SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS
AT ABERDEEN
A2395/06
JUDGEMENT
of
SHERIFF
PRINCIPAL SIR STEPHEN S T YOUNG Bt QC
in the cause
LOUISE LAVERY
Pursuer and Respondent
against
DAVID ALAN LAVERY
Defender and Appellant
|
Act:
Mr P G Davies, advocate, instructed by Solicitors Direct, Aberdeen
Alt:
Mr M A Stuart, advocate, instructed by George Mathers & Co, Aberdeen
Aberdeen: 7th February 2008
The
sheriff principal, having resumed consideration of the cause, refuses the
appeal and adheres to the interlocutor of the sheriff dated 27 September 2007
under deletion of the words: "APPOINTS the cause to a hearing on 24 October
2007 in order to determine further procedure; RESERVES all questions of
expenses until said date"; finds the defender and appellant liable to the
pursuer and respondent in the expenses of the appeal and of the debate before
the sheriff and allows an account thereof to be given in and remits the same
when lodged to the auditor of court to tax and to report; certifies the appeal
as suitable for the employment by the pursuer and respondent of junior
counsel; quoad ultra remits the cause to the sheriff to proceed as accords.
Note
Background
[1] In this case the pursuer and respondent is
the executrix-dative of her mother ("Mrs Lavery") who died on 1 April 2005. Mrs Lavery and the defender and appellant
were husband and wife, having been married on 7 March 1970. In
1998 they purchased a heritable property at 7 Garden
Court, Centre Point, Bridge
of Don, Aberdeen. The disposition in their favour is dated 22
October 1998 and it recorded that the price of the property was paid to the
seller by the defender and Mrs Lavery.
The property was disponed to them "equally between them and to the
survivor of them", and this is reflected in the proprietorship section of the
Land Certificate Title No. ABN26532 which was issued following registration on 2 November 1998.
[2] On or about 9 July 2000 Mrs Lavery and the
defender separated. They subsequently
entered into a minute of agreement upon the narrative that they wished "to
regulate the financial aspects arising from their separation". This was dated 14 and 19 October 2004 and was registered in the Books
of Council and Session on 6 December
2004. It contained fifteen
clauses which were as follows:
FIRST Mr Lavery
shall convey to Mrs Lavery his whole right, title and interest in and to the
former matrimonial home at 7 Centre Point, Bridge of Don, Aberdeen and shall
deliver a validly executed Disposition, a validly executed Renunciation of any
or all rights available to her under the Matrimonial Homes (Family Protection)
(Scotland) Act 1981 (as amended) in respect of the former matrimonial home and
a Form 10 report in terms of the Land Registration (Scotland) Act, 1979 brought
down to a date as near as practicable to the date of settlement and showing no
entries adverse to her interest all of which shall be completed as soon as
reasonably practicable, but in any event, not less than four weeks from the
date or dates hereof (hereinafter referred to as the "date of
settlement".) Solicitors Direct will
carry out the conveyancing in respect of the transfer, and their fees and
outlays shall be borne by Mrs Lavery.
SECOND In exchange for the disposition, Renunciation and
clear Form 10 report, Mrs Lavery shall free and relieve Mr Lavery of all obligations under the existing
standard security in favour of Halifax plc over the former matrimonial home,
and shall exhibit and thereafter record in the Land Register a Discharge or
Deed of Variation of the Standard Security, as the case may be, in agreed
terms, validly executed by the said Bank discharging Mr Lavery of all liability and obligations in respect
of that standard security.
THIRD The house
at 57 Bogie Street, Huntly
(hereinafter referred to as "the said property") is in joint names of the
parties and shall be exposed for sale on the open market forthwith. On a sale being achieved at a price
acceptable to Mrs Lavery and on acceptable ancillary terms, both parties will
co-operate fully in signing any necessary disposition and ancillary
documentation and will deliver the signed disposition and documentation to the
selling agents within seven days of the receipt of it for signature.
FOURTH Solicitors
Direct, 4 Golden Square, Aberdeen
or a local solicitor of Mrs Lavery's choosing shall carry out the estate agency
marketing and the said Solicitors Direct will carry out the conveyancing in
respect of the said property. From the
proceeds of sale, the necessary sum required to redeem the mortgage secured
over the property will be paid to the Bank of Scotland and all necessary estate
agency and legal expenses and outlays in connection with the sale and
conveyancing discharged.
