[1] In this action the pursuer, on behalf of the Commissioners of Customs and Excise, sues the defender for £50,000 sterling with interest thereon. It is averred that sum is due to be paid to the Commissioners as the balance due of a sum undertaken by the defender to be paid to the Commissioners in respect of outstanding VAT due by him for the period 1992 to 1995.

[2] The pursuer, in article 2 of condescendence, sets out averments as to the sums which the Commissioners assessed were due by the defender. The pursuer goes on to aver, at p.7B of the closed record that:

The pursuer goes on to make averments about communings that then took place between the Commissioners and the defender directly regarding the settlement of his outstanding liability, which did not result in an offer which was satisfactory to the Commissioners being made by the defender. The pursuer then avers as follows, at p.8A-B:

[3] The pursuer then proceeds to make averments regarding a meeting that took place at the request of the defender with the local customs officers on 15 January 1998 and it is averred that at that meeting, the defender stated that he wished to pay the full outstanding sum assessed, together with a £50,000 penalty. The pursuer, furthermore, avers that it was agreed that the Commissioners would write to the defender setting out the outstanding sums which had been assessed. After certain averments regarding communings between the parties that took place subsequent to the meeting, the pursuer avers as follows, at p.10C-D:

The terms of the said correspondence between the Commissioners and the defender are incorporated into the pursuer's pleadings. The terms of the defender's undertaking of 23 March 1998, which is No.6/10 of process and which is addressed to the Commissioners are as follows:

1. refer the matter to the Procurator Fiscal and recommend the institution of criminal proceedings against me in respect of the said offences or any of them or
2. recover any outstanding balance under this agreement as a civil debt.

The pursuer avers that the Commissioners subsequently extended the date due for payment until 17 April 1998 and that on or about 17 April 1998, the defender made a part-payment to account of £160,942.99. The pursuer then avers:

That is the sum sued for in the present proceedings.

[4] The defender, in answer 2, sets out averments relating to the Commissioners' investigations into the VAT position relating to the defender's various businesses. These averments, including averments about the defender being interviewed by the Commissioners, and that he was left with the impression that he was liable to prosecution and imprisonment at the hand of the Commissioners - see p.15A-B. The defender then avers as follows:

[5] The defender then proceeds to make averments regarding the behaviour of the Commissioners' officers Lewis Clark and Gordon Millar towards him at the meeting held on 15 January 1998. These averments are apparently made to support the defence that the undertaking granted by the defender, was obtained by force and fear, and/or by facility and circumvention, and/or undue influence, and/or by error induced by misrepresentation.

[6] The defender appears to rely on some of the same averments to support all of the branches of the defence referring to force and fear, facility and circumvention and undue influence. These averments appear to be found at p.16D and are to the following effect:

The defender's case based on error is prefaced in the following terms, at p.19A-B:

There then follows lengthy and somewhat rambling averments as to why it is contended there was no basis for a penalty or prosecution. At p.21C the defender avers:

There are also averments that the Commissioners had no sufficient evidential basis for insisting upon a prosecution of the defender for VAT fraud. The defender complains, at p.23D, that Messrs. Robertson Craig & Co, when instructed on his behalf:

The defender then avers the criteria which it is said the Procurator Fiscal has regard to in deciding whether or not to prosecute and the defender avers that none of these criteria was satisfied in his case. There are then averments by the defender which, it appears, refer back to the actings of Robertson & Craig. They are as follows:

[7] The action was raised at the beginning of 1999. At that time the defender was appearing on his own behalf. A proof before answer was fixed for 4 June 1999. The proof was discharged, on joint motion, to enable the defender to answer a minute of amendment which had been tendered by the pursuer. The pleadings were, in due course, amended in terms of the minute and answers, on 14 June 2000. A procedure roll debate was fixed for 20 December 2000. It was discharged on the motion on the defender to allow a minute of amendment to be lodged by him. The pleadings were amended further on 12 October 2001. The pleadings were further amended in terms of a minute of amendment of the defender and answers thereto on 30 December 2002.

[8] Both parties have pleas as to the relevancy of the other sides averments. The defender also has the following two pleas:

[9] It is to be noticed that while the defender's fourth plea-in-law seeks reduction of the undertaking ope exceptionis, there is no counterclaim for repayment of the substantial sum which the pursuer has been paid by the defender in part performance of that undertaking. The matter came before me for discussion on the procedure roll.

