JANETTE TERESA HAMILTON AGAINST CAMPBELL SMITH W.S.
SHERIFFDOM OF LOTHIAN AND BORDERS AT EDINBURGH
Case Ref: A524/14
2015SCEDIN19
JUDGMENT OF SHERIFF P A ARTHURSON, QC
in the cause
JANETTE TERESA HAMILTON
Pursuer
Against
CAMPBELL SMITH WS, (incorporating Gray Muirhead WS) and Others
Defenders
Pursuer: Wallace, Advocate
Defenders: Logan, Advocate
____________
EDINBURGH, 3 MARCH 2015
The Facts
[1] In August 2004, Mrs AEN (“the deceased”) then residing at subjects in Dalkeith, Midlothian (“the subjects”), consulted with the defenders for the purpose of instructing the preparation of a will. The defenders through their employee duly prepared a will, which was executed by the deceased on 16 August 2004. In terms of a clause in the will, the deceased bequeathed her “whole right, title and interest” in the subjects to the pursuer in this action. The deceased had previously disponed the subjects in terms of a disposition dated 14 September and recorded GRS Midlothian on 21 September, both 2000, to and in favour of herself and Ms KAH “equally between us and to the survivor of us” on the basis of love, favour and affection. The said disposition had been prepared by Gray Muirhead WS, Dalkeith. The deceased died on 11 October 2011. On that date by operation of law the deceased’s share of the subjects passed to KAH.
The Pursuer’s Averments of Fault and Loss
[2] It was not contested that the defenders owed to the pursuer, as a potential beneficiary under the will, a duty of care when acting on the instructions of the deceased and that the scope of that general duty was to act with the knowledge and skill of reasonably competent solicitors. Only one particular duty following upon that general duty was averred by the pursuer, which was in the following terms: “The defenders ought to have made enquiry as to the extent of the title of the bequest of the subjects.” The averments which follow upon the expression of that particular duty are in the following terms: “They ought to have ascertained whether title to the subjects contained a survivorship destination by either checking with the Registers of Scotland or by perusing title deeds held by them for safe keeping. They ought to have advised the deceased that the survivorship destination in the title of the subjects would defeat the bequest provided for in (the relevant) clause of the will without a declaration being made under section 30 of the Succession (Scotland) Act 1964. No solicitor of ordinary skill would, if acting with ordinary care, have provided an engrossed will for the deceased to execute without checking the title to the subjects and without advising the deceased on the need to evacuate the survivorship destination in order for the bequest to the pursuer to be effective. No solicitor of ordinary skill would, if acting with ordinary care, have included (the relevant) clause in the will without making provision for the evacuation of the survivorship destination under section 30 of the said Act. In all the said duties the defenders failed.” The pursuer states her position briefly in respect of the loss and damage sustained by her as a result of the defenders’ alleged negligence. On her behalf, it is averred as follows: “She has suffered the loss of the bequest of a half share of the subjects which is reasonably estimated to be worth £51,250. The pursuer’s total loss is therefore £51,250. “
Submissions for the Defenders
[3] Counsel for the defenders, in support of his first plea in law, contended that there was a lack of basis for the particular legal duty averred against the defenders in this case, and, further, that there were no relevant averments of loss. In support of his second plea in law, he submitted that the pursuer’s averments (in two sentences in article 2) about the involvement of Gray Muirhead WS in the preparation of the disposition should not be remitted to probation.
[4] Counsel observed that the pursuer only sought to prove that the defenders were instructed to prepare a will and that they indeed had prepared a will. There were no averments about the detail of any instructions and none to suggest that the will was not prepared in accordance with any instructions. The said particular duty in respect of the making of enquiry was not said by the pursuer to emerge from the scope of any contract, nor was there any related averment in respect of, for example, a Law Society practice note. The averment simply appeared, following upon the general duties, setting out an obligation on an ex cathedra basis. In any event, the pursuer did not aver that no such enquiry was carried out by or on behalf of the defenders. He pointed out that the defenders’ position was that they did indeed offer to prove that they had made enquiries of the deceased. There was no averment placed in issue for the pursuer to the effect that the defenders were aware of the survivorship destination. Such an averment would properly lead to a dispute of fact meriting enquiry at proof. The bald averment of the said particular duty, however, meant that the pursuer was advancing an absolute proposition of law to the effect that in every case in which a solicitor prepares a will transferring heritable property, that solicitor requires to check the title deeds, and, of course, incur related costs in doing so. Such a duty, counsel accepted, could be tied to averments of fact, but as framed in the current record the challenged averment of duty amounted to an absolute one arising, it appeared, as an implied term in the case of any solicitor taking instructions to prepare a will.
