SHERIFFDOM OF SOUTH STRATHCLYDE DUMFRIES AND GALLOWAY

 

A10/12

	JUDGMENT OF SHERIFF PRINCIPAL B A LOCKHART
	in causa
	ALEXANDER BARBOUR
	First Pursuer and Appellant
	and
	RINGFORD MOTOR SERVICES LTD
	Second Pursuer and Appellant
	v
	VIVIENNE MARRIOTT
	Defender and Respondent

 

Solicitor for the first pursuer and appellant: C Lawrie, Solicitor, Castle Douglas

 

Counsel for the defender and respondent: Mr McFarlane, Advocate

 

 

KIRKCUDBRIGHT: 24 April 2012

 

The Sheriff Principal having resumed consideration of the cause upholds the appeal and recalls the Sheriff's interlocutor of 15 March 2012. Ad interim interdicts the defender by herself and all others acting under her instructions or on her behalf from taking any actions towards the marketing and sale of (1) The subjects registered in the Land Register of Scotland under title number KRK736 known as Eustonford House, Ringford, Castle Douglas and (2) The subjects known as informing 5 Main Street, Ringford, Castle Douglas, until further orders of the court; finds the respondent liable to the appellant in the expenses of the appeal. Allows an account thereof to be given in and remit same when lodged to the auditor of courts to tax and to report.

 

Background to the appeal

 

1.      The relevant craves in respect of this appeal are as follows:-

"(1) To find and declare that the First Named pursuer contracted for the purchase of an area of ground at Ringford, Castle Douglas being the subjects now registered in the Land Register of Scotland under Title Number KRK736.

 

(2) To find and declare that the First Named Pursuer instructed his then agents that title to said area of ground should be taken in name of the Defender and that the Defender holds that title in trust for behoof of the First Named Pursuer and his heirs and assignees and not absolutely in her own name; to find that the First Named Pursuer is entitled in his pleasure to revoke said trust and that he has validly done so; to ordain the Defender to denude herself of said trust and to re-convey and transfer her interest as proprietor in said subjects to the First Named Pursuer; and, failing her doing so within such period as the court shall appoint and failing the Defender executing all Dispositions and other deeds as shall be necessary for constituting full right to the subjects registered under Title Number KRK736 in name of the First Named Pursuer to authorise the Sheriff Clerk to execute such Dispositions and other deeds as adjusted at his/her sight

 

(3) To find and declare that the First Named Pursuer conveyed title to the heritable subjects at 5 Main Street, Ringford, Castle Douglas, without any consideration having been paid therefore.

 

(4) To find and declare that the conveyance by the First Named Pursuer to the Defender for the First Named Pursuer's whole interest in and to the heritable subjects comprising 5 Main Street, Ringford, Twynholm was a conveyance and transfer of said property in trust for behoof of the Pursuer and his heirs and assignees and that the said property is held by the Defender only in trust as aforesaid; to find that the First Named Pursuer is entitled at his pleasure to revoke said trust and that he has validly done so; to ordain the Defender to denude herself of said trust and to re-convey and transfer said property to the First Named Pursuer; and failing her so doing within such period as the court shall appoint and failing the Defender executing such Dispositions or other documents as may be required in order to constitute full right to the said subjects in name of the First Named Pursuer, to authorise the Sheriff Clerk to execute such Dispositions and other deeds as adjusted at his/her sight....

 

(5)To interdict the Defender by herself and all others acting under her instructions or on her behalf from taking any actions towards the marketing and sale of (One) the subjects registered in the Land Register of Scotland under Title Number KRK736 known as Eustonford House, Ringford, Castle Douglas and (Two) the subjects known as and forming 5 Main Street, Ringford, Castle Douglas and to grant such Interdict ad interim.

 

(6) To find and declare that the First Named Pursuer is entitled to occupy the dwelling house known as Eustonford House, Ringford, Castle Douglas for a period of six months.