[10] Counsel for the pursuer invited me to hold that the defences were irrelevant and to pronounce decree de plano. Counsel, in the first place, drew my attention to the terms of the defender's letter of 30 January 1998, 6/5 of process, the terms of which are incorporated into the pursuer's pleadings and are not specifically denied by the defender. That letter is addressed to:

It is headed:

"Without prejudice,

Copied to Mr Gordon Millar of Vigilant House Paisley

Re Thistle Contracts".

The letter states as follows:

"Dear Sirs

I was referred by the counsel for the pursuer to the terms of 6/6 of process, which is a letter from the pursuer dated 18 February 1998, addressed to the defender. It reads as follows:

The letter concluded:

The letter is signed by F. Phipps for the Commissioners of Customs and Excise.

[11] Counsel for the pursuer drew my attention to the context out of which these communings had emerged. It is averred by the pursuer in article 2 of condescendence at p.6 that the defender, between 8 April 1992 and 30 April 1995, made taxable supplies for which he was required to account to the Commissioners for value added tax. The averments continue:

The pursuer's averments continue as follows:

Counsel for the pursuer then referred me to the relevant statutory provisions. Section 60(1) of the VAT Act 1994 provides as follows:

"(1) In any case where -

1. his conduct involves dishonesty (whether or not it is such as to give rise to criminal liability),

Subsection (6) provides:

Section 70(1) of the 1994 Act provides that:

Section 72(1) of the Act provides that:

Section 152 of the Customs and Excise Management Act 1979 is in the following terms:

"The Commissioners may, as they see fit -

Public Notice 700 referred to in the pursuer's pleadings, is produced as 7/1 of process. Para.12.3 of that Notice is headed "Tax Evasion". It states, inter alia, as follows:

There is then recited a list of situations where criminal proceedings might be taken. The first of these is stated to be where "the VAT evaded is at least £75,000 in total over the last three years". The paragraph ends in the following terms:

[12] It was accepted by counsel for the pursuer that, in Scotland, the decision to prosecute or not would be taken by the Crown, but it would be for the Commissioners, in the first place, to decide whether or not to report the matter to the Crown for possible prosecution. It can be seen that the statutory provisions allow the Commissioners a significant amount of discretion with regard to the way in which they deal with suspected and actual tax evasion when it comes to light. Counsel for the pursuer pointed out that the defender does not, in the present case, deny that there was an underpayment of VAT of a very substantial amount. In answer 3, he avers: "After an investigation by VAT officers, it emerged that the amount of £181,980 was outstanding and this amount has been subsequently repaid." Counsel for the pursuer then turned to examine the defender's pleadings.

[13] As far as could be discerned, the defender's third plea-in-law, to the effect that his consent to the undertaking was initiated by error induced by the Commissioners, depended upon averments in answer 2 that the Commissioners had represented to him that he was liable to prosecution and imprisonment. (Compare answer 2 p.15D-E and p.19A-C). But, as previously noted, the defender does not deny that there was underpayment of VAT to the extent of £181,198. If this constituted fraudulent evasion on his part, he was, indeed, liable to prosecution and imprisonment if the offence was established. The Commissioners were justified in bringing that possibility to his attention. The defender does not aver that he was in error as to the nature of the compromise agreement he entered into, or as to its effects, or that any such error was induced by the Commissioners. He does not aver that the undertaking did not reflect the true terms of the agreement reached. There are no averments of misrepresentation inducing the contract. If it be the case that the Commissioners' representatives said that he was liable to prosecution and imprisonment, that was said, after police investigation, and it being discovered that he had failed to pay a substantial sum of VAT. There is no averment that the Commissioners' representatives, who may have said that the defender was liable to prosecution and imprisonment, knew that that was actually not the case. While the defender avers at p.19B that the Commissioners had "no probable cause for instituting a criminal prosecution or charging a civil penalty", the defender does not aver that they knew that that was so but nevertheless, made the representations which he alleges were made to him regarding prosecution and imprisonment.

