix 15 of 6/87, the graph, Miss Smith was challenged about the reasons she gave for the variation in sales. She accepted that there had been reasonably significant sales in July and August 2002. Miss Smith indicated that what she was trying to consider was a trend. She accepted that historically the business had the largest number of its sales in October, November and December each year, months during which Miss Mooney had not traded. So far as the important figure for stock was concerned, Miss Smith confirmed that Appendix 10 of 6/87 had been given to her by the pursuer. She had understood that it had been prepared both by Jonathan Turner and by someone on Irene Lamont's behalf. She was unaware of the basis of valuation within the stock sheets. She had just been given them. Miss Smith accepted that she had made an assumption about changes in the suppliers of goods to the business. She took the view that the number of overdue invoices from suppliers was not a good sign in terms of the health of the business. Miss Smith explained that when she had prepared her report she expected there to be a claim for goodwill lost through Miss Mooney's actings. However, as Fiona Martin of Tenon had prepared her report indicating that following the death of the deceased as a sole trader there was no goodwill in the business she understood that no claim for that was being made. Miss Smith reiterated that she was not an expert in business valuation. Miss Smith's summary of what, on the face of the accounts she had prepared, would be due by the defender to account to the pursuer as Executrix Dative was summarised in Appendix 14 of 6/87. However, she was clear that the figures in Appendix 14 were not intended to be a definitive valuation and went so far as to say that she did not regard her role in court as to speak to the value of a claim but simply to explain the figures in the accounts. A previous version of her report was put to Miss Smith, (No. 6/5 of process). A version of Appendix 14 appeared therein. Miss Smith confirmed that when those figures were put together "we decided we weren't happy with them". On more than one occasion the witness reiterated "...I wasn't happy about giving a valuation. I didn't have the experience." Returning to the issue of the items said to be stock for the business and situated at 53 Queens Square Miss Smith confirmed that she had been instructed to include that as stock in the accounts. She accepted that the claim being made by the pursuer was increased by the inclusion of those items as stock. Her view was that a claim for loss in the pursuer's situation was always going to be subjective and not necessarily accurate. Miss Smith had no idea of the specific assertions in relation to the items in the house. She had seen no documentation to vouch the claim that they were business assets and ultimately included the figure because she was told to do so by the pursuer.

[64] Miss Smith did not know whether Glasgow Audio traded the same number of days per week during Miss Mooney's period of control as it did when the deceased was alive. She thought it might have traded for six days per week although that was a guess. It was put to her that there had been a change from seven day trading to five day trading but she could not say on the material she had had with her that was the case. On the trading pattern generally she accepted that trading appeared to be going up slightly in July and August 2002. She confirmed that she did not know what had happened after that. She accepted it was possible that the upward trend shown in August 2002 could have continued if there had been no change of ownership at the beginning of September. She accepted that her views on why business had dropped between April and June 2002 were based on speculation rather than fact. Miss Smith confirmed she had been aware of the court action raised against the defender in relation to unpaid VAT. She had not seen any paperwork in relation to that litigation. Under reference to the stock figure used in Appendix 14 for the stock handed back to the business (£63,579) Miss Smith confirmed that she understood that stock had been valued at the lower of cost and net realisable value. The cost price had been written down due to damage or goods used for demonstration and so on. There had been a slight adjustment to the figure for stock as a result of information about purchasers who had already paid a deposit. When asked to compare the basis used for closing stock with that used for opening stock as listed by Mr Hotchkiss (£133,308) at first Miss Smith confirmed that she understood Mr Hotchkiss' figure to be cost price but was then unsure as to what the position was, which she had taken from a statement of Mr Hotchkiss. The normal accounting procedure was to value stock at the lower of cost and net realisable value. Miss Smith then confirmed that the headline figure in Appendix 14 of £133,985 included a bank balance that had gone to the estate and she confirmed that required to be deducted. It then transpired that Miss Smith wished to depart from the version of Appendix 14 that was lodged in process. Miss Smith explained that after a meeting with Mr Crawford, CA, an expert instructed by the defender, she had decided to revise her figures having accepted a couple of points that he had raised. The meeting had taken place in April 2010. Miss Smith tried to raise the issue of a possible revisal of Appendix 14 but she had been told it was too late to do so. Ultimately, after an adjournment, I allowed Miss Smith to tender and rely upon her revised version of Appendix 14 and that document now forms 6/104 of process. It reflected further deductions from any sum due by Miss Mooney in respect of a bank balance that had been double counted, a creditor's figure and a VAT adjustment.

[65] There was considerable focus on the heading of "loss on profit of business" of £60,000. Miss Smith confirmed that that was a gross profit figure calculated on the basis that, had the gross profit percentage (represented by the difference between sales and purchases) continued to be about 35% that is the sum the business would have made as profit between January and August 2002. When challenged about whether the figure for loss was gross profit rather than net profit, Miss Smith said that gross profit would go "straight to the bottom line figure" and would not be affected by expenses. Miss Smith had taken an expected gross profit percentage of 35% because in previous years when the deceased was alive the average gross profit was about 36‑38%. She accepted that no account had been taken of the far higher sales in the last three months of the year achieved by the deceased but said that would not change the percentage overall.

[66] When asked about the £50,000 received for the business in the sale by the pursuer over and above the stock figure Miss Smith confirmed that she thought that sum had been for goodwill. When challenged on an earlier assertion that there was no goodwill in the business, Miss Smith confirmed that the opinion that the business had no goodwill was that of Fiona Martin and not her own. In any event she thought what she had done was to take the first eight months of the deceased's annual figures and compare them with the eight months of trading of the defender although she could not confirm with confidence that was the approach she had taken. Miss Smith went on to explain that on her own initiative and without instructions she had carried out a calculation of what might be termed "additional gross profit" based on a loss of turnover. Miss Smith had considered that had Miss Mooney achieved a turnover at the same level as the deceased, additional gross profit would have been made. Ultimately that claim was not insisted in by the pursuer and the evidence in relation to it was accordingly not relevant to the claim itself.

[67] Miss Smith was shown a tax return No. 6/103 of process. She confirmed that this had been sent to her firm by Mr Cairncross. Someone in her firm had added additional information to it and processed it. She did not know why, in the version revised by her firm it was indicated that the figures were no longer provisional. As far as she was aware the figures ultimately submitted were accepted by HMRC. The figures in the return were based on the accounts prepared by Cairncross & Cairncross. Miss Smith's understanding was that HMRC regarded the accounts as "open" pending the resolution of the current dispute. While Wylie & Bisset had apparently submitted a further revised return based on other figures which was not before the court, Miss Smith did not think that they had done so as agents for the Estate.

[68] So far as the counterclaim was concerned, Miss Smith was unaware what had happened to the debt to Yell for advertising of £4,042. She was also unaware as to what had happened to the Clydesdale Bank overdraft of £4,716. She confirmed that the overdraft had been generated through trading but that any purchases made by overdrawing the account would have been included in the stock which had been accounted for. Miss Smith was shown the various versions of Appendix 14 that she prepared, including schedules in 7/56, 7/57 and 7/84. She had revised her figures over a long period of time.

[69] In re-examination Miss Smith reiterated that the 35% gross profit figures used in Appendix 14 revised was simply based on an estimate of the gross profit percentage achieved by the deceased. In relation to the revisal of her figures, she confirmed that it was the meeting with Mr Crawford that triggered that revisal. Miss Smith's general instructions had been to prepare a set of accounts. The question of looking at loss came very much later. She did so because she was asked by the pursuer and the pursuer's solicitors to see if she could prepare something about that. She had only been asked to consider gross profit in making her calculations and not net profit. In any event she thought that it was appropriate to calculate loss according to gross profit because where business overheads are closely related to the sales, she thought it was better to do so. Where costs are effectively static and don't fluctuate with the sales she considered that net profit was inappropriate. The expenses of Glasgow Audio remained the same both prior to and after the deceased's death, albeit there was an increase in staff to allow for his absence. Miss Smith accepted that she had not shared her final figures with the defender prior to giving evidence. She had in fact never spoken with the defender other than briefly during a previous mediation process.

[70] Miss Smith was firmly of the view that Cairncross & Cairncross had been incorrect to include the deceased's capital account in the trading accounts for the defender. Her position was that it could not be transferred and this was an error in the Cairncross accounts. Miss Smith's exercise was, she said, hampered by having no opening stock reconciliation as the sales book had been mislaid by the administration of Glasgow Sheriff Court. On the issue of the loss of discounts, Miss Smith confirmed that it was important to make prompt payment in a business such as that of Glasgow Audio in order to receive a discount. A higher price is paid for late payment.

[71] Miss Smith was further cross examined briefly in relation to the issue of her dealings with Judith Scott of BDO Stoy Hayward. Miss Smith confirmed that the discussions with Miss Scott had not led to any formal agreement and that closing stock was mentioned only in passing.

[72] The last witness for the pursuer was Fiona Martin, a 43 year old Chartered Accountant with RSM Tenon. Miss Martin was instructed to look at the goodwill position of Glasgow Audio. She had access to Gill Smith's report. By the time she gave evidence she had been provided with the revised version of Appendix 14, No. 6/104. She was unable to comment on the calculations themselves but could confirm that the general approach taken by Miss Smith appeared to be methodical. On the face of the figures provided to her Miss Martin agreed with Miss Smith that the business had severe financial trading difficulties at the end of August 2002. She accepted that the main differences related to the stock figure. On the issue of the transfer of the capital account, Miss Martin confirmed that, short of a specific gift being made, the capital account would not normally transfer to someone looking after the business.

[73] Miss Martin confirmed that as a general rule when one was looking at loss of profit in a retail business the main costs are fixed and the calculation of loss would be made using the gross profit level. There were other situations, such as in manufacturing businesses, where net profit percentage would be more appropriate. There were situations in the retail business where a net profit percentage would be used. For example if there was a variation in trading days, or more staff were taken on, or additional advertising was incurred or there was a change in the way the business was operating then in all of these using a net profit figure would be considered. In the case of Glasgow Audio additional staff had been taken on to replace Mr Lamont. There had also been some change in the trading pattern in that the percentage achieved in the period after death was lower than it had been prior to death. However, Miss Martin did not consider that these might be exceptional enough reasons to use a net profit percentage in calculating any loss. It was the absence of the proprietor that made a difference to the business of Glasgow Audio. That would affect turnover and profit margins. If the business was being run less efficiently and less attractive deals were being negotiated with suppliers, then these would all be factors. However she still considered that it would be more appropriate to use a gross profit percentage in calculating any loss.

[74] Under cross examination Miss Martin confirmed that she had been given information from Miss Smith and from the pursuer. She had not checked any primary material and had no access to source documentation. Miss Martin reiterated that her conclusion in relation to goodwill was that it attached to the proprietor of this particular business, that it had "died with him" and that accordingly from January 2002 onwards there was no goodwill in the business. Miss Martin had not considered the issue of any loss of profit herself. She had simply looked at Gill Smith's approach. She confirmed that Miss Smith had made the calculation on an assumption that the profits had remained at the same level as when the deceased was alive. Miss Martin confirmed that the gross profit margin does not include any allowance for a proprietor's time. Miss Martin's overall view was that, had the business continued in exactly the same way as it had prior to Mr Lamont's death, then Gill Smith's figures were reasonable.

[75] Miss Martin had been given some information about the price at which Glasgow Audio had been sold. She was aware that there was separate figures for stock and then a payment of £50,000. She had not seen a copy of the sale and purchase agreement. She was told that the £50,000 was an additional amount and negotiated in the sale. She was not told what it related to. She agreed that it would be surprising if the purchaser of such a business had not carried out some "homework" on the trading position of the business. Normally the seller would of course know the business intricately and be able to provide that information. She confirmed that the marketing of a business might affect price but there were different strategies for selling different businesses and she could not be specific about the present case. She did not accept that the only way of achieving best price was to market a business. Miss Martin accepted that the sort of issue that might justify her looking a net profit percentage rather than gross profit percentage in calculating any loss was a change in the number of days trading. This was relevant for overheads. So far as the absence of the deceased from the business was concerned, Miss Martin confirmed that the effect of that would depend on what actions were taken by the individual taking over. There might be differences in dealing with staff and if the business was not being run in the same way as it had been when the deceased was alive that would certainly have an impact. Miss Martin was aware that there could be seasonal fluctuations in sales in the Hi Fi Business but had not been asked to consider that matter.

[76] In re-examination Miss Martin confirmed that she had thought the overheads of Glasgow Audio had remained the same and nothing had presented itself that might have led her, had she been carrying out the exercise, to apply a net profit percentage. She did not consider that there was a significant difference in the overheads, including any change in the number of trading days. She thought that the price achieved by Miss Lamont on the sale appeared to be a very good deal. It appeared to have been fortunate that Mr Turner saw "synergy" in the two businesses. If the business was in a situation where the liabilities exceeded the assets then there would have been an urgent need to see whether it should be closed down or sold. However, any deficit could be resolved by refinancing and turning the business back to profitability. It depended on the particular case. If the staff were co-operative and working towards profitability then that would be a reason to see if one could continue with a business. As a purchaser, one would look to see whether there were key individuals who would co-operate with the purchase. Miss Martin agreed that an actual sale was the best guide to the value of a business at any given time. Where a business loses its proprietor and any replacement does not have the expertise of their predecessor, that would be likely to affect profitability. It would be very difficult for anyone with no experience in the Hi Fi sector to walk in and take over a business such as Glasgow Audio.

[77] Following Miss Martin's evidence, a motion was made for the pursuer to lodge handwritten stock sheets with a view to reconciling these and the stock valuation prepared by Mr Turner. The pursuer had not hitherto lodged these documents which were in her possession. The defender did not oppose the motion and the pursuer was accordingly recalled to speak to them.

[78] The pursuer confirmed that documents 6/100 and 6/101 were the handwritten stock documents produced by Derek Henry and Gordon Arnott at the end of August 2002. 6/101 was primarily Mr Henry's document and 6/100 was compiled by Gordon Arnott. Miss Lamont's position was that there had been no time to complete the stock take on the first day she had been in the premises of Glasgow Audio on 30 August 2002. The following morning she realised that she required someone with more experience to attend to the stocktake. Gordon Arnott had offered to help and attended at the shop to follow on from where Mr Henry had finished. The pursuer accepted that 6/100 and 6/101 had no prices for stock indicated on them. She agreed that the only valuation that had been carried out was by Jonathan Turner and that her own stock check was simply a list done independently of Mr Turner's. She said that it was impossible for her to obtain prices without the price lists. She had thought that the lists would be there, she had been advised by Mr Picken that that had been agreed. Mr Turner had never seen the pursuer's handwritten stock sheets. She said that sometime after the agreement to sell, Mr Turner had indicated to her that many of the items in the shop were damaged. She said that she, Mr Hotchkiss, Gordon Arnott and Mr Turner all met in the shop on a trading day and compared the lists at 6/100 and 6/101 with 6/87 of Appendix 10. She claimed that the two lists were checked against each other and that every item was accounted for. She said that further extra items were identified. She had been assured that the prices were fair. She had later prepared a document 6/106 of process during the proof. This was when she realised that there were items extra to the handwritten lists. She was aware of a rough value of the items before. Document 6/106 began with the list prepared by Jonathan Turner, then the handwritten list, and was a summary of the items on Mr Turner's list but not on Mr Arnott's or Mr Henry's list. There were in addition a handful of what she described as "very low value items" that did not appear on Jonathan Turner's list but they were on Mr Henry's and Mr Arnott's lists. She had place reliance on Mr Turner who seemed to carry out the exercise very thoroughly and she said that he had never seen her lists at the time.

[79] Under cross-examination the pursuer was asked why she had not produced Mr Henry and Mr Arnott's lists when called upon to do so in the Commission and Diligence Procedure in 2004. The pursuer said that she had not done so because they had no values attributed to them and it was decided to put forward Mr Turner's valuation as if it was her own stock list. Her justification for that was that it had been impossible for her to value the stock. The pursuer's averment in the closed record (page 55) was put to her where it is said "a stock take carried out by the pursuer..." and she was asked whether that averment related to the handwritten sheets or Mr Turner's stocktakes. The pursuer confirmed that it related to Mr Turner's stock valuation less the value of some items where deposits of 50% had been paid for goods and it was agreed that Mr Turner should not have to pay for those. The pursuer was asked whether there were price tickets on the items that Mr Henry and Mr Arnott had been listing in the shop and she said she could not remember. She confirmed that there were references to damaged stock both in the handwritten stock lists and Mr Turner's lists. The pursuer accepted that Mr Turner had found at least £4,000 of stock additional to that which appeared on the handwritten sheets. When challenged that she had instructed the purchaser of the business to carry out a stock valuation which she then used to substantiate her claim against the defender, the pursuer confirmed that Mr Turner had offered to help her and she agreed to take his help. As there were no stock lists or price information in the shop she had been unable to carry out the exercise herself. She confirmed that the comparison that took place between the handwritten lists and Mr Turner's valuation was in the Spring of 2003. She accepted that she had not shared her handwritten stock sheets with Mr Turner as such. They were for her own personal check. When she carried out the check in Spring 2003 some of the handwritten notes had gone astray so she made a list. She trusted Mr Turner to treat the estate as fairly as he could. When asked whether there was a possibility that stock had been missed by Mr Turner the pursuer said that the exercise had been carried out over 5 to 6 months but the listing of the stock was done before the shop opened. She accepted that she had not known the value of the stock when she sold the business. She felt she had done the best she could in relation to the matter.

[80] In re-examination the pursuer's position was that all relevant documentation she held for the business had been handed over to her previous agents in the context of commission and diligence in the case against the defender in the Sheriff Court. She had mislaid a couple of handwritten sheets of her own. She did not receive everything back from the Sheriff Court but she had photocopied everything. Her position was that she took advice on the specification of documents and that the decision not to lodge the handwritten sheets was based on that advice.

Evidence led in the Defender's Case

[81] In her case, the defender first called Colin John MacKenzie. Mr MacKenzie, aged 55, is the Managing Director of Hi Fi Corner based in Edinburgh. He is also a business consultant. He has been in business since the 1970's and has post graduate qualifications in that area. In his time at Hi Fi Corner he had acquired premises in Haddington Place and Rose Street in Edinburgh and a branch in Falkirk. He had also run a branch of Hi Fi Corner in Glasgow until about 2009. He had been a friend of the deceased for many years. The deceased had originally worked for Mr MacKenzie in Hi Fi Corner in the late 1970's and was a Director of the business by the time he left. Mr MacKenzie knew the defender well as the deceased's "common law wife". He had seen her supporting the deceased by helping out at the Scottish Hi Fi Exhibition. In 1985/86 she had worked in the office at Hi Fi Corner. That would have given her a broad awareness of the nature of the business and a certain amount of product knowledge at the time. Mr MacKenzie had been aware of the deceased forming Stirling Audio and later Glasgow Audio. He regarded Mr Lamont as a very successful businessman, who had taken a considerable amount of business away from Hi Fi Corner and had an excellent reputation. Mr MacKenzie's recollection was that all of the sales representatives of the business would know the defender as she had consistently attended Hi Fi shows. Mr MacKenzie also knew Mr Hotchkiss reasonably well. He confirmed that Mr Hotchkiss had been a Manager in one of the Branches of Hi Fi Corner in Glasgow. He had left to work for the deceased and then returned later to work with Mr MacKenzie's business. He was aware that Matt Hotchkiss was an employee who had not been involved in business decisions about Glasgow Audio. In the summer of 2002 Matt Hotchkiss left Glasgow Audio to work again for Hi Fi Corner. At that time Mr MacKenzie had complaints about Mr Hotchkiss' selling ability. He appeared not to have moved forward in terms of his attitude and was too "laid back" for Mr MacKenzie's business. When Mr Hotchkiss left Hi Fi Corner to return to Glasgow Audio, Mr MacKenzie recalled that he had been somewhat sheepish about handing in his notice.

