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Cite as: [2020] ScotCS CSIH_33, [2020] CSIH 33, 2020 SLT 880, 2020 SC 504, 2020 GWD 21-281

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FIRST DIVISION, INNER HOUSE, COURT OF SESSION

Lord President

Lord Woolman

Lord Doherty

[2020] CSIH 33

A281/17

OPINION OF THE COURT

delivered by LORD CARLOWAY, the LORD PRESIDENT

in the Reclaiming Motion by

CLUB LOS CLAVELES AND OTHERS

against

Pursuers and Respondents

FIRST NATIONAL TRUSTEE COMPANY LTD

Defenders and Reclaimers

______________

Pursuers and Respondents: RG Anderson; BTO Solicitors LLP

Defenders and Reclaimers: O’Brien; Turcan Connell

16 June 2020

Introduction

[1] In this reclaiming motion (appeal), the defenders seek the recall of an interlocutor of

the Lord Ordinary, dated 30 September 2019. The Lord Ordinary sustained in part both

parties’ pleas to the relevancy and specification and determined that certain averments (and

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curiously two conclusions) should be excluded from probation. He refused the defenders’

motion to dismiss the action and allowed a proof before answer.

[2] In general terms, the action concerns the efforts of a time share organisation to

terminate the appointment of the trustee of the property which is held on behalf of the time

share holders. The Lord Ordinary rejected the pursuers’ case, in so far as it related to the

second and third conclusions for count, reckoning and payment. The pursuers do not seek

to revisit that part of the decision. The remaining conclusions are: (first) for declarator that

the defenders’ appointment as trustee terminated on 1 December 2012; (fourth) for specific

implement in terms of a Deed of Trust (infra) by ordaining the defenders (a) to execute a

Deed of Retirement, Assumption and Conveyance which transfers the property, including

shares in five companies, to a new trustee and (b) to deliver all lists of members to the

pursuers; and (fifth) for a declarator that all copies of the Register of Members, or lists of

members and their contact details, are “Property” in terms of the Deed. The defenders have

declared a willingness to resign and transfer what might be said to constitute property, but

only if they are provided with certain indemnities.

[3] Both parties produced draft Deeds of Retirement etc. The pursuers’ version stated,

inter alia, that:

“(4) The Committee on behalf of each and all of the members of the [pursuers]

HEREBY DISCHARGES the [defenders] from the trusts of the Deed of Trust subject

to the transfer of title to the Property to the New Trustee and the indemnities

contained herein”.

There are no indemnities in the pursuers’ draft. The reference to them in clause (4) is a relic

from an earlier draft prepared by the defenders.

[4] The defenders’ draft contains a discharge but includes an indemnity of the defenders

by the Founder Members, the pursuers and the new trustee:

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“(10) ... against all claims actions proceedings charges (including ... charges to tax

and breaches of Spanish and/or United Kingdom legislation ...) fees costs liabilities

and expenses to which it may be entitled or which may result from or be incurred in

connection with the performance by the [defenders of their] duties under the Deed of

Trust and transfer of Property to the New Trustee and to keep the [defenders] fully

indemnified against all losses, claims, demands, taxes, actions, damages, costs and

expenses made or incurred in connection with the [pursuers] and/or in connection

with the Property or in any other way in connection with the Deed of Trust ...”.

There was an additional requirement to secure a direct indemnity in similar terms from the

new trustee.

Background

[5] The pursuers are an unincorporated association which was established by a

constitution dated 5 April 1990 and amended in July 2014. The object of the pursuers is to

secure for their members rights of occupation, on a time-share basis, of some 105 villas and

apartments at the Los Claveles resort in Los Cristianos, Tenerife. The original time-share

holders or their successors have real rights in the properties under the Spanish Escritura

system. They amount to some 15% of the total. They are members of the Development

Owners’ Association (DOA) which controls the common parts to the resort and authorises

relevant expenditure. Later time-share holders have no real rights. They are members of the

pursuers but ownership of the properties which they occupy, ie 85%, vests in five limited

companies who exercise that percentage of voting rights in the DOA.