[14] So, counsel for the pursuer asked, what was the misrepresentation and more importantly, what was the error which the defender was labouring under which related to the nature and content and effect of the contract? Counsel for the pursuer maintained that it was clear from the context that the offer to compound and the acceptance by the defender amounted to a contract in the nature of a compromise. In relation to such transactions, Gloag on Contract (Second Edition) at p.456, has this to say:

The point is taken up and elaborated upon in McBryde The Law of Contract in Scotland (Second Edition) at para.15.25 in the following terms:

[15] Counsel for the pursuer, finally, in relation to this chapter of the defender's case, referred me to the averments of the defender at the end of answer 2, p.24E-25B, where he appears to be saying that he was induced to agree to a compounding agreement because of advice given to him by Messrs. Robertson Craig. Those averments were inconsistent with any averments about an error induced by representatives of the Commissioners.

[16] Counsel for the pursuer then turned to consider the defender's case based on force and fear. The averments which were apparently proferred by the defender in support of this plea were, in the first place, to be found in answer 2, page 16D-17A which are to the following effect:

The matter is further taken up in answer 2 at p.18C-E where it is averred as follows:

[17] In relation to those averments, counsel for the pursuer made the following submission. In the first place, he pointed out that the meeting referred to took place on 15 January 1998. The undertaking was not ultimately granted by the defender until 23 March 1998. There had, clearly, therefore, been considerable opportunity for the defender to consider the whole matter, seek advice and reflect on the position, between anything that might have occurred at the meeting and the granting of the undertaking by him. In any event, the averments regarding force and fear were extremely vague and lacking in the required degree of specification. There were no averments of threats of violence having been made, nor were there averments of any illegal act being committed by the Commissioners' representatives. At the highest for the defender, what was being suggested was that Mr Millar had been verbally aggressive towards him and had sought to intimidate him, but that was not an averment of anything which could be said to be illegal. The fear that was being described in the defender's averments was fear in him that his business might collapse, with consequences for the welfare of his family. But that was fear of a lawful act being taken against him, namely a prosecution in respect of his failure to pay VAT.

[18] Counsel referred me to the case of Priestnell v Hutcheson (1857) 19 D 495. In that case a husband who had been substantially indebted to a bank, obtained his wife's concurrence to a disposition of certain property, life-rented by her in security for his indebtedness. The wife subsequently sought reduction of the disposition on the ground of force and fear, fraud and essential error. The wife averred that, prior to her signing the disposition, her husband had come hurriedly into her bedroom, when she was unwell and had told her that the bank was threatening him with diligence and ruin, unless she consented to granting the deed. She had refused at first to sign but he repeated that she had to sign without anybody knowing of it, otherwise he would require to flee the country to avoid imprisonment. At that point, the banker's agent came into the wife's bedroom with the prepared deed and, without reading it, she was compelled to sign it immediately. The court held that the facts and circumstances averred by the wife were insufficient to support a case based on force and fear. Lord Deas, having set out the averred facts and circumstances summarised above, said this at p.500:

Counsel for the pursuer, took from that passage, two propositions. Firstly, the fear of the consequences of a lawful act cannot found a relevant basis for a plea based on force and fear and secondly, that in any such case, there was a need for very specific averments to be made as to what it is that is said to have amounted to force and fear in the circumstances.

[19] My attention was then drawn to the case of Euan Wallace & Partners v Westscot Homes Plc 2000 SLT 327. In that case a firm of chartered surveyors raised an action against a company for declarator that a certain verbal agreement to reimburse fees to the company was null and void due to force and fear. In the action it was alleged that a partner of the firm, who was also managing director of the company, had paid to the firm substantial fees from the company which were unauthorised by the company. At a meeting, the company's solicitors advised that the payments might have been quasi loans in breach of the Companies Act 1985 and the possibility of reporting the alleged breach to the Procurator Fiscal was mentioned by the other directors. The managing director, as partner of the firm, agreed to reimburse the fees in question to the company. In his opinion, the Lord Ordinary, Lord Macfadyen at p.328H, cited a passage from opinion of Lord Maxwell in the case of Hislop v Dickson Motors (Forres) Ltd 1978 SLT (Notes) 73, where his Lordship said this:

Lord Macfadyen then went on to say as follows, at p.329C-D:

His Lordship at p.330C-D then opined:

[20] In the present case, counsel for the pursuer, submitted, what was missing from the defender's averments was any allegation that in making threats to have the matter of the VAT underpayment referred to the Procurator Fiscal, the Commissioners' representatives had been acting in bad faith. For that reason, applying the dicta, just cited, to the defender's averments regarding force and fear, they were clearly irrelevant.

