Scottish Sheriff Court Decisions

(1) This is an action of count reckoning and payment. In terms of the initial writ the pursuers (who are brother and sister, two out of five siblings) contend that the defender, their sister, was in possession of and intromitted with certain items of their father's estate between the date of his death on 23 November 1994 and their mother's death on 5 December 1997. The defences which were lodged were skeleton, and summary decree, pronouncing decree de plano, was granted on 22 April 2002. That interlocutor was the subject of an appeal. When the appeal was heard by one of my predecessors it appears to have been accepted that the sheriff should not have gone so far as granting decree as craved. His interlocutor was recalled and the Sheriff Principal ordained the defender to produce a full account of her intromissions with a specified bank account.

(2) The defender duly lodged in process what purported to be an account. At the same time she lodged a minute of amendment which the sheriff describes as "seeking to amend the record by adding averments giving for the first time the defender's version of the arrangements under which she had been holding and intromitting with the funds and also expanding on the information provided in the accounting". The minute of amendment was allowed to be received and answered and the defender was ordained to lodge objections to the accounting. These written objections were subsequently formally answered by the defender.

(3) When the defender's agent moved that the record be amended in terms of the minute of amendment and answers his motion was opposed. It was submitted to the sheriff that "once a duty to account had been decided upon the record was functus and the minute of amendment was therefore incompetent". It also appears to have been submitted that at least some of the points raised in the minute of amendment could be incorporated into the answers to the objections. The sheriff accepted the first of these submissions and refused the motion to amend as incompetent.

(4) The contention that " the record was functus" does not in my judgment accurately reflect the status of the record at this stage of an action of count reckoning and payment. Nevertheless I am wholly satisfied that the sheriff was correct to refuse to allow the amendment. In his submissions the solicitor for the defender and appellant accepted, at least implicitly, that the averments that he sought to add contained three distinct elements namely (1) averments and explanations relating to items in the account produced; (2) averments of an "agreement" amongst the siblings that the defender could use certain of the funds to maintain herself and her mother and (3) averments that on any view the pursuers were only entitled to a one-fifth share each of the estate in question and that in consequence would only be entitled to a decree for two-fifths of any sum found due. He accepted that the first of these could be dealt with in the answers to the objections, but maintained that the second two matters were appropriate for inclusion in the original pleadings, and indeed that this provided the only "vehicle" for the defender to plead matters which affected the "basis of the claim".

(5) The appellants' argument was developed by reference to Walker, Civil Remedies, page 304 where the learned author describes an action of count reckoning and payment as "a mixture of an action ad factum praestandum, to produce accounts, with an action for payment". Thus, it was said, the first part of the action was only directed to establishing a legal relationship giving rise to an obligation to account. Thereafter one proceeded to the "action for payment" element in which the type of issue now sought to be raised could be argued. The argument then focused on Coxall v Stewart 1976 SLT 275. In dealing with a question of competency of an action of count reckoning and payment Lord Maxwell said at page 276: "Where assets belonging to one person come into the possession of another and where the persons to whom the assets belong has, broadly speaking, a right to recover these assets or their value from the possessor, but where the nature of the property, or the rights and obligations of the possessor, or both are such that the intromissions of the possessor may affect the precise extent or value of the owner's claim against him, at least in some cases our law provides the remedy of an action of count reckoning and payment". The observation that "the intromissions of the possessor may affect the precise extent or value of the claim" was said to support the argument that it was open at any time to make averments relating to the issue of the extent of liability. In a subsequent passage (page 278) Lord Maxwell accepted a contention by counsel for the pursuers in that case that matters "relating not only to quantification but to the basis of the claim" might be properly raised at a later stage after production of the accounts. His Lordship made reference to the preparation of a second record. That, it was argued, related to the objections to the account and answers thereto. It did not preclude the use of the original record or render it "functus". Reliance was also placed on certain observations of Lord Maxwell in Cunningham-Jardine v Cunningham-Jardine's Trustees 1979 SLT 298 at page 300 where His Lordship accepted that in certain circumstances it would only be possible for a pursuer in an action of this type to formulate the claim at the stage when an account had been lodged. That supported the view that all issues were arguable even after an order to account had been made.

(6) The practical consequence of these submissions, as the defender's solicitor accepted, is that at least in the present case if not in every action of a similar nature there would be two records in respect of each of which the procedure would run simultaneously. Thus his motion in the present case was to allow the first record to be amended and to fix "a proof on both records". As the solicitor for the pursuers pointed out such a procedure, as a matter of generality, could only result in confusion. Would it be permissible, for example, to order a debate on one record and a proof on the other?

(7) The solicitor for the pursuers and respondents made reference to an article in the Scottish Law Review of 1950 at page 276 on the subject of procedure in actions of accounting. The article bears the initials "WJD". It can presumably be attributed to Sheriff William Jardine Dobie and might fall to be regarded as of some authority. In it the author referred to "The golden rule...that the original condescendence and the answers thereto in the defences are concerned with one thing only - the defender's liability to account. He proceeds: "if liability to account is established, or if it is not disputed, the proper procedure is to make an order for the production of accounts, and to allow objections to the accounts to be lodged and answers put in to the objections. The objections and answers will probably require to be adjusted and a record will usually be made up upon these pleadings and be closed, when adjusted in the usual way. The form in which the objections are stated will vary with the nature of the objections themselves". He subsequently states: "Normally the objections will be statements of fact, but if legal issues are involved it may be convenient to add a note of pleas in law at the end in the usual way". There is a similar emphasis on the need to confine the original pleadings to the question of liability to account in Macphail Sheriff Court Practice 2^nd Edition at paragraph 2105.

(8) It is of interest to note that in his article Sheriff Dobie clearly contemplated fairly extensive pleadings in the second record. Again this is echoed in Macphail (paragraph 2111) where after indicating that adjustment of the objections and answers may be allowed the learned author states: "The interlocutor allowing adjustments should appoint the case to call in court again at the end of the adjustment period in order that further procedure may be determined. At this calling the record is closed on the objections and answers. This calling may be compared with an options hearing but as there is no provision for it in the Ordinary Cause Rules the requirement of lodging a note of the basis of any preliminary plea does not apply. Nevertheless the solicitor appearing for a party who has stated a preliminary plea should be prepared to explain to the sheriff why it justifies a debate if that is what he seeks. The issues in the objections and answers may be disposed of by debate, proof or proof before answer, or by a remit to an accountant".

(9) Applying these observations it is clear as a matter of law and practice that the condescendence in the initial writ in an action of count reckoning and payment is intended to be confined to the issue of the relationship between the parties and the consequential liability on the part of the defender to account. The defences should be similarly confined. Once an order to produce accounts has been made - as it has been in this case - the issue to which those averments were directed is held to be determined. It goes too far to say that the record is functus because reference will require to be made to the pursuers' craves when the action is disposed of finally. However, liability to account having been determined, it is thereafter too late for the defender to challenge that as a matter of generality. I accept nevertheless that issues may arise as to whether certain items which have been the subject of the defender's intromissions properly fall within the liability to account. That, in my view, is a matter which can be dealt with in the course of the objection and answer procedure, being the type of issue touched on by Lord Maxwell in the case of Coxall. I agree with the submission made on behalf of the respondents that the observations in that case support their position more than that of the appellant.

(10) In these circumstances it appears to me that the view that amendment of the original record in the manner proposed by the defender was incompetent is correct. If not incompetent, the amendment is certainly unnecessary for determination of the issue in controversy and in consequence does not fall within the criteria of Ordinary Cause Rule 182(2)(c). In these circumstances the appeal is refused.