EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
Lady Paton Lord Carloway Lord Maclean	[2012] CSIH 61 A792/08 OPINION OF THE COURT delivered by LADY PATON in the reclaiming motion EWEN ROSS ALEXANDER, Trustee on the sequestrated estates of David George Pocock Pursuer and Respondent; against SKENE INVESTMENTS (ABERDEEN) LIMITED and others Defenders and Reclaimers: _______

Pursuer and respondent: Clark QC, Barne; Ledingham Chalmers LLP

Seventh defenders and reclaimers (Abbey National plc): Lindsay QC; DLA Piper LLP

Non participating parties: Balfour & Manson LLP (Fourth defenders)

Party (Fifth defender)

3 August 2012

Introduction

[1] The issues in this reclaiming motion and cross-appeal are (i) a plea of mora, taciturnity and acquiescence; and (ii) a plea of adoption of forgery. The parties debating these issues were the pursuer and the seventh defenders ("Abbey"). The case has yet to go to proof.

Background

[2] The sequence of events, as set out in the pleadings, the Lord Ordinary's opinion dated 1 September 2011, and the submissions in the reclaiming motion, was as follows.

[3] In 2000, Skene Investments (Aberdeen) Limited ("Skene") disponed heritable property known as 5 Queen's Gardens, Aberdeen, to Mr Pocock. The property comprised a ground floor flat and semi-basement flat. The disposition was then altered by the substitution of a page, with the effect that the price was changed and the disponee altered to Howemoss Properties Limited ("Howemoss"), a company of which Mr Pocock was a director. The circumstances in which these alterations were made have not yet been established. The original disposition in favour of Mr Pocock is hereafter referred to as "the first disposition", and the altered disposition as "the second disposition".

[4] Thereafter Mr Pocock, as a director of Howemoss, sold the ground floor flat to Colin Torr, and signed a disposition dated 21 November 2002 in his favour, granted by Howemoss. Further, he sold the semi-basement flat to Sinclair Brebner, and signed a disposition dated 17 December 2002 in his favour, again granted by Howemoss. Mr Brebner granted a standard security over the semi-basement flat to the Nationwide Building Society.

[5] In 2002 Morna Grandison of the Law Society of Scotland was appointed as a judicial factor to the solicitor who had acted for Mr Pocock. Her remit included an investigation of a large number of conveyancing transactions, including those relating to 5 Queen's Gardens referred to above.

[6] On 15 October 2003, Mr Pocock was sequestrated. In December 2003 the pursuer was appointed permanent trustee on the sequestrated estate. He began to investigate Mr Pocock's affairs. His agents held meetings with the Keeper of the Registers of Scotland and with the judicial factor, in an endeavour to collate information about Mr Pocock's property transactions. He met with Mr Pocock, but obtained little information as Mr Pocock attributed responsibility to his lawyer.

[7] On 1 June 2004, Miss Grandison produced a report which indicated that the disposition from Skene to Mr Pocock (the first disposition) appeared to have been altered as outlined in paragraph [3] above. The pursuer received and read that report. On 15 July 2004 the pursuer's solicitors met with the Keeper to discuss the title to 5 Queen's Gardens. At that stage, Mr Torr's disposition had not yet been registered. The pursuer also requested the opinion of Professor Paisley, University of Aberdeen. The professor's opinions became available on 4 February, 2 March, and 26 April 2005. No specific advice was given about 5 Queen's Gardens. Indeed the pursuer was still trying to locate the conveyancing file and documents relating to 5 Queen's Gardens.

[8] The pursuer considered that he had sufficient information and evidence to enable him to raise actions in respect of three other properties transferred by Mr Pocock, namely 22 Hamilton Place, 3 Queen's Gardens, and 27 Holburn Street, Aberdeen. Those actions were ultimately successful. The properties were sold, and additional funds became available to the Pocock sequestration estate.

