SHERIFFDOM OF GLASGOW AND STRATHKELVIN AT GLASGOW
A91/10
JUDGMENT
of
SHERIFF PRINCIPAL C A L SCOTT, QC
in the cause
Gordon Collins
Pursuer
against
Carol Anne Sweeney
Defender
Glasgow, 13 March 2014.
The sheriff principal, having resumed consideration of the appeal, Refuses same and Adheres to the sheriff's interlocutor dated 21 February 2013; Finds the defender liable to the pursuer in the expenses of the appeal; Allows an account thereof to be given in and remits same, when lodged, to the auditor of court to tax and to report thereon; and Certifies the appeal as suitable for the employment of junior counsel.
NOTE:-
Defender's submissions
[1] This appeal concerns an action of division and sale in respect of subjects at [address]. It is not disputed that the subjects are incapable of division. Similarly, counsel for the defender explicitly accepted that the right to resort to a division or sale is an absolute right. (See Upper Crathes Fishings Ltd v Bailey's Executors 1991 SLT 747, Lord President Hope at 750).
[2] In dealing with the action at debate, the sheriff was called upon to consider the counterclaim lodged by the defender and, in particular, craves 1, 4 and 5 therein. The essence of the dispute between the parties for present purposes flows from the terms of the fourth crave in the counterclaim. That crave is in the following terms:
"To grant warrant for the sale to the Defender of the Pursuer's one half pro-indiviso share in the subjects forming ALL and WHOLE [address] at the price of £42,500; less one half of the mortgage redemption figure to be determined by the court in respect of the said subjects; the said price being satisfied in part by a discharge (to the extent of the said price minus deductions as determined by the court) of the capital sum payable by the Pursuer to the Defender; and to grant Decree for Payment by the Defender to the Pursuer in respect of the outstanding sums owed to the Pursuer."
[3] The sheriff concluded that the fourth crave in the counterclaim was incompetent and, in his interlocutor dated 21 February 2013 dismissed craves 1, 4 and 5. The reasons for his decision are to be found at paragraph [44] onwards in his note.
[4] Counsel for the defender referred to the Upper Crathes case and, in turn, to the case of Anderson v Anderson (1857) 19 D 700 in which the case of Brock v Hamilton is reported as a note.
[5] Under reference to passages from Lord Hope's opinion in Upper Crathes, counsel for the defender sought to identify a two stage process by which the court was bound to give consideration to an action of division and sale. The first consideration involved recognition that the right to raise and pursue such an action is absolute. However, a second consideration according to counsel for the defender involved the full equitable jurisdiction of the court in working out the remedy.
[6] The phrase "the full equitable jurisdiction of the court" seems to emanate from Lord Rutherfurd's note in the case of Brock v Hamilton. However, in Upper Crathes Lord Hope observed that:
"That jurisdiction, it seems to me, was 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."
[7] Counsel for the defender drew the court's attention to the terms of the note of appeal and the contention that the sheriff had materially erred in law. It was submitted that equity did apply when it came to how the sale of the subjects should be effected. In that regard, counsel argued that the court had full equitable jurisdiction. In the present case, the defender was seeking an order from the court to the effect that a sale of the subjects to her should take place and that at a fair price.
[8] Counsel submitted that the sheriff had, as he put it, "fallen into a material error". The sheriff had taken the notion of an absolute right to sell and determined that such a right outweighed the court's full equitable jurisdiction to give effect to a fair means of disposal. Counsel referred to the case of Campbell v Murray 1972 SC 310 in which it was determined that sale by public roup could no longer be regarded as being invariably the best method of securing the highest price for heritable subjects. That decision arose in the context of an undefended action of division and sale wherein the pursuers sought a sale by private bargain, ie as opposed to sale by public roup. As I understood the submission of counsel for the defender, the case of Campbell demonstrated the court's ability to regulate the means of disposal in such a context.
[9] Following upon some discussion as to specific authority for the course which the defender was inviting the court to take in the present case, counsel, firstly, cited the case of Gray v Kerner 1996 SCLR 331 being a decision by a (then) temporary sheriff sitting at Falkirk Sheriff Court. The pursuer and defender had cohabited for a period of time. They had jointly purchased a house. The relationship broke down and the pursuer raised an action for division and sale. She wished the property to be transferred to her in return for payment to the defender of half the reversionary value, subject to a deduction of one-half of the total mortgage payments she had made since the breakdown of the relationship. In contrast, the defender sought a sale on the open market together with an equal division. It appears that, after a proof, the sheriff granted the pursuer's crave.
