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Cite as: [2022] ScotCS CSIH_58, 2023 GWD 1-16, [2022] CSIH 58, 2023 SCLR 187, 2023 SLT 113, 2023 SC 90

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SECOND DIVISION, INNER HOUSE, COURT OF SESSION

[2022] CSIH 58

A58/21

Lord Justice Clerk

Lord Malcolm

Lord Tyre

OPINION OF THE COURT

delivered by LORD TYRE

in the Reclaiming Motion

LESLEY CURRIE

Pursuer and Reclaimer

against

SUSAN JANE BLAIR, as Executor Nominate of the late John Currie

Defender and Respondent

Pursuer and Reclaimer: Bowen KC, Kinnear; Drummond Miller LLP

Defender and Respondent: R MacLeod; Anderson Strathern LLP

20 December 2022

Introduction

[1]

The reclaimer is the daughter and the respondent is the adopted daughter of the late

John Currie. Mr Currie died on 16 January 2015 leaving a will in which he appointed the

respondent as his executor and bequeathed his estate to the reclaimer and the respondent in

equal shares. No confirmation has been obtained. During his lifetime Mr Currie had

executed a continuing and welfare power of attorney appointing the reclaimer and

respondent as his attorneys. The power of attorney was exercised only by the respondent.

[2]

In this action the reclaimer seeks (1) production by the respondent of Mr Currie's

will; (2) decree ordaining the respondent in her capacity as Mr Currie's executor to seek a

full account of her intromissions as attorney with Mr Currie's assets and property, failing

which payment of the sum of £72,835.36; and (3) decree ordaining the respondent to

produce a full account of her intromissions as executor with Mr Currie's assets and

property, and payment of the sum of £69,545.85.

[3]

The will has been produced. The respondent does not dispute that she has a liability

to account to the reclaimer for her intromissions with Mr Currie's estate after his death, but

she pleads that the reclaimer has no title to sue in respect of the second conclusion which

relates to the respondent's intromissions as attorney during Mr Currie's lifetime. After a

debate, the Lord Ordinary by interlocutor dated 10 February 2022 sustained the

respondent's plea to relevancy and dismissed the second conclusion. The reclaimer now

reclaims against the dismissal of that conclusion.

The respondent's intromissions as attorney: the parties' averments

[4]

The reclaimer avers that after Mr Currie's death the respondent made a number of

small payments to her in respect of his estate. She became suspicious regarding the

apparently low value of his estate, and sought and obtained statements of bank accounts in

his name for the period from April 2013 to April 2015. The statements showed payments

amounting in total to £72,835.86 during the time from when he entered a nursing home in

July 2014 until his death. These included transfers of funds to the respondent and

expenditure on flights, toy shop orders and other items which were unlikely to be

attributable to Mr Currie's needs. The respondent had made regular purchases from retail

outlets and large lump sum purchases. The reclaimer avers that Mr Currie was a generous

but fair man. It was highly unlikely that, having modest assets, he would authorise the

respondent to spend £72,835.86 of his money on gifts for herself and her family. Such

extravagant expenditure would deplete his own resources in his final years, and would

favour the respondent and her family over the reclaimer and her family to the latter's

financial detriment.

[5]

In response the respondent avers that she acted as Mr Currie's attorney with his

knowledge and authority. She was his carer until he could no longer live at home. From

November 2013 she intromitted with his bank accounts with his knowledge and authority

and on his instructions. On account of his gratitude to the respondent for caring for him, he

made gifts to her and to her family. He instructed her to purchase goods and services for

her and her family and to uplift cash for herself. He had previously made gifts to the

reclaimer.

The issue

[6]

The only issue in this reclaiming motion is whether the reclaimer has pled a relevant

case that she is entitled to an order requiring the respondent in her capacity as executor to

obtain a full accounting from herself as attorney, which failing to payment of the sum that

the reclaimer avers was expended by the respondent on herself and her family out of

Mr Currie's funds.