[9] On 9 June 2007, the pursuer instructed senior counsel for an opinion relating to 5 Queen's Gardens. That opinion became available on 15 July 2007. On 20 August 2007 the pursuer's agents wrote to the Keeper informing him that an action of proving the tenor was to be raised in relation to 5 Queen's Gardens. Documents were requested. By letter dated 5 September 2007 (referred to in terms during the reclaiming motion, without objection) the pursuer's agents wrote to Mr Torr's agents as follows:

"Sequestration of David George Pocock

Ground Floor Flat, 5 Queens Gardens, Aberdeen

Your client: Colin Torr

We act for Ewen Alexander, the Permanent Trustee on the Sequestrated Estate of David George Pocock.

We understand that you were instructed by Mr Torr in respect of the purchase of the above noted property from Howemoss Properties Limited in or about 2002. Based on the information currently available to us it appears that Howemoss Properties Limited was not the legal owner of the property at the time it purported to sell to your client. The original proprietor granted a Disposition in favour of David Pocock however it appears that the original Disposition was then altered without the original proprietor's knowledge or consent to record the purchaser as Howemoss Properties Limited.

If the above is the case, it is the Trustee's intention to raise an action in the Court of Session to prove the tenor of the original Disposition. We however have very little information regarding your client's purchase of the property from Howemoss Properties Limited. If you have any information that may assist in clarifying matters we would be grateful to receive it."

[10] In November 2007 the police became involved. The second disposition was sent to the Crown Office. In early 2008 the pursuer instructed agents to commence proceedings. On 18 February 2008 Mr Torr granted a standard security over his ground floor flat at 5 Queen's Gardens to Abbey. Agents acting for Abbey are believed to have ascertained that Mr Torr's disposition had not yet been registered, despite the purchase having taken place in 2002, some six years earlier. The full nature and extent of their investigation of the title has not yet been established.

[11] On 13 April 2008 the pursuer's agents instructed junior counsel to draft summonses in relation to four properties, including 5 Queen's Gardens. On 17 September 2008 the present proceedings were raised. The summons was served on seven defenders, namely (i) Skene; (ii) Howemoss; (iii) Woolwich Ltd; (iv) Sinclair Brebner; (v) Colin Torr; (vi) Nationwide Building Society; (vii) Abbey. There were 13 conclusions, as follows:

1.     Declarator of proving the tenor of the first disposition.

2.     Declarator of proving the tenor of the plan attached to the first disposition.

3.     Declarator that the second disposition is null and void.

4.     Reduction of the second disposition.

5.     Declarator that the second disposition was not capable of transferring a valid title.

6.     Reduction of certain standard securities granted by Howemoss in favour of Woolwich Ltd (matters not directly relevant to the issues in this reclaiming motion).

7.     Declarator that the purported disposition by Howemoss to Mr Brebner was not capable of transferring a valid title.

8.     Declarator that the disposition by Howemoss to Mr Torr was not capable of transferring a valid title.

9.     Declarator that the standard security granted by Mr Brebner in favour of Nationwide Building Society was granted a non domino.

10. Reduction of the standard security dated 29 November 2002 in favour of Nationwide Building Society.

11. Declarator that the standard security granted by Mr Torr in favour of Abbey was granted a non domino.

12. Reduction of the standard security dated 18 February 2008 in favour of Abbey.

13. Expenses.

[12] Defences were lodged. Abbey's pleas-in-law included the following:

"1. The action is barred by mora, taciturnity and acquiescence ...

10. The pursuer being personally barred from challenging the title of the second defender [Howemoss] to grant dispositions to the fourth and fifth defenders [Mr Brebner and Mr Torr], decree of declarator or reduction should not be pronounced as first, second, third, fourth, seventh, eighth, eleventh, and twelfth concluded for.

11. The pursuer not being entitled to benefit from the fraud of the bankrupt as condescended upon, decree of declarator or reduction should not be pronounced as third, fourth, seventh, eighth, eleventh and twelfth concluded for."