[6] The pursuers’ constitution provides that their business is to be managed by their

committee, the members of which are named as pursuers in the instance. In terms of

clause 11.5, the committee is given certain powers, including that:

“8. To bring… any proceedings or claims of any kind in relation to the affairs of

the [pursuers] or the obligations of the Members hereunder or under the Deed of

Trust [infra]…”.

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The constitution requires that an independent trustee be appointed to hold certain property

for the benefit of the pursuers’ members. The property is defined (Deed of Trust (infra)

clause 1(f)) as including the share capital of the five owning companies, “together with all

other property (real or personal) which may from time to time be transferred to or otherwise

vested in the Trustee to be held for the benefit of the Members of the [pursuers] ...”.

[7] In relation to property, Schedule 1 (general terms and conditions) to the Deed of

Trust states:

“7. All monies securities title deeds and documents belonging to or relating to

the Property or this Trust shall be under the exclusive custody and control of the

[defenders], any other person having all reasonable facilities for verification or

inspection and the name of the [defenders] shall be placed first in the Register of all

stock, shares, securities or property”.

[8] In connection with the termination of the trust, the Deed provides:

“15.1 This Deed shall continue until (a) terminated ... by the [pursuers] giving not

less than six months’ notice in writing to the [defenders]; ...

15.2 Upon termination … the [pursuers’] Members (or failing which the

[pursuers]) shall pay to the [defenders] all remuneration then owing to the

[defenders] …and all expenses incurred by the [defenders] in conveying or assigning

or otherwise disposing of the title to the Property in manner hereinafter provided.

The [defenders] shall in the event of this Deed being terminated convey or assign the

Property ... (at the expense of the [pursuers] …) to any succeeding trustee or

otherwise as the Committee of the [pursuers] in writing may direct.

Upon the termination or expiration of this Deed… or as soon thereafter as is

reasonably practicable the [defenders] shall as directed by the Committee either:

(a) Transfer the Property to the alternative trustee of this… trust… or

(b) Retain the Property upon the terms of any new trust …or

[9] The Deed of Trust was dated 5 April 1990. It was entered into by the “Founder

Members” of the pursuers, who at that time were Wimpey Homes Holdings Limited and

Time Ownership Los Claveles (Management) Limited and the Royal Bank of Scotland plc.

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The defenders were substituted as the trustee by a Deed of Retirement and Appointment

between the pursuers, the defenders and RBS dated 21 May 1991.

[10] The terms of the Trust Deed in relation to the provision of indemnities to the trustee

are as follows:

“12. In connection with the Property and/or the Apartments the Founder

Members on behalf of the [pursuers] and (as a separate covenant) for themselves

covenant with the [defenders]:-

…

[defenders] from and against all actions claims demands losses damages costs

and expenses made against or suffered or incurred by the [defenders] arising

from any breach non-observance or non-performance of any of the

agreements and/or covenants contained in this Trust Deed and/or the

Constitution and/or the Management Agreement;…

13. The Founder Members on behalf of the [pursuers] and as a separate covenant

for themselves the Founder Members hereby agree jointly and severally to indemnify

and hold harmless the [defenders] against all claims actions proceedings

charges…fees costs liabilities and expenses to which [they] may be entitled or which

may result from or be incurred in connection with the performance by the

[defenders] of [their] duties hereunder and the [defenders] shall be kept fully

indemnified jointly and severally by the Founder Members and the [pursuers]

against all losses claims demands taxes actions damages costs and expenses made or

incurred in connection with the Property or the Owning Companies in connection

with the sale of Membership Certificates…

…

22. If [the defenders retire] from the trusts hereof… such Trustee shall be

released from all claims demands actions proceedings and accounts of any kind on

the part of any beneficiary… interested under this Deed for or in respect of the

Property or in the income thereof or the trusts of this Deed or any act or thing done

or omitted in execution… of such trusts other than and except only actions –

(a) arising from any fraud or fraudulent breach of trust…

(b) to recover from [the defenders] trust property or the proceeds of trust

property…”.

