MARY DIANE JEANNIE AUCHNIE OR WILLOX v (FIRST) WILLIAM JOHN AUCHNIE AND (SECOND) HENRY AUCHNIE
OUTER HOUSE, COURT OF SESSION
[2016] CSOH 70
A375/15
OPINION OF LORD CLARKE
In the cause
MARY DIANE JEANNIE AUCHNIE or WILLOX
Pursuer;
against
(FIRST) WILLIAM JOHN AUCHNIE and (SECOND) HENRY AUCHNIE
Defenders:
Pursuer: Campbell QC; Davidson Chalmers LLP
Defenders: Parratt; Campbell Smith LLP
20 May 2016
[1] In this action the pursuer seeks reduction of a decree of the sheriff principal of Grampian, Highlands and Islands, dated 27 September 2013, allowing an appeal from an interlocutor of the sheriff of Grampian Highlands and Islands at Banff, dated 7 February 2013.
[2] The action relates to proceedings in Banff Sheriff Court concerning the executry of the late William Duncan Auchnie (“the deceased”). The deceased died on 23 July 2003. He was a widower and had five children: the pursuer, the two defenders, Duncan Henry James Auchnie and George Allan Auchnie. In terms of the deceased’s will, dated 24 June 2002, after payment of his lawful debts, the deceased’s said children were the sole residuary beneficiaries in properties set out and described in the will. In terms of the said will, the said Duncan Henry James Auchnie and the said George Allan Auchnie, were appointed the deceased’s executors and trustees. They accepted office and confirmation was issued by the commissariat of Grampian, Highlands and Islands on 3 November 2006. The said Duncan Henry James Auchnie and the said George Allan Auchnie assumed Tony Willox and Duncan Auchnie Junior, as trustees of the executors in their stead, in February 2015 and they themselves, thereafter, resigned as executors and trustees.
[3] The proceedings in Banff Sheriff Court, to which the present proceedings relate, were concerned with the proper interpretation of clause SECOND in the defender’s will the terms of which are set out in full in article 2 of condescendence and which provided for how the deceased’s assets should be distributed among his children. The parties to the proceedings were also in dispute as to the valuation of certain assets within the estate of the deceased. The proceedings brought were in the form of an action of count, reckoning and payment and were brought by the present defenders to the present action against the said Duncan Henry James Auchnie and the said George Allan Auchnie. The said Tony Willox and the said Duncan Auchnie Junior were sisted, as additional defenders, in the proceedings on 24 April 2015. No warrant was sought or granted to intimate the proceedings to the pursuer in the present action. After sundry procedure before the sheriff at Banff, a record was made up on the executors’ accounts, objections thereto taken by the defenders, and the executors’ answers to the objections.
[4] On 14 January 2013 the sheriff at Banff heard a debate on the record. On 7 February 2013 the sheriff sustained one objection, which had been conceded prior to the debate, and otherwise upheld the executors’ answers to the objections. The defenders appealed to the sheriff principal. No warrant was sought or granted to intimate the appeal to the pursuer.
[5] On 24 September 2013 the sheriff principal allowed the appeal and recalled the sheriff’s interlocutor of 7 February 2013, upholding the defenders’ objections to the executors’ accounts and answers and finding the executors liable to the defenders in the expenses of the appeal. In answer 4, in the present proceedings, it is averred, inter alia as follows:
“Explained and averred that the pursuers in the Banff action (the defenders in the present action) contend that there had been maladministration in the conduct of the winding up of the estate having taken the inordinate period of 10 years so far and they aver and offer to prove that the trustees and the executors (as originally appointed) have acted in rem suam and have unlawfully preferred some of the beneficiaries (including the present pursuer) in the distribution of the assets over the 10 year period.”
They aver further that:
“By early May 2015, all parties to that action had almost resolved differences as to the ingathering valuation and distribution of the estate when the present pursuer sought and obtained suspension and interdict, suspending the proceedings at Banff, obtaining an interdict ad interim interdicting all the parties to the action from taking further steps in relation to the valuation of farm properties in the deceased’s estate by Aberdeen and Northern Marts and obtaining interdict ad interim against the new purported trustees and executors (Tony Willox and Duncan Auchnie Junior) from producing accounts reflecting the Sheriff Principal’s interlocutor of 27 September 2013 and finally interdicting ad interim any distribution of the assets.”