[13] Those pleas were amongst the issues debated before Lord Uist. In his judgment dated 1 September 2011, at paragraphs [47] to [59], the Lord Ordinary rejected Abbey's contention that the pleadings disclosed an unanswerable case of mora, taciturnity and acquiescence against the pursuer such that Abbey should be assoilzied from the action. He concluded:

"[59] The submission of Abbey National on this aspect of the case therefore fails. On the other hand, I am not satisfied that their averments about mora, taciturnity and acquiescence can be said to be irrelevant, the submission to that effect not having been strongly pressed. There will therefore require to be a proof before answer on their first plea-in-law."

[14] As for Abbey's argument that the pursuer was, as a consequence of the common law principle of adoption of forgery, personally barred from seeking to reduce the second disposition, the Lord Ordinary related that argument to another argument about personal bar, and stated:

"[65] As I have concluded that the averments about personal bar are irrelevant, and the case based on adoption of a forgery was put forward as a sub-species of personal bar, it follows that the adoption case must be irrelevant. Moreover, I am of the opinion that, for the reason given in the submission of the trustee, the substantive averments on this point are irrelevant."

[15] The Lord Ordinary accordingly repelled Abbey's tenth and eleventh pleas, and in Answer 6 for Abbey, deleted all the averments following upon the word "denied" (pages 15-16 of the Reclaiming Print). Those averments included the following:

" ... On the hypothesis of fact condescended upon by the pursuer (which is not known and not admitted), Mr Pocock was directly involved in the fraudulent alteration of the Disposition and himself fraudulently executed, inter alia, the dispositions in favour of both the fourth and fifth defenders [Mr Brebner and Mr Torr] in the name of the second defenders [Howemoss]. ... a trustee is not entitled to benefit from the fraud of the debtor. On the pursuer's hypothesis of fact, Mr Pocock fraudulently altered the Disposition in order to avoid the payment of stamp duty. His estate has already benefited to that extent. It would not be equitable to permit the pursuer to benefit further from the frauds of the bankrupt by granting reduction of the Disposition and the Standard Security granted by the fifth defender to the seventh defenders as sought."

[16] Abbey reclaimed, contending that the Lord Ordinary had erred in refusing to grant them absolvitor on the basis of the pursuer's mora; and further that he had erred in excluding from probation the averments in Answer 6. The pursuer cross-appealed, arguing that Abbey's averments relating to mora were irrelevant: the pursuer's first plea-in-law (challenging the relevancy and specification of Abbey's pleadings) should be further sustained by excluding from probation all the averments after the word "denied" in Abbey's Answer 7 (pages 20-22 of the Reclaiming Print).

Submissions for Abbey

[17] Senior counsel submitted that the pursuer's averments and admissions disclosed an unanswerable case of mora, taciturnity and acquiescence. There had been an excessive and unreasonable delay of over four years, coupled with materially altered circumstances in that Abbey had granted a loan to Mr Torr to their detriment. While prejudice and reliance were not essential for mora, they formed part of the background (Somerville v The Scottish Ministers 2007 SC 140, at paragraph [94]). It was accepted that some investigation was necessary, but the pursuer had received Miss Grandison's report in June 2004. In a busy property market, it was incumbent upon him at that stage to "get a move on" and to "speak out" (United Co-operative Ltd v NAP 2007 SLT 831, paragraph [30] et seq). Instead, the pursuer had delayed raising proceedings for over four years (June 2004 to September 2008). The letter of 5 September 2007 simply made matters worse, as there had been a threat of court action followed by inaction.

[18] Acquiescence had to be assessed objectively. The necessary element of acquiescence could be inferred from all the circumstances. The question was what the pursuer knew or should reasonably have been expected to know (United Co-operative Ltd v NAP, paragraph [33]). The admitted facts gave rise to an irresistible inference of acquiescence (Bethune v A Stevenson & Co Ltd 1969 SLT (Notes) 12).

