Eileen Blackburn V. Elizabeth Cowie
| Jurisdiction | Scotland |
| Judge | Lord Eassie,Lord Kingarth,Lord Osborne |
| Neutral Citation | [2008] CSIH 30 |
| Date | 25 April 2008 |
| Docket Number | XA187/06 |
| Court | Court of Session |
| Published date | 25 April 2008 |
| EXTRA DIVISION, INNER HOUSE, COURT OF SESSION | |
| Lord Osborne Lord Kingarth Lord Eassie | [2008] CSIH 30 XA187/06 OPINION OF THE COURT delivered by LORD OSBORNE APPEAL FROM THE SHERIFFDOM OF GLASGOW AND STRATHKELVIN AT GLASGOW in the cause EILEEN BLACKBURN, permanent trustee on the sequestrated estates of William Cowie, Pursuer and Respondent; against ELIZABETH COWIE Defender and Appellant; _______ |
Pursuer and respondent: Mrs S Wolffe, Advocate, Lindsays, McDonalds, Glasgow
Defender And Appellant:Kinnear, Advocate, Drummond Miller LLP, Ross Harper, Glasgow
25 April 2008
The Background Circumstances
[1] The pursuer and respondent in this appeal is the permanent trustee on the sequestrated estate of William Cowie. The defender and appellant, Elizabeth Cowie, is the former spouse of William Cowie, who was sequestrated on 13 June 1989. The appellant and the bankrupt were divorced in 1993. A Mr Allan O'Boyle was initially appointed the trustee in the sequestration. The present respondent was appointed as permanent trustee in succession to Mr O'Boyle, by virtue of Act and Warrant granted in Glasgow Sheriff Court on 8 July 2002. The bankrupt owned inter alia heritable property situated at 41 Westbourne Gardens, Glasgow, in which he and the appellant lived. Mr O'Boyle expeded a notice of title to that property, which was registered on 30 January 1990. On 14 November 1990, the Sheriff granted an application, made by the then trustee in the sequestration, in which the court was asked to dispense with the consent of the appellant to the sale of the property, in terms of section 40 of the Bankruptcy (Scotland) Act 1985. The only conditions attached to the grant were that the date of entry was to be no earlier than 31 May 1991; that twenty one days notice of the proposed date of entry was to be given to the appellant; and that she was to afford all reasonable access by the permanent trustee to the property for the purpose of its maintenance and marketing. That decree was not one in absence.
[2] Over a long period of time, the former trustee in sequestration and subsequently the respondent have had various meetings, discussions and correspondence with the appellant, both directly and through her legal advisors, with a view to her acquisition of the heritable property at 41 Westbourne Gardens, Glasgow, for a price reflecting the reasonable market value of the property. At an early stage, a decision was taken by the trustee in sequestration to sell the property to the appellant for an acceptable price. However, at no time during the period from 1990 to the present date has any formal offer been made on behalf of the appellant to purchase the property. Eventually, the trustee in sequestration began to take the view that the appellant either did not intend to purchase the property, or was unable to do so. Against that background the trustee in sequestration considered that the duty owed to the creditors of the bankrupt and the bankrupt himself meant that, in the absence of an offer from the appellant, the property had to be marketed in the normal way. In these circumstances, the respondent raised the present action for recovery of possession of heritable property by means of a summary cause summons in Glasgow Sheriff Court. The respondent claimed in that action, that, in the circumstances described, she was entitled to recover possession of the property and asked the court to grant a decree against the appellant, removing her, and her family, sub-tenants and dependents, with their goods and possessions, from the said property.
[3] After hearing evidence, on 28 October 2005, the Sheriff granted the decree sought by the respondent. Subsequently, the appellant appealed to the Sheriff Principal, as a result of which the Sheriff was requested to state a case. In the stated case subsequently furnished by the Sheriff four questions of law were posed. These were
"(1) Did I err in law in rejecting the argument presented to me on behalf of the defender, that the pursuer was not entitled to decree in her favour, in the circumstances where she was uninfeft in the heritable subjects at 41 Westbourne Gardens, Glasgow?
(2) Did I err in concluding that I did not require to take account of the factors set out in section 40 of the Bankruptcy (Scotland) Act 1985?
(3) Did I err at the outset of the diet of proof by asking the pursuer's agents to confirm my assumption that in light of the circumstances of the case the defender ought to lead in the proof?
