SHERIFFDOM OF GLASGOW AND STRATHKELVIN AT GLASGOW
A91/10
JUDGMENT
OF
SHERIFF JOHN NEIL McCORMICK
in the cause
GORDON COLLINS
PURSUER
against
CAROL ANNE SWEENEY
DEFENDER
Act: Mr D F M Burr, Advocate, for the pursuer, instructed by Messrs Gallen & Co
Alt: Mr R P Macfarlane, Advocate, for the defender, instructed by Messrs Livingston Brown
GLASGOW, 21st February 2013. The Sheriff, having resumed consideration of the cause, Sustains pleas-in-law numbers 1, 2 and 4 for the pursuer in the principal action, grants decree de plano in terms of craves 1, 2 and 3; supersedes extract pending determination of the counterclaim and meantime reserves to pronounce further; sustains pleas-in-law numbers 2 and 3(in part) for the pursuer in the counterclaim and dismisses craves 1, 4 and 5 for the defender in the counterclaim; quoad ultra in respect of the counterclaim allows parties a proof their averments, before answer, on a date to be hereafter assigned; assigns the day of March 2013 at 9.30 am as a hearing on expenses.
................................Sheriff
NOTE:
Background
[1] This case called before me for debate on 7 January 2013 in respect of the pursuer's plea-in-law number 4 in the principal action and the pursuer's pleas-in-law numbers 2 and 3 in the counterclaim.
[2] I had before me the amended record, number 26 of process, lodged on 4 January 2013.
The case
[3] This is a case of division and sale of heritable property. The subjects are incapable of division. The dispute includes whether the court may competently grant decree for the sale to a co-proprietor, against the will of the other proprietor, rather than on the open market. In particular, the pursuer seeks decree for division and sale of property at Shiskine Drive, Maryhill, Glasgow G20 0JQ with the free proceeds being divided equally. The defender has lodged defences and a counterclaim. Confusingly, she too craves decree for division and sale. However, her primary position is reflected in her crave for the sale of the pursuer's one half pro indiviso interest in the property to her for a price of £42,500 (less one half of the mortgage redemption figure). The defender also craves payment of £21,000 by way of "recompense" for debts relating to the property including the mortgage.
Submissions on behalf of the pursuer
[4] Counsel for the pursuer invited me to sustain plea-in-law four for the pursuer in the principal action and repel pleas-in-law one, two and three for the defender and to grant decree in terms of craves one, two, three, four and six. In relation to the counterclaim counsel invited me to sustain pleas-in-law numbers two and three for the pursuer and repel pleas-in-law one, two and three for the defender and to dismiss the counterclaim.
[5] Counsel commenced his submissions by referring me to Rankine, J The Law of Land Ownership in Scotland 4th Ed, 1909, at page 591 for the proposition that the pursuer has "an absolute right at any time to demand division of the subject, if it be divisible - or sale, followed by division of the price, if it be not". The parties are one-half pro indiviso owners of the property and the defender admits that the subjects are not capable of division.
[6] Accordingly, the dispute arises solely in respect of the sale of the property. The pursuer has the right to insist upon the sale on the open market. The pursuer's right is described in Upper Crathes Fishings Ltd v Bailey's Executors, 1991 SLT 747 by Lord Hope at page 749. I was also referred to the opinion of Lord Rutherford in Brock v Hamilton reported within in Anderson v Anderson (1857) 19 D 700 at page 701. The pursuer has an absolute right to insist upon the sale of the subjects. His motives for exercising that right are irrelevant. The court has no discretion but to grant it in this case. Questions of equity only arise in dividing the free proceeds of sale.
[7] While counsel accepted that an equitable remedy might include the division of the free proceeds unequally, that remedy does not extend to a transfer of the property between the parties. There is no stateable defence. A counterclaim seeking the transfer of the property is not competent.