[19] Taciturnity was a failure to speak out (United Co-operative Ltd v NAP, paragraph [32]). The passage of over four years was eloquent of taciturnity. The letter of 5 September 2007 aggravated matters.

[20] On the basis of the pleadings alone, the three elements of mora, taciturnity and acquiescence, when looked at together, gave rise to an irresistible inference. There was no need to lead evidence. If Abbey's plea of mora were sustained, the pursuer would be unable to prove the tenor of the first disposition, or to have the second disposition reduced. The Keeper would then register all the deeds currently awaiting registration, including the standard security by Mr Torr in favour of Abbey.

[21] As for adoption of forgery, counsel referred to Lord President Dunedin in Muir's Exrs v Craig's Trs 1913 SC 349, pp 354 to 355; and Rankine, Personal Bar, at p 209. Although there was no forged signature, a substitute page had been inserted in the deed, and thus the deed had been falsified. The Lord Ordinary had erred in treating the adoption of forgery case as a sub-species of personal bar, and deciding the question on that basis. The adoption of forgery argument had a different legal foundation, and it was necessary to consider it separately. The pursuer, having discovered that the disposition had been falsified, delayed for over four years before raising proceedings. He had thus adopted the forgery, and was barred from seeking the remedies of declarator and reduction so far as relating to the first and second dispositions, and the standard security in favour of Abbey.

[22] Finally, counsel reserved his position in respect of the pursuer's cross-appeal.

Submissions for the pursuer
[23] Senior counsel for the pursuer invited the court to refuse the reclaiming motion. The cross-appeal should be granted, Abbey's plea-in-law of mora repelled, and Abbey's averments in Answer 7 relating to mora excluded from probation.

[24] There had been no excessive or unreasonable delay. Miss Grandison's report was not equivalent to a known right or a known claim. The pursuer had to undertake considerable investigation before being in a position to raise an action. Matters had also been held up because documents were in the possession of the police. The full picture relating to 5 Queen's Gardens was still unclear. Reference was made to Assets Co Ltd v Bain's Trs (1904) 6F 692, at pp 705 and 739; Rankine, Personal Bar, at p 130 footnote 82; Mackie v Mackie (1896) 34 SLR 34; and Lees' Trs v Dun 1912 SC 50, at pp 65 to 66.

[25] While acknowledging that particular expedition was expected in judicial review cases (cf Tonner v Reiach and Hall 2008 SC 1 at paragraph [114]; United Co-operative Ltd v NAP cit sup, paragraph [30]), other more general authorities pointed to the need for a proof before answer rather than the sustaining of a preliminary plea of mora at a debate (D's CB v Lothian Health Board 2010 SLT 725, paragraphs [36] and [39]; Halley v Watt 1956 SC 370, at pp 374 to 375; Bethune v A Stevenson & Co Ltd 1969 SLT (Notes) 12). It was not clear what the pursuer was supposed to have acquiesced in. Abbey's pleadings were neither full nor accurate. They did not justify sustaining Abbey's first plea-in-law.

[26] Not only was it not possible, on the pleadings, to sustain Abbey's plea of mora, but no relevant case of mora was made out on the record. Abbey's averments in Answer 7 relating to mora should therefore be excluded from probation. First, no date was averred at which it was said that the pursuer knew that he had a claim, unless one adopted the date of Miss Grandison's report (1 June 2004). Secondly, the averments at the end of Answer 7 were inaccurate. In particular, the pursuer had warned Mr Torr about his title by the letter dated 5 September 2007. Abbey were in effect arguing that the pursuer, having warned Mr Torr, should nevertheless have foreseen that Mr Torr would obtain a further loan secured over his property without warning the lender about the problem, and that the lender would lend without making sufficient enquiries of the Keeper. Furthermore, in the context of acquiescence, there was nothing in the pleadings from which an inference of implied assent could be drawn. Prejudice and reliance, although not perhaps essential elements for acquiescence, could assist when assessing whether or not there had been implied assent. Thus if the pursuer had been told that Abbey intended to lend on security of 5 Queen's Gardens, and, to the pursuer's knowledge, Abbey relied on the falsified disposition without being warned by him, those facts might be used as the basis of an acquiescence argument. But even if matters were viewed on a broad basis from 2002 to date, there was nothing from which acquiescence could be inferred. The steps taken by the pursuer (incidentally not included in Abbey's pleadings) could scarcely be characterised as acquiescence.