[5] Insofar as the law had developed, counsel accepted that Scots Law recognised the duty on the part of a solicitor to a potential beneficiary in respect of non-compliance with the instructions of a testator: Holmes v Bank of Scotland 2002 SLT 544. That was not being suggested in this case, however, counsel submitted. Insofar as any issue of best practice in such matters arose, counsel referred to Kerrigan, Drafting for Succession, 2nd Edition, para 2.04, which set out certain risk management recommendations and at subparagraph 6 therein referred to Holmes, supra. The particular duty founded upon by the pursuer did not ex facie arise from the risk management recommendations listed in this textbook.
[6] Counsel conceded that if the defenders had been aware of the existence of a special destination in the will of the deceased, the said obligation upon the defenders in respect of further enquiries could statably be said to arise. On the pursuer’s pleadings, however, there was no suggestion that the defenders were ever aware of the special destination. Even the briefest of averments regarding such awareness would generate, he accepted, a potentially relevant claim to be explored at a proof before answer.
[7] Counsel founded further upon the opinion of the Lord Ordinary in the Outer House in Matthews v Hunter & Robertson Ltd 2008 SLT 634. In that case an executor nominate sought damages in respect of the alleged negligence of a firm of solicitors’ predecessors in respect of a failure to evacuate a survivorship clause in the disposition, with the result that a one half pro indiviso share of the relevant subjects did not vest in the pursuer. The Lord Ordinary dismissed the action. Counsel noted that at paragraph 4 the Lord Ordinary had recorded the position of the defenders in that action. The defenders denied negligence on the part of their predecessors and made certain averments. In particular it was their position that the solicitors acting in the preparation of the will in that case proceeded without checking the terms of the title to the subjects. Counsel directed his argument to the reasoning of the Lord Ordinary set out at paragraph 33, in which his Lordship considered that the pursuer’s submission to the effect that the defenders’ predecessors owed a duty of care to whomever should be confirmed as executor of the estate of the deceased was unsupported by authority. Counsel noted that Professors Gretton and Reid, in Conveyancing 2008, at 115-116, had commented on Matthews, noting as follows: “To this sensible decision we have one or two comments to add. In the first place, it will be noted that in such cases as Holmes the duty is to the beneficiaries, and thus in such cases it is the disappointed beneficiaries who sue. Here the beneficiaries did not sue. Presumably the result would have been the same if they had sued. Secondly, the action was against the (successor of the) firm that prepared the original 1975 disposition. It was not against the firm that prepared the deceased’s will, which was executed in 2003. Might the executor, or more plausibly the disappointed beneficiaries, have a claim against that firm? When preparing a will, does a law firm have a duty to check the title to the client’s heritable property? We do not know the answer to that question.” In respect, accordingly, of his contention about the said particular duty, counsel contended that the court would not be assisted by hearing any proof on the matter. Instead, he argued, a real issue of principle arose, on the basis that if there was an absolute obligation in all circumstances on solicitors preparing wills to check deeds, any evidence to be led by the defenders in respect of what they did or did not do would be irrelevant to the task of the court. If the argument for the defenders was correct, and no such absolute legal duty existed in the absence of specific contractual terms or matters of professional practice, the pursuer could not succeed on the averments currently before the court, and the action properly fell to be dismissed as irrelevant.
[8] Turning to the pursuer’s averments of loss, counsel submitted that these were insufficient to set up a relevant basis for loss to be explored by the court at proof. There were no averments explaining or justifying the position. The pursuer could have offered to prove that had the deceased become aware of or remembered granting the special destination, then she would have elected to evacuate that destination. There were no such averments. In any event, it could have been the case that she may not have taken that course, on a scenario whereby the deceased, having remembered the destination, determined to leave matters as they were. There were no averments to that effect, nor indeed was it averred that the defenders would have been instructed to evacuate the destination. There was further no factual basis set out for the sterling figure averred upon. As a matter of specification, and in turn relevancy, the defenders were entitled to notice of the pursuer’s valuation of her loss.
[9] Finally, counsel noted that the pursuer placed on record two sentences in article 2 averring upon the preparation of the disposition by Gray Muirhead WS, Dalkeith. These sentences were plainly irrelevant standing the absence of any pertinent constructive knowledge averments in connection with the disposition and the defenders in this action. In the event that he was unsuccessful in his primary motion for dismissal in terms of his first plea in law, counsel moved the court to refuse to admit these contentious sentences to probation, in terms of his second plea in law.
Submissions for the Pursuer
[10] Counsel for the pursuer presented an alternative analysis of the case before the court. His position, briefly put, was that the pursuer required, and in this case offered to prove, that (a) there was a usual and normal practice, (b) such a practice was not adopted by the defenders, and (c) no solicitor of ordinary skill would have taken the course adopted by the defenders if acting with ordinary care: Hunter v Hanley 1955 SC 200. In this case the pursuer had instructed Professor Rennie and the defenders had instructed Professor Reid. The issue for the court at proof would simply be one relating to normal practice, as covered by these experts in evidence. Reference had been made in the pleadings to an opinion of Professor Rennie. The duties relied upon by the pursuer were set out succinctly in article 3. The case of Matthews did not assist the defenders. It was not a case in which the pursuer was a beneficiary, and was not directed against the solicitors who had prepared the will.