[11] In 2012, the pursuers decided to appoint a new trustee. A letter, dated 23 May 2012,

was issued by the pursuers’ management company to the defenders stating the pursuers’

intention to terminate the defenders’ appointment with effect from 1 December 2012. The

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pursuers proposed to appoint Hutchinson Trustees Ltd as the new trustee. The Deed of

Retirement etc (supra) was drafted. That deed has never been executed. The pursuers

maintain that the defenders’ appointment was terminated as of 1 December 2012. They aver

that they have called upon the defenders to transfer relevant property but the defenders

have refused to do so. The pursuers maintain that their decision to appoint a new trustee

has been frustrated by the defenders’ refusal to sign the appropriate Deed. The defenders

had continued to act as “de facto Trustee”.

[12] The defenders make detailed averments about the validity of some of the interim

appointments to, and decisions of, the pursuers’ committee. These concern whether or not a

retired member had been duly re-elected and whether others were ever appointed.

Although the relevance of such averments is unclear, it is on this basis that the defenders

maintain that some of the committee members, who appear as pursuers, have no title to sue.

The defenders have averments about a dispute between the pursuers and the management

company, which had been referred to arbitration. This too concerned the validity of

committee appointments and had been resolved, both at arbitration and in the Spanish

courts, in the pursuers’ favour. Nevertheless, the defenders maintained that they were

“stuck in the middle”. The averments about the arbitration and the court action have largely

been excluded from probation and this is not challenged in the reclaiming motion.

[13] The defenders contend that they are entitled, in terms of the Deed of Trust, to certain

indemnities from the pursuers and others. The original trustee had been granted such

indemnities when they retired on 21 May 1991. The defenders state that, subject to the

pursuers’ title being established and the provision of the indemnities, they would be willing

to execute a Deed of Retirement etc, in terms of the draft which they have lodged, in favour

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of the pursuers’ nominated trustee. They maintain that, in terms of clauses 12(c) and 13 of

the Deed, they are entitled to such indemnities along with a discharge in terms of clause 22.

[14] A Register of Members had been kept by the management company, as the pursuers’

administrators. They had given it to the defenders, who had requested it, according to the

pursuers, in order to have a list of the beneficiaries of the Trust. Since their position as

trustee had been terminated, the pursuers had sought the return of the register, which

contained personal data of the members.

[15] The pursuers aver that the defenders require:

“to account for [their] compliance with data protection legislation; ...; and for copies

of the Register of Members held and processed by the [defenders] which forms part

of the “Property” held ... by the [defenders].”

They maintain that the defenders had frustrated their efforts to appoint a new trustee.

Lord Ordinary’s Opinion

[16] Leaving aside the issue of count, reckoning and payment, the Lord Ordinary

identified several discrete issues for determination. These included: (i) the effect of the May

2012 letter; (ii) the meaning of “Property” in the Deed of Trust; (iii) whether the defenders

were entitled to indemnities in terms of their draft Deed of Retirement etc; and (iv) the

pursuers’ averments about the defenders’ attempts to frustrate of the pursuers’ actings.

[17] The Lord Ordinary held that the letter of May 2012 constituted a valid notice of

termination. The defenders’ appointment had ended. The trust continued pending the

appointment of a successor. Such a situation did not preclude post termination action on the

part of a trustee (Trusts (Scotland) Act 1921, s 20). The use of the term “trustee” in

clause 15.2 was simply a reference to the party holding the appointment of trustee prior to

any event arising under clause 15.1.

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[18] The terms of clause 1(f) and clause 7 of Schedule 1 of the Deed of Trust were broad

enough to encompass a right to the transfer of the content of the Register of Members, as

being “all other property real or personal” in the context of “documents…relating to the

Property or Trust”. This gave practical effect to clause 15.2. Accordingly, the conclusion

relating to the Register and its supporting averments were respectively competent and

relevant. The pursuers had title to sue for implement of the Deed in terms of clause 11.5.8 of

the Constitution.

