(FIRST) JAN CLAIRE IGOE and (SECOND) DOMINIC VINCENT MACARI AGAINST YVONNE CAMPBELL
OUTER HOUSE, COURT OF SESSION
[2016] CSOH 136
A752/15
OPINION OF LORD BECKETT
In the cause
(FIRST) JAN CLAIRE IGOE and
(SECOND) DOMINIC VINCENT MACARI
as executors nominate of the late Robert Nisbet Courtney
Pursuers;
against
YVONNE CAMPBELL
Defender:
Pursuer: Ms Malcolm; Harper Macleod LLP
Defender: Ms MacColl; Anderson Strathern
28 September 2016
Introduction
[1] I heard the debate on the parties’ respective preliminary pleas in this action on 17 June 2016. The pursuers sue as the executors of the late Robert Nisbet Courtney (the deceased) for £150,000 as a result of what is averred to be unjustified enrichment said to arise from his having made certain payments and contributions to the benefit of the defender in the course of their relationship. They cohabited but did not marry.
[2] The first conclusion seeks payment of £100,000 to reverse two sums of £50,000 paid by the deceased to the defender.
[3] The second conclusion seeks payment of £50,000 as recompense for benefits gained by the defender as a result of the deceased contributing to renovations by making payments towards the cost of materials and labour and contributing his own joinery skills.
[4] The defender maintains that the claim for unjustified enrichment is irrelevant:
- ·on the basis that there had been available to the deceased a remedy under section 28 of the Family Law (Scotland) Act 2006 (the 2006 Act) thus excluding any equitable remedy;
- that the pleadings fail to show that there was no legal justification for the retention by the defender of any gains which she made;
- the pleadings do not support the second conclusion such that the pleadings relating to the estimated contribution of £50,000 towards renovations should be struck out.
[5] The pursuers maintain that the defender discloses no legal basis upon which she was entitled to retain the sums paid by the deceased towards the purchase of the property and no legal basis on which it would be inequitable to repay at least one half of the sums contributed by the deceased.
[6] Parties agreed that I should be addressed first by the defender. At the conclusion of the debate I made avizandum. Having allowed the pursuers to amend in the course of the debate in response to the defender’s submissions on “subsidiarity,” I allowed parties to present further submissions in writing on the effect of the amended pleadings. Having considered all of the parties’ submissions I now give my decision and reasons.
The claim
[7] Parties are in agreement that the deceased and the defender commenced a relationship in 2009 and that a property in Glenrothes was purchased by the defender for £195,000 with a date of entry on 28 May 2010 with the intention that she would live there with the deceased. She took title in her own name only. They moved in there together. The deceased had paid the defender £50,000 on 14 May 2010 and paid her a further £50,000 on 28 February 2011.
[8] The pursuers aver that the deceased and the defender had intended to buy the property together as a family home. The defender’s position is that the deceased knew that the property was being bought in the defender’s name only.
[9] The defender avers that she and the deceased agreed to share the costs of renovations to the property on which she spent £65,000. The defender was working as a teacher and the deceased did not work. All of the costs of the household were met by the defender amounting to £35,000. She avers that the second payment was used for these purposes. She avers that the first payment was “put toward the purchase price” but also makes averments as to the financial and other benefits which the deceased gained as a result of living with her for three years.
[10] The pursuers aver that between 2010 and 2013 the deceased spent £4,500 on materials for renovations and that in 2011 he paid £3,750 towards the installation of solar panels. In 2011 and 2012 the deceased paid £33,000 towards the costs of renovations and used his skills as a joiner to effect parts of the renovations such that it is claimed that “a reasonable estimate of the total funds spent by him on the property amounts to £50,000.”
[11] The defender maintains that she purchased the necessary building materials and that she was not enriched by any work done by the deceased as she required to have the work “redone professionally.”
[12] Parties seem to agree that the relationship had ended by May 2013 and that the deceased moved out albeit they dispute the circumstances in which he did so. The pursuers aver that the defender’s son, on her behalf, asked him to leave. The defender avers that the deceased left of his own volition.
