BARR AGAINST JAMES CASSELS [2018] ScotCS CSOH_79 (25 July 2018)

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URL: http://www.bailii.org/scot/cases/ScotCS/2018/[2018]_CSOH_79.html
Cite as: 2019 SCLR 537, [2018] ScotCS CSOH_79, 2018 GWD 27-345, [2018] CSOH 79

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OUTER HOUSE, COURT OF SESSION
[2018] CSOH 79
A620/15
OPINION OF LADY WOLFFE
In the cause
AGNES BARR
against
JAMES CASSELS
Pursuer
Defender
25 July 2018
Pursuer: Stevenson (sol adv); Campbell Smith LLP
Defender: Sanders; Allan McDougall
Introduction
[1]       The pursuer in this action seeks reduction of a disposition of land amounting to
about 1.4 ha (“the subjects”), by the pursuer in favour of herself and the defender (and the
survivor) dated 10 May 2006 and registered in the General Register of Sasines (“the GRS”)
on 9 June 2006 (“the disposition”).
[2]       The subjects disponed by the disposition had formerly been part of the land owned
and farmed by the pursuer’s father, John Logan Barr. The pursuer’s father had previously
disponed the subjects to the pursuer by a disposition dated 3 October 2003 (“the 2003
disposition”) but only recorded in the GRS of even date with the disposition. In
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circumstances I will come to narrate, a new house was built on that parcel of land. It is the
pursuer’s reduction of that disposition in favour of herself and the defender which is the
subject matter of this action.
[3]       At the time of the grant of the disposition, the pursuer and defender had been in a
relationship, which had begun several years earlier. The defender, who is about 17 or
18 years older than the pursuer, had been the solicitor to the Barr family for many years. He
had acted for members of the Barr family in relation to a variety of matters, including having
acted for the pursuer in respect of her two divorces.
[4]       The matter called before me for a two-week proof. The pleadings in this case are
extensive. The Closed Record extends to some 50 pages. There are averments of other
matters not obviously or directly reflected to the conclusions. For example, there are
averments attacking the propriety of the defender having acted for the pursuer’s father,
John Barr, in relation to the 2003 disposition. (The averment in Articles 7 and 8 of
condescendence and the answers thereto themselves occupy 19 pages of the Record.)
However, John Barr is not a party to these proceedings and there is no conclusion (or plea)
directed to the 2003 disposition. After discussion on the first morning of the proof, it was
agreed that the essential ground for reduction of the disposition was for breach of fiduciary
duty on the part of the defender. In the circumstances described, the defender was acting as
solicitor for the pursuer in relation to the disposition and he was also benefiting as one of the
disponees thereof.
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The pleadings
[5]       The pursuer’s first conclusion is for reduction of the disposition. The second
conclusion is for interdict against the defender from selling the land and the third conclusion
seeks payment of £187,500 in lieu of reduction.
[6]       The pursuer’s first plea-in-law (as amended on the first day of the proof) is as
follows:
“The pursuer having been induced into executing the disposition condescended
upon as a result of the Defender’s misrepresentations, et separatim his actings
including his breach of fiduciary duty, the disposition dated 10th May 2006 ought to
be reduced.”
The pursuer’s remaining pleas relate to the second and third conclusions.
[7]       The defender stated nine pleas-in-law, of which it is necessary only to note his pleas
of prescription (plea 5), personal bar (plea 8) and that, having regard to the 2015 decree, it
was contrary to natural justice to grant any of the conclusions to be granted.
Factual averments
[8]       It is necessary to note the following additional matters averred in the pleadings:
1) There is reference to the defender’s action in Paisley Sheriff Court for division
and sale of the subjects (“the defender’s action”). Although the pursuer (who
was called as the defender in that action) was legally represented in those
proceedings, summary decree was granted in favour of the defender on 23 March
2015 for declarator that the subjects be sold and the proceeds divided between
the parties (it being inexpedient to divide the subjects) (“the 2015 decree”). Leave
to appeal against that decree was refused on 22 June 2015.
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2) The pursuer avers that the defender acted as her solicitor in relation to a number
of matters, including her application to change her name, a claim for
maintenance against a former husband, and the framing of a will for her in 2002.
There are also averments of the defender acting as a solicitor for other members
of the pursuer’s family, which it is not necessary to record.
3) The pursuer also avers (in Article 2 of Condescendence) that the defender acted
for the pursuer’s father to obtain the requisite planning permission in respect of
the proposed construction of a house on the subjects. (There was some evidence
that, by reason of the agricultural character of the land this was not
straightforward and that there is a planning condition restricting the class of
persons who may occupy or acquire the subjects (“the planning condition”).
4) On the question of the funding of the construction of the house, the pursuer
avers:
“The Pursuer paid for the costs of construction. The defender, in receipt of
State benefits, was not in any position to contribute towards its construction...
Cash had been given to the Pursuer by the Defender. It was given to her to
do with as she wanted. The Pursuer was able to accumulate enough cash
from the gifts of money made by the Defender so as to use the money
towards funding purchase of building materials for construction of the
house.”
It should be noted that the defender denies this and himself avers that he “paid
for the entire construction costs of the house”. He also avers:
“The defender did not give any cash gifts to the pursuer to do as she pleased
with. As the pursuer is aware, and was aware, these sums were handed over
for the specific purpose of the ongoing construction of the property including
paying tradesmen and paying for materials.”
5) The averments (in Article 5 of Condescendence) concerning the grant of the
disposition are as follows:
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“On or about 10th May 2006, the Defender presented a document to the
pursuer for her signature. The signed document is produced herewith. It is a
disposition of heritable property from the Pursuer to the pursuer and the
Defender. The pursuer asked the Defender what the document was for. She
was told by the Defender that the document would transfer her father’s land
to her. The Pursuer did not read the document. The Pursuer relied upon the
Defender’s explanation of the purpose of the document in adhibiting her
signature to it. At the time of adhibiting her signature, the Pursuer was not
aware of the earlier 2003 deed; nor aware of the true nature of the disposition
to the disposition purportedly conveying title to the Defender and herself.
Unbeknown to the Pursuer, the defender purported to act as solicitor and
agent for himself and the pursuer in the drafting, engrossment, execution and
registration of the conveyancing deeds purportedly giving the defender
nominal title to the pursuer’s home. Morag Hill, the person allegedly having
acted as witness to execution of the deed, was not personally present on the
occasion that the Pursuer’s signature was adhibited to the document.”
(Emphasis added.)
6) The defender’s answer to these averments is as follows. After narrating the
ongoing construction of the house, it is averred:
“The defender reminded the pursuer that the property required to be
transferred into the joint names of the parties being what had been originally
agreed and being, at least in part, the basis on which the defender agreed to
fund the entire construction and fitting out costs. The defender advised the
pursuer that a formal Disposition would require to be signed by her and the
title thereafter registered in joint names. The pursuer fully understood what
required to be done and why it required to be done. The defender further
advised the pursuer that it would be in her interests to discuss the matter
with an independent Solicitor. The pursuer understood this but indicated to
the defender that she neither required to nor wished to seek independent
legal advice. She indicated that she was happy for the property to be in joint
names and fully understood the legal import of granting a Disposition to that
effect as she did.”
There are sundry averments as to the rationale of having a survivorship clause,
essentially because of the disparity in the respective ages of the parties.
7) The defender makes additional averments about the steps taken to advise the
pursuer to obtain separate legal advice. These are as follows:
“In addition to the defender explaining to the pursuer about her obtaining
independent advice the defender instructed the conveyancing solicitor (Allan
Findlay) then employed by the defender (Cassels) to write to the pursuer in
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formal terms fully explaining issues such as obtaining independent advice….
In terms of said letter the pursuer was provided with a copy of said letter to
sign and return and a letter of reply for her to sign and return if she so
wished. The pursuer signed and returned the letter of reply. The pursuer
maintained their position that she did not require independent advice. The
defender went through the terms of the proposed disposition. As the pursuer
is aware the aforementioned Morag Hill witnessed the pursuer’s signature of
the disposition granted by her in favour of the parties. There was no coercion,
fraud, undue influence or duplicity by the defender. The pursuer granted the
disposition voluntarily, knowing what she was signing and its legal
significance qua conveying a share in the property to the defender. The
pursuer did so in the knowledge that parties to the action were building a
home together with a view to a future together and in the knowledge that the
defender was funding the cost of constructing and fitting out the said home.”
Averments of the grounds of reduction
[9]       The pursuer’s averments setting out the legal basis of challenge are as follows:
Cond. 9 As solicitor allegedly acquiring heritable property from his client, the
Defender owed the Pursuer fiduciary duties of care to act in her interests. He was
bound to advise the Pursuer to seek independent legal advice as to the nature of the
transactions in which she was involved. The Pursuer was not advised to consult
another solicitor. She was not told the true nature of documents she had been asked
to sign. The Pursuer relied upon the representations made by the Defender. The
Defender breached his fiduciary duties of care owed to the Pursuer. The Defender
has gained personally from his breach of fiduciary duties. The Pursuer did not
intend to dispone any interest in heritable property to the Defender. Had the
Defender fulfilled his duties of care owed to the Pursuer, the Pursuer would have
taken independent legal advice. With the benefit of independent legal advice the
Pursuer would have been made aware of the true nature of the conveyancing
documents given to her. She would not have disponed a share of her home to the
Defender. In the circumstances, the Defender obtained a material personal benefit
from his actings. In the exercise of the fiduciary duty of care, the Defender (i) ought
to have declined to act for the Defender’s [sic]; (ii) ought to have explained his
reasons for doing so; and (iii) ought to have insisted that the Defender consult and
engage the services of an independent solicitor. In a question with the Pursuer, the
Defender was professionally negligent. No solicitor of ordinary skill and acting with
ordinary care would have acted for the Pursuer in the manner condescended upon.
The said letter from Donald B Reid is referred to for its terms. The Defender’s
averments in answer are denied save in so far as coinciding herewith.”
I do not record the averments anent the 2003 disposition.
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The pursuer’s proof
The pursuer’s evidence
[10]       The pursuer described having a number of prior occupations. These included
having been a social work carer, running a business supplying office furniture and as a
nurse. Her current occupation was as a chef in a steakhouse in East Kilbride. She described
having assisted with lambing on the family farm for 30 years but for which, she said, she
was never paid. She said that it was in recognition of that contribution that her father
conveyed the small parcel of land to her by the 2003 disposition. The pursuer first met the
defender when she was 26. He assisted in obtaining maintenance from her first ex-husband.
The defender was the Barr family’s lawyer and other family members went to him on
different legal matters. The defender also assisted the pursuer with her second divorce,
which involved cross actions in Scotland and in North Carolina, and assisted with obtaining
custody of the pursuer’s daughter whom she had had with her second husband.
[11]       A deed described as the will of the pursuer was put to the pursuer. The pursuer’s
evidence was that she had never received this. She acknowledged that the signature looked
like hers, although the signature was smoother, but it did not reflect how she formed the
letter “G”. Furthermore, she maintained that she had never instructed a will from the
defender. The only will she had ever made she had written out at the farm and had left with
her parents there.
[12]       As to whether or not the pursuer’s father ever expressed an interest in conveying
land, the pursuer’s first response was that “farmers do not give away their land”. At a later
point in her evidence it was her position that her father wished to gift her a parcel of land on
the farm in recognition of work she had done in the past for free. To that end, enquiries
were made to secure the appropriate permissions given its character as agricultural land.
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She and her father discussed the pursuer building a three-bedroom house. This coincided
with the start of her relationship with the defender. The defender offered to assist in
obtaining planning and other permissions. At other points, I understood the pursuer’s
evidence to be that she and her father had talked in the past about her father giving her one-
half of an acre so she could build a bungalow (like her brother had done) She maintained,
however, that she was not aware at that time of her father having given land to her. She
only became aware of that in about 2005. The source of this knowledge she described,
somewhat surprisingly, as “hearsay”. It was only when planning permission was obtained
that she understood that she was free to build a house on the land. As she described it, the
defender took her father to the sunroom in the farmhouse and everything was done in
private. However, she said, she knew she was getting the land and knew she was going to
get a house.
[13]       The pursuer explained that in about mid-2002 the defender became friendly with her,
often inviting her out for dinner at a Glasgow Chinese restaurant. Their relationship
progressed and the parties discussed moving in together and getting married. At this point,
the defender was still married to his wife.
[14]       Returning to the topic of how many deeds or legal documents the pursuer had
signed (ie and were prepared by the defender), the pursuer was adamant she had only ever
signed one document intending to have legal effect. This was the transfer of the parcel of
land from her father to herself. She maintained that that document began with a passage all
about property laws of the 14th century. It was all “gobbledygook” to her and the defender
just told her to sign the deed. He told her it was all about land law hundreds of years ago
and she would not understand. She signed it, she said, because the defender said it was
transferring the land from her father’s name to her. To try to relate this to some timeframe,
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she estimated this was in about 2006 because the house was newly built at that point. She
maintained that this was to effect the transfer of land from her father to herself “to make the
house legal”.
[15]       The disposition, being the deed under reduction, was put to her. She at first
acknowledged that the signature was hers (doing so twice in the first few questions on this
chapter of the evidence). Indeed, when the first several lines of the disposition were read
out to her, the pursuer was quick to say that she could understand this document. She could
not understand the document that she had been given to sign in the past which she had
already referred to in her evidence. When asked why she signed the disposition, she was
adamant that this was not the deed she had signed. Whatever she signed, she had signed it
because she trusted the defender. She confirmed that she did not understand what she had
signed and did not read it. She was unaware what happened to the document she said she
had signed, other than that she had given it to the defender and he had taken it to his office.
At this point objection was taken on the basis that the document containing references to 14th
century property law, and which was the single document the pursuer said she signed,
ought to be produced. The pursuer’s solicitor advocate explained, however, that no such
document was to be produced.
[16]       Thereafter the pursuer was asked to explain how her signature appeared on the
disposition, to which she simply replied that she had described the document she had
signed and this disposition was not what she had signed. She repeated that she could
understand the import of the disposition. The other document, which she maintained she
had signed, was more than a few pages, and the reference to the 14th century law was on the
first page. She was unable to explain how her signature came to be on the disposition.
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[17]       She was adamant that she had never received any paperwork from the defender, the
only paperwork she had ever received from him were her divorce papers. She had received
no other paperwork. The defender kept everything, including all of the paperwork relating
to the land and the house.
[18]       Returning to the topic of her father’s conveyance of some land to her, she repeated
her evidence that this was to reflect the fact that she was never paid for her work but would
take time off from work to come home and help with the lambing.
[19]       In relation to the defender’s involvement with the land, this was because she and the
defender were supposed to be starting a new life together; he was the lawyer and
everything she did she put by the defender. Their common expectation was that they would
live together, although not immediately because the defender was still married to his wife.