[82] In late August/early September 2002, Mr MacKenzie found out that Glasgow Audio had been sold to Jonathan Turner of Holborn Hi Fi. The news of the sale surprised him. He knew Mr Turner who had been a junior member of staff at Hi Fi Corner. Mr MacKenzie would have been interested in acquiring the business of Glasgow Audio. He felt that the norm would have been for it to be advertised and for bidders to be invited. He had the capacity and no financial difficulties at the time. He would have been interested in Glasgow Audio because of its reputation, the likelihood that it would be profitable and its location. Mr MacKenzie knew that the defender was running the business after the deceased died. During that period, Mr Hotchkiss had taken to phoning Mr MacKenzie and telling him how unhappy he was at Glasgow Audio. Mr MacKenzie had never been told by any of his trade contacts that manufacturers were threatening to withdraw products from Glasgow Audio or indeed that they had been withdrawn. He would have expected to have heard that. Mr MacKenzie dealt with Cyrus, Meridian, Roksan and Arcam at the time and had heard of no such threats from them. Mr MacKenzie confirmed that it would be normal to have extensive information about a business such as Glasgow Audio before offering to buy. As a basic minimum he would expect to have had profit and loss accounts and balance sheets.

[83] Under cross examination Mr MacKenzie agreed that he would not necessarily know if other businesses were paying their accounts timeously, just if they were not being paid at all. He thought that Hi Fi Corner was probably the only business in the industry who always paid on time and always achieved settlement discounts. He felt that it was not uncommon for suppliers to be pressing for payment in relation to other businesses. When it was put to him that the value of a Hi Fi business was in the suppliers, Mr MacKenzie responded that the value in such a business was in the customers. He did not think it would be difficult to obtain profit and loss account information about a business although he would not rule out buying a business that was unprofitable. While he had no detailed knowledge of Glasgow Audio's books, he had discussed the costings of the business with the defender. He had prepared an Excel spreadsheet and his view was that it looked as if it should be a profitable business. He thought it was a going concern.

[84] Mr MacKenzie did not consider that it was strange that the defender had met suppliers at a Coffee Shop. He had done so himself. He did not consider that there was anything wrong with meeting suppliers away from the business premises. When asked whether it was important that staff had literature on up to date trends in the Hi Fi business Mr MacKenzie said that in Hi Fi Corner they had stopped taking some of the trade magazines. He did not consider they were adding value and he wanted more control over what was sold. In his business the management decided what would be sold and then trained the staff in those products.

[85] In relation to Mr Hotchkiss, one of Mr MacKenzie's concerns was that Mr Hotchkiss did not bring any pool of customers with him when he moved. Mr MacKenzie was asked whether the defender had ever come to him with a view to selling Glasgow Audio. Mr MacKenzie confirmed that she had not, although he knew that there was a long dispute in relation to a Will and he had been asked whether he would be interested in supporting something jointly with her depending on the outcome of that dispute.

[86] Mr MacKenzie was asked about the way in which stock was demonstrated within the premises of Glasgow Audio. He had no particular difficulty with the way in which this was illustrated in the photographs 6/99 of process. It was put to Mr MacKenzie that he felt a considerable amount of goodwill towards the defender and felt that she should have inherited the business. He agreed with that.

[87] Mr MacKenzie confirmed that Nicholas Wearmouth and Gary Young had come to work for him. While the defender had introduced them, it was his decision to take them on. While they had not been particularly experienced he regarded them as very good employees. Gary Young stayed for 7 years and Nicholas Wearmouth also remained with Hi Fi Corner until he set up as a competitor. Mr Wearmouth was the most successful Manager he had employed for many years. He would have been made a Director in Hi Fi Corner had he not left. Both Mr Young and Mr Wearmouth achieved a level within his organisation that Mr Hotchkiss would never have been promoted to. He regarded Mr Hotchkiss as a "plodder" who was not completely committed to the business. His second job as a Fitter illustrated that. Mr Wearmouth was much more ambitious.

[88] Mr MacKenzie had found it peculiar that Miss Mooney was removed from Glasgow Audio. He felt this was not something that the deceased would have wanted. He wasn't a close friend of the defender, but respected her. In relation to the photographs 6/99 of process he felt there was a considerable amount of stock in the stockroom, more than at one of his own branches in Falkirk. His Falkirk Branch carried about £70,000 to £80,000 worth of stock and it was of a lower quality and value of that illustrated in the photographs. Looking at the stockroom exhibited in those photographs his gut feeling was that there was stock of considerably more value than that in his Falkirk Branch. He agreed that a factor in stock valuation was its condition and that a proper valuation would involve more variables than just looking at photographs.

[89] Under re-examination Mr MacKenzie confirmed that Glasgow Audio had continued to trade since Mr Turner took over, presumably profitably. Reverting to the issue of how seriously Mr MacKenzie had taken Mr Hotchkiss' complaints about the defender, Mr MacKenzie confirmed that he regarded Mr Hotchkiss as someone who preferred working for men. He had not liked Mr MacKenzie's co-director because she was a woman. Accordingly, Mr MacKenzie did not take Mr Hotchkiss' complaints seriously. Mr MacKenzie didn't regard the inexperience of Mr Young and Mr Wearmouth when they were taken on as a particular problem. He himself had been only 18 when he took over his first shop. Mr Wearmouth and Mr Young had motivation and passion for the business. Mr Wearmouth had done particularly well. In contrast with Mr Hotchkiss both of those young men were receptive to change.

[90] Allan Campbell was also called as a witness in the defender's case. Mr Campbell is 37 years old and currently works as a landscape gardener. He had worked for many years for the deceased first at Stirling Audio and then at Glasgow Audio. He was a sales assistant. Throughout his time at Glasgow Audio the deceased had worked full time in the shop as well as owning the business. Mr Campbell's recollection of the time when the deceased was ill and subsequently died was vague. After Mr Lamont died Mr Campbell confirmed that he assumed the business would carry on as normal under the charge of the defender. He had been assured that his job was safe, the shop continued to trade and payment of wages also continued. He was well aware of the committed nature of the defender's relationship with the deceased and he had also met the pursuer when she had popped into the shop from time to time prior to the deceased's death. During the period when the defender was in charge of the business of Glasgow Audio in 2002 Mr Campbell recalled that sales representatives would attend at the business premises to ply their trade although he couldn't be specific as to dates. He did recall that some of the sales reps stopped attending at the business premises some time after the deceased's death. He remembered that the defender had attended at the shop on Saturdays and once or twice per week in addition to check that the business was operating effectively. He confirmed that the defender had herself conducted meetings with sales representatives shortly after Mr Lamont's death. His recollection of the level of sales between January and June 2002 was that these appeared to him to be at much the same level as when the deceased was alive. There were no hard and fast targets for sales. Mr Campbell knew in broad terms what level of discount from full price he might be able to offer to secure a sale. Receipt books were kept recording all the details of sales and he and Mr Hotchkiss attended to the banking of the takings. He reiterated that sales in the month after the deceased's death followed the same pattern as before. People tend to buy Hi Fi equipment less in the summer where they will be involved in outdoor activities. Christmas was traditionally a very busy time although the defender was not in charge during any Christmas period. Mr Campbell felt that Mr Lamont's absence from the business made a difference to it. He had been a likeable person and it was well known that customers wished to deal with people that they like and respond well to. Mr Campbell recalled no instruction from the defender or anyone else not to continue the practice of taking good quality second hand goods in part exchange for new equipment after the deceased's death. All items in the shop had price tickets on them. There was a change to the trading days. The shop had been open seven days a week when the deceased was alive but he thought it had reduced to six days after his death.

[91] Mr Campbell confirmed that there was always stock in the shop during the period of the defender's control. He tended not to order it but he knew that someone must have done so. On occasions Mr Campbell would order stock himself and examples of delivery notes confirming his orders were put to him. Mail continued to be delivered to the shop and he was never asked not to deal with the mail. While he was unclear as to details, Mr Campbell's general impression was that there was no significant change in the way the business was run after the deceased's death. He had worked with Mr Wearmouth and Mr Young after they started. Their knowledge had been basic at the beginning but they were pleasant and enthusiastic. During the period in question Mr Campbell felt that the deceased was sorely missed. He had had so much product knowledge and a good feel for what would sell.

[92] Mr Campbell left Glasgow Audio because he had married and was looking to buy property. He decided that he could increase his income by working as a driving instructor and through a landscaping business. However the driving school had not worked out and when Mr Campbell was contacted by Jonathan Turner he agreed to return to work in the shop. He had no particular recollection of the list of items said to belong to the business of Glasgow Audio. He recognised some of the equipment as being items stocked in the past by Glasgow Audio. He certainly had no involvement in making any list of items said to be at 53 Queen Square. While he did recollect that the deceased took things home from time to time to try out he had never assisted the deceased with that.

[93] Under cross-examination Mr Campbell confirmed that prior to Mr Lamont's death the defender wasn't particularly involved in the business. Mr Campbell had tended to report to Mr Hotchkiss who ran the shop quite well and was good at sales. He did feel that Mr Wearmouth and Mr Young had been very inexperienced when they started although he acknowledged that Mr Wearmouth was certainly clever enough to be a manager. He did have some recollection that the defender might have met sales representatives in a café. He personally had no involvement in meeting with suppliers or representatives. On being pressed about whether sales representatives came to the shop after the deceased's death, Mr Campbell's position was that while the number of visits slowed down he could not say that no such visits took place. After the departure of a Mr Fisher and a Mr Orry who were involved in installations of equipment sometimes at customers' houses, Mr Campbell or Mr Hotchkiss undertook that work. He didn't know whether those part time members of staff had left voluntarily or not. He had been inconvenienced at the time when Nicholas Wearmouth and Gary Young were given weekends off. This affected both him and Mr Hotchkiss. During the relevant period he was always paid on time by the defender. There was no formal training in the business although if new equipment was being set up it would be discussed. He found Mr Wearmouth and Mr Young responsive and happy to take any advice on board. On being shown the photographs at 6/99 of process Mr Campbell was far less critical than Mr Hotchkiss of the way in which the equipment appeared to be being demonstrated. The stockroom didn't look any different to him in the photographs than it was in all the years he worked at Glasgow Audio. He felt the amount of stock was consistent with what the business usually carried. He commented that if he walked in and saw the shop and stockroom as it was in the photographs 6/99 of process, "... it would seem to be quite a well stocked shop".

[94] Mr Campbell confirmed that he was not involved in the initial stocktake undertaken by Jonathan Turner when he took over the business in August 2002. However he had been involved in numerous stocktakes over the years that he worked for Glasgow Audio. He didn't see anything untoward about the level or condition of the stock in Glasgow Audio when he returned to work there in 2002. There was some damaged stock but that always happened from time to time. On the issue of the deceased having taken stock of the business home to test Mr Campbell said that the only pieces of equipment he had seen at the deceased's home were those items of Hi Fi equipment used for the funeral. Mr Campbell agreed that CDs and DVDs had been kept in the shop in a rack holding about 100 of each and piled high. He reiterated that while sales representatives seemed to come to the shop less after the deceased's death he couldn't say they disappeared completely. He agreed that there was certainly less stock in the shop after the deceased's death than before but not materially less, "just a little". After he was working for Jonathan Turner Mr Campbell felt there was less stock in the shop than was in the photograph 6/99 of process. On being shown Appendix 10 of 6/87 of process the stock valuation carried out by Jonathan Turner, Mr Campbell indicated he hadn't seen that document before, at least not in the form in which it was lodged. However, the stock listed in the valuation was familiar to him. It did not appear to be any stocktake in which he had been involved. Historically Mr Hotchkiss had been responsible for the stocktake of the business. Mr Campbell confirmed that he knew the deceased had driven a Mercedes motor vehicle. He had never used it although he thought other staff might have used it occasionally for deliveries. He did not consider that Gary Young and Nicholas Wearmouth had been treated preferentially other than that they had been given some weekends off. Mr Campbell was questioned further in some detail about the issue of the CDs and DVDs and where they were stored. He thought that CDs could go missing and that members of the public might take them from time to time.

[95] In re-examination Mr Campbell confirmed that while the deceased and Mr Hotchkiss had worked well together so far as selling to customers were concerned there was no doubt that the deceased was the owner and had the final say in any decisions. He thought that the deceased valued Mr Hotchkiss' services and that they had become reasonably close. Mr Campbell clarified that when he carried out a stock count it was with James Sharp who stayed at his home one evening. His recollection was that Jonathan Turner was trading in the shop at the time and that the stocktake was done in the evening. Mr Campbell confirmed that the system for recording sales was manual when the deceased was alive. Sales receipts were kept until the end of the week and handed to the deceased. He couldn't specifically recall the Mercedes car being driven for business purposes by anyone in particular. He thought the vehicle was owned by the deceased.

[96] The third witness for the defender was Nicholas Wearmouth. Mr Wearmouth is 34 years old and is a director of a home cinema centre in Edinburgh. Prior to that he had been in the Hi Fi business. He confirmed his employment with Glasgow Audio in 2002. He was out of work when the deceased was ill and was asked to help out in the business. He agreed to do so. Mr Wearmouth had no recollection of Matthew Hotchkiss ever expressing dissatisfaction with his performance while at Glasgow Audio. He felt that he and Mr Hotchkiss and Allan Campbell all worked well together. He was never instructed to refuse to accept second hand goods in part exchange for new. He recalled a deposit system but said there was no fixed amount. He recalled sales representatives attending at the shop in Glasgow. He was able to name a Clive Atkins of Henley and a Bill Lee of Mission who he had dealt with at that time and with whom he still has a business relationship. Mr Wearmouth confirmed that while he was at Glasgow Audio in 2002 mail was delivered to the shop. There were price lists in the business premises which were used to determine the sale price. There were price tickets on the items in the shop. When invoices arrived for payment they were set aside for the defender to deal with. Mr Wearmouth knew Gordon Arnott who worked in the shop on a Saturday and who did the deliveries. He was a casual worker. Mr Wearmouth did recollect Andy Fisher and David Orry leaving but he couldn't remember the circumstances of that. There were no sales targets when Mr Wearmouth was at Glasgow Audio. The business relied on people coming through the door. There was considerable guidance on pricing from the manufacturers to which the sales staff stuck closely. Nicholas Wearmouth did recall Mr Hotchkiss saying that the volume of business was quieter than when the deceased was alive, but no information was given about the level of sales achieved on a daily or weekly basis. Stock was ordered by Mr Hotchkiss. There was no question of stock not being ordered as the business couldn't function without it. Mr Wearmouth was quite clear that suppliers such as Cyrus and Meridian did not demand return of demonstration models during the relevant period in 2002. Neither did Roksan or Arcam and he had heard of no threats of such a withdrawal. There was no significant change in the suppliers of the business and felt that the way in which the business was run was pretty static.

[97] With hindsight Mr Wearmouth felt that Mr Hotchkiss hadn't been the best shop manager in light of the lack of sales targets for the staff. Although he knew that the pursuer was the deceased's sister, Mr Wearmouth had had few dealings with her over the years. At some point during the first half of 2002 Mr Hotchkiss and Mr Campbell had indicated to Nicholas Wearmouth that they weren't particularly happy in the business. Mr Hotchkiss had his part time work as a fitter. Both colleagues went off to do other things. No one ever mentioned to Nicholas Wearmouth that there might be stock of the business held anywhere other than on the premises or in two lock ups. After Allan Campbell and Matthew Hotchkiss had left the business the defender made an offer to Nicholas Wearmouth and Gary Young that they became manager and assistant manager respectively. He and Mr Young effectively ran the shop from 22 June to 30 August 2002. On 30 August the pursuer arrived in the shop with a gentleman. She said she was taking control and that he and Mr Young were to leave. There was a short discussion during which the pursuer said that the business wasn't being run properly and that it would be better run by people the deceased had trusted. Mr Wearmouth was quite put out by that. He told the pursuer that specific customers were due to come into the shop that afternoon and suggested to her that closing would be unwise. He wanted to keep his job at Glasgow Audio. He remained on the premises only for about ten minutes after the pursuer arrived. He handed over the keys and the petty cash and the pursuer insisted that they left. The customer he anticipated would have come to the shop that afternoon had it not closed was a lady who had indicated she was going to buy a very expensive television for over £2,000. Mr Wearmouth confirmed that there were would have been a number of CDs and DVDs in the shop, probably less than 50 in total. No formal handover took place. The computer was in the shop and there was information stored on that. About two weeks later Mr Wearmouth discovered that the business was sold. He had not been back since. During the two months that he and Gary Young were in charge of the shop he felt there was an increase in sales. Although they had reduced the trading days from six days down to five that didn't seem to affect the level of sales and they didn't feel they needed to open the extra day. Nicholas Wearmouth knew that the average gross profit on an item such as an expensive speaker would be 35% or more.

[98] Under cross-examination Mr Wearmouth confirmed that he had been about 26 years old when he started working in Glasgow Audio. He had discussed his interest in audio equipment with the deceased when he was alive but it was ultimately the defender who approached him asking him to help out. Mr Lamont was in hospital at the time. On being pressed about the issue of the DVDs and CDs Mr Wearmouth confirmed that Glasgow Audio held fewer of these than Hi Fi Corner where he went to work subsequently. He had not paid close attention to the number of CDs which were a minor issue so far as he was concerned. He was clear that the number was more in the region of 40 to 50 than 100 to 150. On the day he left, Mr Wearmouth confirmed that the sales receipt books for a 12 to 24 month period were all present in the shop. He hadn't been aware of any stocktake. Otherwise all of the material that would show the trading since the deceased's death was on the premises when he left on 30 August. He had no reason to think they weren't there. They were kept in the storeroom and he hadn't removed them. The computer was on the desk when he left. He agreed that he could be mistaken that the shop had opened six days a week rather than seven prior to June 2002.

[99] Mr Wearmouth confirmed that he and Mr Young had been friends and had a mutual interest in disc jockeying which they had done together. That was the main reason he didn't want to work weekends. During the period he was running the shop Mr Wearmouth's remit was to keep the shop going and achieve sales. He felt he was successful in that. The shop was busy when he was managing it. He personally held meetings with sales representatives and recalled no reticence on their part about coming to the shop. Any business mail that came to the shop he tended to pass to the defender. He knew of no pressure from suppliers and thought sales were at a decent level. He was aware of the organisation Mountainsnow, the buying group and he knew that it was important to be profitable to continue in that. He was not aware that there was any problem with the level of purchases being made through Mountainsnow. On being shown number 6/16 of process he agreed that the figures stated therein showed a drop but he hadn't previously been aware of the figures. He thought it was to be expected that the sales figures would drop after the deceased's death. Mr Wearmouth specifically recalled the sales representatives coming to the shop and bringing stock because he had been keen to interact with them and learn as much as he could about the business. While the defender was a full time teacher at the time she had operated a system of messages being left so that she could telephone at a suitable interval. There was regular contact with her. By August 2002 Mr Wearmouth knew that there was a dispute with Miss Lamont and that there was an application in Court for her to take over. The defender had told him about that in general terms. Nonetheless it was a bit of a surprise to him when the pursuer suddenly took over the business. Mr Wearmouth had general knowledge of there being discounts for prompt payment to suppliers but, as shop manager, he didn't expect to have full details of that. He recalled there being brochures in relation to equipment that was being sold in the shop. These would be delivered with the equipment. He regularly checked the brochures and price lists. There was a folder in the front of the shop with all the price lists held in it. There was no problem getting price lists when he was manager and there were racks and racks of brochures relating to equipment in the shop Mr Wearmouth seemed surprised at the suggestion being made to him that there were no brochures in the shop. He was aware that the defender had some meetings with sales representatives away from the business premises and didn't regard that as unusual. Mr Wearmouth was taken to the photographs at 6/99 of process in some detail. He identified some pictures of brochures in the shop at 6/99(iv)(3).

[100] When it was suggested to Mr Wearmouth that there had been evidence from the pursuer that there were no price lists in the shop on 30 August, Mr Wearmouth sounded surprised. He said that he and Mr Young were using the price lists that morning, that it was impossible to do the job without them and that up until the pursuer appeared in the shop he fully expected to be doing his job the next day. He specifically recalled having spoken to the customer who was thinking of buying an expensive television that morning. He was clear that the pursuer had arrived about lunchtime. When he handed the keys over to the pursuer on 30 August the relevant accounts and records were in the shop. He had been working on one sales receipt book at the time but there were 12 to 24 months of receipt books in the shop. Mr Wearmouth was surprised to hear that there had been a stocktake done in January 2002. He had not been made aware of that by Mr Hotchkiss. Indeed, he recalled Mr Hotchkiss suggesting that stocktakes were not done as a matter of course. The deceased had done all the ordering and knew what there was. Mr Wearmouth remembered finding it curious that there was no proper record of stock. It was put to Mr Wearmouth that during the period of the defender's control of the business deposits of 50% were sought from customers. He thought that unlikely, that level of deposit would put too high an obstacle in the way of a sale. So far as part exchange was concerned there was always an option to trade second hand items against new items although it played a relatively small part in the business operation. While there may have been an instruction from the defender to be cautious about the price for such trade-ins it was not stopped.