[13] In condescendence 5, the pursuers aver:
“The deceased and the defender purchased the property with the intention of living there together indefinitely. The deceased, at least, understood that he and the defender were in a long term and committed relationship, and that they would continue to live together as part of a lifetime commitment to one another. On that basis the deceased paid fifty per cent of the purchase price towards the property. In addition he made substantial payments towards the renovation and improvement works on the property. The deceased believed the property was in effect his and the defender’s property, regardless of the title position. He expected to remain in the property and living with the defender there for the rest of his life. The expectation was that he would benefit equally from the contributions that he made.”
The pursuers go on to aver that the deceased’s payments were not made as a gift and that after they separated, the defender acknowledged that she owed the deceased £100,000 but refused to pay any more having been asked to recompense the deceased in respect of his contributions. The defender denies that she made any such admission.
[14] The defender accepts that she has made no recompense to the deceased or his estate. She avers in answer 5:
“…the relationship between the defender and the deceased was a friendship rather than a lifetime commitment. The decision to try sharing a house was taken spontaneously when the defender’s earlier attempt to buy a home for herself fell through. When the house was purchased, they tried sharing a bedroom, but the relationship did not develop in that way and the deceased began to sleep downstairs. The deceased knew that the house was not his property, but made two payments to the defender nevertheless, in accordance with their agreement to find a house big enough for them both and share the cost of living there. The deceased would have had no reasonable expectation that he would live there for the rest of his life.”
Submissions for the defender
Subsidiarity
[15] Counsel referred me to the definition of cohabitant in section 25 and the terms of section 28 of the 2006 Act. In the light of the pursuers’ pleadings, their case was that the deceased was a cohabitant with the defender. Under section 28, the deceased could have sought a capital sum to compensate him for his economic disadvantage and the defender’s economic advantage. The opinion of the Supreme Court in Gow v Grant 2013 SC (UKSC) 1, at paragraph 33, served to demonstrate that Parliament had in mind circumstances such as those of the deceased and defender when enacting section 28.
[16] In section 28(8), Parliament had provided a time limit which is strictly adhered to: Simpson v Downie 2013 SLT 178. Accordingly, a remedy had been available but it was not used in time and this was fatal to the claim.
[17] Unjustified enrichment is an equitable remedy. It is established in case law that recompense is available only where no other remedy was provided by statute or the common law and that failure to act timeously did not open up the possibility of an equitable remedy: Varney (Scotland) Ltd v Lanark Burgh Council 1974 SC 245. This is referred to as subsidiarity. The opinions of Lord Kissen and Lord Fraser supported her contentions about the implications of the time limit particularly clearly. It would be wrong to circumvent the proper procedure provided by Parliament to allow a claim for unjustified enrichment to proceed in these circumstances. Whilst it might be suggested that what was said in Varney applied only in like cases involving local authorities with statutory obligations, the Varney principle had been recognised as being one of general application in the contract case of NV Devos Gebroeder v Sunderland Sportswear Ltd (No.2) 1990 SC 291, Lord President Hope at page 300.
[18] The principles of unjustified enrichment had been clarified in three cases in the 1990s (Morgan Guaranty Trust Co of New York v Lothian Regional Council 1995 SC 151; Shilliday v Smith 1998 SC 725 and Dollar Land (Cumbernauld) Ltd v CIN Properties 1998 SC (HL) 90. Lord Hodge had cause to examine whether the subsidiarity principle still applied in Transco Plc v Glasgow City Council 2005 SLT 958 and he concluded that it did. He noted that causes of actions such as recompense were now treated as remedies where redress of unjustified enrichment is sought and he concluded that the general rule concerning recompense, that the remedy is not available where the pursuer had another legal remedy, was not superseded. In any event, the claim in this case is for recompense, but it would not matter if it was viewed as a claim for repetition because the principle must apply to all equitable remedies. It is clear following Shilliday that repetition, restitution and recompense are not separate causes of action, they are merely the mechanism by which an unjustified enrichment is reversed.
[19] Counsel referred to an article by Michael Hughes, Solicitor at 2016 SLT (News) 7 in which he explained that in an unreported case, Jenkins v Gillespie 8 September 2015, an unnamed sheriff at Alloa had agreed with the contention that if a section 28 remedy was open but allowed to lapse, an action based on unjustified enrichment was not available.