The Lord Ordinary's decision

[7]

The Lord Ordinary decided that the reclaimer's case in relation to the intromissions

of the attorney was irrelevant. In Anderson v Wilson 2019 SC 271, it had been held that the

beneficiaries of a deceased's estate had no title to sue for a debt alleged to be owed to the

estate. The same considerations applied here. The reclaimer had no right or interest in the

composition of the estate: that was for the respondent as executor to determine. That the

attorney was not required to account for her intromissions to beneficiaries was not only a

necessary implication of Anderson, but also followed from the express terms of the power of

attorney which provided that the attorneys were only bound to account for their

intromissions to the grantor, ie to Mr Currie. The respondent as executor stepped into his

shoes on his death, and it followed that the attorneys were only bound to account for their

intromissions to the respondent.

[8]

The Lord Ordinary was not persuaded that Anderson was distinguishable on the

basis that the reclaimer in the present case was seeking decree ordaining the respondent as

executor to seek an account of her intromissions as attorney. Such a distinction was

artificial; to recognise it would be to permit an otherwise incompetent action to succeed

through the back door. The reclaimer was not without a remedy: as Lord Rodger of

Earlsferry had observed in Roberts v Gill & Co [2011] 1 AC 240 in the context of trustees,

where the trustees decline to take proceedings but the beneficiary insists, he can require

them to assign the right of action or to permit him to use their name, provided that he gives

them an indemnity for any liability for expenses.

Argument for the reclaimer

[9]

On behalf of the reclaimer it was submitted that her claim in relation to the attorney's

intromissions was competent and relevant. Reference was made to Wilson & Duncan,

Trusts, Trustees and Executors (2

ed, 1995) at paragraph 34-02 and to the cases of Donald v

Hodgart's Trs (1893) 21R 246, a claim by a beneficiary who alleged that the executors had

refused to ingather estate despite having been alerted to its existence, and Clarke v Clarke's

Trs 1925 SC 693, an action of count, reckoning and payment at the instance of beneficiaries

alleging negligence by trustees. According to Wilson & Duncan, an action calling on the

executor to realise and account for an unrealised asset of the estate was the "usual remedy".

The respondent as executor owed a fiduciary duty to the reclaimer as beneficiary and could

not lawfully become auctor in rem suam by refusing to seek an accounting in respect of

Mr Currie's attorney. It was irrelevant that the same individual was both attorney and

executor.

[10] The Lord Ordinary had erred in finding the present case to be on all fours with

Anderson v Wilson. In that case beneficiaries were held to have no title to sue a third party

for a debt due to the estate. Here the reclaimer was not suing an alleged debtor; she was

suing the executor for her failure to ingather an asset of the estate. Anderson v Wilson was

distinguishable on that basis. Equally the observations of Lord Rodger of Earlsferry in

Roberts v Gill & Co had no application where a beneficiary was taking action against the

executor.

Argument for the respondent

[11] On behalf of the respondent it was submitted that the Lord Ordinary had not erred

in dismissing the reclaimer's second conclusion. A beneficiary of a deceased's estate had no

right to an accounting from the deceased's former attorney. A relevant action of accounting

only emerged where it was alleged that a defender had intromitted with estate in which the

pursuer was interested. The power of attorney granted by Mr Currie expressly provided

that the attorney bound herself to account to the grantor, and on his death the right to an

accounting passed to his executor. As stated in Anderson v Wilson, a beneficiary is not

entitled to sue for a debt due to the estate. The Lord Ordinary had correctly applied the

rationale in that case.

[12] The cases founded upon by the reclaimer were not in point. They were concerned

with the intromissions of trustees with the trust estate. In the present case the reclaimer

sought an order against the respondent as executor in respect of a different patrimony, ie

that of the former attorney. That was an important distinction and the cases were not

authority for the proposition that a beneficiary can sue a former attorney. They ought not to

be relied on to allow indirect regulation of an executor in circumstances where, as here, the

executor is satisfied about the extent of the executry estate but a beneficiary is not. The

reclaimer was not devoid of a remedy: she could sue in the executor's name (subject to

providing indemnity) or could seek to have the executor removed.

