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EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
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Lord Osborne
Lord Philip
Lord Marnoch
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[2006] CSIH26
XA67/05
OPINION OF THE COURT
delivered by LORD OSBORNE
in
APPEAL TO THE COURT OF
SESSION
From the Sheriffdom of
Glasgow and Strathkelvin at Glasgow
in the cause
DAVID J.C. MACROBERT,
Solicitor as judicial factor on the estate of the late THOMAS PETER CAHILL
Pursuer and Respondent;
against
JAMES WILLIAM CAHILL
Defender and Appellant:
_______
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Act: Howie, Q.C., Sanders; MacRoberts
Alt: Party
24
May 2006
The background
[1] The
pursuer in this action and the respondent in the appeal raised an action in
Glasgow Sheriff Court against the defender and appellant in the appeal, in
which he craved, first, a finding and declaration that the pursuer was entitled
to recover possession of property at 119 Yoker Mill Road, Yoker, Glasgow, given
that the defender refused or at least delayed to remove therefrom and, second,
decree for removing against the defender, his family, his subtenants and
dependants, with his goods and possessions from the said property. The action was raised as long ago as in May
1994, the first interlocutor having been pronounced on 9 June 1994. Since that time the action has involved a
range of procedures, including appeals to this court, which, happily, it is
unnecessary to narrate in detail.
Suffice it to say that, by interlocutor dated 28 September 2001, this
court recalled certain interlocutors pronounced by the sheriff principal and
the sheriff and, under deletion from probation of certain averments specified
in the interlocutor and having repelled certain pleas in law for the defender
and appellant, allowed parties a proof before answer of their respective
averments, remitting to the sheriff to proceed as accords, with a direction
that the case was to be sisted pending the outcome of certain other litigation
at the instance of the pursuer and respondent.
[2] It
is convenient at this stage to say something of the background to the present
litigation. The appellant's mother died
in April 1986. The appellant's father
moved out of the home that he had shared with his wife at 119 Yoker Mill Road, Yoker,
Glasgow and died shortly thereafter on 31 July 1986. In his Will he left fairly small legacies to
each of his three daughters and the residue of his estate to the
appellant. The appellant claims that,
prior to his father's death, he had been looking after the subjects mentioned
and that, following his death, it was initially understood that he would move
into the subjects permanently with his family.
Should it have been necessary to do so, he would make payment to the
executor of his father's estate such sums of money as might be necessary to
meet the legacies and executry expenses.
Regrettably the estate was not quickly wound up, cash transfers made by
the appellant's father prior to his death gave rise to questions concerning the
value of the estate and these transfers became the subject of dispute involving
the appellant. That dispute gave rise to
certain other litigation. The executor
who initially had responsibility for winding up the estate was the former
husband of one of the three daughters of the deceased. On account of that relationship, he
considered that a conflict of interest had arisen and, following his
resignation, the pursuer and respondent was appointed judicial factor on the
estate on 20 January
1989. Following the
raising of the present action, there was a debate of preliminary pleas in
November 1997 and February 1998 and on 16 November 1998 the sheriff granted decree of
removing. The sheriff principal heard an
appeal against that interlocutor in February 1999 and on 25 March 1999 refused
it. It was against that interlocutor of
the sheriff principal that the appellant appealed to this court, in which
appeal the interlocutor of 28
September 2001 was pronounced.
Before this court, in that appeal, there was but one issue, whether the
appellant occupied the subjects at 119 Yoker
Mill Road, Yoker under an "arrangement" with
the respondent. In that appeal it was
contended on the part of the respondent that there were no averments of an
arrangement binding upon the respondent, nor any averments from which such an
arrangement could be inferred.
[3] In
the appeal the court examined the averments made on the appellant's
behalf. It considered that the question
for it was whether the appellant could not, on any view of the averments,
establish an "arrangement" with the respondent to remain in the subjects. It concluded that it could not say that. In its opinion, it might be possible for a
sheriff to conclude that there was such an "arrangement". Final determination of the issue required
proof. In those circumstances the court
allowed a proof before answer, restricted to the issue of whether there was
such an "arrangement". Manifestly
irrelevant averments were excluded from probation. We are bound to say that, having considered
the terms of the opinion issued on 28 September 2001 and the averments
made on the appellant's behalf, we are not clear as to the nature of the
"arrangement" which the court then thought might be proved.
[4] The
contemplated proof was held in Glasgow
Sheriff Court on 1-3 September 2004, when the
sheriff made avizandum. On 2 March 2005, the sheriff, having resumed consideration of the
cause, found that the appellant's occupation of the subjects was without right
or title and therefore sustained the respondent's second plea in law and
repelled the appellant's pleas, finding and declaring that the pursuer was
entitled to recover possession of the property.