The pursuer’s petition for suspension and interdict was lodged by the pursuer on 20 March 2014. It was subsequently dismissed, without opposition, on 9 May 2014.
[6] On the 27 March 2014, the pursuer lodged a minute of sist seeking to enter the Banff Sheriff Court proceedings as a party minuter and thereafter to lodge defences. That application, which was opposed by the present defenders, was heard by the sheriff at Banff on 25 April 2014 and was refused eo die. The pursuer appealed that interlocutor to the Inner House on 6 May 2014. On 14 November 2014 the Second Division refused the appeal. A decision of the Second Division, in that respect, is now reported as Auchnie v Auchnie [2014] CSIH 102. The court held that the sheriff had not erred in refusing to allow the pursuer to be sisted as a party to the proceedings. It remarked at paragraph 24 of its opinion:
“… once substantive decisions have actually been taken in foro contentioso, it will seldom be appropriate to allow a sist of a new party which returns the cause to a procedural point before such decisions could have been made. The substantive decisions do not disappear as a result of the sist of a party. They remain extant and will be res judicata as between the parties.”
The court went on to remark further that there were, moreover, perceived procedural difficulties which would arise if the pursuer were to be allowed to enter the process at that late stage and that only in very rare circumstances, indeed, would such a course be allowed in circumstances like those the pursuer found herself to be in. (See paragraphs 25 and 26).
[7] The position of the pursuer has been, and remains, that the sheriff principal erred in law in determining the Banff proceedings appeal in the way he did. She is not, as has been seen, a party to those proceedings, her application to be sisted having been refused. At article 6 of condescendence she avers that:
“As a beneficiary in the estate of the deceased, she has a direct interest in the outcome of those proceedings in the events which have happened, and in particular the raising of the questions about the interpretation of the deceased’s will quoad the division of assets”.
The pursuer maintains that she is under necessity now of seeking the reduction on the sheriff principal’s decision:
“In order that such further procedure may take place in the action before the sheriff at Banff or in such other proceedings as may be necessary to permit all parties interested in the estate of the deceased to be heard and have their claims determined in a single process in which all interested parties are present.”
Elsewhere, in her pleadings, the pursuer sets out detailed averments as to why she contends that the sheriff principal erred in law in reaching the decision he did.
[8] The case came before me on the procedural roll when counsel for the defenders sought dismissal of the action. Counsel for the pursuer, on the other hand, sought a proof before answer. Both sides of the bar were in broad agreement as to the law which fell to be applied in relation to the issue before me, namely, whether the pursuer had averred a case which would, if proved, entitle her to reduction of the sheriff principal’s decision.
[9] In the first place it was a matter of agreement that the Court of Session has the exclusive power to reduce decrees of an inferior court and that reduction itself is a remedy which lies within the discretion of the court and is not granted as of right.
[10] It was agreed, furthermore, that, in cases involving reduction of court decrees and decisions, finality in litigation is a relevant factor to be taken into account. It was also agreed that the decree sought to be reduced in the present case was a decision in foro contentioso that is:
“a decree pronounced in a case which had been litigated by both parties. Accordingly where there is once compearance for a defender and the defences are proponed the decree is a decree in foro”. McLaren Court of Session Practice (1916) pages 692 and following.
[11] The issue between the parties ultimately came to be primarily focused on whether or not reduction was a remedy which could be granted in respect of such a decree when the reduction was not being sought by a party who had personally appeared in the proceedings in question. The defenders’ principle submission was that reduction was incompetent in relation to such a decision on the merits, not only where it was sought by a party who had appeared in the proceedings, but where it was sought by a party whose interests had been represented by a party, or parties, acting in a representative capacity and who represented a class to which the party now seeking to challenge the decision of the court belonged. The pursuer’s position, on the other hand, was that there was no blanket prohibition of reduction of decrees in foro as a matter of competency. The matter remained, it was submitted, throughout, one that was for the discretion of the court, though it was accepted, on behalf of the pursuer, that at least in a case, like the present, the party seeking reduction of a decree in foro had to aver and establish “exceptional circumstances” before such a reduction could be granted. The defenders have a sixth plea‑in‑law of mora, taciturnity and acquiescence which was, in the event, not advanced by the defenders. It should be noted that none of the defenders’ eight pleas‑in‑law include a plea to the competency of the present proceedings.