[27] Turning to adoption of forgery, authorities such as Mackenzie v British Linen Company (1881) 8R 8, Muir's Exrs v Craig's Trs 1913 SC 349, at pp 354 to 355, and Rankine, Personal Bar, p 209, demonstrated that the principle of adoption of forgery required a person who knew that his signature had been forged (or a deed falsified) openly to adopt that signature or falsified deed as his own. But there were no averments of such a situation. On the contrary, the pursuer's actings and communications contradicted any suggestion that he was adopting the falsified disposition as acceptable. In particular, the letter of 5 September 2007 made it clear that he was actively challenging the validity of that disposition. The plea of adoption of forgery should be repelled.

Reply for Abbey

[28] The principles set out in judicial review cases were of universal application. The proper focus for the court was upon what the pursuer knew (or ought to have known), and what a reasonable person would have made of the pursuer's actings. It was noteworthy that the pursuer had managed to take action in respect of the other three properties, which tended to emphasise the point Abbey was making. Applying the test in Jamieson v Jamieson 1952 SC (HL) 44, it could not be said that the case made out in Abbey's averments would necessarily fail.

Discussion

[29] A trustee in bankruptcy is a court appointee to a public office, accountable to inter alios the creditors and to the sequestrated debtor. He has many duties, including investigating the bankrupt's estate, ingathering assets, and raising court actions where necessary. He has to protect the creditors' interests, but also consider whether the funds available in the sequestrated estate are sufficient for any litigation.

Plea of mora, taciturnity, and acquiescence

[30] The first question to be addressed is whether the pursuer's positive averments, taken with his admissions, disclose an unanswerable case of mora, taciturnity and acquiescence such that the plea should be sustained at this stage, without a proof.

[31] In our view, they do not, for the following reasons.

[32] Mora: We note that in June 2004 Miss Grandison reported the fact that the disposition by Skene to Mr Pocock appeared to have been altered, such that both the price and the disponee had been changed. That was, in our opinion, simply an initial stage in the pursuer's investigations. It is a very serious matter to suggest that a formal conveyancing deed, such as a disposition, has been falsified. Further investigation, expert opinions, evidence, and possibly the involvement of the police and Crown Office, may be required. There may be a potential disruption in a series of steps in title dependent upon what happened to the impugned disposition. A responsible trustee in bankruptcy would in our view be well entitled to conduct a number of investigations, to obtain advice and opinions, and to ensure that sufficient funds were available in the estate before launching into what might otherwise be an ill-thought-out, ill-prepared, and possibly under-funded litigation - even taking into account the possible benefits of having a public Notice of Litigiosity on the Land Register. It seems to us that the steps taken by the pursuer, outlined in paragraphs [6] to [11] above, reflect such a responsible approach. Far from being aware of a known right in June 2004, the pursuer was alerted to an apparent tampering with a deed of heritable title which had serious implications not only for the debtor but for others. The pursuer then took appropriate steps as set out in his pleadings and outlined above. That those steps took some time is not perhaps surprising, bearing in mind the nature of the problem, the apparent lack of assistance from persons such as Mr Pocock, and the repercussions of reducing heritable titles. As Lord Glennie observed in United Co-operative Ltd v NAP 2007 SLT 831, at paragraph [30]:

"Mora simply means delay beyond a reasonable time. What is a reasonable time will depend on all the circumstances ... In assessing what is a reasonable time, account must, of course, be taken of the complexity of the matter, and the need to take advice, gather information, and draft proceedings. In some cases, this will require considerable time ..."

