Elizabeth Anne Smith V. Alexander Shewan Stuart
| Jurisdiction | Scotland |
| Judge | Sheriff D.J. Cusine |
| Court | Sheriff Court |
| Date | 23 February 2009 |
| Docket Number | A1927/01. |
| Published date | 26 February 2009 |
A1927/01.
SHERIFEDOM OF GRAMPIAN HIGHLAND AND ISLANDS AT ABERDEEN
Interlocutor
of
Sheriff Douglas J Cusine
in causa
ELIZABETH ANNE SMITH, The Cottage, Denhead, Manse Road, Potterton, Aberdeen, AB23 SUB.
Pursuer
against
ALEXANDER SHEWAN STUART, 43 Kirkhill Road, Potterton, Aberdeenshire.
Defender.
Act: Bovey Q.C.
Alt: McCall, Advocate
ABERDEEN, 23 February 2009.
The sheriff having heard counsel in debate, Repels the Pursuer's 4th and 5th pleas-in-law and Sustains the 1st, 2nd and 3rd pleas-in-law for the Defender in respect of the Pursuer's 2nd 3rd 4th, 5th and 6th Craves and Dismisses the action; Certifies the Debate as suitable for the employment of junior counsel; Finds the Pursuer liable to the Defender in the expenses of the action; Allows the Defender to give in an account of these and remits the same, when lodged, to the Auditor of Court to tax and to report.
NOTE
On appeal from my original interlocutor dated 5 December 2003, the Court of Session allowed the Pursuer to amend. The amendments are reflected in the Amended Record (No. 19 of Process.)
The Pursuer's original case as set out in Craves 1 and 2 still remains, but she has added new Craves 3 and 4. Craves 5 and 6 are original Craves which have been re-numbered.
The Defender has a Supplementary Rule 22 Note (No. 20 of Process) on which a further debate took place on 15 December 2008, on the Defender's 1st, 2nd and 3rd pleas-in-law which raise an issue of prescription.
Background
The background, which is not in dispute, is set out in Article 3 of Condescendence, and Answer 3. The Pursuer has raised an action for declarator that the Defender gave an Undertaking to the Pursuer (his sister) that he would enter into a Minute of Agreement which relates to the sale of land in Potterton. The Pursuer seeks to have the Defender ordained to enter into the said Minute of Agreement.
In terms of the new Craves, the Pursuer seeks declarator that the Defender is bound to implement paragraphs 1, 2 and 3 of the Undertaking, the terms of which are set out below, and to have the Defender ordained to implement these paragraphs.
The Undertaking is set out in Answer 3 of the Amended Record (No. 19 of Process) at page 10. It is in the following terms:-
"I, ALEXANDER SHEWAN STUART, hereby confirm that, I will enter into a formal Minute of Agreement with my sister, ELIZABETH ANNE SMITH, Glenloye, Ardo, Whitecairns, Aberdeen to the following effect:-
I] In the event of the sale of the land adjacent to the Stead Inn, Denhead, Potterton for agricultural or development purposes, half of the sale proceeds of the said land will fall to be paid to my sister, the said Elizabeth Anne Smith, and
2] In the event of the sale of the said land for agricultural purposes, I will effect the sale on the basis that if the purchaser from me were to sell the said land for development purposes, the increase in the value of the said land over agricultural value because of the said sale for development purposes will be paid equally to both myself and my sister, Elizabeth Anne Smith.
3] In the event of the sale of the said land for agricultural purposes and that I do not wish to retain any interest in the future development of the property I will effect the sale on the basis that if the purchaser from me (or any future purchaser thereafter) were to sell the said land for development purposes, one-half of the increase in the value of the said land over agricultural value because of the said sale for development purposes will be paid to my sister, the said Elizabeth Anne Smith.
Yours faithfully".
At the original debate, there was no dispute between the parties that a unilateral promise or undertaking is binding in Scots Law. In support of that proposition, at the original debate, the Defender cited two cases, Macfarlane v Johnston (1864) 2 M 1210 per Lord Neaves at 1214 and Morton's Trustees v The Aged Christian Friend Society of Scotland (1899) 2 F 82 per Lord Kinnear at 85. It was accepted that this kind of promise, i.e. the Undertaking, would have been enforceable at the time when it was given.
It was accepted also that the Undertaking would have prescribed under the Prescription & Limitation (Scotland) Act 1973 ("the 1973 Act") unless it is an "obligation relating to land". The Defender's 3rd plea-in-law is to the effect that the obligation undertaken by the Defender has prescribed.
The Present Debate.