FIFTH Mr
Lavery shall convey to Mrs Lavery his
whole right, title and interest in and to the two timeshare properties Barratt
Leila Playa resort, Marbella, apartment numbers A11 (week 22) and B23 (week 23)
at and shall validly execute any Disposition or document with similar effect
provided by Mrs Lavery and shall effect same within four weeks of being
provided with same.
SIXTH Mr
Lavery will pay Mrs Lavery the sum of
TWENTY ONE THOUSAND POUNDS (£21,000) within 4 weeks of the last date of signing
hereof (hereinafter referred to as "the date of settlement") failing which
interest shall accrue on the said sum from the said date of settlement until
paid at 8% per annum.
SEVENTH Both
parties undertake to sign all deeds or other documents necessary declaring in
the event that either party refuses to sign any deed or document without due
cause then the parties authorise and ordain the Sheriff Clerk at Aberdeen to
subscribe said deed or document in lieu thereof to give effect to all or any of
the provisions of this agreement.
EIGHTH Mr
Lavery shall pay Mrs Lavery a sum of ONE
THOUSAND POUNDS (£1000) within two months of the last date of this agreement in
lieu of his one half share of the aliment for Louise Lavery's tertiary
education, failing which interest will accrue from that date to the date of
payment at the amount of 8% per annum.
NINTH The
furniture, plenishings and whole contents within the former matrimonial home,
together with any other moveable assets owned by the parties, have been divided
by mutual agreement and both parties hereby acknowledge that they have received
a fair share of the said contents, furniture, plenishings and other moveable
assets and discharge any rights that they may have in any furniture and
plenishings retained by the other party.
TENTH In
implementation of the foregoing, both parties renounce and discharge all and
any rights that they have or may have against the other or against the executor
or assignees of the other now or in all time coming to any capital sum,
property transfer order, or periodical allowance of whatsoever nature, whether
under common law or statute, either on death or divorce and without prejudice
to the foregoing generality, any claim in terms of the Divorce (Scotland) Act
1976 or any re-enactment thereof, or in terms of the Family Law (Scotland) Act
1985 or any re-enactment thereof.
ELEVENTH Both
parties hereby renounce and discharge for all time coming his or her legal
right of jus relictae or jus relicti and also any prior rights
and such other rights of succession which may arise on the death of the other
party under the Succession (Scotland)
Act 1964 or any amendment thereof or at common law.
TWELFTH On any
subsequent divorce between the parties, the terms of the said divorce action
shall be in line with the provisions of this agreement. Either party may apply for divorce on the
ground of two years separation and the other party will not withhold their
consent to the divorce as long as the party applying for divorce does not seek
an award of expenses against the other party.
THIRTEENTH Each
party shall be responsible for his or her own legal expenses and outlays in
connection with the negotiation, preparation, execution and registration of
this agreement.
FOURTEENTH Both
parties, by their signatures hereto, acknowledge that they have received the opportunity
to seek independent legal advice in relation to the terms of these presents and
they accept the terms of this agreement to be fair and reasonable.
LASTLY The parties
consent to the registration of this agreement in the Books of Council and Session
for preservation and execution.
[3] In implement of clause 1 of the minute of
agreement solicitors prepared a disposition of the former matrimonial home by
Mrs Lavery and the defender in favour of Mrs Lavery alone. The defender then signed this but Mrs Lavery
died before she had signed it. As a
result of her death it could no longer be registered and it is accepted that in
consequence of the survivorship clause the title to the whole property became
vested in the defender. The pursuer
subsequently called upon the defender to implement the minute of agreement by
conveying the whole property to the pursuer.
This he evidently refused to do.
In these circumstances the pursuer raised the present action.
[4] In terms of crave 1 the pursuer craves the court
to ordain the defender to implement clause 1 of the minute of agreement by
executing and delivering to her a valid disposition in her favour of the
property and such other deeds as may be necessary to give her a valid title to
it in exchange for a discharge or deed of variation of the standard security
over the property relieving the defender of all obligations under this. The defender's response has been to say that
at the date of the minute of agreement he owned a one-half pro indiviso share of the property and that the extent of his
obligation under clause 1 is to convey that interest alone to the pursuer,
subject to being relieved by her of his liability to the heritable creditors.
[5] In due course a debate took place before
the sheriff on the first plea-in-law for the pursuer and the first and fourth
pleas-in-law for the defender. The
pursuer's plea-in-law reads:
1.
The defender being obliged to implement the minute of
minute of agreement by granting a disposition of the subjects in favour of the
pursuer as condescended upon, decree for implement should be granted as first
craved.
