Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2011] CSOH 144
A792/08	OPINION OF LORD UIST in the cause EWEN ROSS ALEXANDER as Trustee on the sequestrated estates of DAVID GEORGE POCOCK Pursuer; against SKENE INVESTMENTS (ABERDEEN) LTD AND OTHERS Defender: ­­­­­­­­­­­­­­­­­________________

Pursuer: A M Clark QC, Barne; Ledingham Chalmers LLP

Fourth Defender: Primrose QC, A N McKenzie; Balfour + Manson LLP

Seventh Defenders: Lindsay; DLA Piper LLP

1 September 2011

[1] In this action, which called before me on the procedure roll for debate on certain of the preliminary pleas of the relevant parties, the pursuer seeks eight declarators and four decrees of reduction. He seeks those remedies as a result of a series of conveyancing transactions flowing from an alleged fraud on the part of the bankrupt on whose estates he has been appointed permanent trustee. The property in question ("the property") consists of the semi-basement flat and the ground floor flat at 5 Queen's Gardens, Aberdeen. The basic sequence of events, as averred by the pursuer, is briefly as follows.

[2] By missives dated 6 and 7 July 2000 Messrs Jamieson and Cradock on behalf of Mr Pocock offered to buy and Messrs Ledingham Chalmers on behalf of Skene Investments (Aberdeen) Limited (the first defenders) agreed to sell the property to Mr Pocock for £207, 125. A disposition (to which a plan of the subjects was annexed) conveying the subjects was executed by two directors of Skene and delivered to Jamieson and Cradock on settlement of the transaction. Inspection of the books of Jamieson and Cradock by accountants acting on behalf of the Law Society revealed various irregularities and also breaches of the Solicitors (Scotland) Accounts Rules 1997. In August 2002 the Law Society petitioned for the appointment of a judicial factor on the estates of Russell Taylor trading as Messrs Jamieson and Cradock and Ms Morna Grandison was appointed interim judicial factor on 9 August 2002, with her appointment being confirmed on 11 September 2002.

[3] The pursuer was appointed permanent trustee on the estates of Mr Pocock in December 2003. He thereafter discovered from the records available to him that in a number of transactions Mr Pocock had acquired a heritable property with the assistance of Jamieson and Cradock as his solicitors and the relevant disposition in his favour had not been registered. On checking the position with the Keeper of the Registers of Scotland ("the Keeper"), he ascertained that (i) the disposition and plan of the property had not been registered; and (ii) that a second disposition, which purported to be a disposition of the property executed by Skene in favour of Howemoss Properties Limited (the second defenders), had been lodged with the Keeper. I shall refer to the disposition in favour of Mr Pocock as the first disposition and to the disposition in favour of Howemoss as the second disposition. He also ascertained that further transactions had taken place in reliance on the validity of the second disposition. Howemoss executed four standard securities over the property in favour of Woolwich Limited (the third defenders). Howemoss also disponed the semi-basement flat to Sinclair Brebner (the fourth defender) on 17 December 2002 and Mr Brebner granted a standard security over that flat in favour of the Nationwide Building Society (the sixth defenders) on 29 November 2002. Howemoss also disponed the ground floor flat to Colin Torr (the fifth defender) on 21 November 2002. Mr Torr granted a standard security over that flat in favour of Abbey National plc (the seventh defenders) on 18 February 2008. The deeds relating to these additional transactions have been lodged with the Keeper for registration, but he is awaiting clarification of the status of the first disposition before he makes any decision about the status of the second disposition and the other deeds flowing from it. The dispositions by Howemoss in favour of Mr Brebner and Mr Torr were signed by Mr Pocock as a director of Howemoss.

[4] The trustee avers that Skene did not execute the disposition in favour of Howemoss. He believes and avers that it consists of an unauthorised alteration of the first disposition by Jamieson and Cradock, the name of the purchaser and the purchase price having been changed without the proper authority of Skene as sellers and that, as such, it is a nullity. He further believes and avers that the first disposition was destroyed or lost in the process of its unauthorised alteration and conversion into the second disposition. The second disposition being null and void, Howemoss had and have no right in the property over which they would be able to grant a standard security. The trustee therefore seeks reduction of the second disposition and of the four standard securities granted by Howemoss in favour of Woolwich (conclusions 3 and 6) as well as declarator of the tenor of the first disposition (the principal of which cannot be found and a copy of which was found in the file of the solicitors for Skene relating to the sale of the property), declarator that the copy plan annexed to the copy of the first disposition is an accurate copy of the principal plan that was annexed to the first disposition, declarator that Skene did not execute the second disposition and declarator that the second disposition and the standard securities granted over the property by Howemoss were granted a non domino (conclusions 1, 2, 3 and 5 respectively). Further, on the basis that Howemoss had no right to dispone the property to third parties, he seeks declarators that the dispositions by Howemoss to Mr Brebner and to Mr Torr and the standard security granted by Mr Brebner in favour of the Nationwide Building Society were granted a non domino (conclusions 7, 8 and 9), together with reduction of the standard security (conclusion 10). He also seeks declarator that Mr Torr's standard security in favour of Abbey National was granted a non domino and reduction of that standard security (conclusions 11 and 12).

[5] The trustee avers that he does not know the purpose of the alteration of the first disposition but he believes that it might have been to avoid payment of stamp duty by Mr Pocock on the original purchase of the property by him from Skene. He has ascertained that similar alterations were made to dispositions of four other properties in Aberdeen purchased by Mr Pocock with the assistance of Jamieson and Cradock. He believes that in each case the original disposition was destroyed in the process of creating the forged replacement.

[6] Several points were argued in support of the preliminary pleas for Mr Brebner and Abbey National, and I propose to deal with each of these in turn.

Whether there are sufficient averments for a case of proving the tenor, in particular for proving the casus amissionis

Submission for Mr Brebner and Abbey National
[7] The submission for Mr Brebner, which was adopted for Abbey National, was that it was incumbent on the trustee to aver and prove not only that the first disposition existed, but that it was lost or destroyed in some way that did not affect its validity or imply extinction of the right of which it was the evident. The law was set out with admirable clarity in Walker and Walker, The Law of Evidence in Scotland (3^rd Ed, 2009) at p 377, para 20.4.2 as follows:

"To obtain decree the pursuer must aver and prove (1) the execution of the document, (2) its tenor or terms, and (3) the casus amissionis (the circumstances of the loss). But these three matters may not be wholly independent. For example, if it is proved that the document was destroyed by someone with an adverse interest, who had no right to destroy it (the casus amissionis), the burden of proving its execution and tenor may be reduced, and strong evidence that a deed of the nature alleged was executed may lead the court to accept slight evidence of its tenor. Clear proof of authenticity and tenor reduces the burden of proving the casus amissionis, and vice versa. It is therefore unwise to isolate the evidence on one matter in a previous decision and assume that the same result will follow in another cause where the evidence on that matter is similar. The evidence on the other matters may be different."

[8] In this case the trustee could not on any view establish that the first disposition had been lost or destroyed in a situation not intended to affect its validity. He averred (in condescendence 6 at p 26D) that the purpose of the alteration of the first disposition was not known although it was believed that it may have been to avoid payment of stamp duty by Mr Pocock on the original purchase of the property from Skene. The circumstances were not innocent as avoidance of stamp duty amounted to fraud. Mr Pocock intended to destroy, or be involved in the operation, to destroy the first disposition so that it was no longer valid: he wanted the world to believe that the disposition was not from Skene to him personally, but instead to Howemoss. The situation here was very far from that where a deed was lost or destroyed in circumstances not intended to affect its validity: it was analogous to a testator revoking his will by tearing it up. In Winchester v Smith (1863) 1M 685 a mutual settlement of spouses in favour of the survivor, and providing for the distribution of the means and estates "of the said longest liver" was found, on the death of the husband, in the repositories of himself and his wife, with the wife's signature and that of the instrumentary witness cancelled. In an action of proving the tenor at the instance of a party having a spes successionis under the provision relative to the estate of the survivor the widow deponed that she had cancelled the signatures in a fit of passion without her husband's knowledge. It was held, in conformity with the opinions of the majority of the judges of both Divisions, that it was incumbent upon the pursuer to prove that the cancellation took place in some way which did not affect the validity of the deed, that the uncorroborated testimony of the widow was insufficient, and, therefore, that the pursuer had failed to prove the casus amissionis. Lord President McNeill, and Lords Curriehill and Ardmillan, having accepted that the deed had been executed by the granters and as having been of the tenor alleged, stated at p 689:

"But that is of no avail in such an action as the present, unless there be likewise sufficient proof of what is technically called the casus amissionis, - and which, as we understand the phrase, means not only that the writing has been actually destroyed or lost, but that its destruction or loss took place in such a manner as implied no extinction of the right of which it was the evident.

Such casus amissionis requires to be supported by much stronger evidence in some cases than in others. For example, if the writing be a disposition of land, of which the tenor is satisfactorily established, and which was followed by infeftment and long and uninterrupted possession, and the instrument of sasine on which is produced, a comparative slight proof of the casus amissionis may be sufficient. But if it be such a writing as is usually cancelled or destroyed when it has served its purpose - as, for example, a bill of exchange or a promissory note, or a personal bond; and if it has been destroyed, or has been found in the hands or in the repositories of the granter actually cancelled, the presumption is that the right of which it had originally been the evident no longer subsists; and very clear evidence is requisite to overcome the presumption. The same is the case when the right, of which the cancelled or destroyed writing, if it were effectual, would be the evident, is a revocable one; because such cancellation or destruction is itself an effectual mode of executing a power of revocation; and when such writing has actually been destroyed, or has been found cancelled, in the hands, or in the repositories, of the granter after his death, the presumption is that such destruction or cancellation took place in the exercise of his power of revocation, and that presumption can be obviated only by very clear evidence to the contrary. In order, therefore, to judge of the sufficiency of the evidence of the casus amissionis of a writing in an action of proving the tenor, the nature of the writing must be fully attended to."

[9] The presumption enunciated by the three judges in Winchester was applied by Lord Guthrie in Clyde v Clyde 1958 SC 343 when he dismissed as irrelevant an action of proving the tenor of a will. The averments were to the effect that the testator had executed a formal will in favour of a nephew who was his partner in a building contractor business. He deposited the will with his solicitors, who returned it to him at his request twelve years later. After his death some seven years later the principal will could not be found and he left no other testamentary writing. Until his death he remained on good terms with his nephew, to whom he gave no indication that he intended to alter the will in the nephew's favour. Lord Guthrie held that the facts averred by the pursuer were not sufficient to rebut the presumption that the testator had destroyed the will animo revocandi.