[20] In her written submissions, counsel referred to Lord Macfadyen’s opinion at first instance in Property Selection and Investment Trust Ltd v United and Friendly Insurance plc 1999 SLT 975. His Lordship had concluded that in the circumstances of that case, the pursuer had failed to meet the high test of showing special and strong circumstances so as to except his claim for recompense from the general rule that it was a remedy of last resort.
[21] In response to the pursuers’ oral submissions, counsel submitted that NV Devos, Newton and Bennet demonstrated only that a claim for unjustified enrichment might be brought as an alternative to a primary remedy or that the primary remedy had been take up but had failed.
[22] Counsel challenged the pursuers’ contention that there were common characteristics of the leading authorities which may narrow the scope of the subsidiarity principle or bear on the threshold which will be considered to amount to special and strong circumstances. The leading cases, were not just concerned with statutory duties, they included issues of landlord and tenant, contract and private property rights. Individuals, such as the defender, are protected by the law just as much as large enterprises. There was no common feature of “creation of a loss” because the principle of subsidiarity was one of general application (NV Devos.)
[23] So far as Satchwell v McIntosh 2006 SLT 117 was concerned, it could plainly be distinguished on its facts where the parties knew that the pursuer had multiple sclerosis and a very short life expectancy. In any event the decision was wrongly arrived at because the equities of the situation were considered before it had been established that there was an unjustified enrichment. Equity only came into play once unjustified enrichment, and particularly the absence of a legal right for retention, was established.
[24] The circumstances of Newton v Newton 1925 SC 715 could be distinguished. The pursuer in Newton had not acted on the kind of whimsical basis averred in the present case. Mr Newton had reasonably believed that property was held in trust for him. In this case, the deceased cannot have reasonably believed that he had a home for life and therefore there was no basis for his claim in unjustified enrichment.
The second attack on relevancy
[25] Counsel submitted that it was for the pursuers to show that there was no legal justification for any gains made by the defender at the deceased’s expense. Lord Hodge was correct, in Transco, in stating that in a case of alleged unjustified enrichment, a pursuer must show that the defender has been enriched at the pursuer’s expense, that there is no legal justification for the enrichment and that it would be equitable to compel the defender to redress the enrichment. Any question of fairness would only arise in consideration of what was equitable and that consideration would only arise if there was no legal justification for any gain. The pursuers could not show that in this case. Whilst there was an assertion that the payments were not gifts, the pleadings demonstrate that they were gifts.
[26] Whilst it was averred that the deceased believed the property was in effect his and the defender’s property, regardless of the title position, no grounds for that belief were averred. It was not averred how the title was to be taken or that he thought he had created a trust when he had not. On the pursuers’ pleadings it was clearly accepted that title was to be taken in the name of the defender so that it was going to be her house.
[27] Whilst it was averred that the deceased expected to live in the property with the defender for the rest of his life and that he expected to benefit equally from the contributions which he had made, he had no grounds for such expectations where the house was registered in the name of the defender and owned by her. That arrangement excluded him owning the property or sharing the benefits of property ownership.
[28] So far as the second conclusion was concerned, the deceased could not have expected to benefit equally from improvements made to a property which he did not own. The position could readily be distinguished from Shilliday where the pursuer had put money into improvements of a property in the expectation that it would be the marital home when she was engaged, but the marriage proved to be a purpose which failed. A marital home had legal implications greatly exceeding any possible protection which the deceased may have enjoyed under section 28 of the 2006 Act.
Specification
[29] The lack of clarity in specification of how the sum of £50,000 sought under the second conclusion was arrived at prevented the defender from preparing her case and left her at risk of being surprised in any proof. There was an explanation of £33,000, but thereafter the balance could only be based on the value of the deceased’s labour, but the averments were not sufficiently clear so as to indicate whether the remedy sought was recompense as opposed to repetition.
The pursuers’ preliminary plea
[30] In response to the pursuers’ note of argument in support of the pursuers’ preliminary plea, counsel suggested that answer 5 should not be read in isolation from answer 2. Viewing the answers as a whole, there plainly were averments to the effect that there was not unjustified enrichment.