The
defender's pleas-in-law read as follows:
1.
The pursuer's averments being irrelevant et separatim lacking in specification
the action should be dismissed.
4. The
defender not being obliged to grant a disposition in the terms referred to in
the first crave, decree of absolvitor should be pronounced.
The sheriff's decision
[6] By interlocutor dated 27 September 2007 the sheriff sustained the
pursuer's first plea-in-law, repelled the first and fourth pleas-in-law for the
defender and granted decree in favour of the pursuer in terms of crave 1. It is this interlocutor which is the subject
of the present appeal.
[7] In support of his interlocutor the sheriff
wrote a detailed and careful note in which he set out the parties' respective
submissions and then explained his decision.
This speaks for itself, and it is unnecessary to repeat it here. In short, his conclusion was that the effect
of clause 1 of the minute of agreement was that the defender was obliged to
convey to Mrs Lavery not only his one-half pro
indiviso share in the property but also his contingent right to succeed to
Mrs Lavery's share in the event that she died before him. Thus at paragraph [52] the sheriff wrote:
Considering the terms of the whole Minute of agreement,
it seems to me that the intention of parties is clear and that the use of the
words "whole right, title and interest" in Clause FIRST intends to convey all
the defender's rights in the property, that is not only his own one half pro indiviso share but also his rights
in the survivorship destination. Had
Clause FIRST stated that the defender would convey to his wife his one half pro indiviso share together with his
whole right, title and interest (as in Gardner's
Trustees v Raeburn (supra)) then the situation in my view would be
completely different because that would demonstrate that the defender intended
to reserve the survivorship destination.
Parties' submissions
[8] Opening the appeal, counsel for the
defender acknowledged that it raised a short point, namely whether upon a true
construction of the minute of agreement the defender's obligation under clause
1 was to convey to Mrs Lavery both his existing one-half pro indiviso share in the property and his right to succeed to her
share in the event of her pre-deceasing him or whether on the other hand he was
obliged only to transfer his existing share to her. Counsel submitted that the second of these
alternatives was correct and that the defender's right under the survivorship
destination was not included in the expression "whole right, title and
interest" in clause 1. Under reference
to Erskine's Institute II.vii.2, Craigie's Conveyancing - Heritable Rights at
page 126 and Gardner's Executors v
Raeburn 1996 SLT 745 counsel submitted that the expression "whole right,
title and interest" referred only to lesser or subordinate heritable or real
rights in the property in question which fortified the title to it and were
transmitted with it. The expression did
not include a right under a survivorship destination which had the character of
a contractual right between the disponees and did not transmit with the
heritable property in the same way as would a real right. Counsel submitted that the argument for the
pursuer received no support from the remaining clauses in the minute of
agreement and there was nothing in these clauses to suggest that the expression
"whole right, title and interest" should be given anything other than its
normal meaning as set out in the passage in Erskine to which
he had referred. If, from the pursuer's
point of view, an error had been made, this had been in the drafting of the
minute of agreement and it was not for the court to try and rescue the pursuer
from a bad bargain. Under reference to
the Scottish Law Gazette 2006 Vol. 74, No. 1 at pages 12/13 and Rennie:
Solicitors' Negligence at paragraph 6.15 it was submitted that the error had
been that of the pursuer's advisers who had failed to evacuate the survivorship
destination in the minute of agreement with the result that, following the
death of Mrs Lavery, the defender was now vested in both one-half pro indiviso shares in the
property. It was accepted that he was
under an obligation to transfer to the pursuer the share which he had taken
under the original disposition in favour of Mrs Lavery and himself. But he was not obliged to transfer to the
pursuer the share which he had received upon the death of Mrs Lavery. The appeal should therefore be sustained, the
sheriff's interlocutor dated 27
September 2007 recalled and the cause remitted to the sheriff to
proceed as accords.
[9] In response, counsel for the pursuer
submitted that I should refuse the appeal and adhere to the interlocutor of the
sheriff who had reached the correct conclusion on the issue debated before
him. Counsel submitted that it was clear
from the terms of the minute of agreement as a whole that its purpose was to
separate the affairs of Mrs Lavery and the defender following their separation. The expression "whole right, title and
interest" in clause 1 conveyed to the reader that the defender was to transfer
to Mrs Lavery all his rights in the property.
The expression was not qualified by a reference to his existing one-half
pro indiviso share in the property,
nor was any other description given in the clause of the nature of his rights
in the property. In these circumstances
the expression covered both his existing one-half pro indiviso share and also his right to succeed to Mrs Lavery's
share in the event of her pre-deceasing him.