[10] The present case was one where very strong evidence was required to rebut the presumption since the deed was destroyed deliberately so that it would not look to the world that Mr Pocock was the proprietor of the property. The activities narrated in the pleadings could be taken to imply the revocation of the personal right of which the disposition was the evident: once it was destroyed it was no longer valid. The presumption enunciated by the judges in Winchester was not restricted to testamentary writings. In McKinnon's Trustee v Bank of Scotland 1915 SC 411 a cautioner (Mr Zollner), desiring to terminate his liability to a bank under a limited guarantee, paid to the bank the full amount for which he was liable. The bank, having written on the back of the letter of guarantee a receipt for the payment, which contained a reservation of its right to claim on the estate of the principal debtor (Mr Mackinnon) for the full amount of his indebtedness, delivered the letter of guarantee to the cautioner, who intentionally destroyed it. The principal debtor having thereafter become bankrupt, the bank made a claim for a ranking in the bankruptcy proceedings, and a question having arisen as to the amount for which the bank was entitled to rank, the bank sought to prove the terms of the letter of guarantee and receipt. It was held by the Second Division that there was no casus amissionis which could entitle the bank to prove the tenor of the destroyed document. Lord Salvesen stated at pp 417-9:

"In my opinion there was nothing in the terms of the settlement between Mr Zollner and the bank which in any way disentitled him from dealing with the letter of guarantee and the receipt endorsed upon it in the manner in which he did. There was no agreement that Mr Zollner should hold the letter of guarantee on behalf of the bank; and no condition was attached to the discharge which the bank granted to him. His sole object appears to have been to ascertain at the date of settlement the amount which the bank could claim against him under the letter of guarantee; and he had apparently no intention of making any claim against the bankrupt. Assuming Mr Mackinnon to be still solvent at the time, I do not doubt that Mr Zollner had a good claim against him to the extent of £408; but this was a claim which Mr Zollner might waive if he chose, and there could be no better evidence of his having done so than his destruction of the document on which his claim would naturally be founded. Supposing that at a later date he had changed his mind and had found it necessary to prove the tenor of the destroyed guarantee in order to make such a claim, would his own deliberate destruction of the document have been treated as a casus amissionis entitling him to such proof? I am of opinion that it would not. It would have been a different matter if the document had been destroyed by mistake, as, for instance, if he had destroyed it intending to destroy some other document; but there is nothing of that kind here. ...

If I am right so far, it appears to me that the bank are in no better position. No doubt if Mr Zollner was in any sense a trustee for them in holding the document in question, or was under any obligation to make it forthcoming on their demand, his unauthorised destruction of the document would be a proper casus amissionis which would entitle them to a proof of its contents. I cannot, however, view the transaction in this light. As between the parties to the guarantee it was treated as at an end, and the only document of debt which the bank held was delivered up to the guarantor on his satisfying their full claim against him. When Mr Zollner received it he was entitled to deal with it as he pleased. Whatever reservations the bank made in their receipt did not concern him. ...

The matters with which I have been dealing necessarily to some extent enter into the merits of the dispute; but, if my view is well founded, it was incompetent for the bank to prove the tenor of the guarantee in question. If so, there is an end of the case ..."

Lord Hunter and the Lord Justice-Clerk agreed with Lord Salvesen. Lord Hunter stated at p 424:

"The evidence in the present case satisfies me that the bank's failure to make a relevant averment of the casus amissionis arose from the circumstance of its being impossible for them to do so."

[11] In the present case Mr Pocock could never have succeeded in proving the tenor of the first disposition because he had deliberately destroyed it. Just as the bank in Mackinnon's Trustee were never in a better position than Mr Zollner in seeking to prove the tenor of the document, so in this case the trustee was in no better position than Mr Pocock: it made no difference that the pursuer as a trustee in bankruptcy acted for the general body of creditors. There still had to be proof of the casus amissionis, which there could not be on the averments of the trustee. Reference was made to Kerr v Kay (1830) 8S 1008 and Pollok v Jones' Heir (1899) 1F 394. The activities narrated in the pleadings could be taken to imply the revocation of the personal right of which the disposition was the evident: once it had been destroyed it was no longer valid. Gretton and Reid on Conveyancing (3^rd Ed), under reference to Hume, Commentaries, I, 159, pointed out at para 11-25 that alteration of a deed after execution amounted to the crime of forgery. Section 5(1) of the Requirements of Writing (Scotland) Act 1995 provided that an alteration of a document required by section 1(2) of that Act otherwise than as mentioned in paragraphs (a) and (b) of section 5(1) shall not be formally valid. The second disposition was therefore not valid and the right granted by the first disposition had been extinguished by its destruction. Mr Pocock, by destroying the first disposition and creating the second one, must be taken as having abandoned his right to the property to Mr Brebner. Mr Pocock had deliberately never presented the first disposition for registration, it being his intention that Howemoss should appear to the world as the owner of the property.

Submission for the trustee

[12] The submission for the trustee in response was that the circumstances of the loss, the tenor of the deed and its authenticity were matters for evidence and proof. There had been proofs in related actions of proving the tenor before another Lord Ordinary. It was not accepted that if the trustee could not prove the tenor of the deed that was the end of his case. It was possible that Skene would execute a new disposition in favour of Mr Pocock. Howemoss was a non-owner. The foundation writ for the titles of Mr Brebner and Mr Torr had been granted a non domino and was a nullity. All parties involved were vulnerable to Skene, who were still the infeft proprietors, going into liquidation.

[13] In Winchester at p 689 the judges had pointed out that in order to judge of the sufficiency of evidence of the casus amissionis of a writing in an action of proving the tenor "the nature of the writing must be carefully attended to". In Clyde v Clyde there was a presumption that the testator had revoked the will by destroying it. In Mackinnon's Trustee Mr Zollner had wished to be done with the whole transaction. In Pollok Lord Kinnear at p396 declared it to be

"quite settled law, and quite reasonable, that the tenor of a document not extinguishable by destruction may be proved with much slighter evidence of the accident by which it was lost than the tenor of a document which creates a right that may be extinguished by a debtor or granter or their representatives, such as a bond."

[14] In this case Skene did not execute the second disposition. It was averred by the pursuer (condescendence 6, p 26D) that the purpose of the alteration of the first disposition was not known although it was believed that it might have been to avoid payment of stamp duty by Mr Pocock on the original purchase of the property by Skene. There was no averment by Mr Brebner or Abbey National that the first disposition was obtained by Mr Pocock by fraud and no suggestion that his estate was enlarged by the purchase. The averments of fraud were based solely on the stamp duty point. There were no missives or disposition relating to the sale from Mr Pocock to Howemoss. In Smith v Smith's Trustees (1904) 6F 775 the court granted declarator of the tenor of an ante-nuptial marriage contract and at the same time intimated that the declarator did not preclude the defenders from challenging the validity of the deed or from maintaining that the spouses were entitled to destroy it and had done so. The Lord Justice-Clerk stated at p777 that the granting of the declarator would

"not in any way foreclose the defenders from challenging the validity of the deed, the existence of which has been set up in this action."

Lord Trayner stated at pp 777-8:

"The pursuer avers that the deed in question was executed and that it had been destroyed by the parties who executed it. It is not disputed that these facts - the execution and destruction of the deed - and also its tenor, have been proved, and that entitles the pursuer to the decree which he seeks. But that only puts him in the same position as if he had produced the original deed. Our decision does not affect any question as to its validity or effect, nor does it preclude the defenders from maintaining that the persons who destroyed the deed were entitled to do so. All such pleas are still open to the defenders."

[15] The question whether Mr Pocock deliberately destroyed his own right was a matter for proof. Only the first page of the first disposition had disappeared. Proving the tenor was not the end of the story. There was no suggestion that Skene had destroyed or altered the grant of property effected by the first disposition. It was averred by the trustee (condescendence 2, p 17B-E) that missives had been concluded between Skene and Mr Pocock in terms of which they agreed to sell the property to him and that a disposition conveying the property to him was signed by two directors of Skene and delivered to his solicitors on settlement of the transaction. In these circumstances, the question had to be asked, what was the effect of destroying the deed? It was surely not to throw away £207,125. Mr Pocock's intention in destroying the deed was critical. He wished to retain ownership and then pass it on. For all that was known, it could have been a fraud by the solicitor in order to keep the money payable as stamp duty. It was all a matter for proof.

Discussion and conclusion

[16] It seems to me that the question which arises from the submissions on this point is whether an averment by a pursuer that a deed was deliberately destroyed in itself precludes him from seeking to prove the tenor of the deed. Having considered the authorities to which I was referred, I am clearly of the opinion that it does not. It seems to me that whether such an averment precludes proof of the tenor of a destroyed (or damaged) deed depends on the nature of the deed, by whom it was destroyed and for what purpose. Plainly, in the case of testamentary writings, deliberate destruction by the testator implies revocation of the will by him, but that is only a presumption which can be overcome by evidence. For example, if the testator tore up his will under the mistaken impression that it was another document which he intended to destroy, it would be permissible for the tenor of the will to be proved. If the will were destroyed by a third party in order to defeat the rights of intended beneficiaries it would be possible to prove its tenor. In the case of non-testamentary writings there must be many situations in which the tenor of a deed which has been deliberately destroyed can be proved. If a third party has maliciously destroyed a deed it must be possible for its tenor to be proved in order to establish the rights and duties of the parties to it. In this case I see no reason why there should be any legal bar to Mr Pocock's trustee in bankruptcy proving the tenor of a disposition in favour of Mr Pocock, for which Mr Pocock paid a purchase price of £207,125, which he claims Mr Pocock deliberately destroyed in order to conceal the fact that he had purchased the property. Indeed, I take the view that would be a denial of justice to the trustee if he were not allowed to prove the tenor of the disposition. I therefore reject the submission for Mr Brebner and Abbey National on this point.

The tantum et tale principle, personal bar and fraud of the bankrupt

Submission for Mr Brebner

[17] The submission for Mr Brebner was that Mr Pocock's trustee in bankruptcy took Mr Pocock's estate exactly as it stood in the hands of Mr Pocock at the time of sequestration (tantum et tale). The operation of that principle had the effect of denying the trustee the remedies of proof of the tenor of the first disposition and reduction of the subsequent writs. This in turn gave rise to two separate legal concepts, namely, (1) personal bar; and (2) the effect of the fraud of the debtor.

[18] It was first of all necessary to consider the nature of Mr Pocock's right in the property at the time of his sequestration. The relevant statutory provision was section 31(1), (3) and (8) of the Bankruptcy (Scotland) Act 1985 ("the 1985 Act") as applicable at the material time. The relevant provisions read as follows:

"(1) Subject to section 33 of this Act and section 91(3) of the Pensions Act 1995, the whole estate of the debtor shall vest as at the date of sequestration in the permanent trustee for the benefit of creditors; and -

(a) the estate shall so vest by virtue of the act and warrant issued on confirmation of the permanent trustee's appointment; and

(b) the act and warrant shall, in respect of the heritable estate in Scotland of the debtor, have the same effect as if a decree in implement of sale, as well as a decree for adjudication for payment and in security of debt, subject to no legal reversion, had been pronounced in favour of the permanent trustee.

(3) Where the debtor has an uncompleted title to any heritable estate in Scotland the permanent trustee may complete title thereto either in his own name or in the name of the debtor, but completion of title in the name of the debtor shall not validate by accretion any unperfected right in favour of any person other than the permanent trustee.

(8) In subsection (1) above, subject to section 31A of this Act, the 'whole estate of the debtor' means, subject to subsection (9) below and to sections 71(10B) and 78(3B), his whole estate at the date of the sequestration, wherever situated, including -

(a) any income or estate vesting in the debtor on that date; and

(b) the capacity to exercise, and to take proceedings for exercising all such powers in, over or in respect of any property as might have been exercised by the debtor for his own benefit as at, or on, the date of sequestration or might be exercised on a relevant date (within the meaning of section 32(10) of this Act)."

[19] On the trustee's averments the first disposition was never recorded in the Register of Sasines or registered in the Land Register. Accordingly, Mr Pocock had never obtained a real right in the property and therefore had only a personal right. That distinction had important consequences, particularly in relation to the doctrine of personal bar pleaded against the trustee. Mr Pocock would have been personally barred from challenging the validity of the second disposition. It could be said that when he signed that disposition on behalf of Howemoss his conduct justified Mr Brebner in thinking that Howemoss was conveying the sub-basement part of the property to him (Mr Brebner) and that Mr Pocock was therefore not disputing the right of Howemoss to do so. Mr Brebner acted upon this belief to his prejudice by paying the purchase price for his flat. Mr Pocock could not therefore have averred against Mr Brebner that a different state of facts existed, namely, that he personally, and not Howemoss, had the right to dispone the flat. Mr Pocock would have been personally barred from succeeding in any of the conclusions in the present action. The question then became whether that bar passed to the trustee. The leading case on the doctrine of personal bar was Gatty v Maclaine 1920 SC (HL) 1, in which Lord Chancellor Birkenhead enunciated the doctrine of personal bar at p 7 as follows:

"Where A has by his words or conduct justified B in believing that a certain state of facts exists, and B has acted upon such belief to his prejudice, A is not permitted to affirm against B that a different state of facts existed at the same time."