[21] Counsel for the pursuer next made submissions regarding the defender's case based on facility and circumvention and undue influence. It appeared that the defender, as previously observed, sought to rely on the same averments to support each of these concepts. I have set out the averments in the question above. Taking those averments, as a whole, counsel for the pursuer submitted that they failed to instruct a relevant case based on facility and circumvention. There was simply a total lack of appropriate averments regarding circumvention and lesion and barely adequate averments of facility. In making this submission, counsel referred me to the case of McKay v Campbell 1967 SC (HL) 53. In that case the seller of heritable property sought to have missives of sale reduced on the basis that his agreement to them had been obtained while he was in a state of facility. He averred that, prior to signing the missives, he had had an accident to his leg which necessitated his removal to hospital and a subsequent operations and that thereafter "he was in a weak and facile state of mind and easily imposed upon", owing to the fact that he believed, wrongly, that he might die and, in any event, he would never again be able to walk properly and look after his farm. He, furthermore, averred that the purchaser, who had bought the subjects himself, thought that the injury was trivial and that he would fully recover from it and on that basis, negotiated with him "taking advantage of the defender's false belief about the severity and consequences of his accident". The defender then went onto aver that while he was still in hospital, he signed a document in which the price of the subjects was put at £10,250 and that the purchaser had told him that he was "caught by what he had signed" and that the purchaser, and the purchaser's solicitor, had led him to believe that he had bound himself to sell the subjects and that, in these circumstances, he had believed that he had no obligation but to sign to missives, which he did. The House of Lords held that, even assuming that the seller had made relevant averments of facility, these were not so strong as to relieve him of the necessity of averring and proving circumvention. The House of Lords reached the conclusion that there were no relevant averments of circumvention. Lord Guest, in giving the main speech, with which the remainder of their Lordships agreed, said this at p.61-62:

[22] Applying that statement of the law to the averments of the defender, in the present case, counsel for the pursuer submitted that it was far from certain that the defender had averred any lesion in granting the undertaking which he did grant. If proceedings had been brought, the defender may well have incurred a penalty much in excess of the sum agreed in the compromise agreement. Moreover, in any event, there was a lack of specific averments regarding circumvention. It was simply insufficient to aver certain aggressive behaviour by one of the Commissioners' representatives. Applying the words of Lord Guest: "To succeed the defender must aver some facts and circumstances for which circumvention can be inferred." There is a notable lack of anything suggestive of deceit or dishonesty on the part of the Commissioners' representatives which brought about the compromise agreement. Once again, it was submitted that there had been a significant lapse of time between the meeting on 15 January, when the acts complained of were alleged to have been committed by the Commissioners' representatives and the granting of the undertaking in question.

[23] Turning to deal with the defender's case based on undue influence, counsel for the pursuer submitted that, once again, there were simply insufficient relevant averments to support such a case. It was of the essence of such a case that there had been in existence, some relationship of trust and confidence which had been abused. The averments of the defender relating to the dealings and communings between the defender and the Commissioners' representative Mr Clark, did not amount to a relationship which was open to the exercise of undue influence as that phrase was known to the law. It was not averred that the defender had sought advice from Mr Clark and that Clark, having put himself into a relationship of advisor to the pursuer, had abused the trust and confidence placed in him. Counsel referred me to the case of Gray v Binny (1879) 7 R 332, one of the leading authorities on the topic of undue influence. In that case the Lord President, at p.342 said this:

The case itself related to a deed granted by a son consenting to a disentail for a grossly inadequate consideration, in favour of his mother, where it was alleged that she and the family solicitor had taken advantage of the son's ignorance of his rights and the confidence he placed in them. At p.346 Lord Shand said:

At a later passage in his opinion, at p.347-348, Lord Shand said this:

[24] It was apparent from these dicta, counsel for the pursuer submitted, that certain requirements had to be met before a transaction would be reduced on the ground of the exercise of undue influence. The first was that there had to have been a relationship giving rise to trust and confidence having been placed in the person who impetrated the transaction. Secondly, there must be a material and gratuitous benefit conferred as a result of that impetration. While it was not necessary to establish fraud on the person alleged to have impetrated the transaction, it was necessary to show that his conduct involved an abuse of trust or an illegal act. I was then referred by counsel for the pursuer to the decision of Lord Maxwell in the case of Honeyman's Executors v Sharp 1978 S.C. 233, particularly at pps.226-227, 228 and 230. Under reference to that decision, counsel submitted that, in the present case, the defender made no averment of the kind of advice-giving relationship with which the Honeyman case was concerned, as having existed between Mr Clark and the defender. There were also no averments of Mr Clark having indulged in some conduct amounting to a trick upon the defender. There were no averments that, as a result of anything done by Mr Clark, he, or any person associated with him, had obtained a material or gratuitous benefit. The lapse of time between the averments, such as they were, relating to Mr Clark's dealings with the defender and the defender granting the undertaking was again noteworthy. There was no alleged causal connection between the alleged actings of Mr Clark and the granting of the undertaking. Accordingly, the defender had failed to plead a relevant case based on undue influence. Counsel for the pursuer submitted that it followed, therefore, that all the lines of defence advanced by the defender were irrelevant and decree de plano should be pronounced.