[101] On the issue of stock, Mr Wearmouth did not accept that the stock was run down by the defender. He felt there was too much stock in the shop in the period January to March 2002. The volume was adjusted appropriately thereafter. It was suggested to Mr Wearmouth that the Christmas stock would be ordered as early as July or August but he disagreed with that and was clear that it would be September before such ordering took place. He accepted that he and Gary Young had been involved in an accident in which a television set was broken. He recalled the incident and rejected the suggestion that Mr Hotchkiss had not been happy with him. The incident took place after 22 June when Mr Hotchkiss had left. Mr Wearmouth remembered phoning the defender with some trepidation. In the time he worked for Glasgow Audio he had only damaged one other item, an amplifier. On being shown appendix 10 of 6/87 of process, Mr Wearmouth was able to recognise the manufacturers and the stock listed but could not speak to quantities some 8 years after the event. Mr Wearmouth conceded that with hindsight he had not done a perfect job on all of the demonstration of items in the shop in 2002. However, he maintained that everything he dealt with had been properly labelled and that the shop was clean and tidy. On the trend of sales, Mr Wearmouth said that his recollection was that April and June were particularly quiet months but that in the last 2 months, those in which he and Mr Young were running the business, they had achieved sales levels only £6,000 or so short of the 2001 figures and that with fewer staff. He felt that he and Mr Young had performed well during that period. Mr Wearmouth did not have the details of all of the figures earned during the period January to August 2002 and could not comment on the accounting details. Matt Hotchkiss never discussed with Nicholas Wearmouth a complaint that responsibilities had been taken away from him. He accepted that after Mr Hotchkiss left the defender had retained people that were loyal to her and that she could trust.

[102] In re-examination Mr Wearmouth confirmed that he had some experience as the manager of a food outlet prior to working for Glasgow Audio. He felt he had gained good communication skills and was able to take on the job given to him in 2002. On the issue of the change to the opening hours, Mr Wearmouth confirmed that he had thought the shop was open five days out of seven but accepted it could be six. He was very clear that the shop was closed on a Sunday. He did not recall any particular pattern of days off and knew that he had worked on some Saturdays prior to June 2002. He felt he had had a good relationship with Mr Hotchkiss during the first few months of that year. There had been no suggestion from any of the sales representatives he came into contact with that Glasgow Audio was in any sort of financial difficulty. Neither Mr Hotchkiss or Allan Campbell had told Mr Wearmouth that they had resigned because of something the defender had done. When the pursuer had arrived in the business on 30 August she had not asked Mr Wearmouth to show her any other paperwork than the books being used that day, the cash, the keys and the till.

[103] The defender called Fiona McKeracher, solicitor. Miss McKeracher is a 49 year old solicitor and partner with Brechin Tindall Oatts. She qualified in 1984 and has worked exclusively in private practice. She is experienced in civil court litigation. In 2002 she was with Campbell Riddell Breeze Paterson and was consulted by the defender, initially in relation to a potential medical negligence claim arising out of the deceased's death. She had been made aware that the defender and the deceased had cohabited for a long time. On issues relative to the current dispute, Miss McKerachar recalled that the defender's position had always been that there was a Will executed by the deceased in her favour. She had been instructed by the defender to assist in finding a Will, efforts had been made to find a Will and she recalled that there had been a copy Will available. Miss McKeracher had been the principal solicitor involved when an action of declarator of marriage was raised. On being shown the Summons (No. 6/12 of process) Miss McKeracher did recall an issue of interim interdict had been raised but had no memory of the details. Her view was that the ongoing declarator of marriage action might have imposed a duty on the executrix dative not to intromit with the estate pending its conclusion. She could not remember if that was the clear advice given at the time. She did recall that the defender had asked for her advice on whether she could run the business of Glasgow Audio pending resolution of the dispute. Miss McKeracher had been unsure of the answer and had sought counsel's advice. The advice received from counsel was that there was no difficulty with the defender running the business in the circumstances but that would be subject to any duty to account that may subsequently arise. Miss McKeracher was shown correspondence between herself and Mr Picken. Her memory of the detail was vague given the passage of time. What she was clear about was that in the letter she sent to Mr Picken which forms No.6/13 of process, there had been an offer of a meeting written on the defender's instructions. She was clear that no such meeting had ultimately occurred. She thought she would remember if it had. Her general recollection was there had been no resolution at all of the dispute between the parties. She recollected that the dispute was vitriolic in character but she had no recollection of an allegation being made that the defender was in bad faith.

[104] Under cross examination Miss McKeracher recalled the defender being very upset after the death of the deceased. She had arranged for an advert to be taken out in either the Law Society Journal or a newspaper. She had also written to a large number of organisations including solicitors in an attempt to find the Will. She had no recollection of accounts requested by the pursuer's agents ever having been sent to them. It was put to her that the understanding between the parties was that accounts would be produced before the meeting offered by the defender. Miss McKeracher had no such recollection. There had been a consultation with counsel before the raising of the declarator of marriage proceedings but without her file and relative file notes it was difficult for her to put in context the chronology of events. There was a change of agency in about 2003 when Miss Mooney consulted another solicitor. Before that, Miss McKeracher could not recall seeing any accounts of the business although she thought she must have asked for them. Her recollection in relation to the action of declarator of marriage was that the advice given was that there was a problem with proving the necessary repute. She thought that ultimately counsel had advised that there was no reasonable prospect of success. Miss McKeracher had no recollection of there being an issue about stock allegedly belonging to Glasgow Audio but held in the deceased's home. She did remember something about a car. She thought it was an old car but had no recollection of who had owned it or what the issue was. She was clear that she had not found the defender to be resistant to co-operating. She was aware that an impasse was reached with the other side and that the dispute was far from amicable, but she thought that the offer of a meeting at the defender's instigation suggested that she was willing to negotiate. She had not found the defender to be intransigent in relation to the issues and she had instructed Miss McKeracher to find a way forward. When it was again suggested that the pursuer would expect information and accounts before agreeing to such a meeting, Miss McKeracher indicated that it was not her recollection that there was any such intention. The impression she had was that the defender felt very strongly and genuinely that a Will existed. Miss McKeracher had written to the Sheriff Clerk objecting to the pursuer being appointed as Executrix Dative. She was shown No. 6/107 of process in this respect. She did not recall the defender's response to allegations being made by the pursuer's agents in relation to the trading position of the business.

[105] In re-examination Miss McKeracher recalled that there were consultations with counsel about the effect of an interim interdict in the declarator of marriage action if granted. After it was decided that the defender could no longer sustain an argument that she should be running the business she agreed to remove from it and to hand over the keys. Other than that Miss McKeracher was unclear as to the mechanics. She did recall that the defender was co-operative in the process of handing over once she had agreed to do so.

[106] The defender also called Gary Young to give evidence. Mr Young is 30 years old and is now a recruitment consultant. In the past he had managed two hi-fi shops and assisted in another. He had first helped in the business of Glasgow Audio when the deceased was ill. He was asked to help because he had some previous experience in a hi-fi shop in Edinburgh. He was given some informal training by Mr Hotchkiss who would listen to him selling products and then discuss the process. He recalled that sales representatives would come into the shop to present a new product range and that they would assist with training in setting up the equipment. He completed all his informal training successfully. He felt he got on very well with Mr Hotchkiss who gave him a good reference. He did not recall Mr Hotchkiss ever expressing dissatisfaction with his work. He recalled being instructed by Mr Hotchkiss to ask for a deposit. It would be about 10% of the price although it depended on the item and could be more than that. There was no fixed rule. There was no instruction not to sell an item if there was no deposit in place. He was sure that he had been involved in taking second hand items or used goods in part exchange for new. He was never instructed not to speak to company representatives. He recalled mail being delivered to the shop while he was there in 2002. He had no recollection of being given sales targets by Mr Hotchkiss. Everyone who worked in the shop had responsibility for trying to generate sales. If he required to order stock he would be given authority for that by Mr Hotchkiss. His memory of Glasgow Audio was that it was a good business and he was not surprised that Jonathan Turner of Holburn Hi-Fi wanted to buy it. He had heard rumours that Mr Turner wanted to buy while he was still working in Glasgow Audio. In relation to CDs and DVDs being held in the shop Mr Young did recall that there might have been 100 or so of those. He recollected the day he was asked to leave the business. The pursuer was there and he thought Mr Turner was too. He could not remember exactly at what point this had taken place. Mr Young explained that he suffered from epilepsy and to some extent this had affected his memory for detail.

[107] Under cross examination Mr Young agreed that while he did not have any recollection of stock being damaged in the shop that could be attributable to the difficulty he had with detailed recall because of his condition. He did not have a permanent general memory loss but there were some aspects of events and places that he could not recall. His general recollection was that Glasgow Audio was a good place to work in as was Hi-Fi Corner where he worked subsequently for some years. When he and Mr Wearmouth were working at Glasgow Audio he recalled that they would both open mail, he did not have a clear memory of invoices coming to the shop but he did not consider that to be unusual. It was the practice at Hi-Fi Corner that invoices were not sent to the shop. He did remember Mr Hotchkiss always sitting down with sales representatives when they were in the shop and that he and Allan Campbell had the opportunity to speak with them after that. He was clear that while he needed approval before he could order stock that approval was given fairly readily. The ultimate decision lay with the defender who wrote the cheques.

[108] In re-examination Mr Young confirmed that Mr Hotchkiss had given him a reference when he went to work for Hi Fi Corner, albeit that Mr Hotchkiss was no longer working at Glasgow Audio. He had kept contact with some of the sales representatives that he had first met at Glasgow Audio when he went to work at Hi Fi Corner. Although Hi Fi Corner dealt with mid-range products and was one level down from Glasgow Audio which dealt with high-end products there was an overlap between the items sold in both.

[109] The defender also called James Alistair Aitkenhead, a 59 year old solicitor from Glasgow. Mr Aitkenhead has practised as a solicitor for about 35 years. He had professional dealings with the deceased for many years prior to Mr Lamont's death. He had been aware that the defender was the deceased's partner. In 1992 Mr Aitkenhead had suggested to Mr Lamont that it would be appropriate for him to have a Will. Mr Lamont duly instructed Mr Aitkenhead to prepare a draft. Relative file notes of Mr Aitkenhead (No. 6/53 and 6/64 of process) were confirmed as relating to those instructions. The draft Will (No. 6/57 of process) was put to Mr Aitkenhead who confirmed its terms as being in accordance with Mr Lamont's instructions. Mr Aitkenhead sent the draft Will to Mr Lamont together with a covering letter, (No. 6/55 of process). However, despite two letters of reminder Mr Lamont had never executed that Will. In about September 2000 Mr Aitkenhead raised the issue of a Will again. Mr Lamont told him that he had a Will and that it was held with another firm of domestic conveyancing solicitors. Mr Lamont indicated that those solicitors held Wills for both him and the defender. The terms of the discussion appear in a file note (No. 6/58 of process).

[110] After Mr Lamont died Mr Aitkenhead acted for the defender until about April 2002 when a clear conflict of interest arose. Mr Aitkenhead had professional dealings with Miss Lamont also. As it seemed litigation might ensue he suggested to the defender that she would require to have alternative legal representation. During the period he was acting for the defender after the deceased's death, Mr Aitkenhead advised her that pending resolution of the issue about a Will there were duties owed to the estate. He considered the best way of resolving matters ad interim was to involve the accountant of the business in the decision making process, to keep the Clydesdale Bank informed and to have them set up a facility to enable matters to continue. Those matters were all attended to either by Mr Aitkenhead or his colleague Mr Hay. The defender accepted all advice tendered to her. Mr Cairncross attended a meeting at Mr Aitkenhead's office. An issue arose in relation to due to an insistence on the part of HMRC that the defender register as a new trader. Mr Aitkenhead did not consider that the defender was acting unlawfully. He felt the advice he gave was appropriate. He recognised that the lack of a signed Will presented a problem. He was comforted by the support of the Bank and the accountant. No question of the defender being in bad faith arose. When time passed and no Will turned up the option of an action of declarator of marriage was discussed. The defender had advised Mr Aitkenhead that she thought she was able to keep the business going. Although he was aware she had a full time job as a teacher she was willing to devote time to the business as well and the situation was satisfactory.

[111] Under cross examination Mr Aitkenhead agreed that there had been an issue between Mr Lamont and a colleague of his at the time his firm acted in the lease of the premises of Stirling Audio. Mr Lamont had taken that business elsewhere but had returned subsequently to see Mr Aitkenhead. In advising Mr Lamont to make a Will, Mr Aitkenhead had been mindful that, in the absence of a Will, it might be difficult to resolve the succession to the business. Mr Aitkenhead did not know why Mr Lamont had not signed the particular Will that he had drafted. He had sent a follow-up letter after four weeks and a further one four weeks after that. He then dropped the matter but took the opportunity when his client was in the office some years later to raise the issue again. That was when Mr Lamont had explained that he had made a Will that was being held by another firm of domestic conveyancing solicitors. There was no discussion about the terms of those Wills. After Mr Lamont died and Mr Aitkenhead saw the defender, it was agreed that he would write to a firm of Edinburgh solicitors named by Miss Mooney as the firm likely to have the Will. The Clydesdale Bank had also been asked if they had a testamentary writing. A large number of documents were put to Mr Aitkenhead which he confirmed comprised the various correspondence he had written in an attempt to find the Will mentioned by the deceased in the meeting of September 2000. Mr Aitkenhead could not recall asking the defender whether she held a Will with a firm of solicitors. He asked her for names of all solicitors that she and Mr Lamont had had dealings with. Particular inquiry was made of Barton and Hendry, Solicitors in Stirling. The solicitor from that firm had moved to a different firm by the time of Mr Aitkenhead's investigations. The solicitor had been quite vague but there was reference to a fee note which referred to advice given to the defender and the deceased in relation to the preparation of Wills for both of them. The solicitor who had acted when he was at Barton and Hendry but had moved firms was a Roderick Stewart. 6/42 of process was a file note of a conversation between Mr Aitkenhead's colleague, Mr Hay, and Mr Stewart. Mr Stewart appeared to have confirmed to Mr Hay that he held no Will for the deceased. Mr Aitkenhead was concerned and surprised that no Will had turned up. After eight weeks or so he felt it would be appropriate to advertise to see if a Will would turn up. An advert was placed in the Journal of the Law Society of Scotland. By early summer of 2002 Mr Aitkenhead had made clear to the pursuer, Irene Lamont, that it would not be appropriate for him to deal with either party given the likelihood that litigation would ensue. Mr Aitkenhead did not think he had advised the defender to keep the Lamont family informed of the outcome of the search for the Will until after the advertisement period.

[112] Mr Aitkenhead had been comforted by the fact that Mr Cairncross the accountant knew the business well and was in a position to keep an eye on it if necessary and deal with the bank manager. At the meeting in Mr Aitkenhead's office Mr Cairncross had been able to give an approximate figure for the profits of the business prior to the date of death. So far as the Mercedes motor vehicle was concerned, this had come up in conversation but Mr Aitkenhead could not recall what was discussed other than the type of car. He was unaware that the defender had transferred the car so that she was the registered keeper of it. So far as he was concerned the main assets of the estate were the house, the life policies and the business. Mr Aitkenhead was shown two file notes 6/71 and 6/72 of process. The second of these recorded that there had been a family meeting that was not helpful. It was thought that the pursuer was likely to be difficult. In February 2002 Mr Aitkenhead had had no reason to think there was any difficulty in the various family relationships prior to the deceased's death. By March 2002 (Mr Aitkenhead's file note 6/75 of process) Mr Aitkenhead was concerned that problems were going to arise if no Will was found. However he placed some reliance on the conversation he had had with the deceased who had confirmed to him that such a Will existed. Mr Aitkenhead believed the deceased when he had said that he had made a Will. When it became clear that no principal Will was likely to turn up, the issue of declarator of marriage proceedings was raised but Mr Aitkenhead's firm were not prepared to take that matter on and advised Miss Mooney to seek separate legal advice.

[113] Mr Aitkenhead confirmed that he had undertaken certain matters for the pursuer prior to her brother's death and he continued to do so for a short period thereafter. There was never any question of Mr Aitkenhead acting for both Miss Lamont and Miss Mooney in relation to the issue in dispute between them. Mr Aitkenhead was quite clear that he had explained to the defender that she should maintain and run the business until matters were resolved. Mr Aitkenhead agreed that the most likely person to hold a Will for the deceased was Mr Stewart who had been with Barton and Henry in Stirling. His colleague Mr Hay had been surprised that Mr Stewart was so vague about Mr Lamont when they spoke by telephone. When pressed about whether the deceased was lying to him when he said he had a Will, Mr Aitkenhead was clear that he did not doubt Mr Lamont's word at the time and that he still did not doubt it. He considered that a Will was in existence and was surprised it had never turned up. Mr Aitkenhead was not particularly surprised that the deceased might not have shared the details of where the Will was kept with the defender. He had a number of clients in a similar situation. When the defender had come to see him after the deceased's death she was distraught. She told Mr Aitkenhead that she thought that Mr Lamont would have wanted him to deal with the executry. While the defender was determined that there was a Will, she was aware that if it turned out that none could be found it would be for the pursuer and her family to take over the administration of the estate. Mr Aitkenhead had no reason to think that the deceased had anything other than a good relationship with his sister and with his parents.

[114] Mr Aitkenhead recalled that the summer before the deceased died his business had increased in profitability. At the time of his death he was interested in acquiring a further branch. He was told that the defender had effectively run the business for some weeks prior to the deceased's death and albeit that he was concerned because of her recent bereavement, he reiterated that he felt with the accountants on board the arrangements in place were appropriate.

[115] In re-examination Mr Aitkenhead agreed that if the Mercedes vehicle had been transferred immediately after the deceased died, then that would be before the defender had consulted him. He did not recall seeing any DVLA documents at all in relation to the car. He was not aware of any dispute about the assets of the business including the car or any stock said to be held other than on the business premises, Mr Aitkenhead confirmed that a party who has de facto possession of an estate's assets holds them in a fiduciary capacity, as an agent of necessity, for the beneficiaries. He agreed that there was often an overlap between the executors and beneficiaries in this context.

[116] The defender also called Ronald Cairncross in her case. Mr Cairncross is a 73 year old retired chartered accountant. He practised as a CA for about 46 years. He was introduced to the deceased by a mutual friend and attended to the accounts of Glasgow Audio. He was aware of the committed relationship the deceased had with the defender. He had had a discussion with Mr Lamont about the terms of a Will. The deceased told Mr Cairncross that everything would be left to the defender.

[117] After the deceased died, Mr Cairncross was instructed to produce accounts to the date of death and then to produce a set of accounts for the period of Miss Mooney's administration of the business. On being shown a letter to Mr Picken of Black Hay & Co of 19 December 2002 enclosing accounts. Mr Cairncross recalled that he had sent the accounts to the date of death to that firm. Thereafter he understood that the accounts he had prepared had been accepted so far as the estate and HMRC were concerned. When he prepared the accounts Mr Cairncross had a trial balance. He couldn't recall how the stock figure was arrived at. He thought it would be relevant to the level of purchases. His trial balance came from all the documents of prime entry that he had had access to. So far as the accounts for the period of the defender's control were concerned, these were those produced at Appendix 2 of 6/87 of process. Again these were prepared from documents of prime entry albeit that one or two of the figures were estimates of expenses to be clarified. The reason there was no accurate stock figure for that period was because the defender was unable to prepare one, having been denied access to the premises at Great Western Road from the end of August 2002. The defender had given Mr Cairncross the best estimate she had of the stock she carried in the shop. He was content that it seemed reasonable. Mr Cairncross had never had any reason to amend either the accounts he had prepared to the date of the deceased's death or those for the period of the defender's control of the business. The accounts he prepared for that period illustrated a surplus of net assets and no liabilities at the end of the period. The business seemed to be in a healthy condition. Mr Cairncross himself had prepared the tax return for the tax year to 5 April 2002. A copy was produced to the Sheriff Court in the action in respect of VAT. Those documents are contained within No 13 of process. The tax return had subsequently been altered by a note on box 23.5 that the executors wanted to have the accounts independently examined. Mr Cairncross had never had any dealings with the pursuer.