Submissions for the pursuers
[31] Counsel was primarily concerned with resisting the defenders’ pleas in law rather than supporting her own which she invited the court to allow to stand in a proof before answer.
Subsidiarity
[32] The primary issue was the question of subsidiarity and it was the pursuers’ position that it was not an absolute rule.
[33] The proper understanding of subsidiarity was not that there should never have been an alternative remedy, it was sufficient that any alternative had been exhausted. It might be said that the pursuers’ remedy under statute had been exhausted by the passage of time.
[34] Professor Macqueen of the University of Edinburgh had examined related issues in Edinburgh School of Law Working Papers Series 2010/01, “Unjustified Enrichment and Family Law.” He noted that the 2006 Act does not explicitly prevent the common law from applying to the situations it is designed to address so that unjustified enrichment must continue to provide an alternative claim for a cohabitant. He also envisaged that since the Prescription and Limitation (Scotland) Act 1973 Schedule 1, paragraph 1(b) allows 5 years within which to bring a claim for unjustified enrichment, it will be available where a claim under the 2006 Act was not taken within the section 28(8) time limit.
[35] In the language of Lord Hodge in Transco, it could not be said that the deceased “chose” not to raise an action under section 28 because he was not aware of that possibility. There were no alternative options open to the pursuers and so this action truly was seeking a remedy of last resort.
[36] In Varney, Lord Wheatley had left open that in strong or special circumstances an action of recompense might be open even where there was or had been an alternative remedy open to the pursuer. Lord Wheatley considered his opinion in Varney again in City of Glasgow District Council v Morison McChlery and Co 1985 SC 52 and emphasised that he had used the word “normally” in his dictum and that there was not an absolute rule.
[37] At one stage in her submissions, counsel for the pursuers seemed to suggest that the approach of the court in certain cases might undermine the implication of the decision in Varney that a claim for recompense could not be brought if there had been a failure to pursue a primary remedy. Counsel referred in particular to NV Devos, Newton and Bennet v Carse 1990 SLT 454. In NV Devos, Lord Hope and his colleagues each thought that the claim for unjustified enrichment could have been averred as an alternative to a contractual claim and similar conclusions were reached in Newton and Bennett.
[38] It was a common feature of the situation in Transco, City of Glasgow and Varney that the loss had been created by the party pursuing, all large entities, and in each case if the pursuer had taken another remedy, there would have been no loss. The same could not be said of the deceased. Special circumstances would properly need to be very strong in such cases whereas in a simple case arising from payment by one person to another, special circumstances might be found at a lower threshold.
[39] In Lawrence Building Co Ltd v Lanark County Council 1978 SC 30 Lord President Emslie, whilst not examining the question of subsidiarity in any detail, allowed proof and indicated that the question of whether recompense should be available would depend on the particular circumstances of each case.
[40] Recognising that the pursuers had not pled what special and strong circumstances might justify departure from the normal rule, counsel sought to amend to address that issue. I allowed amendment on the understanding that the defender should have an opportunity to consider the amendments and to make further submissions in writing on the question of special and strong circumstances.
[41] The purpose of section 28 of the 2006 Act was to introduce fairness between cohabitants and it would not serve that purpose if an action based on unjustified enrichment was thereby excluded. It would be a breach of natural justice and inequitable if the pursuers did not have redress. The payments of at least £100,000 were substantial and had benefitted the defender where they were not intended as a gift. This was not a situation where the deceased had failed to exhaust his remedies, he lost the opportunity to make a claim before he knew of his rights under statute. The deceased had not sought advice immediately following his leaving the home in 2013 as the defender’s son was ill and later died. By the time he sought legal advice in August 2014, the statutory remedy was no longer available to him. He had not sought to take a procedural short-cut, he had not known that there was a procedure open to him.
The second attack on relevancy
[42] Counsel responded by founding on passages from the opinions of Lord Hope in Dollar Land and Lord Rodger in Shilliday and the opinion of Sheriff Principal Bowen QC in Satchwell.
[43] The pursuers had averred that the defender had gained a benefit and the deceased had made a loss. He had not intended to make gifts. The pursuers averred the deceased’s expectation that he would continue to have a home with the defender was the reason for him making payments to the defender. The purpose failed when he was required to leave. It would be equitable for the deceased’s executors to be reimbursed.