[19] There was no basis in the terms of clauses 12(c) or 13 of the Deed of Trust for the

indemnities sought by the defenders. There was no reference to indemnification upon

termination or retiral in the Deed. What was conferred by the Deed was a right to a release

(ie a discharge). The defenders’ averments, including those relating to earlier indemnities,

were irrelevant and fell to be excluded from probation. The question was to be determined

only by reference to the terms of the Deed.

[20] The averments that the defenders required to execute the appropriate deed, and the

defenders’ frustration of that process, were relevant. Further specification of the terms of

the Deed had been provided.

Submissions

Defenders

[21] The defenders argued that the Lord Ordinary erred in failing to dismiss the action, in

so far as it sought a declarator that the defenders’ appointment as trustee had been

terminated, as irrelevant. In terms of clause 15.2, a notice under clause 15.1 did not

necessarily terminate the trust, or even the trustee’s appointment. It could also lead to the

trust continuing with a new trustee, or with the existing trustee continuing to hold the

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property qua trustee. Moness Country Club v First National Trustee Co [2013] CSOH 188

concerned whether a clause, which was similar to clause 15, involved terminating the trust

rather than the appointment of the trustee. It did not examine the status of the trustee. The

letter of 23 May 2012 stated an intention to have the trust continue with a new trustee. That

had not taken place. The defenders could not resign as trustee unless a new trustee

simultaneously assumed office (Trusts (Scotland) Act 1921, s 3 proviso (1); Wilson &

Duncan, Trusts, Trustees and Executors, (2nd ed), para 22-17; Gloag & Henderson, The Law of

Scotland (14th ed), para 41.08). On the pursuers’ own averments, no new trustee had

assumed office. The pursuers’ case was that the defenders remained obliged to take steps in

terms of clause 15.2. That was not consistent with the defenders ceasing to be trustee. The

conclusion for declarator that the defenders’ appointment had been terminated was

inconsistent with the other conclusions, particularly that for implement.

[22] The averments, about the defenders’ frustration of the pursuers’ wish to appoint a

new trustee, were irrelevant. If the defenders had ceased to be the trustee, there was

nothing they could do to prevent a new trustee being appointed. The pursuers’ averments

did not give fair notice of the basis upon which it was said that the defenders had prevented

the appointment of a new trustee. In relation to implement, if the defenders had ceased to

be trustee on 1 December 2012, they could not be called upon to execute a Deed “of

retirement” qua trustee. The right conferred on the pursuers was limited to requiring the

defenders to transfer the property to the pursuers’ nominated trustee. Clause 15.2 did not

require the defenders to execute a Deed of Retirement.

[23] The draft Deed of Retirement etc proposed by the pursuers did not include the

requisite indemnities which were required by clauses 12 and 13. The practical need for such

indemnities was reinforced by the possibility of a change in the Founder Members and the

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existence of the ongoing disputes between the pursuers and the current Founder Members.

There were issues concerning Spanish capital gains tax, because the concept of a trust was

not recognised in Spanish law. The defenders could not be required to execute a Deed of

Retirement which did not include the indemnities. It was accepted that the indemnities in

the draft Deed were wider than those in clauses 12 and 13 and required to be given by more

persons. The Lord Ordinary had been wrong to conclude that, in the absence of express

reference to the provision of an indemnity in clause 22, the defenders were not entitled to

such an indemnity. It was incorrect to maintain that it was the Founder Members who were

to indemnify the defenders. It was accepted that there was no right of indemnity at

common law, but here there was specific provision in the Deed. The pursuers’ own draft

Deed of Retirement etc included a discharge and made reference to indemnities. It would be

odd if an outgoing trustee required to rely on the terms of the original Deed of Trust when

that Deed was said to have been terminated. The defenders were seeking no more than

what was normally done and had been done in 1991.