[10] The view taken by the sheriff seems to be summarised at page 332D in the report:
"It is my opinion that where one pro indiviso proprietor wishes to acquire title to the whole of the heritable subjects and the other pro indiviso proprietor is not in a position to acquire title and is not seeking to acquire title but can be fairly compensated, it is appropriate for the court to order a sale or transfer in another form."
[11] Secondly, counsel for the defender sought to found upon the case of Scrimgeour v Scrimgeour 1988 SLT 590 as support for the position adopted by the defender in the present action. At 594B to C Lord McCluskey made the following observations:
"In considering the question of competency I have come, first of all, to be of the view that a remedy short of exposing the subjects to public sale has existed in Scots law and has never been abolished. No court has ever said it was incompetent to allow such a remedy to one or more of the co-owners. If one of two co-owners were to raise an action seeking the court's sanction of and a supervision over such an arrangement and the other co-owner were to appear as defender in the action and ultimately settle upon the basis of a joint minute which invited the court to sanction such an arrangement the court could plainly, in my view, sanction the arrangement upon which the parties agreed and pronounce a decree based upon the parties' agreement."
[12] Counsel for the defender argued that the case of Scrimgeour whilst not binding upon the court was persuasive when it came to the issue of competency. He accepted that in Scrimgeour there had, of course, been no appearance on behalf of the defender and, consequently, the pursuer had no contradictor. However, it was pointed out that the case of Scrimgeour pre-dated the Upper Crathes case and that neither case was in conflict when it came to the proposition that it was for the court to exercise its full equitable jurisdiction in working out the remedies involved in an action of division and sale.
[13] Counsel recognised that the sheriff had agreed with Sheriff McInnes (as he then was) in Ploetner & Others v Ploetner 1997 SCLR 998. (See paragraph [48] in the sheriff's note). However, he pointed out that the sheriff had allowed a proof before answer on whether there ought to be an order for sale of one party's share to the other. That was exactly what the defender in the present action was seeking.
[14] In summary, the court was invited to allow the appeal; to reinstate the first, fourth and fifth craves within the defender's counterclaim; and to allow a proof before answer.
Pursuer's submissions
[15] Counsel for the pursuer invited the court to refuse the appeal and to adhere to the sheriff's interlocutor. He highlighted a difficulty concerned with the defender's explicit acceptance that the right of a co-proprietor to raise and pursue an action of division and sale was absolute. Counsel submitted that it followed from such acceptance that the first crave in the counterclaim was "incompetent, otiose and unnecessary". It flowed from the absolute nature of the right associated with the remedy sought by the pursuer in this action that the pursuer's first crave must be granted.
[16] Reference was made to Rankine on Land Ownership, 4th Edn at page 591 and to the learned author's passage on "division":
"The rule which has thus been illustrated shows clearly enough the private inconvenience and public loss which results from the ownership of land remaining common to several individuals. Accordingly, a ready remedy for these evils lies in the further rule, that 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. And this right cannot be barred by a restriction in the title to property."
[17] Counsel for the pursuer stressed that there were two separate and distinguishable parts to an action of division and sale. Historically, there were cases in which division of the subjects might be ordered. By way of example, the case of Morrison v Kirk 1911 2 SLT 355 was cited.
[18] As far as the Upper Crathes case was concerned, counsel for the pursuer indicated that, for his part, he adopted an entirely different approach to the decision from that embraced by counsel for the defender. Lord Hope's reference to what was stated by Lord Ormidale in Thom v Macbeth (1875) 3 R 161 at 164 was highlighted by counsel for the pursuer. Lord Ormidale had stated that the mode in which the union is to be dissolved may, according to the circumstances, be attended with more or less difficulty. As he put it, "Ought the joint or common property to be divided, or ought it to be sold, and the realised price be divided, is the practical question we have to determine in the present case." That question, submitted counsel for the pursuer, equated with the working out of the remedy to which Lord Rutherfurd and Lord Hope, in turn, had referred.