[118] Mr Cairncross used an organisation called Office Bureau Services, operated by his son, Brian Cairncross, to prepare the trial balance. He had complete confidence in his son's organisation. He used the trial balance provided by them to prepare the accounts. At no time was he required to carry out an audit. Mr Cairncross was asked a number of questions about the detail of the accounts. He confirmed that he had been preparing the accounts for Glasgow Audio since 1995. His recollection was that there were no significant variations in the average gross profit percentage in each year's account, and that he recalled that it was in the region of 31-32 per cent. During the period of the defender's control it was slightly lower. He could not remember the precise figures. He was asked to look at 7/89, 7/90, 7/91, 7/92 and 7/93 of process which were all the previous years' accounts for the business. He was asked to confirm from those what the gross profit percentage was in each year. In fact the range was from 35.9% to 38%. The last period of trading, that immediately prior to the deceased's death had shown a drop in gross profit percentage of about 4%. This was a sizeable drop which might be attributed to the fact that the deceased hadn't been available to make sales for two to three months prior to his death. He was not at all surprised to find that the gross profit percentage had reduced further during the period of the defender's control. The deceased had been the "principal mover" in the business when he was alive. The expectation was that in his absence the business would not do so well.

[119] Under cross-examination Mr Cairncross was again taken through the accounts he prepared at the date of the deceased's death which appeared at Appendix 1 of 6/77 of process. He was also shown some explanatory notes to the accounts for the defender's period of control. He did not prepare those explanatory notes. Some time after the accounts had been prepared he recalled that questions about the accounts had been raised by a third party but he couldn't remember the details. Mr Cairncross accepted that he had delegated the task of preparing a trial balance from the source documentation to a third party, namely his son's organisation. He was clear that Office Bureau Systems had processed every relevant piece of paper. Office Bureau Services had been formed by Mr Cairncross splitting his business in two. His son attended to the book-keeping side of the business and Mr Cairncross dealt with the aspects for which a chartered accountant's qualification was required. And book-keeping for Glasgow Audio was probably done three-monthly when the deceased was alive. This would coincide with the need for a VAT return each quarter. Office Bureau Services also assisted with processing wages through the PAYE system and various other matters. Mr Cairncross could not recall the detail of the transition from the PAYE system used prior to the deceased's death and that used by the defender. He had no doubt that the book-keeping operated by his son's business was full and accurate. Mr Cairncross was challenged about some of the figures in the balance sheet for the date of the deceased's death including the figure for VAT and stock. He was unable to comment further on how each figure had been calculated given the lapse of time. What he did know was that he always sought vouching of each figure to be inserted in the accounts. Everything was processed up to the date of death but some documents came in after the date of Mr Lamont's death. So far as the Mercedes motor vehicle was concerned, Mr Cairncross had a recollection that the deceased had traded one vehicle and bought another. On the issue of the defender being registered for VAT during her period of stewardship, Mr Cairncross recalled that an issue had arisen about whether or not she should have been so registered. For that reason no VAT quarterly returns were submitted pending resolution of that issue. There had been at least one VAT return prepared. Mr Cairncross did not take responsibility for submitting VAT returns, simply in assisting in their preparation. Some documentation had not been submitted until quite some time after the defender ceased running the business. Mr Cairncross attributed that to the manner in which she had been removed from the business in August 2002. The accounts for the period of Miss Mooney's stewardship were eventually prepared in 2004. While Mr Cairncross had probably held some documentation before that, it was difficult to prepare the accounts without all the documents of prime entry. The defender had not been in a position to conduct a stocktake. When he prepared the accounts for the period of the defender's control Mr Cairncross included figures from the deceased's capital account into the defender's accounts. All of the assets and liabilities at the date of death were included in the opening account for the defender. Mr Cairncross considered that was the correct approach. It was the same business with someone else operating it. His understanding at the time had been that the defender was the "rightful owner" of all of the deceased's estate. That accorded with what the deceased had told him would happen. He accepted that others would take a different view on whether it was appropriate to transfer the capital account of the deceased to the defender into the defender's accounts in those circumstances. He had some recollection of the deceased having taken stock from the business home. He didn't see anything irregular about that. He wasn't aware of any stock having been held in the house at the date of death.

[120] It was again suggested to Mr Cairncross that the figures provided by Office Bureau Services from the source documents might be inaccurate. Mr Cairncross was clear that the trial balance reflected the documentation supplied by the business. The figures were entered on a computer by his son and his staff. Mr Cairncross was pressed again on the issue of his having transferred the capital account of the deceased into the defender's accounts. He reiterated that he did what he believed to be correct. It had been his clear understanding that the business had been left to the defender in the deceased's Will. In December 2001 shortly before the deceased's death he told Mr Cairncross that in the event of anything happening to him everything was going to the defender. The discussion took place in the evening at the deceased's home which at that time was round the corner from Mr Cairncross' office. The conversation took place when Mr Cairncross had been picking up some documents for processing from the deceased's home. The deceased had spoken to Mr Cairncross as a friend. Mr Cairncross understood that the deceased's wishes were as stated in his Will. When it was put to Mr Cairncross that he was lying about that conversation, he confirmed that his son could verify the position as he had gone to meet him afterwards. He had subsequently told the defender of the conversation he had with the deceased. The context of the conversation had been that the deceased was ill. Mr Cairncross was clear that the deceased had mentioned a Will in which everything was left to the defender, his "common law wife". Mr Lamont was visibly unwell during the visit, he had lost weight and his pallor was unhealthy. When challenged about the date, Mr Cairncross said that he thought it was December, that it was certainly not long before the deceased died and that while some eight or nine years after the event he could not be certain about the date, he was clear that the meeting had taken place. Mr Cairncross fully accepted that he felt the defender had been unfairly treated. As he had been made aware of the deceased's intentions, he felt strongly that these should have been honoured.

[121] Mr Cairncross accepted that the normal rule was that when a sole trader died anyone taking over the business did so as a new business rather than a continuation unless it was being run by the executors on behalf of the estate. However, Mr Cairncross reiterated that because he thought the business had been left to the defender in a Will, he thought that the assets in the deceased's capital account would transfer to the defender's capital account. He thought that the defender was the deceased's legal representative. The accountant's report in the accounts was in standard form and made clear that the responsibility lay with the proprietor. As it happened Mr Cairncross had retired from the Institute of Chartered Accountants when he was 65 in March 2002. The last accounts he prepared were not done by him as a practising chartered accountant. Mr Cairncross had moved to Fife in March 2002 but maintained an office in Glasgow for a period thereafter. Mr Cairncross did not accept that by 30 August 2002 on the face of the accounts the business was insolvent. While it was not profitable during the period of the defender's trading, the business had assets. Mr Cairncross agreed that a drop in the gross profit percentage down to 1.2% would call for explanation and would be wholly unacceptable. However, whether or not that was the gross profit percentage would depend on whether the figure for stock was that used by him or that used by Wylie & Bisset. He did recollect a conversation he had had with Gill Smith about the accounts. She had asked him for an explanation of his figures but didn't give him hers. Insofar as there were differences in the figures for purchases and sales, Miss Smith may have taken a different view on the invoices produced. Mr Cairncross had ascertained that the figures in his accounts reconciled to the bank statements.

[122] Reverting to the car, some capital allowances had been claimed although these were reduced to reflect the fact that the car was used privately by the deceased. Mr Cairncross was taken in detail through the accounts of the business to see how the car had been reflected in those. The accounts prepared for the period of the defender's control assumed that the car would be handed back to the estate at the end of August 2002. Mr Cairncross recollected that he had attended part of a meeting that took place in Mr Aitkenhead's office in February 2002. He could not recall the specific details of what had been discussed that day.

[123] During the period that the defender ran the business, Mr Cairncross had not been involved in its day to day running but he had talked with the defender regularly. He believed at the time that the defender had the skills to run the business. She had held a responsible position as a head teacher and she had been involved in the business side of Glasgow Audio when the deceased was ill. Of course she had little or no experience of audio equipment but she had experience of management. He was unaware of any pressure from creditors during the period January to August 2002. He had not been given any final demand notice from creditors when the accounts were being prepared. He had never seen the documentation relating to the level of trading through Mountainsnow. On being shown the cheques that formed 6/86 of process, Mr Cairncross confirmed that the signature on all of these appeared to be that of the deceased. Any cheques written by the deceased but not honoured by the bank at the date of death wouldn't necessarily be picked up when preparing the accounts and the figure would be included in the entry for creditors.

[124] In re-examination, Mr Cairncross agreed that he may have had some discussion with the defender about the explanatory notes prepared by her to Appendix 2 of 6/86/87. He had never been asked to revise the figure for VAT in the accounts for the period to 30 August 2002. In relation to the delay in producing the accounts for the period of the defender's control, Mr Cairncross confirmed that there had been a great deal of confusion about ownership of the business and he hadn't understood there was a pressing need to finalise the accounts for that period. Insofar as the deceased taking stock home to test was concerned, if any items had been taken and not returned, Mr Cairncross confirmed that those should be treated as drawings and should be accounted for in the business accounts in that way. When his attention was drawn to the figure of £63,579 in the revised balance sheet prepared by Miss Smith at Appendix 6 of 6/87 of process, Mr Cairncross confirmed that if that was the figure counted by the purchaser it seemed extremely low. He could not say why from his own knowledge it would be so low but felt that it must be either because some stock hadn't been counted or some stock had been removed. It was certainly an abnormally low figure compared with the previous six or seven years. Mr Cairncross agreed that he had been asked to write a letter confirming that he regarded the defender as a fit person to run the business. He had written an open letter and that appeared at 6/90 of process. Mr Cairncross agreed that the definition of a business manager would not require that person to be on the business premises on a full-time basis.

[125] The defender also lead evidence from Crawford Herald. Mr Herald is a 60 year old tax consultant with Jeffrey Crawford & Co in Edinburgh. He had long experience as an employee of the Capital Taxes Office (as it then was). He was instructed in the summer of 2003 by the defender's former agents to deal with a VAT problem that had arisen. HMRC had raised some assessments against the defender that were centrally generated in the absence of VAT returns. There were two periods for which HMRC indicated that quarterly returns were due. Their view was that the defender should have been registered for VAT from January 2002 onwards and two returns were due for the period year that she had had control.

[126] Mr Herald had become involved on the defender's behalf in the Sheriff Court action raised by the Advocate General for payment of £17.639 for unpaid VAT. When he was instructed he contacted HMRC and said that he would be lodging an appeal on the defender's behalf and asked them to desist from recovery pending that. The appeal was taken on the basis that there was no requirement on the defender to register for VAT. Mr Herald's view was that the representatives of a deceased can carry on the obligations of the deceased in terms of submitting VAT returns and paying the VAT due. Accordingly he regarded the deceased's registration was sufficient pending the resolution of the dispute about ownership. Ultimately it was agreed with HMRC that the Sheriff Court action would be sisted pending the outcome of the present action. The appeal before the first tier tribunal was also sisted. Mr Herald's understanding was that the business of Glasgow Audio had continued after January 2002 in the same form at least until August of that year. Mr Herald had also looked at the tax return for the period to April 2002. He confirmed that 6/103 of process is the document he had been asked to consider. He had noticed that an additional page 9 of the tax return had been prepared by the representatives of the estate with a completely different narrative to that originally submitted. He thought perhaps the estate's representatives had in mind issuing an amended tax return and that this would be part of the submissions. The deceased's representatives would be responsible for the tax return.

[127] Under cross-examination Mr Herald confirmed that his position was that the defender ought to have no requirement to register for VAT and that the VAT liability for the period of her control should attach to the representatives of the estate. If the defender had been advised to register for VAT then that was an error. There is provision for someone to de-register in such circumstances. A fairly informal written application is made. The argument being run in the appeal with HMRC was that the defender should be allowed to de-register. Even where the defender was carrying on the business it would still be the representatives of the estate who would be liable for VAT in Mr Herald's view. Mr Herald referred to Regulation 9 of the 1995 VAT Regulations. This regulation, he said, was governed by section 46 of the 1994 Act. Regulation 9 deals with registration matters and Regulation 30 deals with accounting for VAT. It is clear from those that it is the personal representative of a deceased who registers for VAT. The regulations allow a year for representatives to be appointed. A liberal view is taken by HMRC. It doesn't depend on who had control. There is a degree of latitude but HMRC would expect to see a piece of paper formally appointing a personal representative. They would look for evidence of who was appointed as representative but would not insist on a new registration. It was not uncommon for mistakes to be made in terms of HMRC insisting on a new registration when none was necessary. It was put to Mr Herald that his interpretation of the regulations was wrong and that Mr Aitkenhead had been correct to advise the defender that she required to register for VAT. Mr Herald disagreed with that. If his appeal was successful the effect would be to absolve the defender from any VAT liability. Mr Herald confirmed that any purchaser of Glasgow Audio would of course require to register the business for VAT if it had been sold as a going concern. He agreed that had the business been left to the defender in terms of a Will she would require to have registered for VAT but not in the circumstances as they turned out to be. Mr Herald clarified that it wasn't the Sheriff Court action against the defender that was sisted but the first tier VAT Tribunal appeal.

[128] In re-examination Mr Herald confirmed that in terms of a retail outlet the requirement to register for VAT or otherwise would be the same whether the business had been in sole tradership or an incorporated entity.

[129] Robert (Bob) Crawford was then called by the defender. Mr Crawford is a 58 year old chartered accountant and tax adviser. He has been a member of the Institute of Chartered Accounts since 1977 and has been instructed in various disputes relating to business valuation and tax. He was instructed by the defender in December 2009 to consider whether the claims made by the pursuer as presented by Gill Smith were well-founded. He also considered a report from Fiona Martin of Tenon. He had seen a number of documents including the sale agreement between the pursuer and Jonathan Turner, the various reports from Gill Smith and ultimately No 6/104 of process, the revised Appendix 14. He had produced his own report, No 7/108 of process. After the various revisals made by Gill Smith he had produced 7/131 which was a summary response to what he understood to be Gill Smith's revised position. He had had one meeting with her. At that meeting the accountants looked together in detail at the claims being made. They discussed Miss Smith's workings, and how she had come up with her original figure of £60,000 for the claim.

[130] Looking at Appendix 14 of 6/87 it was clear that the £133,985 was used as the figure for the assets of the business taken over by the defender during her period of control. That figure included the items alleged to have been in the deceased's home but said to be stock of the business. Mr Crawford had pointed out that if these items, said to be worth £9,221 were assets of the business they couldn't also be included as a separate claim. Further, the motor vehicle, the Mercedes appeared to be in Miss Smith's calculation three times. It was in the original £133,985 figure and then claimed separately in the calculation of loss. Thirdly, Gill Smith had failed to notice that the bank account of the business was not taken over by the defender but was closed and the sum of £6,994 was returned. Fourthly, the creditor's figure was higher than that allowed by Gill Smith.

[131] Of more significant concern was the issue of the figures for stock. Mr Crawford said that the estate's position had to be that the defender should account to it for the stock she had taken over and used immediately following the deceased's death. The figure for the stock taken over by her was about £130,000. That was the cost of stock bought by the deceased. The defender had not been a party to the decision of the pursuer's Executrix Dative to sell that stock. There was no indication that the figure for the stock sold by the pursuer and used by Miss Smith was correct. Further, in relation to the "loss of profit" for the period of the defender's control this appears to have been made up by taking the defender's turnover of £177,170 together with an assumption that she ought to have made the same gross profit percentage as the deceased had done when alive. To achieve the alleged loss, Miss Smith deducted what she said was the gross profit earned by the defender from the gross profit that the deceased would have earned on his gross profit percentage. As a general rule if a gross profit figure changes by more than 5-6% serious questions would be asked. Miss Smith alleged that the gross profit was 1.2%. This would indicate that something had gone seriously wrong such as stock being sold at too low a figure or damaged or stolen. Mr Crawford was not aware of any such explanation for the figures being available. It was important to understand that the figure used by Gill Smith for closing stock was the sale price not the cost. Accordingly a different basis was used in estimating a value for opening stock and closing stock for the period of the defender's control. Mr Crawford analysed what a claim of £60,000 for "loss of profit" meant. He noted that by working in his business the deceased had received annual sums of £45,301, £72,721 and £65,977 respectively for the three previous years trading. The sum Miss Smith originally said should have been earned as gross profit by the defender was accordingly not far off what the deceased's business earned (net) in a whole year when he was alive. On an average annual turnover of £424,470 the deceased's net profit had been £61,333 per annum. This was a margin of 14%. Only net profit would be available to the business, not gross profit. Further, Miss Smith's calculation assumed that the business after the deceased's death was the same in terms of overheads as it was prior to his death. In fact additional staff were required. In summary, Mr Crawford considered that, even on the basis that the business ought to have made roughly the same amount of money at maximum "loss" for the period of the defender's control would be £15,337.

[132] During his discussions with Gill Smith, Mr Crawford suggested that, so far as the moveable estate said to belong to Glasgow Audio but situated at the deceased's home were concerned, there were clearly problems in identifying the items as belonging to Glasgow Audio and there could be further debate about the value of the items depending on how old they were at the time of death. He considered that the matter ought to be compromised by agreement rather than litigated and he suggested (with the defender's approval) that one half of the figure being claimed by the pursuer should be agreed. He said that Miss Smith considered that to be reasonable but that she was unable to get instructions from the pursuer to take the matter forward.

[133] Mr Crawford's conclusion was that there was no sustainable claim against the defender and that there would in fact be an amount a due to her given some of the outlays she had made in respect of the business. No allowance was made by the estate for the fact that they did get return of the fixtures and fittings which were worth about £5,000 and had been returned to the estate. After the meeting between the accountants in February 2010, Mr Crawford produced his report. He agreed that in the revised Appendix 14 (6/104 of process) Miss Smith seemed to have taken on board a number of his concerns and revised her figures accordingly. He had seen the idea Miss Smith had for adding £23,000 to "lost turnover" but had been advised that this was not being insisted in.

[134] On the all important stock issue, Mr Crawford presented a rough calculation of why he considered the figure difficult to reconcile. The defender started with opening stock to a value of about £130,000. She made purchases that cost £100,000. Adding those two together gave a total of £233,000 for stock over the period. She made sales of about £170-£177,000. Assuming a gross profit margin of 35% the cost of the stock sold would be about £130,000. Accordingly, the closing stock should have been in the region of £125-£130,000. Looking at Appendix 10 of 6/87 of process, it was clear that the figure there did not represent the cost of stock but was the value put upon it by the purchaser. Even if one accepted the list as a comprehensive list of what was in the shop when Mr Turner took over, the cost column alone added up to almost £75,000. Miss Smith's view that the business was technically insolvent arose only because of the way in which she presented the accounts. If the accounts prepared by Cairncross & Cairncross for the period of the defender's control were used, it was clear that the gross profit figure had not changed by more than 6%. It was only when the stock was inserted at the price paid by Mr Turner that the figures looked very different.

[135] In relation to the sale to Holborn Hi-Fi, Mr Crawford had managed to trace a sum of £45,000 as a goodwill figure in the Holborn Hi-Fi account as being purchased at the time of acquisition. However, he wondered whether the parties had simply reached agreement as to a figure and then divided it between payment for goodwill and a payment for stock because this would be better for CGT purposes than a higher global purchase of assets. It was clear from an analysis of Glasgow Audio's accounts that the business was "year end loaded". In September to December each year the business earned far more than in other months. Mr Crawford had calculated that in the accounts for the year 2000 52% of annual turnover had been made in the last four months of the calendar year. In 2001 42% of the annual turnover had been made in those months. If the expenses of the business are consistent, then where turnover increases much greater net profit will be made. Accordingly more of the annual net profit was made in the last four months of each year. Mr Crawford found it difficult to see how on that basis it could be said that £60,000 of net profit could be made in the first eight months of the year when sales were traditionally lower. The so-called loss of £60,000 calculated by Gill Smith was not a real loss in Mr Crawford's view. It was an arithmetical calculation that Miss Smith had compared with her own view of the accounts. He disagreed in principle.

[136] On the issue of the Mercedes vehicle, Mr Crawford agreed that it was possible that a vehicle would be included by someone in their business accounts even if it was used exclusively for personal use. This was not something HMRC would approve of but Mr Crawford had seen it happen. On the issue of the loss of the deceased to the business Mr Crawford's clear view was that if the main driver was taken out of a sole trading business then that would be likely to damage the business. Much would depend on the calibre of the staff left behind. Despite the amended version of Appendix 14 being produced by Miss Smith in evidence, Mr Crawford considered there were still substantial questions in relation to the closing stock, the alleged stock items said to be held in Queen's Square and the claim for "loss of profit".