[24] The issues arising in relation to a declarator that the Register of Members constituted

property overlapped with the conclusion for delivery of the Register. Property was defined

in clause 1(f). For the Register to be regarded as property, it would have had to constitute

“other property (real or personal)”. The conclusion was not directed towards a physical

copy, but the information contained within the Register. That information was not trust

property. The only rights referred to by the pursuers were the rights of the individual data

subjects over their data in terms of the General Data Protection Regulation (EU

Reg 2016/679). Those were not rights which the pursuers were entitled to vindicate. They

were personal to the individual data subjects (GDPR Art 79). The pursuers’ approach failed

to distinguish between trust property and a trustee’s administrative records. Clause 7 of

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Schedule 1 simply reinforced the view that the Register was part of the records relating to

the trust. It had no bearing on the issue and just described what was to happen to the

property. A former trustee was entitled to keep records relating to the trust and what he or

she had done in his or her capacity as trustee. They needed a copy of the Register in order to

know from whom the indemnities had been granted. There was no rule of law that, upon

demitting office, a trustee had to provide records to his or her successor and to destroy all

records held by him or her.

Pursuers

[25] The pursuers maintained that the highly technical grounds advanced by the

defenders were without merit. The Lord Ordinary had distinguished between the internal

relationships among trusters, trustees and beneficiaries on the one hand, and the formalities

which may be required to give effect to a termination of an appointment.

[26] A trust was an amalgam of mandate and deposit (Gretton: Trusts in Reid and

Zimmermann (eds) A History of Private Law in Scotland I, 480 at 488-489, 506). The modern

dual patrimony concept explained the nature of a trustee’s title (Ted Jacob Engineering Group

v RMJM 2014 SC 579 at para [90]). Termination of the mandate of a sole trustee did not

automatically result in the removal of the sole trustee from office, or inform third parties

who were ignorant of the internal workings of the trust (see eg Trusts (Scotland) Act 1961,

s 2).

[27] In terms of the Constitution, the May 2012 letter was, ex facie, a valid notice of

termination of the defenders’ appointment, but not the trust (Moness Country Club v First

National Trustee Co (supra) at para [22]). While the letter terminated the defenders’ mandate,

they remained “clothed in the office of trustee” pending the appointment of a replacement.

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The defenders remained in the office but their appointment was terminated. The pursuers

required the defenders to execute the draft Deed of Retirement etc to allow a replacement to

be appointed before the defenders could formally relinquish office. The defenders could

only demit office on assuming an additional trustee or with leave of the court (Trusts

(Scotland) Act 1921, s 3 proviso (1)). It was accepted that the defenders had not ceased to be

a trustee on 1 December 2012 and that accordingly decree of declarator in terms of the first

conclusion was not appropriate. Specific implement was the more important remedy.

[28] The defenders’ records constituted property in terms of the definition in clause 1(f),

and para 7 of Schedule 1. The pursuers were facing the very real practical difficulty of being

deprived of their own Register. The natural and ordinary meaning of clause 15.1 was that

property included such copies of the Register as the defenders may have maintained in the

course of carrying out their duties. It was appropriate to construe property in a practical

and realistic way, having regard to the context in which it occurs (Sharp v Thomson 1997 SC

(HL) 66 at 76-77). Delivery of the books and records of a trust was a standard condition on

the removal of a trustee because those records formed part of the assets of the trust. The

defenders had no relevant averments of any entitlement to retain the records. Following

termination, the defenders were no longer a data processor. The pursuers were the data

controllers. The pursuers had the primary obligation to maintain a Register (Constitution,

clause 1.6). The committee was authorised to bring proceedings on behalf of the Club. The

remedies sought were consistent with the data protection framework. Each member had

consented to the committee holding his or her personal data in terms of Article 6(1)(a) of the

GDPR or Article 7(1)(a) of the Data Protection Directive 95/46/EC. Any processing by

returning the data to the committee was necessary in terms of Article 6(1)(b) of the GDPR or

Article 7(1)(b) of the Directive. Any processing constituted by the return of any copies of the

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lists pursuant to an order of court would be legitimate in terms of Article 6(1)(c) and (f) of

the GDPR and Article 7(1)(c) and (f) of the Directive.