 

2.      The first named pursuer avers that he and defender were in a relationship for a period in excess of twenty years terminating at or about 28 February 2010. During that period, the first named pursuer and the defender conducted their affairs as if they were man and wife. In addition, the defender was employed by the second named pursuer. The second named pursuer is a company wholly owned by the first named pursuer and the first named pursuer is a director of the second named pursuer. It is averred that the first named pursuer instructed his then agents to act on his behalf in connection with the acquisition of an area of undeveloped ground at Ringford, Castle Douglas. The first named pursuer's intention was to develop said area of ground by construction thereon of a dwelling house and a yard for the better conduct of his business. Missives were concluded in the name of the first named pursuer for that purchase and the date of entry was 19 December 1997. Prior to the date of entry the first named pursuer instructed his then agents that title to said subjects should be taken in the name of the defender. The first named pursuer considered it expedient to so direct his then agents with the intention of insulating assets from potential claims that might be made against him in respect of the conduct of his business. It was clearly understood between the first named pursuer and the defender that the defender would hold the said subjects in trust and subject to the first named pursuer's direction. Title was taken in the name of the defender....Following settlement of the transaction the first named pursuer obtaining planning permission for the development on the property of the dwelling house known as Eustonford House, Ringford and a yard for use in connection with his business. The first named pursuer expended his own capital on construction of said dwelling house and yard....Following completion of the dwelling house and yard, the dwelling house was occupied by the first named pursuer and the defender as their principal private residence. Following completion of the yard, the yard was used in connection with the business of the first named pursuer until the date of the incorporation of his business and, thereafter, by the second named pursuer. At all material times the first named pursuer has enjoyed the beneficial use of said dwelling house and yard. Following the determination of the first named pursuers relationship with the defender the first named pursuer, per his agents, has called upon the defender to denude herself of title to the said subjects. It is averred that not only does the defender refuse to denude and re-convey to the pursuer, she has evinced an intention to sell the subjects without further reference to the first named pursuer. It is averred that the first named pursuer would suffer loss in the event that the defender refuses to re-convey said property

 

3.      It is further averred that the first named pursuer was the proprietor of heritable subjects at 5 Main Street, Ringford, Castle Douglas. Again with the intention of insulating himself from claims that might be made in respect of his business activities, he instructed his then agents to convey 5 Main Street, Castle Douglas, into the name of the defender. No consideration was paid by the defender in respect of this conveyance. The costs of this conveyance were met by the first named pursuer. The parties clearly understood that the defender became registered proprietor of the subjects only as trustee and subject to the pursuer's direction. Although bearing to be absolute, truly the defenders title is as trustee for the pursuer's behoof. The first named pursuer has called up on the defender to denude herself of said title by re-conveying said property to the first named pursuer. The defender has refused to do so. It is averred the defender has evidenced an intention to market and sell the property without reference to the first named pursuer. Again it is averred that the first named pursuer will suffer loss in the event that the defender declines to re-convey the said property.

 

4.                  It is averred that the defender has instructed estate agents with regard to the sale of subjects at Eustonford House and yard and 5 Main Street, Ringford. The first named pursuer reasonably apprehends that the defender may proceed to endeavour to secure a sale of both properties without reference to the first named pursuer. The first named pursuer's rights as beneficial owner in respect of both properties are jeopardised.

 

5.                  In order to protect the first named pursuer's position, interdicts are now sought against the defender in respect of her taking actions towards the marketing and sale of either property.

 

6.                  The first named pursuer seeks interim interdict and inhibition on the dependence of the action. It is said that the grant of such orders would not prejudice the defender's position pending resolution of this case.

 

7.                  The initial writ was placed before the Sheriff in Chambers on 23 February 2012. A warrant to cite was granted and interim interdict as craved, was also granted. Parties were appointed to be heard thereon on 1 March 2012. On 1 March, on joint motion the hearing was continued until 15 March 2012 and interim interdict was also continued until that diet.

 

8.                  On 15 March 2012 the Sheriff, having heard parties, refused the motion for warrant to inhibit on the dependence and recalled the interim interdict granted on 23 February 2012. It is against that interlocutor of 15 March 2012 that this appeal is taken on behalf of the first named pursuer.