[19] Counsel for the pursuer turned his attention to the terms of the fourth crave in the counterclaim. In his submission, sale by private bargain did not mean that the court had the power to force a pursuer to accept an offer from his co-proprietor to purchase his share in the subjects. Counsel submitted that the court could not competently impose such an order.
[20] There were no statutory provisions enabling the imposition of such an order and counsel submitted that the pursuer's right in his capacity as pro indiviso proprietor would be unduly fettered. The pursuer was entitled to have the subjects placed on the open market for the purposes of a sale. Unlike circumstances to which the provisions of the Family Law (Scotland) Act 1985 might apply, there was no status associated with relationship as between the pursuer and defender which might entitle the court to impose, for example, an order for the transfer of either party's share in the heritable subjects.
[21] With regard to the case of Gray v Kerner, counsel for the pursuer argued that it was not binding upon this court; that the only authority which the sheriff had considered was the Scrimgeour case; and that the decision was, in any event, based upon a curious set of circumstances in which one party's solicitor had advanced a submission to the court which, in effect, contradicted the evidence of his client. Furthermore, the case of Scrimgeour had been undefended and therefore ought to be distinguished from the present case in which the orders sought by the defender were manifestly contested on a root and branch basis.
[22] The Scrimgeour case did not, according to counsel for the pursuer, provide authority for the proposition that, in a defended action for division and sale, the court might competently order a transfer of one-half of the title to the subjects to one or other of the two co‑proprietors. Under reference to the passage from Lord McCluskey's opinion at page 594B, counsel for the pursuer submitted that the matter might have been completely different had there been opposition to what the wife in Scrimgeour was seeking.
[23] Accordingly, in the absence of agreement or implied consent it was submitted by counsel for the pursuer that it was incompetent for the court in the context of an action for division and sale such as the present one, to order, in effect, that one proprietor's share be transferred to the other. Counsel stressed that the position was entirely different from matrimonial type situations. He referred to the case of Berry v Berry (No 2) 1989 SLT 292 in which a wife had raised an action of division and sale in respect of a matrimonial home, against her husband. After sundry procedure, decree de plano had been obtained entitling the wife to insist upon the subjects being sold. The report obtained by the court suggested that the subjects should be sold on the open market at an upset price of £190,000. The pursuer enrolled a motion for approval of the report and for warrant to sell the subjects. The defender opposed the motion and enrolled a counter motion to the effect that the pursuer's one-half pro indiviso share of the subjects should be sold to him at an open market valuation to be fixed by the reporter.
[24] The Lord Ordinary in Berry, Lord Cowie, inter alia, refused the defender's motion. Counsel for the pursuer in the present action pointed to the fact that Lord Cowie had failed to derive assistance from the case of Scrimgeour. "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."
[25] Finally, in returning to the case of Upper Crathes, counsel for the pursuer stressed that the court's decision had expressly excluded any equitable defence to an action of division and sale. Were the court to tolerate the approach taken by the defender in the present action such a decision would run contrary to that express exclusion.
Decision
[26] In my opinion, the argument presented on behalf of the defender is ill‑conceived. Counsel for the defender placed much reliance upon a particular characterisation of Lord Hope's remarks in the Upper Crathes case. However, properly analysed, any reference therein to the full equitable jurisdiction of the court being used "in the working out of the remedy" does not avail the defender in the present case.
[27] As counsel for the pursuer submitted and, moreover, when the opinions of Lords Allanbridge and Mayfield in Upper Crathes are reflected upon, it is clear that "the working out of the remedy" involves the selection of the remedy as between a division of the subjects and their sale. (See Lord Allanbridge at 752F). I respectfully agree with Lord Allanbridge when he stated that, "...all that Lord Rutherfurd was saying (in Brock) was that equity could be a good defence to a division considered in the context of an action demanding division or sale." (752G).
[28] The issue which the sheriff confronted in the present case was whether the defender had averred a relevant defence. The defender's second plea in law (in the counterclaim) is in the following terms:
"The Defender having made disproportionate financial contribution to the essential maintenance and upkeep of the commonly-owned property, Decree should be granted as Second, Third and Fourth craved."
[29] That plea is underpinned by considerations of equity and as a defence to the action the defender, inter alia, seeks to force a sale (to the defender) of the pursuer's one‑half pro indiviso share in the subjects as opposed to a sale of the subjects followed by division of the price. (Crave 4).