[137] Under cross-examination Mr Crawford clarified that his starting point was that he regarded the estate as asking for an accounting of assets alleged to be owned by the deceased at the date of death. Those assets were taken into the defender's custody in January 2002. What return, if any, could the estate expect on the use of those assets for an eight month period on top of their return at the end of it. Effectively it was a calculation of what might reasonably have been earned by the business when Miss Mooney was in charge. On one view the business should have made £25,600 during that period. That would assume broadly the same level of profit that the deceased earned annually. That calculation presupposed that the Wylie & Bisset figures for the accounts were correct and there was a question about that. On the issue of whether it was appropriate to calculate any loss of profit using the gross profit percentage rather than net profit, Mr Crawford said that it had to be understood that the estate would never have had £60,000 in its bank account had the profit earned had been the same as in the time of the deceased. What the estate would have earned would be a net sum after expenses. He criticised Miss Smith for having taken no account whatsoever of the fact that, had the executrix run the business, she would have incurred costs during the eight months in question. In calculating the net profit Mr Crawford had not taken into account that most net profit would be generated in the last four months of the year. Accordingly he felt he had been more than fair to the pursuer in his calculations. On the issue of stock, the important point was that the deceased's stock figure was always in at cost, not at the lower of cost and net realisable value. The problem with 6/87 Appendix 10 was that provided the figure that combined the concepts of cost and value. Some of the items reduced because they were old stock might well have been purchased during the deceased's lifetime. It was important to understand that if there was a policy of running the stock of the business down a little, that wouldn't normally affect the gross margin. It simply answered whether the closing stock was the same as the opening stock. He did not understand why the pursuer would not have carried out a proper closing stock when she was selling over the business. Mr Crawford maintained that it had been wholly inappropriate for Miss Smith to look at the gross profit percentage in trying to assess what was due to the estate. One would have to know what it cost the business to make the sum of £62,000 before concluding what the loss was if the business didn't make that sum. On the issue of stock in the house, Mr Crawford's view was that if someone takes stock from their business to their home never intending to return it then at some point it ceases to be stock of the business. In his experience HMRC took a fairly strict line that if stock of a business was taken to the house of the proprietor then it was no longer stock of the business. Further, Mr Crawford had seen an invoice for the purchase of the computer on the list. It appeared it had been purchased by the defender. He confirmed that the defender had given him a mandate to try and resolve that particular matter but for the reasons explained it could not be agreed. Mr Crawford accepted that one way of resolving the issue about whether any "loss of profit" should be calculated using the gross profit percentage or net profit was to take the gross profit figure and then deduct the annual costs pro rata for the eight month period. That would produce a much lower figure than Miss Smith had calculated. Taking the average net profit figure was a simply reasonable way of approaching the matter on the basis of the available information. He agreed that there were many instances in which one might use a gross profit percentage in calculating loss of profit. However, in the circumstances of this case, where the assets of an estate have been used by someone else for a defined period he did not consider it would produce the correct result.

[138] Mr Crawford was not critical of Mr Cairncross' approach of including the capital account balance of the deceased in the accounts for the business as operated by the defender. It seemed to him that on one view the business was continuing and the assets were being used by the defender. If she was holding the business for the estate during 2002 then she must have been holding the capital account as well.

[139] In re-examination Mr Crawford confirmed that his role had been to look at the significant figures in the claim and to provide an opinion on the issues of principle. It was not part of his remit to check the vouching for all the figures in the account.

[140] The defender concluded her case by giving evidence herself. She is 57 years old and continues to reside at 53 Queen Square, the property she had owned jointly with the deceased. She qualified as a teacher in the early 1980s. She became a head teacher in about 1998. From May 2010 she has worked as an Access to Education Officer for Clackmannanshire Council. This is a relatively new post, dealing with the management of looked after and accommodated children in mainstream education.

[141] The defender explained that she met the deceased in late 1978 through her sister, although they did not commence a relationship until 1980. At that time the defender was studying at Queen's University in Belfast. Her relationship with the deceased developed quickly. Although the defender returned to Belfast to university, her relationship with the deceased was a committed one from the Autum of 1980. From 1981 onwards, they rented property together. They had permanent homes at 33 Queen Square and latterly at 53 Queen Square in Glasgow. They had made a conscious choice not to go through a formal ceremony of marriage, although no decision was taken in relation to children, that just never happened. The defender described a close, loving and supportive relationship with the deceased. She had required to teach for a short period in Northern Ireland because her teaching qualification was not recognised by the General Teaching Council of this country. It was not until about 1987 that she obtained permanent work in Glasgow. By 1998 she was the head of Arden Primary School in Glasgow. She remained there until 2006 when she took up the headship at Park Primary School. She had lived with the deceased when he worked as a sales person in Hi Fi Corner. He then became a manager there. The defender worked for a short period at Hi Fi Corner. She and Robert socialised with Colin MacKenzie and his wife and family. She met many people in the Hi Fi industry through the deceased. She was involved in various discussions and in looking at business premises together with Mr Lamont when he started business initially in Stirling. She was involved in discussions about borrowing over their home to fund the business. In 1992 the parties moved to 53 Queens Square. At that point the deceased was looking for premises in Glasgow and the defender was involved in helping to choose those and to design the layout for the shop. She recalled particularly the opening of Glasgow Audio on 1 August 1994. There was an event to advertise the opening of the business. The defender organised the catering. She recalled that the deceased had made a speech and thanked her for everything she had done. It had been a struggle for the deceased to keep the two businesses going and he subsequently disposed of the Stirling business. The defender and the deceased enjoyed many common interests and socialised together. Robert had very quickly become a member of the defender's family. In contrast, the defender said that he did not feel emotionally close to his own immediate family. The defender never really felt she was accepted as part of the Lamont family. According to the defender, the deceased did not trust his sister, the pursuer. The two sets of parents did not meet until the deceased's funeral. During the period of the defender's co-habitation with Robert Lamont, his sister, the pursuer, was often out of the country. She did come to visit from time to time but the defender did not see a great deal of her. The defender disputed the suggestion that had been made in the pursuer's case that she had had little to do with the deceased's business or that the deceased had not spoken to her about it.

[142] The defender recalled that it was not until the last week of October that the deceased became ill. It was thought to be some sort of viral infection at first but the symptoms persisted. On 29 October 2001 the deceased had come home ill from work and never returned to business thereafter. The defender recalled all of the details of the deceased's deteriorating health, including his being in hospital from 3 December to the date of his death in January 2002. She recalled one visit by members of the deceased's family to the hospital. The pursuer and her mother had been at the hospital but the deceased's father never visited. The deceased had undergone serious surgery in late December 2001. He told the defender that he did not want anyone other than her to visit at that time.

[143] The defender was devastated by the deceased's death. A post mortem had been carried out because the death was so unexpected. She had still been helping with the paperwork for the business throughout the time Mr Lamont was in hospital. She had regularly assisted with invoices and cheques. On 10 January, she had taken various invoices into Mr Lamont for payment and he had signed a number of cheques for that purpose. On 12 January the defender and her sister attended at the shop at Great Western Road. She knew the staff would be anxious and upset. She indicated to them that the shop would remain open. She organised a secular service in the garden at the parties' home for the deceased which took place on 19 January 2002. The defender disputed that on that day she had had any conversation with the pursuer or her mother in relation to the business.

[144] The defender explained that Robert had told her that he had a Will, leaving everything to her. The first discussion they had about that was in 1992, the time it subsequent transpired the draft Will had been prepared. The defender had always been convinced that the deceased had made a Will. Like Mr Aitkenhead, she still thought the Will existed but simply had not been located. The defender had never asked the deceased where his Will was kept. Her initial thought when he died was that it would be with Mr Aitkenhead at AJ & A Graham. When she was told of the discussion the deceased had had with Mr Aitkenhead in 2000 (file note No. 6/58 of process) she realised the Will must be held by a firm of solicitors known to her and Mr Lamont. The defender was clear that if the deceased had told Mr Aitkenhead that he had made a Will, then he must have done so. On that basis the defender had instructed opposition to the appointment of the pursuer as Executrix Dative and the sheriff had allowed for some time for the Will to be located. Under reference to 6/11 of process, a file note recording details of a visit by the pursuer to the defender in February 2002, the defender said that the pursuer had not raised any issues about her parents' concerns at that time. The defender sensed that the pursuer had another agenda when she brought a gift for her that day. The defender was deeply distressed at the time but did recall telling the pursuer that her understanding was that the deceased had left everything to her. The pursuer seemed keen to explore the issue of the deceased's Will at that time. The defender said that she did not make a conscious decision to take over the business of Glasgow Audio because she understood it had been left to her by the deceased. She wanted to keep things going as best as she could. She had started running the business before Mr Aitkenhead explained to her that while he held a draft Will, he was not the solicitor who had held an executed Will of the deceased. Under reference to item 6/20 to 6/38 of process, the defender confirmed, as Mr Aitkenhead had, the efforts made to locate a Will.

[145] So far as the arrangements for running the business were concerned, the defender had attended the Clydesdale Bank and asked for an account to be opened so that she could run the business. She referred to letters from the Clydesdale Bank to her (Nos. 7/104 and 7/106 of process). Those confirmed the basis on which Glasgow Audio could continue trading. That correspondence made no reference to the defender having claimed she would inherit the estate. The defender's position was that she administered the business while there was a search for the deceased's Will and that she acted in good faith in doing so. By the time she had been stewarding the business for 71/2 months and no Will had been located, she raised the declarator of marriage proceedings. She sought interim interdict to prevent the pursuer from intromitting with the estate and distributing it pending conclusion of that action. However, the defender had to concede during those proceedings that, absent any Will, the pursuer's appointment as Executrix Dative was valid and ultimately it was agreed that the business would be handed over to the pursuer on 30 August 2002. The defender offered to run the business on behalf of the estate for no remuneration pending the conclusion of the declarator of marriage action. She also offered to meet with the pursuer and discuss matters but the pursuer never agreed to that. The legal advice the defender had received prior to August 2002 was that neither she nor the pursuer had any greater right than the other to run the business and that she could continue doing so. As the deceased had been a sole trader, the only way in which the business could be run was to continue it on the same basis as before. At a court hearing on 16 August 2002 in connection with the interim interdict sought by the defender in the declarator of marriage action, the defender was given leave by the court to continue to intromit with the business and the pursuer was requested not to intromit with any of the assets of the estate for the period until 30 August. During the last two weeks of August 2002 the pursuer had been given permission to examine the books and documents of the business with a view to deciding whether or not she would continue to oppose an interim interdict. The Lord Ordinary dealing with the interim interdict hearing had suggested that the parties should consider whether a factor or other third party should be brought in to run the business pending the outcome of the proceedings. Ultimately the defender had been advised that there was insufficient evidence to succeed with the claim for interim interdict pending the outcome of the action and it should be dropped. The defender took that advice. The pursuer had requested keys and these were handed in to the solicitor's office. The defender did not attend at the shop. She telephoned the staff to say that the pursuer should be given everything she requested. She was advised by her solicitors and counsel at the time to let the utility companies and the bank know that she would cease to be responsible for the business. It was anticipated that there would be an administrative handover but the pursuer did not want her involved in that. The defender felt strongly that it was the lack of an administrative handover that had led to the subsequent dispute. She had anticipated that there would be a period of about two weeks after the pursuer took over to deal with all the documentation. The pursuer had given no information through solicitors about her actings with the business and the defender was unaware at the time of the acquisition by Jonathan Turner. Given that the transfer of the lease did not take place until October 2003, it appeared that the pursuer had retained legal control of the business but had relinquished possession and actual control to Mr Turner. The defender's position was that the pursuer should be held responsible for any loss caused by her own incompetent actings. She had sold the business without Confirmation which was not obtained until July 2003. She put the estate at risk, the action for declarator of marriage was ongoing, the Will was still being searched for and her actions were precipitate. She chose not to co-operate with the defender or her representatives to try to clear up any matters that she claimed she had insufficient information about. She let Mr Turner have the benefit of the stock without knowing the value of that. She had said in evidence that the main reason she took the action that she did was to secure employment for her late brother's staff. This failed to recognise that she was duty bound to act in the interests of the estate rather to third party employees.

[146] The defender drew attention to the Confirmation (No. 7/15 of process) and relative inventory. She noted that item 4 on the inventory of the estate was the business of Glasgow Audio which was detailed as having a value of £219,908. That figure included bank balances. It was difficult to know how the figure was broken down. The two bank balances themselves amounted to £81,274. That would leave a figure of £138,434 as the value of the business which did not equate with the sum received from Mr Turner, which was slightly lower. On the issue of the stock of the business, the defender's position was that many of the difficulties in this process had arisen because of the pursuer's decision not to value the stock herself, independently or in conjunction with the defender. The defender also criticised the pursuer for having held out Mr Turner's stock valuation as her own. She had withheld such lists of stock as had been prepared on her behalf until during the diet of proof. Further, the pursuer had not appreciated the efforts of the defender and staff to preserve the assets of the estate and keep the business continuing prior to August 2002. The estate had benefited from the business having been kept running by the defender during that period. The defender had secured a VAT repayment from Customs & Excise to the business and a repayment from Arcam. There had also been a payment from Mountainsnow to the estate of £3,715 (see 7/41 of process). The defender also referred to No. 6/16 of process, a letter from Mountainsnow dated 22 August 2002 which confirmed that the business of Glasgow Audio was in a credit situation with that organisation on that date.

[147] The defender was critical of the pursuer's rush to sell the business to Jonathan Turner, given that there were other parties potentially interested such as a Bill Hutcheson mentioned by Mr Hotchkiss. Colin MacKenzie would also have been interested despite the pursuer's contention that the deceased would not have wanted that. Competition would have led to a better sale price. The defender felt that the pursuer failed to maximise the benefit to the estate by securing best price. In essence, the defender saw the pursuer's trying to recover through these proceedings the price she thought she should have obtained for the business. If the pursuer was being truthful when she said she had absolutely no documentation available to her, it was all the more incredible that she would have sold the business in that context at that time. Reference was made to a letter from Mr Picken to the solicitors acting for Jonathan Turner (No. 7/23 of process) where on the face of it the lease had ultimately been transferred for a nominal figure of £1. The occupation of the premises by Mr Turner from 31 August to the transfer of the lease the following year, put the estate at risk. And Mr Turner had the benefit of the earnings of the business while the pursuer retained ownership of some of the assets. The defender disputed that she had been unwilling to provide information or documentation to the pursuer. She had offered the meeting in July 2002 and had given an undertaking to the court in August (see Minute of Proceedings No. 7/13 of process) to allow the defender to contact the bankers and accountants involved. It was clear from certain correspondence included within No. 13 of process (the file from the sheriff court proceedings in respect of recover of VAT) that the pursuer had access to accounts. There was correspondence from Mr Picken on 12 September 2002 confirming that he had received accounts for 1999 and 2000 and sent them to the pursuer. The defender contended that the pursuer had left many debts of the business unpaid notwithstanding that she had taken control of all the assets in August 2002. Until the declarator of marriage proceedings were dismissed in May 2004, the defender continued to have a potential claim on the estate. It was for that reason that the pursuer was allowed only copies not principles of the relevant documentation. Her solicitors had been made aware of this. The pursuer had gone ahead and raised the present proceedings prior to dismissal of the declarator of marriage action.

[148] The defender disputed that the schedule of items listed at page 48 of the Closed Record belonged solely to the estate. The pursuer had led no evidence illustrating that these items were stock of the business. No code items had been produced. There had been no access to 53 Queen Square to compile the list. In any event, there were different versions of the list and there were some anomalies. The pursuer had not attempted to make enquiries of the defender about the items on the list. The defender went through the schedule of items said to belong to Glasgow Audio. The sound system referred to was situated in the kitchen of the home she had shared with the deceased and had been there since the summer of 1998 when it had been purchased from the business. The rosewood speakers had been in the house since about 1996 or 1997. The defender was unsure of the circumstances of purchase. The Tact Millennium amplifier was quite a new item and had been in the house for a few months. The deceased had brought it home for personal use. The Meridian CD player had been in the house from 1998. The Panasonic video player and TV had been in the house from 1998 and had been purchased from Excel, not through Glasgow Audio. The Rotel preamp and power amp were not in the property and had never been there. The Target audio stands for the speakers had been in the house since 1998 as had the Target audio equipment rack. The defender had no knowledge of the DVD player in the list. The Aviva midi system had been bought by her in 1995/96 but was not in the house when Mr Lamont died. It had been donated into a school raffle in 2000. The computer iMac DV Grape was a gift to the defender from the deceased. It was bought from a computer shop. The laptop zip drive and IBM computer were bought for home use by her and Mr Lamont. She had no idea why it was said that there were CDs and DVDs belonging to the business at 53 Queen Square when there were not. She and Mr Lamont had more than one digital camera which they had purchased for personal use. She noted that at page 3 of the Confirmation (No. 7/15 of process) the deceased's share of household contents was given a value of £1,500. It seemed to her that the items the pursuer was claiming belonged to Glasgow Audio were mostly personal items that would be included in the contents figure.

[149] So far as the Mercedes motor vehicle was concerned, the defender confirmed that this had been situated at Queen Square where she and the deceased had two parking spaces. Different figures had been given for the value of the vehicle. In any event the defender's position was that the car was joint property of her and Mr Lamont. They both used the car, they both maintained it and they both drove it. To that extent, she did not accept it was a business asset.

[150] The defender addressed the counterclaim made by her at pages 36-44 of the Closed Record. These were debts of Glasgow Audio that had been left with her. These were (1) the debt to Yell of £4,042, (2) the Clydesdale Bank overdraft of £5,261, (3) the VAT liability of £17.639 and an income tax debt of £3,107. The defender's position was that those debts are debts of the business and should be paid by the pursuer as Executrix Dative. They were incurred reasonably by the business. The position with Yell is unclear, the Clydesdale Bank have not been paid. They have assigned the debt and the matter is being pursued in Glasgow Sheriff Court. The Inland Revenue have not been paid. The tax debt relates to PAYE and national insurance payments. HMRC do not appear to be pursuing that particular debt. The defender confirmed the advice she had received from Mr Herald in relation to VAT. She considered she had acted in a reasonable and responsible fashion during the period of her control of the business. She kept the business going. She dealt with a number of creditors. She worked for the business early in the morning, after school each day and at weekends. She attended at the shop 2-3 times a week. She worked on the administrative and management side away from the business. She met sales representatives at the shop but also at other places. She had given Mr Hotchkiss sufficient direction and resources to generate income for the business. She disputed that she had told Mr Hotchkiss that she was the sole beneficiary under the Will. There were no such discussions. When she appointed Mr Young and Mr Wearmouth on a trial basis, Mr Hotchkiss seemed content with that. He made no complaints about their performance. The defender disputed that only junk mail was being sent to the business premises at Great Western Road. While for administrative convenience she had some invoices sent to Queen's Square, there was no blanket redirection of mail. The defender disputed that staff were told that they could not buy stock. On any view there were over £100,000 of purchases during the relevant period. The staff were authorised to purchase and there were a number of examples of that within the primary documentation. There was no instruction not to accept Hi Fi equipment in part exchange. There was an example of that in the bundle of documents 6/4 of process at 39/3. There had been no termination of employment of any of the staff. Some left of their own accord. There was a period when Andy Fisher was working at the same time as Mr Wearmouth and Mr Young. There was no question of inexperienced staff being preferred over those who had been previously employed in the business. On the pattern of sales during the period of her control, the defender noted that there was a dip in sales in April and in June 2002. She attributed that to the lack of motivation of Mr Hotchkiss and of course the absence of Robert Lamont. She noted that sales were back up in July and August and that when the pursuer took over the business, the turnover figures were close to those of the year 2000. It had been expected that sales would have risen considerably in the month leading up to December 2002. The defender disputed the pursuer's evidence that Arcam and Meridian had taken their custom elsewhere. The business continued trading with both those suppliers. No suppliers ever withdrew from the business. There were some problems with a range that had not performed well even when the deceased was alive. As a result, one particular concession was withdrawn but Arcam continued to supply other products. It was noteworthy that sales had increased almost immediately after Mr Hotchkiss and Mr Campbell left the business. The defender considered she had sufficient experience, time and knowledge to administer the business and employ staff who dealt with issues as they arose. The defender referred to a document within 6/4 of process (No. 36/4) which illustrated that the television damaged in the accident involving Nicholas Wearmouth was duly reported to the insurers and a claim made. This was the damaged television that appeared in the photograph 6/99 of process. The defender's response to the accident was reasonable and she sought to minimise any loss to the business. The defender's position was that she had accounted for all of her intromissions during the period of her control. She arranged for accounts to be made up. She had offered to do that prior to this action being raised in March 2004

[151] The defender gave more information about the chronology of events after proceedings were raised. The accounts Cairncross & Cairncross prepared for the period to August 2002 were given informally to the pursuer in June 2005. Thereafter the defender had offered mediation but that was rejected by the pursuer. Although the pursuer had offered a joint accounting, it was an extremely narrow remit and would have unduly prejudiced the defender. The defender had never been ordered by the court to produce a set of accounts. There was a meeting between Miss Smith for the pursuer and Judith Scott of BDO Stoy Hayward who had been instructed at that time for the defender. They met in September 2005. All documents for prime entry were handed over to Jill Smith at that meeting. These are the documents which now form 6/4 of process. There was discussion at that time about the issue of opening and closing stock. There was no agreement, particularly on that issue. The defender's contention had always been that because she was not allowed to undertake a stock take on 31 August 2002, she could not accept that the figures being produced by the pursuer (which she now knew to be Jonathan Turner's valuation) could be accepted. The defender's best estimate of the stock in the business when she left was that it would not be much below £120,000. In 2006 the pursuer changed agents and there was a period of delay. It became apparent that the pursuer had had possession of the receipt books in August of the business in August 2002 because they were produced in the case raised by the Advocate General against the defender in 2004. The defender pointed out that the pursuer had produced many documents at that time under commission and diligence procedure. She could have used those to check the accounts. In the years leading up to proof, the defender felt she had accounted for everything and could not add more to the documentation she had produced in 2005. The defender was concerned about the inhibition over 53 Queen Square that had been obtained by the pursuer when this action was raised. The inhibition was recalled in January 2007 in return for an undertaking by the defender that she would not sell the property or secure it for more than £100,000. The defender felt that the effect of the inhibition had been to damage her financially.