 

THE SHERIFF'S POSITION

 

9.                  The Sheriff appended a Note to his interlocutor of 15 March 2012. Counsel had attacked the cogency of the case under reference to an argument about the relevancy of the first pursuer's pleadings. The Sheriff recorded that counsel had submitted that it was not enough to aver, as the pursuers did, that "parties clearly understood" that the defender held the property in trust for the first pursuer. He submitted that the creation of a trust required a declaration of trust, which must specify particular purposes and that, in the absence of averments about those matters and about the alleged trusters intention to create a trust, the pursuers' pleadings were irrelevant. He referred to the analysis of trusts in Part 3 of the Scottish Law Commission Discussion Paper No. 133 on the Nature and the Constitution of Trusts. He submitted that the pleadings were so defective that they did not give substance to flesh out a claim such as that which had been made. He submitted that the interdict placed the defender in a highly disadvantageous position. He referred to the dicta of the Lord Justice Clark in Loudon v Hamilton 2010 SLT984 at 990 where he stated:-

"Interim interdict ought not to be granted as a matter of course... A party applying for it should explain the whole circumstances to the court with complete candour....An interim interdict is granted periculo petentis ...Where it is shown that the claimant obtained an interim interdict to which he was not entitled, he will be liable in damages to those who were subject to the interim interdict for the losses that they have sustained as a consequence of it. A claim for damages in such a case may necessitate further litigation in which not all of the pursuer's expenses will be recoverable if he should succeed; and there is always the risk for the pursuer that at the end of the day a decree for damages may be worthless."

Counsel maintained that there had been a lack of candour because the pleadings did not disclose that the first call on the defender to denude herself of the property was made two years after the parties had separated.

 

10.             The Sheriff was also referred to the dicta of Lord Maxwell in Chill Foods (Scotland) Ltd v Cool Foods Ltd 1977 SLT38:-

"Where the right alleged to have been invaded arises only out of an alleged contract, the very existence of which is denied, if the petitioner can point to no document, no admission and no other prima facie evidence or circumstance supporting the averment of the contract, it will, at least, require a very strong argument on balance of convenience to justify interim interdict."

 

11.             Before the Sheriff solicitor for the first pursuer submitted that a declaration of trust need not be in any particular form and that the formula "The parties clearly understood ..." implied a declaration of trust sufficiently. He submitted that a case may be cogent without being relevant and that the matters upon which the defender founded were properly matters to be raised at debate at a later stage. He submitted that the interdict should stand, at least until defences were seen, and that, as far as the balance of convenience was concerned, the status quo was sustainable. The Sheriff then concluded in his note:-

"Having heard parties, I came to the conclusion that Mr McFarlane's attack on the relevancy of the pursuer's pleadings was well founded. Although trusts no longer require to be constituted by declarations in writing, a trust is not constituted by mere tacit understanding but requires a declaration of trust by the truster with sufficient substance to it to justify its description as a "juridical act" (see Goag and Henderson, 12^th, paragraph 42.06 as well as the material from the Scottish Law Commission Discussion Paper to which Mr McFarlane referred). In my opinion, the pursuer's pleadings as presently framed are irrelevant. Whilst I can see that a writ might be relevant without being cogent, I do not see how a writ which is not relevant can possibly be cogent. Leaving aside criticisms of relevancy which are of a pedantic sort (the category into which the criticism of the present writ does not by any means fall), an irrelevant writ does not provide a proper basis for a remedy. A fortori , once the irrelevancy is recognised, that writ cannot provide a basis for the continuation of an interim interdict. Without a relevant writ there is no prima facie case and as, Lord Dervaid reasoned in a passing off context in Alex Ferguson & Co v Matthews McLay and Manson 1989 SLT 795, no basis for interim interdict.

The criticism made of the pursuers' pleadings goes to the very heart of the basis on which the remedy is sought. It may be that the defect could be cured by amendment so as to aver that there was a declaration, or (perhaps) an agreement of an enforceable sort or even facts from which the court might be invited to draw an inference that there had been a trust properly constituted. I have doubts about whether any of these things is likely be possible but, in any event, I have to deal with the pleadings as they stand at present. In my opinion, the lack, relevancy and, hence, cogency.

It follows that I am bound to recall the interim interdict."