See too Somerville v The Scottish Ministers 2007 SC 140 at paragraph [92]:

"The plea [of mora, taciturnity, and acquiescence] is necessarily protean and it must depend on the particular circumstances of the case whether or not its requirements are satisfied. There may be cases where the passage of time, as related to the surrounding circumstances, may be such as to yield the inference of acquiescence in the decision in question ... The petitioner may, however, be in a position to put forward an explanation for the delay sufficient to rebut the inference ..."

In all the circumstances, we are unable to accept that the pursuer's positive averments and admissions disclose the excessive and unreasonable delay referred to in Somerville v The Scottish Ministers.

[33] Taciturnity: As for taciturnity or a failure to speak out on the part of the pursuer, we are of the view that the pursuer's positive averments and admissions do not disclose an inappropriate silence on his part. On the contrary, on receipt of Miss Grandison's report dated 1 June 2004, the pursuer instructed solicitors to meet with the Keeper to discuss the problem. He and his agents corresponded with the Keeper. He sought the opinion of an acknowledged expert in conveyancing. He instructed senior counsel. Importantly his solicitors, by letter dated 5 September 2007, expressly warned Mr Torr and his agents of the problems which had arisen. At that stage, the pursuer could not have known to warn Abbey as it was not until the following year, 2008, that Mr Torr decided to borrow money from Abbey, securing the loan over 5 Queen's Gardens, apparently without Abbey being given any warning about the potential problems over Mr Torr's title. By November 2007 the police became involved, and papers had been sent to the Crown Office. In 2008, following upon all the investigations and an assessment of their results, and being in funds following upon successful court actions and sales relating to other properties presenting less complex factual and legal problems, the pursuer instructed junior counsel to draft a summons relating to 5 Queen's Gardens. That summons was duly served on the defenders, including Abbey, in October 2008. In all the circumstances we are unable to accept that the element of taciturnity has been made out in the pleadings.

[34] Acquiescence: As explained in United Co-operative Ltd v NAP cit sup at paragraph [33]:

" ... Acquiescence simply means assent to what has taken place. The enquiry is not a subjective one to be answered by looking into the mind of the petitioners. The test is objective. Acquiescence requires to be inferred from the petitioners' inaction and silence. The question is how the matter would have appeared to a reasonable person observing the petitioners' conduct, knowing of all the circumstances of which the petitioners knew or ought to have known when acting in the way they did."

Again we do not agree that the pursuer's averments and admissions, viewed objectively, disclose anything which might be characterised as acquiescence. On the contrary, once the pursuer had been warned about the existence of what appeared to be a falsified disposition affecting the sequestrated estate, he put in hand inquiries; he communicated the problem to lawyers, the Keeper, Mr Pocock (the bankrupt), and Mr Torr's solicitors. He generally sought advice and information, and at no time gave any indication that he was inclined to leave the altered disposition as it stood.

[35] Conclusion: In the result, we agree with the Lord Ordinary's view that it would be inappropriate to sustain Abbey's first plea-in-law of mora at this stage. However we go further. In the cross-appeal, senior counsel for the pursuer contended that Abbey's averments relating to mora, taciturnity and acquiescence did not disclose a relevant case, and that the pursuer's first plea-in-law (challenging relevancy and specification) should be further sustained by excluding from proof Abbey's averments in Answer 7 from the words "Quoad ultra denied" onwards. We agree with that contention, for the following reasons.