[20]       A number of letters from the defender’s firm, Cassels, were put to her. The first was
a letter dated 14 April 2006 (“the Advice Letter”), which was in the following terms:
“Dear Ms Barr,
1.42 Hectares at Bonnyton Moor Farm Eaglesham
I have been instructed by James Cassels in connection with the transfer of title to the
above area of ground, which is currently owned by yourself.
I am advised that you and Mr Cassels have agreed that the title should be transferred
into YOUR JOINT NAMES AND TO THE SURVIVOR. This effectively means that
on the first death the title to the ground ‘automatically’ passes to the survivor and in
plain English if Mr Cassels were to die first then the title (ownership) automatically
passes to you. It is also the case that if you were to die first that the title would pass
to Mr Cassels. This is known ad [sic] ‘a Destination’ ie on the occurrence of a specific
event (first Death) the titled [sic] is destined to pass to the survivor. It is also a
contract that is entered into between you and in order to change the Destination then
each party will require to consent.
It also means that each of you has a share in the title (ownership) and in the event of
any dispute that cannot be resolved then the ultimate recourse to either of you would
be to make an application to a Court of competent Jurisdiction seeking a decree of
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division and sale of the property. The court could order that the property be sold
and the proceeds of sale divided between you.
The ownership of the buildings erected (or to be erected) on the land is also subject to
the same rules and effectively the buildings become part of the land.
I have prepared a Disposition of the Land (and buildings) which is enclosed.
If it is your intention that that title (ownership) of the Land and buildings be
transferred to your joint names and the survivor I would ask that you sign the deed
at he [sic] place indicated by your pencilled initials and that you complete the date
and place of signing. Your signature should be witnessed by an independent witness
who should also sign and after their signature complete their personal details.
If you require any advice or instruction about signature please phone.
I MUST STRESS TO YOU THAT WHAT IS PROPOSED IS THE TRANSFER OF
OWNERSHIP OF THE LAND AND BUILDINGS FROM YOUR SOLE NAME INTO
THE JOINT NAMES OF YOURSELF AND MR CASSELS AND THE SURVIVOR.
You must appreciate that once done the title cannot then be Transferred back
without the consent of you both.
I would strongly urge that you take INDEPENDENT ADVICE as to the steps that
you are about to take BEFORE SIGNING the Disposition.
In the vent [sic] that you are satisfied that you do not require that advice I would ask
that you sign the enclosed letter and again have your signature witnessed in order
that I can be sure of your receipt of this letter and your confirmation that you do not
wish independent advice before signing.
Nothing in this letter is intended as advice to you other than to illustrate in broad
terms the nature of the proposed transaction and it’s effect. You should take
independent advice if in any doubt.
[21]       The pursuer was quick to assert that she had never seen this document, asking
rhetorically “why would I give the defender half my land?” She had never received this
letter.
[22]       A second letter was put to her also dated 14 April 2006 (“the Waiver letter”), which
bore to have been sent undercover of the Advice letter. This was in the following terms:
“Dear Mr Findlay
1.42 Hectares at Bonnyton Moor Farm, Eaglesham
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I refer to you letter of 14th April 2006 a copy of which is attached and I confirm that I
have read and understand the terms thereof.
I have decided that I wish to proceed to execute the disposition in favour of Myself
and James M Cassels and to the survivor of us. I acknowledge that I have been
advised to seek independent advice as to the nature and effect of granting the said
disposition before signing but having had that advise [sic] I have declined to take
independent advice.
The executed Disposition is attached hereto.”
[23]       The pre-typed signature was in the name of “Agnes Y L Barr”, whereas the signature
appended was “Agnes Fillers”. (This was one of the pursuer’s married names.) Her first
response was to say that she didn’t know she was getting 1.4 ha. She accepted that this
appeared to be her signature but she had not signed this letter. She could not explain how
her signature was on it, but she repeated that she had not signed this letter. Nor had she
received either of these letters.
[24]       The pursuer was next asked some questions to elicit how she became aware of the
disposition. So far as the pursuer could recall, she and her daughter had moved into the
house in about October 2006. This was three or four months before the defender moved in
because he first had to buy his wife a house. It is not necessary to go into the details of the
breakdown of the parties’ relationship. The pursuer recalled spending two Christmases
with the defender in the house. It was in the course of an argument with him that she said
the defender told her that she could not put the defender out because he owned one half of
the house. She described being shocked. She went to four or five lawyers before any lawyer
would accept her case, the reason being that the defender had given them all business in
Glasgow.
[25]       Ultimately, she instructed Lynn Collingham of T C Young. Lynn Collingham’s
advice was that as the pursuer had signed the document (ie the disposition) the defender
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was entitled to one-half of the house. She maintained in her oral evidence that it had never
been her intention to give or convey one half of the subjects to the defender.
[26]       In relation to the parties’ respective financial contributions, the pursuer accepted that
the defender had “paid for a lot of stuff”. This was because he wanted to be with the
pursuer, to leave his wife and start a new life with the pursuer and her daughter. She
explained that the defender would give money for her to treat herself but she never touched
this. She put it away. This was years before, when she and the defender had started dating
and going to Chinese restaurants. He often gave her money in an envelope and, if it was not
money, it was jewellery. This was every couple of weeks or months, and the amounts
varied from £1000, £5000, to £10,000 at a time. Her position was that he had given her this
money unconditionally, explaining to her that he could not use the money and she was to
treat herself, but the pursuer never did. She used these monies to pay for the work on the
house and to pay the men. She stated that in addition to the defender giving her a lot of
money he had also given her his limited-edition Saab.
The pursuer’s cross-examination
[27]       The pursuer’s relationship with the defender had begun in about 2002 or 2003 and
ended acrimoniously in about 2007. She was not sure of the exact dates.
[28]       In relation to some of her work history, she worked on the farm from about 2002
until she hurt her back. This was probably after she had moved into the house in 2006. At
that point the defender would not give her any money to look after the house or anything;
she described the defender having changed after she had moved into the house. She sought
money from her mum. She did not go back to work until about 2011.
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[29]       She was asked questions under reference to an application for legal aid made in
August 2002. She accepted the entries recording that she had no income, no capital, and that
she was in receipt of income support were incorrect. She accepted that she had undertaken
no paid employment between 2002 and 2005. In the light of her earlier evidence, about
receiving large cash sums from the defender at this time, she accepted that she should have
come off income support. She had gone on income support in about 2001, when she came
back from the United States, after divorcing her second husband. She explained the
defender told her she could stay on income support because he had paid “a lot of” taxes.
After a warning on incrimination, it was put to the pursuer that she had engaged in benefit
fraud. She replied that she did not deny that what she did was wrong in claiming benefit
support. She accepted that she knew she should not have claimed it. So far as she could
recall, she had come off income support when she had moved into the house (ie around
October 2006).
[30]       The cover letter (dated 26 August 2002) to a will was put to the pursuer. She
maintained she had not received this letter. In response to a question as to whether the will
had been manufactured, she said yes, and became somewhat combative asking why would
she draw up a will having just returned from the United States. She maintained throughout
cross-examination that she had not signed the will. She accepted that the signature
appearing at the foot of the page appeared to be her signature, but it was too smooth to be
her signature. She was adamant that she had never signed the will and that this was not her
signature. It was a forgery.
[31]       Each term of the will was put to the pursuer and, apart from stating that she had
never appointed the defender as her executor, she otherwise accepted that all of the
provisions reflected her testamentary intentions. These were to bequeath her jewellery to
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her daughter and to divide the residue of her estate among all three of her children. While it
matched her testamentary intentions, she explained that the defender “knew her”. She had
never asked him to frame a will. At this point the passage in the pursuer’s pleadings
averring that the defender had acted for her in the drafting of the will, quoted at
paragraph [9(2)] above, was put to her but she simply repeated her evidence that she had
written out a will and left it in her father’s safe. She had made her own will and written it
out. Her signature on this will was a forgery. The signature purporting to be hers was too
smooth.
[32]       The cover letter to the disposition and the disposition was put to her. When asked
whose signature appeared at the foot of the disposition, she said “it looks like mine” but
maintained that Morag Hill never witnessed her sign anything at the farm. She repeated
this and added that this was because it was a couple of days later that Morag Hill had
appended her own signature as a witness. She maintained that Morag Hill had signed
something as a witness when the pursuer was not there. The pursuer’s position was that
Morag Hill had not witnessed her signature on the disposition. The pursuer had signed this
in her house and dropped it off at Morag Hill’s house a few days later. (This evidence was
difficult to follow: it was suggestive that the pursuer had signed the disposition and it was
inconsistent with the main thrust of her evidence in chief.)
[33]       The terms of the two letters from April 2006 (ie the Advice letter and the Waiver
letter) were put to her and she confirmed that she had never received these. Anything that
had been discussed regarding the land had taken place between the defender and her father.
She repeated her evidence that she did not know about the 1.4 ha. She knew the author of
the letters, Allan Findlay, but repeatedly stated that she would never have given away her
own land. She accepted the terms of these letters were clear and easily understood and that
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they recommended that she take legal advice. The Advice letter sounded fine to her, but she
repeated she had never received this letter. The terms of the Waiver letter were put to her
and she again repeated she had not seen this letter about the land; the signature looked like
her signature but she had not signed this letter and therefore the signature on it was also a
forgery. If it were Mr Findlay’s evidence that he had sent these letters out or received the
Advice letter back, he was either mistaken or lying. She was the one telling truth.
[34]       Several questions were put to her that it was not unusual for a house to go in joint
names when a couple moved in together, but the pursuer maintained she would never give
her land away. She accepted that they would be starting a new life and that at the time the
parties intended to move in together.
[35]       A series of questions were asked of the pursuer about her communications with, and
advice from, Lynn Collingham of T C Young and also under reference to a number of file
notes in those agents’ file. The pursuer confirmed that the matter on which she had sought
advice from Lynn Collingham had been about signing a document entitling the defender to
one-half the house and that this is what she had told Lynn Collingham at the time.
[36]       The disposition was again put to her and she repeated her evidence that she had not
signed the disposition but had signed a deed containing passages about 14th century land
laws. When pressed as to whether or not it was her signature on the disposition, she said
“it’s my signature but it is not mine”. She appeared then to confirm that this was her
signature but that the paper she had signed was all about the 14th century property laws.
The first two pages of that document were all about old land law. She confirmed she had
asked advice from Lynn Collingham because she had signed a deed entitling the defender to
half of the house.
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[37]       At this point the closed record in an action at the instance of the pursuer against the
defender in Paisley Sheriff Court in 2009 was put to her. After a series of questions under
references to certain passages in that record, which I need not set out, she confirmed that she
knew by 2009 that the defender asserted that he was entitled to one-half of the subjects. She
also accepted that, by then, she was very concerned about her situation generally and that in
her view the defender had tricked her out of one-half of the house. It was in order to have
this corrected that she had contacted solicitors. She gave evidence about an incident where
the defender was seen walking about the house with a new girlfriend as if showing it for
sale, which had worried her. She was worried that the defender would take the house from
her.
[38]       There then followed a chapter of evidence based on the recovered solicitor’s file of
T C Young, the agents whom the pursuer instructed on a number of matters. A number of
file notes recording calls from, or advice to, the pursuer were put to her. Some of these
entries also disclosed the pursuer being concerned about, and receiving advice concerning, a
proposed action at the instance of her father against her or to challenge the 2003 disposition.
For example, there was an entry in September 2010 about this and the pursuer confirmed
that this was a live dispute at that time. She accepted that her dispute with the defender was
simply part of the “bigger picture of events(as it was put in Lynn Collingham’s letter to the
pursuer dated 20 September 2010), about which she was receiving legal advice from Lynn
Collingham. The pursuer was affected by two disputes: one involving her father against the
defender about the 2003 disposition and the transfer of land to her; and the second being
the defender’s action. She had not opposed the latter action, because Lynn Collingham’s
advice was that, because the pursuer had signed the disposition, the house had to be sold. In
relation to the first dispute, she understood from Lynn Collingham that her father was
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trying to get the house back. If that happened, ie if her father’s disposition to her were
reduced (ie the 2003 disposition), then the disposition by the pursuer in favour of herself
and the defender would also fall, with the consequence that the pursuer would lose
everything.
[39]       A file note recording a meeting between the pursuer and Lynn Collingham on
3 August 2012 was put to the pursuer. This concerned the defender’s action against her (for
division and sale of the subjects). After narrating the recent procedure in that case, the file
note recorded the following:
“Agnes saying that she [ie the pursuer] is not necessarily opposed to the sale of the
property in the future but only when [the pursuer’s daughter] has completed her
education.
Agnes brought with her a large amount of paperwork that had been passed to her by
her Dad and asked that I peruse it as it may be relevant to her case. She saying that
she did not know what she was signing when she was presented with the disposition
by [the defender] but advising that in my view that is not a defence to the fact that
she signed a disposition. Explaining that if I passed her over something during our
meeting to sign today, and she signed it without reading it, whilst as a solicitor I
could be criticised professionally for not explaining the content and meaning of the
Deed, the Law generally is that if you sign something without reading it, you have to
accept the consequences if you are bound by what you have signed. She said she
appreciated that.(Emphasis added.)
[40]       Reference was then made to another dispute, between the pursuer and her father,
and the relative file note entries between August and October 2012. In substance they
recorded that the defender’s father, John Barr, wanted to get the subjects back from the
pursuer. If this happened, the title to the subjects conferred by the disposition on inter alia
the pursuer would also fall. The entries record consideration of whether or not this should
be disclosed to the defender in the context of the defender’s action.
[41]       A further series of questions followed, to the effect that the pursuer was seeking an
assurance from her father that, if his action was successful, she would still have a roof over
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her head. (Other entries, some dating from January 2011, were put to her.) She had fallen
out with her father at this time. Ultimately, however, she never obtained sufficient
reassurance. In August 2012, Lynn Collingham’s advice was, essentially, “better the devil
you know”, which is why the pursuer had decided to side with the defender against her
father at that time.
[42]       It was put to her that at that time the pursuer had two options: to back the defender
or to back her father. She backed the defender, she said, because she would be getting half
the house and she had done so on the advice of Lynn Collingham. This was about seven
years ago. It was put to her that she did this even although, in her evidence, she knew the
defender had “done” her. She accepted all of this. Even back in 2011, she was reluctant to
raise an action against the defender in relation to the subjects. She accepted that at that time
one option was to go against the defender. She ultimately permitted the 2015 decree to pass
against her in the defender’s action. It was put to her that she had made a tactical decision
to go with the defender, otherwise if she supported her father she would lose everything.
She accepted she understood this at this time. And she accepted she took the view at that
time that it was better to keep half (ie of the house) than to lose it all. She also accepted that
she has known that she had “sustained a loss” arising from the defender’s conduct more
than five years before the raising of the proceedings.