[25] In reply, counsel for the defender sought a proof before answer. At a very early point in his submissions, however, he sought leave to amend, apparently in light of the submissions made on behalf of the pursuer. He was unable, however, to advise the court with any degree of precision the extent and nature of the amendment he proposed to make. In that situation, counsel for the pursuer opposed the motion. He reminded me of the procedural history in this case, which I have set out above. My attention was particularly drawn to the fact that a procedure roll diet had been fixed for 20 December 2000 and on the morning of that diet the defender had sought leave to lodge a Minute of Amendment, which motion was granted and the procedure roll diet discharged. The pursuer had produced three notes of argument, attacking the relevancy of the defender's pleadings. They are No.19 of process lodged 11 July 2000, No.24 of process lodged 1 November 2001 and No.29 of process lodged 16 April 2003. These notes had given notice to the defender of the points to be taken, and which were taken, against the defender's pleadings at the debate before me. Indeed the substance of the attack on the defender's pleadings was to be found in the first two notes. There could be no question of the defender having been taken by surprise by the submissions made on behalf of the pursuer. It was too late, having regard to the history of this case, to seek leave to amend. In any event, counsel for the defender was not in a position to indicate what amendment was contemplated.

[26] I refused the defender's motion to amend. I was satisfied that having regard to the notes of argument lodged on behalf of the pursuer that the defender had had more than enough time to put his pleadings into order, if that were possible, to deal with the criticism made thereof on behalf of the pursuer. In any event, as I have already indicated, counsel for the defender was quite unable to indicate what the metes and bounds of any amendment might be.

[27] Counsel for the defender then proceeded with his submissions. Dealing, in the first place, with the defender's case of error and the attack made upon it by counsel for the pursuer, counsel for the defender submitted that the defender's pleadings referred to various representations made by Mr Millar on behalf of the Commissioners, to the defender prior to the execution by the defender of the undertaking. These amounted to a misrepresentation that the defender would be put "in prison on remand". Counsel referred me to the following averments of the defender, at p.19E-20C, which are in the following terms:

[28] Counsel for the defender conceded that the defender did not aver, and was not in a position to aver, that either Mr Millar or Mr Clark, or any other of the individuals, who dealt with the defender on behalf of the Commissioners, prior to his granting the undertaking, and who are said to have represented to him that he was liable to prosecution and imprisonment, knew or ought to have known that that was not so. On this chapter of the case counsel for the defender made no reply, at all, to the submission made by counsel for the pursuer in respect of the law of error as it operates in relation to compromise agreements.

[29] Counsel for the defender then sought to reply to the submissions made on behalf of the pursuer in relation to the defender's case based on force and fear, facility and circumvention and undue influence. In doing so he did not always carefully distinguish between these distinct legal concepts.

[30] In the first place counsel for the defender maintained that the pursuer, in pointing to the significant amount of time that had elapsed between the meeting of 15 January and the various representations referred to by the defender, and his granting of the undertaking, as demonstrating that there was no direct relationship between these matters, failed to give proper recognition of the defender's case, which was that it had to be viewed as a "progression of events" leading to the undertaking being given. The separation of time between the meeting of 15 January and the granting of the undertaking was not determinative and the gap in time may be explained at proof.