[8] Counsel referred me to the record. He referred me in particular to answer 1, page 4, lines 10-12 and 16-18 and general denial at the end of answer 1. I was also referred to answer 3, page 9 of the Record, lines 8-9 and the general denial at the end of answer 3. Referring also to paragraph 1 of the Rule 22 Note, counsel argued that the defence is wholly irrelevant decree should be granted de plano in the principal action.
[9] Counsel then turned his attack to the counterclaim. He argued that crave 1 of the counterclaim (itself a crave for division and sale) might be described as both unnecessary and incompetent as there is no defence to the pursuer's crave in similar terms.
[10] Crave 4 seeks to have the pursuer's interest sold to the defender. Crave 5 is a standard crave in an action of division and sale with the fallback position so as to provide for the sheriff clerk executing a valid disposition and ancillary documents.
[11] In advancing his submission that craves 1, 4 and 5 of the counterclaim are incompetent, Counsel referred me to Berry v Berry (No 2) 1989 SLT 292 where a wife had obtained decree de plano in an action of division and sale. The pursuer had enrolled a motion for approval of a report suggesting that the subjects be sold on the open market and for warrant to sell. The defender (the husband) opposed the motion and enrolled a counter motion to the effect that the pursuer's one-half pro indiviso share should be sold to him. The motion on behalf of the pursuer (wife) was granted and the motion on behalf of the defender (husband) refused. In that case Lord Cowie was not prepared to countenance the court ordering the sale of the property by the wife to the husband. At page 293 Lord Cowie distinguishes the case of Scrimgeour v Scrimgeour 1988 SLT 590.
[12] In Scrimgeour a husband and wife were divorced with the husband ordered to make payment to the wife of a capital sum of £10,000 and expenses. The husband had refused to make payment. Aside from the matrimonial home there were no assets. The wife brought an action of division and sale in which she concluded for warrant to purchase her former husband's one-half share at an open market price which was to be fixed by a reporter appointed by the court. Payment of the price was to be satisfied by the wife granting a discharge pro tanto of the husband's debt under the decree for the capital sum. Lord McCluskey described the action as "unprecedented" (page 591F). Scrimgeour was undefended and at page 594I Lord McCluskey notes further that an amended summons was served upon the defender who again had not entered appearance.
[13] Counsel highlighted that Scrimgeour was an unusual case. It was important to note that whilst the defender in Scrimgeour may not have expressly agreed to the proposal, he had acceded to it by not defending the action. Scrimgeour is authority only for the proposition that such an order is competent. Lord McCluskey had been asked to do something for which there had been no authority. Having found that the order was competent, and the action undefended, Lord McCluskey was prepared to grant it.
[14] In the present case, however, the pursuer opposes the defender's crave for the property to be sold to her. He wishes the property sold on the open market.
[15] Counsel also referred me to the case of Ploetner & others v Ploetner 1997 SCLR 998 where each party wished to buy the other's interest. Sheriff McInnes opined that Scrimgeour applies where there is consent to that course of action or possibly implied consent (at page 1000).
[16] I was also referred to the case of Wilson v Harvey 2004 SCLR 313 where the parties had entered into a minute of agreement which provided for the transfer of a property, held pro indiviso, on the death of the other party. The sheriff, at page 315, found that the deed did not restrict their respective rights to insist on the sale of the property during their joint lifetimes. It was submitted that the analysis of the law at page 317 was correct. The sheriff had expressed an obiter opinion that, had the defender sought a transfer of the pursuer's interest in the subjects, the sheriff would not have been able to grant such a crave, if the pursuer insisted upon sale. At the foot of page 316 the sheriff distinguishes the situation where the free proceeds are to be divided unequally. A defender may be able to recover expenditure on a property by way of "recompense or restitution" (page 317).
[17] Counsel returned to the terms of paragraph 2 of his Rule 22 Note. He observed that the Note had been framed when the defender's claim for a financial figure had been higher than the sum of £21,000 craved now. Counsel referred me to the terms of the pursuer's plea-in-law number 3 in the counterclaim which was a general plea-in-law directed towards crave 3 being a crave for payment of £21,000.