[43]       There was further evidence about the pursuer no longer being on speaking terms
with her parents and siblings, notwithstanding that she still lived at the subjects. She
asserted that her father was lying if he said he had paid for the pursuer’s house and was
“blatantly lying” as to what he had done for her. If he had asserted that he had paid for the
house and for the attic to be done, this was a lie. It was put to her that her father was a liar
to which she replied that this was not completely the case, but he “bent the truth”.
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[44]       A number of further file note entries were put to her. She maintained she was
always told she would be better off with the defender than with her father. She accepted
that when she was told “to consider her battles” that this accurately recorded the discussion.
[45]       There was no re-examination of the pursuer.
The pursuer’s expert evidence: Donald Reid
Examination in chief
[46]       The pursuer’s second witness was her expert witness, Donald Reid. He was a
solicitor in private practice with Mitchels Roberton in Glasgow. He had been a partner or
(latterly) a director since 1975. His specialism was in commercial and domestic property,
but he also had a wide range of dealings as a family solicitor. He had given expert evidence
in court many times. He had contributed chapters to two books of essays on property-
related topics; published articles in the Journal of the Law Society of Scotland and had
served as a member of the property committee of the Law Society of Scotland.
[47]       He had produced an expert report (lodged at 6/275) which he adopted. He had been
supplied with a bundle of papers and, after an overnight break, these were duly lodged in
the process. (To facilitate progress in the proof, a witness for the defender was interposed,
namely Allan Findlay. For convenience I note his evidence below.)
[48]       When his evidence resumed the next day, Mr Reid confirmed that he had had regard
to the bundle of materials supplied to him with the letter of instruction. Having regard to
the live issue in these proceedings, the relevant part of his report concerned his answer to
question two (about the disposition). I need not record the first question and the answer he
provided to it (which related to the 2003 disposition). So far as material, the passages of his
report and his answer to question two are as follows:
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“I begin by addressing the point on the hypothesis (which was not the fact) that [the
defender] and [the pursuer] were not in a personal relationship in 2006. [The
defender] was thus advising [the pursuer] on making over to [the defender] half of a
property [the pursuer] owned. What possibly could the reason be for such a
transaction, absent any personal relationship? I see two possibilities. One that [the
pursuer] had simply formed an affection or liking or sympathy towards [the
defender] and wanted to give him a gift. That takes us straight back to the fiduciary
duty referred to above obliging [the defender] to steer wholly clear of any
involvement and direct [the pursuer] to independent advice. The other is that the
proposed conveyance was not truly a gift but an onerous consideration for services
or goods or financial value being offered to equivalent value by [the defender] to [the
pursuer]. In this regard [the defender] does point to the language of the 2006 deed
which narrates ‘certain good and onerous causes and considerations’ and has offered
the explanation that [the defender] had personally provided the funds for the
construction of a house on the subjects. I can understand this response but I do not
consider it has any exonerating effect for [the defender] even if, continuing the
hypothesis, his involvement with [the pursuer] was not personal but purely
commercial. This is because I consider the fiduciary duty remained paramount even
where no personal relationship was present. Apart from that, if the deed truly
represented a commercial deal then [the defender] was hopelessly conflicted: a
solicitor advising [the pursuer], and [the pursuer] alone, would give her very clear
and strong advice to be satisfied that there was, at least, a reasonable vouched
equivalence between the value passing to [the defender] and the costs incurred by
him on the project.
Next I ask whether the fact that [the pursuer] and [the defender] were in a personal
relationship in 2006 goes any way to reducing or mitigating [the defender’s] duty.
After all, it might be said, a gift of property to a solicitor by some loved one such as,
say, a spouse or a parent, should surely permit a more ‘relaxed’ approach to rule
observance. I do not accept this. There may well be incidences out there where just
such a relaxed approach has been taken without adverse result. That is as may be
but it is my opinion that any solicitor so proceeding is thereby taking upon himself
accountability for anything subsequently going wrong or being challenged. The
practice, if it does occur, may be more understandable but it is not thereby more
excusable. It simply cannot be condoned.
That leaves [the defender] with only one more card to play, namely the letter of
advice Mr Findlay of his firm sent to [the pursuer] dated 14 April 2006 and the letter
declining separate advice signed by [the pursuer], also dated 14 April 2006,
addressed to Mr Findlay. Mr Findlay’s letter strongly, indeed perhaps stridently,
advises [the pursuer] to take independent advice but invites her, if she does not wish
to do so, to sign a letter confirming. [The pursuer] took the latter option but I do not
consider this was sufficient to validate or homologate [the defender’s] actions. In my
opinion the circumstances, involving as they did substantial benefit flowing to [the
defender] personally, were wholly beyond [the defender] acting at all for [the
pursuer], even if she declined his advice to go elsewhere. He should have insisted
she did so as the only proper course. But of course [the pursuer] denies having
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received the letter or signed the declining letter and if her testimony in this regard
prevails then [the defender] is left, again, in a parlous position.
The relevant guide as to proper professional practice in these respects pertaining at
the time was the Code of Conduct issued by the Law Society of Scotland in 2002. If
so required I could extrapolate specific provisions which bear out my remarks as
above.
I did note certain ‘oddities’ surrounding these letters of 14 April 2006:
Mr Findlay’s letter states that it encloses the Disposition and invites [the
pursuer] to sign it. This did not happen because the actual Disposition was not
purportedly signed until 10 May 2006.
The declining letter from [the pursuer] states that the executed Disposition is
enclosed, which it wasn’t.
[the pursuer] signs with a surname other than Barr. She signed ‘Barr’ on the
actual purported Disposition.
Neither Mr Findlay nor [the defender] appears to have picked up on these
oddities.
[]
Conclusions
It is my opinion that:
[]
4. Even absent any relationship with [the pursuer], [the defender] breached his
fiduciary duty to her in acting for both [the pursuer] and himself in relation to
the 2006 Disposition and in not insisting she get independent advice. This was
professional misconduct. It was also negligence against the Hunter v Hanley test.
5. Given that there was a relationship my conclusions at 4 apply a fortiori or at any
rate the existence of the relationship has no exonerating effect.
6. The letters of 14 April 2006, if found to be valid, do not of themselves exonerate
[the defender].
[49]       A series of somewhat general questions were put to Mr Reid, but he was,
understandably, anxious to answer more focused questions by reference to specific passages
in his report.
[50]       Mr Reid was asked to explain how the Hunter v Hanley test applied to a breach of
fiduciary duty. Mr Reid referred to the several legs of the Hunter v Hanley test. In his view,
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the normal course had not been followed and the deviation from the norm here had been the
decision to invite the pursuer to obtain separate legal advice but not to insist that she do so.
In his view, no solicitor of ordinary skill and care would have failed to do so. What the
defender should have done was to insist upon the pursuer getting independent legal advice.
[51]       There followed a number of general questions about the effect of delivery of a
disposition which, until recorded, conferred a personal right but not a real right of
ownership. In the circumstances where a solicitor acted for both the disponer and the
disponee, delivery to the latter could at least be inferred from the act of presentation of the
deed at the GRS for registration. In the absence of that obvious step, the solicitor was
required to take instructions about delivery. While he noted the gap of 2 ½ years between
the signing of the 2003 deed and its recording in the GRS in 2006, he did not regard this as
particularly relevant.
[52]       Certain passages in the report obtained from the defender’s expert, Mr Macreath,
were put to Mr Reid for comment. To the extent that they differed it was, essentially, on
whether or not the defender should have insisted upon the pursuer obtaining separate legal
advice (as Mr Reid maintained) or whether it sufficed to advise her to do so (as Mr Macreath
maintained). Mr Reid stood by his own conclusion, although he could follow Mr Macreath’s
reasoning.
Cross-examination of Mr Reid
[53]       Mr Reid fairly acknowledged that Mr Macreath had gained a “justifiable reputation”
in the field of regulatory and disciplinary matters. Mr Reid accepted that he had never
represented a solicitor before the Scottish Solicitors Disciplinary Tribunal (the “SSDT”). He
also accepted that, as at 2006, he had “relatively little” work involving solicitors’ disciplinary
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issues. He also accepted that, generally, the profession had become subject to more
regulation in later years than less, and that the rules about professional ethics had become
more developed.
[54]       He was asked a number of questions about the documentation supplied to him with
the letter of instruction. He had read these at the time but, if asked whether he had these
specifically in his mind, he would refer to any discussion in his expert report. His
understanding of the background was that the land had initially been owned by the
pursuer’s father; that at some point a dwelling house had been built and which was a new-
build property. He also understood the sequence of transfers to be from the pursuer’s father
to the pursuer, and thereafter a grant by the pursuer to herself and the defender. His
general recollection was that the land had been funded or contributed by the pursuer’s
father. A passage from other proceedings was put to Mr Reid, containing an averment on
behalf of the pursuer that she had paid the whole costs of construction. Mr Reid fairly
accepted that he could not now see what consequence or thought ran through his mind
when he read that, but he did recall also reading documents with other assertions. He
accepted that his general impression had been of a solicitor abusing his position and getting
one-half the subjects for nothing, but he refrained from being judgemental in his report. He
confirmed that it was his general impression that the defender had become a co-proprietor
of the subjects for no consideration.
[55]       Under reference to the disposition, he confirmed that the document was the
disposition in its entirety as it contained no plan. It comprised three pages. He confirmed it
had never been suggested to him that this was part only of a document. He also confirmed
that it had never been suggested to him that the pursuer had not signed this disposition. So
far as he recalled, the suggestion was that the pursuer did not know what she was signing,
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but that she had signed it. He did not think it had ever been suggested to him that the
pursuer had not signed the disposition.
[56]       Mr Reid also confirmed that the warrant for registration, which was signed, would
be contained at the bottom of the last page of the disposition. It appeared here on page 3 of
the disposition. He also confirmed that it had never been suggested to him that the
pursuer’s signature on the disposition was a forgery.
[57]       Under reference to the Advice and Waiver letters of April 2006, he confirmed that
they were clear and unambiguous in their terms. Nonetheless, his position was that it did
not suffice to send these letters to discharge any fiduciary duty owed at the time. He
resisted the proposition that he was applying a standard as at 2018 retrospectively. His view
was based on the reality at the time and what was contained in the Solicitor’s Code of
Conduct of 2002 (“the 2002 Code”).
[58]       A copy of a SSDT decision was put to him. While he was aware of this he had not
studied its terms.
[59]       A passage from the 2002 Code was put to him. Under the heading “the Interests of
the Client”, the following passage appears:
“Where solicitors are consulted about matters in which they have a personal or
financial interest the position should be made clear to the clients and where
appropriate solicitors should insist that the clients consult other solicitors. For
example, neither a solicitor, nor a partner of that solicitor, is generally permitted to
prepare a will for a client where the solicitor is to receive a significant legacy or share
of the estate.” (Emphasis added.)
He accepted that the use of the qualification “where appropriate” was significant. The
difference between him and Mr Macreath was that, in Mr Reid’s view, the Advice letter did
not suffice.
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Re-examination of Mr Reid
[60]       A passage from the 2002 Code, just quoted, was put to him. He accepted the
proposition that the 2002 Code did not suggest an absolute requirement that in all
circumstances a solicitor must insist on separate representation. He confirmed that it was
his evidence that the defender should have insisted that the pursuer got separate advice.
This was not based on the 2002 Code; or perhaps only partly so, but also on his own reading
of the situation. This was his gloss on the phrase “where appropriate”. This was one
instance where, in his view, the defender should have insisted on the pursuer obtaining
separate legal advice. He went further and suggested that the example in this case was
stronger than the example in the 2002 Code of a will. That will was revocable whereas the
gift of land by disposition was an irrevocable act.
[61]       Given Mr Reid’s emphasis on the characterisation in his last answer of the
disposition as a gift, he was asked to express a view on the hypothesis that the defender
contributed “a significant amount” to the construction of the house, and whether that would
change his opinion. He confirmed that it might, although it is fair to record he was
uncomfortable considering the hypothesis. If there were still a question of an undervalue,
he remained of the view that there was no question but that separate representation must be
insisted upon. If, however, there had been full value given to the granter (which had been
vouched), then perhaps it was more for the court to consider the question of whether or not
the solicitor in that circumstance should be exonerated. When pressed as to the source of his
inflexible rule, standing the terms in which the 2002 Code was expressed, he replied that
even if the 2002 Code had not been there, he would still ask if there had been full
contribution or equivalent to the value of the property passing. He would regard that as an
exception to his inflexible rule and, as I understood his evidence, would be prepared to
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accept a solicitor proceeding on the basis of the Advice and Waiver letters would not be
acting inappropriately. He would be ready, in those circumstances, to accept that the
solicitor had discharged his duty, though he emphasised the need for vouching of the value.
[62]       As the pursuer’s last witness was not available until the beginning of the second
week of the proof, counsel agreed to interpose the defender. I record his evidence below.
David Donnachie
The J&E Shepherd valuation
[63]       The pursuer’s last witness was David Donnachie, an associate chartered surveyor
with the firm J&E Shepherd. He had prepared a valuation of the subjects in October 2016
(“the valuation”). In brief, Mr Donnachie had prepared a report providing the market
valuation of the subjects, their reinstatement value, and their value taking into account the
restriction imposed by the planning condition. The reinstatement value was stated at
£545,000. The market value with no planning condition restriction was stated as £750,000.
However, the effect of the planning condition reduced the market value by half, to the figure
of £375,000. The valuation also contained a statement that it would be “extremely unlikely”
for a lender to offer a mortgage over the subjects for so long as the planning condition was
in place.
Examination in chief
[64]       Mr Donnachie was a chartered surveyor and had been a full member of the RICS
since 1999. He had been in practice since that date. He was employed by J&E Shepherd in
East Kilbride. His experience was in the valuation of all types of residential properties
including in East Kilbride and in the surrounding areas. He adopted his report, the salient
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features of which I have recorded above. He had undertaken his valuation of the subjects
for the purposes of ascertaining its market value by considering the size and location of the
house, its condition, and comparing it with other similar semi rural properties of
comparable sizes. In his view, the value of the subjects was the same in 2006 as in 2016.
Cross-examination
[65]       He accepted that East Kilbride was a built-up area, but he also had experience in
rural properties around East Kilbride and similar to the subjects. He accepted that this was
only a valuation and not a detailed inspection; this was what was instructed. He was
pressed as to his valuation of the subjects as at 2006. He explained that it was not a question
of no movement in the market for 10 years. Rather, there had been a drop in value from
2008 which continued until 2012. There was then an uplift in the market from 2012 to 2016.
As a consequence of this drop and rise in the market, the valuation as at 2016 was the same
as 10 years previously. He had used six or seven similar properties by way of comparators
in coming to the market value of the subjects. He accepted that these were not recorded in
terms in the valuation but he had this information on file.