[44] Whilst in Shilliday the parties intended to marry, that need not be viewed as being materially different from a situation of cohabitation as the decision in Satchwell demonstrated. The averments to the effect that the deceased had intended to continue his relationship with the defender and to live with her in what was intended to be, in effect, their family home were sufficient to make out a relevant case for proof.
Specification
[45] The averments in condescendence 3 were relevant and if there was to some degree a lack of specification, the pursuers were at risk of not being able to prove all of the sums referred to, but that was not sufficient reason to refuse to admit averments to probation or dismiss the action. If evidence were sought to be led beyond the scope of the notice given in the pursuers’ averments then it could be objected to and excluded in the course of proof before answer.
Pursuers’ preliminary plea
[46] Whilst the pursuers’ note of argument asserted that the defender’s averments were irrelevant and lacking in specification, counsel did not press the point to the extent of seeking decree or having answers removed from probation, she invited the court to leave the pleas standing and fix a proof before answer.
Decision
Subsidiarity
[47] I cannot reach any conclusion on the basis of the unreported case of Jenkins v Gillespie referred to at para [19] above.
[48] It was not in dispute that the deceased and the defender were cohabitants as defined by section 25 of the 2006 Act.
[49] Section 28 provides:
“28 Financial provision where cohabitation ends otherwise than by death
(1) Subsection (2) applies where cohabitants cease to cohabit otherwise than by reason of the death of one (or both) of them.
(2) On the application of a cohabitant (the ‘applicant’), the appropriate court may, after having regard to the matters mentioned in subsection (3)—
(a) make an order requiring the other cohabitant (the ‘defender’) to pay a capital sum of an amount specified in the order to the applicant;
(b) make an order requiring the defender to pay such amount as may be specified in the order in respect of any economic burden of caring, after the end of the cohabitation, for a child of whom the cohabitants are the parents;
(c) make such interim order as it thinks fit.
(3) Those matters are—
(a) whether (and, if so, to what extent) the defender has derived economic advantage from contributions made by the applicant; and
(b) whether (and, if so, to what extent) the applicant has suffered economic disadvantage in the interests of—
(i) the defender; or
(ii) any relevant child.
(4) In considering whether to make an order under subsection (2)(a), the appropriate court shall have regard to the matters mentioned in subsections (5) and (6).
(5) The first matter is the extent to which any economic advantage derived by the defender from contributions made by the applicant is offset by any economic disadvantage suffered by the defender in the interests of—
(a) the applicant; or
(b) any relevant child.
(6) The second matter is the extent to which any economic disadvantage suffered by the applicant in the interests of—
(a) the defender; or
(b) any relevant child, is offset by any economic advantage the applicant has derived from contributions made by the defender.
…
(8) Subject to section 29A, any application under this section shall be made not later than one year after the day on which the cohabitants cease to cohabit.
(9) In this section—
…
‘contributions’ includes indirect and non-financial contributions (and, in particular, any such contribution made by looking after any relevant child or any house in which they cohabited); and
‘economic advantage’ includes gains in—
(a) capital;
(b) income; and
(c) earning capacity;
and ‘economic disadvantage’ shall be construed accordingly.
…”
[50] The implications of subsection 8 were considered in Simpson where an Extra Division noted that short time limits were intended to discourage stale claims and that parliament had made no provision for extension of the time limits. The court concluded, at paragraph 13, that the only qualifying application under section 28 was one made within the 1 year time limit. Accordingly in this case, parties agreed that the pursuers could not now avail themselves of section 28. The pursuers accepted that but for the time limit, section 28 (8) would have provided the deceased with a remedy.
[51] Whilst there is reference to unjustified enrichment and recompense in condescendence 5, having regard in particular to the opinion of Lord President Rodger in Shilliday at page 727 I ‑ 728 C, I consider that, on the basis of a claim rooted in unjustified enrichment, the pursuers are seeking repetition of the sums first concluded for (£100,000) and both recompense and elements of repetition in relation to the sum second concluded for (£50,000).
