BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £1, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] | ||
Scottish Court of Session Decisions |
||
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Hann (AP) v Howatson [2014] ScotCS CSOH_69 (11 April 2014) URL: http://www.bailii.org/scot/cases/ScotCS/2014/2014CSOH69.html Cite as: [2014] ScotCS CSOH_69 |
[New search] [Help]
OUTER HOUSE, COURT OF SESSION
|
|
|
|
A157/09
|
OPINION OF LORD McEWAN
in the cause
GEORGE HANN (AP)
Pursuer;
against
JENNIFER ROSALYN SPENCE HOWATSON
Defender:
________________
|
Pursuer: Thompson; Brodies LLP
Defender: Gill; Anderson Strathern LLP
11 April 2014
[1] The action
before me seeks production and reduction of a will and confirmation following
thereon and on an esto basis a pro tanto reduction. The defender
has a general plea to the relevancy and also one against admitting certain
averments to probation. Both parties are agreed that some form of proof will
be required, on the averments relating to an alleged forged signature on the
will. The first defender seeks to exclude article 5 and parts of
article 6 all as more fully set out in the revised note of argument. In
essence what he wants excluded is anything asserting that the testamentary
grant to him is in breach of a prior obligation.
[2] Let me
briefly summarise the closed record. It proceeds at the instance of the
executor nominate of a deceased James Wheeldon ("James") against the
executrix-nominate of the late Doris Spence ("Doris") and others. The
second defender ("George") is the son of Doris.
[3] What has
happened is this. There is a property Powfoot Hall. James resided there for
43 years till his death in 2007. He had a business relationship with
Doris, and in fulfilment of certain informal agreements between them he
conveyed the property to her in 1987. In 1994 James and Doris made a
further informal written agreement. It contained the following clause.
"... As affairs between ... Doris ... and ... James ... are now agreed by both parties concerned and fully settled, and the title deeds to the Powfoot Hall are hereby returned to ... James .... who now assumes full legal title to Powfoot Hall on 20/12/1993 and becomes owner of said property ..."
[4] Doris died
in 2003 without having conveyed back to James. By her will of 2002
she left the property to her son George. In the action, as I have said, the
pursuer seeks production and reduction of the will and the confirmation that
followed thereon. Founding on the above clause the pursuer avers that Doris
was obliged to convey to James.
[5] I was
referred to the following authorities viz Rodger (Builders) Ltd v
Fawdry 1950 SC 483; Gibson & Hunter Home Designs 1976 SC 23; Paterson v Paterson (1893) 20 R 484; Jamieson
v Jamieson 1952 SC (HL) 44. Reference was also made to
DM Walker: Civil Remedies (1974); Stair Society Encyclopaedia
vol 18; Gloag & Henderson, Law of Scotland (13th edn);
Succession (Scotland) Act 1964. In the debate the following other cases
were referred to in passing: McLachlan v Seton's Trs 1937
SC 206; Gibson v Royal Bank 2009 SLT 444.
[6] The first
defender lodged a note of argument (paragraph 7 was excluded) and a series
of propositions (number 4 was not argued). In supplement of these
Mr Gill argued in these terms. I should sustain the second plea for the
first defender and repel the 5th and 6th pleas
of the pursuer. The "esto" case was not relevantly averred and the
words set out in paragraph 3 of the note of argument should be excluded
from probation. Aliunde he accepted there should be a proof before
answer. Having introduced the parties he took me to the record which I refer
to elsewhere.
[7] Counsel
then referred me to his propositions. He argued that no real right was
conferred in 1994 (Gibson was cited) only a personal right. Secondly,
he referred to Rodger (pages 498/501) for the proposition that in
the present case there was only a pre-existing personal right. Thirdly, there
was no authority for the "offside rule" to be applied to a bequest. Rodger
should not be extended to the facts of this case. The beneficiary in a will
should not be equated to a subsequent buyer. He merely took his bequest in a
passive way and was not trying "to score a goal". Fifthly, even if Rodger
did apply there were no relevant averments of bad faith. It would be necessary
to aver knowledge and none was present. The bequest was gratuitous and that
did not amount to knowledge. Every bequest was gratuitous. The 1994
obligation was not "not to make a will leaving the home to her son".
