[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Duncan (AP) v Duncan [2000] ScotCS 150 (7 June 2000) URL: http://www.bailii.org/scot/cases/ScotCS/2000/150.html Cite as: [2000] ScotCS 150

[New search] [Help]

[1] This action arises out of a dispute between the pursuer, who was the daughter-in-law of the defender, and the defender, in relation to his activities, on her behalf, as her solicitor. The matter has a long history and the pursuer has been involved with a number of firms of solicitors and counsel. By the time the case came before me, she was representing herself.

[2] In the original action the pursuer seeks a count reckoning and payment for the defender's intromissions as her solicitor with her funds during a period 1 December 1976 to 30 June 1990 and for the payment of a sum of money thereanent. She also concludes for damages.

[3] In due course, an order for accounts appears to have been made because in any event, such were lodged and a record was made up upon the objections and answers relating to those accounts, which was adjusted.

[4] The action itself has a long history, but in due course, proceeded to a procedure roll where the defender challenged the pursuer's claims as having prescribed under the Prescription and Limitation (Scotland) Act 1973. The Lord Ordinary allowed a proof restricted to the objections and answers to the limited accounts in question which were subsequently reprinted in a supplementary record apparently upon a view that solicitors' intromissions with a client's fund creates a trust, a proposition upon which I express no opinion. In any event it follows that the pursuer no longer has any competent claim for damages, but only such claims as arise from the accounts that were lodged (7(1), 7(2) and 9(2)) of process and the relevant pleadings in the relevant supplementary record. This is important to bear in mind having regard to the nature of many of the allegations she made before me in evidence and assertions as a party litigant.

[5] The pursuer presented to me at the Bar, three documents she had prepared with supplementary, well articulated documentary productions. These volumes were entitled respectively, "The pursuer's response to defender's accounts", "Pursuer's accounts" and "Defender's accounts in chronological order". Her evidence comprised speaking to or rather reading out the contents of two of these documents which as will be seen, range over many matters.

[6] The substance of the issues which for reasons I will give in due course are all I can competently consider, relates to the intromissions by the defender with the proceeds of the sale of a house known as Tigh-na-Bruaich on Loch Ness side ("the property") in respect of which the pursuer maintained she was the title holder, albeit that she apparently executed a contract of co-partnery undertaking to gift one half of the property to her husband, who was the defender's son. However, as will also be seen, there were a number of schedules attached to the accounts produced in in particular, 9(2) of process and the longest of these at the back of the bundle (e) represents alleged statements of monies due by the pursuer to the defender on the basis of having been expended on her behalf or on behalf of her husband by the defender over many years. A great part of the pursuer's documents responding to the defender's accounts attacks the quantification and indeed existence of most of these figures reducing the balance down to virtually nil by the time the exercise was completed.

[7] The defender was represented by counsel, Miss Joughin and at one stage of the hearing I asked her to explain to me why this particular schedule (e) had been lodged, since it was occupying so much of the pursuer's consideration in evidence. I did not get an entirely satisfactory answer save that central to the issue as will again become apparent, was a standard security granted by the pursuer in relation to the relevant property in favour of both the defender and his wife. As far as I could see, the schedule in question was designed to show the actual continuing indebtedness of the pursuer to the defender, thus making him still her creditor and furthermore, such indebtedness would therefore wipe out any balance that might still be due to her from the defender in respect of the intromissions with the property.

[8] As again will be seen, the pursuer invited me effectively to strike out of the schedule all the items which she challenged, which she did one by one, but I do not intend to embark upon this exercise because it is wholly irrelevant to the issues raised in the pleadings. Counsel only agreed to the evidence coming in on the basis of her position being reserved as to both competency and relevancy and I now sustain that objection without hesitation. None of the items, or indeed the whole thrust of the matter, features in the pleadings other than an averment by the defender that the pursuer is indebted to him. I therefore rule that all the evidence relating to the schedule in question is incompetent and irrelevant, not having been foreshadowed in the pleading. I therefore do not intend to consider it further.