 

 

SUBMISSIONS FOR THE APPELLANT

 

12.             Solicitor for the appellant first submitted;-

"If the first named pursuer required to make averments as to the effective constitution of the trust in order to make out a prima facia case (which is denied), it is submitted that he did so. A declaration of trust in the case such as the present need not be in writing. Whether oral or written, no technical language is required for it to be effective, not even the word "trust". The first named pursuer avers in respect of each of the subjects that he intended to have them transferred to the defender, and that both he and she "clearly understood" that she would thereafter hold them in trust as trustee and subject to his direction. It is submitted that if the first named pursuer required to make averments as to the effective constitution of the trust (which is denied), the sheriff erred in holding that he had not done so sufficiently to satisfy the prima facie test"

As the Sheriff had made clear in his note, the interim interdict was recalled on the basis of what he thought was an irrelevant writ. The Sheriff pointed out that there were two requirements for the creation of a trust, (A) a declaration of trust and (B) delivery of the trust property. The Sheriff took the view that the writ as framed did not create a declaration of trust. He found the writ irrelevant on that basis.

 

13.             The primary submission for the appellant was that the writ was relevant. I was referred to condescendence 3 line 11 regarding Eustonford House which stated;

"It was clearly understood between the first named pursuer and the defender that the defender would hold the said subjects in trust and subject to the first named pursuer's direction."

I was referred to condescendence 4 line 6 regarding 5 Main Street as follows;

"The parties clearly understood that the defender became registered proprietor of the subjects only as trustee and subject to the pursuer's direction."

I was referred to the Scottish Law Commission's Discussion Paper on the Nature and Constitution of Trust dated October 2006 page 19 paragraph 3.1;

"It is generally accepted that two juristic acts are necessary in order to create a standard trust. First, the truster must make a declaration of trust i.e. he declares that he is setting up a trust....

Second the ownership of the property that is to constitute the trust fund must be transferred to the trustees."

It is acknowledged that since Requirement of Writing Act 1995 the trust did not require to be in writing. I was also referred to page 22 of the discussion paper as follows;-

"3.12 Before a trust can arise the truster must have the intention to create a trust. This intention is found in the declaration of trust. It is well settled that no special form of words is necessary in order to create a trust: in particular, there is no need to use the word "trust".

3.13.... whether a statement amounts to a declaration of trust is ultimately a question of construction of the language used by the alleged truster."

In this case it was submitted that the appellant was the truster and beneficiary of the trust. The respondent was the trustee.

 

14.             In the absence of the form of words required by law to constitute a declaration of a trust, it was submitted that the words set out in condescendence's 3 and 4 to which I have referred to in paragraph 13 were sufficient. It was submitted that these averments were sufficient to allow the appellant to lead evidence as to the exact terms of the declaration of the trust. The essentials were there. On that basis the Sheriff erred in finding the writ to be irrelevant. It was submitted that was sufficient to dispose of the appeal. However, if I was against the appellant on this ground of appeal, it was further submitted;

The first named pursuer's craves 2 and 4 to inter alia ordain the defender to re-convey and transfer to him the subjects known as Eustonford House and 5 Main Street, both Ringford, Castle Douglas are based on clear averments that the defender holds both of these subjects as trustee for the first named pursuer. For the creation of a voluntary trust, there requires to be a declaration of trust by the truster, and a transfer to the trustee of property to be held subject to the trust. The Sheriff refused to grant of new the interdict ad interim on the ground that there were no averments in the Initial Writ to the effect that there had been a declaration of trust. It is submitted that the sheriff in requiring specific averments as to the constitution of the trust fell into error. "The perpetual interdict can only be granted on ascertainment of the facts by proof or admission, while an interim question, only the prima facie aspect can be considered. The question at this stage is not so much the absolute relevance of the case, but the seeming cogency of the need for interim interdict" (Burn Murdoch, Interdict in the Law of Scotland, para.143.) The first named pursuer's averments to the effect that there was in existence a trust, as trustee of which the defender held the subjects, were sufficient to make out a prima facia case for the interim order to be continued.

It was submitted that in applying the strict test of relevancy the Sheriff fell into error. The issue at a hearing on interim interdict was not whether there was a relevant case. That could only be decided if the pleadings had been finalised, a rule 22 note submitted, and a debate taken place. What should be considered at the stage of interim interdict was whether there was a prima facie case averred and whether the balance of convenience favoured the continuance of the interdict. The Sheriff had conceded that the balance of convenience did favour the continuance of the interdict. It was submitted that the Sheriff dealt with the hearing as if it were a debate. A hearing on interim interdict and a debate are procedurally very different. In debate there is a record where both sides had set out their stalls following adjustment when perceived interpretations could be addressed. There would also be a rule 22 note in respect of preliminary pleas.