He also granted decree for removing against the defender in terms of the
second crave of the initial writ. It is
against that interlocutor that the appellant has now appealed to this court.
[5] It
is appropriate to narrate certain of the findings in fact made by the
sheriff. After making findings narrating
the background circumstances, he continued as follows:
" ... (4) There were insufficient funds in the estate
to allow the executor to make payment of the pecuniary legacies. The defender was advised that he would
require to fund the estate's liabilities before the house could be disponed to
him.
(5) The defender took up residence in the
house on or about 10 August
1987.
(6) After Thomas Cahill's death, a dispute
arose regarding the value of the estate.
In particular, the defender challenged the extent of cash transfers
alleged to have been made to Dr. Smith, prior to Thomas Cahill's death. In due course the executor decided that he
could no longer act and that a judicial factor should be appointed.
(7) By interlocutor of the Court of Session
dated 20 January 1989, the
pursuer was appointed judicial factor on Thomas Cahill's estate.
(8) Thereafter the pursuer proceeded to do
all that was reasonably required of him in terms of ascertaining the extent and
value of the estate.
(9) The defender believed that his father,
Thomas Cahill, had intended that he, the defender, should inherit the subjects
on Thomas Cahill's death. With that in
mind, the defender held discussions with the pursuer with a view to having
title to the subjects transferred to him.
(10) Within about three months of the pursuer's
appointment, the pursuer advised the defender that if he, viz. the defender,
were to continue living in the subjects, he would require to provide the
pursuer with sufficient funds to facilitate payment of the legacies together
with other liabilities of the estate.
Those requirements were prerequisites to the defender being granted
title to the subjects. The pursuer also
advised the defender that if such payments were not forthcoming the pursuer
would require to raise an action for ejection against the defender.
(11) In or about July or August of 1989, the
approximate sum required to meet payments of these liabilities was £22,000 as
at September 2004, the amount involved was in excess of £100,000.
(12) In principle, the pursuer's position
regarding the prerequisites to the defender being granted title to the subjects
has not altered since his appointment.
To date, apart from certain annual audit fees and other administration
expenses, the defender has failed to make payment of any of the sums required.
(13) The legacies and other liabilities of the
estate remain unpaid. In order to make
those payments and to wind up the estate, the pursuer requires to realise the
value of the subjects. He requires to
sell the subjects. In order to do so, he
requires to offer vacant possession to potential purchasers.
(14) At a point some time after the raising of
the present action, the defender took up residence in Ireland. As at September 2004, he continued to reside
in Ireland. He no longer resides at the subjects. The defender's son resides at the subjects.
(15) At no stage prior to or since his
appointment as judicial factor did the pursuer enter into an agreement with the
defender regarding the defender's occupation of the subjects."
[6] In
the Note which accompanies the sheriff's interlocutor of 2 March 2005, the sheriff expands upon
the issues which were canvassed at the proof and furnishes his comments as
regards his evaluation of the witnesses.
Of the pursuer he observes that he gave evidence in a clear and
compelling manner and that he had no doubt that his testimony was both credible
and reliable. He continues by observing
that:
"On the
pursuer's evidence, and, indeed, on any view of the whole evidence in the case,
it was clear to me that he neither agreed to nor consented to the defender's
residence at or occupation of the subjects since 10 August 1987. The pursuer's appointment did not arise until
almost a year and a half after that date.
Accordingly, the pursuer's rejection of any such arrangement squares
with the clear fact that prior to his appointment, the pursuer had neither
title nor interest to agree anything relating to the subjects.
In my view
the reality of the situation was that the pursuer, as his counsel submitted,
merely inherited a fait accompli. When
the pursuer took up his appointment, the defender was, as a matter of fact,
already in occupancy. No doubt both
parties were hopeful that the defender would be able to fund the liabilities of
the estate thereby facilitating his infeftment in the subjects. However, to my mind, it did not follow that
the parties had entered into an agreement simply because the defender, pending
resolution of the financial impasse, declined to give up residence.
In his
closing submission, counsel for the pursuer argued that for the agreement
founded upon by the defender to prevail, there had to be evidence of 'some sort
of consensus' between the parties. I
have concluded that the evidence led at proof disclosed no such thing. In so far as counsel for the defender sought
to argue that there had been an agreement 'through implication', having regard
to the surrounding facts and circumstances, I reject that contention. In any event, the evidence led fell far short
of establishing the nature and extent of the agreement espoused by the defender
let alone the existence of a concluded bargain ...
It was
obvious to the court that the defender's testimony was driven by the genuinely
held belief that his father, Thomas Cahill, had intended that, after his death,
the subjects would be passed down to the defender. Unfortunately, that, on any view of matters,
was not provided for in Thomas Cahill's Will.
Had the testator made the house at 119 Yoker
Mill Road the subject of a specific legacy
to the defender then, it may be, that this whole sorry litigation would have
been avoided. However he did not do so."