[18] Counsel also referred me to page 14 of the Record, statement of fact number 1, lines 8-13. The pleadings referred to a schedule of sums expended by the defender on behalf of the pursuer. Although the schedule has been lodged it has not been incorporated within the pleadings. Although this was a technical point, counsel felt entitled to make it. He referred me to the opinion of Sheriff Principal Bowen QC within Steelmek Marine and General Engineers' Trustee v Shetland Sea Farms Ltd 1999 SLT (Sh Ct) 30 at page 31 and Royal Bank of Scotland Plc v Holmes 1999 SLT 563 in particular the opinion of Lord Macfadyen at page 570E.
[19] In this case there is no specification as to how the sum of £21,000 is calculated. It lacks specification to such a degree that it is irrelevant to support the crave.
[20] Counsel also criticised the use of word "recompense" in statement of fact 1 and contrasted this with plea-in-law number 2 for the defender within the counterclaim. This plea-in-law was not framed correctly and was not a legal proposition. Counsel did understand what was intended but queried whether the defender was making a claim for unjustified enrichment. It was conceded that a counterclaim is competent in an action of division and sale where the point at issue is not the question of division or sale of the property but the division of the proceeds of sale Johnston v Robson 1995 SLT 26, Sheriff Principal Maguire at page 28E and Ralston v Jackson 1994 SLT 771. It was not conceded that a party should necessarily reimburse a co-proprietor for all money spent on the subjects. Not all expenditure might be necessary or enhance the market price of the property.
[21] Counsel concluded by moving me to grant the pursuer's craves in relation to the sale and to consign the funds to the court for further submissions. Alternatively, the court could grant decree for the sale now but delay the sale until a proof on the quantification of the division of free proceeds.
Submissions on behalf of the defender
[22] On behalf of the defender, counsel moved me to refuse the pursuer's motion for decree de plano in the principal action and to allow a proof before answer on the pleadings in both the principal action and the counterclaim as they stand and to reserve expenses.
[23] Counsel summarised the defender's case thus: this is not a case about the rights of the parties but about the remedies available to either, or both, parties.
[24] There was no dispute that the property is incapable of division and that both parties have a right to insist upon the sale of the subjects.
[25] The defender seeks to acquire the pursuer's interest in the property in exchange for a payment which would take into account the sums which she has expended on the property. I was referred to Upper Crathes Fishing Ltd v Bailey's Executors at page 750 and in particular, the opinion of Lord President Hope where he says that the jurisdiction of the court is "in respect of the working out of the alternative remedies of sale and division of the price, and not the primary remedy which is to insist in an action of division of the property." In other words, there are two stages to be considered. The first, which is not disputed, is that both parties have the right to insist on the sale of the pro indiviso subjects. The second issue should be determined at a proof before answer, namely, the remedy arising from the sale. Should the property be sold by the pursuer to the defender or placed on the open market? If placed on the open market, are the free proceeds to be divided equally and, if not, in what proportion? These issues, it was contended, are matters for proof.
[26] I was invited to conclude that the Upper Crathes Fishing Ltd extended not only to a co-proprietor's fundamental right to insist upon the sale of a property but also to the remedies resulting from that sale to the extent that the "alternative remedies" referred to by Lord Hope would include one party acquiring the interest of a co-proprietor, despite opposition.
[27] Turning to what counsel described as established practice, I was referred to the Scrimgeour case which it was said had "foreshadowed" the Upper Crathes case. In Scrimgeour Lord McCluskey opined at page 594C that if a co-proprietor "were to come into the process as defender seeking to oppose the arrangement but ultimately defaulted I see no reason why a decree giving such a remedy to the pursuer should not be granted." Accordingly, it is both competent and part of the equitable jurisdiction of the court to entertain such an arrangement even where there is opposition.
[28] In relation to the counterclaim, I was referred to the opinion of Sheriff Principal Maguire in Johnston v Robson where he quotes with approval (at page 28E) the terms of Sheriff Macphail Sheriff Court Practice, 1st Ed, at para 12.33 that a counterclaim might avoid a multiplicity of actions. I was advised that there are three actions involving the parties in this case, excluding the current action.