[66]       He had certain aerial photographs put to him and readily described the area on
which the subjects were located as agricultural land. He accepted that if one obtained
planning permission to build on agricultural land it would increase its value. He was quick
to state that he did not get involved professionally in valuing agricultural land. He
volunteered that he had no knowledge or experience in valuing agricultural land. If the firm
received such instructions these would be passed to an agricultural surveyor. He confirmed
that agricultural land with planning permission was worth more than agricultural land
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29
without planning permission, though he could not say what by what factor that difference
would be.
[67]       In relation to the subjects, he agreed it was a large house with an area of
approximately 340 m², and that this would push the value of the house up. He was again
pushed to estimate the increase in value of the land with planning permission and the
house. He was patently reluctant to do so and gave a very rough estimate, as I understood
him, that the land value would be around a third of the value of the house. He was anxious
to stress that this was a “very rough” estimate; that J&E Shepherd had specialists dealing
with development value and he was not involved in that kind of work.
[68]       He confirmed the reinstatement value and that this was based on the floor area, age
of construction of the house and type of materials. It was a new house built of conventional
materials, namely a timber frame, built in a modern style. He was challenged on the basis
that the effect of the planning condition would reduce the value. He resisted this, explaining
that it was the price one would achieve with such a planning restriction. He accepted he
was not a planning expert, although he knew the implications of having a planning
restriction on the house such as that contained in the planning condition.
[69]       Mr Donnachie was the last witness led on behalf of of the pursuer and the pursuer’s
proof was closed.
The defender’s proof
The defender’s evidence
Evidence in chief
[70]       The defender explained he had been a solicitor in practice since 1979. Before then he
had studied architecture for two years and worked at Glasgow School of Art and the Royal
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College of Technology. He then joined the police, working most of his time in CID. He left
the police to undertake a law degree and a law apprenticeship. His main area of work was
in the criminal courts but he also undertook wills and powers of attorney. As at 2002, he
was in practice on his own and at some point thereafter took on Mr Findlay as an employee.
He confirmed he acted for Mr Barr and other members of the Barr family over the years in a
variety of matters.
[71]       He was then asked about a curious episode occurring at the end of a commission to
take the evidence of the pursuer’s parents earlier this year. Notwithstanding that Mr Barr’s
evidence about the defender had been uncomplimentary, Mr Barr approached the defender
after the commission; he fumbled in his pocket for something and told the defender that he
needed his help with a matter. The defender explained that he could not talk to or deal with
Mr Barr. The defender left the courtroom where the commission had taken place but
Mr Barr pursued him outside. Mr Barr repeated his request for the defender’s assistance.
The defender was very surprised. He had explained that he, the defender, could not help
Mr Barr and that Mr Barr needed to speak to other solicitors.
[72]       As at 2002 he was often up at the farm, probably two or three times a week and
sometimes at the weekends. He and the members of the Barr family were on very friendly
terms and he was treated as a member of the family. He dined with them, socialised with
them and was invited to weddings and birthday parties.
[73]       He also confirmed having acted previously for the pursuer in relation to her
divorces. He confirmed that there was a slow-developing relationship between him and the
pursuer from about 2002 or 2003. There had come a point when the two of them had
discussed living together. He thought that maybe that point had come in about 2003 or
2004. Initially, the pursuer said she did not want to stay on the farm or near the farm, but
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then things changed. After that point, she and the defender had discussed having a house
built on the farm. He was asked about the size of the house and he explained that the plot of
ground was part of Mr Barr’s farm. Mr Barr had indicated to the defender that he would
give him and the pursuer several acres to build a house on the farm. The size of the house
had not really been discussed between the defender and Mr Barr.
[74]       The defender confirmed he had funded the building of the house. It was funded in
the following manner. He and the pursuer were in a close relationship and were going to
build or buy a house. The defender had quite a lot of money and he gave the pursuer a lot
of cash. He agreed with her evidence on this point. However, he gave her cash to hold. He
did so because, he explained, he lived in a remote house whereas the Barr’s farm had a safe
and dogs and was a safer place for the cash. At this point he was close to and trusted by the
Barr family. At this time the pursuer was on income support and so could not fund any
construction costs of the house. The land had initially been provided by Mr Barr and a
conveyance had been entered into by him in favour of the pursuer in about 2003.
[75]       Turning to the disposition, he confirmed this had been prepared by Allan Findlay. It
had not been prepared by him personally. He also confirmed that the three pages of the
production comprised the whole of the disposition. No pages were missing. No pages had
been removed. He confirmed the testing clause and that the signature appended at the
bottom of the last page was the pursuer’s signature. He was asked if he or anyone else had
forged or transposed the pursuer’s signature onto the disposition, a proposition he rejected.
He had no reason to do so.
[76]       He was asked about the will and whether he had forged the pursuer’s signature on
that deed. Again, he rejected that proposition with alacrity. If the pursuer had suggested
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that the will was forged, or that she had never instructed him to prepare one, she was
mistaken or lying.
[77]       He explained the genesis of the Advice and Waiver letters. He had asked Allan
Findlay, one of his employees at the time, to write to the pursuer. He asked him to send
clear letters to let her know that she was entering into a transfer of land and that she was
made fully aware of what she was doing. Allan Findlay did these and typed these letters on
his own computer. The defender asked him to do this because it was a personal matter and
he did not wish his staff or the typists to know his business. He wished to keep it
confidential. He confirmed that it was within his knowledge that she had received these
letters because she had spoken to him about them. He had no doubt about this. And he had
no doubt that these had been prepared and sent by Allan Findlay. This had all occurred at
the point where the house was under construction. There were good relations between him
and pursuer at that time. He confirmed he had nothing to do with the registration of the
disposition and that this all would have been done by Allan Findlay.
[78]       In relation to a solicitor acting for the client with whom he was in an intimate
relationship, he felt at the time that it was safe to act because of all of his input into the house
and funding for it. He acknowledged he had had some concerns, given Allan Findlay’s
involvement. He explained it was a practical decision. He had just come back from
Australia before these letters were sent. The pursuer had asked him for money to keep
things going and he wished Allan Findlay to do the conveyancing. Meantime, the defender
was busy; he was on a duty week at the sheriff court and he simply asked Allan Findlay to
proceed. He had taken the view that something had to be done to protect the pursuer’s
position. He had spoken to her and her father, as he was at the farm, but the pursuer had
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point-blank refused to go to another solicitor. He thought to himself: I must put this in
writing from an independent person, ie Mr Findlay, and not from his own pen.
[79]       It was put to him that Mr Reid was critical of his conduct and that the defender
should have insisted the pursuer obtain separate representation. So far as the defender
could recall, he did insist but she refused. This was not a matter that had come out of the
blue; he and the pursuer had talked about this before construction of the house had started.
He had spoken to the pursuer and the house was to be in joint names. She had received the
Advice and Waiver letters from Allan Findlay.
[80]       It was put to him that the pursuer did not know what she was signing. The defender
rejected this, explaining she knew exactly what was happening and what was being asked of
her. He repeated that she had told him she had received these letters. He did not know if
she had gone for other help or independent advice. The Barrs were not a family who were
strangers in dealing with solicitors.
[81]       In relation to the 2003 disposition (from Mr Barr to the pursuer), the defender
confirmed he had acted. He explained that at that time Mr Barr wanted the pursuer and her
family out of the farmhouse; he wanted peace and quiet in his home. He believed that in
conveying some land to her this would get her out of the farmhouse. This was at his behest.
He confirmed that as his relationship developed with the pursuer, Mr Barr was aware of this
and was happy with this.
[82]       He confirmed that once the house was finished, the pursuer had moved in several
months before he had, sometime in 2006. He also confirmed that latterly there had been a
deterioration in the parties’ relationship. This was later than the pursuer suggested. In his
evidence, in about July or August 2009, the pursuer had left the house with her furniture
and chickens. He had stayed on in the house. It was his only home. The pursuer had never
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expressed horror at the notion that he was the co-owner of the subjects. He remained there
until the pursuer broke into the house, at which point he couldn’t return and had moved in
with his sister, where he remained.
[83]       He explained the circumstances that led him eventually to raise his own action,
resulting in the 2015 decree in his favour. Once the defender’s action had been raised, he
had given an undertaking not to sell the subjects until this action was finished, which meant
a further three years during which he was unable to sell the subjects.
Cross-examination of the defender
[84]       The defender was challenged on his evidence that Mr Barr had wanted to give him
and the pursuer land. The defender confirmed that Mr Barr knew he was in a relationship
with the pursuer, that he had said this and that Mr Barr had expressed his desire to give
some property to them. The pursuer had not been present. Mr Barr was happy if the
pursuer and he had a house on the farm. He spoke to the pursuer but she was reluctant and
said she really needed to think about this, because she had had a bad time recently with her
family - including her parents. Mr Barr had wanted the pursuer away from the farmhouse,
that was his main complaint. This was because the pursuer’s daughter was disruptive and
so was the pursuer. There was a lot of jealousy between the pursuer and some of her
siblings.
[85]       The defender said he was a little surprised when Mr Barr offered a parcel of land to
him. There had been a degree of enmity between the siblings. They lived and worked in
close proximity. There was a potential for difficulties (ie from the pursuer’s siblings) and
that is why the defender suggested to Mr Barr that the land should go into the pursuer’s
name and not his. He was an outsider to the family. He explained that he said to Mr Barr
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that if he was giving land he might be in difficulty with his other children, and it ought to be
put into the pursuer’s name. He would send the disposition in favour of the pursuer.
[86]       A passage was put to him from the pleadings in the defender’s action. In particular,
there was an averment that Mr Barr offered a plot of land. The defender was asked how he
could reconcile that with Mr Barr’s offer to him and to the pursuer. The defender stated that
Mr Barr had made that offer but he, the defender, was staying at Clarkson. He had not
taken it up. Meantime, the pursuer was going hot and coldabout living on the farm with
her daughter. He explained that he spoke to the pursuer and said they (ie the parties) could
have the land. To protect the pursuer from sibling aggression, he suggested that the land
should not be in his name but rather should be in the name of the pursuer. He could not
recall being involved in the minutiae of the 2003 disposition. It was a long time ago. It was
drawn up and needed to be witnessed, and so far as he could recall, this was done by a lady
who lived at the bottom of the hill. He couldn’t recall if he was present or not on that
occasion. He was not sure.
[87]       The pursuer’s version of events spoken to in her oral evidence, that the defender had
presented her with a document containing arcane language and references to 14th century
land law was put, but the defender rejected this as “absolute nonsense”. He did not know
where this had come from. He had not given the pursuer the disposition to sign; it was
Mr Findlay who had sent the disposition to her. He could not recall giving her the will to
sign. He repeated his view that the pursuer’s evidence about being presented with a
document referring to 14th century land law was nonsense.
[88]       He was asked why the 2003 disposition was only recorded in 2006. He explained
that when the 2003 disposition had been signed, it was not known whether the application
for planning permission to build a house on the land would even get off the ground. There
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had been a very difficult planning officer at the council. The defender had had to liaise with
SEPA about septic tanks and with architects; there were lots of side issues. The difficulty at
that time was the uncertainty as to whether Mr Barr would get planning permission. It took
years to get planning permission and there was the need to please all of his neighbours
having an interest. The reason why planning permission had to be in the name of Mr Barr
was because of the planning condition. The planning officer had told him the planning
application had to be in the name of Mr Barr. The link between planning permission and the
disposition was, basically, that if there had been no planning permission then the land
would have remained with the Barr family. In reply to further questions, the defender
confirmed he was not sure why the disposition helped in any question with planning
permission. He did not know. The reason the 2003 disposition was there was because of the
rest of the family. He didn’t want the land in his name and Mr Barr agreed it would be in the
pursuer’s name. That was the reason for the 2003 disposition. It was reassurance to the
pursuer that she would not be put out of the farm.
[89]       It was put to him that he should not have acted for the pursuer in respect of the
disposition. The defender did not accept this, given the Advice letter written to her and
what Allan Findlay had done. He was satisfied at that time that, basically, what he had
done was acceptable and would be understandable to anyone looking at matters from the
outside. He had invested in the house and he and the pursuer had agreed on that.
[90]       He was challenged as to the level of his contribution. The defender was firm that he
had funded all of it, including the applications for planning permission and fitting out and
furnishing. During some of the construction there had been a temporary link between the
house and the farm to access the electrical and water supplies to the latter. He had supplied
the pursuer with money. Whether she paid the contractor personally, he had met all the
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larger items and the expenditure. He had given the pursuer cash in connection with the
house. It had not been given unconditionally, as the pursuer asserted. He had given her
cash to buy materials and to pay the labourers because she had a safer place for the cash
than he had. She was on site. She lived on the farm. She could check deliveries. He was a
busy solicitor and worked until the early hours. She was the conduit in getting funds to
contractors to work.
[91]       He accepted that he had not sent Terms of Business letters in relation to the 2006
disposition, nor had he opened a conveyancing file. He had probably sent such Terms of
Business letters in previous years in relation to other instructions.
[92]       There was no re-examination of the defender.
Allan Findlay
Examination in chief
[93]       While now a summary sheriff, Allan Findlay had been in private practice for many
years, often practising on his own account. He ultimately joined the defender’s practice as
an assistant. He confirmed that he was aware that the defender was in a personal
relationship with the pursuer and that he had understood it to be the intention of the
pursuer and defender to live together. The defender asked him to deal with the transfer of
title to the pursuer and him. He was the author of the Advice and Waiver letters. These
bore his reference. Indeed, he had typed these letters out himself. He had done so because
the defender did not want his personal affairs to be known to his staff. It was in any event
not unusual for Mr Findlay to type his own letters.
[94]       In relation to the purpose of these letters, Mr Findlay explained that he had
understood from the defender that an area of land at the farm, which was owned by the
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pursuer’s father, was to be transferred to or in the name of the pursuer, and the intention
was that the house was to be built on that ground by the defender, with a view to them both
having that as their family home and in joint ownership. He had sent these letters because
the defender had asked him to do so. The defender was concerned that the pursuer should
get independent advice before transfer of title effected by the disposition. The title at that
point was in her own name. He understood the cost of building the house was born by the
defender.
[95]       He was taken to the terms of the Advice and Waiver letters, and he confirmed what
he wrote and what he intended to convey. He assumed he had received the Waiver letter
back but, after this passage of time, had no positive recollection to that effect.
Cross-examination
[96]       So far as he could recall, these letters related to the point in time when the house was
more or less completed. He had never met the pursuer. He accepted that he could not recall
receiving the Waiver letter, it had been 12 years ago, but he assumed he had. He also
assumed that these letters simply came in and were processed in the normal way. He did
not know whether he himself had personally filed these.
[97]       In response to a question, he confirmed that he was sure a copy of the disposition
had been provided with the Advice letter because he had typed it. He could not say after
this passage of time whether the disposition had been returned with the letter but he could
not see why it would not have been at that time. He also confirmed that the defender was
concerned that the pursuer get independent advice. He confirmed that he was also
concerned about this, because the pursuer was signing away half of her land and it was
important that she get independent legal advice and he made this absolutely clear to her.