Submissions for the Defender.
Counsel for the Defender accepted that no Minute of Agreement has been entered into, but submitted that the obligation in the Undertaking has prescribed and he referred to section 6 and Schedule I, of the 1973 Act.
It was said that it is clear from Article 4 that the Pursuer accepts the Defender's construction of the Undertaking, namely that the Defender undertook to enter into a Minute of Agreement with his sister, the Pursuer, and it is admitted in Answer 5 that he has not done so.
Article 6 sets out the Pursuer's additional position. It was submitted that the Pursuer's position must be that the obligations referred to in Craves 1 and 2, as well as those referred to in Craves 3 and 4 are live, in that both arise from the Undertaking. It was submitted that it is not open to the Pursuer to take that approach.
Craves 1 and 2.
It was submitted that the 5-year prescription applies to the Undertaking, that more than 5 years has elapsed, and so the Undertaking is unenforceable. The Pursuer's response is that the 20-year prescription applies. Counsel for the Defender adopted the position as set out in my original interlocutor and invited me not to depart from the decision I took at that point.
Section 6 of the 1973 Act provides that if an obligation to which the section applies has subsisted for a continuous period of 5 years without any relevant claim having been made in relation to it, the obligation will be extinguished.
Schedule I, para. I sets out the obligations covered by section 6 and para. 2 lists the obligations which are subject to the 20-year prescription or are imprescriptible. Schedule 1, para. 1(g) applies to promises. It was submitted that the Undertaking was a promise, and so unless this promise is an "obligation relating to land" within the meaning of para. 2(e) of schedule I of the 1973 Act, it would have prescribed after 5 years.
It was accepted that the 1973 Act does not define an "obligation relating to land," except to say that it includes an "obligation to recognise a servitude", something which is not a feature of the present case.
Counsel for the Defender drew my attention to two cases, there being a paucity of authority on this point. The cases are Barratt Sçotland Limited v Keith 1993 SC 142, a decision of the Second Division, and Glasgow City Council v Morrison Developments Ltd. 2003 SLT 263, an Outer House decision of Lord Eassie. Counsel for the Defender referred to and adopted paragraphs 10, 11 and 12 to 17 of my original Note which are set out here for the sake of simplicity.
"10. In Barratt the Pursuers raise an action seeking implement of an obligation in missives to deliver a disposition of certain subjects in exchange for the price. The Defender submitted that the obligation was covered by section 6 of 1973 Act and accordingly had prescribed. Lord Penrose, the Lord Ordinary, held that the obligation in the missives was an obligation relating to land within the meaning of para. 2(e) of schedule I of the 1973 Act and accordingly the subject of the long negative prescription. That decision was upheld by the Second Division."
"11. Counsel for the Defender drew my attention to the dictum of Lord Penrose at page 148 A to B.
The 'golden rule' of construction, in its modern expression, requires that the words of the statute must, prima facie, be given their natural and ordinary meaning, in their context, and according to the appropriate linguistic register, without addition or subtraction, unless that meaning produces injustice, absurdity, anomaly or contradiction. The expression in para. 2 (e) includes the words 'any obligation', without specification of the source of the obligation. This is in marked contrast to most of the provisions of paras. I and 2. One must assume that this was intentional, and that the provision should be capable of application whatever the source of the obligation, be it in contract, promise, rule of law or statute. Except that it is clear that an obligation must be owed by a person or persons to another person or persons, there is no restriction on the scope of its application by reference to the parties or their relationships either to each other or to the subjects in question or any other subjects."
"12 Counsel also referred to a later passage on page 148 D.
The words 'relating to land' define the subject matter to which the obligation relates. They provide no other qualification on its scope. If this view is correct, then the expression cannot be limited to obligations relating to real rights of third parties, but must include personal obligations under contracts dealing with land and interests in land. With the exception of cases in which land is dealt with incidentally only, contractual and other forms of obligation, such as unilateral gratuitous promise, to create rights and interests in land, or to convey land or interests in land, are in my opinion typical 'obligations relating to land'."
"13 In the Inner House, the Lord Justice-Clerk, Lord Ross, said at page 154 A to B.
In the course of his opinion the Lord Ordinary expressed the view that certain obligations in which land was dealt with only incidentally were not 'obligations relating to land'. In this passage, 1 think the Lord Ordinary must he referring to the sort of situation envisaged by counsel for the pursuer where someone was instructed to dig a ditch on land or a plumber was instructed to carry out repairs to heritable fixtures. I agree with the Lord Ordinary that these can be regarded as cases in which land is dealt with...
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