Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION

[2016] CSOH 6

A302/14

OPINION OF LORD GLENNIE

In the cause

CARLYNNE NEVILLE

Pursuer;

against

ANTHONY JAMES DONALD

Defender:

Pursuer:  Logan;  Balfour & Manson LLP

Defender:  Upton;  Clyde & Co

13 January 2016

Introduction
[1]        The pursuer is the daughter of Isabella Martin (“Mrs Martin”).  She claims to hold a Power of Attorney from Mrs Martin, dated, registered and approved in 2014.  In this action the pursuer seeks reduction of a disposition purportedly entered into by Mrs Martin in favour of the defender, who is Mrs Martin’s nephew.  The disposition relates to subjects at 5C Nelson Street, Aberdeen.  It bears to have been signed by Mrs Martin on 3 September 2013 and was registered in the Land Register on 24 February 2014.

[2]        The matter came before me on the procedure roll on the defender’s first and second pleas in law (respectively title and interest and a general plea to relevancy and specification) and on the pursuer’s plea to the relevancy of part of the counterclaim.

The pursuer’s case on record
[3]        The pursuer avers that her father (Mr Martin) died intestate on 14 February 2004.  His estate was exhausted by the prior rights of his wife.  At that time Mr and Mrs Martin were in the process of purchasing their council house at 5C Nelson Street.  The sale had already been agreed but the transaction did not finally complete until on or about 7 February 2005, nearly a year after Mr Martin’s death.  Title was taken by Mrs Martin in her own name and as executrix dative of her late husband.

[4]        Money for the purchase of the subjects by Mrs Martin came in part from an interest‑free loan provided to her by the defender.  This loan was secured by a standard security in favour of the defender dated 4 February 2005 in the sum of £18,150.  The defender’s generosity was recognised by Mrs Martin in her Will dated 4 February 2005 in terms of which, “in gratitude and recognition” of him providing that interest-free loan, she bequeathed the premises to him upon her death.  Subsequently the defender expended money and time in the refurbishment of the premises after their acquisition.

[5]        It is against this background that the pursuer avers that at some time in 2014 she discovered that earlier that year the defender had registered in the Land Register a disposition of the subjects in his favour bearing to have been signed by Mrs Martin on 3 September 2013.  This discovery occurred as a result of Mrs Martin going into hospital for a broken leg and thereafter moving to residential accommodation for payment of which she needed to release capital from the subjects.  The pursuer says that neither she nor her mother knew about the disposition.  According to the pursuer, Mrs Martin has no recollection of signing any such deed and would have had no reason to do so.  In those circumstances the pursuer alleges that if it turns out that her mother did sign the disposition, she must have been deceived into signing it by the defender or others acting on his behalf at a time when she was facile.  In support of this case she makes reference to a number of matters, in particular to correspondence between solicitors and others strongly suggesting that there were detailed discussions about the terms of a possible disposition with suggested revisals going on well into 2014.  It is not necessary to narrate in detail every matter relied upon by the pursuer.  It should, however, be emphasised that at this stage these are only averments.  There has not yet been any proof.

The defender’s case on record
[6]        The defender denies these averments and puts forward an account of the circumstances in which the disposition was signed.  Again, I do not need to go into the details.  It is sufficient for present purposes to note that the defender claims that he had an agreement with Mrs Martin as early as 2003 that he would get the subjects in their entirety.  This provides the basis for the counterclaim.  The defender says, in effect, that if the disposition falls to be reduced, then Mrs Martin will not have fulfilled her agreement to transfer the subjects to him.  Accordingly there should either be decree ordering her to do so or payment of damages for her breach.  On an esto basis, he also advances a claim for unjustified enrichment on the basis that he spent some £20,500 on improvements to the subjects, thereby increasing their value.  That money was not intended as a gift to Mrs Martin or to the pursuer.  He had the work undertaken “in honest and reasonable reliance on his agreement with Mrs Martin and his late uncle”.  In those circumstances it would be inequitable for Mrs Martin either as an individual or as executrix of her husband to retain the value of that work.