[52] Parties were in agreement that since the decisions in Morgan Guaranty, Dollar Land and Shilliday, recompense, restitution and repetition should be seen as remedies which can be used to reverse unjustified enrichment. Whilst the courts in both Varney and Transco were discussing actions seeking recompense, the pursuers did not contend that the subsidiarity principle only applies where the remedy of recompense is sought.
[53] The language used in the opinions in Varney rather suggests that that principle arises wherever an equitable remedy is sought on the ground of unjustified enrichment.
[54] Lord Wheatley, in a passage of his opinion reported at page 252, stated:
“The general proposition of the pursuers' counsel seems to me to be misconceived. Recompense is an equitable doctrine. That being so, it becomes a sort of court of last resort, recourse to which can be had only when no other legal remedy is or has been available. If a legal remedy is available at the time when the action which gives rise to the claim for recompense has to be taken, then normally that legal remedy should be pursued to the exclusion of a claim for recompense. Stewart v Steuart is a case in point. That is the crucial point of time. It seems to me that it would militate against the concept of recompense if a person under no error of fact could ignore his legal remedy at the appropriate time and commit himself to work and consequential expense which he was under no legal obligation to incur, but which he could have obliged the other party to undertake, and then turn round and say that a new legal remedy of recompense of his own creation had arisen which he could pursue to the exclusion of the appropriate remedy at the appropriate time. Such an attitude can hardly be regarded as the basis for the invocation of a doctrine based on equity.”
Whilst his Lordship went on to discuss the particular circumstances under consideration in Varney, it appears to me that it was because recompense was an equitable doctrine that it should be viewed as a last resort available only when no other legal remedy is or has been available.
[55] Lord Kissen, in his opinion, at page 257, stated:
“There does not appear to be any reported case which is directly in point but, in principle, I cannot see how an equitable remedy can be invoked when another remedy given by statute or, indeed, by common law was available and was not used. The application of a similar principle can be seen in the case of Stewart v Steuart.”
[56] Lord Fraser, stated in his opinion reported at page 259:
“The pursuers did not take proceedings at that time to resolve the legal position, but in order to make progress with the building scheme as a whole they went ahead and constructed the sewers themselves under reservation of their legal rights and pleas. In effect, therefore, they took the risk of being able to pin legal liability on the defenders after the work had been done. They now find that they are unable to do so, and they are falling back on the equitable plea of recompense.
In these circumstances I am of opinion that the plea must fail. The pursuers had a legal remedy by raising an action of declarator, or with other suitable conclusions, before carrying out the work. If they now find themselves in the position of being unable to raise an action on a strict legal basis, that position is one of their own making, because they failed to raise an action when they could have done so. If the pursuers were entitled to succeed in the present action, it would open the door very wide for any party to short-cut proper procedure, by undertaking a duty which rested upon a local authority and then turning round and claiming reimbursement from the local authority. In principle, of course, the possibility would not stop at local authorities but could extend to other persons. That would introduce quite novel and, in my opinion, undesirable possibilities.”
[57] At page 259-260, Lord Fraser stated:
“I do not know that it is absolutely essential to the success of an action for recompense that the pursuer should not have, and should never have had, any possibility of raising an action under the ordinary law, but in my opinion it would at least require special and strong circumstances to justify an action of recompense where there was, or had been, an alternative remedy open to the pursuer. The classic case for an action of recompense to succeed is where the pursuer has incurred expense upon heritable property which he reasonably believed to belong to him but which turns out owing to a mistake to belong to the defender—Gloag on Contract, (2nd ed.) p. 324. In relation to a case of that sort Lord Kames in his Principles of Equity, (4th ed.) p. 104, made an observation which bears upon the present point, to the following effect: ‘That the common law affords no relief, will be evident at first sight … If then there be a remedy, it can have no other foundation but equity.’ While Lord Kames did not say that the absence of a remedy under the common law was essential, he evidently regarded it as important. In the present case the common law did afford relief, but the pursuers did not avail themselves of it, and in the circumstances of this case that is, in my opinion, enough to prevent their relying on the equitable remedy.”
[58] I agree with counsel for the defender, that the preceding passages which I have quoted from Varney do not support the view that the pursuers have no problem arising from the subsidiarity principle on the basis that the statutory remedy is no longer available.