[152] The defender referred to her third conclusion in the counterclaim in which she sought £10,000 as a sum that would reasonably have been due to her for remuneration for the period in which she ran the business. She stated that she had benefited the estate during that period by preserving the asset of Glasgow Audio so that it could be sold on. There was no established representation for the estate until 13 August 2002.

[153] In summary, the defender concluded her evidence in chief by reiterating that she had been open and honest in these proceedings, that she had sought to be co-operative and had produced information and documentation. She had no doubt that the deceased had made a Will. She considered that through actions and averments the pursuer had cast doubt on her character, conduct and relationship with Mr Lamont. The only diminution to the deceased's estate that had occurred related to actings of the pursuer not the defender.

[154] Under cross-examination the defender agreed that she had returned from Belfast permanently in 1987. The first property that had been taken in the joint names of herself and the deceased was the property at 53 Queen Square which they had purchased in 1992. Previous properties had been held by the deceased. However, the defender and the deceased had operated a joint bank account since the late 1980s. The defender also agreed that the deceased had borrowed both from his parents and by securing the property at 33 Queen Square when he set up in business. On being challenged about the nature of her relationship with the pursuer the defender confirmed that she didn't feel comfortable with Miss Lamont or indeed her parents. She did not articulate that to them. She just accepted the position and the social niceties were observed. On the issue of whether she had been involved in the business of Glasgow Audio prior to the deceased's death the defender confirmed that she had not been involved on a daily basis but that the deceased had spoken to her about business decisions and she was involved in finding business premises and the like. She disputed that Mr Hotchkiss would know more about the figures and cash flow of the business than she did.

[155] The defender was cross-examined at length on the issue of the conversations she had had about Wills with the deceased. She recollected a conversation sometime between 1990 and 1992 at home, then 33 Queen Square. The deceased said that he would require to make a Will. It was anticipated at the time that mutual Wills would be required because the parties were not formally married. There was a subsequent discussion after 53 Queen Square was purchased. The matter had been raised by Barton and Hendry, Solicitors who had attended to the conveyancing for the purchase of 53 Queen Square. When the matter was raised the defender and the deceased had agreed that they should get something done about making mutual Wills. At some point in 1992 the deceased had told the defender that he had instructed a draft Will and that everything was to be left to her. At that stage the defender had not made a Will herself but she was aware that she should do so. In fact she did not attend to instructing a Will herself until about 1997. Her own Will left everything to the deceased. She didn't recall whether she had told Mr Lamont that she had made a Will and thought she probably hadn't. In early 2001 the defender and Robert Lamont had a further conversation about Wills. She raised the matter because she was going to change one of the executors in her Will. She joked with the deceased that she was leaving him five pence in her Will. In reply Mr Lamont had said to her that he was leaving everything he had to her. The defender was shown an affidavit she had previously sworn (No. 6/102 of process) in which she referred to having a Will drafted in 1992. She confirmed that that was not correct as far as she was concerned as she had not made up a Will at that time. The defender said that she was sure the deceased had made a Will because he wouldn't have said that he had left everything to her if he hadn't done so. She and Mr Lamont had never used the same firm of solicitors other than when Barton and Hendry attended to their conveyancing. The defender agreed that the file note 6/58 of process couldn't be quite accurate insofar as it may indicate that the same firm of solicitors held Wills for both herself and Mr Lamont. Other than that it reflected what she understood, namely that the deceased had made a Will making appropriate provision for her. When asked why she had not told the pursuer that the deceased had intended she be an executrix, at least in the draft Will, the defender said that she didn't trust the pursuer or her parents. Although she didn't conceal anything she had good reason to think that there was an executed Will and that would clarify matters. It was her understanding that the deceased had left everything to her and that was what she told the pursuer when asked what the deceased's wishes were. The defender disputed that the copy letter, 6/7 of process dated 8 March 2002, in which she had asked the deceased's mother for space and time before answering requests for information was in any way misleading.

[156] The issue of the Mercedes motor vehicle was explored at length. The defender confirmed that when the deceased was alive she had shared with him the maintenance costs of the car and paid for some petrol. She did not know what costs for the vehicle were being put through the business. She had understood the car was for personal use. She did not know this was an asset of Glasgow Audio. The car had been bought using a personal cheque. She had been with Mr Lamont when he bought the car. Her understanding had been that the car was a joint asset belonging to her and the deceased for personal and social use. After Mr Lamont died the defender thought that because of the way in which the car had been used and for emotional reasons, she thought she would be able to keep it. The defender explained that she had taken no steps to transfer ownership of the vehicle. She became the registered keeper in April 2002 and the issue of the car had been in dispute ever since. She did not seek legal advice about the matter. On the issue of items alleged to be stock of Glasgow Audio and held at Queen Square, the defender explained that she had a receipt for the computer which she had given to Mr Crawford. She had seen nothing to suggest that any of the items were assets of the business. The CDs and DVDs on the schedule were not held at 53 Queen Square. So far as the other items were concerned these had been held by her and Mr Lamont for personal use. While there was an amplifier that had only been in the house for a few months, the other items had been in the household for much longer. One or two items such as the Panasonic television had been replaced since the deceased's death. Mr Hotchkiss said she was wrong when he indicated that that television or the AIWA midi system were ever sold by Glasgow Audio. She did not think that the deceased would have signed out items taken from the business as staff were required to do. In any event, the receipt books for the business were in the premises when Glasgow Audio was taken over by the pursuer. They were passed to Jonathan Turner who in turn passed them to Glasgow Sheriff Court under commission and diligence procedure.

[157] When asked why she had not left all the paperwork for the business on the premises when the pursuer took over, the defender said that there was no agreement as to what would be left. The legal process was continuing and although her solicitor had discussed with her a request that she produce certain things there was no agreement as such. The defender had not known until the evening of 29 August that the pursuer was going to take over the shop. There was some documentation on the premises when the pursuer took over and it was made clear at the interim interdict hearings in the declarator of marriage process that some documentation was at the accountants and the pursuer could access it. While there had been correspondence in July and early August in which requests were made for all paperwork there was no agreement reached. After the business was handed over the defender agreed that she had been advised that she had a legal obligation to account to the estate. She accepted that it had taken two to three years for that to be completed. She attributed the delay to the way in which the pursuer had removed her from the business and subsequently sold it. She had been unable to carry out a stocktake. It was agreed that she would produce accounts and they would be considered by both sides. Cairncross & Cairncross had not produced the formal accounts until 2005. She had left the stock sheets in the premises of Glasgow Audio and that had hampered her. She had not anticipated that the handover would be so rapid without the ability to organise the paperwork. The closing stock figure in the Cairncross & Cairncross accounts was based on previous years and was an estimate based on the trend of purchases and sales. The defender disputed that there was a general policy of stock reduction during the period that she was in charge. There might have been a drive to sell certain items that were being held in stock but that was a different matter. Had she not been removed from the business the defender anticipated that she would have been ordering for the busiest time of year in September in advance of the Christmas period. When Mr Lamont was alive there had always been high level ordering in the autumn. Miss Moonie continued to dispute that the closing stock figure offered by the pursuer was accurate. Jonathan Turner and James Sharp had based their figures on realisable value not cost, unlike the practice of the business in previous year's accounts. The defender disputed there was anything inappropriate about meeting sales representatives away from the shop. The deceased had occasionally done so. During the period of her control no sales representative was ever told not to attend at the business premises. There was no blanket redirection of mail although it was convenient for her to attend to business invoices at home in the evenings and weekends and she redirected some of those. She disputed saying to the staff that she would run the business her way. She had only one recollection of being pressed for payment and that related to invoices in the period prior to the deceased's death. She noted that Miss Smith had given no specific examples of suppliers pressing for payment. The defender did accept that there had been occasions when she had stopped paying early enough to attract an early payment discount. Some examples of that were shown to her from number 6/4 of process. Of the various invoices put to her the defender confirmed that she had paid each of these but that in many cases they had been settled outwith the early payment discount period.

[158] The defender disagreed with the assertion that she had stopped trading with any of the existing suppliers of the business. Certain products such as the FMJ line from Arcam was withdrawn because of low trading covering a period in late 2001, early 2002. Also there were a couple of suppliers involved in the insufficient ordering issue with Mountainsnow. One of the reasons that the defender was not always able to make use of the early repayment discounts was that she had to keep an eye on cash flow. It was not always prudent to pay invoices early where there was insufficient cash flow. Accordingly they would be paid within a reasonable time but not late. The defender said that the deceased didn't always take advantage of the early repayment discount if cash flow didn't permit. While the defender accepted that failing to use early payment discount might affect gross product by a very small amount, it still might be a prudent course of action for cash flow reasons. She had obtained a working overdraft on the business account of £10,000 during her period of control and she took a decision not to use it more than necessary. Had she exceeded the overdraft limit the charges would far outweigh the advantage of any early payment discount.

[159] On the issue of the cheques that had been signed by the deceased but not cashed until some time after his death, the defender's recollection was that she had probably failed to post the signed cheques for a number of weeks after his death. The defender also confirmed that she had handed over the Mountainsnow share certificate with the boxes of documents delivered in 2005. She maintained that she had not held herself out as proprietor or owner of Glasgow Audio to Mountainsnow. She had attended meetings as a representative of the business. On being questioned in relation to the issues in her counter-claim, the defender confirmed that she did not understand there would now be tax or VAT payments due as she considered that if these debts required to be paid then the pursuer would require to deal with it. She explained that what she thought was an order that the pursuer pay any sums due. She also confirmed that Yell were not pursuing their debt at present. In relation to the drawings she had taken from the business she confirmed that she had drawn £750 per month but that she sought an additional payment as negotiorum gestor.

[160] The defender reiterated that she regarded the pursuer as having been unreasonable as having refused to attend mediation early in the proceedings. Ultimately mediation had taken place in 2008 at the defender's instigation. The defender was taken through the various points from the accounts that had been covered by Miss Smith in her evidence. She reiterated the problem that had arisen with closing stock which accounted for the major difference. So far as the discrepancies between the accounts prepared by Mr Cairncross and those prepared by Wylie & Bisset were concerned the defender accepted that insofar as Mr Cairncross may not have examined all of the vouching she could not dispute that where Miss Smith had done so that might explain some of the differences. She was, however, surprised that Miss Smith had indicated that the float in the till at zero in Miss Smith's accounts. She recalled that Mr Hendry had said there was money in the till. She also considered that Miss Smith's figure of £374 for trade creditors seemed low and referred to her own explanation at Appendix 2 of 6/87 of process.

[161] The defender disputed that she ran the business as if she was entitled to the deceased's estate, that she transferred assets into her name and that she was not in good faith. She maintained that no deficiency in stock was created by her or that she had failed to leave necessary documentation for the pursuer. She explained that she had been co-operative since June 2002, that she taken legal advice and that what she had said about the Mercedes vehicle was the truth.

[162] When given the opportunity to clarify any matters she wished by way of her own re-examination, the defender added that the method of accounting used by Miss Smith particularly in respect of liabilities was being used to produce an artificially high loss in the accounts. In particular, there continued to be double counting on the issues of stock and the motor vehicle.

Submissions for the pursuer

[163] A formal note of written submissions was submitted on behalf of the pursuer and forms number 66 of process. Those submissions summarise the evidence on which the pursuer sought to rely. There was some focus on the events prior to the death of Robert Lamont. The submissions then deal with each of the issues arising from the date of death. They detail the pursuer's case on the issues of (1) the Mercedes motor vehicle, (2) the items alleged to be stock of Glasgow Audio and held at 53 Queen Square, (3) the running of the business at Glasgow Audio by the defender, (4) the issue of the valuation of opening and closing stock, the period of the defender's trading, (5) issues about the conduct of the defender during the period of her control, (6) the legal issues arising from the pursuer's claim, including the outstanding motion to amend the case on vitious intromission to one of Spuilzie, and (7) the defender's counter-claim.

[164] The tenor of the pursuer's submission on the facts was that there was no evidence that the deceased had left a Will. It was claimed that the defender was in bad faith and lacked credibility in her evidence about the discussions she had with the deceased in relation to a Will and that the deceased could not have been telling the truth to Alistair Aitkenhead when he said that a firm of domestic conveyancing solicitors held Wills for himself and the defender.

[165] On the issue of the Mercedes motor vehicle, given that the evidence squarely pointed to it being a business asset the defender should be ordered to make a payment of the value of the car at the date of death to the pursuer which failing for delivery of it. It was claimed that the defender was not being candid about stock said to belong to the business and held at Queen Square. It was submitted that the evidence of Mr Hotchkiss should be accepted on the matter.

[166] The running of the business Glasgow Audio in 2002 again it was suggested that Mr Hotchkiss' evidence should be accepted. It was suggested that there was no evidence that the defender had been involved in the business before the deceased's death. The defender was criticised for recruiting her nephew and his friend as staff. It was suggested that the existing staff understandably saw this as a control issue on the part of the defender. It was submitted that the way in which the business was run after the deceased's death was markedly different from the way it had been run before, that stock was being run down and that suppliers were withdrawing from the business.

[167] On the key issue of the value of the opening and closing stock for the period of the defender's stewardship it was submitted that the defender had never at any stage produced vouching in the way of stock sheets. It was asserted that the stock figure put forward by the pursuer was accurate because it was consistent with the evidence that stock was being sold without being replaced. Also Nicholas Wearmouth himself had said that he had been surprised at the high volumes of stock held in the business and that he had reduced it to levels required for off-peak periods. Jonathan Turner had valued the stock fairly and that was corroborated by James Sharp. The pursuer had the stock physically checked albeit not valued.

[168] On the issue of conduct it was claimed that the defender ran the business without lawful title during the period January to August 2002. It was accepted that whether there was ever a Will was a moot point depending on how a survivorship destination is viewed, given that there was one in the title of 53 Queen Square. However, there was no formal executed Will and it was said that it should have been plain to the defender that the likelihood of a Will emerging was, by February 2002, "a low chance". Accordingly the defender should not have run the business and retained possession of assets in the way that she did.

[169] On the central issue of the accounting to be made, there was a difference in approach between the accountants called for both sides. The pursuer's submissions summarised the areas of disagreement as including stock, growth in net profit percentage on "loss of profit", overall calculation of loss and the introduction of the capital account of the deceased's business into the balance sheet. The first of these had to be determined in accordance with the evidence. It was submitted that only the stock figure put forward by the pursuer was accurate. On the issue of whether to use a gross or net profit percentage approach in calculating any "loss of profit" it was submitted that the evidence of Gill Smith and the general evidence of Fiona Martin should be accepted, namely, that for a retail concern with relatively fixed costs, as opposed to a manufacturing plant with variable costs, the gross profit percentage represented the standard accounting approach. The business had already paid the expenses involved in creating the profit and so the value of the business had already been diminished by those having been incurred. On the third issue of the method of calculating any profit or loss it was submitted that Mr Crawford's approach was in error because it was projected from a base line of nil where according to the Cairncross accounts there was an actual net loss for the period of the defender's control of £18,500. Thus the profit which ought to have been earned of £15,337 ought to be added to that loss to achieve a total loss figure of £33,837. The issue of the treatment of the deceased's capital account was dealt with in Miss Smith's criticism of the way in which Mr Cairncross prepared his accounts. This evidence should again be preferred over, in this instance, Mr Cairncross. While it was not suggested that every entry in the Cairncross accounts should be corrected by every entry in Miss Smith's accounts it was submitted that substantial correction to the Cairncross figures was required. Mr Cairncross was criticised for having not consulted the books of prime entry, a task he had delegated to his son.

[170] On the applicable law, it was clear that the obligation to account had been admitted by the defender. The question was how much, if any sum, the defender justly owns the pursuer, not whether the books were properly kept. Reference was made to Walker on Civil Remedies at page 306. The first task of the court is to draw up an account. On the evidence in the case it was submitted that decree for payment should be made in the sum of £41,823. That whole sum was not thought to be due. Orders in respect of the car and the stock allegedly in Queen Square could be granted. The conclusion for delivery was a separate and alternative remedy if payment was not awarded in terms of the first conclusion.

[171] The third conclusion is a conclusion for damages which was sought as an alternative to conclusions 1 and 2. It was only if this alternative award was being made that the issue of the amendment arose. The pursuer now sought damages under the nominate delict of Spuilzie. It was submitted that the essence of Spuilzie was that it was the wrong of doing any act in relation to goods which denies the complainer's title to own or possess them (Walker on Delict, page 1005). The remedy for Spuilzie is restitution and damages which can include violent profits. Reference was made to John Norman Mackinnon v Avonside Homes Ltd 1993 SCLR 976. In essence Spuilzie was compensatory rather than restitutionary and it could be used for the "loss of profit" element if it was not appropriate to award that under the count reckoning and payment part of the claim. The central issue for this part of the claim was whether not the defender had been in good faith. The pursuer claimed that she had not. It was not correct for the defender to say that during the periods where there was no executrix appointed there was no representative of the deceased. From the date of death the pursuer was the legal representative of the deceased as her appointment was retrospective.

[172] So far as the counter-claim was concerned the pursuer's submission was that the counter-claim was irrelevant and should be dismissed and the claim for salary should not be granted given that the defender had already received £750 for each month she was running the business. That was more than enough for a part-time job. The Inland Revenue claim was said to have been withdrawn and the HM Customs and Excise claim was on one view not due by the defender at all. The pursuer should have been sisted into the action at their instance. The Yell claim was eight years old and had not been pursued at the time and was likely time barred. It was not clear what items the Clydesdale Bank overdraft of £5,261 related to. Given the eight year passage of time it was also not clear whether this debt could be insisted on.

Submissions for the defender

[173] The defender made her submissions orally. She made a number of general preliminary remarks relating to her role in the deceased's life and her knowledge of his business. She disputed the picture the pursuer had attempted to paint of her own relationship with her late brother. She said that the evidence indicated that the pursuer had been aware that the deceased had made a Will. This should cast doubt on her assertion that there had never been a Will. Emphasis should be placed on Mr Cairncross' evidence about what the deceased had said to him just before he went into hospital in December 2001. It was clear that the deceased intended that the defender inherit his whole estate. The defender's position was that she had never held herself out as sole beneficiary of the deceased's estate. She had looked after the business pending resolution of the dispute. The professional advisers were not misled. None of the witnesses directly corroborated the pursuer's claim in that respect.