[9] The issue that is raised in the pleadings as I have indicated, relates to the intromissions with the property but before turning to that, I have to refer to the document also produced and read into evidence by the pursuer namely, "Pursuer's accounts".

[10] This appears to be an attempt as can be seen from the schedule at the end to quantify a claim for money by the pursuer which she says is due to her by the defender. It will be seen on page 49 of the document to be the grand sum of £221, 530.12. None of this is foreshadowed in the pleading save where possibly bearing upon the accounts relating to the sale proceeds of the property and certainly the pursuer has no basis in the action, given the limited proof that was ordered, for asserting these types of monetary claim. I hold them again to be irrelevant and incompetent.

[11] In so doing however, I should comment that in so far as the pursuer, for some reason not entirely clear to me, adds into the equation the sum of £160,000 representing insured value of the property and £100,000 as representing residual value of the property neither of these figures could remotely be relevant to any claim since they are both speculative and not based on any established value or more importantly, money that existed. This is unfortunately just one of the many examples of where the pursuer, understandably as a party litigant, has misconceived the fundamental position in which she finds herself.

[12] In these circumstances the only issue with which I have to deal, is the extent to which the defender has to account to the pursuer for his intromissions with the proceeds of sale of the property. It is important, however, to bear in mind that the pursuer recognised that the defender ceased to act for her in the course of 1987 and since the prescription plea that was taken in procedure roll was sustained to the extent of everything being deleted except such acts that might have been carried out by the defender when he was still the pursuer's solicitor, accordingly nothing that happened after the time he ceased to be solicitor was relevant save if it bore upon what he had done while he was her solicitor.

[13] At this point, it is appropriate that I give a brief summary of the factual history.

[14] The pursuer married the defender's son in 1976. Initially they lived in London. It appears that the pursuer's husband had been a serving officer, but having left the armed services, had embarked on a number of business ventures which spectacularly failed and finally was working as an insurance salesman before the couple moved north in 1983, when the particular saga starts. It has to be said, however, that the pursuer's husband continued to indulge in certain business activities which have a peripheral bearing on the issue I have to determine, since it is perfectly apparent to me that he was wholly irresponsible with money and indeed, may well be the cause of much of the pursuer's unhappiness and her financial problems during the relevant period. The defender's husband is said to have disappeared in 1987, leaving bouncing cheques. The parties to the marriage in any event separated in 1990 and have been divorced.

[15] The pursuer owned a house in London and accepts that she agreed to sell it and apply the proceeds to the purchase of the property, with a view to running it as a guest house/country hotel. She maintains that in addition to the sale proceeds from her London House, there were also going to be made available, proceeds of sale of a Duncan family property which was in fact sold. However, on the face of the accounts, the amount of money that was required for the purchase of the property exceeded the free proceeds of the pursuer's house in London and the shortfall was made up by a mortgage and what amounts to a loan by the defender of the balance. One of the pursuer's bitterest complaints was that she never accepted or knew that the defender had bridged the gap so to speak, with his own money, but I am entirely satisfied upon the accounts that that is exactly what happened. It therefore follows that the defender had an entitlement to be re-paid either by the pursuer and her husband or from the sale proceeds of the house if the property came to be sold. This again, was another matter of concern to the pursuer throughout her evidence.

[16] In 1985, the house burnt down. It was insured, but this raises another question with which I shall have to deal in due course. Thereafter, the parties lived in a caravan on the site while they developed the remaining undamaged part of the site with a view to running it as a bar. However, the pursuer maintained this was entirely her husband's activity in marked contrast to the previous business and she had no financial or actual interest in it apart from being, as she maintained, still the title holder of the property.