[20] The principle of tantum et tale was an equitable one. It was discussed in the Scottish Law Commission Report on Bankruptcy and Related Aspects of Insolvency and Liquidation (Scot Law Com No 68) dated 25 February 1982 in the following passage at p 164, para 11.22:

"The property of the bankrupt which vests in his trustee is subject to certain exclusions and qualifications, generally expressed in the maxim that the trustee takes the property tantum et tale as it stood in the person of the bankrupt. The principle - which is amply vouched by authority - rests upon the common law. It is an equitable principle. Accordingly, save in respect of matters where the trustee has a title superior to that of the bankrupt (for example, under the rules relating to gratuitous alienations and fraudulent preferences), the property which vests in the trustee does so vest subject to any qualifications or rights which affect it or which have arisen from the conduct of the bankrupt. So where property has been acquired or dealt with fraudulently by the bankrupt, the property rests in the trustee subject to the rights of the persons who have suffered from the fraud (Colquhoun's Tr v Campbell's Trs (1902) 4F 739). But it should be noted that the trustee, being an adjudger, is not bound by contractual obligations relating to the heritable property of the bankrupt - see Gibson v Hunter Home Designs Ltd 1976 SLT 94. Likewise, rules of law which regulated the rights of creditors of the bankrupt inter se prior to the sequestration are applicable in a question with the trustee when the property of the bankrupt vests in him. It would, we think, be unwise to put the adaptability of the principle at risk by attempting to make it the subject of express statutory statement."

[21] Goudy on Bankruptcy (4^th Ed, 1914) expressed the matter thus at p 249:

"The right which the trustee takes in the bankrupt's property is limited by all equitable exceptions pleadable against the bankrupt. This rule is commonly expressed by saying that the trustee takes the estate tantum et tale as it stood in the bankrupt. Thus, property acquired by the fraud or deceit of the bankrupt cannot be retained by the trustee. So, where the bankrupt, acting in a fiduciary capacity as trustee, agent or factor, has inmixed funds of his constituent with his own, the trustee must restore them if they are capable of being disentangled from the mass. Again, where one creditor held a catholic security over the estate, both heritable and moveable, of the bankrupt, and another creditor held a secondary security over the heritage, and the heritage was insufficient to meet both debts, it was held that the secondary creditor's right to demand that the catholic creditor should go against the moveable estate primo loco was not affected by the vesting in the trustee. So, in the case of rights vested in the bankrupt in respect of contracts, if the contract be adopted by the trustee, he must take up at the same time all the liabilities of the bankrupt relating thereto. It has also been held that the trustee was barred from founding jurisdiction by arrestment against a debtor to the bankrupt on the ground that the fund arrested could not have been arrested by the bankrupt himself without a breach of trust, and that the personal bar pleadable against him operated also against the trustee. Again, a trustee's right to demand a feu charter, in implement of a contract entered into by the bankrupt under articles of roup was decided to be subject to the right of a bondholder under a bond granted by the bankrupt while holding on a merely personal title under a defective charter erroneously supposed to give him a valid feudal title to the subjects."

[22] The existing law was correctly stated in the following statement by Lord Chancellor Cranworth, concurred in by Lord Brougham, in Edmond v Gordon (1858) 20D (HL) 5 at p 6:

"With respect to an equitable right of this nature - a personal right to land - upon what principle is a trustee under a sequestration not to take that tantum et tale as the bankrupt held it? It is a mere personal right in the bankrupt, and so, I should have thought, it would be exactly the same personal right in the trustee under a sequestration."

[23] In Halifax plc v Gorman's Trustee 2000 SLT 1409 Lord Eassie said at p 1418L - p 1419C:

"The main ground of challenge was to the effect that reliance in this context on the principle of tantum et tale could only be placed where the bankrupt had been guilty of fraud. While it is no doubt true that the acquisition of an item of estate by fraud on the part of the bankrupt is a clear example of the principle whereby the victim of the fraud may vindicate that item, I am not persuaded that the doctrine is limited to such cases. Having regard to the materials placed before me, which included Goudy on Bankruptcy at p 249 and the application of the rules regarding catholic and secondary creditors (Littlejohn v Black (1855) 18D 207), I do not see the principle as being so narrowly confined. The Scottish Law Commission's report (para 11.22) points to the undesirability of giving statutory expression to the principle, lest that endanger its adaptability and flexibility. It appears to me that any misrepresentation or other acting by the debtor which would otherwise vitiate his holding of the item of estate in question had his estate not been sequestrated may come within the scope of the doctrine of tantum et tale. It was not submitted to me by counsel for the defender that, leaving apart sequestration, a negligent misrepresentation of the kind alleged would not constitute a vitiating factor."

[24] In the present context the distinction between real and personal rights became important. Mr Pocock had no rights, real or personal, in the property because of his involvement in the scheme resulting in the second disposition. In any event the most he can be said to have had was a personal right as described by Lord Rodger of Earlsferry in Burnett's Tr v Grainger 2004 SC (HL) 19. If he had a personal right, did the personal bar pleadable against him transmit against his trustee in bankruptcy?

[25] In Personal Bar by Reid and Blackie (2008) the learned authors state at paras 5-05 and 5-06:

"Problems regarding transmissibility of personal bar may arise in the context of insolvency. The issue is whether the liquidator of a company or a trustee in sequestration may be affected by personal bar deriving from the conduct of the company or the bankrupt. Here, as in other contexts, the distinction between real and personal rights is crucial. When the trustee or liquidator acquires title to the insolvent estate, he or she acquires real rights unhindered by the personal obligations which bound the bankrupt or company. ... In principle, therefore, the inconsistent conduct of the bankrupt cannot form the basis for personal bar against the trustee in such a way as to affect title to the assets of the insolvent estate. ...

The position is, however, very different with regard to any personal rights transmitted to the trustee or liquidator. Here the assignatus utitur rule applies, and therefore the trustee or liquidator 'stands in the shoes' of the bankrupt or company in asserting personal or contractual claims. Thus there is authority to the effect that bar may be applied to prevent a liquidator from making a further claim against shareholders when the company has represented them as fully paid-up on the relevant share certificate."

[26] Personal bar operated against the trustee in the context of personal rights. In Waterhouse v Jamieson (1870) 8M (HL) 88 Lord Westbury said at pp 98-99:

"The question therefore is, has the liquidator, standing in the place of the company, a right to recover from a shareholder to whom the company has given a certificate that the whole amount, save £5, has been paid upon his shares - can the liquidator impeach the memorandum, set aside the articles, reduce the certificate, and recover in the right of the company that which the company could not for one moment, as against a bona fide shareholder, be entitled to recover?

I entirely adopt the statement which fell from my noble and learned friend sitting opposite me (Lord Cairns) in the case of Duckworth, which is reported in the second volume of Chancery appeals, where my noble and learned friend used these words: 'the liquidator represents the creditors only because he represents the company, and through the company the rights of the creditors are to be enforced'. Now, here the appellant is a bona fide holder of shares, upon which, no doubt, there was a false statement made by the company, of which he had no knowledge, and as to which he was under no obligation to inquire, and therefore he cannot be subjected to liability by having imputed to him a knowledge of the falsehood. Could the company recover against him? If there had never been a winding-up order the question would never have admitted of a moment's doubt; and the winding-up order does not place the liquidator in a better position against the shareholders than the company were in."

[27] Where the debtor had only a personal right any defence pleadable against him was also pleadable against his trustee in bankruptcy. In Graeme's Trustee v Giersberg (1888) 15 R 691 a lady who, with her husband, was domiciled in Germany, conveyed by antenuptial marriage contract her whole estate, including acquirenda, to trustees, of whom her brother was one, for behoof of herself and her children. She subsequently succeeded to a legacy, which was arrested ad fundandam jurisdictionem in the hands of the representative of the donor (to whom the marriage contract trust had not been intimated) by the trustee on her brother's sequestrated estate for a debt alleged to be due to her by the latter. It was held by the First Division (affirming the Lord Ordinary (Kinnear), Lord Shand dissenting) that the arrestments were bad, as the trustee had no higher right than the bankrupt, who could not have benefited by his failure to intimate the marriage contract trust to the testamentary trustee to the prejudice of the beneficiaries under the trust, whose interests it was his duty to protect. Lord President Inglis stated at pp 694-5:

"The question consequently upon which this case hinges is whether the trustee in sequestration, who comes in the place of the bankrupt, can do diligence though the bankrupt could not? The Lord Ordinary answers this question in the negative, and I must say that, after giving every attention to the argument which has been presented for the reclaimer, I think that the Lord Ordinary is right. The position of a trustee in sequestration does not seem to me to differ from any other assignee as regards a claim of this kind. The claim is of the nature of a nomen debiti - an incorporeal moveable right which passes by assignation - and therefore the trustee is in no better position than an onerous assignee. ... I should ... put it this way - that a trustee in a sequestration is in no better position than an onerous assignee who has bought a debt. The meaning of the maxim assignatus utitur jure auctoris has been so often and so lately commented upon in opinions which I have had occasion to deliver that it is hardly necessary for me to refer to it again. I need only refer to my opinion in the case of Scottish Widows' Fund v Buist 3 R 1078 as to the meaning of the maxim. I agree with the Lord Ordinary in the present case that, as the bankrupt could not have used the arrestments without being guilty of a breach of trust, neither can his trustee. If the bankrupt had used the arrestments he would have committed a breach of trust, and I do not think that the trustee can do what would have constituted a breach of trust in the bankrupt. He would have had no right to use the arrestments or any diligence against the fund in question, which would have had the effect of defeating the purposes of the marriage contract trust."

[28] In Bell's Tr v Bell's Tr 1907 SC 872 the bankrupt was held by his actings to have discharged his right to legitim in his late father's estate. It was held by the Second Division that consequently his trustee in bankruptcy could not make the claim for legitim. Lord Justice-Clerk Macdonald stated at p 877 and p 878:

"In this case I am satisfied, in accordance with the views of the sheriff in the court below, that there is sufficient ground for holding that the bankrupt whose trustee is suing elected to take the provisions made for him and is not now entitled to repudiate these and claim his legitim, and that his trustee, as representing his estate, cannot, as trustee, make good the claim for behoof of his creditors...

His claim must be for what the bankrupt could have claimed had he been solvent. It cannot be higher. Here, holding as I do that the bankrupt had abandoned his right, I am of opinion that the trustee cannot make the claim effectual."

[29] On his own pleadings Mr Pocock's trustee was personally barred from seeking to challenge Mr Brebner's title to the sub-basement flat. Mr Pocock would not have been able to do that, and his trustee could not do it either. The issue could be decided after debate on the procedure roll as it turned on the trustee's own pleadings. The effect of a successful plea of personal bar was set out in the Stair Memorial Encyclopaedia of the Laws of Scotland, Vol 16, para 1604 as follows:

"One of the important aspects of personal bar is that when it is established it is exclusive of other pleas. It shuts out all contrary pleas and proof. The words or conduct in question yield an inference which cannot be contradicted by other evidence. Actings and statements of a contracting party may frequently be evidence as to his state of mind (including his intention) and the status of subjects and the nature of the contract itself may be affected by the state of mind thus evidenced. The result of the actings or statements will, however, be different if they constitute personal bar, because if personal bar is established that in itself amounts to a legal bar to the party exercising what would otherwise have been his legal rights. The plea of personal bar requires to be pled by means of a specific plea-in-law with supporting relevant and specific averments. A plea of personal bar will normally be decided only after the facts have been ascertained by proof, but in exceptional cases proof may be dispensed with if all the material facts on which the plea depends are disclosed and admitted in the pleadings."

