Dws Against Rms
| Jurisdiction | Scotland |
| Judge | W.M.D. Mercer |
| Neutral Citation | [2016] SC GRE 47 |
| Court | Sheriff Court |
| Date | 29 March 2015 |
| Published date | 07 July 2016 |
SHERIFFDOM OF NORTH STRATHCLYDE AT GREENOCK
[2016] SC GRE 47
Judgment of
W.M.D. MERCER, Advocate, Sheriff
in causa
DWS
Pursuer;
against
RMS
Defender:
Act: Malcolm, Advocate
Alt: S.E. Bell, Advocate
Greenock, 29 March 2015
The Sheriff, having resumed consideration of the cause, makes the following findings in fact:
1. The parties are designed in the instance. They were married on 12 August 2005. They have one child aged seven years.
2. In August 2012 the pursuer raised an action of divorce against the defender.
3. Parties had tried unsuccessfully for two years to negotiate a fair division of the matrimonial property.
4. The parties’ marriage has broken down irretrievably.
5. The pursuer instructed Mr C of P & P LLP, solicitors (‘P&P’).
6. The defender instructed two solicitors, latterly Mr Y of P, P, N & W, solicitors (‘PPN&W’).
7. Proof was set down for April 2013. This was discharged due to valuations of investment property not being available.
8. On 10 June 2013 Mr C and Mr Y met to discuss the case.
9. By letter dated 19 June 2013 Mr C wrote to PPN&W ‘without prejudice.’ He was concerned that parties had inadequate information in advance of proof.
10. By letter dated 15 August 2013 Mr C again wrote to PPN&W. He requested further information of Mr Y.
11. By e-mail dated 23 August 2013 Mr C told Mr Y that Birmingham Midshires had ‘given a positive response to DWS’s application for transfer of equity’.
12. He detailed what Birmingham Midshires would accept and what DWS would agree to.
13. Mr C and DWS discussed a broad proposal. DWS would allow his name to remain on the standard security and the defender would organise funds and a transfer into her name.
14. RMS is self-employed. She could raise loan funds of £35,000 in her own right.
15. The matrimonial home had borrowings of £135,000, the investment properties £173,000.
16. RMS was receiving income from the investment properties. She used that income to service her debt.
17. On 26 September 2013 Mr Y telephoned Mr C. They discussed the proposal. RMS would transfer her interest in the investment properties to her husband for no consideration. He would transfer his interest in the matrimonial home to her.
18. By letter dated 26 September 2013 Mr C sought RMS’s valuation of and equity in the matrimonial home and investment properties.
19. Said letter proposes: ‘If your client is willing to transfer her interest in the various investment properties he is willing to allow the matrimonial home to remain in joint names and subject to the existing mortgage facility on the strict understanding he will convey his interest to the property for no consideration once your client secures his release from the mortgage.’
20. Said letter continues: ‘He will need an undertaking that she will indemnify him in relation to any cost that may be incurred by him in relation to his continued obligation to Birmingham Midshires.’
21. Said letter concludes: ‘We also insist on agreeing a reasonable timescale for his release. At this stage [DWS] is willing to remain on the mortgage product for at least twelve months or so and possibly longer.’
22. Said condition had not previously been proposed between parties. It is a material condition in the contract.
23. Mr Y obtained counsel’s Opinion on Mr C’s proposal.
24. On 21 October 2013 at Greenock Sheriff Court the divorce case called for a pre-proof hearing.
25. On the morning of 21 October 2013 Mr Y telephoned RMS. They discussed the proposal and Counsel’s Opinion.
26. During said conversation RMS instructed Mr Y to agree to the transfer of properties as proposed by Mr C in his letter of 26 September 2013.
27. RMS did not instruct Mr Y as regards a reasonable timescale for DWS’s release from the Birmingham Midshires mortgage.
28. By File Note dated 21 October 2013 Mr Y noted his instructions. He did not ask RMS to confirm these instructions in writing.
29. Mr Y approached Mr C before the court sat. He suggested that the proof be discharged. He said he had instructions to settle the case as set out in the letter of 26 September 2013.
30. Mr C did not agree to discharge the proof.
31. Mr C was surprised at the defender’s change in position.
32. Mr C wanted to discuss what had been agreed and how matters should proceed. He had questions about how and when the transfer would go ahead. He wanted to sort out the ‘finer details’.
33. Mr Y asked Mr C to write to him to record heads of agreement.
34. The pre-proof hearing was continued one week, to 28 October 2013.
35. At this stage no Minute of Agreement giving effect to the proposed settlement had been drafted.
36. On 22 October 2013 Mr C faxed PPN&W. Said fax did not agree a reasonable timescale for DWS’s release.
37. Witnesses and the shorthand writer for proof were cancelled.
38. RMS changed her mind about settlement. She told Mr Y she no longer wanted to settle the action.
39. By fax dated 25 October 2013 Mr Y intimated he was withdrawing from acting because his client was not accepting advice.