[12] Before dealing, in more detail, with the respective positions adopted by the parties in relation to the law, it is appropriate that I set out some matters relating to the pursuer’s position with regard to her knowledge of, and attitude towards, the present proceedings. On her own averments, in article 5 of condescendence, the pursuer admits that she came to learn of the Banff Sheriff Court proceedings shortly after they had been raised. She contends however in article 5:
“The action concerning, as it did, the intermissions of the executors, the pursuer was initially content to leave the conduct of the action to them. That was a reasonable course”.
It was accepted that the pursuer was also legally advised during the currency of the proceedings. The pursuer expressly accepts that she was aware of the debate before the sheriff. The defenders aver that she attended and sat through 13 of the 15 hearings in Banff Sheriff Court and had attended both the debate before the sheriff and the appeal before the sheriff principal. Those averments are technically covered by a general denial in the pursuer’s pleadings, but they are clearly matters within the pursuer’s own special knowledge. When they were referred to by counsel for the defenders, in his submissions, senior counsel for the pursuer took no objection thereto. As averred by the defenders:
“Following that decision of the sheriff principal she has made four belated and unsuccessful attempts to now enter into the process including the current petition for suspension and interdict and action of reduction.”
Reference is then made to the pursuer’s petition for suspension and interdict, referred to above, and her lodging of a minute to sist, also discussed above. In respect of the proceedings for minute to sist the defenders aver:
“Before the sheriff at Banff the learned sheriff, without the benefit of the above affidavits and attachments, found that the appellant knew that the litigation was in progress, that she knew what was being litigated and that she knew that her interest in her father’s estate would be affected one way or the other depending on the outcome. He considered it was untenable that she should do nothing until the sheriff principal had issued his judgment. He found that she had access to legal advice. He decided that her minute ‘came far too late’ and on that basis refused it in the exercise of his discretion. The Second Division agreed with the sheriff’s approach” (Answer 6)
[13] As has been noted, the pursuer at the debate before me, sought a proof before answer on the question as to whether there was exceptional circumstances justifying the court granting decree of reduction. There is, no doubt, that the pursuer’s present action is brought because she is dissatisfied with the sheriff principal’s decision as a matter of law. She makes averments as to why she claims it is wrong in law. In Walker Civil Remedies at page 176 it is stated that the general principle is that:
“Reduction may not be granted on the merits, that is, merely averments that the interlocutor, decree or other decision was unwarranted on the facts, or granted under an erroneous view of the law, because if that were so a reduction would be in substance merely a further appeal, and would always be available where the ordinary mode of appeal had been neglected or exhausted, or even where no appeal in the ordinary sense was permitted”
[14] The writer then cites the following passage from the opinion of Lord Young in Mathewson v Yeaman (1900) 2F 873 at page 881:
“Reduction has been the common law remedy for such a case of hardship for which in any civilised country there must be a remedy… I should give no countenance to the notion that we should allow actions of reduction to be substituted for and come in the place of appeals… I think the court would not entertain, and I should not myself be at all prepared to assent to the court entertaining, an action of reduction to serve the purpose of an ordinary appeal…”
The writer of the text book then remarks:
“Nor is reduction competent if by choice or oversight appeal was not taken or not taken timeously, nor if a plea was not taken in the former action.”
[15] The authorities, it seems, recognises that the general principle is that reduction of a decree as a mode of review of a decree in foro is incompetent but that there may be exceptional circumstances where reduction of such a decree should be granted. So in Philp v Reid 1927 SC 224 Lord Hunter, at page 232 said:
“There have been decisions in certain special and exceptional circumstances where the Court have entertained actions of reduction of Sheriff Court decisions where an appeal might, perhaps have been taken; but the circumstances in which these appeals have been held competent have, to my mind, always been extremely exceptional. Speaking generally, I think that what Lord Dunedin said in the case of Adair v Colville 1926 SC (HL) 51 at page 56 was quite sound and applicable to reductions of sheriff court decrees. He says:
‘Generally speaking, it is certainly not competent when other means of review are prescribed, and these mean have either been utilised or the parties have failed to take advantage of them’”.