[30] In relation to the specific question of fraud by the debtor, it was vouched by ample authority that the trustee and creditors could not benefit from the fraudulent conduct of the bankrupt. In Scott v Sceales (1873) 10 SLR 315 A obtained a loan of £500 from an assurance company and granted a bond and assignation in security therefor over a fund to which his wife had right. He was thereafter sequestrated, but obtained a further advance of £700 from a second company which was ignorant of his sequestration. The second company obtained a discharge from the first company and a new bond and assignation in security for the full sum of £700. It was held, in a competition between the trustee in bankruptcy and the second company, that the trustee could not be benefited by the concealment of the bankrupt, so as to claim the £500 assigned in security of the advance. In Colquhouns' Tr v Campbell's Tr (1902) 4 F 739 a solicitor engaged by his client to invest a sum upon the security of certain lands wilfully abstained from recording the bond and disposition in security which he obtained for his client and afterwards obtained from the debtor an ex facie absolute disposition of the lands in his own favour which he recorded with a view to obtaining a preference over his client for debts due to him by the disponer. The solicitor was thereafter sequestrated. In a competition between the trustee and the client for the price of the subjects the First Division, affirming Lord Kyllachy, held that, as the bankrupt when solvent could not have taken the benefit of his own fraudulent breach of trust, his trustee in sequestration was in no better position, that the bankrupt was to be regarded as holding the ex facie absolute disposition for behoof of the client in the first instance and that the client was entitled to a preferential ranking on the fund in medio: see the Lord President (Balfour) at pp 742-3. These two cases involved the debtor acquiring something by fraud: in this case the debtor had alienated something by fraud, presumably to avoid stamp duty. If the trustee were to succeed the body of creditors would be enriched to the value of Mr Brebner's house (£135,000 plus any increase in value) and he would lose his house through absolutely no fault of his own. On the trustee's own pleadings the body of creditors had already been able to recover four properties in Aberdeen and benefited from that.

Submission for the trustee
[31] It was submitted on behalf of the trustee that it was necessary first of all to consider the nature of the right in question: the key question was whether the right of an uninfeft proprietor fell within the term "heritable estate" in section 31(1)(b) of the 1985 Act. It was necessary to look at what was said by their Lordships in Burnett's Tr v Grainger. Lord Rodger of Earlsferry began his speech at p 39, paras [66] and [67] as follows:

"[66] A, the owner, sells her flat to B and C. B and C pay the price to A and, in return, she delivers the relevant disposition to them. B and C take possession of the flat , but do not record the disposition in the Register of Sasines ('the register'). A is sequestrated and, on the basis that the flat remains part of her estate at the date of sequestration, the trustee in sequestration, who knows of the disposition to B and C, records a notice of title to the flat in the register. B and C then record their disposition. An Extra Division of the Court of Session hold that the trustee's title is to be preferred and that he can evict B and C from the flat without repaying the price. Reduced to algebraic terms, that is the issue that confronts the House in this appeal.

[67] The decision of the Extra Division is correct. But it shocks. It is important not to play down that sense of shock since admitting that the decision shocks, and identifying why, are the keys to explaining why it is also correct. It shocks because it seems inequitable when judged by the criteria applied in other cases. Suppose that D, a purchaser from A, who was aware that she had previously sold and disponed the flat to B and C, deliberately tried to cut them out by recording his disposition before them. He would be regarded as not being in good faith and would therefore not obtain a valid title. In the case of a purchaser like D, as Lord Justice Clerk Thomson famously remarked in Rodger (Builders) Ltd v Fawdry (at p 501), 'offside goals are disallowed'. They are disallowed because they are judged to be unfair. By contrast, the trustee in A's sequestration, who proceeds to record a notice of title ahead of B and C and with the intention of cutting them out, is not regarded as being in bad faith and obtains a valid title. The offside rule does not apply and the trustee's goal is allowed - even though, by the standards that apply to a purchaser, it would be judged unfair and would not be allowed. In order to maximise the assets available to the creditors, the trustee can deliberately set out to destroy B and C's right to complete their title. The difference in this respect between a purchaser and a trustee in sequestration lies at the heart of this case."

At pp 41-42, paras [74] and [75], under reference to section 31(1)(a) of the 1985 Act, his Lordship pointed out that, when the permanent trustee is appointed, the estate of the bankrupt vests in him for the benefit of the creditors and he must recover, manage and realise the debtor's estate and distribute it among the debtor's creditors, according to their respective entitlements. The submission for Mr Brebner and Abbey National had focused on the wrong dichotomy: it had focused on that between real and personal rights instead of that between heritable and moveable rights. Section 31(3) of the 1985 Act dealt with the power of a trustee to complete title to any heritable estate to which the debtor had an uncompleted title. His Lordship proceeded to analyse (in what he modestly described as an introduction) the nature of an uncompleted title between pp 49 and 53, paras [95] to [105] as follows:

"[95] At the time when Mrs Burnett was sequestrated, the appellants were disponees to whom the disponer had delivered the disposition but who had not yet recorded it in the register and were accordingly not yet infeft. Even if only for a short period, this is a stage through which all purchasers of land must pass and so the nature of their rights is of some importance. Sometimes, as in section 31(3) of the 1985 Act, such a person is simply said to hold an 'uncompleted title' to the land; or, more fully, he may be described as a person having an interest in land 'but whose title thereto has not been completed by recording' (Conveyancing and Feudal Reform (Scotland) Act 1970, section 12(1)). ...

[96] ... I draw particular attention to certain observations of the whole court in Earl of Fife v Duff (1862) on the 'personal fee' as they call it, of the uninfeft proprietor. Although in Sharp v Thomson (1997 SC (HL) 66 at pp 70, 84) both Lord Jauncey and Lord Clyde alluded to these observations in passing, for some reason they have tended to be given less prominence than might have been expected in discussions of the topic.

[97] The Earl of Fife and his trustees sought a declarator that they had power to sell certain lands and to receive the price and use it at their pleasure. The defenders included the heirs called to the succession by various deeds. Some of the heirs contended that the lands in question were subject to an entail and so could not be sold. The First Division rejected the contentions for the Earl and his trustees and assoilzied the defenders (Earl of Fife v Duff (1861) 23D 657). The pursuers appealed to this House which instructed that the case should be argued before the whole judges and that their opinions should be reported to the House. This was done and a single opinion was returned by the whole court with the exception of Lord Mackenzie, who was absent due to illness (Earl of Fife v Duff (1862) 24 D 936).

[98] The opinion of the whole court began by setting out the well-established rules relating to the transmission of the ownership of feudal subjects. They explained that voluntary transmission of such subjects was effected by a dispositive act followed by tradition of the subject to the transferee. To explain the nature of the dispositive act, they cited Stair, Institutions of the Law of Scotland (3.2.3), including his comment - apparently directed at the natural law position - that the words of conveyance 'express something presently done, and not engaged to be done; and so can be nothing else but the alienation or transmission of the right itself.' Their Lordships observed (at p 941):

"Thus the legal effect of such a disposition, even before it is followed by tradition of the subject disponed, is twofold. In the first place, it operates as an actual alienation of the subject to the disponee; and it vests in him most of the essential attributes of ownership. In particular, it vests in him not only a right to possess the subject and to reap its fruits but also a power to sell it; to dispone it for either onerous or gratuitous causes; and to settle the estate by mortis causa dispositions and deeds of entail. The right so created is transmissible from one person to another by voluntary disposition; and on the death of any person in whom it is vested it is transmissible to his heir by general service; and each person in whom it is vested successively has the powers and privileges of ownership above mentioned. This right is usually called a personal fee - a denomination importing not that the subject of it is moveable, for it is truly heritable, but that it is not feudal, and indicating at the same time that, even when not followed by solemn tradition or infeftment, the right is still sua natura a right of fee.

Secondly, such dispositive act, although it operates as a de praesenti alienation, and not merely as an obligation to alienate, does farther by implication impose upon the disponer an obligation of a different kind - viz a consequent obligation (as Lord Stair calls it) to delivery or tradition of the subject disponed.'

Having described in some detail the two modes of feudal 'tradition' by which the disponer could perform his obligation as to the delivery or tradition of the land, the court continued (at p 942):

'Although the personal fee, thus vested in a disponee before he is infeft, confers upon him such powers and privileges of ownership, it is, while in that state, attended with some risks and disadvantages. One of them is that the owner is not the entered vassal of the feudal superior. Another is that, as his right is not clothed with infeftment, and published in the Register of Sasines, it is of no effect against third parties who may attach the estate by legal execution for the debts of the disponer, or who may in bona fide purchase it from him, and be first infeft. And still another disadvantage (which may often be of moment in cases related to the titles of entailed estates) is that, when the disposition is granted under conditions intended to burden or restrict the disponee's right in favour of third parties as creditors or as heirs of entail these conditions cannot be entered real burdens upon the estate without being embodied in the infeftment of the disponee. But a personal fee, while in these and some other respects is not equivalent to a fully feudalised fee, still leaves the person to whom it belongs vested in the important powers and privileges of ownership formerly mentioned, and with a right, in addition, to call upon the disponer or his heir to grant a proper warrant for clothing the personal fee with feudal tradition.'

[99] This analysis by the whole court of the nature of the personal fee was critical to their decision. Discussing the nature of the deed granted by Major George Skene in 1721, they held (at pp 943, 944):

'It was itself a substantive and de praesenti disposition to a certain disponee, and to a certain series of heirs of entail, with all the restrictions prescribed by that statute. It was thus itself a habile entail. It is true that Major Skene's right under that entail was still only such a personal fee as has been described, and that in order to render its conditions and restrictions real burdens upon the estate, three proceedings were still requisite.'

Similarly, describing the position of Elizabeth Skene, who by her general service had taken the personal fee out of Major Skene's haereditatis jacens, the court said (at p 947):

'In virtue of that title she had all the powers and privileges of ownership arising from a personal fee as formerly mentioned, excepting in so far as these powers and privileges were restricted by the entail ... No doubt, while her right under the entail remained only personal, and the conditions in favour of the heirs of entail were not made real burdens upon the lands by her being infeft in them under these burdens, the rights of these subsequent heirs of entail were exposed to the risk of being defeated in the manner already explained - that is to say, by third parties obtaining themselves first infeft in the land, in virtue either of onerous and bona fide purchases from the heirs-at-law of the entailer or of legal execution for payment of the onerous debts of such heirs, if these heirs should, in that character, have made up a feudal title to the lands. But, subject to that risk, the personal fee was vested in Elizabeth Skene by the deed of entail itself, and her general service as heir of entail; and a jus crediti was created in favour of the subsequent heirs of entail.'

[100] When after four days of argument Your Lordships' House affirmed the decision of the Court of Session (Earl of Fife v Duff (1863) 4 Macq 469) it was on the basis of that analysis. For instance, Lord Westbury LC said (at p 847) that Major Skene's settlement remained effectual 'as a disposition of the personal fee, although the parties entitled under it would be obliged to resort to some other mode of obtaining a feudal tradition of the subject.' He went on to say (at p 848) that, despite subsequent actings by Major Skene, the settlement 'remained what it originally was, an actual immediate conveyance, giving right to, and capable of receiving , feudal investment, and consequently possessing the elements of a habile entail.'