[17] Again, surrounded by controversy, there is in existence a standard security granted in favour of the defender as an individual and his wife, in the sum of £60,000 in respect of the property. The pursuer's position in respect of this security has changed from time to time. At various stages, she has maintained that although she signed the document, she only did so on the second page. She understood the first page of the whole document related to some bond of caution for a litigation in Dumbarton Sheriff Court. At other stages in the correspondence, and before me, she accepted that she had signed the security without appreciating what it meant but it is highly significant that she did not succeed in persuading, if that is the way I should put it, the solicitor from whom she sought advice once the defender had ceased to act for her, to take any steps to prevent the standard security being called up. Indeed she does not seem to have asked him to take the matter up with the defender. Furthermore, it was her clear evidence that she consented to it being called up by the defender, which was the way in which it was determined within the family to realise money to deal with mounting debts that the business was incurring both before and after the fire. A bank account with Lloyds in Aberdeen had an overdraft of approaching £100,000.

[18] There is little doubt to my mind that this security is ex facie valid and I also have grave doubts about the accuracy, to put it mildly, of the pursuer's evidence as to how it came to be signed and what she thought it to be. It seems to me, and I so hold proved, that taking the standard security was a perfectly sensible way for the defender to protect himself with regard to indebtedness that he had incurred in the purchase of the property and secondly calling it up was a sensible way to deal with the mounting financial crisis facing the whole family.

[19] Before going further, it is important to note that since the property was insured for fire damage, at least in the sum of £120,000, nobody, least of all the pursuer, could account for the proceeds of the claim upon the policy, which was undoubtedly made after the fire, beyond the settling of the existing mortgage with the Alliance & Leicester in the sum of approximately £47,000. The pursuer's husband purchased a boat, apparently as part of another commercial exercise with a view to trips on the Loch. Again, the pursuer's position in this respect was equivocal. At one stage at least, she seemed to accept in correspondence that the boat had been paid for out of the free proceeds of the insurance policy, but before me in evidence, she denied knowing anything about it. I only mention this because once again it reveals the extent to which the dead hand of the pursuer's husband appears to have been on the tiller of her financial affairs whether she knew about it or not and this I suspect to be the real substance of her understandably bitter attitude toward her husband's family as manifested in this action.

[20] Suffice it to say, it appears that there was no money available from the insurance proceeds to fund the re-development of the property and hence the overdraft in Aberdeen rose rapidly. It was one of the pursuer's incidental complaints that much of the schedule, to which I have already referred, relating to alleged indebtedness over the relevant period, related to the building works upon this project.

[21] It is also important to bear in mind that there was an additional standard security afforded to a firm called Albion Construction. The pursuer accepted she knew of the existence of this loan to the extent of £20,000. There was also a secured loan in favour of the Highlands & Islands Development Board in respect of which she professed to know nothing and a secured loan to Tennent and Caledonian Breweries, again in respect of which she claimed to have no interest because it related to the bar.

[22] In due course, the property was sold and as at page 9 of the Record there is set out allegedly an accounting for the free proceeds. It has to be noted at once that if the Albion claim is taken into account, the sum is effectively reduced to a very small figure indeed. The matter is carried further on page 11 of the Record, bearing in mind that these are the pursuer's pleadings, which produces a net figure finally of £27,035. It has therefore to be noted that on page 8 of the Record on the relevant schedule, the claim should be initiated at the sum of £27,035 and not the sum stated of £42,035. It has also, however, to be stated that the pursuer in evidence accepted that the first call on these free proceeds should be Albion and that accordingly her claim to them was very limited, putting aside any entitlement of the defender to recover his initial input.

[23] On this basis alone, this part of the claim would be destroyed, but further investigation reveals an even more fundamental question with which I shall deal in due course.

[24] The balance of the claim is made up with a claim from the free proceeds of the insurance policy to which I have made reference but there is absolutely no evidence to suggest the defender ever intromitted with the fire policy proceeds. Loss adjusters were involved and as far as I am able to establish, despite the pursuer's denial of any knowledge of the matter, the insurance proceeds were paid ostensibly to the couple, but probably again to her husband, probably thereafter being used to purchase this boat. I take with some scepticism the pursuer's denial that she knew anything about the source of funding for that boat.