[29] The pursuer in the current action has been the subject of an exclusion order and has been criticised by a sheriff who found that the pursuer had drunk alcohol to excess, smoked cannabis and had been abusive towards the defender. Accordingly, if a proof before answer were allowed, the court could consider such matters when dealing with equitable remedies including the defender's crave for a transfer of the property to her. [30] The sheriff would be able to exercise a full equitable jurisdiction as envisaged by the Upper Crathes decision to consider, for example, whether the pursuer is the author of his own misfortune by having been removed from the property. The court might then be persuaded to order a sale by the pursuer to the defender.
[31] If the counterclaim were dismissed in its entirety, the defender would have no crave seeking the transfer of the property albeit the defender would still be entitled to insist upon her defence in relation to an unequal division of the free proceeds. It is not clear that a counterclaim is required for the purposes of an unequal division. An action could be defended upon that basis. However, a counterclaim is competent in respect of a defender's claim for an unequal share. I was referred again to Ralston v Jackson where the court held that the free proceeds of sale can be divided equitably (page 774B). I was referred to the terms of crave 3 of the counterclaim which seeks payment of either £21,000 or such sum as the court deems just and equitable.
[32] I was also referred to the case of Gray v Kemer 1996 SCLR 331 which counsel described as being on all fours with the current case. In that case the defender had no objection to the property being sold on the open market with the free proceeds divided equally between the parties. In evidence, however, he said that he was prepared to transfer his one-half pro indiviso share to the pursuer at an agreed valuation (page 332A). It was submitted that the court will not know the pursuer's final position unless this were to be tested at proof. Accordingly, the court should permit a proof before answer.
[33] I was also referred to Gray v Kemer at page 332D for the proposition that where one pro indiviso proprietor wishes to acquire the whole title, and the other pro indiviso proprietor is not in a position to acquire title but can be fairly compensated, it is appropriate for the court to order a sale or transfer. That is the situation here. The pursuer is not able to afford to acquire the property or to maintain it. He wishes it sold. The defender is in a position to acquire the property and wishes to do so.
[34] In relation to the pursuer's attack on the defender's use of the word "recompense" in the pleadings, this word was used by the sheriff in Grey v Kemer at page 332E.
[35] I was invited to read all of the defender's pleadings both in the principal action and in the counterclaim as a coherent whole.
[36] The pursuer had referred to Berry but counsel for the defender submitted that that case had been "overridden" by Upper Crathes. In Berry Lord Cowie questioned whether he had the power to transfer the property but it was submitted that the power to do so is clear when one reads the Upper Crathes case.
[37] In the current case there is a factual matrix comprising the expenditure in relation to the property by the defender; the circumstances whereby the pursuer is excluded from the property and the medical condition of the parties' son which will be focused at proof in relation to issues of equity. A home valuation report will be prepared in advance of the proof. The value of the property is decreasing.
[38] In relation to the Ploetner case, Sheriff McInnes, at page 1001, whilst commenting on the lack of authority for a transfer in circumstances similar to the present case, does not rule out the possibility that there will never be such an authority. This case could be the one. As for the pursuer's reliance on Wilson v Harvey, that case can be distinguished from the present case because, in Wilson v Harvey there was no crave before the court seeking for a transfer of the property.
[39] In relation to the criticisms of the defender's style of pleading, the case of Steelmek can be distinguished from the present case. If the defender's counterclaim had been founded on a contract or an invoice, clearly such documents would require to be incorporated within the pleadings brevitatis causa. In this case the defender had prepared a list of debts which she had paid in relation to the property. The list is in the form of a schedule within the fourth inventory of productions for the defender. Accordingly, it does not require to be repeated brevitatis causa. It is essentially an aide-memoire.