[8] In his reply
speech he added under reference to Paterson that there the previous
settlement was irrevocable.
[9] Counsel
for the pursuer invited me to refuse the motion and to allow before answer a
proof. He made a minor corrective amendment to article 5 of the condescendence.
As a matter of relevancy it could not be said that the pursuer was "bound to
fail" (Jamieson) what was important was to consider the meaning of
"gratuitous", against the background of "knowledge". Doris had undertaken a
prior obligation to make a grant to James. Counsel referred me to Paterson,
Walker at page 150 and Stair vol 18, para 690/95.
Gloag & Henderson 39.10 Here there was a prior obligation.
Reference was also made to Gibson v Royal Bank and McLachlan
the latter case said not be in point.
[10] I now want
to look at the cases cited and other authorities.
[11] In Gibson
the first party (Gibson) by missives bought land and a home in Dunfermline from
the second party a company (Hunter etc). He paid a deposit, then the balance
and took entry. Before the disposition and the security holder's consent could
be delivered a liquidator to Hunter was appointed. The issue was whether
property had passed to Gibson. In answering the special case the First
Division held that the property remained with the company. The buyer only had
a jus crediti. Payment and entry did not instruct a trust.
[12] Next is Rodger
v Fawdry. Fawdry agreed to sell an estate to Rodger. The buyer
failed to pay the balance of the price at entry. Two weeks later the seller's
agent gave the buyer three more days of grace. The seller got in touch with
one, Bell, and when the price was not paid sold to him the title being taken by
his wife. Bell knew the estate had been sold to Rodger but accepted Fawdry's
statement that the contract was at an end. After proof the Lord Ordinary
granted reduction of the second sale. The First Division adhered holding that
the second buyer had failed to make sufficient inquiry into the nature and
result of the first contract and was not a bona fide purchaser. They
also agreed with the Lord Ordinary's view that the failure to pay by a
stipulated date was not a ground for rescission.
[13] A closer
look at the evidence shows a mix up, a misunderstanding between solicitors and
a letter delayed in the post for ten days. The solicitors did not disclose the
second sale. The description about the visit to the property, the reaction of
the grieve, the reuse of the original missives (490) and what happened later in
the solicitors office in Selkirk on 28 November 1947 (491 and see in the
Inner House 499) make it very clear why there was mala fides and the
"offside goal" rule applied. Bell was clearly in bad faith. Fawdry was
not and it seems to me he was poorly advised. He lived in London and I suspect
panicked into reselling because of the agricultural nature of part of the
estate. The case of Paterson was not cited either to Lord Sorn or
to the Division.
[14] Professor
Reid's article in the encyclopaedia deals with transfer of ownership. Normally
a granter's power is unimpaired by personal obligations (para 689) but
under reference to Rodger where the grantee was in bad faith the power
of the granter remained affected by his prior personal obligation. The author
deals with what the Lord Justice-Clerk described as the offside goal rule
(called by the writer an "arresting metaphor"). The author also writes that
the same rule applies if the grant was made without consideration. This is
developed in para 695 and 699. The rule does not just apply to double
sales but according to the writer to a failure to take for value. The example
of pure donation is referred to.
[15] Walker: Civil
Remedies p150 is to the same effect as is Gloag & Henderson 39.10.
The case of Paterson is cited and I refer to this elsewhere.
[16] Having
looked at McLachlan v Seton's Trs I do not think it is in point
since it deals with cumulative or substitutional legacies. Gibson v Royal
Bank of Scotland also is not precisely in point. It is, however, a
decision by a strong judge and I cannot let it pass without noticing some of
his comments with which I agree. Having analysed the position in double grant
cases (para 43), he held there was no difficulty in applying the "bad faith"
exception. The bank knew of the option to purchase yet took its security just
before the date of entry. Lord Emslie would well understand how the
"offside rule" would apply (as would have his father before him). I agree with
him when he commented that it is very difficult to devise a universal rule.