[36] As senior counsel for the pursuer pointed out, it is necessary for this court to consider all the circumstances of the case (Somerville v The Scottish Ministers 2007 SC 140, paragraph [94]). But Abbey's averments refer only to two dates, namely 1 June 2004 when Miss Grandison made her report, and 17 September 2008 when the present action was raised. That is to ignore the many actions and events which occurred between those two dates, all as set out in paragraphs [6] to [11] above. Those actions and events do not, in our view, support a categorisation of the pursuer's conduct as taciturnity and acquiescence. On the contrary, the steps taken by the pursuer amounted to investigation, consultation, the seeking of appropriate advice, warnings to both the Keeper and to a current heritable proprietor (Mr Torr), and the raising of an action. For this reason alone we find Abbey's averments of taciturnity and acquiescence to be inadequate and irrelevant. Furthermore we agree with senior counsel for the pursuer that the pursuer was entitled responsibly to seek information and advice before raising a court action with all its consequences. In other words, while the pursuer was alerted to the problem in June 2004 by Miss Grandison's report, he was entitled to take the steps he did before launching into a litigation which, if not well-based in fact and law, could result in considerable losses to the sequestrated estate. In the result therefore we are persuaded that Abbey's averments so far as relating to mora, taciturnity and delay are irrelevant. We shall repel Abbey's plea of mora (i.e. the seventh defenders' first plea-in-law); sustain the pursuer's first plea-in-law to that extent; and refuse to remit to probation the passage in Abbey's averments in Answer 7 from the words following "Quoad ultra denied" to the end of Answer 7.

Plea of adoption of forgery

[37] No point was taken by Mr Clark QC that the authorities on adoption of forgery could not be applied to a falsified disposition in which the signature was not in fact forged (Mr Pocock being a director of Howemoss and therefore entitled to sign on the company's behalf). We accordingly accept that the doctrine extends to such a falsified disposition.

[38] However the crucial element illustrated by decisions such as Mackenzie v British Linen Bank and Muir's Exrs is that a person who knows about the forgery, and knows that a third party is being misled into relying upon the forgery, says or does nothing to alert the third party to the problem. In effect therefore it is necessary for Abbey to aver and prove that the pursuer knew not only that the disposition was falsified, but also that Abbey were intending to lend Mr Torr money in reliance upon that falsified disposition, and yet did nothing to prevent Abbey from relying upon the falsified disposition. As senior counsel for the pursuer pointed out, there are no averments that Abbey actually relied upon the falsified disposition itself - the nature and extent of Abbey's agents' investigation into the title in respect of 5 Queen's Gardens being unclear. But perhaps more importantly, there are no averments that the pursuer knew that Abbey were, or were likely to, rely upon the falsified disposition. Furthermore, the pursuer's actings as outlined in paragraphs [7] to [11] above, and in particular the letter dated 5 September 2007, do not disclose a picture of an adoption of forgery. On the contrary, the pursuer had taken active steps to warn Mr Torr's agents that his disposition was from a non-owner and that court proceedings challenging that disposition would be raised. It is impossible, in our opinion, to view that as an adoption of forgery. Furthermore there are no averments to explain why the pursuer could, or should, have known that, following upon such a warning, Mr Torr and his agents would seek a loan from Abbey apparently without referring to the problem.

[39] In the result, we are not persuaded that the Lord Ordinary erred in repelling the plea of adoption of forgery, although he did so on the basis set out in paragraph [65] of his judgment, which was accepted by both parties (and by this court) as erroneous.

Decision

[40] For the reasons given above, we shall refuse the reclaiming motion. We shall allow the cross-appeal by sustaining the pursuer's first plea-in-law to the further extent of not remitting to probation Abbey's averments relating to mora, taciturnity and acquiescence contained in Answer 7 for Abbey (i.e. from the words following "Quoad ultra denied" to the end of Answer 7, including the sentence "Such knowledge combined with the delay in challenging the Title to the Property constitutes acquiescence."), and by repelling Abbey's first plea-in-law ("The action is barred by mora, taciturnity and acquiescence").

[41] We should add that counsel for the pursuer drew our attention to a difficulty which might arise in respect of certain averments relating to fraud contained in Answer 6, in the event that these averments (excluded by the Lord Ordinary) were to be restored to the record. That matter does not now arise, on the view which we have taken. It is accordingly unnecessary to deal with that point.

[42] We reserve the question of expenses to enable parties to address us on that matter.