 

15.             It was submitted that the test which the Sheriff had applied of absolute relevance was too high. I was referred to Burn Murdoch on Interdicts, paragraph 143, to the effect that, when considering interim interdicts:-

"The question at this stage is not so much the absolute relevancy of the case as the seeming cogency of the need for interim interdict. In practice, therefore interim interdict is sometimes granted on presentation of a note which, when reconsidered on answers, is refused as irrelevant. That passage was approved in the case of Deane v Lothian Regional Council 1986 SLT 22 at 24B where Lord Wheatley said;" at that stage the question was whether there was a prima facie case that the parent had a title, and in that regard consideration had to be given to the words of Burn Murdoch, that the answer lay not so much in the absolute relevancy of the case as in the seeming cogency of the need for interim interdict."

Lord Wheatley continued at 24L;

"Where, in my view, the vacation judge was basically in error was in the manner in which he approached the question of an interim order. Instead of applying his mind to whether the case presented by the parent at that stage disclosed a prima facie case for an order to be granted, he proceeded to deal with the question on relevancy as it would require to be dealt with at the end of the day. In doing so he disregarded the differences spoken to by Burn Murdoch supra at page 128, in particular that in an interim question only the prima facie aspect can be considered... What the vacation judge seems to me to have done was to consider and decide the case on relevance, and, having decided that the case was irrelevant, he proceeded to hold that there was accordingly no prima facie case at this stage. I accept that there may be a case where the petitioner's pleadings are so clearly irrelevant or incompetent that it could be said that no prima facie case could be made, but that approach is not warranted where, as here, there is clearly a prima facie case and a substantial issue between the parties."

It was submitted that was precisely the situation in this case. The Sheriff had erred in dealing with the case on the basis of absolute relevancy. He ought to have dealt with it on the basis that there was a "prima facie case" or a "case to try" or "a stateable and arguable case."

I was also referred to the dicta of Lord Drummond Young in the case of Kipling v Dunbar Bank PLC 212 CSOH 40 at paragraph 12 where he stated;

"I have not found the issues raised by the present motion to be particularly easy, and in considering them I think it important to keep in mind precisely what the court's task is in an application for interim interdict or interim suspension or an application for the recall of such an order. Five general matters appear to me to be pertinent. First, the courts decision on an interim order is not a conclusive determination of the parties dispute and in particular does not conclusively decide any factual question that arises in that dispute. Secondly, the orders under consideration are merely temporary orders; they are a holding operation, pending determination of the dispute between the parties. Thirdly, because of the two foregoing factors, in any motion for the grant or recall of an interim interdict the court must give consideration to the balance of convenience.... Fourthly, the relative strength of the case is put forward by the parties in averment and argument is important; this means that the court must consider the cogency of the legal and factual case that is said to justify the interim order....Fifthly, the relative strength of the case that is said to justify an interim order must always be weighed with balance of convenience in the sense of likely prejudice.......In every case, however, the critical task for the court will be an evaluation of the cogency of the parties' cases and the likely prejudice to each party according to whether or not an interim order is granted or maintained."

It was submitted that the word cogency was being used in the sense of "intelligible or arguable".

 

16.             In this case it was submitted there was a prima facie case and the balance of convenience was accepted to favour the appellant. In these circumstances I was asked to allow the appeal, recall the Sheriff's interlocutor and continue the interim interdict pending resolution of the case.