[29] The defenders already held an indemnity from the Founder Members in terms of

clauses 12(c) and 13. There was no right to a re-grant of that indemnity on termination of

appointment. On the defenders’ construction, the indemnities survived termination. If that

was correct, there is no need for a re-grant. The power of termination in clause 15 was on

the pursuers and not the Founder Members. It was not conditional on the grant of

indemnities. The fact that the Founder Members granted the indemnities on behalf of the

pursuers and themselves supported the conclusion that it is the Founder Members who are

the principal obligants. The indemnity provided for in clause 13 related to expenses

incurred “in connection with the sale of Membership Certificates by the Company.” The

defenders had not transferred any certificates. The express right conferred upon the

defenders by the Deed on executing a Deed of Retirement was to a “release” (Clause 22); ie a

discharge. There was no common law right to an indemnity; only to a discharge in respect

of a trustee’s intromissions (1921 Act, s 3(d); Mackenzie’s Exr v Thomson’s Trs 1965 SC 154).

[30] Any indemnity should come from the Founder Members, who were major

businesses. The committee consisted of individual members of the pursuers. The pursuers

were not a person. Their members were beneficiaries who were not parties to the Deed of

Trust. The indemnities in clauses 12 and 13 were given by the Founder Members. The

indemnity in the previous Deed of Retirement etc had been provided by the Founder

Members. Any indemnities would have to reflect the terms of the Deed.

[31] As regards ongoing disputes, the letter of termination was issued in 2012.

Subsequent disputes between the pursuers and the management company were irrelevant to

the proper construction of the May 2012 letter and the formalities required to give effect to it.

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Even if the court were to find that the defenders were entitled to the indemnities sought,

that could be addressed by way of an adjustment of the proposed Deed of Retirement. It

would not be in the interests of justice to dismiss the action as a whole.

Decision

[32] Wilson & Duncan: Trusts, Trustees and Executors (2nd ed) explains (at para 22-37) the

rarity of the use of the Court’s powers to remove a trustee as being partly because of the

existence of the statutory facilities for resignation and assumption:

“which in the absence of quite unreasonable attitudes afford an easier and less

unpleasant mode of resolving disagreements among trustees”.

The same might be said of situations, such as the present, in which there is a disagreement

between the beneficiaries of the trust and a sole trustee. It is most unfortunate that the

current dispute has proved incapable of simple resolution by the resignation of the

defenders and the appointment of a new trustee. The court does not know why that may be,

but protracted litigation in relation to events which stretch back to 2012 is an expensive

solution.

[33] The court has not been asked by the pursuers to grant decree de plano. The

reclaiming motion has focused upon whether the action should be dismissed in its entirety,

principally on the grounds that the defenders’ appointment has not terminated and they are

not obliged to execute a Deed of Retirement etc in the form lodged by the pursuers. The

court does not consider that, as a matter of law, dismissal is merited. It is also concerned

that, in practical terms, dismissal will not assist the parties in achieving finality.

[34] A trust either exists or it does not. It may lapse, because of the death of a trustee or

there may be a requirement for the court to appoint a trustee, if those originally selected

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have declined office. For a trust to continue to operate, there must be a trustee who holds

the trust’s assets. For this reason, where a sole trustee wishes to resign, he cannot do so

without assuming a new trustee (Trusts (Scotland) Act 1921, s 3 proviso (1)).

[35] A person either holds office as a trustee, or he does not. There is no such person as a

“de facto trustee” or someone “clothed in the office of trustee” who is not a trustee. Clause 15

of the Deed of Trust is designed to meet a number of different situations. One is when the

intention is to wind up the trust. A second is when there is to be a new trust created. Both

of these events involve termination of the trust itself. The third situation is where the trust is

to continue with a different trustee. This substitution envisages the continuation of the trust

on the same terms. It may be because the clause is attempting to cover these different

situations that it refers to the termination of the “Deed” rather than the trust itself. Seen in

that context, the correct interpretation of the clause, in a situation such as the present, is that

it is the trustee’s appointment which is terminated rather than the trust itself. This was the

analysis in respect of the similar clause in Moness Country Club v First National Trustee Co

[2013] CSOH 188 (Lord Doherty at para [22]). The court agrees with the Lord Ordinary’s

reasoning in Moness. It follows, from the ability of the pursuers to terminate the “Deed” by

notice, that they have in effect the power to remove the trustee by giving that notice.

