Brown's Trustees v Hay
| Jurisdiction | Scotland |
| Judgment Date | 12 July 1898 |
| Date | 12 July 1898 |
| Docket Number | No. 178. |
| Court | Court of Session |
Ld. Stormonth-Darling, Lord M'Laren, Lord President, Lord Adam, Lord Kinnear.
ReparationInterdictDisclosure of contents of private writingsLiterary PropertyPublic PolicyInland Revenue.
An accountant was employed by a firm of law-agents to wind up its affairs. While so engaged he obtained possession of certain documents belonging to a client of the firm, which he communicated to the Inland Revenue, with the view of shewing the true state of the profit and loss account of the client, which he alleged was different from the account returned by the client. The Inland Revenue called for an explanation from the client, who satisfied them that his return was substantially correct. In an action at the instance of the client against the accountant, held that the pursuer had a right of property in the papers, that the defender had no right to disclose the contents of these to the Inland Revenue or to any third party, and that the pursuer was entitled to interdict and damages.
(Antea, 24 R. 1108.)
William Brown, of Dunkinty, died in June 1893, leaving a trust-disposition and settlement. For many years prior to his death he had carried on the business of a distiller at Linkwood, Glenlivet, near Elgin. After his death his testamentary trustees continued to carry on the business.
Mr Brown, and after his death, his trustees, employed as solicitors the firm of Cameron & Allan in Elgin, the partners of the firm being Mr Alexander Cameron, Mr Ralph Compton Cameron, and Mr Allan. Mr Alexander Cameron having died in 1895, the firm was dissolved, and Mr James Hay, the cashier of the firm, was appointed to wind up the business.
On 9th February 1897 the testamentary trustees of Mr Brown and Mr Ralph C. Cameron, as an individual, raised an action against Mr Hay, concluding (1) for delivery to the pursuers of all documents or copies of documents having reference to the business of distillers sometime carried on by the deceased William Brown, and now by the pursuers, at linkwood-Glenlivet Distillery; (2) for interdict against the defender communicating to third parties, without the pursuers' consent, or to their prejudice, any information relating to the affairs of the distillery obtained by him while acting as auditor; and (3) for payment of 500 damages to the testamentary trustees.
The following narrative of the material facts averred on record and subsequently established in a proof is taken from the opinion of the Lord Ordinary:The defender occupied for many years the position of cashier to the now dissolved firm of Cameron & Allan, solicitors, Elgin, and was employed in 1895 to wind up the affairs of that firm. In the course of his employment as liquidator he came upon a bundle of documents shewing, inter alia, the profits for the years from 1872 to 1891 of the Linkwood Distillery, for which the dissolved firm had acted as law-agents. He made a copy of these documents so fax as they shewed the profits of the distillery, and on 5th November 1896 he sent this paper to the Inland Revenue authorities, adding that he had reason to believe that the profits in the income-tax returns had been considerably understated. At first he only suggested that inquiries should be made, but in the correspondence which followed he pointed the charge by claiming credit for exposing the fraud of the late Mr Brown in giving the Commissioners false returns. Thereupon the authorities put themselves in communication with Messrs Cameron & Jameson, who had succeeded the dissolved firm as law-agents for the distillery. The accuracy of the figures communicated by the defender was not disputed by these gentlemen, but they maintained that certain deductions were claimable in respect of depreciation in the value of plant and machinery, and that when these were made it would be found that the profits had not been understated. As a result of the negotiations which followed a test year was selected, and the question of deductions was referred to the local Commissioners of Inland Revenue. An inquiry was held, and the Commissioners fixed the amount of the deductions claimable. When their decision was applied to the years from 1884 to 1891, which formed the subject of controversy, it appeared that there had been a slight under statement of profit. But the agents of the distillery claimed that against this there should be set an over statement of profit for some years subsequent to 1891, and the Revenue authorities thinking this plea reasonable, and finding that the one thing as nearly as possible balanced the other, withdrew all claims against the pursuers.
The pursuers pleaded;(1) The defender having obtained the documents or copies mentioned in the first conclusion of the summons confidentially while acting in the service of the pursuers' William Brown's trustees' author, or as liquidator of the firm which acted as their law-agents, the pursuers are entitled to decree for delivery of same in terms thereof. (2) The defender having wrongfully disclosed information of a private and confidential nature which he obtained while acting as auditor for said distillery, the pursuers are entitled to decree of interdict, in terms of the second conclusion. (3) The pursuers, the said William Brown's trustees, having suffered loss, injury, and damage to the extent of the sum third concluded for, through the defender's wrongful actings as condescended on, are entitled to decree therefor as craved.
The defender pleaded;(4) In communicating to the Inland Revenue authorities the information required by them in connection with the estate of the said deceased William Brown, the defender having acted in good faith and in accordance with the duty incumbent on him as liquidator of the firm of Cameron & Allan, is entitled to absolvitor. (5) The defender as an...
To continue reading
Request your trial