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[98]       He confirmed he left the employment of the defender in about February 2007.
[99]       It should be noted that this witness was not challenged on the basis that the
disposition was incomplete or unsigned. Nor was there a challenge to his credibility and
liability.
Re-examination
[100]       Mr Findlay could not specifically recall sending the disposition for registration but
confirmed that documents were sent for registration in batches. He confirmed the reference
“A F/Cassel” was his reference and not that of a secretary. The reason that the Advice and
Waiver letters were dated the same date was because he had typed and sent them on the
same date. He could not recall any system for date-stamping letters on receipt. He
confirmed that the firm’s signature under the warrant for registration in the GRS was his
own.
Morag Hill
Examination in chief
[101]       The defender next called Morag Hill who had witnessed the pursuer’s signature on
the disposition. At the time she and her husband had been long-standing neighbours of the
Barr family. She had known the pursuer since she was seven. Morag Hill and her late
husband had been on good, neighbourly terms with the Barr family, helping each other out
from time to time. Mrs Hill described regularly being asked to witness signatures for deeds
being signed by members of the Barr family. This was usually while she was up at the
Barr family house on the farm.
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[102]       She was asked if she would ever sign a blank piece of paper, to which she was quick
to reply no, because she understood she was witnessing the signatures of those granting a
deed. After the raising of these proceedings, she had discussed this with her son, a solicitor,
and she understood that she was there to witness signatures. She was quite clear about this.
[103]       The disposition was put to Mrs Hill. She confirmed her signature, date and the place
of signing (at the Barr farmhouse) and the pursuer’s signature. In identifying the latter she
did comment that she did not know if the pursuer’s writing was always the same. She
clarified what she meant by this answer, saying that the pursuer was not particularly
learned and she thought her writing might vary from document to document. She accepted
that she suspected this but was not sure. She reiterated her position that she would not sign
a blank piece of paper. She was also asked if she would have signed the disposition if the
pursuer had not signed the deed. Mrs Hill was firm that the pursuer had to sign the
disposition so she could see it in order for her, Mrs Hill, to witness that signature. She
accepted that she did not read the document at the time, she just witnessed the pursuer’s
signature.
[104]       In response to a question from the bench, as to whether she had acted as a witness
where the grantee had already signed a document but acknowledged the signature in her
presence, she confirmed that she had always witnessed the granter signing the deed she was
being asked to witness. In the case of the disposition, she had witnessed the pursuer’s
signature in the kitchen of the farmhouse.
Cross-examination
[105]       She was first asked if she had ever discussed the pursuer’s marriages with the
pursuer’s brother, John Barr. She explained that she had no occasion to do so. This
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statement was challenged under reference to an affidavit she had previously given, which
lodged at that point, in which the following statement appears: I recall on one occasion
when [the pursuer’s] problems were being discussed, and her father John stated there will
be no third marriage”. Mrs Barr readily acknowledged that she had forgotten about that
observation.
[106]       It was put to her that the pursuer had brought the disposition to her own home and
had left it for her to sign. Mrs Hill stated that she could recall one occasion when she
witnessed a document for the Barr family in her own home. She explained that she
regularly witnessed deeds such as certificates, licences and so on. She simply witnessed a
signature, as a neighbour would do. It was suggested to Mrs Hill that she was mistaken
when she said she had witnessed the pursuer’s signature. She rejected this, explaining that
she would not sign (as a witness) if she had not seen the deed signed in front of her.
Mr Macreath
Mr Macreath’s Report
[107]       Background
[The defender] has been a solicitor since 1978. He acted for [the pursuer’s father] in a
number of matters as private client solicitor. In particular he acted for [the pursuer’s
father] in connection with ground subject to compulsory purchase at the time of the
M77 road extension and the south orbital link to the M8. [The defender] acted for
[the pursuer’s father] on compensation issues in respect of a Compulsory Purchase
Order in relation to ground at Bonnyton Farm. [The defender] acted for [the
pursuer’s father] in connection with a dispute over ground which [the pursuer’s
father] grazed but over which he did not have a formal tenancy. Proceedings were
instituted whereby [the defender] represented [the pursuer’s father]. [The defender]
achieved a negotiated settlement for [the pursuer’s father]. [The pursuer’s father]
was an established client. As a result he was introduced to [the pursuer], one of five
children of [the pursuer’s father]. At the time of introduction [the pursuer]
instructed [the defender] in connection with her divorce. [The defender] assisted
American lawyers representing [the pursuer] in the provision of information in
connection with [the pursuer]’s divorce proceedings in the United States of America.
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[The defender] formed a relationship with [the pursuer] in or around 2003. [The
pursuer’s father] wished [the pursuer] and her children to have a home, if possible,
on ground at his farm steading. [The pursuer’s father] was in his late 70’s and was
concerned that [the pursuer] needed to have a home. A solution was found that
ground could be made over to [the pursuer] but that ground had no planning
permission attached to it. Such planning permission may well prove difficult to
obtain and [the pursuer’s father] instructed [the defender] to assist. [The defender]
assisted an established client, [the pursuer’s father] to seek planning. [The pursuer]
was an established client within the meaning of the Law Society Conflict of Interest
Practice Guidance. An established client is one for whom a solicitor has or his
practice unit has acted on at least one previous occasion. [the defender] and [the
pursuer] agreed that any Disposition in favour of [the pursuer] need not be
registered unless and until planning permission for a dwellinghouse was obtained
with appropriate Building Warrant. The relationship between [the defender] and
[the pursuer] became intimate. In 2006 planning permission was obtained for a
dwellinghouse to be built on the ground gifted by [the pursuer’s father] to [the
pursuer] in terms of the 2003 Disposition. [The defender] met the attendant costs in
connection with planning advice and other specialist services. [The pursuer’s father]
and [the pursuer] and [the defender] agreed that the unregistered 2003 Disposition
by [the pursuer’s father] to [the pursuer] be registered. [The pursuer’s father], [the
pursuer] and [the defender] agreed that title to the ground when planning
permission was obtained would be taken in joint names of [the pursuer] and [the
defender] and to the survivor. [The defender] was 18 years older than [the pursuer].
The purpose of transfer was to secure the interest of [the defender] as [the defender]
had met all costs for Planning and Building Warrants including professional fees and
would now meet all costs in the building of the dwellinghouse to be shared by [the
pursuer] and [the defender]. The basic costs as advised by [the pursuer’s father]
would be £200,000 but the final fitting of the property would increase these costs to
£350,000 with [the defender] meeting all of these costs.”
2. In acting for [the pursuer] as grantor and for [the pursuer] and [the
defender] as grantee of the 2006 Disposition did [the defender] properly
and sufficiently discharge professional duties incumbent upon him?
This transaction relates to a time when [the defender] and [the pursuer] were in a
personal relationship. [the defender] according to the matrix of facts provided made
financial provision to obtain planning permission for the building of the dwelling
house on the ground. [The defender] maintains this was not a commercial
relationship. The relationship between [the pursuer] and [the defender] was settled
and the intention was for the parties to marry. Their intention was the
dwellinghouse would be a matrimonial home for [the pursuer] and [the defender].
The ground with Planning Permission now had greater value than originally
anticipated at the time of the 2003 Disposition. The ground is moorland at the
Fenwick Moor. A dwellinghouse was to be built on the ground. The total cost of the
building works and ancillary planning and professional fees, according to [the
defender], amounted to £350,000 to be met entirely by [the defender]. [The pursuer’s
father] had gifted the ground to [the pursuer] in terms of the 2003 Disposition. [The
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pursuer’s father] no longer had an interest in the ground. [The defender]’s
contribution was the material financial contribution. [The defender] issued a letter to
[the pursuer] on 14 April 2006. There is an acknowledgement from [the pursuer]
who signed using her former married name ‘Fillens’. [The pursuer] was asked and
advised to take independent advice. She did not wish to do so and she would sign a
letter so confirming. Of itself that would validate [the defender]’s actings. It cannot
be said there was any substantial commercial benefit flowing to [the defender]
personally. This is asserted on the basis that the ground on which the dwellinghouse
would be built had little or no material value as at 2003 and no significantly greater
value in 2006 even with Planning Permission obtained. [The defender] would have
to expend substantial sums of money to build the house in which he and [the
pursuer] intended to live as man and wife. [The pursuer] remained an established
client. She was been [sic] advised that the proper course was that she should take
independent advice. [The pursuer] accepted receipt of that letter as I understand it,
and signed the letter of declinature in respect of independent advice. Whilst I note
that the letter from [the defender] makes reference to the executed Disposition being
enclosed and [the pursuer] signed using the name ‘Fillens’ as opposed to ‘Barr’ my
conclusions are based and premised upon the matrix of facts as known to me and
based on the limited documentation provided to me. There is no strict liability
offence so far as a solicitor forming a sexual relationship with a ‘client’. There may
be a risk of breach of fiduciary duty and a risk of no longer being able to give
independent advice free from external influence in certain circumstances but a
relationship between solicitor and client of a sexual nature does not of itself prohibit
the solicitor from acting subject to a solicitor such as [the defender] being able to
demonstrate he was free from influence and that his client, in this case [the pursuer],
obtained his utmost trust and confidence.
Summary and Conclusion
1. [the defender] may have been in breach of the 1986 Practice Rules in failing to
issue conflict of interest letters to [the pursuer’s father] and [the pursuer] relating
to the 2003 Disposition. However, both parties were established clients and
whilst there may have been a technical breach that of itself may not amount to
professional misconduct.
2. I do not consider that [the defender] breached any fiduciary duty to [the
pursuer’s father] relative to the 2003 Disposition given his then ‘budding’
relationship with [the pursuer]. That relationship would not amount to
professional misconduct. CF The Law Society of Scotland v- Solicitor B SSDT
decision 29 April 2015.
3. In relation to the 2003 Disposition I do not consider that [the pursuer’s father]’s
actings would amount to professional negligence applying the Hunter v- Hanley
tests.
4. In respect of the 2006 Disposition [the defender] did advise [the pursuer] to
obtain independent advice, see letter of 14 April 2006 and her acknowledgement
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that she did not insist upon getting independent legal advice. In my view that
does not amount to professional misconduct and in my opinion does not amount
to professional negligence when applying the Hunter v- Hanley test.
5. Even if there were, as admitted by both [the pursuer] and [the defender], an
intimate sexual relationship, that of itself did not prohibit [the defender] from
acting in connection with the 2006 Disposition unless it can be demonstrated that
[the defender]’s ability to act was impaired by the personal relationship. This is
not a case involving family law. This is a case involving property where a father
gifted to a daughter some three years previously a plot of ground with no
Planning Permission. The intention to build a dwellinghouse required [the
defender]’s involvement, expertise and financial contribution.
6. The letters of 14 April 2006, if considered valid, amount to providing advice to
[the pursuer] to take independent legal advice. She declined to do so.”
Examination in chief
[108]       The defender’s expert had qualified in 1976. He had developed a professional
expertise in acting for solicitors in all matters concerning professional discipline and
conduct. He had been a chairman of the Legal Defence Unit. He had over 30 years’
experience in dealing with, and appearing before, the SSDT. He knew Mr Reid. He was
chairman of a very well established firm. He had known him for many years and readily
acknowledged his “great expertise” in property law. He accepted that Mr Reid had more
experience in property law then he did. He also accepted that he, Mr Macreath, had more
experience on disciplinary matters and appearing before the tribunal. So far as he was
aware, Mr Reid had never appeared before the SSDT.
[109]       He adopted the terms of his report.
[110]       Mr Macreath explained that there was a great difference between allegations of
negligence and of breach of fiduciary duty. It appeared that Mr Reid viewed the issue of a
solicitor having a relationship with a client as a strict liabilitymatter, which was not his
opinion.
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[111]       The Advice and Waiver letters were put to him. He was aware that Allan Findlay,
then in the employ of the defender, had prepared these. He confirmed the terms of the
letters, namely that the author was instructed in relation to transfer of title; that the title was
to be in the name of the pursuer and the defender and the survivor. The Advice letter
suggested the disposition was enclosed and it stressed that that deed had final and legal
consequences, and it asked the pursuer to get professional legal advice. In relation to the
Waiver letter, there was no particular style for letters of this type. There was guidance on a
5.2 letter and in regulation 7. It was put to him that these letters were clear in their terms, to
which Mr Macreath assented. He observed they were expressed in very great detail
including block capitals; normally such letters were short and to the point. The point of
such a letter was that the individual was being encouraged to take legal advice and if they
did not, to obtain a waiver. He was asked if, as at 2006, the Waiver letter sufficed. In his
view it did so long as the solicitor was satisfied that the addressee had signed it and
understood its terms.
[112]       Under reference to a passage in his report (at page 5) he explained the purpose of
conflict of interest letters, being where a solicitor acted for both parties and, if a conflict
arose, would have to withdraw from acting for one or both of them.
[113]       He was asked if, in the circumstances, notwithstanding the Advice and Waiver
letters, there had been a breach of fiduciary duty on the part of the defender. In his view,
the answer was no. He referred by way of illustration to a recent case (7/93 of process)
which concerned a solicitor being involved in a personal relationship and the question of
whether this was a breach of fiduciary duty being addressed. He drew attention to this case
to illustrate that a nonprofessional (ie personal) relationship between a solicitor and client
could give rise to significant problems for the solicitor, his independence, and the fiduciary
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duties owed to the client. This was the most recent decision in relation to that issue and
where proper findings by the SSDT had been made. He explained that in that case, there
had been sexual relations between the solicitor and a vulnerable client. While the solicitor
had withdrawn from acting, the finding of the SSDT had been against the solicitor. He
distinguished that case on its facts, stressing that the client in that case had clearly been
vulnerable. He also emphasised the observations of the Tribunal that the solicitor’s conduct
in those circumstances did not import a “strict liability”. He referred to the observation that
there was no “absolute prohibition” on a sexual relationship between a solicitor and client,
but the solicitor must be cautious that his independence was not imperilled and that the
fiduciary duty owed to the client was not impaired. He also confirmed that, in his
understanding, there was no suggestion that the pursuer in this case was vulnerable. He
also narrated his researches in the US and elsewhere, but Scotland maintained a distinctive
position on this issue. He confirmed the case dated from 2010 and that there was no change
in standards between 2002 and 2010.
[114]       When referred to the 2002 Code, he explained the history of their development and
adoption in this jurisdiction. The impetus for this had been contact with the European bars
and the CCBE. The terms of paragraph 2 of the 2002 Code was put to him (see paras [59]
and [60], above). He stressed the significance of the words “where appropriate”. In his
opinion, these words appeared for good reason and reflected the articulation in Scotland of
the test for professional misconduct by Lord President Emslie in the case of Sharp v Council
of the Law Society for Scotland 1984 SC 129. This case was significant, as it was the first time
authoritative guidance had been given as to what could be professional conduct and the
standards to be expected of solicitors. The question to be answered was the same and the
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test was conjunctive: it must be serious and reprehensible conduct. This test had
subsequently been followed in England and adopted by the Inns of Court.