[174] On the central issues relating to the claims made by the pursuer the defender listed the seven complaints that appeared to be made against her. First, the pursuer claimed that the defender had redirected business mail to her home when she took control of the business and that thereafter only junk mail was going to the business premises. The defender said this was untrue and not corroborated by others who were working in the shop. No evidence of any Royal Mail redirection was produced. Secondly, that the pursuer claimed that staff were instructed not to order any further stock when the defender was in control. Only Mr Hotchkiss spoke to this. Mr Young, Mr Wearmouth and Mr Campbell said otherwise. Mr Hotchkiss should not be believed. Thirdly, the pursuer's case was that the defender was selling stock and not replacing it. The defender noted that there were lots of invoices in the primary documentation (No. 6/4 of process) relating to purchases during her time of stewardship. There was nothing to support the assertion that stock was not being purchased. Fourthly, the pursuer claimed that staff were instructed not to accept part-exchange as part of a sale. In fact both Mr Wearmouth and Mr Campbell said that they had undertaken part-exchange transactions during the relevant period. Again only Mr Hotchkiss supported the pursuer's position. The defender had pointed in her evidence to a cheque stub in the bundle of documents (No. 6/4 of process) that showed that the practice had not ceased. Fifthly, it was claimed that the defender had terminated the employment of experienced personnel. Again this was not corroborated. There was no documentary evidence or witnesses to speak to the defender terminating the employment of any staff. The sixth matter about which the pursuer claimed was the drop in sales figures during the relevant period. However, the defender asserted that Appendix 15 of 6/87 of process illustrated that while there were two dips in trading in April and June 2002, by July and August sales figures were increasing substantially. Finally, there was an allegation by the pursuer that suppliers had taken their custom elsewhere. The defender said that there was no proof to back up this assertion. There was documentation confirming that Meridian, Cyrus, Arcam and Roksan all supplied items to the business during the relevant period.

[175] The defender had a number of criticisms to make of the pursuer's actions. In particular she argued that the evidence had illustrated that the pursuer had sold, or attempted to sell, the business on 31 August 2002 without taking due care of the legal responsibilities she had at that point. She had had no intention of being co-operative in relation to an administrative handover. A reasonable person would have exercised a high degree of caution which she had failed to do. The purported transfer to Jonathan Turner was described by the defender as a "back of a fag packet" deal. If the pursuer's assertions were correct it was entered into without any documentation or access to figures. Confirmation was not obtained until October 2003 and there was no Bond of Caution in place.

[176] The value of the closing stock on 30 August 2002 was a major issue. The pursuer did not involve the defender in any stocktake. She did not know the value of the stock that she asked the defender to account for. She attempted to rely on the purchaser's valuation which was, in any event, not carried out on 31 August 2002. It was pointed out that the pursuer asserts on record that she carried out a stocktake when she either did not do so or did not rely on it. She held Jonathan Turner's valuation out as her own. On any view the figure of £63,579 was incorrect. The cost value of the items listed by Jonathan Turner was £74,511. The reduced amount related to the damage or outdated stock. As there was no reliable stock record Jonathan Turner's valuation could not be relied upon for the purposes of an accounting.

[177] So far as the schedule of assets said to belong to Glasgow Audio were concerned, the defender pointed out that neither Mr Hotchkiss nor Mr Campbell were able to confirm that the items definitely came from the business, or at least that they were owned by the business at the date of the deceased's death. The pursuer said she had code numbers for them, but none had ever been produced. There was nothing to substantiate her claims.

[178] In terms of the obligations on her, the defender's position was that she had been asked to account for her intromissions and that she had done so. From very early in the dispute she had offered a meeting and full discussion. It was the pursuer who chose not to take up such offers. It was clear that the pursuer had had access to the accounts to the date of death by September or October 2002. In February 2004, shortly before these proceedings were raised, a considerable amount of paperwork was produced in the sheriff court action relating to the VAT claim. That documentation was in the hands of the pursuer who had handed it to Jonathan Turner. The pursuer's claim that she had no documentation was accordingly untrue. By way of explanation for the period 2003/2005, the defender pointed out that she remained a potential beneficiary of the estate until the declarator of marriage action was dismissed. In any event, no requests for formal accounts for the period of her control were made while that action was ongoing. Mr Cairncross completed the accounts in July 2004. They were never demanded by the court but were produced informally. It was not until late 2004 that notification was given that the pursuer was to rely on a stock valuation of £63,579 which she claimed as her own. At that point it became clear that the figure could not be agreed. In relation to the evidence of Miss Smith, the defender submitted that her report and revised accounts were unreliable for a number of reasons. It was clear from her evidence that she was not willing to speak to the version of Appendix 14 that was attached to 6/87 of process. Her revised figures required to be produced during her evidence. This was at least the fourth version of her calculations. Miss Smith did not purport to support the claims on record as such. She made clear that her job was to carry out arithmetical calculations. Even with those, she had to be corrected on a number of matters by Mr Crawford. The accountants had met at the defender's instigation. It was Mr Crawford who noted the double-counting of the items allegedly belonging to the business at held a Queen Square. Miss Smith's figures had reduced during the course of her evidence. There was triple-counting of the value of the car. This represented one of many basic errors by Miss Smith. The errors in Miss Smith's methodology included (1) taking the figure of £9,221 as having anything to do with the business, (2) using a market value figure for stock rather than a historic cost figure which had always been used in previous accounts, (3) the reallocation of the capital account of the deceased. It was said this was used by Miss Smith to portray Glasgow Audio as insolvent when it was not. Mr Cairncross said in evidence that the legal inheritor of Glasgow Audio inherited the capital account and balance. When the defender was in control it was understood that that would be hers. The defender's position was that she had simply continued the business using the deceased's assets and so they could not be introduced as a liability.

[179] The defender made the point that the business had been sold by the pursuer just before its most profitable period of the year. It was clear that she was trying to obtain monies as quickly as she could. In the event that there was any loss, it was attributable to the pursuer not the defender. The gross profit percentages used in Miss Smith's report were ludicrous according to the defender. The whole issue of alleged loss of profit was created by the use of Mr Turner's stock valuation as a closing stock figure. Mr Crawford said in evidence that a 5% reduction in the gross profit percentage required explanation. There was no rigorous intellectual analysis by Miss Smith of the supposed fall from 35% to 6.2% in her workings. Both Mr Crawford and Mr Cairncross said that the stock would have had to have been sold at purchase price or stolen or damaged on a massive scale for the gross profit percentage figure used by the pursuer to be correct. What the defender required to account for was the stock of the business as at 30 August. It had not been listed or valued at that date. Mr Crawford's evidence was correct in pointing out that the estate could not lose a gross profit. The way of looking at the action was that the business had assets of £133,983 (excluding bank accounts already accounted for) at the date of death. Those are the assets to be accounted for. They were the only assets that the estate had to take in at the date of death. The defender accepted that she had stewarded those assets and that she would have to account for them. The court should look at what those assets would return to the estate. At best for the estate they would achieve a net profit by using those assets during the relevant period. Miss Smith had failed to take into account anywhere the cost of producing profit. It was never explained by Miss Smith (or Miss Martin) how the costs would go "straight to the bottom line". As the goodwill of the business had died with the deceased, the profit that he earned would not necessarily be sustained.

[180] The defender agreed with a statement made by counsel for the pursuer that the proof had been long and difficult and that the cost now far outweighed the level of the claim. The defender argued that the action was a waste of time and/or was completely unnecessary. On the detail of Miss Smith's final figures for the accounting she had failed to deduct the £5,000 fixtures and fittings which were taken over by Jonathan Turner. If the car was to be delivered its value would require to be deducted. In so far as loss of profit was relevant, Mr Crawford's figure of £15,333 should be preferred. On the defender's calculations if these matters were taken into account, the items alleged to be in the house were deducted and the closing stock was taken at a basic minimum value of £74,511 (the cost value of the stock listed by Jonathan Turner) the net effect would be a payment due to the defender of £27,993. Therefore there was no loss to the estate even if some of Miss Smith's figures were accepted.

[181] On the allegation that she had not been in good faith, the defender pointed out that there was no clear averment that she was in bad faith. The only clear assertion against her related to the Mercedes motor vehicle. The defender reiterated her position that this was a joint asset that she held with the deceased that now belonged to her. She accepted that it might be regarded as belong half to the estate and half to her, which was a pragmatic suggestion made by her accountant. She was not in bad faith as she had not sold the car and had never accepted that it belonged wholly to the estate. Miss McKeracher, who had acted for the defender during the relevant period, had failed to support any contention that she had been in bad faith.

[182] So far as the counterclaim was concerned and the debts referred to therein, the defender submitted that these were incurred in the proper and reasonable management of Glasgow Audio. The defender is being sued for payment of VAT and while there was a claim that she was erroneously registered for VAT the outcome was unknown. She accepted, however, that if that part of the counterclaim was dismissed, but without absolvitor in the pursuer's favour, her right of relief would be preserved. The level of the Clydesdale Bank overdraft was not as averred by her, but was in the primary document 6/4 of process at an agreed figure of £4,716. However, as it remained unpaid, the balance outstanding increased and by January 2004 was standing at £5,261. The defender accepted that Yell had not pursued their debt actively for a number of years and may yet not do so. What she sought was an indemnity against any other claims. As a result of the manner in which the pursuer took over the business the defender had been prevented from winding down her stewardship and paying off the relevant debts. The defender argued that the pursuer had failed to separate her personal feelings about the defender from her responsibilities in her capacity as executrix dative.

[183] The defender concluded by addressing the legal issues, in particular the pursuer's attempt to amend her alternative case to one of spulzie. The defender argued against the amendment on the basis that counsel for the pursuer was wrong to say that it was a simple substitution for the claim of vitious intromissions. Spulzie could more properly be described as vitious dispossession rather than intromission (Walker on Delict, Chapter 28 para 1). It was necessary for the delict of spulzie to show that someone had taken possession from someone else without consent or judicial warrant. The term "possession" should be used strictly. The pursuer had not been in legal or physical possession of the business when the defender took over. Reference was also made to the Stair Memorial Encyclopaedia Vol 21 para 10-59. The defender argued that prior to confirmation the pursuer could not be regarded as having been in lawful possession of a type that would give rise to the delict of spulzie. For all these reasons the minute of amendment was opposed. In the event that it was allowed, the defender argued that the requirements for spulzie were in any event not fulfilled.

Reply for the pursuer

[184] In reply, counsel for the pursuer's position was that assets had been removed by the defender from the estate of the deceased, who had shown a lack of bona fides from the outset. The nature of the delict of spulzie is removal without consent or warrant. The business was only partially restored to the estate at the end of the period. There was no candid accounting in respect of the stock. There was a discrepancy of missing stock. The defender should be regarded as having taken the estate away and only partially returned it. If the defender was a negotiorum gestor she was entitled to defend an action of vitious intromissions by creditors or spulzie by the estate. Probable title was not a separate argument and the only argument available to the defender was that she was bona fide. It was argued that there was a presumption of fraud and that the issue was whether or not that presumption was rebutted. Mr Forsyth reiterated his submissions about the defender's alleged bad faith.

[185] So far as the counterclaim was concerned, the defender's submissions were without foundation, other than in relation to the Clydesdale Bank overdraft which was accepted. Mr Forsyth confirmed that he sought asbolvitor in relation to the claim for payment for services but would be content with dismissal in respect of the others. On the issue of whether the costs of running the business had been taken into account in using a gross profit percentage for calculating alleged loss, Mr Forsyth argued that the costs of the business were static and in that sense they had been taken into account. He claimed that Mr Crawford was massaging the figures by saying that the expenses were not accounted for. The issue with the value of closing stock was a factual issue, although he accepted that the purchaser valued the stock and that the pursuer was relying on that valuation for her closing stock figure. As there was no rule of law relating to the method of valuing the closing stock, the figure could be anything from £63,000 to £127,000 depending on what evidence was accepted.

Discussion

[186] The parties are agreed in this case that the defender has an obligation to account to the pursuer for her intromissions with the business of Glasgow Audio for the period 12 January to 30 August 2002. She has produced accounts for that period. She did so voluntarily rather than by order of court, although full vouching was not produced until 2005. The obligation having been accepted and accounts produced, the issue becomes one of what payment, if any should be made by the defender to the pursuer. Certain entries in the defender's accounts are not accepted by the pursuer. However, the scope of the proof extended far beyond an examination of objections to the accounts produced. What is at the heart of the dispute is the breakdown of a previously civil relationship between the parties whose common interest was the deceased. The consequence of the breakdown of that relationship was a 25 day proof that was used by each party as an opportunity to air her grievances about the way in which the other had conducted herself during the events of 2002-2004. Neither party appeared to have any sense of proportion in relation to the amount of time spent on each issue relative to its monetary worth. There were effectively no concessions on the issues in dispute, nor was there any agreement on matters of lower value, although in fairness to the defender she had made some attempt to reach such agreement. Perhaps the best example of the lack of agreement on lower value issues is that of the items said to belong to the business but held by the defender at Queens' Square. Ignoring the motor vehicle which the defender accepted she had retained, the items in question had been given a total estimated value in Miss Smith's calculations of £9,221. A number of witnesses were questioned at length about these items. No documentary evidence of them having been stock of the business was produced. There was some general evidence that the deceased would take equipment home but no satisfactory evidence of whether and if so how that would be accounted for in the books if the items were not returned. The defender's position was that these were household items belonging to her and the deceased jointly. On that basis she offered to include one half of the value of them in the accounting. Miss Smith was unable to get instructions from the pursuer to agree to that when the issue was raised by Mr Crawford on the defender's behalf. It was clear that she had included the estimated value of the items in her workings on instructions and not because she was satisfied that there was any vouched basis for it. The failure to compromise this issue was one of the many factors that prolonged the proof.

[187] Before turning to the detail of the accounting I intend to address the more general issues of contention in relation to the circumstances in which the defender took control of the business of Glasgow Audio between January and August 2002. I am in no doubt that that the defender and Robert Lamont enjoyed a close and committed relationship for at least 20 years. They were life partners. It was the defender to whom Mr Lamont turned for support with the business paperwork and invoicing during the illness that led to his untimely death. No member of staff had ever been entrusted with invoicing or accounting matters and that did not change. I am sure that Mr Lamont valued Mr Hotchkiss as a member of staff but there is no question of his having entrusted Mr Hotchkiss to run the business, only the shop. I accept the defender's evidence that Mr Lamont discussed his business regularly and that he shared information about it with her. Of course she was not physically involved in the business to any great extent prior to his death, as she had her own professional commitments. There was evidence that Mr Lamont intended the defender to inherit his estate. When he first gave consideration to making a Will, in 1992, he instructed his solicitor Mr Aitkenhead to make the defender the sole beneficiary of his estate. I accept Mr Carincross' evidence that near the end of the deceased's life he told his accountant that everything he had would be left to the defender. While there was some evidence that he had made a Will, no Will could be found after his death. As a result, his estate fell to be distributed according to intestate succession and as he and the defender had not married she could not inherit. What is important, however, is not the ultimate outcome of the search for a Will but the reasonableness or otherwise of the defender's position. In my view, her determination that a Will existed under which she would inherit was entirely reasonable in the circumstances. The professional she went to for assistance shortly after Mr Lamont's death was Mr Aitkenhead, the solicitor. Mr Aitkenhead had been told by Mr Lamont in 2000 that a Will had been made but was held by another firm. A number of witnesses confirmed that the deceased had been an honest man. Mr Aitkenhead had no reason to doubt his word that he had made a Will. Importantly, even at the proof, many years after Mr Lamont's death, Mr Aitkenhead remained of the view that a Will existed but had never been found. Thus the defender had support for the existence of a Will from an experienced professional who had known her deceased partner. Although Mr Aitkenhead realised by March or April 2002 that a real problem existed as the Will could not be found, he was unable to represent either party once it became clear that the issue had become contentious and the defender required to instruct a new solicitor, Fiona McKeracher, in connection with the issue of who should administer the deceased's estate. Miss McKeracher agreed to object to the pursuer's application to be appointed Executrix Dative on the basis that continued efforts could be made to locate a Will. The sheriff at Glasgow gave the defender time to do that. So at least until 13 August 2002 there was no certainty about who would administer Mr Lamont's estate and the defender had no reason to alter her view that a Will existed. When it became clear that a Will could not be located and the pursuer was thus entitled to be appointed Executrix Dative, proceedings for declarator of marriage were raised. That was done after a consultation with counsel. There was no suggestion that the defender instructed the raising of the proceedings against advice. Between 16 and 30 August 2002 matters were regulated on an interim basis through court procedure pending a decision on the interim interdict sought by the defender in the action of declarator to prevent intromissions with the estate. It was not until 29 August, the eve of the continued hearing that was to take place that the defender accepted, on advice, that she was unlikely to succeed in preventing the pursuer from entering the business and intromitting with the deceased's estate pending the outcome of the action. It was in those circumstances that the defender agreed to cede control to the pursuer. While the action for declarator was not dismissed until 2004, it appears that there was a real concern about the extent of the necessary repute from the outset and while the defender's advisers must have considered the case to be stateable when it was raised, there seems no doubt that she was advised thereafter that the prospects of success were poor. What I conclude on this chapter is that the defender had reasonable cause to believe that a Will existed leaving everything to her, that she acted upon that belief, that she took legal advice and that she did not act contrary to the advice received. In my view she was exhibited no bad faith in relation to the controversy about the matter of a Will. While she might be criticised for failing to keep the pursuer fully informed of the problem that had arisen in the absence of an executed Will during the first two months or so, it is noteworthy that the pursuer and her parents were keen to focus the issue of inheritance within a short period of Mr Lamont's death. No account seems to have been taken of the shock and grief from which the defender was undoubtedly suffering. The impression I was left with was that, while the pursuer had also suffered a significant bereavement her efforts were concentrated on the issue of inheritance in a manner than indicated far less emotional involvement than that of the defender.

[188] In any event there was a practical reason that favoured the defender having control of the business during the period of uncertainty. She was in Glasgow, she had assisted the deceased with invoicing and other paperwork prior to his death and there was no other person in a position to manage the business. The pursuer lived in the West Midlands. While she had visited her brother reasonably regularly when in the country, she had lived abroad for certain periods. While she had been in business, Hi Fi was not her area of expertise or experience. The defender was keen to keep the business going if she could in difficult circumstances. She was advised by her then solicitor and subsequently by counsel that she was entitled to do so pending resolution of the problem that had arisen in the absence of an executed Will.

[189] The pursuer made various criticisms of the defender's running of the business during the relevant period. The source of the criticisms was Mr Hotchkiss, with whom she had been in regular contact when he was working at Glasgow Audio prior to 22 June 2002. However, there was little, if any, support from others involved in the business during that period for those criticisms. I found Allan Campbell to be an honest and reliable witness on these matters. He did not profess to recall specific details so many years after the event, but his general evidence was to the effect that little changed in the day to day operations of the business in the months after Mr Lamont's death. Of course the loss of the proprietor who had devoted himself to the running and development of the business had a detrimental impact, both in terms of staff morale and customer links. However, all of the pursuer's claims about redirection of all but junk mail, lack of stock being ordered, no part exchange for goods, termination of staff employment and suppliers withdrawing from the business were spoken to only by Mr Hotchkiss, whose evidence was inconsistent with the other staff, Nicholas Wearmouth, Allan Campbell and Gary Young. It was in my view perfectly understandable that the defender would attend to invoicing at home in the evenings and at weekends and that she would arrange meetings with sales representatives at a location that allowed her to combine this with her other work commitments. I formed the view that Mr Hotchkiss was unhappy with the defender having control of the business from the outset and that his efforts reduced. It is interesting to consider the sales figures for the period when Nicholas Wearmouth and Gary Young were in charge after Mr Hotchkiss left with the months preceding his departure. There was undisputed evidence that the Summer is the quietest period for Hi Fi sales, but under Mr Wearmouth's management the sales figures picked up during that time so that when Mr Turner acquired the business they were running at a level just below that achieved by Mr Lamont in the year 2000 (see 6/87 Appendix 15). I will comment further on Mr Hotchkiss' reliability in due course but on this chapter I find the evidence of the other former employees far more reliable and I do not find it established that the defender deliberately ran down the business during the period of her control. Having regard to her lack of experience, all of the steps she took to try to keep control of the financial side of the business are explicable. She had to take a view on whether she could exceed an overdraft limit in order to take advantage of prompt payment discounts and often found that she could not. She ordered stock at a level commensurate with the trading levels. She met with sales representatives and she attended meetings of the buying group Mountainsnow. At the end of her period of trading Mr Turner bought the business as a going concern and continued trading with it. He made profits over the busy Christmas period just after he took over. He paid a price that reflected what he thought the business was worth having regard to what he knew of it when it was being run by the deceased. All of these factors require to be borne in mind when considering whether the estate lost money as a result of the defender having control of the business for seven and a half months. Of course the figures illustrate that there was a net loss rather than a profit for the relevant period. However, as I discuss below, the defender was willing to agree that some "lost profit" figure be inserted, only the quantum of that was in dispute. It is indisputably the case that her efforts, while carried out with the best of intentions, did not achieve anything concrete by way of profit. It also important that during the relevant period the defender offered to meet with the pursuer and discuss the business and its trading. That offer was rejected by the pursuer, who as a result knew little of what had been going on in the business prior to taking it over. Turning to the figures, the evidence disclosed four main disputes on issues that require to be resolved in principle before the accounting can be done. These are (i) the items held at Queens' Square and said to belong to the business, (ii) the figure for closing stock on 31 August 2002 (iii) the loss of profit issue and (iv) the Mercedes motor vehicle.