The attack on the pursuer’s pleadings – discussion and decision
[7]        The defender’s first plea in law is a plea to title and interest.  The pursuer claims to sue as attorney of her mother pursuant to a power of attorney in her favour dated February 2014.  Her mother’s interest in the subjects is said to be, as to half, an interest in her own right and, as to the other half, an interest as executrix of her late husband.  Mr Upton, who appeared for the defender, argued that it was well‑established that an executor may not lawfully delegate his rights or powers.  In those circumstances, while the pursuer may competently act on behalf of her mother in respect of her mother’s own interest in the subjects, she had no title or interest to bring this action on behalf of her mother acting in her capacity as executrix of her late father.

[8]        I can deal with this point briefly.  Mr Logan, who appeared for the pursuer, did not challenge that legal analysis.  However, Mr Upton had misunderstood the pursuer’s pleadings.  In article 2 of condescendence, the pursuer narrated that Mrs Martin took title to the subjects “in her own name and as executrix dative of her late husband”.  So she did, as a matter of fact.  That was the form in which she took title.  But, as the pursuer says in article 1, Mrs Martin’s prior rights exhausted her husband’s estate.  As a result, on his death she became the beneficial owner of his half share in the subjects;  “although the Title was not corrected to reflect that, she has been the sole beneficial owner of the property … until the purported Disposition in favour of the defender”.  On that basis there was no question of her delegating her powers as executrix to the pursuer.  She was not executrix.  She was beneficial owner of the whole property;  and, as her mother’s attorney, the pursuer was entitled to act for her and to assert her interest.

[9]        In my opinion Mr Logan was right about this.  Although the pursuer’s pleadings are not a beacon of clarity, on a proper analysis what the pursuer is saying is that she took title to the whole of the property by virtue (a) of her own interest and (b) her husband’s interest of which she became beneficial owner after his death.  There is, of course, a certain amount of untidiness in this analysis.  Her husband died before the property transaction was completed.  There was arguably no need, and arguably it was incorrect, for the title to be taken both in her own name and as executrix dative of her late husband.  No doubt there were practical reasons for doing this, the agreement to sell having been reached when Mr Martin was still alive.  But whatever the rights and wrongs and the potential for misunderstanding, the pursuer’s case is now clear and does not involve any infringement of the principle that an executor cannot lawfully delegate his powers.

[10]      The defender’s second plea in law is a plea to the relevancy and specification of the pursuer’s pleadings.  Mr Upton pointed to the averments that Mrs Martin was deceived into signing the disposition by the defender “or those acting on his behalf”.  That, he submitted, was quite inadequate specification of a very serious allegation.  He referred to cases on facility and circumvention in which it is emphasised that the person making the accusation must identify the persons through whose circumvention the deed is alleged to have been carried out.  That was an aspect of the general standards of pleading required in a case of this sort, whether it be facility and circumvention or a more general case of fraud.  A general reference to people acting on behalf of the defender is inadequate in that it fails to give fair notice of who is alleged to have practised the deception.  In the phrase “… by the defender or those acting on his behalf”, the words “or those acting on his behalf” are the weaker alternative.  If the pursuer cannot say who deceived her mother into acting as she did, then, according to Mr Upton, that made the weaker alternative totally irrelevant and the whole of this part of the case must fail. 

[11]      I accept, of course, that a very high degree of specification is required in any pleading of fraud, and the same applies to the pleading of a case of facility and circumvention.  But a party cannot be required to plead what he does not know.  If he can set up circumstances from which the inference can properly be drawn that a fraud must have been carried out, or circumvention used, though he cannot say precisely by whom, then he must be entitled to say so.  The relevance of that case will depend upon the strength of the averments from which he seeks to draw the inference.  In the present case the pursuer avers that Mrs Martin has no recollection of ever having signed the disposition and that she had no reason to do so.  If she gives evidence to this effect, and that evidence is believed, then, depending on what other evidence there is, that may give rise to the inference that she did not sign it; or, if she did sign it, that she did so against her will, under pressure, or because she was deceived as to what she was signing.  There may be other possibilities, but I need not go into them.  If her evidence is accepted, and the proper inference is that she was deceived into signing it, she will be unable to say who it was who deceived her, nor what was the exact nature of that deception.  All she can say is that she had no reason to sign such a document, does not remember doing so and therefore, that if she did sign it, she must have done so in some such circumstances.  It seems to me that in those circumstances the pursuer’s pleadings give fair notice of the case to be made against the defender.