[115]       It is now prohibited, since 2009 or 2010, for a solicitor to prepare a will in which he
had an interest. He was asked what his position would be if the defender had prepared the
disposition but had contributed nothing, he responded by asking why should a solicitor get
such a benefit for no consideration? It was a question of equivalent consideration. A
different hypothesis was put to him, namely, that if the pursuer had no savings, no capital
and no income and if the defender had funded all or most of the costs of the house, would
this be a relevant factor. Mr Macreath accepted this “absolutely”. In his opinion it must be
relevant. He had based his opinion on the premise that the defender bore the costs, other
than the supply of a few acres of pasture land and which, until planning permission had
been obtained had, no or minimal value; in other words the defender had spent his own
funds. He expanded on this by contrasting the position of a solicitor acting for the testator in
the grant of a will and under which the solicitor obtained a benefit. He asked, what interest
was there in having a solicitor draft a will and receive a significant legacy? This was
prohibited. Similarly, if property was transferred and the person transferring the property
was bearing all the costs, that person must obtain independent advice. But if the other
person, ie the transferee, was bearing all of the building costs this was different.
[116]       Under reference to the Advice and Waiver letters he was asked whether these letters
would have sufficed in 2006 to discharge any fiduciary duty owed. He stated they would
not suffice if someone was making over an asset for no value, even if granted for “favour
and affection”. The defender would be duty-bound not act. However, he stressed,
everything must be assessed according to circumstances and culpability. If there had been a
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personal relationship between the pursuer and the defender, and if the intention had been
that the subjects were to be a family home and the defender had paid, these letters sufficed.
[117]       A few passages in Mr Reid’s report were put to him. It was put to him that Mr Reid
had softened his position, namely if there had been consideration or significant contribution
on the part of the defender, then his opinion was closer to Mr Macreath’s.
Cross examination
[118]       Mr Macreath was first challenged that not all of the papers supplied to him had been
produced. In relation to the factual narrative set out at the beginning of his report, he had
this material on file but had not produced it. (He was not challenged that any part of his
factual narrative was incorrect.)
[119]       He acknowledged that Mr Reid had a great expertise in property, whereas his
experience and expertise was in representing those who appeared before the SSDT. His
expertise related to the conduct of solicitors across the whole gamut of professional practice.
He also appeared for other professionals, such as doctors and nurses.
[120]       Returning to the background narrated in his report, he was asked the source of
certain statements. These statements put to him included,
(i) that Mr Barr and the pursuer had agreed that the 2003 disposition would not
be registered unless and until planning permission for a dwelling house was
obtained with the appropriate building warrant;
(ii) that the defender met the attendant costs in connection with the planning
advice and other specialist services;
(iii) that Mr Barr, the pursuer and the defender had agreed that the 2003
disposition be registered; and
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(iv) that the title to the land would be taken in the names of the pursuer and the
defender and the survivor, when planning permission had been obtained.
Mr Macreath confirmed that this information came from the defender or from the
instructing solicitors.
[121]       Notwithstanding that there is no challenge to (or conclusion or plea in law directed
to) the 2003 disposition, Mr Macreath was asked a number of questions about this, to ask if
there was an impropriety on the part of the defender in also acting as solicitor in relation to
that deed. As I understood his evidence, Mr Macreath effectively rejected that proposition
or that any criticism was justified, even if there were a personal relationship between the
pursuer and the defender at that time. The defender had acquired no interest under the
2003 disposition; it conferred no consideration or benefit on him and therefore there was
nothing to prevent his acting. He did not accept the proposition that there was “an indirect
benefit” by reason of the defender’s relationship with the pursuer. The title under the 2003
disposition was in the sole name of the pursuer.
[122]       In relation to the 2006 disposition, and the duties owed by the defender to the
pursuer, he was asked about the importance of the equivalence of consideration. He
considered this to be a relevant factor. The hypothesis put to him was, if there was no
consideration passing from the defender to the pursuer, whether there was a breach.
Mr Macreath would consider whether the client was vulnerable or not, and he explained
that the solicitor would have to be mindful that if there were a benefit to him, ie beyond a
token one, and no equivalence in his financial input, then he would have to suggest that the
other person take independent legal advice. But on the facts and circumstances, if the
solicitor was funding the planning and funding the construction of the house, it would not
be deemed to be unreasonable in a professional sense. He accepted that the consideration
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would be the value of the benefit conferred, as opposed to outlays and expenditure. He
understood the defender was funding the planning permission exercise, and to large extent
the funding of the building and its fitting out. Otherwise this was simply agricultural land.
In those circumstances, both parties benefited and the property could be taken in joint
names and the survivor.
[123]       In respect of the question as to how to relate a breach of fiduciary duty and the
Hunter v Hanley test, Mr Macreath confirmed that these were very different. The test for
professional misconduct was that set out by Lord President Emslie in the case he had
explained earlier. A case of professional negligence was completely different and he
explained the three limbed test which the pursuer needed to prove. It was a very high test
to demonstrate negligence in the exercise of professional judgement. He stressed that these
were really two very different areas. A solicitor could be guilty of professional misconduct
but not be found negligent. One example would be a breach of the accounts rules, giving
rise to professional misconduct but not involving any negligence. The question of breach of
fiduciary duty was very different. He acknowledged that there was confusion about this,
even in the regular regulatory context. Misconduct did not satisfy the test for professional
negligence in Hunter v Hanley. That is why he looked at the matrix of facts with such care.
[124]       There was no re-examination.
Parties’ submissions
[125]       Parties lodged written submissions in advance of their oral submissions at the end of
the proof. I have taken those into account. I need not set these out for the purposes of this
Opinion.
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Discussion
Grounds for reduction relied upon by the pursuer
[126]       As noted above, it has not always been easy to discern the legal ground or grounds
relied upon by the pursuer in this action of reduction. There is a degree of confusion in the
pleadings (which refer to misrepresentation, negligent actings and breach of fiduciary duty).
On the first morning of the proof, the pursuer’s solicitor advocate, Mr Stevenson,
endeavoured to clarify the pursuer’s position and to focus matters by amendment to his first
plea in law. In particular, he deleted the reference to “negligent actings” and inserted
instead the phrase “breach of fiduciary duty”. The case was thereafter conducted on the
understanding that this was the essential ground of challenge relied upon by the pursuer.
Notwithstanding this, in Mr Stevenson’s written submissions at the end of the proof he
introduced the topic of undue influence and reintroduced the topic of negligence and undue
influence, in addition to that of breach of fiduciary duty. When I asked him to confirm
what grounds he relied upon, he identified breach of fiduciary duty, negligent
misrepresentation and negligence.
[127]       Even on a benign reading of the pleadings, it is difficult to find relevant and specific
averments or pleas-in-law for all of these. On a fair reading, the averments about
misrepresentation are more apt to play a supporting role for the case of breach of fiduciary
duty rather than to constitute a free-standing ground. They bear to relate to the
circumstances by which the pursuer came to sign the disposition.
Issues of credibility and reliability
[128]       Each party challenges the credibility and reliability of the other. I will deal
separately with the challenges to the parties’ respective expert witnesses, Mr Reid,
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Mr Donnachie and Mr Macreath. I consider first the credibility and reliability of the other
factual witnesses, apart from the parties themselves.
Allan Findlay
[129]       There was no challenge to the credibility or reliability of Allan Findlay. I have no
hesitation in accepting him as an entirely credible and reliable witness in the essentials of his
evidence. Given the passage of time, it is not surprising that he had little active recall of the
precise dates or dealings with the documents with which he was concerned. I accept his
evidence in its entirety concerning the drafting, sending, receipt and recording of the
disposition and the Advice and Waiver letters.
Morag Hill
[130]       While Mr Stevenson sought to challenge her reliability on the basis that she could not
recall a single sentence in an affidavit provided by her nearly two years before she gave her
evidence in court, I do not accept this criticism. She readily accepted that she had forgotten
about the brief statement made to her by Mr Barr (whom she was quoting in her affidavit).
She was otherwise a very precise, clear and careful witness and I have no hesitation in
accepting her evidence.
Mr and Mrs Barr
[131]       The evidence of these witnesses was taken on commission over two days in January
and April earlier this year. The Commissioner expressed concerns about their lack of
credibility and reliability. Having read their evidence, it is difficult to discern what direct
relevance it had to the subject matter of this action (once properly focused). Most of their
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evidence concerned an inchoate challenge to the 2003 disposition. As Mr Stevenson
accepted that the averments concerning the 2003 disposition were irrelevant, I need say little
more about their evidence. In light of the Commissioner’s comments, I would be reluctant
to place any weight on their evidence particularly if unsupported by other credible and
reliable evidence or by agreed documents.
The pursuer
[132]       The pursuer accepted she was not good with dates and there is, therefore, a question
about her reliability. Given that she was at times talking about events 10 or 12 years ago,
this itself would not be a cause for concern. However, there are very serious issues
concerning her credibility. It suffices to narrate five bases of concern:
1) In the first place, she admitted improperly claiming income support for a number
of years, even although she knew she was not entitled to this by reason of the
substantial cash provided to her by the defender. It is likely that these cash
payments began in about 2003 or 2004. Nonetheless, she remained on income
support for some years (either to 2006, when she moved into the house, or until
2011 when she resumed employment).
2) As quoted above, the pursuer’s case on Record is essentially predicated on her
having signed the disposition, but this having been procured by a combination of
the defender’s alleged misrepresentation as to its terms coupled with the fact that
she did not read it at the time. (See para [8(5)], above, and the passages
underlined.) By the time of her oral evidence, however, she departed radically
from this version of events and asserted that she had never seen the disposition
and that either the signature was a forgery, or, at least, had been appended
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fraudulently to the disposition. It is difficult to envisage evidence that could be
more at odds with a party’s written case than this. She could not explain the
departure from the case pled on her behalf.
3) However, it is not just a question of a disjunction between the pursuer’s evidence
and her pleadings. As was explored with her in her evidence, she had consulted
solicitors from as early as 2010 or 2011. This was at the time that there was a
possible challenge by her father, John Barr, to the 2003 disposition, and, latterly,
there was the defender’s action for division and sale. What is striking about the
file note entries of her then solicitor, are the matters now relied upon in these
proceedings but which were never raised with her solicitor. At that time, for
example,
(i) There was no suggestion that the disposition did not reflect her
dispositive intention. In other words, what she understood she was
trying to save from her father’s threatened action to challenge the 2003
disposition, was her onehalf interest in the subjects. At no point did she
apparently say to Lynn Collingham that, contrary to the terms of the
disposition, she was entitled to the whole of the subjects.
(ii) There was no suggestion that the defender made any specific
representation, or (as the pursuer would now have it, as averred in
article 5), any misrepresentation anent the effect of the disposition.
Further, there was no suggestion that this (mis)representation deflected
her from reading the disposition. (Cf para [8(5)], above.)
(iii) Rather, the pursuer’s position at that time was that she had not read the
disposition: this was the subject matter of the advice Lynn Collingham
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gave at the time (see paras [36] and [39]ff, above), but that she had
simply signed it. (Cf. para [8(5)], above, and the passages underlined
and in bold.
(iv) There was no assertion at that point that she had not signed the
disposition or that the signature thereon was a forgery.
(v) Further, there was no suggestion that the disposition was not the deed
she had actually signed or that it was several pages shorter than some
other document said to have been signed.
By implication, the pursuer’s position is that she was deflected from defending
the defender’s action for division and sale by reason of what she would argue
was incorrect legal advice she received at the time. In substance, that advice was
to the effect that, having signed the disposition, even though she had done so
without reading it, she was bound by its terms. The difficulty with this position
is that it is irreconcilable with the assertion in her oral evidence that she had not
signed the disposition. Had her position at that time been that she had not
signed the disposition, such advice would have been incomprehensible and, at
the very least, would have prompted her to explain to Lynn Collingham what she
now asserts (namely, that she didn’t sign the disposition).
4) In her evidence the pursuer maintained that she had only ever signed one deed
intended to have legal effect and that the defender “kept all of the paperwork”,
meaning all of the legal documentation. Notwithstanding that assertion,
amongst the documents produced on her behalf was a will in her name and
signed by her in 2002. Inexplicably, by the time the pursuer came to give
evidence, she denied having seen or signed this, or having ever instructed the
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defender to prepare a will. She went so far as to maintain that her signature on
the will was a forgery. This evidence sits uncomfortably with the fact that she
produced the will as part of her own productions.
5) In her oral evidence, the pursuer also maintained that her signature on the
Waiver letter was a forgery. On Mr Findlay’s evidence, he drafted, sent out and
received the Waiver letter. Furthermore, in relation to the disposition, at points
in her evidence the pursuer maintained that it was not her signature. At other
points, she maintained that, if it were her signature on the disposition, she herself
had not appended it to that document. There is an inherent improbability in
having one’s signature forged on a variety of documents (the will, the Waiver
letter, the disposition), at least where these were not all handled or controlled by
the same person. In the light of the evidence of Mr Findlay and Mrs Hill, and the
fact that the pursuer herself produced the will, I find the pursuer’s evidence on
this matter to be improbable.
[133]       For these reasons, I find the pursuer to be a largely incredible and unreliable witness
and I place no reliance on her evidence, unless it is also supported by a witness whom I have
accepted as credible and reliable.
Has it been proved that the pursuer signed the disposition?
[134]       The pursuer’s case in record is premised on the fact that she signed the disposition.
Her essential ground of challenge is that she was duped by the defender into signing this
deed. As recorded above, the pursuer’s oral evidence constituted a complete volt face from
her written case. I am obliged to consider the consequence for the pursuer of this feature of
her evidence. Had matters rested with her evidence, she would have failed to prove the
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factual premise upon which her whole case was based and which was the basis upon which
her expert gave his report. (I raised this issue with Mr Stevenson before the evidence of
Mr Reid was resumed on the third day of the proof. He accepted the offer of time to
consider his position and to take instructions. Having done so, he did not seek to amend. It
was at that point that he tendered the suggestion, apparently just discussed with the
pursuer, about the substitution of new or other pages.) However, there is also the evidence
led by the defender from Morag Hill and Allan Findlay whose evidence I accept. In other
words, on this issue and in the light of the evidence of these other witnesses, the defender
has proved that the pursuer did indeed sign the disposition, which had been drafted and
sent by Mr Findlay, witnessed by Morag Hill, and sent for registration to the GRS by
Mr Findlay. Accordingly, my finding that the pursuer was lacking in credibility and
reliability is not fatal to this part of her case.