[40] In Royal Bank of Scotland Plc v Holmes correspondence incorporated brevitatis causa did not provide adequate specification of the allegations of fraud. Fraud is a particularly serious matter even in the civil courts. The level of specification needed in such a case is entirely different from the situation which we have here. Here the pursuer has lodged not only a list of expenditure but she has also lodged vouching in support of that expenditure.
[41] Counsel concluded by reiterating that this case was not about the rights of the parties to insist upon a sale but on the remedies which arose from the sale. It is competent to crave everything the defender seeks. The case should proceed to proof before answer.
Reply on behalf of the pursuer
[42] In a brief reply counsel for the pursuer made two observations. Firstly, he interpreted Lord McCluskey saying in the Scrimgeour case that he would not necessarily have done what he did if Scrimgeour had been defended. Where a co-proprietor seeks to acquire the other share there has to be implied consent or express consent.
[43] Secondly, it is not appropriate to surmise on what the pursuer's evidence might be at proof and, in particular, whether he may change his mind in relation to his position as stated on Record.
Decision
[44] I begin by considering the defence to the principal action and crave 4 of the defender's counterclaim being the crave seeking a sale of the pursuer's one-half pro indiviso share to the defender. I do so because the latter is the primary dispute between the parties and goes to the root of the case as it is currently pled. In my opinion the defender avers no relevant defence to the principal action and crave 4 of the counterclaim is incompetent in the circumstances where a co-proprietor objects. I have come to this conclusion by following the line of authority.
[45] Firstly, the right of pro indiviso proprietors to insist upon a sale is absolute. As noted in Rankine J, The Law of Landownership in Scotland, 4th Ed, 1909, at page 591:
"...none of the co-owners can be compelled to remain in the community against his will. He has an absolute right at any time to demand division of the subject if it be divisible - or sale, followed by division of the price, if it be not."
[46] The law was authoritatively stated in Upper Crathes Fishing Ltd v Bailey's 1991 SLT 747. I do not accept the defender's interpretation that the opinion which Lord Hope expresses extends to the possibility of an opposed transfer by one owner to another. I refer to Lord Hope's opinion at page 749:
"But if the correct view is that the right is an absolute one it must follow that it cannot be qualified by considerations of equity. The absolute nature of the remedy excludes any defence which is founded on such principles and which is therefore, in effect, at the discretion of the court. The pursuers' motive for its exercise is irrelevant, and questions as to whether it is fair or unfair in all the circumstances for it to be resorted to have no place. Nor, in my opinion, is there room for questions of good or bad faith".
[47] In context, Lord Hope's subsequent reference (at page 750) to the equitable jurisdiction of the court when working out the alterative remedies of sale and division of the price, does not extend to an enforced sale by one proprietor to a co-proprietor. The defender's averments here are redolent of an acrimonious breakdown in a relationship. She refers to other litigations involving the parties, including an exclusion order. She avers that she can afford to acquire and maintain the property, something which the pursuer cannot afford to do and she makes a case for the purchase of the property by her for the sake of the child of the relationship. The difficulty for the defender is that such averments, even if proved, do not constitute a defence to the pursuer's absolute right to insist on a sale on the open market.
[48] I agree with Sheriff McInnes in Ploetner and others v Ploetner 1997 SCLR 998 at page 1000 where he opines:
"While there is authority for the proposition that the court has power to make an order for the sale of one pro indiviso share to the proprietor of the other such share, that authority applies where there is consent to that course of action (see Scrimgeour at page 594B) or possibly implied consent. ...But there are no authorities which support the proposition that, where there is no question of consent, the court can nonetheless order the sale of the share of one of the parties to the action to the other."
[49] In the case of Berry v Berry (No 2) 1989 SLT 292 Lord Cowie referred to the Scrimgeour case. He said at page 293:
"I should say first of all, that I do not regard the case of Scrimgeour v Scrimgeour as providing any assistance in the present case. The circumstances there were very special and do not support the general proposition that I have a wide discretion enabling me to lay down, in the absence of agreement between the parties, how the subjects should be disposed of.