[7] The
sheriff then went on to consider the defender's own evidence. He found that the defender, in evidence, did
not adhere to parts of his written pleadings which appeared to be important and
which had influenced this court in allowing a proof. The sheriff then went on to explain:
"My overall
impression at the time of the proof and, in particular, when the defender was
being cross-examined was that it was far from clear precisely what it was that
the defender maintained should be his stated position. However, given his explicit departure from
the averment pleaded on record, it seemed to me that his reliability on the
central issue in the case was wholly undermined. He had, in evidence, departed from the
passage of averment which the Inner House, understandably, regarded as being
the potential foundation for the establishment of an 'arrangement' with the
pursuer."
The sheriff, finally, explains
that, on the balance of probabilities his conclusion was that the defender had
no right or title to occupy the subjects and that, more acutely, the pursuer
had never entered into the agreement contended for by the defender.
Submissions
[8] When
this matter came before us the appellant appeared on his own behalf. He embarked upon a wide-ranging examination
of the whole sorry background to this case.
At an early stage in his submissions he appeared to contend that the
Will of his deceased father was invalid, the testator not having testamentary
capacity at the time when the Will was signed.
However, it was made clear to the appellant that it was not open to him
in these proceedings to assert the invalidity of the Will. In response to that indication, the appellant
sought to have the present appeal sisted while an action of reduction of the
Will was raised and determined. That
motion was opposed. In all the
circumstances, and having regard to the very prolonged history of this case, in
which no such contention had previously been made, we decided to refuse that
motion.
[9] The
appellant then went on to draw attention to the basis upon which this court had
allowed a proof before answer on the question of whether an "arrangement" had
been made. He criticised the evidence
given before the sheriff by the respondent, upon the basis of his allegedly
imperfect recollection. He relied upon
certain dicta in Morrison's Executors v Rendall
1986 S.L.T. 227. He contended that there
was an element of personal bar involved in the present case. Although there were no averments to that
effect, there was a plea-in-law directed to that matter. He also contended that the present action was
flawed because no notice to quit had been served upon him prior to its being
raised. He then launched into an attack on
the conduct of the respondent as judicial factor. He proceeded to make submissions related to
those of his grounds of appeal that were permitted to be argued, drawing our
attention to numerous passages of evidence and documentation which had been
before the sheriff. He contended that
the sheriff ought to have formed an adverse view of the respondent's
testimony. He criticised the basis upon
which the sheriff had made an adverse assessment of the appellant's own
testimony, particularly in relation to certain averments in Answer 1, which the
appellant had acknowledged were erroneous.
He claimed that he had previously sought, but failed, to have the
averment concerned changed.
[10] Senior counsel for the respondent moved us to refuse the
appeal. He examined the appellant's
submissions individually and contended that none of them would justify this
court in interfering with the interlocutor of the sheriff. He made submissions specifically about those
of the appellant's grounds of appeal that he, the appellant, had supported. He emphasised that the position of the
appellant was that he had been a residuary legatee; he did not enjoy a specific legacy of the
heritable property. Accordingly, he had
no right to that asset, until such time as the obligations of the estate had
been discharged. In that connection he
referred to the article in the Stair
Memorial Encyclopaedia of the Laws of Scotland, volume 25, paragraph 851
and Cochrane's Executors v The Commissioners of Inland Revenue 1974
S.C. 158. Senior counsel contended that
there were at least two consequences of the state of affairs outlined.
[11] First, when the appellant had entered the house on 10 August 1987, he had no
right to occupy it under the Will. Accordingly
his possession of the property was precarious and merely tolerated first by the
executor and subsequently by the respondent.
That was the situation which the evidence led at the proof
demonstrated. It was reflected in the
sheriff's findings in fact, which findings the sheriff, on the evidence, was
fully entitled to make. The basis upon
which the occupation of the appellant had been tolerated was that it was
anticipated that, in due course, he would be enabled to become the proprietor
of it, on settlement of the obligations of the estate.
[12] The second consequence was that, because the appellant was a
residuary legatee, if the financial circumstances of the executry estate so
required, a payment by the appellant to the executry would be necessary to
enable him to retain the house.
Otherwise, the house would require to be sold in order to discharge the
obligations of the executry estate.
There was no significance in the fact that, over a period of years, the
appellant had discharged certain debts, such as those for council tax, repairs
and other outgoings arising from the property.
Had he not done so, those obligations, apart from council tax, which was
an obligation of an occupier, would simply require to have been discharged by
the executry, resulting in a diminution of the residue of the estate.