[101] As the law stands today, the uninfeft proprietor is in much the same position as at the time of the decision of the whole court and of this House. He has the right to possess the subjects and to reap the fruits, including taking the rents; he has the power to sell the subjects, and, by deducing title, to dispone them for either onerous or gratuitous causes. When he dies, his right to the subjects forms part of his heritable, as opposed to his moveable, estate for purposes of legal rights (Stair, Institutions of the Law of Scotland, 3.5.6; Succession (Scotland) Act 1964 (cap 41), section 10(2); cf Gloag and Henderson, The Law of Scotland, para 36.07). Subject to that Act, the uninfeft proprietor can bequeath the subjects in his will. In addition, under section 12 of the Conveyancing and Feudal Reform (Scotland) Act 1970 he can grant a standard security over the subjects. In one very real sense, however, the position of the uninfeft proprietor has actually moved on since 1862 - and even more so since the eighteenth century when the deeds under consideration in Earl of Fife v Duff were executed. Even in 1862 an uninfeft proprietor required the active involvement of the feudal superior if his infeftment was to become public, but since the Conveyancing (Scotland) Act 1874 once infeft, a disponee has been deemed to be entered automatically with his superior. So an uninfeft proprietor has it in his own power to do everything necessary to become infeft and so to vest the real or feudal right in himself, simply by recording the disposition in the register. If anything, therefore, the position of an uninfeft proprietor vis-à-vis the granter of the disposition has been strengthened.

[102] The decision of the whole court, as affirmed by this House, in Earl of Fife v Duff therefore constitutes the most authoritative possible licence for describing the holder of the personal fee, personal title or uncompleted title as 'an owner' and his rights as 'powers and privileges of ownership': the execution and delivery of the disposition can be said to vest in him 'most of the essential attributes of ownership'. The whole court and your Lordships' House would, therefore, have found little to quarrel with in the well-known passage in Lord President Emslie's opinion in Gibson v Hunter Homes Designs Ltd (at p 27):

'In the law of Scotland no right of property vests in a purchaser until there has been delivered to him the relevant disposition. On delivery of the disposition the purchaser becomes vested in a personal right to the subjects in question and his acquisition of a real right to the subjects is dependent upon recording the disposition in the appropriate Register of Sasines. Putting the matter in another way, the seller of subjects under missives is not, in a question with the purchaser, divested of any part of his right of property in the subjects of sale until, in implement of his contractual obligation to do so, he delivers to the purchaser the appropriate disposition.'

In the distinguished company of Lord President McNeill, Lord Justice-Clerk Inglis and the other judges of the Court of Session - not to mention your Lordships' House - Lord President Emslie can scarcely be accused of unorthodoxy, far less of heresy. Moreover, whatever criticisms can now be made of the language or reasoning in Earl of Fife v Duff would be pointless quibbles when the passage has stood for more than 150 years. For present purposes, the case is useful as marking the high point in the authorities characterising uninfeft proprietors, like the appellants, as having the powers and privileges of owners. Indeed, although senior counsel for the respondent frequently referred to uninfeft proprietors, such as the appellants, as 'creditors' of the granter of the disposition, in reality there is nothing by way of positive action that they can or need demand of the granter. All that they want, and can or need demand, is that the granter leave them alone and do nothing to prevent them completing their title.

[103] But it is important to notice that, however far the judges went in describing the uninfeft proprietor as an owner in Earl of Fife v Duff, what he had was a 'personal fee', with the corresponding obligations on the disponer being personal obligations. The personal fee had indeed the characteristics of a personal right.

[104] For one thing, the right was transferred by assignation - in due course under section 22 of the Titles to Land (Consolidation) Scotland Act 1868. Even after section 3 of the Conveyancing (Scotland) Act 1924 made it possible for an uninfeft disponer to deduce title from the person last infeft, such assignations remained competent. In practice, however, the convenience of the new system meant that they fell into desuetude after 1924. They were eventually abolished by section 48 of the Conveyancing and Feudal Reform (Scotland) Act 1970.

[105] More importantly, perhaps, the judges of the whole court in Earl of Fife v Duff (at p 942) quite specifically pointed out that the uninfeft proprietor's personal fee was of no effect against third parties who might attach the estate by legal execution for the debts of the disponer, or who might in bona fide purchase it from him, and be first infeft. For personal purposes this means that the personal fee was held to be of no effect against adjudgers and bona fide purchasers who were first infeft. That remains the position today."

[32] His Lordship then proceeded in the following passage at pp53-54 to deal with the effect of section 31(1) of the 1985 Act as follows:

"[107] In critical respects the language of section 31(1) of the 1985 Act repeats the language of earlier bankruptcy statutes. Parliament first says that by virtue of the act and warrant the whole estate of the debtor vests in the permanent trustee. The relevant picture is therefore not of the permanent trustee stepping into the shoes of the debtor, but of the debtor's estate being taken from her and placed in the hands of a completely different individual, the trustee for the debtor's creditors. This suggests that, in so far as the debtor herself may be subject to personal obligations, those obligations do not affect this new person, the permanent trustee. That is, of course, consistent with the general rule in sequestrations that the permanent trustee is not bound by contracts entered into by the debtor unless he expressly or impliedly adopts them.

[108] Section 31(1)(b) then explains precisely what is meant by the heritable estate vesting in this way. The particular form of vesting was originally chosen to allay any alarm that applying sequestration to heritable estate would subvert the feudal principles of transmission, upon which the whole system of heritable conveyances was built (Bell, Commentaries on the Laws of Scotland, vol 1, p 400). The wording of the present provision is rather obscure but its interpretation is perhaps helped by noticing that it derives from the rather clearer words of the Act of 1793 (33 Geo III, cap 74): 'which adjudication being of the nature of an adjudication in implement, as well as for payment or security of debt, shall be subject to no legal reversion.' The model for vesting is based on adjudication, which is 'a judicial disposition to the subject' (Bankton, Institute of the Laws of Scotland, 3.2.49).

[109] First, the act and warrant from the sheriff has the same effect as if a decree of adjudication in implement of sale had been pronounced in favour of the permanent trustee. Since an adjudication in implement is a way of obtaining specific implement of a seller's obligation to convey property, armed with his decree or judicial disposition, the trustee can proceed to infeft himself as owner - nowadays by recording a notice of title on the register, as the respondent did in this case.

[110] Section 31(1)(b) then says that the act and warrant has the same effect as if a decree of adjudication for payment and in security of debt, subject to no legal reversion, had been pronounced in favour of the permanent trustee. Normally, an adjudger initially acquires only a right to the subjects which is redeemable within ten years on payment of the debt, but the effect of this part of section 31(1) is to confer 'a right of absolute property in the trustee, for the benefit of the creditors, according to their rights and interests at the time' (Mansfield v Walker's Trs, per Lord Craigie at pp 829, 830). Again, the trustee's right under the judicial disposition will be converted into a real or feudal right only if he records a notice of title in the register, as the respondent did.

[111] At first sight it looks as if the legislature has piled Pelion upon Ossa, since both the adjudication in implement and the adjudication for payment and in security result in the trustee having an absolute right of property on infeftment. But, in actual fact, giving the act and warrant the effect of an adjudication for payment and in security is significant because it is one of the ways in which the law of sequestration builds upon the pre-existing law of adjudication for debt. In particular, the trustee in sequestration is to be treated as an adjudger for payment with a decree in his favour for the benefit of the creditors. And it is because he is treated as an adjudging creditor, and not merely as a purchaser of the debtor's heritable estate that the trustee can set out to destroy the rights of uninfeft purchasers of that estate by infefting himself before they do. A purchaser could not do this (Rodger (Builders) Ltd v Fawdry)."

[33] Other statements of the law supported the above exposition by Lord Rodger of Earlsferry. Stewart, A Treatise on the Law of Diligence (1898) states at p 600:

"All heritable estate, corporeal or incorporeal, belonging to the debtor, whether is infeft or uninfeft, may be adjudged. Not only proper feudal estate, but all rights or interests connected with land - as liferents, heritable securities, real burdens, leases; and also rights of a heritable character, although unconnected with land - as annuities, personal bonds heritable destinatione - and generally every right for which there is no other competent diligence, may be attached by adjudication."

[34] Gretton, The Law of Inhibition and Adjudication (2^nd Ed, 1996) states at p 71:

"Inhibition is a diligence against the heritable property of the inhibitee ... a right may be heritable, and so affectable by inhibition, even though the inhibitee has not completed title. For example, where there is an ex facie absolute disposition, the debtor is uninfeft, but his right is heritable, and thus affectable by inhibition."

At p 215 in the same work the following statement appears:

"Personal rights to heritable property are adjudgeable to the extent that they are themselves heritable. Thus uncompleted titles are adjudgeable, as are reversionary rights under an ex facie absolute disposition."

[35] The Stair Memorial Encyclopaedia of the Laws of Scotland, Vol 18, p 19 at para 14 states:

"The principal heritable rights are the following; ...

(2) Uncompleted real rights in land. Where a real right in land has been granted but title has not been completed by the grantee, the grantee's right is considered to be heritable. The grantee must be in a position to complete the real right without some further act of the granter. The typical case for the application of this principle is where a deed, such as a disposition or standard security, has been delivered but not yet registered in the Register of Sasines or the Land Register."

[36] In the present case the act and warrant of the trustee covered the heritable estate of Mr Pocock in the same way as a decree of adjudication in favour of the trustee would have done. An adjudger was not affected by prior personal rights of the debtor. The rights of an uninfeft proprietor were part of the heritable estate. It was very much a question of creditors doing diligence and obtaining the heritable property unsaddled by the personal obligations of the debtor. By virtue of section 31(3) of the 1985 Act a trustee may complete a debtor's uncompleted title; he is seen as having a judicial disposition of the subjects, but to make an uncompleted title real he had to complete title by recording a notice of title in the register. It did not matter whether the title of the debtor was completed or uncompleted as the 1985 Act treated the trustee in the same way whether the title was completed or uncompleted. There was no suggestion that the personal obligations of the debtor got in the way of, or defeated, the trustee's right to the heritable property of the debtor. It was a fact that somebody always lost out when there was insolvency. It was not necessary to look back at any statements of the law which preceded the decision in Burnett's Tr and the exposition of the law therein by Lord Rodger of Earlsferry. The decision of Lord Eassie in Halifax plc v Gorman's Tr predated that of the House of Lords in Burnett's Tr. In any event Lord Eassie was talking about something which vitiated the property in question and caused it not to become part of the bankrupt's estate in the first place. In Burnett's Tr Lord Hobhouse stated that it was "now clear that the tantum et tale argument was discredited".

[37] Accordingly, as the right of an uninfeft proprietor was part of the heritable estate of the debtor, personal restrictions on the debtor just did not apply to the bankrupt and the averments of personal bar made against the trustee were irrelevant.

[38] In any event, so far as concerned the merits of the case of personal bar, the case being made against the trustee was that he was barred from seeking to prove the tenor of the first disposition and from challenging the titles and transactions proceeding on a fundamental nullity. The applicable law had been stated clearly in the relatively recent decision of the First Division in William Grant & Son Ltd v Glen Catrine Bonded Warehouse Ltd 2001 SC 901 (a case which treaded upon mora, taciturnity and acquiescence, discussed later) in which it was held that it was essential to the doctrine of personal bar that the defender should have been induced to act and change his position by his reasonable belief that the pursuer was consenting. At p 917B-C, para 35 Lord President Rodger stated:

"It follows, in my view, that in para 946 Bell analyses the situation as one where the party carrying out the operations, or taking the irretrievable step, does so on the faith of the consent or conventional permission which he has assumed to exist, on the basis of the other party seeing what was happening and doing nothing to stop it."