Decision

[13] The issue raised by this case is an important one. Since the enactment of the Adults

with Incapacity (Scotland) Act 2000, the use of continuing and welfare powers of attorney

has become widespread, and we understand that it is not uncommon for the same

individual to be appointed as a person's attorney and also as his or h er executor. Where,

after the person's death, a beneficiary with an interest in the estate wishes to challenge the

intromissions of the attorney, it is important for the law to be clear as to whether such a

challenge may competently be pursued and, if so, how.

[14] It is well settled as a general rule that a beneficiary of a trust, including an executry

estate, has no title to sue a debtor to the trust: see Rae v Meek (1888) 15R 1033 (affd (1889) 16R (HL) 31 );

Morrison v Morrison's Exrx 1912 SC 892, Lord President Dunedin at 85; Roberts v

Gill & Co (above), Lord Rodger of Earlsferry at paragraph 87; Anderson v Wilson (above) at

paragraph 30. As Lord Shand put it in Rae v Meek at page 1050:

"If the trustees do not think fit to raise an action against the debtors for certain debts,

having doubts it may be how far they may be certain of success, is it for a beneficiary

or beneficiaries to do so in their own name? I think they have no such right. And I

do not think this is a matter of mere form; it is, in my view, a matter of substance,

because if the law were otherwise, then the debtors of trust-estates, including

amongst them law-agents who may have been employed by the trustees, would be

liable to actions at the instance of many different persons -- of anyone having a

beneficial interest in the trust-estate -- requiring them to pay the amount of their

debts to the trustees. I think such actions are not competent, and that the only

persons who can maintain actions to recover debts due to an executry or trust-estate

are the administrators of the estate, the trustees or the executors."

It follows that in the present case it would not be competent for the reclaimer, as a

beneficiary in Mr Currie's estate, to raise an action against the respondent in her capacity as

attorney, seeking payment of a share of the sum alleged to be due to the executry estate.

[15] An executor is, however, accountable to beneficiaries for the proper performance of

his or her fiduciary duty to ingather the deceased's estate in order to pay the deceased's

debts and distribute the balance among the persons entitled to it. Wilson & Duncan state

(Trusts, Trustees and Executors (2

ed,1995) at paragraph 34-02:

"An executor is liable to be debited with the value of any estate which he fails to

realise. The fact that the executor has a beneficial interest in the estate is not an

excuse for his failure to use due diligence in ingathering it. If a beneficiary claims

that the executor has not realised an asset of the estate, his usual remedy is to raise an

action against him calling on him to realise and account for the asset."

[16] The cases founded on by the authors as authority for the latter proposition are

Donald v Hodgart's Trs (above), Smith v Smith (1880) 7R 1013 and Reid v Reid 1938 SLT 415. In

each of Donald v Hodgart's Trs and Reid v Reid, the beneficiaries in a deceased's estate sought

an accounting from the executor for the value of the goodwill of a business carried on by the

deceased during his lifetime. In both cases the point at issue was whether, as a matter of

fact, there was any goodwill to be accounted for as an asset of the estate. Neither contains

any discussion of the competency of the action or of the pursuers' title to sue, which do not

appear to have been disputed.

[17] The brief report of Smith v Smith narrates that the pursuers sought an accounting

from the executor-dative of their late father for monies that they alleged ought to have been

included in the inventory of the estate. The pursuers averred that the inventory did not

include the deceased's share of a daughter's estate which had not, as the defender

maintained, been paid to the deceased and then paid in turn by him to the defender for

board etc. It was further averred that the defender's statement of monies expended by him

for behoof of the deceased was untrue. The sheriff-substitute dismissed the action on the

ground that the pursuers had mistaken their remedy: they were not in the position of

creditors and should have had themselves confirmed as executors ad omissa. That decision

was upheld by the sheriff but reversed by the court, which held in a short judgment that the

action was competent, if relevantly stated, and that the beneficiaries were indeed in the

position of creditors.