[31] Turning specifically to the defender's case of force and fear, counsel for the defender contended that while there were no averments of threats of actual violence, that was not destructive of the defender's challenge. What the defender was claiming was that the representatives of the Commissioners, at the meeting held on 15 January, threatened him in a way which they were not entitled to do. The defender's case was that he was made the subject of illegitimate threats regarding not just one, but two matters, namely the possibility of prosecution and imprisonment and the imposition upon him of a civil penalty. This submission was made under reference to the provisions of section 72 of the Value Added Tax Act 1994 and to the defender's averments at p.21C of the Record. In the absence of deliberate intention by the defender to evade paying VAT, or deceit on his part, there was no question of the imposition of imprisonment or other penalty upon him. The threats made by the Commissioners' representatives were, accordingly, illegitimate. The defender had, in support of his defence based on force and fear, averred sufficient to make out a case of intimidation. Counsel for the defender, at this point in his submission, referred me to the Opinion of Lord Maxwell in the case of Hyslop v Dickson Motors (Forres) Ltd where Lord Maxwell, at p.74, referred to the characteristic of a threat in extortion cases being "The expression or implication of intention to do something, as for example to report to the police, unless the victim gives way to the extortioner's demand". His Lordship then continued, at p.75, in the passage I have cited above, to say as follows: "In some cases, payment made to 'buy off' a threat of procedure is itself legal, such as a report of a crime to the police will be recoverable on the ground of the extortion."

[32] Counsel for the defender submitted that, in the present case, the payment in question was the £50,000 penalty, which he now maintained was not due by him. Counsel made reference, in this connection, to paras.12.2 and 12.3 of the Note referred to above, and was given leave to amend the defender's pleadings to make specific reference thereto. The defender's position was that the Commissioners' officials had exerted pressure upon him to obtain a payment which was not properly due. Their actings in that regard resulted in fear in him as to his future liberty. Counsel's attention was drawn to a letter from the defender to Mr Clark dated 21/5/97, which is No.6/3 of process, and which is expressly referred to in the pursuer's pleadings. In that letter the defender states inter alia as follows:

The reply to that letter is No.6/4 of process. It is a letter from Mr F Phipps for the Commissioners and is dated 24 June 1997. It states as follows:

[33] As will be seen that letter was giving notice, in June 1997, to the defender that matters would be referred to the Procurator Fiscal. He does not, however, rely on that letter as inducing, by force and fear, the undertaking he gave in March 1999. Counsel for the defender conceded that the only averments which he could point to in support of a case based on force and fear were to be found at p.16E - 17F of the Record, in relation to what Mr Millar was alleged to have done and said.

[34] Counsel for the defender then turned to make submissions in relation to the defence based on facility and circumvention. In the first place, he maintained that there were relevant averments regarding lesion. That submission, insofar as I could understand it, amounted to saying that if the £50,000 was not due as a civil penalty then, if the defender is obliged now to pay the sum sued for, that would be lesion. The defender had made averments regarding his mental health, which were relevant for the purposes of establishing facility and weakness. He also averred that the Commissioners' officials were aware of these matters. What was averred here, on behalf of the defender, was that at the time of the meeting on January 15, he was in a "facile condition" and was bullied by the Commissioners' officials into conferring "the advantage" now complained of. Once again, the fact that there was a substantial lapse of time between the events of 15 January and the granting of the undertaking, did not mean that, after proof, the defender would necessarily fail in showing the connection between those events.

[35] As to the case of undue influence, it was, counsel for the defender submitted, no answer to such a case that the person who it was alleged had procured an undertaking, to the substantial lesion of the defender tax payer, in the form of a civil penalty, that was not otherwise due, was an official acting for a government department. What was involved was a gratuitous benefit to the prejudice of the granter to use the language of Lord Shand in the case of Gray v Binny. A government department, like the Commissioners, of necessity acted through individuals and, if those individuals exerted undue influence in the course of acting for that department and obtained a benefit in favour of the department, that might be subject to attack. Counsel referred me, in this connection, to the case of Anderson v The Beacon Fellowship 1992 S.L.T. 111 by way of analogy. In that case, the Lord Ordinary, Lord McCluskey, allowed a proof before answer in relation to averments of undue influence where the beneficiary of the alleged gift conferred by the exercise of undue influence, was a religious voluntary association and the persons accused of the exercise of undue influence were officials and representatives of the association. Reference was also made to the case of Honeyman's Executors v Sharp, where Lord Maxwell had pointed out that the categories of relationship in which the plea might be relevant are not closed. The court, in that case, had also pointed out that where such allegations are made the court should be slow to decide the matter without inquiry into the facts. The essential idea in the concept of undue influence was that there had been some "unfair dealing". In the present case there are averments of a close relationship of trust having developed between the Commissioners' Mr Clark and the defender, together with averments of the defender being induced because of that relationship to give the undertaking. While the facts and circumstances of the present case were, perhaps, quite far removed from the normal kind of case where the defence of undue influence was held to be relevant, that did not, of itself, make it irrelevant. Counsel for the defender renewed his motion that a proof before answer should be allowed on the entire pleadings as they stand.