[36] Returning to the three situations, in the first two, which involve the termination of

the trust, the trustee has either to sell the property or to hold it on the new terms. In the

former situation, the sale is executed by the trustee in that capacity. It is not a sale after his

office has been terminated, although it may be concurrent with that event. In the third

situation, there requires to be an assumption of a new trustee by the existing trustee before

the latter’s appointment is terminated. The only alternative to that occurring is to have the

trustee removed and replaced by the court. For an assumption to occur there has to be a

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trustee who is willing to undertake that role. It is not disputed that Hutchinson Trustees,

who were the pursuers’ selection, were unwilling to accept appointment. That being so, the

defenders remained, and remain, in office until an alternative is found.

[37] The court is accordingly unable to agree with the Lord Ordinary that the effect of

giving notice was to terminate the defenders’ appointment on the expiry of the notice

period. The letter of 23 May 2012 expressed the pursuers’ intention to bring that

appointment to an end, but that could not happen unless and until a new trustee was found

and the defenders had executed the appropriate Deed to bring about the substitution. A

declarator in the terms sought in the first conclusion is not therefore appropriate. That is not

to say that dismissal of the action, in so far as relating to that conclusion, is the appropriate

course. Rather, after the proof before answer, a declarator in not too dissimilar terms, which

states that the defenders are obliged to resign and assume a nominated trustee once the

latter has been identified, may be justified.

[38] The next question is the form of Deed of Retirement etc. It cannot be in exactly the

same terms as that drafted by the pursuers, given its reference to Hutchinson Trustees, but it

can, as will be explained, be in substantially the same format. The central question is

whether the pursuers require to provide the defenders with indemnities of the nature set out

in the defenders’ draft deed. The answer to that is in the negative. The simple reason for

that is the absence of such a requirement in the Deed itself. In addition, the Deed already

contains indemnities in clauses 12 and 13. These have been provided by those described in

the Deed for the benefit of the trustee in the circumstances stated. These indemnities will

remain enforceable by the defenders, after any resignation, against the granters of the

covenants. The Deed contains no obligation on the pursuers, as an unincorporated

association, to provide additional indemnities on behalf of the time-share holders, even if

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the committee had power to bind these individuals, or to procure new indemnities from

others. In due course, the pursuers may well be entitled to a decree for implement in terms

of the fourth conclusion on the basis of a suitably revised draft of the Deed which they have

lodged. That Deed ought to include the discharge, to which the defenders are entitled, in

terms of clause 22.

[39] The court is satisfied that the Register of Members, including their contact details, is

part of the property of the pursuers as defined in clause 1(f) of the Deed of Trust. Clause 7

of Schedule 1 does not add to this equation. It is simply a statement that the trustee pro tem

has the control and custody of documents relating to the trust property. In the event of the

defenders ceasing to be the trustee, they must deliver the Register, along with all other

records relating to the Trust, to the pursuers or the new trustee. That is not to say that the

defenders cannot retain copies of some documents, if that has a legitimate purpose.

However, their retention of details of the pursuers’ members may contravene the Data

Protection regime. The obligation to deliver records is unlikely to require the defenders to

provide the pursuers with multiple identical copies of relevant records. However, duplicate

records ought not to be retained unless there is a legitimate reason and retention does not

contravene data protection requirements. In the event of such contravention, the defenders

may be subject to the sanctions within that regime. Meantime, the court is unable to hold

that the pursuers’ averments about the defenders’ obligation to transfer documents are

clearly irrelevant.

[40] The court has taken a different approach from the Lord Ordinary in certain respects.

Nevertheless, the Lord Ordinary was correct to decline to dismiss the action in its entirety.

His subsidiary decisions on relevancy are sound. The court will accordingly refuse the

reclaiming motion and adhere in substantial part to the interlocutor of 30 September 2019.

Page 18 ⇓

The exception is a technical one relating to the exclusion from probation of the second and

third conclusions. That is not a competent remedy. The interlocutor should have dismissed

the action in so far as relating to these conclusions.