The disposition
[135]       Given the pursuer’s oral evidence and the faint suggestion made by Mr Stevenson in
his submissions that the disposition lodged might be incomplete, I require to address this
matter. As I understood it, Mr Stevenson advanced such a submission in an attempt to
reconcile the pursuer’s pleaded case with her oral evidence of having been presented with
and having signed a deed which began with references to 14th century property law.
Mr Stevenson never put to any witness that the disposition was in some manner incomplete
or that, as suggested by Mr Stevenson (again, only in submissions), it had different front
pages which had been produced to the pursuer but which somehow had been subsequently
removed. Indeed, Mr Stevenson went so far as to suggest in his submissions that the only
inference was that this was what had been done. What Mr Stevenson did not address was
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Mr Findlay’s evidence, in which he expressly confirmed that the disposition was complete
and that he had typed it himself, as he had the Advice and Waiver letters. There was
absolutely no evidence to support Mr Stevenson’s somewhat extraordinary suggestion and I
have no hesitation in rejecting it as having no foundation in the evidence.
Advice and Waiver letters
[136]       I next turned to consider the conflicting evidence about these letters. The pursuer
maintains that she never received these and that her signature on the Waiver letter was a
forgery. For the reasons already explained, I accept Mr Findlay’s evidence on this chapter in
preference to that of the pursuer. I also accept the short passage of the defender’s evidence
that the pursuer had mentioned these letters to him. I therefore accept that the pursuer
received these letters and that she returned the Waiver letter. It follows that I reject the
pursuer’s assertion that the latter was a forgery.
Other chapters of evidence
[137]       Before turning to consider the expert evidence led in this case, it is convenient next to
consider the other, ancillary chapters of evidence.
Has the pursuer proved any misrepresentation on the part of the defender?
[138]       On record, the pursuer avers that the defender misrepresented the substance and
effect of the deed she said she signed. In her oral evidence, she spoke to having been
presented with a document commencing with references to 14th century land law, which she
described as “gobbledygook”. It was in this context that she asserted that the defender
advised her not to worry and that this deed related to her father’s disposition of the land to
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her (ie as effected by the 2003 disposition). I have already rejected her evidence that there
was, in effect, a sleight of hand in relation to the number of pages and presentation of the
disposition to her. Given the very substantial concerns about her credibility and reliability, I
do not accept this chapter of her evidence. In particular, I do not accept that the defender
made the kind of representation asserted in relation to the disposition.
[139]       It will be recalled that the 2003 disposition was not immediately presented for
registration but that this was done only once planning permission for construction of a
dwelling house on the land was secured. It may well be the case that the pursuer has
confused in her own mind an explanation of the 2003 disposition with the 2006 disposition,
which were presented at the same time to the GRS for registration. This is also consistent
with Morag Hill’s evidence that the pursuer was not particularly learned.
[140]       In any event, as I find there was no misrepresentation as to the import of the
disposition, it matters not whether this was advanced as a free standing case of negligent
misrepresentation (as Mr Stevenson sought to argue) or whether this was simply allied to
the pursuer’s case for breach of fiduciary duty.
Did the pursuer refuse to obtain independent legal advice?
[141]       I have already held that the pursuer received the Advice and Waiver letters. In her
oral evidence the pursuer readily accepted that she could understand the terms of these
letters. I have also accepted the defender’s evidence that the pursuer had mentioned
receiving these letters to him. In the light of this evidence I find, albeit as a matter of
inference, that the pursuer declined to take separate and independent legal advice and that
she signed the Waiver letter to that effect, and in full knowledge of the consequences of
doing so.
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[142]       This is reinforced by the parties’ evidence that their common intention at that time
had been to build a house on the land with a view to starting a life together. While the
pursuer presented as somewhat embittered in her evidence, it was apparent from the
defender’s presentation in evidence that he had genuinely been in love with the pursuer at
the material time. This provides an explicable context for the pursuer’s grant of the Waiver
letter.
[143]       Whether the Advice and Waiver letters were sufficient to exonerate the defender
from any breach of fiduciary duty or negligence, this question remains to be determined in
the light of the parties’ expert evidence, to which I shall turn shortly.
The delay in registering the 2003 disposition until registration of the 2006 disposition
[144]       The 2003 disposition was not presented for registration in the GRS until 2006, when it
was presented at the same time as the disposition. Mr Stevenson appeared to advance a
criticism for delay in presentation of the 2003 disposition. It is notable that neither Mr Reid nor
Mr Macreath commented adversely on this matter. The defender explained that registration of
the 2003 disposition was held back until planning permission was secured. Mr Macreath
regarded this explanation as entirely reasonable, given that the small parcel of agricultural land
without any planning permission had in his view little value: see paragraph [113], above. The
pursuer had also referred to these arrangements as “making the house legal”. In my view, there
is no basis for criticism arising from the gap in time between the signing of the 2003 disposition
and its presentation for registration.
[145]       The grant of planning permission to build a dwellinghouse on the land was subject
to a number of conditions, including a planning condition which imposed a restriction on
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the class of persons entitled to occupy the subjects. The planning condition was in the
following terms:
Occupation of the dwelling shall be limited to a person solely or mainly employed
or last employed in the locality of [the farm] and as identified on the enclosed plan,
in agriculture as defined in Section 277(1) [of] the Town & Country Planning
(Scotland) Act 1997 or to a widow or widower, spouse, ascendants, descendants and
those living in family with such persons.” (Emphasis added.)
The local authority’s reason for imposing the planning condition stated that the subjects
were within an area identified in the development plan “as being inappropriate for new
residential development unless related to the essential needs of agriculture”. The planning
condition therefore restricted occupation of the subjects to someone “employed or last
employed” in “agriculture” (as defined) or to a specified relative “living in family” with
such a person. On the evidence led at proof, it is questionable whether the pursuer herself
would have complied with this condition at the time of the application for planning
permission. This may be a further reason why the 2003 disposition could not be registered
at the GRS until after planning had been secured and the house built, and why it was only
presented for registration at the same time as the disposition.
The parties’ respective contributions toward the subjects
[146]       I have recorded above the somewhat curious passage in the pursuer’s pleadings,
averring that the defender was without resources. (See para [8(4)] above.) The pursuer also
averred that she made a substantial financial contribution to the construction of the dwelling
house. These averments have not been proved. They are inconsistent with the
unchallenged evidence that the pursuer was on income support and was not working at the
material time. The uncontested evidence was that the defender was a man of wealth. On
the pursuer’s own evidence, from about the early 2000’s the defender was regularly
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providing her with bundles of cash in substantial amounts (the sums of £1000, £5000, and
£10,000, were mentioned). The dispute between the parties is whether these were
unqualified gifts (as the pursuer contends) or were provided to the pursuer to spend on
materials and labour for the construction of the house. The pursuer also referred to gifts of
jewellery and a limited edition Saab from the defender. On this evidence he was no doubt a
generous man, but I do not accept the pursuer’s evidence that the sums were provided to
her for her to do with as she wished. Rather, these payments were described as having been
made in the context of a budding relationship and where the longer term plan was to build a
house together, even though the location for that had not yet been identified or agreed.
[147]       There was a confusing passage in the evidence of the pursuer’s father, taken on
commission, to the effect that he may have paid for or contributed to the first payment (of
£47,000) toward a timber kit. (At two points on the first day of the Commission, Mr Barr
stated that he had received a cheque of £47,000 from the defender and had applied this
toward purchase of the timber kit: at pages 16 and 89 of the notes from the Commission.)
There was also some evidence that he or his sons had assisted in digging the foundations.
This is the only evidence that supports any contribution having been made by the pursuer or
her family, apart from the disposition of the 1.4 ha parcel of agricultural land. Otherwise,
there was unchallenged evidence that the defender used his expertise and resources to
secure planning permission to erect a dwelling house, and thereafter to obtain a building
warrant. The defender’s position, not seriously challenged, was that he had contributed all
or substantially all of the costs to the construction and fitting out of what became a two-
storey five-bedroom modern house. The pursuer conceded that he had “contributed a lot”.
The pursuer was living at the family farm, had a dependent child and had no income or
capital. Such evidence as there was about the relationship between the pursuer and her
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family, was suggestive of tensions, at the very least, and of enmity amongst her siblings and
a subsequent falling out of the pursuer with her whole family. It was not suggested that the
pursuer’s family was otherwise a family of means or one with disposable capital. While the
pursuer’s father provided the 1.4 ha of agricultural land, in the light of the whole evidence I
find that the defender contributed all or substantially all of the costs of the construction and
fitting out of the house. I also find that through his efforts and expenditure planning
permission for a dwelling house was secured which thereby materially increased the value
of the parcel of land disponed by the pursuer’s father to the pursuer. I will deal with the
question of the value of the subjects when I consider the evidence of the pursuer’s chartered
surveyor.
[148]       In submissions Mr Stevenson suggested that it was improbable that the pursuer
would give away her only asset, namely the 1.4 ha parcel of agricultural land. However,
such evidence as there was tended to show that agricultural land, without the benefit of
planning permission (if it could be secured in respect of land of that character), had very
little worth. It might be considered equally improbable for the defender to expend effort
and considerable resources to secure planning permission and to build a dwellinghouse for
him and the pursuer to begin their life together without, at least, taking title in both parties’
names. The evidence I have accepted most naturally supports the inference that, as both
parties had made a contribution, title to the subjects was to be taken in both names.
Mr Donnachie’s evidence as to the valuation of the subjects
[149]       The principal purpose of this evidence was to support the pursuer’s third conclusion,
which sought the sum of £375,000 as half of the market value of the subjects. (Neither party
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addressed me on the relevant date at which the subjects fell to be valued, if the pursuer’s
third conclusion were to be granted.)
[150]       In submissions, Mr Sanders sought to challenge Mr Donnachie’s evidence. It is not
entirely clear on what basis he sought to do so. There was no comparable expert led by the
defender. There was no challenge to Mr Donnachie’s qualifications, experience or
methodology. I found him to be a careful and measured witness. It is entirely to his credit
and his professionalism, that he readily acknowledged the limits of his expertise (eg in reply
to questions concerning agricultural land values) and I do not regard this as a basis to
discount his evidence in any way. I also accept his evidence that the effect of the restriction
contained in the planning condition would materially reduce the market value of the
subjects, and which he had calculated to be a reduction by half of its market value. I have no
hesitation in accepting Mr Donnachie’s evidence in its totality. For aught yet seen, the fact
that it is a large house situated on land adjacent to a disgruntled former owner, in the form
of Mr Barr, may have a further depressive effect on the value of the subjects or, at least, their
marketability.
[151]       The valuation may also assist on the question of ascertaining the quantum of parties’
respective contributions. As noted above, the valuation also stated the reinstatement value
of the subjects. Conventionally, this is the costs of rebuilding in the event the physical
structures on the land (in this case the dwelling house) are destroyed. The land value does
not generally form part of this figure, for the obvious reason that the land subsists.
Accordingly, a rough estimation of the value of the land itself (with the benefit of planning
permission) can be made by deducting the reinstatement figure of £545,000 from the market
value of £750,000. (There is an obvious coherence in comparing reinstatement and
construction costs.) In arithmetical terms, this attributes a value of about £205,000 to the
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land itself (with planning permission). This is broadly in accordance with Mr Donnachie’s
evidence that the land may contribute about a third of the value to the subjects. While
Mr Donnachie was unable to say what the value of the land was without planning
permission, Mr Macreaths evidence was that this would be of very little worth.
[152]       In light of this evidence I find that the defender’s efforts, especially in securing
planning permission, materially increased the value of the land itself. Furthermore, even
allowing for digging the foundations and a payment in the order of the figure claimed by
Mr Barr (£47,000), and about which the evidence was equivocal at best, it is clear that the
defender’s contribution was the most substantial in relative terms, and was very substantial
in absolute terms. Having regard to the figures in the valuation, in broad terms, the total of
the defender’s contribution may have equated to nearly 90% of the construction costs
whereas the pursuer’s contribution was about 11%. (The latter ratio is obtained by taking c
£60,000 as the contribution from the pursuer’s family (ie the payment of £47,000 towards the
timber kit and rounding this up to reflect some work on the foundations), as a proportion of
the reinstatement figure of £545,000. Having ascertained the percentage of the pursuer’s
contribution, namely of about 11%, by inference the defender contributed the remaining
89%.)
[153]       This calculation, which is necessarily a broad estimate based on the available (and
limited) evidence, can be crosschecked against the value of the land. The value of the land
without planning permission was likely not to be a significant proportion of the estimated
value of the land with planning permission at £205,000. (As noted above, the value of the
land with planning permission may be ascertained, in general terms, by deducting the
reinstatement costs (of £545,000) from the full market value (of £750,000).) If the value of the
land with the benefit of planning permission was broadly £205,000 then, taking, say, 25% of
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that figure, as representing the value of the land without planning permission would
produce a value of c £50,000 for the parcel of agricultural land without planning permission.
(This rough approximation may be generous, given Mr Macreath’s evidence of the minimal
value of a small parcel of agricultural land without planning permission.) When the figure
of £50,000 (representing the value of the land without planning permission) is added to the
estimated figure of the £60,000 (reflecting the contribution of the pursuer and her family),
ie bringing about a total of c £110,000, this is still a very modest contribution relative to the
defender’s own. Whether the correct figure for comparison purposes is the full market
value of the subjects with the planning permission (ie of £750,000), or also taking into
account to the planning condition (reducing market value to the figure of £375,000), it is
evident that the contribution of the pursuer’s family was no more than 1/7th to 1/3rd of the
full or reduced market value. For present purposes, it suffices to note that this was
significantly less than half of the reduced market value of the subjects.
The expert evidence
[154]       As noted above, the pursuer’s oral evidence bore no relation to her case on record.
Had matters rested with the pursuer’s evidence there would have been an unbridgeable gap
between that evidence and the premise of fact upon which her expert’s opinion was
predicated. On the evidence of some of the defender’s witnesses, I have nonetheless found
that the pursuer signed the disposition. In those circumstances, notwithstanding my
rejection of the pursuer’s own evidence, there is a basis in fact to which her expert’s evidence
could meaningfully be related.
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The experts’ respective areas of expertise
[155]       There was no challenge to the credibility or reliability of either Mr Reid or Mr Macreath.
Rather the reverse, in that each readily acknowledged the standing and expertise of the other.
Mr Reid’s expertise was principally in the field of property and conveyancing whereas
Mr Macreath was pre-eminent in the field of disciplinary and conduct matters. Their respective
areas of expertise did not entirely coincide. However, as is apparent from their evidence, their
views converged considerably on certain matters.