[11] Counsel set out the pursuer’s case with helpful simplicity. The deceased did indeed instruct the defenders to draft a will. That will was drafted with a bequest in respect of the subjects. To make that bequest work, it was axiomatic, counsel contended, that the defenders would require to insert an evacuation in terms of section 30 of the Succession (Scotland) Act 1964. The bequest having been ineffective (in favour of the pursuer), the duties averred as incumbent upon the defenders had not been discharged. The deceased having sought the professional help of the defenders, put short by counsel it was axiomatic that an evacuation was required. Counsel observed that it was further axiomatic that the deceased would have instructed such an evacuation, standing the instructions to frame the will with a bequest in respect of the subjects.
[12] Turning to the criticisms advanced regarding the pursuer’s averments of loss, counsel contended that the position was straightforward. The pursuer offered to prove and sought as damages the value of the loss of the bequest by the deceased of the deceased’s half share interest in the subjects as at the date of death of the deceased. With regard to the pursuer’s averments about the preparation of the disposition, counsel accepted that the pursuer did not aver constructive knowledge. This was not part of the pursuer’s case. The criticised averments in article 2 featured by way of background, but also substantively to answer the defenders’ contention about the cost and effort involved in checking the title. As a matter of fact, the defenders had custody of the title deeds in their safe. These challenged averments were accordingly all relevantly stated. Counsel for the pursuer accordingly moved the court to repel the defenders’ preliminary pleas and appoint a proof simpliciter.
Discussion and Decision
[13] I propose to dispose of the arguments presented by counsel in brief terms. Counsel for the pursuer made it clear that the contested duty (to make enquiry as to the extent of the title of the bequest of the subjects) arose in the context of the first part of the well known formula in matters of professional negligence set out in Hunter v Hanley, supra, namely that there was a usual and normal practice. The pursuer has the benefit of an opinion from a professor of conveyancing, and the defenders the benefit of the opinion of another professor. Insofar as any duty can in due course be made out by the pursuer, she offers to prove by reference to expert opinion evidence regarding matters of professional practice that such a duty arose and applied in this case. She can only do so if the court prefers and accepts opinion evidence to the effect that there was as a matter of fact such a usual and normal practice as is contended for on behalf of the pursuer at the relevant time. When seen in this context, the averment criticised by counsel for the defenders cannot be characterised as an absolute duty on all solicitors in such circumstances. Rather, it should be viewed through a fact-specific prism, in this case involving a testator who wished to make a bequest involving heritage which, to be effective at all, would necessarily have required an evacuation to be made under section 30 of the Succession (Scotland) Act 1964, and that in the light of expert evidence on usual and normal practice. On my limited understanding of these matters, professional practice in conveyancing is not static. The position of Professors Gretton and Reid in 2008 appeared to be that the answer was not known to the proposition whether a firm of solicitors has a duty to check the title to the client’s heritable property when preparing a will: Gretton and Reid, Conveyancing 2008, at 115-116. The Lord Ordinary in Matthews, supra, dealt with a case which appeared to be analogous, but in fact involved an action at the instance of an executor, not a beneficiary, and was further against the successor of the firm that prepared the original disposition, not the firm that prepared the will. In all of these circumstances I am not prepared to hold at this stage that the pursuer’s case on the merits is irrelevant.
[14] The pursuer’s averments of loss have the merit of considerable brevity, and I do have sympathy with the defenders’ contention that they are entitled to greater notice of the basis of the loss claimed. Counsel for the pursuer has in my view answered this criticism, however, properly advancing the proposition that it is for the pursuer to prove her loss and that the pleadings, though spare, are sufficient to permit her to seek the value of the loss of the bequest by the deceased to the pursuer of a half share of the deceased’s interest in the subjects as at the date of the death of the deceased. I am satisfied that there is sufficient specification in this chapter of the pleadings, read against the whole of the pursuer’s record, to survive what amounted essentially to a specification challenge as contended for by counsel for the defenders. I further take the view that the averments concerning the involvement of the solicitors who prepared the disposition in 2000 are unobjectionable, and indeed potentially helpful, background averments, which should remain on record.
Disposal
[15] For all of these reasons I propose neither to dismiss the action nor to refuse to admit the averments about preparation of the disposition to probation. Instead I propose to repel the defenders’ second plea in law and to reserve their first plea in law, appointing the cause to a diet of proof before answer. No applications were made in the course of the submissions of counsel in respect of expenses or sanction for counsel, and accordingly all questions of expenses are reserved meantime.