The method of sale sought by the defender is not one which is referred to in textbooks, nor is it supported by any of the authorities to which my attention was directed and I am not prepared to countenance it."
[50] In the current case the defender argues that equitable considerations arise justifying the court ordering the transfer of the property from one proprietor to a co-proprietor. In my opinion, such equitable considerations do not arise in relation to the pursuer's absolute right to insist upon a sale. No authority has been exhibited to me where the absolute right to insist on division or sale is qualified by the prospect of a court obliging a proprietor to sell to a co-proprietor against his will.
[51] I refer again to Sheriff McInnes in Ploetner at page 1001:
"There also appears to be no authority which would support the view that the court can properly order the sale of one pro indiviso share to the owner of the other unless there is consent or implied consent or there is an agreed valuation of the property and only one party wishes, or is in a position, to buy out the share of the other. That is not to say that there will never be such authority. An attempt may be made to widen in a general way the types of cases in which a sale of a share by one proprietor to the other would be ordered. But in the absence of agreement as to a fair price or in other cases in which both or all pro indiviso proprietors wish to buy, it is difficult to see how a court could avoid ordering the sale of the property on the open market."
[52] To conclude, where the subjects cannot be divided, a co-proprietor has an absolute right to insist upon sale on the open market. He cannot be obliged to sell to a co-proprietor against his will. It follows that there is no relevant defence on record to the pursuer's right to insist upon an action of division or sale. Accordingly, I shall sustain the pursuer's plea-in-law number 4 in the principal action and grant decree in his favour.
[53] It also follows that I sustain plea-in-law 2 for the pursuer in the counterclaim and dismiss crave 4 of the counterclaim (for the sale of the subjects to the defender) as incompetent.
[54] Counsel for the pursuer invited me to take one of two paths, namely, to proceed with the sale at this juncture on the basis that the free proceeds would be consigned to court for division at a later date or to postpone the sale procedure until such time as the court has determined the appropriate division of the free proceeds of sale in terms of the counterclaim. I have chosen the latter course and superseded extract pending determination of the counterclaim. I have also reserved to pronounce further as I was not addressed in relation to the marketing and sale of the property in relation to, for example, crave 2 of the principal action. It might be hoped that such matters can be capable of agreement in due course.
[55] Dealing with the remainder of the counterclaim, in relation to craves 1 (the defender's crave for division and sale) and 5 (authorising the sheriff clerk to sign the disposition etc. in the event that the pursuer fails to do so) I consider these to be unnecessary and irrelevant. I enquired of counsel as to why, standing the defender's position on record, such craves where inserted. I did not feel that I received a satisfactory answer other than that both parties are entitled to insist upon their absolute right. That may be true but the tenor of the pleadings indicates that the defender is reluctant to sell but prepared to purchase. Standing my decision to grant decree de plano in favour of the pursuer, I shall sustain the pursuer's plea-in-law number 3 of the counterclaim and dismiss the defender's craves 1 and 5.
[56] This leaves the pursuer's crave 4 (to divide the free proceeds equally) in the principal action and the defender's craves 2 (that the price of the subjects when sold should not be divided equally) and 3 (a crave for payment of £21,000 plus interest) in the counterclaim. The defender has chosen to proceed by counterclaim which is competent.
[57] I therefore now turn to consider the pursuer's attack on the specification of the financial sums expended by the defender on the property. I shall allow a proof before answer in respect of these averments in the counterclaim. Counsel for the pursuer was frank in conceding that his criticisms were somewhat technical. They were points of style and specification which in my view do not deny the pursuer fair notice. Indeed counsel for the pursuer accepted that he knew what was meant even when criticising the language. The defender is seeking reimbursement, from the free proceeds of sale, of the pursuer's share of money expended by her in relation to the joint property.
[58] I was not addressed in relation to the expenses of the debate. Accordingly I have assigned a hearing. If parties can agree expenses and advise of appropriate dates for proof, they should contact my clerk as I shall sign the appropriate interlocutor without the necessity of attendance.