The convergence of the experts’ opinion
[156]       While Mr Reid initially took a more stringent view, he accepted that his overall
impression had been that the defender qua solicitor had obtained something for nothing: see
paragraph [54], above. In other words, in those circumstances he would have found the
solicitor to be in breach of fiduciary duty or negligence, notwithstanding the terms of the 2002
Code. However, he accepted that, on the hypothesis that there had been full consideration
provided by the solicitor, and so the transaction did not result in a gift or disposal at an
undervalue, a solicitor who had conducted himself in such circumstances was not necessarily
culpable or in breach of any relevant duty. Similarly, Mr Macreath would not have sought to
exonerate a solicitor who obtained a disposition in similar circumstances to the grant of the
disposition, if no equivalent value had been transferred. At the heart of it, both experts took
into account as a highly material factor whether the solicitor who was in a relationship with his
client and who transacted with her, benefited from the transaction at his client’s expense. In
short, both would have censured a gratuitous disposition; neither would have done so if there
was no such financial advantage to the solicitor at the expense of the client. While parties did
not approach the matters in this way, on the evidence, what the pursuer obtained in exchange
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for the grant of the disposition of the land (even giving her credit for the figure c £60,000 (from
her family’s physical labour and financial contribution, and therefore constituting a total
contribution of c £110,000 from the pursuer), was a one-half share in subjects worth either
£750,000 (at full market value) or £375,000 (taking into account the effect of the planning
condition). In short, she acquired more (or, if the full market value were relevant, significantly
more) in value than she contributed. This evidence is problematic, to say the least, for the
pursuer’s action, regardless of the particular legal ground or grounds founded upon.
Breach of fiduciary duty
[157]       As I understood it, the pursuer’s essential criticism was that the defender placed
himself in a position where he had an interest in the pursuer’s grant of the disposition and
he had failed to insist that the pursuer obtain separate legal advice. (Mr Macreath
characterised this as a “strict liability” approach.) Mr Reid did not maintain his position, if
the defender had demonstrably given full value. On the evidence, I have found that the
defender did not obtain a financial benefit to the disadvantage of the pursuer. Rather,
assessed in the round, the pursuer benefited from the disposition when viewed in the
context of the defender’s financial contribution and his role in securing the requisite
planning and other permissions. In the light of the common position of the two experts,
there was scope for permissible conduct on the part of the defender consistent with this
evidence.
[158]       Does this nonetheless constitute a breach of fiduciary duty?
[159]       Mr Sanders relied on Aitken v Campbell’s Trustees 1909 SC 1217 (“Aitken”). In that
case, which also concerned a solicitor contracting with his own client, the Court held that
where a solicitor acted in a transaction outside a solicitor’s ordinary business (ie involving
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self-dealing with a client), then such transactions were to be subjected to the “closest
scrutiny” (at p 1225, per Lord President Dunedin) and the question posed: “would another
law-agent have advised it, or if the proposition had been made by a third party, would this
same law-agent have advised it to his own client?” (ibid, at p 1227). It must be noted that
Mr Stevenson did not address this case in his submissions (nor did he cite any other case as
providing the test for breach of fiduciary duty in the context of a civil action). Further,
neither of the experts was referred to or asked about this formulation. They were asked, in
effect, whether the circumstances would have constituted misconduct, although neither was
asked to comment on the different standard of proof (of beyond reasonable doubt)
applicable in the SSDT. Notwithstanding this, in the circumstances I have found proved,
and applying the test in Aitken, which is binding on me, the pursuer’s case for breach of
fiduciary duty is bound to fail. There is no evidence to support a finding that the Aitken test
was met; the convergence of views between Mr Reid and Mr Macreath pointed strongly
away from such a finding.
[160]       For completeness, I did not find the evidence about other conflicts of interest (ie
where a solicitor acts for both parties in a transaction) to be of assistance. Nor did I find the
discussion about the test for misconduct, spoken to by Mr Macreath under reference to the
case of Sharp (or the more recent SSDT decision) to be of assistance. It respectfully seems to
me that the test in Aitken for misconduct (which is within the jurisdiction of the SSDT), is not
to be assimilated to that of breach of fiduciary duty although, of course, the same factual
basis may support both types of characterisations (in the respective fora of this Court and the
SSDT).
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Negligence
[161]       I must now deal with the presentation of this case as one of professional negligence.
The evidence concerning this was very thin. The circumstances do not readily instruct a
case for professional negligence, which is more typically concerned with the exercise of
professional skill which is said to have fallen below an established standard and to amount
to conduct which no reasonably competent professional exercising due skill and care would
have done. Typically, such cases involve proof of the three limbs of the Hunter v Hanley test.
(To the extent that there was a conflation by Mr Reid of the distinctive features of a case for
negligence and one for breach of duty, this flowed from questions posed by Mr Stevenson
assuming or inviting such a conflation. Mr Stevenson appeared to proceed on the basis that
the obligations in the 2002 Code were interchangeable with the test in Hunter v Hanley.)
Such evidence as there was in this case, militated against the test of negligence being met. I
have in mind the terms of the 2002 Code, quoted at paragraph [59], above. The presence of
the words “where appropriate” and “should” are necessarily inconsistent with a contention
that no reasonably competent solicitor exercising due skill and care would have failed to
insist that the pursuer should have got separate legal advice and was otherwise obliged to
refuse to act. To the extent that Mr Reid’s evidence was to be understood as adhering to the
initial view expressed in his report (eg as recorded at para [48], above), I prefer
Mr Macreath’s evidence on this matter. Mr Reid’s evidence was not entirely consistent with
the 2002 Code and, to the extent there was a basis for his stricter view, this was founded on
his ipse dixit but unsupported by reference to other any cases or examples. It is likely to be
the case that what Mr Reid commended was in accordance with good or best practice, but
departure from that does not necessarily instruct a case of negligence. I prefer the more
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nuanced evidence of Mr Macreath, which was supported by reference to his understanding
of practice in the profession.
[162]       It follows that the pursuer’s case on negligence also fails.
Misrepresentation or negligent misrepresentation
[163]       I have already determined that as a matter of fact there was no misrepresentation, as the
pursuer contended. Properly analysed, what the pursuer was seeking to prove was an
intentional misrepresentation. It is in my view inapt to characterise that as a “negligent
misrepresentation”, as Mr Stevenson sought to do in his submissions. In any event, there was
no evidence to support this contention, no analysis of the relevant case law and no considered
submission to support this. I also find that this ground of challenge, even if available as a free-
standing ground on the pursuer’s pleadings, fails.
The third conclusion
[164]       Mr Stevenson also moved for the third conclusion in the alternative to that for reduction.
As the pursuer’s case was presented, the same matters were founded upon for both conclusions.
It follows that the pursuer has failed to establish any basis for the third conclusion, and this also
falls to be refused.
Reduction as an equitable remedy
[165]       Both parties accepted that the remedy of reduction is an equitable remedy and that
the court may take into account facts and circumstances not directly related to the merits or
subject-matter giving rise to the parties’ action. So, for example, the acquisition of rights by a
third party in good faith and for value in the subjects (eg such as a heritable creditor), had
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this occurred, is likely to have been a relevant factor in the exercise of the court’s discretion
to grant or refuse reduction. It is therefore appropriate that I indicate the factors I would
have taken into account in considering whether or not to grant the remedy of reduction, had
I found that the pursuer established a basis for the same.
[166]       What follows proceeds on the hypothesis that the pursuer had established a breach of
fiduciary duty. In considering whether or not to grant reduction, I would have had regard to
the following:-
1) The parties’ respective contributions to the subjects: The pursuer’s rhetorical plea in
her evidence was to ask: “why would I give away half my land?”. In truth, on the
evidence, this would not have been to give away very much. The import of the
available evidence was that a small parcel of agricultural land without the benefit
of planning permission was worth very little. The pursuer led no evidence to the
contrary, that is, to prove that the land conveyed by the disposition had any
substantial value, even absent any planning permission. I refer to the findings I
have made about the parties’ respective contributions to the value of the subjects.
Accordingly, had it been established that there was an absolute restriction on the
defender acting for the pursuer in respect of the disposition where he was also
one of the disponees, and that that constituted a breach of fiduciary duty, I would
nonetheless have regarded it as inequitable to grant reduction, given the very
substantial contribution the defender made to the increase in the value of the
subjects (by obtaining the requisite consents and funding substantially the whole
of the construction costs). Putting it another way, the effect of breach of any such
fiduciary duty had not, on the evidence I have accepted, resulted in any financial
disadvantage to the pursuer. Indeed, the effect of the reduction would in effect
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be to grant the pursuer a windfall, to the extent that the value of what she
received exceeded her contribution. In those circumstances, any such breach was
technical rather than prejudicial in character. (I am not to be understood as
suggesting that the latter feature is a necessary element to establish breach of
fiduciary duty or that its absence proves there was no breach. I do regard the
question of prejudice to be a relevant circumstance to which regard may be had at
the stage of considering the grant of the remedy of reduction.)
2) The impermissibility of these proceedings constituting a de facto undermining of the 2015
decree: The defender holds a decree in his favour, confirming his right (which is
available to any common owner of subjects) to sell the subjects and divide the
proceeds according to the parties’ respective rights thereto. That decree was a
decree in foro in proceedings in which the pursuer was legally represented
throughout. Moreover, the pursuer’s appeal was refused, and the 2015 decree is
final. On the authorities, a party must demonstrate “exceptional circumstances”
to reduce a decree in foro. If granted, the decree of reduction of the disposition
would render the 2015 decree otiose, but without meeting this high test. It
respectfully seems to me that these proceedings are being used as an
impermissible means to elide the 2015 decree and to deprive it of its efficacy.
Mr Stevenson’s only answer, when the matter was raised with him on the first
morning of the proof, was to suggest that the decrees wouldn’t be inconsistent:
the defender could no longer sell the subjects if he had no title. In my view, this
fails to appreciate or address the fundamental objection of this aspect of the
pursuer’s case.
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3) The undesirability of inconsistent decrees: Separate from the factor just noted, I
would have regarded it as legally repugnant for there to be inconsistent decrees
pronounced by two courts in the same jurisdiction. This, it respectfully seems to
me, undermines the virtues of finality and certainty that should attend a final
decree, such as the 2015 decree.
4) The unexplained and irreconcilable differences between the pursuer’s positions in the
defender’s action and in these proceedings: In any event, it is deeply troubling that
the pursuer could participate in the defender’s action (with the benefit of legal
aid), assert a certain state of affairs in those proceedings and permit decree to pass
and thereafter raise separate proceedings (again, with the benefit of legal aid) on a
factual premise that is radically inconsistent with the position she adopted in
those earlier proceedings. (Had this been disclosed to or appreciated by the
Scottish Legal Aid Board, it is questionable whether she would have received
legal aid to raise these proceedings.) In respect of these proceedings, her pleaded
case was that she had been deflected by the defender’s misrepresentation from
reading the disposition and that it was never her intention to dispone a one-half
share to the defender (the evidence about the inconsistency between that stance
and her position in the defender’s action has been noted above, at paras [35] and
[37] to [41]). Her oral evidence, to the effect that her signature on the disposition
was either a forgery or fraudulently appended, presented an even more radical
departure from her stance in response to the defender’s action. This volte face was
never explained. (It was not suggested that the first solicitor, Lynn Collingham,
had laboured under a mistake of fact.) I would have regarded this as a very
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material factor in the exercise of the court’s discretion to refuse the remedy of
reduction.
In the light of these factors, viewed individually and collectively, I would have refused to
grant decree of reduction had the pursuer established breach of fiduciary duty.
Prescription
[167]       In the light of my findings, I do not need to address the question of prescription in
any detail. Mr Stevenson conceded that if his case were based on negligence, then the
pursuer’s action had prescribed by reason of the expiry of the five-year negative prescriptive
period. Mr Sanders elicited evidence from the pursuer, noted above at paragraph [42], to the
effect that the pursuer had been aware of a claim against the defender and a loss sustained
by his conduct, more than five years before the raising of this action. This would have
sufficed to refuse the pursuer’s third conclusion based on this ground.
[168]       In relation to characterisation of the defender’s conduct as a breach of fiduciary duty,
I did not have the benefit of full submissions under reference to the case law or of considered
analysis of the provisions of the Prescription and Limitation (Scotland) Act 1973 (“the 1973
Act”). Mr Sander’s position was that a breach of fiduciary duty was subject to the 5-year
negative prescription. (He referred to para 1(d) of schedule 1 to the 1973 Act and he
produced the case of Khosrowpour v Taylor [2018] CSOH 64.) Mr Stevenson hazarded that as
this was a disposition under reduction, this may be an obligation “relating to land” to which
the twenty-year long negative prescription applied. (He referred to para 1(2)(e) of schedule 1
to the 1973 Act, to para 6 of JAL Fish Ltd Small Self-Administered Pension Scheme, Trustees Law
& Others v Robertson Construction Eastern Ltd [2018] CSIH 24, to the effect that this phrase was
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apt to cover a wide range of obligations, and to the example in para 2.54(i) of the Scottish
Law Commission Discussion Paper 160 (on prescription) of 2016.) Other than Mr Sanders’
brief reference to schedule 3 of the 1973 Act (specifying imprescriptible obligations), which
he rejected out of hand, neither party addressed the possibility of the fiduciary obligations
owed by the defender qua solicitor as falling within one of the classes of imprescriptible
obligations.
[169]       The characterisation of the obligation in question for the purposes of the 1973 Act is a
question of some subtlety. I am not persuaded that either Mr Sanders or Mr Stevenson is
correct in his submissions on this issue. It suffices for present purposes to observe that the
meaning of “reparation”, where it appears in schedule 1(1)(d) of the 1973 Act, has been
authoritatively construed by the First Division in Miller v Glasgow DC 1988 SC 440, a case
which is binding on me but which neither party cited. In Miller, the court confirmed the
technical meaning of “reparation” in Scots law (per Lord President Emslie at p 444: “From
the authorities to which we were referred it is apparent that the word is used in the sense of
reparatio injuriarum, and is a pecuniary remedy which the law of Scotland affords for a loss
caused by a wrong”) and it held that that word was not given any special or wider meaning
in the 1973 Act. In other words, “reparation” is confined to payment of damages. It does not
include specific implement (see Miller) and, by a parity of reasoning, it would not include
reduction. Insofar as the pursuer’s action is predicated on the remedy of reduction, it does
not fall within paragraph 1(d) of schedule 1 to the 1973 Act. Accordingly, Mr Sanders is
wrong in his principal submission that the pursuer’s case for reduction has prescribed by
operation of the short negative prescription. The defender’s plea to prescription falls to be
repelled quoad the pursuer’s first conclusion. However, in the absence of considered
submissions and full reference to the relevant authorities, I refrain from expressing any view
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on the question of the characterisation of the obligation in question or the provision within
which it falls in the 1973 Act. In the light of my other findings, this view would in any event
be obiter.
Decision
[170]       In the light of the foregoing, the pursuer’s action fails and decree will be pronounced
to give effect to this decision. As requested, I reserve meantime the question of expenses.



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