[36] In reply, counsel for the pursuer once again drew my attention to what Lord Maxwell had said in the case of Hislop, in the passages already cited. The effect of those passages was that it was necessary, in the present case, for the defender to make very clear and specific averments that the £50,000 penalty was not due and that he was never liable to prosecution (as opposed to conviction) and that the Commissioners' Mr Millar and Mr Clark knew this. In other words, to get the defender off the ground, it was necessary for him to aver specifically that at the meeting on 15 January Messrs Millar and Clark were acting in bad faith. There were no such averments. The defender's own averments, at pps.19-20, were to the effect that the Commissioners were, from December 1997 to March 1998, still awaiting legal advice on what action should be taken against the defender and what decision should be taken following upon such advice. The fatal omission in the defender's pleadings were averments to the effect that the Commissioners' representatives, knowing that a decision had been taken following upon legal advice, that no penalty could be imposed or that no prosecution could be taken against the defender, extorted the agreement from the defender upon which the pursuer now sues. At no stage does the defender aver that the Commissioners, or their representatives, knew that the defender had not, in any respect, been guilty of any dishonesty in his failure to pay the substantial amount of VAT involved. With specific reference to the defender's submissions made in relation to undue influence, counsel for the pursuer submitted that it would be an odd thing to say that Crown employees, acting in the capacity of the officials referred to in the present case, in collecting and enforcing the payment of tax, were in a relation of trust and confidence as set out in cases such as Gray v Binnie.

[37] I have little hesitation in concluding that the defences to this action are entirely misconceived and irrelevant for the reasons put forward by counsel for the pursuer in his careful, clear and comprehensible submissions. The defender, in this case, seeks to avoid performance by him of an obligation set out in an undertaking by him to the Commissioners, in writing, which he said was granted "after careful consideration". He does so by now pleading almost every legal basis for contending that a contract or undertaking has been brought about by consent having been unfairly obtained. I am satisfied that in respect of not one of these grounds, as pled, has the defender made a relevant case.

[38] In the first place, as has been seen, his plea-in-law No.3 is to the following effect: "The defender's consent to said undertaking being initiated by error induced by the Commissioners, he is entitled to avoid said undertaking and decree of absolvitor should be pronounced accordingly." That plea, in my judgment, is unsupported by any relevant averments. There are no averments of misrepresentation made by, or on behalf of, the Commissioners creating an error in the mind of the defender, at the time he executed the undertaking, of a type which would now allow him to be freed from performing that undertaking. In particular, he fails to aver any error as to the subject-matter of the undertaking itself. The mere fact that the representatives of the Commissioners had informed him that he could be subject to prosecution in respect of his failure to pay substantial sums of VAT, did not induce a relevant error in respect of the nature and effect of the undertaking which he was giving. It is not averred by him that the terms of the undertaking did not reflect what he truly intended. In any event, the defender's averments that the Commissioners had no "probable cause" for initiating a criminal prosecution or charging a civil penalty, do not go as far as averring that the Commissioners knowingly represented otherwise, knowing that that was not true. There is, in my judgment, therefore no relevant case of misrepresentation pled against the pursuer. As the defender's own pleadings demonstrate, right up until the time he granted the undertaking, the Commissioners were awaiting legal advice as to how they might proceed against the defender and had not reached any final decision on that matter. Moreover, and in any event, I agree with counsel for the pursuer's submissions, under reference to authority, that extremely strong averments of wrongful conduct on the part of the other party to a compromise agreement are required before the party seeking to avoid such an agreement will be given relief. (See McBryde, Law of Contract in Scotland, (Second Edition)., para.15.25 and the cases cited thereat, and Gloag on Contract, (Second Edition), at p.456). It was noticeable that counsel for the defender, in his submissions, simply failed to address this point.