 

SUBMISSIONS FOR THE RESPONDENT

 

17.             Counsel for the respondent commended the Sheriff's reasoning to me. He submitted that the Sheriff was entitled to take the view that a trust was not constituted by mere tacit understanding. There required a declaration of trust by the truster with sufficient substance to it to justify its description as a "juridical act". The Sheriff was entitled to take the view that the appellants pleadings as presently framed were irrelevant. The Sheriff had accepted the submission made to him that the creation of a trust required a declaration of trust, which must specify particular purposes and that, in the absence of averments about those matters and about the alleged trusters intention to create a trust, the pursuer's pleadings were irrelevant. The Sheriff was correct in reaching the conclusion that:-

"The criticism made of the pursuer's pleadings goes to the very heart of the basis in which the remedy is sought. It may be that the defect could be cured by amendment so as to aver that that there was a declaration, or (perhaps) an agreement of an enforceable sort or even facts from which the court might be invited to draw an inference that there had been a trust properly constituted. I have doubts about whether any of these things is likely to be possible but, in any event, I have to deal with the pleadings as they stand at present. In my opinion, they lack a relevancy and, hence, cogency. I was referred again to the Scottish Law Commission Discussion Paper paragraph 3.1 "First, the truster must make a declaration of trust" i.e. he declares that he is setting up a trust. It was submitted that the idea of an "understanding" could come into this category was not enough. It had to be averred that the pursuer made a declaration of trust. This was a sine qua non and without it the appellant's case failed."

In page 2 of the Sheriff's Note he stated :-

"An irrelevant writ does not provide a proper basis for a remedy."

The Sheriffs position was that the writ was fundamentally irrelevant.

 

18.               I was referred to the following sources on which I have already commented, namely Burn Murdoch on Interdicts paragraph 143; Lord Drummond Young in Kipling v Dunbar Bank PLC, at paragraph 13; and Deane v Lothian Regional Council per Lord Wheatley at page 24. It was submitted that there were no averments of a declaration of trust by the truster in the pleadings. The writ was accordingly irrelevant. I was again referred to the Law Commission Discussion Paper on Trusts as follows:-

"3.12 Before a trust can arise the truster must have the intention to create a trust. This intention is found in the declaration of trust. It is well settled that no special form of words is necessary in order to create a trust: In particular, there is no need to use the word "trust"."

"3.13....Whether a statement amounts to a declaration of trust is ultimately a question of construction of the language used by the alleged truster."

It was submitted a declaration of trust required to be averred. There was no averment of any such declaration in this case.

 

19.             It was not disputed that the property at Eustonford House was taken in the name of the defender and that 5 Main Street was conveyed by the first pursuer to the defender. The Sheriff required to look at the facts averred in the writ. There was no intimation in either of the conveyances made to the defender that it was made in trust; there were no other documents to state that a trust was being set up. It was submitted in this case that there was no case to try and the Sheriff was correct to reach the decision which he did.

 

20.             Counsel for the respondent then made certain submissions to me to the effect that the decision which the Sheriff had reached was a discretionary one, in these circumstances, the issue was not whether I considered the decision which the Sheriff had reached was correct or not or that I might have reached a different view from the Sheriff on the facts. The issue for me was whether the decision made by the Sheriff was one which was open to him in all the circumstances. In view of the concessions which had been made to the effect that there was no other documentation made by the appellant and that the pleadings contained no averments concerning any declaration of trust, it was submitted that this was a decision the Sheriff was entitled to reach. I could only intervene if I took the view that the Sheriff was wholly wrong in the exercise of his discretion.

 

21.             Put simply, the respondent's case was that the Sheriff was correct to take the view that the appellant's case as pled was irrelevant and to refuse to continue the interim interdict.

 

DECISION

 

22.             I do not think this was a discretionary decision on the part of the Sheriff. The Sheriff decided the application for a continuation of the interim interdict on a point of law. He took the view that the appellant's pleadings were irrelevant. The issue before me is a straight forward one, namely, was the Sheriff correct to come to that conclusion.

 

23.             I respectfully do not agree with the conclusion reached by the Sheriff in this case. He approached the application on the basis that, before he could decide whether or not to continue the interim interdict, there required to be a relevant writ. The proper approach to an application for interim interdict was very concisely set out by Lord McCluskey in the case of Nicol v Blott 1986 SLT677 where he stated;

"Now, in an application for interim interdict, there are always two questions before the court. They have been put shortly in this way; "is there a case to try; if there is, where does the balance of convenience lie. If the defenders have a stateable claim to the area of ground in dispute then I would certainly conclude that the balance of convenience was in favour of maintaining the status quo."

The issue for the Sheriff in this case was whether there was a case to try, or whether, in the words of Lord Wheatley in the case of Deane v Lothian Regional Council supra, there was a "prima facie case for an order to be granted."