[13] It was accepted that there was an arrangement between the
appellant and the respondent, but it was qualified. The arrangement was that the appellant's
occupation of the heritable property would be tolerated until such time as the
appellant made the necessary payment to the executry to enable its obligations
to be discharged. No such payment had
ever been made or offered. It was
submitted that the decision of this court to allow a proof did not clearly
explain the kind of "arrangement" it had in contemplation. However, it was obvious that it had to be an
arrangement with no such qualification as that just described.
[14] Senior counsel for the respondent went on to explain in detail
the ways in which the respondent had attempted to recover funds which the
appellant contended should not have been removed from his father's possession
prior to his death. Those efforts had
been unsuccessful, though even involving litigation. No legitimate criticism could be made of the
respondent's handling of the judicial factory.
[15] As regards the arrangement which appeared to be contended for
by the appellant, it was argued that it would have been very surprising for the
judicial factor to have entered into any such arrangement. If he had done so, he would have exposed
himself to liability to the estate under his charge. Further, at no time had it been made clear by
the appellant or proved at the proof what the duration of the "arrangement" was
supposed to be. Unless it had a duration
extending beyond the time when the respondent demanded that the appellant
should remove himself from the property, it would not avail the appellant.
[16] Some reliance had been placed upon the circumstance that, at
one stage in the lengthy history of the matter, the titles to the property had
been transmitted to solicitors acting for the appellant, with a view to
preparations being made for a disposition in his favour. However, it was submitted by senior counsel
that there was no significance in that circumstance. That simply indicated that it was
contemplated that a conveyance might be granted in the future, upon the making
of the necessary payments by the appellant.
It was acknowledged that there had been very considerable delay in the
raising of the present action, but that was readily explained by the fact that
there was an expectation that at some stage the appellant would offer funds
sufficient to discharge the obligations of the estate and thus be enabled to
acquire a title to the property.
Finally, there was no substance in the appellant's contention that a notice
to quit should have been served upon him before the raising of the present
action. Upon the basis that there was no
right to occupy in the first place, and that the appellant's occupation of the
house was merely upon the basis of the toleration of the respondent, no notice
to quit was required.
Decision
[17] We consider that it is regrettable that the decision of this
court on 28
December 2001 to allow a proof before answer on the issue of
whether the appellant occupied the subjects under an "arrangement" with the
respondent did not possess greater clarity than it did. It is not a matter of dispute that, for a
very substantial period of time, the respondent permitted the appellant to
occupy the premises upon the basis that there was an expectation that, in due
course, the appellant would furnish funds sufficient to discharge the
obligations of the estate to legatees and creditors, following which, as
residuary legatee, he would be entitled to a conveyance of the remaining asset
of the estate, namely the heritable property.
However, it appears that that is not the kind of "arrangement" upon
which the appellant can and must rely.
Plainly he has not offered to pay the sums of money necessary to
discharge the obligations of the executry estate and does not now offer to do
so. His position is that there was some
other free-standing "arrangement", not subject to the qualification of payment
to which we have referred. It is,
perhaps, unhappy that, in the decision of the court of 28 December 2001, it was
not made clear what was thought to be the nature of the "arrangement" which was
allowed to be the subject of proof.
However, be that as it may, the outcome of the proof was quite
clear. The sheriff held that at no stage
prior to or since his appointment as judicial factor had the respondent entered
into an unqualified agreement with the defender regarding the defender's
occupation of the subjects. Thus the
sheriff rejects the contention for the only kind of "arrangement" that,
standing the non-payment by the appellant of sums necessary to discharge the
obligations of the estate, could avail him.
[18] A number of criticisms were attempted to be made by the
appellant of the sheriff's evaluation of the evidence. However, we were not impressed by any of
those criticisms. In our opinion, the
sheriff was quite entitled to make the findings in fact which we have
narrated. Upon the basis that those
findings in fact must stand, it follows that the only basis upon which the
appellant could justify his continuing occupation of the property disappears.
[19] A number of miscellaneous points were made by the appellant in
the course of his submissions to us; we
see no merit in any of them. In
particular, the principles of personal bar can have no application to the
circumstances of this case, since there are no averments about that matter,
which, in any event, was not canvassed at the proof. [20] The
appellant made a point concerning the absence of a notice to quit in this
case. Having regard to the nature of the
appellant's occupation of the premises, we cannot see why a notice to quit was
necessary. In that connection, one of
the insuperable problems which the appellant faced was that there was no
indication of the alleged duration of the "arrangement" on which he
founded. Unless it could be shown that that
duration entitled the appellant to continue to occupy the property, then clearly
it could not avail him. Nothing in the
case suggests that there was ever an "arrangement" with such a duration. The conclusion which we reach is that the
appellant was simply tolerated as an occupant of the property, upon the basis
which we have explained, and that his occupation can now be determined at the
instance of the respondent. For all
these reasons we shall refuse the appeal and adhere to the interlocutor of the
sheriff of 2 March
2005.