[59] In Lawrence, Lord President Emslie made the uncontroversial observation founded on by the pursuers to which I have referred at paragraph [39] above. However, in that case, Lord Maxwell at first instance, and the Lord President and his colleagues on appeal, were not persuaded that it was clearly established that another remedy had been open to the pursuers. It was not clear that the statutory duty which rested with the defenders in Varney did so in Lawrence. The court distinguished Varney before supporting Lord Maxwell’s conclusion that proof before answer was appropriate as Lord Cameron made abundantly clear at the end of his opinion at page 55 of the report.
[60] Whilst it is true, as counsel for the pursuers observed, that the 2006 Act does not explicitly exclude an action based on unjustified enrichment being raised after the period specified in section 28(8), and I note Professor McQueen’s view on the matter, I am not persuaded that it follows that an equitable remedy will always remain open following the expiry of the 12 month period. Parliament, and particularly the parliamentary draftsmen on whom it relies, are expected to be aware of the common law. If, as it has been presented to me in this case, the subsidiarity principle applies not just in cases where recompense is the remedy sought but in all cases of unjustified enrichment, then parliament would be expected to know that.
[61] Counsel for the pursuers’ submissions in the debate appeared to proceed on an acceptance that the principle of subsidiarity would apply unless the court accepted that the deceased had not had an alternative remedy because he did not know of the implications of section 28 of the 2006 Act or found special and strong circumstances to allow the action to proceed notwithstanding that section 28 had provided the deceased with a remedy.
[62] However, both the amendment made at the bar during the debate and the pursuers’ written submissions use the expression “in the event” that subsidiarity applies. It may be that the “event” which might prevent subsidiarity applying is a reference to the somewhat faintly argued contention that the effect of the passage of time extinguishing the avenue of application under section 28 of the 2006 Act meant that there was no alternative remedy. It may be that it is a reference to the pursuers’ contentions advanced with reference to Newton, Bennett and NV Devos.
[63] In Newton, the pursuer’s claim was that despite having bought a house and registered it in the name of his wife to be, he believed that it belonged to him and carried out works in that belief. His action in the Court of Session for an order that his wife should re‑convey the house to him on the basis that she held it in trust for him failed. Thereafter, he brought an action in the Sheriff Court seeking recompense on the basis that he was entitled to payment for the value of the work that he undertook and paid for to improve the house whilst under the belief that it truly belonged to him. I would not see that as an exception to the subsidiarity principle. The remedies sought in the different courts were directed to different ends and were not alternatives.
[64] In NV Devos and Bennet, the courts endorsed the pleading of an unjustified enrichment claim as an alternative to a claim based on contract. Again I would not understand this to be an exception to the subsidiarity principle, rather it fits with it. The primary remedy is pursued and unjustified enrichment only comes into play if the primary cause of action fails. In that event, it could not be said that the pursuer failed to employ a primary remedy.
[65] Ultimately I understood counsel for the pursuers’ primary position to involve an acceptance that they must show special and strong circumstances why an equitable remedy should now be open when a statutory remedy was not used timeously. That was the reason why she moved her amendment and it forms the thrust of her written submission.
[66] There may be reason for particularly special and strong circumstances to exist before an action seeking recompense can be relevant in cases arising out of circumstances such as Varney and Transco, and I accept that Lord Wheatley in City of Glasgow stressed that the rule (subsidiarity) in Varney was not an absolute one.
[67] However, where Parliament imposed a 12 month period in which an application under the 2006 Act must be brought, it would also seem that there would need to be special and strong circumstances before a claim could be brought for an equitable remedy after that time has passed.
[68] The circumstances on which counsel sought to found were these:
- The deceased had not known of his remedy under the 2006 Act until he got legal advice when it was too late to claim under that Act.
- He sought legal advice as soon as he realised that it was necessary, and not long after the expiry of the time limit.
- To exclude the pursuers’ claim would result in unfairness of the kind the 2006 Act was intended to remedy. This would be contrary to natural justice.
- The defender’s son’s illness caused the deceased to delay to pursue matters with the defender more quickly.