(4) Did I err in rejecting the submission made on behalf of the defender and granting decree in favour of the pursuer?"
[4] In the appeal before the Sheriff Principal, questions 1 and 2 only of the questions formulated in the stated case were argued on behalf of the appellant. In due course, the Sheriff Principal answered questions 1 and 2 in the negative and refused the appeal, in his interlocutor of 25 May 2006. On 28 September 2006, the Sheriff Principal, on the appellant's application to him to certify the cause as suitable for appeal to the Court of Session, granted that application. On 6 October 2006 the appellant appealed to this court.
[5] In the present appeal, the appellant has tabled three grounds of appeal, of which only grounds 1 and 3 were argued. These grounds are as follows:
"1. The Sheriff Principal erred in law in upholding the decision of the Sheriff that the pursuer was entitled to decree in her favour, in circumstances where she was uninfeft in the heritable subjects at 41 Westbourne Gardens, Glasgow. In terms of section 31(1) of the Bankruptcy (Scotland) Act 1985 the estate of the debtor, William Cowie, vested in the pursuer in terms of the Act and Warrant granted in her favour as permanent trustee. However, a permanent trustee only acquires a real right in the estate by recording a Notice of Title in the Register of Sasines or registering such a Notice in the Land Register. The pursuer had not recorded such a Notice of Title and accordingly remained uninfeft at the time that decree was granted in her favour by the Sheriff on 10 May 2005. It is an essential legal requirement in bringing an action for recovery of possession of heritable property that the pursuer's title is completed by infeftment. In the absence of such infeftment, the pursuer was not entitled to decree in her favour......
3. The Sheriff Principal further erred in law in upholding the decision of the Sheriff that the Sheriff did not require to take account of the factors set out in Section 40 of the Bankruptcy (Scotland) Act 1985. Section 40(3)(b) requires that section 40(2) shall apply to an action for the purposes of obtaining vacant possession of the debtor's family home brought by the permanent trustee, as it applies to an application under section 40(1)(b) for the Court's authority to sell or dispose of any right or interest in the debtor's family home. Accordingly, the Sheriff required to address the considerations set out in section 40(2). Upon the alternative basis set out by the Sheriff that he was required to take account of the factors set out in section 40 (which basis he had rejected), the Sheriff then failed to adequately set out the evidence led before him, to address and properly apply the factors contained in section 40(2) to that evidence, and provide adequate reasons as to why he rejected the submissions made in that regard on behalf of the defender that he should refuse to grant decree in the whole circumstances of the case. In particular, the Sheriff erred in considering that the circumstances of the attempted set off of sums due by the pursuer to the defender, as creditor in William Cowie's Sequestrated Estates, was irrelevant. In terms of Section 40(2)(c) the Sheriff ought to have had regard to the interests of the creditors, of whom the defender was the majority creditor."
Submissions of the appellant
[6] Introducing his submissions, counsel for the appellant pointed out that, before the Sheriff Principal, the agent for the respondent had conceded that she was not infeft in the property in question; it had been contended that she did not need to be. The Sheriff Principal had concluded that that concession was wrong; however, it had not been withdrawn. The Sheriff Principal had reached his decision upon the basis that there was a distinction between ejection and removing, a point that had not been argued before him. He had concluded that the present action was, in substance, an action of ejection in the form of a summary cause; hence, infeftment was not necessary. The Sheriff Principal also dealt with the impact of section 40 of the Bankruptcy (Scotland) Act 1985. He had answered questions 1 and 2 in the stated case in the negative, those being the only questions that were argued before him.
[7] Counsel next drew attention to the terms of the grounds of appeal, which we have already quoted. He went on to mention certain features of the background to the matter. In 1990, an application had been brought before the court for authority to sell the property, the appellant having refused to consent to that course. In due course, a decree had been granted dispensing with her consent. In 1993 the appellant and her husband had been divorced. She had obtained assignations of certain of her husband's debts, whereby she became a major creditor. After a period of time, the original trustee in bankruptcy had demitted office. He had expeded a Notice of Title. The respondent had an Act and Warrant in her favour but had not expeded a Notice of Title until after the decree pronounced by the Sheriff in the present action, which ultimately gave rise to this appeal. The appellant and her former husband had continued to occupy the property. The appellant was creditor for £67,000 which made her the majority creditor. She had hoped that she would be able to purchase the family home from the trustee, but in 2004 the present application was finally brought.
[8] There were...
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