(i) Items held at Queen's Square.

[190] I have already recorded that this was an issue on which compromise had been suggested by the defender and rejected by the pursuer. The list of the items in question appears at page 48 of the Closed Record No 61 of Process although there had been more than one version of the document. The list was compiled by Mr Hotchkiss, effectively from memory. There was no clear picture in the pursuer's case of how long the items had been at the home of the deceased and the defender prior to Mr Lamont's death. As indicated no documentation was produced matching the items listed with stock of the business. Although Glasgow Audio undoubtedly stocked some of the Hi Fi equipment on the list, many of the items, such as the television, DVD player and camera, seem likely to have been acquired for domestic use. The defender was able to recall the source of each item and approximately how long she and Mr Lamont had held them and I accept her evidence on that. There was some evidence that the Tact Millennium Amplifier was in the property for a shorter period and that it was used for the deceased's funeral service in the garden. Overall, while there was insufficient evidence to conclude with confidence that any of the items were stock of Glasgow Audio at the time of Mr Lamont's death, there was ample information to suggest that they were items held by him and the defender for domestic use. As Mr Crawford pointed out, where stock is taken from a business to the proprietor's home, after a while it no longer belongs to the business and should be accounted for as drawings. Some of the items may be in that category. Others were purchased by the deceased and Miss Mooney for their own use. One or two items, such as the Rotel pre amp and power amp and the Aviva Midi system had never been or were no longer held by them at all when Mr Lamont died. The pursuer is entitled, as Executrix Dative to look to the defender to account for all items belonging to the estate, not just those that formed part of the business. The suggestion that one half of the estimated value of the items should be included in the accounting may have been designed meet a claim that even if the items were joint personal possessions one half would belong to the estate, or it may have been a compromise to take account of the risk to each side on the matter. In any event it accords with the conclusion I have reached on this matter, namely that at best for the pursuer, one half of these jointly held items belonged to the deceased. In the absence of clear evidence that they were stock of the business at the time of death, I cannot include them as belonging to Glasgow Audio. However, taking a broad view, I find that the defender should account to the pursuer for approximately one half of their value, not as part of the accounting for Glasgow Audio but because there appear to have been some items which ought to have formed part of the deceased's estate. I do not intend to take into account the estimated figure for demonstration DVD's and CD's of the business. There was no satisfactory evidence that these were retained by the defender or even that they were missing from the shop on 30 August. They might have reduced in number over time, but there was no reliable evidence that they were all missing from the shop.

(ii) Closing Stock of Glasgow Audio at 30 August 2002.

[191] When the defender accepted advice that she was unlikely to be able to prevent the pursuer controlling the business now that she was Executrix Dative, there was no discussion about how to effect a transition between the defender ceasing to run the business and the pursuer taking over. The keys were handed over and Nicholas Wearmouth and Gary Young were summarily dismissed. The defender had no opportunity to do a stocktake. The pursuer sought the assistance of Mr Hendry and subsequently Mr Arnott who were going to carry out the task for her. It was difficult for them to do so without full information about the cost of each item. While I accept the evidence of Nicholas Wearmouth that he had been using price lists that day and that the items on display had price labels, it is undoubtedly the case that much of the documentation that would have made the stocktake easier was still with the defender, who did not hand over the bulk of the primary documentation until 2005 when the action for declarator had been dismissed and the accounts for this action produced. The discrepancy between the defender's estimate of closing stock (£127,060) and the figure relied on by the pursuer (£63,579) impacts not just on the figure for assets handed over to the pursuer but also on the whole "loss of profit" argument. It is regrettable that the pursuer chose not to have a stocktake done on her behalf for the estate. Instead she relied on a valuation prepared by the purchaser of the business. It is even more regrettable that she effectively sought to pass this valuation off as her own stocktake until challenged about its provenance at proof. That led to her being recalled after she produced the sheets prepared by Mr Hendry and Mr Arnott which she had always held but had chosen not to produce under commission and diligence procedure. The only acceptable evidence about the method used for calculating the opening stock in January 2002 was that the figure represented the cost of all items exclusive of VAT. That was the basis on which Mr Hotchkiss had done a stocktake ten days after Mr Lamont died. The figure he reached was £133,308. The same exercise was not carried out by the pursuer when she took control of the business. A stock valuation was carried out by Jonathan Turner and ultimately agreed and the figure paid in two instalments. That valuation is produced at No 6/87 of process, Appendix 10. The list of items valued had a total cost price, exclusive of VAT of just under £75,000. A number of items that had been listed by Mr Hendry and Mr Arnott do not appear on Mr Turner's list. The price of those is unknown but there was no real challenge to the pursuer's claim that they were low cost items such as cabling. Accordingly, the only evidence of the level of stock left in the business using the cost exclusive of VAT method, results in a figure of £75,000 (£74,511 rounded up to take account of the low cost items not listed by Mr Turner). In some ways it might be unfair to the defender to conclude that this was the level of stock left by her. Using the figures for the stock she started with, the purchases made and sales achieved, the figure should have been higher, as Mr Crawford pointed out. However, the list of stock compiled by Mr Hendry and Mr Arnott at the end of August 2002 and eventually produced do appear to correlate broadly with the items valued shortly thereafter by Jonathan Turner. There was no evidence of theft from the shop or of significant items being ignored in the lists. There was some, slightly unsatisfactory, evidence to suggest that the deceased may not have undertaken a formal stocktake to achieve the figure or each year's accounts, but it was vague and not supported by Mr Cairncross and I not consider I can rely on it. I have considered rejecting Mr Turner's valuation completely given the circumstances in which it was prepared. However, as the list in that valuation is to some extent corroborated by the lists made by Mr Hendry and Mr Arnott and as Mr Turner's staff noted the cost price of each item, I have taken the view that there is sufficient material to include the figure of £75,000 for closing stock, using the same method as Mr Hotchkiss in January 2002 rather then the valuation put upon the stock by Mr Turner and his staff. That is the figure that I will use in my accounting.

(iii) Loss of Profit.

[192] This was probably the single biggest issue of principle at proof. The pursuer claims that the accounting should include a figure for the profit that would have been earned by the defender had she made approximately the same gross profit percentage as the deceased had when alive and running the business. The defender claims that the business was profitable and well run by her and that any loss was caused by the precipitate manner in which the pursuer sold it at the end of August 2002.

[193] Dealing first with Miss Smith's evidence on the matter, it was clear that she was not an expert in valuing loss and did not attempt to hold herself out as such. Although the revised version (No 6/104 of process) of her original schedule was headed "Due by T A Mooney for Loss on Business" Miss Smith was very clear that her role in the action was to check the accounts prepared by Cairncross & Cairncross for the period to January 2002 and to prepare her own figures for the period of the defender's control from the primary source material. Her experience is as an accountant used to preparing and checking business accounts. She does not have valuation experience. Her remit was to carry out calculations, not to assess the pursuer's claim from a valuation perspective. On that remit she made a number of errors, which she accepted after her meeting with Mr Crawford and tried to rectify. Having been told it was too late to do so, she was left in the embarrassing position of being asked to give evidence in support of a schedule of loss she knew to be inaccurate. She was uncomfortable when giving evidence as a result. However, on the issue of her calculation of "loss of profit" she had been consistent. Her position was that, if one took the annual gross profit percentage made by Mr Lamont (rounded down to the lowest of three years figures) and applied it to the defender's turnover a gross profit figure of £62,010 should have been achieved, as opposed to the £2,050 achieved by Miss Mooney on her calculations. Of course, Miss Smith's calculation of the gross profit made by the defender relied on her the figure for stock of £63,579 being accurate. Using the figure of £75,000 that I found to be the most accurate one to be used on the evidence, would increase her calculation of gross profit made by Miss Mooney by £11,421 to £13,471. In turn that would reduce her calculation of lost gross profit from £60,000 to £ 48,539. However, the issue does not end there. Leaving aside for the moment the assumption that the defender could be expected to make the same gross profit during the few months she traded as Mr Lamont had when he was alive, in my view it cannot be ignored that the deceased tended to make about 45-47% of his annual profit in the last four months of the calendar year, the very period during which the defender did not trade. Further, Miss Smith did not address the issue of why the defender would be due to account to the estate for gross profit rather than the sum she ought to have handed to the estate on the assumptions made. Miss Smith's view that "loss" in this respect should be calculated by reference to gross profit percentage was based on the idea that because the costs of the business were relatively static, all profit went "straight to the bottom line". While she was supported in that contention by Fiona Martin CA, Ms Martin's evidence related to the way in which loss of profit would be calculated generally rather than with reference to the specific nature of the claim being made in this case. In any event, she accepted that some of the factors that existed in this case, such as changes in the number of staff and in opening hours would in principle be reasons that could result in looking at loss of profit on a net rather than gross profit percentage basis. Only Mr Crawford, the independent expert called by the defender, explained why the calculation based on gross profit percentage was flawed. He pointed out that £60,000 was, broadly, the level of net profit Mr Lamont tended to achieve for a whole year's trading. It was inconceivable that someone running the business for seven and a half months of non peak season trading could be expected to have that sum to hand over to the estate at the end of it. No account had been taken by Miss Smith of the fact that costs were incurred in order to earn profit. Whoever had been in control of the business between January and August 2002 would inevitably have incurred costs during that period. There were two ways of trying to calculate what the estate had lost by not having the use of the business in order to generate profit during the relevant period. One was to calculate what net profit might reasonably have been earned using historic net profit figures for the business. The other would be to take the gross profit figure and deduct the costs actually incurred by Miss Mooney for the relevant period. Mr Crawford adopted the former approach in the absence of detailed figures about costs. In my view, Mr Crawford's approach to this matter is to be preferred. He was an impressive witness who was able to explain his thinking in a clear and helpful manner. He was able to point out to Miss Smith various errors in her calculations after only a brief analysis of her work. Having worked on the figures for a long time, Miss Smith accepted his corrections. I was left with far more confidence in Mr Crawford's ability to put calculations into context and to test them against information about the business from the agreed historic figures. It seems to me that the exercise I am embarking on is one designed to decide whether or not the defender has properly accounted to the pursuer for assets of the business and the transactions it carried out between 12 January and 30 August 2002. Had she made profits and failed to remit the net sum after deduction of costs (including reasonable drawings) to the pursuer, she could have been called upon to pay over the relevant profits. As it happened she did not make a profit, but a loss. She did not dispute in principle that the calculations ought to take into account such sum as could reasonably have been earned and paid over had the business continued to earn at something approaching the level it had when Robert Lamont was alive. She did point out, however, as did all the professional witnesses, that the deceased's absence was bound to have a detrimental effect on sales. As I have already indicated, the defender was the only person in a position to run the business after Mr Lamont died. That she could not do as successfully as he did is not surprising. The net loss she made was not sustained by the estate as such, it was not a debt that required to be paid. However, had she made a profit at broadly the level enjoyed in previous years, the estate would have benefitted. Mr Crawford's net profit percentage calculations were based on figures that I have not relied on entirely. While I accept his approach based on net profit as correct, I consider that a broad view should be taken of the profit that might reasonably have been achieved. I have taken into account that the deceased achieved annual net profit of about £60,000, but that the defender did not trade for the four months of the year that usually generated about 45% of the sales and that the business was detrimentally affected by the loss of Mr Lamont. Profitability had started to reduce prior to his death due to his absence from the business through illness. In these circumstances I consider that a figure of £20,000 would be reasonable for loss of net profit to the estate. I agree with the defender's submission that it was never properly explained by Miss Smith how the gross profit could go "straight to the bottom line" when Miss Mooney had actually required to make payment of all rent, wages and other expenses for the period of her control. It seems to me that taking account of those costs and having regard both to the difficult personal circumstances in which the defender took over and the particular months during which she traded, the maximum reasonable sum representing loss of profit she could be said to be responsible for is about £20,000. That is the figure I will use in my accounting.

(iv) Mercedes Motor Vehicle.

[194] There was ample evidence to support the pursuer's contention that this was a business asset and as such ought to have been delivered to her by the defender in August 2002. The car had been entered as an asset of the business in his accounts, as had previous vehicles he had had. It had been treated as a depreciating asset and capital allowances had been claimed, albeit that these had been reduced to reflect that the car was used privately. Mr Cairncross who had prepared the accounts for years did not dispute that the deceased had included his car as an asset of the business. The estimated value of the car at the date of death was £10,000. The defender regarded the car as a joint asset, belonging to her and the deceased as a couple. However, the treatment of the car in the accounts clearly contradicted that. The relevant remaining issues relating to the car were whether it had been double or even triple counted by Miss Smith in her calculations and whether or not the defender's actings in relation to it were illustrative of bad faith on her part. So far as the first of these is concerned, it is clear that Miss Smith's figure of £133,985 for the value of the business assets that existed at the time of Mr Lamont's death and were used by the defender thereafter includes a figure of £10,000 for the car. Thus in calculating what sum, if any, is due by the defender it should be assumed that she will retain the car. If it is to be delivered, the sum of £10,000 would fall to be deducted from any such sum due. On the question of bona or mala fides I have reached the view that, while on the issue of the car the defender was clearly wrong, she was misguided rather than in bad faith. It is important that there was no evidence that she had sought any advice before taking steps to register herself as keeper of the car. She did not ask Mr Aitkenhead whether or not the car had to be regarded as a business asset. So far as she was concerned it was the car used by her and the deceased as a couple, it was the "family car." She described an emotional attachment to it. In the absence of legal advice on the matter, I can readily understand why she regarded it as an item in dispute, like the items in the house that the pursuer was alleging belonged to Glasgow Audio. By the time the pursuer was appointed Executrix Dative a number of issues were in dispute and remained so at the time of proof. The defender has not disposed of the car pending the outcome of the dispute. There was some evidence that it was now off the road but it was and is available pending determination. In all the circumstances I do not consider that the defender's position on the car exemplifies general bad faith on her part. However, I conclude that she was not entitled to retain the car and it must be taken into account.

Credibility and Reliability

[195] Some of the issues I have required to determine in this matter depend on the credibility and reliability of the various witnesses. I have already touched on my concerns about the way in which the pursuer presented the stock information but I have more general concerns about her evidence. A striking feature of the evidence on issues such as the defender's style of running the business and the alleged running down of its stock was the similarity between the evidence of the pursuer and Mr Hotchkiss and the contrast between their evidence and that of other witness. In relation to the condition of the shop and the goods being demonstrated there on 30 August 2002, the pursuer spoke to the photographs No 6/99 of process as a record of the shop being in a poor condition with stock rooms that were "virtually empty". Mr Hotchkiss agreed with that. But less partial witnesses such as Mr Hendry, Mr MacKenzie and Mr Campbell had a different view. They thought the shop looked well stocked and well kept, Mr Hendry having been present and Mr Campbell comparing the photographs with his knowledge of the shop for the period of his employment. Mr Hotchkiss changed his evidence completely on the issue of the date on which he had attended at the shop relative to handing in his notice to Hi Fi Corner when the pursuer took over Glasgow Audio. He did so overnight, having been transported to and from court by the pursuer personally. Further Mr Hotchkiss exaggerated his role in the business and spoke as if he had run not just the shop sales but the business itself. Yet he had no knowledge of the turnover or profitability of the business and had never seen the accounts. The pursuer and Mr Hotchkiss gave the impression of being united in their animosity towards the defender and their determination to portray her actings in the worst possible light. The pursuer said at first that there was "practically nothing" by way of books and records in the shop and noted the absence of receipt books. Under cross examination she conceded that some receipt books had been left. In fact a large amount of documentation, including receipt books, was produced to Glasgow Sheriff Court in 2004 by the pursuer and by Jonathan Turner in the action against the defender for payment of VAT. On this and on many other matters the pursuer's initial position was either wrong or exaggerated. Other witnesses such as Mr Wearmouth and Mr Campbell seemed much more measured in their evidence, for example on the issue of how the business was run. Mr Wearmouth was noticeably willing to take on board some criticisms and he struck me as an honest witness. Mr Hotchkiss and the pursuer placed great emphasis on Mr Wearmouth's inexperience when he was taken on by the defender, as if that was sufficient to justify Mr Hotchkiss' view that he and Mr Young were a "total waste of time". Yet it was Mr Hotchkiss' performance that was called into question by Mr Turner and Mr MacKenzie, the latter speaking very highly of Mr Wearmouth's ability. I have been left with significant concerns about the evidence of the pursuer and Mr Hotchkiss and I have relied on it only where it is corroborated by another witness or by documentation or is otherwise uncontroversial. I found the defender to be a generally honest and reliable witness. She had a good recall for dates and events. She remained emotional about the death of her partner and the subsequent events but her response to the various criticisms made of her was largely backed up by documentary material or through the evidence of reliable witnesses. She was unfailingly courteous to the court in presenting her own case. While she displayed considerable antipathy to the pursuer she did not strike me as someone who would exaggerate or mislead to present her case in the best possible light.

The Accounting

[196] I now turn to the figures to calculate what sum, if any, is due by the defender to the pursuer in terms of the First Conclusion. I intend to use the format adopted by Miss Smith in her revised schedule (No 6/104 of Process) and used for comment by Mr Crawford. I have accepted Miss Smith's figures on the detail that she checked against the primary source material. While I do not consider that Mr Cairncross can be criticised for adopting a system of delegation that resulted in his not having carried out such a check I accept that only Miss Smith actually carried out that exercise. Accordingly, the accounts produced by Wylie & Bisset (No 6/87 of process Appendices 5 and 6) can in broad terms be used, subject to the alterations for items in Queens Square, stock and loss of profit dealt with above. The controversy surrounding the issue of whether the capital account should have been inserted as a liability in Miss Mooney's accounts (as per Miss Smith) or as an asset (as per Mr Cairncross) makes no difference to the final accounting because the defender handed back the assets of the business held by her as at 30 August 2002 with the exception of the car. The exercise I require to carry out is to analyse whether, having handed the assets over, there is an additional payment due to the estate. Mr Cairncross included the capital account of the business as an asset because he thought that the defender had been left the business by the deceased. As that must now be regarded as incorrect, Miss Smith's approach is probably correct. However, the net liability position that occurs and can be seen in Appendix 6 of No 6/87 of process must be balanced by the price paid by the purchaser for the assets represented by the capital account figure. In any event Appendix 6 continues to double count the car and includes the figure for the items at Queens Square that have not been proved to be assets of Glasgow Audio. All of this requires to be taken into account. The starting point is to assess what assets of the business came into the hands of the defender that she requires to account for. Miss Smith calculates that to be £133,985 before deductions and I accept that figure. From that I intend to deduct the estimated value of the household items for the reasons explained, together with the figures for the bank balance, creditors and accruals that Miss Smith ultimately accepted. Thereafter I have made provision for VAT on the basis of Miss Smith's calculation. Regardless of the arguments in the action for VAT against the defender, account has to be taken of it. The insertion of Miss Smith's figure at this stage results in the defender having no further liability, as between her and the pursuer, for payment of VAT. Should decree be taken against her for any sum, she should have a right of relief against the pursuer as Executrix Dative. Adding back the VAT leaves a net sum of £121,639 due to the estate. The defender handed back the business, including the stock. The estate then received monies due to the defender but has, as I have indicated, an undisputed claim for the level of profit that might have been made from the assets over the period of the defender's control. Taking those into account and then deducting the stock handed back and the sum realised by the pursuer for the business, a sum due to (or by) the pursuer can be calculated.

The following summarises the accounting exercise I have carried out:-