Counsel then drew attention in particular to clauses 2, 7, 10, 11 and 14
and submitted that an examination of the minute of agreement as a whole
reinforced the view that the intention of clause 1 was that the defender should
give up any right that he might have in the property. Counsel acknowledged that the expression
"whole right, title and interest" commonly appeared in a disposition and he
suggested that it might be that a different approach should be taken where it
appeared in missives. But on any view it
included all lesser rights in a property including the right to succeed under a
survivorship destination which had the character of a real or heritable right. If it had been intended that the defender should
retain his right under the survivorship destination, one would have expected to
have seen in the minute of agreement an express provision to this effect. Under reference to Fleming's Trustee v Fleming 2000 SC 206 counsel accepted that the
minute of agreement of itself was not sufficient to evacuate the survivorship
destination and that what was required was a deed recorded in the Land
Register. Turning to the significance of
Mrs Lavery's death, counsel emphasised that it had been accepted by the defender
that this did not affect the enforceability of the minute of agreement. The effect of Mrs Lavery's death had been
that her half share in the property had been automatically vested in the
defender and in order to implement the terms of clause 1, in other words to
convey his whole right, title and interest in the property, he now had to grant
a disposition of the whole property to the pursuer as executrix of Mrs
Lavery. This would achieve the result
that would have been achieved if the disposition prepared following the
execution of the minute of agreement had been signed not only by the defender
but also by Mrs Lavery and recorded before her death.
Decision
[10] The critical question here is what is meant
by the expression "whole right, title and interest" in clause 1 of
the minute of agreement. In answering
this, it is I think important to bear in mind that this expression is used, not
in a disposition of heritable property, but in a contract between two private
individuals and that the ordinary principles of construction of contracts
apply. In particular, the contract
should be construed as a whole, and regard may be had to be the admissible
surrounding circumstances. In the
present case the circumstance that matters above all is that, when the minute
of agreement was executed, the title to the property was held in the name of
Mrs Lavery and the defender "equally between them and the survivor of
them". In other words, each of them
had a one half pro indiviso share in
the property and a contingent right in terms of the survivorship destination to
succeed to the other's share. It is not
in dispute that this survivorship destination, being contractual in character,
could only be evacuated by the joint consent of the parties - Perrett's Trustees v Perrett 1909 SC 522
and Shand's Trustees v Shand's Trustees
1966 SC 178 - and that for this purpose what was required was a deed recorded
in the Land Register - see Fleming's
Trustee v Fleming. While it may have
indicated what the parties had intended should happen, the minute of agreement
was thus not of itself sufficient to evacuate the survivorship destination.
[11] The expression "whole right, title and
interest" in clause 1 begs the question what was the defender's right,
title and interest in and to the former matrimonial home. As already indicated, it consisted of two
parts, namely a title to a one half pro
indiviso share of the property and a contingent right under the
survivorship destination to succeed to Mrs Lavery's share in the event that he
survived her. This contingent right was
capable of being transferred to a third party no less than the defender's one
half pro indiviso share - see Trappes v Meredith 1871 10 M 38 - and in
my opinion it is plain, in particular when regard is add to the word
"whole", that the effect of clause 1 was that the defender became bound to
transfer to Mrs Lavery both his one half pro
indiviso share in the property and his contingent right under the
survivorship destination so that he was thereafter denuded of any right, title
or interest in and to the property. For
if, as the defender maintained, his obligation had only been to transfer to Mrs
Lavery his one half pro indiviso
share, then he would manifestly not have transferred to her his whole
right, title and interest in and to the property.
[12] That this is the correct construction is I
think confirmed by a consideration of the terms of the minute of agreement as a
whole. As the opening narrative
indicates, its purpose was to regulate the financial aspects arising from the
party's separation and it seems to me to be plain that the overall import of
its provisions was, as might be expected in the current state of the law, to
achieve a clean break between the parties' respective financial affairs so that
thereafter neither party any longer had any interest in the affairs of the
other. If this be correct, then it might be thought extraordinary that, as the
defender maintained, the effect of the minute of agreement should nonetheless
have been that he should have retained the right to succeed to Mrs Lavery's one
half pro indiviso share in the event
that he survived her.
[13] Counsel for the defender relied strongly on
the decision of Lord Cullen in Gardner's
Executors v Raeburn. In that case a
husband and wife were granted a disposition of a house in 1984 "equally
between them and to the survivor".