[17] Let me finally
look at Paterson. One John Paterson lent money to his father in
his lifetime in connection with property in Linlithgow. His mother, then a
widow, made an agreement binding herself to execute a trust disposition and
settlement entitling her son John to her whole property, he undertaking certain
other obligations at the same time. The mother duly executed the settlement
and John performed his obligations. Two years later the mother died having
revoked the former deed and leaving the property to her three sons. John
sought reduction of the latter deed. The Lord Ordinary (Kincairney) granted
reduction.
[18] He attached
no significance to the declaration that the prior settlement was irrevocable as
a mortis causa deed is always revocable. The agreement, however, he
held was irrevocable stating:
"... I must hold that the deed is what it purports to be, a bilateral agreement, and as such a delivered deed, or, as binding without delivery, equivalent to a delivered deed. I see no reason why it should not be held to be, as it purports to be, irrevocable ..." (486).
He regarded the matter as beyond doubt referring to Stair and Erskine and earlier cases. He went on to find that it was of some importance that John had advanced money on the properties more than their worth and concluded:
"... (487) it is of no importance in this question whether a deed is binding or is revocable to consider whether the deed is gratuitous or onerous. The one is just as irrevocable as the other if meant to be so, and containing nothing to the contrary ...".
[19] The
Division adhered. To the judges it was clear that the agreement was onerous
(£800 in these days was a fortune!). The mother treated her son as her
creditor and he was content to let the bond lie during her lifetime and take no
interest. Having given value his mother was bound to honour the counter
obligation, even though this could only be done after her death.
[20] In my view
the case of Paterson is decisive of the point before me. The case is
binding on me and I consider the remarks of the judges as conclusive. In my
view Doris in her lifetime bound herself to leave the heritage to James and the
fact that the son George may have taken it in good faith is nothing to the
point. I am confirmed in that view by the three academic writers which I have
already referred to. Rodger is, of course, also binding, but in my
opinion falls to be distinguished and for this reason. The case really dealt
with bad faith and a second sale. That is not this case. It also had the
benefit of a proof. Much was made of the "offside goal rule" in the very good
natured debate before me where metaphors were freely mixed and, I suspect, both
counsel knew more of soccer than I.
[21] If I can
continue in the same vein, I think the "offside goal rule" was
intended to strike at bad faith; the player knowing he is out of position yet
trying to secure a benefit from the offside place on the field of play. This is
what Rodger is about. It does not deal with the player who takes an
advantage gratuitously and who may not be offside. The problem is that the
player (Doris) who passes the ball to him (George) has broken the rules and the
pass is invalid.
[22] Whether
Lord Kincairney in 1893 was an aficionado of the beautiful game I
know not. Even by then the game had rules. It was not called offside in those
days but since the rules of football were formulated by the gentleman players
of the English public schools in 1863 there was a prohibition against
playing the ball if you were "out of play" (Rule 6) (See Melvyn Bragg: "Twelve
books that changed the world" p102).
[23] In my
opinion this case does not depend on the doctrine in Rodger but on the
principles set out in Paterson, dealing as it does with succession and
not property and titles.
[24] The
pursuer's counsel did not seriously suggest that George was in bad faith. The
averments about it are sparse and nowhere approach was happened in Rodger.
I do not think there is any issue here of bad faith in the sense of moral
turpitude, and on that I agree with Mr Gill. The proper point is that the
taking was gratuitous. I think it would complicate any proof to leave in the
issue of bad faith, and so I do not propose to admit to probation the words
"....in bad faith and...." on line 10 of article 5 of the
condescendence. To that limited extent, I will in part sustain the defender's
second plea-in-law and quoad ultra before answer send the whole record
for proof. I will reserve expenses meantime.