[39] The defender's case based on the undertaking having been vitiated by force and fear is, in my judgment, also wholly irrelevant for the reasons advanced by counsel for the pursuer. The essential feature missing from the defender's averments in this regard is anything to the effect that in making the alleged threats of a civil penalty being imposed, or a prosecution being initiated, the Commissioners' representatives were acting unlawfully, or maliciously, or in the knowledge that there was simply no warrant for such threats being made. It may, in my judgment, be entirely appropriate for representatives of the Commissioners faced with a long-standing failure to account for very substantial sums of VAT, as was apparently the position in the present case, to make it very clear, indeed, to the person or persons liable for the payment of that VAT, that sanctions, including imprisonment, may follow, provided that this is not done maliciously. There is no averment in this case that in doing so the individuals in question were acting in mala fides. As counsel for the pursuer put it, the defender's case, at the highest, is that Mr Millar was verbally aggressive, but there is no averment that what was said to him, or done to him, was itself unlawful. As was made clear by Lord Deas in the case of Priestnell v Hutchison, fear of the consequences of what is lawful, does not instruct a case of force and fear entitling a person who has granted a deed, under such fear, to avoid it if it is otherwise valid.

[40] I am also unable to discern any relevant basis pled by the defender, for avoiding payment, under the undertaking, on the basis that it was induced by facility and circumvention. There are simply inadequate averments to support the necessary components of that plea, having regard to the law as discussed by Lord Guest in Mackay v Campbell. It is far from apparent that it can properly be said that the payment under the undertaking would involve any lesion. But, in any event, the averments regarding facility fall, in my judgment, far short of the sort of circumstances referred to by Lord Guest at p.61 in Mackay. What is more, I can identify, in the defender's pleadings, nothing amounting to circumvention as that concept is described and discussed by Lord Guest at pps.61-62, under particular reference to Stair, who defined it as "the act of fraud, whereby a person is induced to a deed or obligation by deceit".

[41] The last component of the defender's omnibus fourth plea-in-law, is that the undertaking was "vitiated" by undue influence. As has been seen, this plea apparently depends on averments of a relationship between the Commissioners' Mr Clark and the defender. While I accept, as Lord Maxwell said in the case of Honeyman's Executors at pps.227-228, that it is the case that the class of relationships in which undue influence may be exerted is not closed, I would find it difficult to see the averments of the defender as to his dealings with Mr Clark, in the present case, amounting to a relationship of the class to which this branch of the law applies. As Lord President Clyde put matters in the case of Executors at p.228: "The essence of undue influence, that a person who has is assumed or undertaken a position of quasi fiduciary responsibility in relation to the affairs of another, allows his own self interest to deflect the advice or guidance he gives in his own favour". Mr Clark's first responsibility was owed to the Commissioners and related to the enforcement of the VAT legislation and the collection of VAT. That he may have given the defender some advice as to how he best get himself out of his predicament, in relation to his very substantial underpayment of VAT, in my judgment, falls far short of his assuming a quasi fiduciary relationship towards the defender. Moreover, and in any event, I am unable to identify what advice it is said that Mr Clark, in breach of any duty owed to the defender, gave to him, which amounted to an abuse of that relationship. While I accept that in a case based on undue influence, the gratuitous benefit involved need not be conferred directly on a party abusing the position of trust, I cannot see that plea as relevant where, as in this case, the alleged benefit was not to be conferred either on Mr Clark on anyone directly connected with him but was rather to be conferred on the public purse. The present case, is, in my opinion, quite distinguishable from the situation which arose in the case of Anderson v The Beacon Fellowship, where the persons accused of the exercise of undue influence, were themselves members of the voluntary association which was to benefit from the donations in question. For the foregoing reasons, and for the reasons advanced by counsel for the pursuer in his submissions which I have set out above, this branch of the defender's case is also, in my opinion, wholly irrelevant.

[42] Accordingly, the defender has, in my judgment, failed to set out a relevant basis for any of the grounds on which he seeks to avoid payment of the sum sought as being remaining due in terms of his undertaking.

[43] For completeness, I should add that, while I agree with counsel for the pursuer that the lapse of time between the meeting of 15 January and the granting of the undertaking itself is significant and tends to show that that undertaking was not impetrated by anything done or said on that occasion, I would not have considered that that factor, of itself, was conclusive. What is even more significant, however, in my judgment, are the averments at the end of answer 2, which appear to blame the firm of Robertson Craig, as being the cause of the defender seeking to make offers to compound. Counsel for the defender offered no explanation as to how those averments were consistent with the rest of the case he endeavoured to make out.

[44] I will, in the circumstances, sustain the pursuer's second plea-in-law and pronounce decree de plano.