They separated in 1985 and later divorced. In 1985 the wife disponed her one half pro indiviso share in the house to the
husband together with her "whole right, title and interest, present and
future in and to the said subjects".
The husband did not evacuate the special destination in the original
disposition during his lifetime nor did the parties dispose of their respective
shares to him alone. Following his death
in 1991 his executors brought an action against the wife, claiming that the
later disposition had counteracted or cancelled the operation of the
survivorship clause in respect of the husband's one half pro indiviso share. For the
pursuers it was submitted that the words "my whole right, title and
interest, present and future in and to the said subjects and others"
covered any contingent right which the defender enjoyed in respect of the
deceased's one half pro indiviso
share. For the defender it was submitted
that the expression did not convey any additional heritable subject and did no
more than fortify the title to the property which was being conveyed, namely
the defender's one half pro indiviso
share. At pages 746K/747A Lord Cullen
stated:
I consider that the submissions for the defender are well
founded. The meaning which is given to a
clause in such terms is well established, and it was common ground that in the
ordinary case it did nothing more than fortify what had earlier been
conveyed. I am unable to give the
wording as it appears in the present case a significance which is different
from the normal and which would cover the disponer's interest in a different
subject. I do not accept the argument
based on the scope of the expression "the said subjects". This disposition shows evidence of an unhappy
attempt to apply language which would be appropriate for a disposition of the
whole of a heritable property to a disposition of a one half pro indiviso share without proper
adaptation of the language.
[14] In my opinion the circumstances of Gardner's Executors v Raeburn are readily
distinguishable from those of the present case.
The issue in that case was what was meant by the expression "whole
right, title and interest" in the context of a disposition of a one half pro indiviso share of the property in
question. By contrast in the present case what clause 1 says is, not that the
defender shall convey to Mrs Lavery his whole right, title and interest in and
to his one half pro indiviso share in
the former matrimonial home, but that he shall convey to her his whole right,
title and interest in and to the property.
So the question once again comes to be what was his whole right, title
and interest in and to this property when the minute of agreement was
executed. As already indicated, it
consisted of two parts and together these two parts made up the whole which he
was obliged to convey to Mrs Lavery.
[15] It is true of course that of as a result of
Mrs Lavery's death, the defender's contingent right to succeed to her half pro indiviso share has in effect been
converted into a vested right to this share so that he is now vested in what
were previously two distinct shares in the property. In other words, the character of his whole
right, title and interest in and to the property has changed as a result of Mrs
Lavery's death. But his obligation to
convey his whole right, title and interest to the pursuer as executrix-dative
of Mrs Lavery remains, and in order to implement this obligation he must in my opinion
now execute and deliver to the pursuer of a disposition of the whole property.
[16] It was also submitted for the pursuer that,
in the event that the meaning of the expression "whole right, title and
interest" in clause 1 was thought to be ambiguous, it would be legitimate
to have regard to the fact that, following the execution of the minute of
agreement, the defender had signed the disposition which had subsequently been
prepared. The fact that he had done this
was, so it was said, an indication that the parties' intention had been to
clear out the survivorship clause in implement of the minute of agreement. Reference here was made to Scottish Residential Estates Development Co
Ltd v Henderson 1991 SLT 490, Cameron
(Scotland) Ltd v Melville Dundas Ltd 2001 SCLR 691, Ballast plc v Laurieston Properties Ltd 2005 CSOH 16 and Westbury Estates Ltd v The Royal Bank of
Scotland plc 2006 CSOH 117. This
alternative contention was disputed by counsel for the defender. Since I do not myself think that the
expression "whole right, title and interest" in clause 1 is ambiguous, it
is unnecessary that I should express any opinion on it.
[17] On the whole matter I am persuaded that the
sheriff reached the right conclusion following the debate. I have therefore refused the appeal.
[18] In addition to the authorities which I have
already mentioned, I was also referred to Love
v Storie 1863 2 M 22, Professor J. M. Halliday's Conveyancing Opinions at
pages 636/7, McBryde on Contract (3rd Edn) at paragraphs 8 - 05 et seq,
Trayner's Latin Maxims (4th Edn) at page 583 and Redfern's Executors v Redfern 1996 SLT 900.
[19] It was agreed that, if the appeal were
refused, the defender should be found liable to the pursuer in the expenses of
both the appeal itself and the debate before the sheriff. It was also agreed that the appeal should be
certified as suitable for the employment by the pursuer of junior counsel.