[30] That defence, to my mind, is redolent of exactly the sort of thing which the judges in Upper Crathes held to be irrelevant. For instance, at 749F, Lord Hope stated:
"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 pursuer's 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."
[31] At 750A-B, Lord Hope observed that:
"On closer examination, however, it is I think reasonably clear that Lord Rutherfurd's references to the equitable powers of the court are directed to the working out of the remedy and not to the fundamental right of the co-proprietor to insist on an action of division or sale."
[32] It is also worth taking note of a passage at the end of Lord Hope's opinion:
"To introduce questions as to the marketability of the pro indiviso share and as to the bona fides of the co-proprietors' intentions with regard to the joint management of the property would be to open up the exercise of the right of division to great uncertainty. It would raise substantial questions of fact and degree, the effects of which might well be to discourage resort to the remedy in the very circumstances in which, for reasons of public policy, it has always been recognised as being available. As the pursuers' counsel put it, it is surprising if there is a sound basis for this argument that there is no reported case in which it has ever been advanced, let alone upheld. If we were to allow the argument to proceed in this case, however unusual it may appear, we would be transforming the nature of the right of action, and I am not persuaded that we should take this step."
[33] The existence of authority supporting the approach favoured by the defender was canvassed in the course of the appeal and, of course, counsel for the defender pointed to the cases of Gray and Scrimgeour. In Gray, the only case cited as authority was that of Scrimgeour. There was no mention of the Upper Crathes case. It is extremely difficult to understand why a proof before answer was properly allowed in the first place and, to an extent, the case is also tainted by its own curious circumstances. In evidence, the defender stated that he was prepared to transfer his one-half pro indiviso share to the pursuer at an agreed valuation. However, during closing submissions, the defender's solicitor appeared to go against her client's instructions and sought a sale on the open market. At all odds, I reject the case of Gray as constituting authority for the proposition relied upon by the defender in the present case. It was, in my view, wrongly decided and, in any event, the sheriff's decision appears to have been based upon an evidential concession by the defender.
[34] Similarly, I do not regard the decision in Scrimgeour to be authoritative for present purposes. There was no contradictor and, accordingly, Lord McCluskey concluded that it was competent to make the order sought particularly having reflected upon certain hypotheses involving agreement between parties and/or default by a co‑owner defender. (See 594B-C). It is also of note that Lord Cowie in Berry did not regard the case of Scrimgeour as providing assistance.
[35] In the circumstances of the present action, the remedies craved by the respective parties are contested. I agree with the submission of counsel for the pursuer that, absent agreement or implied consent, it is incompetent for the court to make an order for the sale of the pursuer's one-half pro indiviso share to the defender.
[36] Such a conclusion is justified not merely by the absence of authority supporting the defender's argument and contrary authority, particularly in the form of the Upper Crathes case. It can be securely arrived at by an analysis of the fundamental principles involved here. When it comes to division and sale, a co-proprietor's right to raise such an action is absolute. It cannot be qualified by consideration of equity. The remedy itself is straightforward. Whereas in this case division does not come into play, it follows that a sale of the subjects must take place and the proceeds of that sale require to be divided.
[37] The subjects are the house at [address]. They are to be contrasted with a sale of the pursuer's one-half pro indiviso share in those subjects. Giving effect to crave 4 in the counterclaim would not equate to a sale of the subjects and, in any event, would be entirely at odds with the first crave in the counterclaim which invites the court to find that the defender is entitled to insist upon an action of division and sale of "all and whole of the subjects forming ALL and WHOLE [address]".
[38] The position in the present case is not dissimilar to what the court in Upper Crathes was being asked to sanction. In other words, were this court to legitimise the first, fourth and fifth craves in the counterclaim, it would, in effect, be transforming the nature of the right of action. That was a step which Lord Hope considered should not be taken. For my part, I am certainly not persuaded that the defender's argument carries with it any form of legitimacy and neither was the sheriff at first instance. I agree with the decision he reached and broadly with the reasoning employed. The appeal is without merit and falls to be refused.
[39] It was agreed that expenses should follow success. Accordingly, I have awarded the expenses occasioned by the appeal in favour of the pursuer. I have also sanctioned the appeal as suitable for the employment of junior counsel.