At p 919B-C, para [38] he stated:

"What is in any event of importance is that, in the Scottish cases which counsel examined, the analysis was not in terms of waiver but in terms of acquiescence in the form of an implied representation of consent and actings in reliance on that consent. When analysed in this way, the doctrine of acquiescence in these cases falls, in my view within the terms of Lord Chancellor Birkenhead's statement of the principle of personal bar in Gatty v Maclaine."

At p 921H- 922A, para [43], he stated:

"When faced with the submission that the pursuers have in effect lost the right to bring proceedings, one cannot help remembering the wise observation of Lord Deas, some years after Cairncross, in MacKenzie v Catton's Trustees at p317: 'there must either be prescription or not We are not to rear up new kinds of prescription under different names.' It appears to me that, if the court concentrated - as the defenders argued it should - exclusively on the pursuers' failure to object to the defenders' actings over a considerable period, the court would in reality be rearing up a new kind of prescription to supplant the prescription enacted by Parliament in section 11 of the Prescription and Limitation (Scotland) Act 1973."

He went on to state, at p 925C, para [48], that he could find nothing in the facts of that case that would justify the inference that the pursuers had consented irrevocably to the defenders' passing off of their products as the pursuers' in the future. Lord Nimmo Smith dealt with the issue of causation at p 928, para 4 as follows:

"It seems to me to be entirely clear from these and other authorities that in order for a defender to succeed in a plea of acquiescence he must be able to establish a causal relationship between the pursuer's failure to act and his own actings; that he would not have acted as he did if the pursuer had not induced a reasonable belief that he consented to his doing so."

[39] The test in personal bar was obviously quite a high one, because the court in giving effect to plea of personal bar was preventing a pursuer from enforcing his rights. Lord Clarke, dealing with the plea of acquiescence at p 941G- 942D, para [3], said:

"In relation to a case like the present, the leading authority on this subject, which remains the law of Scotland, and which is binding on this court, is the case of Cairncross v Lorimer, and, in particular, the speech of the Lord Chancellor in that case at pp 829-830. There is no doubt, to my mind, that his Lordship was there seeking to set out authoritatively how, and in what circumstances, acquiescence operates to prevent a person enforcing what otherwise are his rights. His Lordship at p 829 was to the effect that he was concerned with a doctrine which was 'to be found, I believe, in the laws of all civilised nations, that if a man, either by words or by conduct, has intimated that he consents to an act which has been done, and that he will offer no opposition to it, although it could not have been done lawfully without his consent, and he thereby induces others to do that from which they otherwise might have abstained - he cannot question the legality of the act he had so sanctioned to the prejudice of those who have so given faith to his words or to the fair inference to be drawn from his conduct (my emphasis). At p 830 his Lordship continued: "I am of opinion that, generally speaking, if a party having an interest to prevent an act being done and has full notice of it having been done, and acquiesces in it, so as to induce a reasonable belief that he consents to it, and the position of others is altered by their giving credit to his sincerity, he has no more right to challenge the act to their prejudice than he would have had if it had been done by his previous licence' (my emphasis). From the words which I have highlighted in those passages it is, in my judgment, an essential element of the doctrine of acquiesecence that the party pleading it, in order to prevent an otherwise legal right being enforced against him, or to avoid the consequences of what would otherwise have been a wrong committed by him, can show that (a) the actings, words or inaction of the person seeking to enforce the right, or seeking a remedy for its infringement, have, as a matter of fact, induced him into a reasonable belief that the right would not be enforced or that no claim would be taken in respect of any infringement thereof and that (b) as a consequence of that inducement, he has in some way altered his position on reliance on that reasonable belief. The essential element in the paradigm case of acquiescence is conduct, or inaction (sometimes described as standing by), by one person which actually induces another to have a reasonable belief upon which that other person places reliance and proceeds to alter his circumstances."

At p 942F, para [4], he stated:

"Since the effect of acquiescence may be to obliterate, for practical purposes, what are otherwise perfectly valid and subsisting legal rights, the equities require, in my judgment, that, if a person's rights are to be so obliterated, he has induced, in some way, others to believe that he was no longer interested in enforcing his rights against them and that they have altered their position in reliance on that belief."

At p 943 G-H, para [7], he added:

"I should add that it is, in my judgement, a considerable weakness of the reclaimers' formulation of the requirements for the plea of acquiescence to succeed that, if it were correct, it would impose a significant qualification on the law of prescription, a qualification which would be quite unclear in its scope."

[40] Reid and Blackie, Personal Bar at p 30, para 2-03, sets out a checklist of the elements of personal bar under the headings of inconsistency and unfairness, and in which the person alleged to be acting within his or her right is "the rightholder" and the person who attempts to bar the rightholder from a proposed course of conduct is "the obligant". The checklist is as follows:

"(A) INCONSISTENCY

(1) A person claims to have a right, the exercise of which the obligant alleges is barred.

(2) To the obligant's knowledge, the rightholder behaved in a way which is inconsistent with the exercise of the right. Inconsistency may take the form of words, actions, or inaction.

(1) At the time of so behaving the rightholder knew of the right.

(2) Nonetheless the rightholder now seeks to exercise the right.

(3) Its exercise will affect the obligant.

(B) UNFAIRNESS

In the light of the rightholder's inconsistent conduct, it would be unfair if the right were now to be exercised. Any of the following is an indicator of unfairness:

(1) The rightholder's conduct was blameworthy.

(2) The obligant reasonably believed that the right would not be exercised.

(30 As a result of that belief the obligant acted, or omitted to act, in a way which is proportionate.

(4) The exercise of the right would cause prejudice to the obligant which would not have occurred but for the inconsistent conduct.

(5) The value of the right barred is proportionate to the inconsistency."

Reference was also made to elaborations of the checklist in the text at p 32, paras 2-07, 2-09 and 2-10; p 33, para 2-12; p 38, para 2-25; p 39, para 2-28; p 41, para 2-35; pp 46-47, paras 2-47 to 2-51; pp 48-49, paras 2-55 to 2-59; and p 50, paras 2-60 and 2-61.

[41] For a case of personal bar to be made out there required to be clear averments and supporting evidence of all the elements of personal bar. An examination of the averments of Mr Brebner in his answer 6 from p 28B to p 29A and of Abbey National in their answer 6 from p 30D to p31B showed that the necessary averments for a case of personal bar were just not there. Moreover, there was no foundation for the assertion that a case of personal bar could be found in the averments of the trustee himself. The questions had to be asked: who made the representation, what reasonable belief was induced, who relied on the representation, did Mr Brebner see the first disposition and rely on it? Abbey National were lenders, and the same questions applied to their case of personal bar. There was no suggestion that Mr Pocock knew anything about them at the material time.

[42] In response to the above submissions minutes of amendment were tendered on behalf of Mr Brebner and Abbey National (nos 37 and 38 of process). No objection was taken to their being received and the record amended in terms thereof, both of which I allowed. The amendment for Mr Brebner was to the following effect. To Mr Brebner's knowledge Mr Pocock signed the second disposition on behalf of Howemoss and in so doing behaved in a way inconsistent with any right he might have had to seek the decrees of declarator and reduction now concluded for by the trustee. On the trustee's hypothesis of fact, Mr Pocock, when he signed the disposition by Howemoss to Mr Brebner, knew that the first disposition had been granted in his favour and that the second disposition was an unauthorised alteration of the first disposition. If the decrees now sought were granted, Mr Brebner would be adversely affected in a way which would not have occurred but for Mr Pocock's inconsistent conduct. Had Mr Brebner known the true position before paying the purchase price for his flat, that the second disposition was an unauthorised alteration of the first disposition, and / or that Mr Pocock claimed to be entitled to challenge the validity of the second disposition and any deeds granted in reliance of its validity, including the disposition by Howemoss to Mr Brebner, he would not have completed the purchase of his flat. The terms of the amendment by Abbey National were mutatis mutandis to the same effect, it being averred that had they known the true position before advancing the loan to Mr Torr, they would not have advanced it to him. The submission for the trustee continued to maintain that, despite these two amendments, the pleadings of Mr Brebner and Abbey National about personal bar remained deficient.

[43] So far as the question of fraud on the part of Mr Pocock was concerned, the averments made by Mr Brebner and Abbey National were exiguous. Scott v Sceales involved fraudulent enlargement of the estate by the bankrupt. There was no suggestion here that the disposition by Skene to Mr Pocock was a fraudulent enlargement of the bankrupt's estate. Colquhoun's Tr v Campbell's Trs was summarised by Lord Hope of Craighead in Burnett's Tr at pp 32-33, para [42], where he quoted Lord Kinnear to the effect that "the creditors cannot enlarge the estate for distribution by adopting a fraud on the part of the bankrupt or doing something which would have been a fraud if done by him when he was solvent". There was no suggestion in this case that title ever passed from Mr Pocock to Howemoss. Skene remained the infeft proprietors of the subjects and there was no suggested basis on which Mr Brebner could have title.

Discussion and conclusion
[44] In my opinion the starting point for consideration of this aspect of the case must be the terms of section 31(1) and (3) of the 1985 Act and the comments thereon by Lord Rodger of Earlsferry in Burnett's Tr. It is clear from the terms of the statute and the expiscation thereof by Lord Rodger that a trustee in bankruptcy, by virtue of the act and warrant granted to him, takes the heritable property of the debtor in exactly the same way as an adjudger possessed of a decree of adjudication in implement of sale, as well as a decree of adjudication for payment and in security of debt, subject to no legal reversion, in his favour: see, in particular, paras [105] and [107] - [111]. That being so, the submission for Mr Brebner and Abbey National based on the principle of tantum et tale is misconceived and must fail. As Lord Hobhouse remarked in Burnett's Tr, it is now clear that the tantum et tale argument is discredited. In my opinion it is correct to say that, in considering the applicable law in this context, it is not necessary to go back to statements of the law before the decision in Burnett's Tr, as the decision in that case must prevail over everything that was previously said. Applying the language of Lord Rodger of Earlsferry at para [107] to the facts of the present case, the relevant picture is not of the permanent trustee stepping into the shoes of the bankrupt, but of the bankrupt's estate being taken from him and placed in the hands of a completely different individual, the trustee for the bankrupt's creditors, which suggests that in so far as the bankrupt himself may be subject to personal obligations, those obligations do not affect this new person, the permanent trustee. The right of Mr Pocock as an uninfeft proprietor was part of his heritable estate and it vested in trustee under his act and warrant, which had the same effect as if a decree of adjudication in implement of sale, as well as a decree of adjudication for payment and in security of debt subject to no legal reversion had been pronounced in favour of the trustee.

[45] In any event, so far as concerns the merits of the plea of personal bar taken against the trustee, I am persuaded that the submission for the trustee that no relevant case of personal bar has been pleaded against him is correct and must be given effect. I need not repeat the essentials of a successful case of personal bar, which are set out above. The submission for the trustee details the respects in which the averments of Mr Brebner and Abbey National are deficient, even after their pleadings were amended in the course of the hearing. I mention in particular the lack of necessary averments on the question of causation.

[46] In relation to fraud, the cases show that a trustee in bankruptcy cannot benefit from the fraud of the debtor which enlarges the estate for distribution, but that is patently not the case here. If anything, it is the contrary: the trustee's position is that Mr Pocock fraudulently alienated part of his estate and he now seeks to reclaim, for the benefit of the whole body of creditors, the property so alienated. What the trustee is seeking to do is to annul a fraud which has wrongfully diminished the bankrupt's estate, not benefit from the bankrupt's fraud in order to enlarge the estate. The submission for Mr Brebner and Abbey National on fraud is, therefore, in my opinion, unsound.