 

24.             It is important to appreciate that the hearing before the Sheriff was not a debate. Solicitor for the appellant properly submitted that a debate, where the relevancy of the pursuer's case is under attack, would be after the pleadings had been adjusted and a rule 22 note submitted on behalf of the defender. At the time of this application for interim interdict, the pleadings were not finalised. The averments which require to be scrutinised in respect of Eustonford House are as follows:-

"The first named pursuer instructed his then agents... in connection with the acquisition of an area of undeveloped ground at Ringford, Castle Douglas... Prior to the date of entry the first named pursuer instructed Messer's Williamson & Henry that title to the said subjects should be taken in the name of the defender. The first named pursuer considered it expedient to so direct his then agents with the intention of insulating assets from potential claims that might be made against him in respect of the conduct of his business. It was clearly understood between the first named pursuer and the defender that the defender would hold the said subjects in trust and subject to the first named pursuer's direction....Following settlement of the transaction, the first named pursuer obtaining planning permission for development on the property of the dwelling house now known as Eustonford House, Ringford and a yard for use in connection with his business. The first named purser expended his own capital on construction of said dwelling house and yard. Details of the first named pursuer's expenditure in this regard will be produced.... At all material times the first named pursuer has enjoyed the beneficial use of said dwelling house and yard....The first named pursuer funded the purchase of said property at a price of twelve thousand pounds (£12,000) from his own resources. The first named pursuer has contributed significant capital, estimated to be in the region of £150,000 towards the construction of said dwelling house and yard..."

As far as 5 Main Street is concerned, the purser avers as follows:-

"The first named pursuer was proprietor of the heritable subjects at 5 Main Street, Ringford, Castle Douglas. With the intention of insulating himself from claims that might be made in respect of his business activities, the first named pursuer instructed his then agents, Messer's Williamson & Henry, to convey 5 Main Street into the name of the defender, no consideration was paid by the defender in respect of this conveyance. The costs of such conveyance were met by the first named pursuer. The parties clearly understood that the defender had became registered proprietor of the subjects only as trustee and subject to the pursuer's direction. Although bearing to be absolute, truly the defender's title is as trustee for the pursuer's behoof...."

I take the view that, prima facie, the appellant has made sufficient averments from which it can be inferred that there has been a declaration of trust between the parties it is not in dispute that the property has been transferred to the respondent. In the averments which I have set out above, the appellant has averred what he claims is the factual position from these can be inferred that what the parties were in fact doing was setting up a trust by putting the properties in the name of the respondent subject to the direction of the appellant. The purpose of this was to insulate the properties from the appellant's business creditors. There is a prima facie case. The respondent will have the opportunity to lodge answers in which she can give her version of events and in particular her explanation of why the title to the properties were taken in her name in a situation where she did not provide any capital. Her answers will no doubt lead to adjustment on the part of the appellant. When the pleadings are finalised, if thought appropriate, a rule 22 note would be lodged by the respondent and a debate fixed. It would then be for the Sheriff to decide whether the appellant's pleadings were irrelevant.

 

25.             Having decided that there is a prima facie case, the second question is whether the balance of convenience favours the continuation of the interim interdict. The Sheriff accepts that the balance of convenience did favour the continuation of the interdict. In my view there is no doubt that this is the case. The issue between the parties should be resolved before the premises are sold.

 

26.             I accept that there may be situation in a case, as Lord Wheatley described in Deane v Lothian Regional Council supra where;-

"The petitioner's pleadings are so clearly irrelevant or incompetent that it could be said that no prima facie case could be made...."

In my opinion, that is not the situation in this case.

 

27.             I accordingly take the view that there is substance in the submissions which have been made on behalf of the appellant. I do not accept the submission on behalf of the respondent that this was a discretionary decision made by the Sheriff. In my opinion the appellant's pleadings are not so clearly irrelevant or incompetent that it cannot be said at this stage that there is no prima facie case. On the contrary there is a prima facie case and the balance of convenience favours the appellant.

 

28.             In these circumstances the appeal succeeds. I recall the Sheriff's interlocutor of 15 March 2012 and of new grant interim interdict as craved.

 

29.             I have awarded the expenses of the appeal to the appellant.