[25] On this basis the claim as stated in the Record is defeated on the pursuer's own evidence, but I would go further and hold as satisfied, in terms of an accounting, the obligation to account with the proceeds of sale as to be found on page 4 of the accounts.

[26] It was this statement with which the pursuer took basic exception stating it was not true. However, if it is compared with the original statement of the intromissions with the purchase price, it becomes entirely clear what happened with the sum obtained for the sale of the property, namely £135,000. In particular, the overdraft at Lloyds Bank was obliterated and various fees settled together with the loan from the Highlands and Islands Development Board. Thereafter it is to be noted that the sum of £10,750 was paid to Mr J D Duncan's bank, (the husband) presumably upon the basis that in terms of his entitlement, he was entitled to at least half of the free proceeds. The sum of £10,500 was paid to the defender in settlement presumably of his original advance and to Mrs Duncan (Senior) in respect of a separate loan of which the pursuer admitted she knew the existence. I am suspicious to some extent as to why a payment was made to the pursuer's husband's bank and no payment was made to her but the correspondence would seem to suggest that this was all that was available for both Mr and Mrs Duncan (junior) and the pursuer herself accepted that she did receive something, approximately £1,500, in cash from her husband. This, in my view, is just another example of where it is my clear opinion that the pursuer was a victim of her husband's devious dealings. What is, however, abundantly clear is that there were no free proceeds when the Albion loan was taken into account, and indeed it is my understanding that it was only after that matter had been dealt with by some sort of settlement, the terms of which were not disclosed to me, that any disbursements were made at all. The was some suggestion which I did not entirely follow, that that security was, in due course, reduced. However it follows that even if the Albion loan is left one of the equation, the net sum available after settlement the Duncan's loans (Mr and Mrs Duncan Senior) was paid to the pursuer's husband, and any claim, thereafter, she has is against him and not the defender.

[27] The well documented correspondence and documents produced by the pursuer, make it clear that she complained to the Law Society as to the professional conduct of both the defender and the solicitor to which she subsequently sought advice when the defender resigned from acting at the time of the calling up of the security. The documentation reveals that the defender was reprimanded in respect of failing to adhere to the conflict of interest rules with regard to the fact that he was both the pursuer's solicitor and her heritable creditor at his own instance.

[28] Be that as it may, it does not bear upon the essential issue which I have determined within the limits of the pleadings. I have no doubt that the pursuer's problems with her various solicitors are largely created by the fact that, perhaps understandably she has a large quantity of grievances in relation to her financial affairs, which essentially stem from the fact that her involvement in the Tigh-na-Bruaich property exercise cost her the value of her home in London. With that, I can completely sympathise, but it has not enabled me to grant her remedies far beyond the scope of this action, not least in the claims that she purports to make in her "Pursuer's accounts". Nor is it of any relevance to my mind for me to set about endeavouring to validate or otherwise the numerous entries alleging payments by the defender on behalf of the pursuer over the relevant years, upon which in any event I have already ruled. As I have already indicated, and indeed as she confirmed in her final submission to me, her real basis for grievance is the extent to which she was allegedly kept in the dark by the defender, who in turn she strongly suspects, was covering for the impecuniosity or financial stupidity of his son. It is therefore not necessary for me to determine the extent to which the pursuer may still be indebted to the defender since no positive claim is made by him against her in this action.

[29] In these circumstances, and for these reasons, the pursuer's claim is hopelessly misconceived and in any event fails upon the very facts presented to me by her. The defender did not give evidence. I understand he is elderly, and extremely deaf, but I do not criticise counsel for taking that position. It was entirely appropriate having regard to the state of the case with which the defender was faced so far as relevant to the pleadings.

[30] In these circumstances I do not consider that there is any further accounting required of the defender in relation to the relevant intromissions such as would leave of a sum of money due to the pursuer from him. The action in so far as seeking monetary orders also fails.

[31] I will accordingly give effect to the fifth plea-in-law for the defender, repel the pursuer's pleas in law and grant decree of absolvitor.