Mora, taciturnity and acquiescence
Submission for Abbey National
[47] The submission for Abbey National was that, as the trustee had delayed in raising the present proceedings for in excess of four years and not advanced any explanation for his delay, and during that period they had prejudiced their position by advancing a significant sum of money to Mr Torr on the faith of the deeds now sought to be declared void or reduced, the trustee's claim was barred by mora, taciturnity and acquiescence. The averments of Abbey National in this respect in answer 7 are to the following effect. On or about 1 June 2004 at the latest the trustee was aware that the second disposition had been falsified and the present proceedings were not commenced by him until October 2008. Mr Torr granted the standard security in favour of Abbey National on 18 February 2008. The trustee, by delaying the bringing of proceedings by a period in excess of four years, had caused significant prejudice to Abbey National: had he raised proceedings for reduction of the second disposition before 18 February 2008, and registered a notice of litgiosity in the usual way, this would have been disclosed in the property search carried out by Abbey National's solicitors when processing Mr Torrr's application. Any professional person in the position of the trustee would have been well aware, from 2004 at the latest, that third parties could be entering into transactions, and expending significant sums of money, on the faith of the deeds now being challenged by the trustee. Abbey National accepted the standard security from Mr Torr, and advanced funds thereunder, in good faith: if the trustee were to succeed they would lose the only security they had for the outstanding loan of £250,999 to Mr Torr. The delay in the bringing of proceedings constituted mora. The silence of the trustee in failing to take any other steps to challenge the title to the property before bringing proceedings constituted taciturnity. His knowledge that in the absence of any challenge to the title to the property it could be sold to a third party, such as Mr Torr, and that he would borrow the purchase price from lenders, such as Abbey National, and grant a standard security in their favour, combined with the delay in challenging the title, constituted acquiescence. The submission went on to state that the plea was a plea to the merits and that if sustained it would entitle Abbey National to decree of absolvitor. All three elements of the plea were made out taking the trustee's pleadings pro veritate and there was no need for a proof on the point.

[48] Reference was made to the various dicta from earlier cases set out at pp180-181 in Somerville v Scottish Ministers 2007 SC 140. It was emphasised that Abbey National did not rely on delay alone. In United Co-op Ltd v NAP 2007 SLT 831 Lord Glennie dealt with the plea at pp 840-842, paras [27] - [34]. The following passages in particular were referred to:

"[29] ... This insistence that neither prejudice nor reliance is a necessary element of the plea is an important reminder that the whole plea of mora, taciturnity and acquiescence looks to the conduct of the would-be pursuer or petitioner, and the inferences sought to be drawn from that conduct. The essence of the plea is acquiescence, to be inferred from the petitioner's inaction. Although the three elements of the plea overlap, and indeed coalesce, I think it is helpful, in considering a plea of mora, taciturnity and acquiescence, first to consider separately the questions of mora and taciturnity before going on to assessing what inferences fall to be drawn from those factors in the whole surrounding circumstances.

[30] ... Mora simply means delay beyond a reasonable time. What is a reasonable time will depend on all the circumstances.

...

[32] Taciturnity simply connotes a failure to speak out in assertion of a right or claim when a reasonable person in that position would be expected to speak out. ...

[33] What then of acquiescence? Acquiescence simply means assent to what has taken place. The enquiry is not a subjective one, to be answered by looking into the mind of the petitioner. The test is objective. The question is how the matter would have appeared to a reasonable person observing the petitioners' conduct, know of all the circumstances of which the petitioners knew or ought to have known when acting in the way they did."

[49] The dicta of Lord Glennie should be followed and attention focused exclusively on the trustee's conduct, what he knew or ought to have known and what the reasonable bystander would have made of it all. The trustee's pleadings in response to Abbey National's averments of mora, taciturnity and acquiescence were to be found in condescendence 7, where he averred as follows (from p 32B):

"Explained and averred that by letter dated 5 September 2007 agents for the pursuer wrote to agents acting on behalf of the fifth defender in the purchase of the ground floor flat. In that letter it was stated that it appeared to the pursuer that the second defenders were not the legal owners of the flat at the time it was sold to the fifth defender. The letter also indicated that, if this was correct, it was the pursuer's intention to raise an action proving the tenor of the original disposition. In response the fifth defender's agents stated that it was a perfectly normal transaction but that 'we have been waiting almost five years for the Registers of Scotland to issue a Land Certificate and we fail to understand why this should have taken so long'. The fifth defender should have informed the seventh defenders about the potential defects in his title. In any event, the seventh defenders should have satisfied themselves that the fifth defender had good title to the ground floor flat. By the time the fifth defender granted a standard security in favour of the seventh defenders the second disposition had been pending registration for a number of years. Had inquiries been made as to why the second disposition had not been registered the seventh defenders would have been provided with the relevant information from the Keeper, which would have alerted the seventh defenders to a potential defect in the fifth defender's title. The seventh defenders are called upon to identify what steps they took to examine the title deeds in relation to the ground floor flat in order to satisfy themselves that the standard security to be granted by the fifth defender would be valid. Further explained and averred that the pursuer has not delayed unreasonably in bringing the present action. It has been difficult to ascertain the factual position behind Mr Pocock's actings. Jamieson & Cradock's files have been with the judicial factor and with the police as part of their investigation. In August 2002 Morna Grandison was appointed judicial factor over Messrs Jamieson & Cradock. The pursuer was appointed interim trustee on 19 September 2003. Sequestration was awarded on 15 October 2003. At that point Ms Grandison's investigations into Messrs Jamieson & Cradock were still ongoing. It was not clear to anybody what properties might form part of Mr Pocock's estate. On 6 November 2003 the pursuer met Ms Grandison primarily to seek information from her about Mr Pocock's property transactions. Ms Grandison informed the pursuer that there were various potential legal difficulties in relation to many of the property transactions in which Mr Pocock had been involved. She informed the pursuer that she and her team had reviewed several hundred transactions. In fact Ms Grandison and her team reviewed between 300 and 350 conveyancing files, all originating from Jamieson & Cradock. These files were in disarray and proved to be extremely unreliable. Ms Grandison indicated to the pursuer that it would be some time before the legal problems were likely to be resolved in such a way as to clarify the ownership position. On 11 November 2003 the pursuer met Mr Pocock. Mr Pocock told the pursuer that Mr Taylor, the sole practitioner practising as Messrs Jamieson & Cradock, had failed properly to handle various aspects of a number of property transactions. Mr Pocock maintained that, as a consequence, he simply did not know the status of many of the transactions in which he had instructed Mr Taylor. Mr Pocock blamed his solicitor for his sequestration. The pursuer met Mr Pocock on a number of subsequent occasions. Although co-operative, Mr Pocock was unable to provide specific details in relation to his property interests. He did suggest that the judicial factor held proceeds due to him of £600,000. The pursuer decided to instruct law agents to assist in the sequestration. He had an initial meeting with his current agents on 10 December 2003. He provided his agents with a list of properties which might still have formed part of Mr Pocock's estate. There was no reference in the list to 5 Queen's Gardens. The pursuer's agents wrote by letter dated 29 December 2003 to Ms Grandison enclosing said list and asking whether she had in her possession any title deeds relating to property in which Mr Pocock might have an interest. By letter also dated 29 December 2003 the pursuer's agents wrote to the Keeper enclosing said list and asking whether any deeds relating to those properties had been lodged for registration. The pursuer's agents then held meetings with the Keeper and the judicial factor in an attempt to collate as much information as possible about Mr Pocock's property transactions. Ms Grandison wrote to the pursuer's agents enclosing a document entitled 'Summary notes of properties that David George Pocock may have an interest in'. No reference was made to Queen's Gardens. Ms Grandison subsequently sent the pursuer a report on properties in the name of Mr Pocock by letter dated 25 May 2004. No reference was made to Queen's Gardens. Ms Grandison subsequently provided a further report dated 1 June 2004 in relation to properties potentially in Mr Pocock's name. This refers to properties at 3, 4 and 5 Queen's Gardens and indicates that as a result of back-to-back transactions they were bought by Mr Pocock and then sold to the second defenders. The report also notes that the dispositions sent to the Keeper had been falsified. On 15 July 2004 the pursuer's agents met with a representative of the Keeper to discuss inter alia the title position in relation to the Queen's Gardens properties. In 2004 the pursuer instructed Professor Paisley for an opinion in relation to remedies available to the pursuer. Professor Paisley provided detailed opinions on 4 February 2005, 2 March 2005 and 26 April 2005. In respect of some of the properties Professor Paisley recommended actions of proving the tenor where the title deeds had been lost. There was no specific advice tendered in relation to 5 Queen's Gardens. At the time Professor Paisley's advice was received the pursuer had no funds available. The pursuer decided to raise actions in relation to 22 Hamilton Place, 3 Queen's Gardens and 27 Holburn Street. In the meantime the pursuer was still trying to locate the relevant conveyancing file for 5 Queen's Gardens and documents relevant to its title. The pursuer succeeded in those actions and sold the property on the open market. By letter dated 19 June 2007 the pursuer's agents instructed senior counsel for an opinion in relation to certain aspects of proceedings potentially to be raised in relation to 5 Queen's Gardens. Senior counsel produced an opinion dated 15 July 2007. Further inquiries were instructed. The pursuer's agents wrote to the Keeper on 20 August 2007 informing the Keeper that an action of proving the tenor was to be raised in relation to 5 Queen's Gardens and requesting documents in the course of registration. By letter dated 24 August 2007 the Keeper indicated that he would need the consent of submitting solicitors before the documents could be made available. The pursuer's agents then wrote to the police by letter dated 2 November 2007 seeking certain documents. By letter dated 7 November 2007 the police identified that the second disposition was with Crown Office and was required for criminal investigation proceedings (sic). On 23 April 2008 the pursuer's agents instructed junior counsel to draft summonses in relation to four properties, including 5 Queen's Gardens. Further explained and averred that the fourth defender (Mr Brebner) has raised an action in the Court of Session seeking payment from Russell Taylor, Rory Cradock, Morna Grandison as judicial factor and the pursuer for £303, 347.13 in relation to the loss and damage he has suffered as a result of the defect in title to the garden flat."

[50] It was the position of Abbey National that they did not wish to start the clock running any earlier than November 2004. The conduct of other people averred by the trustee was irrelevant as only the conduct of the trustee himself was relevant. The opinion of senior counsel was first sought three years after the trustee had become aware that the second disposition had been falsified. A standard security in favour of Abbey National was granted on 18 February 2008. The present action was not raised until 7 October 2008. The trustee had found out from Ms Grandison about the falsified disposition in June 2004. It was accepted that the matter was complex and that legal advice was required, but the delay of four years on the part of the trustee in bringing proceedings constituted an unreasonable and excessive delay in the circumstances. Taciturnity was to be found in the fact that during that four year period the trustee had taken no steps to challenge the title of Howemoss. So far as acquiescence was concerned, the test to be applied was an objective one: how would it appear to a reasonable person knowing all the facts? The reasonable person would have concluded that the trustee had acquiesced in the second disposition of the subjects, but not in relation to the dispositions of the other three properties mentioned.

Submission for the trustee
[51] The submission for the trustee began by emphasising that the court was being asked by Abbey National to grant absolvitor on the pleadings alone and without any evidence being led, on the basis that the trustee had given up his rights to the subjects. In D's Curator Bonis v Lothian Health Board 2010 SLT 725 the defenders' plea of mora, taciturnity and acquiescence was repelled by Lady Clark of Calton. She cited the comments of Lord Trayner in Assets Co Ltd v Bain's Trs (1904) 6F 698 at p 739:

"... as to mora - on this matter many authorities were cited to us, which I am glad to say do not call for any detailed consideration. The decisions upon this question of mora and its effects depend so much upon the special facts of each case that scarcely one can be cited as an exact precedent for another."