[18] We are satisfied that these authorities adequately vouch the proposition that a

beneficiary who claims that the executor has not realised an asset of the estate may

competently raise an action calling on the executor to realise and account for that asset. The

decision in Smith v Smith demonstrates in particular that the beneficiary's challenge may

relate to an asset consisting of a debt said to be due to the deceased - and thus to the estate -

which the executor has omitted to ingather. That is what is averred by the reclaimer to be

the situation in the present case. Applying the test enunciated by Lord Dunedin in D & J

Nicol v Dundee Harbour Trs 1915 SC (HL) 7 at 12-13, the reclaimer is a party to a legal relation

with the executor which gives her the right to require the executor to implement her

fiduciary duty by ingathering assets forming part of the estate for distribution to the persons

entitled thereto, including herself. She avers that a debt consisting of intromissions by the

attorney in breach of her fiduciary duty was owed to Mr Currie prior to death and is now

owed to the estate. As a matter of competency and relevancy, she is entitled to seek an

accounting from the respondent, in her capacity as executor, in relation to the ingathering

and realisation of such an asset. In this context it is irrelevant that the executor is the same

individual as the attorney alleged to be the debtor; the executor is sued in the capacity of

being the same person in law as the deceased, and not as the former attorney as an

individual.

[19] For this reason the decision in Anderson v Wilson is distinguishable. In that case the

pursuers attempted to sue, in their capacity as beneficiaries in the estate of their late mother,

a person alleged to have been a debtor of their late father who had bequeathed his estate to

his wife, who in turn had bequeathed her estate to the pursuers and others. In the present

case the reclaimer is not attempting to sue the alleged debtor, ie the respondent as an

individual in her capacity as the former attorney; she is exercising her right to receive an

accounting from the executor. We do not agree with the Lord Ordinary's characterisation of

this as permitting an otherwise incompetent action to succeed through the back door. A

competent action has been raised against the correct defender.

[20]

Counsel for the respondent founded upon certain observations by the court in

Anderson v Wilson, notably the statements at paragraph 31 that "the right of beneficiaries to a

deceased's estate does not amount to a right to determine what the estate constitutes" and

that "[t]he right to determine what is in the estate (its composition and extent) rests with the

executor as the representative of the former proprietor". Those observations were made in

the context of the circumstances of that case where the pursuers were not attempting to sue

as beneficiaries in the estate of the person to whom the debt was allegedly owed but as

beneficiaries in the estate of the beneficiary of that person. In such a situation there was no

legal link between the pursuers and the estate to which the debt was allegedly owed. We do

not read the court's observations as restricting the scope of an executor's fiduciary duty to

ingather and realise the deceased's estate, or of a beneficiary's corresponding right to hold

the executor personally to account for the value of any estate that he or she has failed to

realise.

[21] We therefore hold that the reclaimer has pled a relevant case in support of the first

part of the second conclusion, ie for decree ordaining the respondent as executor to seek a

full account of her intromissions as attorney with the assets and property of the late

Mr Currie, and that the Lord Ordinary's interlocutor sustaining the respondent 's plea to the

relevancy of the reclaimer's averments and dismissing the second conclusion must therefore

be recalled.

[22] We are less convinced that the reclaimer has at this stage demonstrated title to insist

upon the second part of the conclusion, ie for paymen t by the respondent to Mr Currie's

estate of the sum specified or such other sum as the court shall determine. As the case law

to which we have referred makes clear, title to demand payment by a debtor to the estate

rests with the executor and not the beneficiary. We are not, however, inclined to dismiss the

second part of the conclusion at this stage. The present dispute may not end with the

granting of decree ordaining the respondent to seek an account of her own intromissions as

attorney. If, for example, no account were produced, or if after production of an account the

reclaimer remained of the view that monies which the executor did not intend to ingather

were owed by the attorney to the estate, further action, such as the bringing of an action

against the attorney in the executor's name, or an application for removal of the respondent

as executor, might be considered necessary. It seems to us that the relevancy of the latter

part of the second conclusion will best be considered when the future direction (if any) of

the present action is more certain. In the meantime we shall leave standing the respondent's

plea to relevancy in case it requires to be argued on a future occasion.

Disposal

[23] We shall recall the Lord Ordinary's interlocutor dated 10 February 2022 in so far as

he sustained the fourth plea in law for the respondent and dismissed the second conclusion

for the reclaimer. Quoad ultra we shall remit the cause to the Lord Ordinary to proceed as

accords.