- During discussions with the defender’s lawyers, they did not tell the deceased of the implications of section 28(8).
[69] Parliament did not provide for any relaxation of the time limit and plainly intended that any action under the Act would be raised quickly. In Simpson, the court considered that the legislative purpose behind the short time limit was to discourage stale claims (paragraph 13). Whilst one can understand the deceased’s reluctance to make demands of the defender when her son was ill, his benevolent motivation need not have prevented him from taking legal advice if he felt that he was entitled to payments from her. The remaining factors are likely to be present in many cases where the time limit has not been complied with and I am not persuaded that even viewed in combination they can be regarded as special and strong circumstances.
[70] Accordingly, on the basis that the deceased had a remedy under the 2006 Act which he failed to pursue, and not being satisfied that there are special and strong circumstances, I conclude that the pursuers have not pled a case which entitles them to the remedy they seek and sustain the plea to the relevancy in so far as based on subsidiarity and for this reason dismiss the action.
[71] Having reached that conclusion, it is unnecessary to decide the remaining questions, but having heard submissions I will explain the decisions that I would have reached on them.
The second attack on relevance
[72] Whilst the prospects of the pursuers succeeding if the case proceeded to proof do not seem strong given their acceptance that the property was bought and registered in the name of the defender only, I could only sustain the plea to the relevancy on the second argument if the claim was bound to fail.
[73] In Dollar Land, Lord Hope, giving the leading judgment, had this to say about unjustified enrichment, with reference to Lord Rodger’s opinion in the Inner House.
“I think that Lord Rodger stated the matter correctly in the present case at p353D when he said that the pursuers must show that the defenders have been enriched at their expense, that there is no legal justification for the enrichment and that it would be equitable to compel the defenders to redress the enrichment.”
[74] On the pleadings the pursuers are averring that the deceased contributed to the purchase and improvement of the property in the expectation that he would share a home there with the defender indefinitely and that he would therefore benefit from his contributions. He did so benefit for a period of 3 years. Since he did not insist on taking title or reach any written agreement about repayment, he put himself in a precarious position as subsequent events have demonstrated. However, the claim for repetition and recompense is based on unjustified enrichment. The pursuers have averred that the deceased made losses by which the defender gained. They have averred that his payments were not gifts and that the defender has no legal basis for retention. They have averred that it would be equitable for the defender to reverse the enrichment she has gained. Whilst I do not find it easy to predict how the court would view the question of equity after hearing evidence, I cannot say that the claim would necessarily fail on that ground. Leaving aside for present purposes the question of subsidiarity, I consider that the pursuers have averred sufficient for a relevant claim for recovery of what was given for a future purpose which failed (condictio causa data, causa non secuta). Accordingly I am not persuaded that, leaving aside subsidiarity, it could be said that even if the pursuers succeed in proving all that they aver still their case must fail and I would have allowed the pursuers a proof before answer leaving this plea standing.
Specification
[75] Counsel did not press this point with much vigour. In condescendence 2 there is reference to the deceased contributing payments of £12,000 (£4,500 and £7,500). In condescendence 3 there is reference to him paying £33,000 towards the cost of renovations. In condescendence 3 it is averred that the deceased applied his joinery skills to various works. There could be some overlap between the sums of £4,500 and £33,000 but, whether it is to be deduced that he values his labour at £5,000 or £9,500, I am not persuaded that the defender would be materially prejudiced at proof. If the evidence were to stray from the record, then the defender could object. I would have allowed the pursuers proof before answer leaving this plea standing.
The pursuers’ preliminary plea
[76] Counsel for the pursuers did not press this point beyond asking for proof before answer. I agree that answer 5 should not be read in isolation. Looking at the answers as a whole, the defender avers that the deceased lived with her for 3 years; she accommodated his woodworking machinery; they agreed to share costs of the alterations and living expenses; the defender maintained the household and the deceased at substantial expense and paid £65,000 towards the cost of renovations. Proof would be necessary to resolve just what enrichment there was, if any, and where the equities lie, and I would have allowed proof before answer leaving this plea standing.
Disposal
[77] For these reasons I shall sustain the first plea in law for the defender and dismiss the action and shall reserve all questions of expenses in the meantime.