She also drew attention to the comments of Lord President Kinross in the same case at p 705 where he emphasised that mere lapse of time would not found an effective plea of mora, the remedy in such a case being provided by the law in the various prescriptions and limitations. He went on to state that, where a case did not fall under any prescription or limitation known in the law of Scotland

"... we should be slow to add, by decisions, a plea of bar or discharge resulting from mere lapse of time, which the legislature has not thought fit to sanction by statute. At the same time, I do not doubt that where, coupled with lapse of time, there have been actings or misconduct fitted to mislead, or to alter the position of the other party to the worse, the plea of mora may be sustained. But in order to lead to such a plea receiving effect there must, in my judgment, have been excessive or unreasonable delay in asserting a known right, coupled with a material alteration of circumstances, to the detriment of the other party."

[52] Lord Penrose in Pickering v Kyle and Carrick District Council (20 December 1990, unreported) said, in the specific context of a planning case:

"The essence of the plea ... is that the person or persons having a legitimate ground of challenge refrain from exercising the rights which flow from that ground of challenge, or from intimating an intention to exercise those rights, in circumstances in which, to their knowledge, the holder of a planning permission proceeds with material operations in reliance upon the permission, and so alters his position that there would be loss or other form of prejudice to him if the permission were to be reduced."

[53] In the present case the trustee's agent wrote on 5 September 2007 to the solicitors for Mr Torr, the purchaser of the ground flat at 5 Queen's Gardens, and he therefore knew that there was a question mark over the title. There were no averments by Abbey National that the trustee even knew of their involvement or of their intention to advance funds. The averments of the trustee in response to the plea of mora, taciturnity and acquiescence were plainly suitable for proof. It could not be taken that the trustee had given up his claim to the subjects. There were two questions for the court on the issue of mora, namely:

(1) Could it be taken from the trustee's pleadings that he impliedly gave up his right of action in the knowledge that Abbey National were relying upon his conduct?

(2) Were Abbey National's pleadings relevant?

Both questions should be answered in the negative.

Response for Abbey National
[54] It was submitted in response for Abbey National that there was no merit in the two criticisms of their pleadings on behalf of the trustee, namely, (1) that they had failed to aver when proceedings should have commenced; and (2) that they had failed to make adequate averments of knowledge on the part of the trustee.

[55] In relation to the first point, it was implicit in Abbey National's existing averments that the action should have been raised in June 2004 when the trustee became aware of the falsified disposition. Al the defenders had to do in a mora case was to aver what the period of delay had been. It was averred in this case that there had been a delay of more than four years. One way of averring what the period of delay had been was to aver when the action should have been raised, but Abbey National had gone about the matter in a different way. Their position was that proceedings should have been commenced in or about June 2004. It was explicitly averred (at p 44C) that the trustee and his solicitors were aware from about 1 June 2004 at the latest that the first disposition had been falsified, that he had delayed in raising the present proceedings for a period at least in excess of four years (at pp 44E -45A) and that by delaying for so long in raising proceedings he had caused significant prejudice to them. It was also explicitly averred (at p 46D) that the action was barred by mora, taciturnity and acquiescence as the trustee had delayed raising the present proceedings for over four years after he became aware that the first disposition had been falsified. The averments by Abbey National on mora were therefore relevant.

[56] In relation to the second criticism, there was no merit in the suggestion that inadequate averments of the trustee's knowledge had been made. It was not necessary to aver actual knowledge on the part of the trustee: it sufficed to aver constructive knowledge, that is, things of which he ought reasonably to have been aware (per Lord Glennie in United Co-op Ltd at para 33). The necessary averments of the knowledge which the trustee ought to have had had been made (at p 45D - 46A and 47A-B).

[57] The submission for the trustee had placed great reliance on the letter of 5 September 2007 to Mr Torr's solicitors and suggested that it cured all problems about acquiescence. That was incorrect: indeed, the opposite was true, because sending that letter and delaying the bringing of proceedings until October 2008 made matters much worse for the trustee and spoke very eloquently of acquiescence. In those circumstances one would have expected proceedings to have been raised promptly, but there was a further delay of over a year before the present action had been raised. (cf Lord Glennie in United Co-op Ltd at para [32]).

Discussion and conclusion
[58] The requirements for a successful plea of mora, taciturnity and acquiescence are laid down in the cases cited in the course of the submissions which I have set out above. What Abbey National are asking me to do is to grant absolvitor at this stage on the basis that the pleadings alone disclose an unanswerable case of mora, taciturnity and acquiescence against the trustee. In my opinion it cannot be asserted that the pleadings do disclose such an unanswerable case. As Lord Glennie observed at para [30] in United Co-op Ltd, mora simply means delay beyond a reasonable time and what is a reasonable time will depend on all the circumstances. Accordingly, before I could be satisfied on the issue of mora, I would require to be able to take the view at this stage that on no possible basis would it be open to the trustee to seek to prove that his delay was not beyond a reasonable time. I consider that, on the basis of the pleadings of both the trustee and Abbey National, I cannot take such a view at this stage. As the question of reasonable time will depend on all the circumstances it must, in my opinion be, except in the most extreme case, one which is a matter for proof. So far as taciturnity is concerned, I do not think that, against the background of the averment about the letter from the trustee's solicitor dated 5 September 2007, I would be entitled to hold that there has been taciturnity without a proof being held. The same goes for acquiescence. I cannot conclusively assert at this stage that "there must have been excessive or unreasonable delay in asserting a known right, coupled with a material alteration of circumstances, to the detriment of the other party" (per the Lord President in Assets Co Ltd at p 725). To give effect to Abbey's National's plea of mora, taciturnity and acquiescence without a proof being held would be tantamount to

my adding a plea of bar or discharge resulting from mere lapse of time which the legislature has not thought fit to sanction by statute.

[59] The submission of Abbey National on this aspect of the case therefore fails. On the other hand, I am not satisfied that their averments about mora, taciturnity and acquiescence can be said to be irrelevant, the submission to that effect not having been strongly pressed. There will therefore require to be a proof before answer on their first plea-in-law.

Adoption of forgery

Submission for Abbey National
[60] It was submitted for Abbey National that the trustee was, as a consequence of the common law principle of adoption of forgery, personally barred from seeking to reduce the second disposition. Adoption was a sub-species of the doctrine of personal bar and cut everything down. A party seeking reduction may be barred from obtaining the remedy if he has delayed in his challenge or, having discovered the deed alleged to be forged, has allowed another to act on the faith of its validity. The latter was what had occurred in the present case. Having discovered that the second disposition had allegedly been falsified, the trustee delayed for over four years before seeking to reduce it, thereby allowing Abbey National to act on the faith of its validity. In those circumstances the trustee was personally barred from seeking reduction.

[61] That submission was based on the following passage from the opinion of Lord President Dunedin in Muir's Exrs v Craig's Trs 1913 SC 349 at pp 354-355:

"The law of adoption of forgery was long ago authoritatively stated in the case of Mackenzie v British Linen Company 1881 8 R (HL) 8 in the House of Lords, and there is nothing more to be said about it. I need scarcely remind your Lordships that adoption is the basis of the doctrine, and that adoption prima facie means something positive. But it was recognised in Mackenzie v British Linen Company that you might be in a position to be what is called 'estopped' in England or 'barred' in Scotland - you might be in such a position that you would not be heard to say that the signature was not yours. In particular, the dictum of Baron Parke in the well-known case of Freeman v Cooke (1848) 2 Ex 654 was adopted in the British Linen Company case, and therefore I may take it that it is good Scots Law as well as good English law. The point of the doctrine is that, when you know there is a forgery and when you know that the person relying upon that forgery is putting himself in a worse position or losing some remedy which he would otherwise have, you are not entitled to keep silence and then to tell him at the end of the day, after his position has been made worse by the delay, that the signature has been forged."

[62] The rubric in Mackenzie v British Linen Co reads as follows:

"When a person comes to know that his signature has been forged to a bill mere delay on his part in giving notice of the forgery to the billholder will not necessarily imply adoption nor bar him from repudiating liability unless the billholder or others have (sic) been prejudiced by his silence"

Lord Blackburn stated at p 15:

"I think that if he ratified to anybody or for any purpose the act done by Fraser as professing to be his agent, that for all civil purposes enured to make him liable just as if he had originally authorised that act, and his conduct and silence ... may prove such a ratification, and if the phrase 'adopted as genuine' is to be understood as meaning that he ratified, I quite agree with what is said."

The following passage is to be found in the opinion of Lord Watson at p 21:

"The question whether a forged bill has or has not been adopted by the person whose signature has been forged is in reality an issue of fact and not of law. Still adoption of a bill may be a matter of legal inference from certain ascertained facts, and in the present case the inference which has been drawn by the court below adversely to the appellant appears to depend upon the fact that after he came to know in July that the second bill had been discounted with the bank he (the appellant) kept silence, or at least did not inform the bank of the forgery of his own name until a fortnight or thereby had elapsed. The only reasonable rule which I can conceive to be applicable in such circumstances is that which is expressed in carefully chosen language by Lord Wensleydale in the case of Freeman v Cooke (2 Wel Hurl and Gordon, Ex 654). It would be a most unreasonable thing to permit a man who knew the bank were relying upon his forged signature to a bill to lie by and not divulge the fact until he saw that the position of the bank was altered for the worse. But it appears to me that it would be equally contrary to justice to hold him responsible for the bill because he did not tell the bank of the forgery at once, if he did actually give the information, and if, when he did so, the bank was in no worse position than it was at the time when it was first within his power to give the information."

[63] The circumstances outlined by Lord Watson in the above passage fell to be contrasted with those of this case. Here Abbey National had been prejudiced by the delay as they had advanced money on the basis of a standard security on the first floor flat. They were relying on prejudice to them which came about only because of the trustee's silence. On the trustee's own averments a case of adoption was made out against him as he had the requisite knowledge from 1 June 2004. The tenth plea-in-law for Abbey National should therefore be sustained.

Submission for the trustee
[64] It was submitted on behalf of the trustee that, as the case on adoption of a forgery was put as a sub-species of personal bar, the essentials of personal bar had to be averred. The allegation being made was that the trustee had adopted the second disposition. There were no averments that the trustee knew that Abbey National were relying upon the second disposition for any purpose (Muir's Execs at pp 354-5), and the case pleaded on the basis of adoption was therefore without legal foundation. The case of McKenzie was about a man adopting his own forged bill of exchange. The averments of Mr Brebner and Abbey National in Answer 6 about adoption of forgery should be deleted.

Discussion and conclusion
[65] As I have concluded that the averments about personal bar are irrelevant, and the case based on adoption of a forgery was put forward as a sub-species of personal bar, it follows that the adoption case must be irrelevant. Moreover, I am of the opinion that, for the reason given in the submission of the trustee, the substantive averments on this point are irrelevant.

Decision
[66] In order to give effect to my above conclusions I shall

(i) repel pleas-in-law 3, 4 and 6 for the fourth defender (Mr Brebner) and delete in answer 6 all averments (including the averments inserted by the Minute of amendment no 37 of process) after the word "admitted" on line 2 at p 28A;

(ii) repel pleas-in-law 10 and 11 for the seventh defenders (Abbey National) and delete in answer 6 all averments (including the averments inserted by the Minute of Amendment no 38 of process) after the word "denied" at p 28D;

(iii) sustain the first plea-in-law for the pursuer (the trustee) to the extent of the averments above deleted; and

(iv) quoad ultra allow a proof before answer.