[16] In Bain v Hugh LS McConnell 1991 SLT 691 the Second Division held that while, in general, where other means of review were provided, and those means had either been utilised, or the parties had failed to take advantage of them, reduction of a decree was incompetent, there were exceptions to this rule and while it was not possible to define categorically the cases in which reduction was competent, a decree might be reduced in exceptional circumstances where it was necessary to do so in order to produce substantial justice, or where there had been a miscarriage of justice such as to render the previous proceedings fundamentally null. In that case the basis upon which reduction was sought was that the sheriff had acted ultra vires and that the defenders’ agents had taken advantage of the pursuer’s mistake in failing to implement an agreement between the parties as to the conduct of the proceedings. Averments in those respects were, it was held, sufficient to set forth relevant exceptional circumstances in which reduction may be competent (at page 695 F‑J.) The authorities, it seems to me, make it clear that the exceptional circumstances relied upon must be specifically and clearly averred ‑ compare Philp v Reid. The authorities brought to my attention, however, were all cases in which the person seeking reduction of the decision in question had been a party to those proceedings. Failure by him, or her, to take certain steps procedurally which had resulted in the decree in question passing was held not to justify reduction of the decree. No authority was placed before me where the pursuer was, as in the present case, a party, seeking reduction who had a material interest in the proceedings and to be involved in those, had known of the existence of those proceedings, but had chosen not to seek to be made a party to the proceedings until after the decree objected to was granted. Those features of the present case distinguish it from the position in the previous authorities to which I was referred and is a distinction which counsel for the pursuer relied upon heavily. As counsel for the defenders, however, pointed out the pursuer had chosen, until the sheriff principal's decision was issued, to rely on the executors looking after her interests in the proceedings. In Allan v McCombie’s Trustees 1909 SC 710 an action had been raised against the trustees for alleged breaches of trust at the instance of one of the two beneficiaries in the trust. The defenders pleaded that the action was incompetent in respect that the other beneficiary was neither conjoined as a pursuer, nor called for her interest as a defender. The court held that the action was competent as any beneficiary might sue for breach of trust and that the action, if properly and not collusively contested, would be res judicata against the non‑compearing beneficiary. The Lord President Dunedin at page 716 said this:
“Therefore, I think that the case ought to go on, but that it will be res judicata against the other beneficiary. But then I do think this, that the other beneficiary ought to be given the opportunity of being here, if she likes, and of seeing that the case is, according to her own view, properly fought out. My judgment, therefore, upon this plea is that it is not a prejudicial plea, but that before the action further proceeds intimation should be made to Mrs Everad with the result that she may come and sist herself if she chooses, but that if she does not choose to do so she will well know from this judgment that it will be quite futile for her to raise the question in the future, for we should hold it to be res judicata”.
In the present case, the pursuer, by her own admission, and with the benefit of legal advice, knew that the proceedings had been raised, what was involved in those proceedings and, in particular, that their outcome could materially affect her interests. She, nevertheless, was content, as she herself accepted, not to seek to be sisted to the proceedings until after the decision of the sheriff principal had been issued, while she now contends was wrong on the merits. This is not a situation, in my judgment, which amounts to “exceptional circumstances” justifying reduction of the sheriff principal’s decree at this stage with the consequent further delay, additional expenses, and likely procedural complications which would then arise in relation to the future of the proceedings. On the history of her conduct, as set out above, it cannot be said that reduction is required to avoid something in the nature of a miscarriage of justice. Indeed it might be said that to allow reduction at this late stage, in these very protracted proceedings in the circumstances might be productive of injustice. In particular, having regard to the pursuer’s own actions, or inaction, set against the background of legal advice, it might be said, adapting the language of Lord Anderson in Philp at 234, that the pursuer is now, in effect, attempting to remedy her own decisions taken, with advice, by seeking the exceptional remedy of reduction. This was not a case where the pursuer was unaware of the litigation until it was too late to do anything about it. The pursuer, if she has a grievance in respect of the outcome of the appeal before the sheriff principal, has, been on the facts averred, the author of her own alleged misfortune. In my judgment, the fact that the pursuer chose not to be a party to the proceedings in question, of which she was fully aware, does not materially distinguish her position from that discussed in the further previous authorities, where the party seeking reduction had been a party to the proceedings. The remedy of reduction remains one for the discretion of the court, having regard to the equities of the matter, and among other things the conduct of the person seeking the exceptional remedy. In the present case I am satisfied that the pursuer’s averments do not amount to exceptional circumstances which, after proof, could justify the exercise of the court’s discretion in granting the remedy she seeks. The action, accordingly, falls to dismissed.