40. No timescale for DWS’s release from the Birmingham Midshires mortgage was agreed between parties.
Finds in fact and in law that parties’ solicitors did not agree an essential term of the contract of compromise.
THEREFORE SUSTAINS the seventh plea in law for the defender, REPELS the fifth plea in law for the pursuer, REFUSES decree of declarator and implement, CERTIFIES the cause as suitable for the employment of junior counsel and quoad ultra RESERVES all questions of expenses.
NOTE
Introduction
[1] This is a preliminary proof on whether this divorce case was compromised by solicitors by written offer dated 26 September 2013 and oral acceptance the following month. Evidence was led on 28 and 29 January 2015 and submissions on 17 February 2015. Miss Malcolm, Advocate appeared on behalf of the pursuer (the husband) and Mr Stephen Bell, Advocate on behalf of the defender (the wife).
Competency of Proceedings
[2] Normally where dispute arises as to whether action has been compromised a Minute and Answers are lodged. The Sheriff may then dispose of the matter on the admitted facts: Macphail, Sheriff Court Practice, 3rd ed., paragraph 14.70. Such procedure is to establish and resolve matters plainly and quickly: Welsh v Dyce & Others [2009] CSIH 102. If the matter cannot be determined proof or debate may be necessary: Dixon v Van de Weterfing 2000 GWD 12-409.
[3] In the present case craves, averments and pleas in law dealing with this matter have been amended into the pleadings. Is such procedure competent? In NB Railway Co v Bernards Ltd (1900) 7 SLT 329 the Lord Ordinary held that “the form of procedure to be adopted was within the discretion of the court.” Parties submitted the court should proceed on that basis. That appears a sensible approach. Pleadings sufficient to focus issues exist. Progress should be made and “churn” avoided. I agreed to proceed on the amended Record and not order a separate Minute and Answers.
Preliminary Objection to Admissibility
[4] Almost at the outset of proceedings counsel for the defender objected to the admissibility of evidence of oral acceptance of the contract. Having heard submissions I reserved judgment and heard this evidence under reservation of all questions of admissibility.
Submissions on behalf of the Defender
[5] Counsel for the defender submitted the pursuer seeks to prove a contract for the transfer of heritage which requires writing for its constitution: Requirements of Writing (Scotland) Act 1995 section 1 and section 2(a)(i). Binding, submitted counsel, was the Inner House case of Cook v Grubb 1963 SC 1 where a claim for personal injuries was compromised by an oral agreement. In the absence of rei interventus a contract of service for more than a year contained in a compromise, of which it formed a major and fundamental part, could not be constituted or proved except by probative writing. He quoted widely from the case but identified the ratio in Lord Strachan’s judgment at page 23 lines 6 and 7.
[6] Counsel considered the Outer House judgment of McFarlane v McFarlane [2007] CSOH 75 especially paragraph [41] in the following terms:
“Actions which are pending in Scottish Courts are settled routinely by the most informal methods. Frequently actions in this court involve large sums of money (and often involve heritable property) are settled by means of verbal agreement between counsel or between solicitors, or by means of an informal exchange of correspondence … There is no requirement in our law for a particular formality or method of concluding a contract for the compromise of a court action.” (emphasis added)
[7] Counsel submitted that McFarlane was wrongly decided for two reasons. First Cook had not been cited to or considered by the court and second the case proceeded by way of a concession improperly made by counsel: paragraph [34]. Of the cases considered, Love v Marshall (1872) 10 M 795 is of little assistance. Murphy v Smith 1920 SC 104 is an action of damages and involved no compromise agreement. Gloag on Contract predates Cook.
[8] Finally counsel considered Torbat v Torbat’s Trustees (1907) 14 SLT 830, referred to in both McFarlane and Cook. In Cook Lord Mackintosh suggested Torbat proceeded upon a misunderstanding of prior caselaw and the decision was disapproved.
Submissions on behalf of the Pursuer
[9] Counsel for the pursuer submitted such evidence is admissible. A compromise agreement is not a creation, variation or transfer of an ‘interest in land’: Reid, The Requirements of Writing (Scotland) Act 1995, 1st ed., 1995. The heritable interests involved are incidental, not fundamental. The agreement pleaded is compromise, not of itself altering rights in land, simply agreement that property will be divided in a particular way. It does not change the rights in heritage. Section 1 is not engaged. Proof need not be in writing.
[10] Counsel submitted that the 1995 Act abolishes the...
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