[12]      Mr Upton had a separate but related point.  The pursuer’s pleading at one point sought to draw the inference that Mrs Martin’s signature on the disposition was a forgery.  That was put forward as an inference to be drawn from the fact that Mrs Martin did not recall signing the document and had no reason to do so.  Mr Upton complained that there was no specification of who was alleged to have committed the forgery.  The answer to that point is the same as the complaint about lack of specification dealt with above.  He also complained that the case of forgery was contrary to the case of facility and circumvention, because it assumed that she did not sign it whereas facility and circumvention proceed on the basis that she did.  So it is, but I see no reason why the pursuer should not go step by step through the possible inferences to be drawn from the fact that Mrs Martin does not recall signing the disposition and had no reason to do so, all in the context of the other averments made by the pursuer about the fact that the document bears a date when, on the basis of other materials referred to on record, the disposition had not been finalised.  One possible inference is, of course, that Mrs Martin had simply forgotten that she did sign the disposition and did so voluntarily in full understanding of what it was about.  Another is that her signature was forged.  Yet another is that her signature was genuine but that she was prevailed upon to sign the disposition by deception as to what it was.  I see no reason why the pursuer should not be entitled to advance all of these differing contentions in the alternative.  Before the debate was concluded Mr Logan offered to amend to delete the reference to forgery and replace it by words to the effect that it was not accepted to have been signed by Mrs Martin.  This was opposed but I allowed the amendment.  I am not sure that the amendment makes any material difference; it simply replaces a positive case of forgery with something more timid with forgery left to be inferred.  But on whichever formulation, I am satisfied that the pursuer’s pleading gives fair notice to the defender of the nature of her case. 

[13]      Mr Upton protested that there was no plea in law to support the allegation of forgery.  In this he was clearly correct.  However, Mr Logan was willing to cure this and moved to amend to add a new plea in law to the effect that if the court were to find that the signature on the deed was not that of Mrs Martin, decree should be granted as first concluded for”, i.e. there should be decree of reduction.  I allowed this amendment too.

The attack on the defenders pleadings – discussion and decision
[14]      Mr Logan challenged the relevancy of the defender’s claim for unjustified enrichment.  This claim concerned the money expended by the defender in improving the subjects after Mrs Martin purchased them.  The defender avers that he had the work undertaken “in honest and reasonable reliance on his agreement with Mrs Martin and his late uncle”, that agreement being in broad terms that he would in due course get the house.  Mr Logan’s argument, as I understood it, was that if there was an agreement then there was no room for a claim based upon unjustified enrichment.  That may be so in principle.  But what the defender is saying here is that in the event that it is held that there was no binding agreement so as to entitle him to have the subjects made over to him and/or entitling him to damages, nonetheless he carried out the work on the basis of what he understood to be an agreement with Mr and Mrs Martin.  In that context, he says that it was clearly understood that the work carried out by him was not intended as a gift.  If it turns out that there was no agreement about the house being transferred to him, then Mrs Martin would be unjustifiably enriched at his expense if he were not reimbursed the expenditure incurred by him.  He is entitled to present a claim for unjustified enrichment.

[15]      I see no difficulty conceptually with such a case.  The counterclaim gives fair notice of what is sought to be proved and, if it is proved, that would arguably support a claim for unjustified enrichment.  I say “arguably” because such matters are very much fact sensitive and it would be wrong at this stage to make any firm pronouncement upon the likely outcome.

Disposal
[16]      I have identified the main points discussed at the procedure roll hearing.  One or two other points were raised but I do not propose to deal with them in this opinion.  It seems to me that both parties in their respective pleadings have advanced relevant cases and each has given fair notice to the other of the points intended to be made in support of those cases.  In those circumstances I shall allow each party a proof before answer of their respective averments.

[17]      I was asked to deal with the question of expenses.  The basic principle is that expenses follows success, but this is in every case subject to the exercise of discretion if particular factors point to a different result.  The defender’s attack on the pursuer’s case was ultimately unsuccessful but, as Mr Upton rightly pointed out, the pursuer’s case on title and interest did not spring out clearly from the paper on which it was written and, further, the pursuer had to offer an amendment to deal with part of the complaint about specification.  The pursuer’s attack on the defender’s case was also unsuccessful, but it took up very little time.  On the whole it seems to me that the appropriate order to make is that each party should bear its own expenses of the procedure roll hearing.