Patricia Fordyce Or Burton Or Clarke V. Alan Alfred Clarke
| Jurisdiction | Scotland |
| Judge | Sheriff J K Tierney |
| Court | Sheriff Court |
| Date | 24 August 2006 |
| Published date | 25 August 2006 |
SHERIFFDOM OF GRAMPIAN HIGHLAND AND ISLANDS AT ABERDEEN
| Case No. F123/05 | DECISION of SHERIFF JAMES K. TIERNEY | |
| in the cause | ||
| PATRICIA FORDYCE or BURTON or CLARKE | ||
| Pursuer | ||
| against | ||
| ALAN ALFRED CLARKE | ||
| Defender |
Act: Miss Ennis, Advocate; Messrs Stronachs, Solicitors
Alt: Mullen, Solicitor,
ABERDEEN, 24th August 2006
The Sheriff, having resumed consideration of the cause, REFUSES the defender's minute No. 19 of process; SUSTAINS the defender's first plea-in-law to the extent of dismissing the pursuer's fifth and sixth craves; Continues consideration of the defender's second plea-in-law in so far as it relates to crave 7 of the initial writ; REPELS the pursuer's first plea-in-law; Appoints parties to be heard on the question of expenses and assigns 11 September 2006 at 10.00am within Aberdeen Sheriff Court as a hearing thereon.
Sheriff
NOTE
1. This case called before me (1) for a hearing on the defender's Minute (number 19 of process) for recall of an interlocutor stated in the defender's minute to be dated 4th October 2005 but in fact being dated, according to the interlocutor sheets, 21st November 2005, wherein the court made an order in terms of section 14(2)(a) of the Family Law (Scotland) Act 1985 for the sale of the parties heritable property at Auchlea, Kingswells, Aberdeen, and granted warrant to a firm of estate agents in Banchory to dispose of the subjects and to divide the proceeds of the sale of the subjects equally between the parties after deduction of debts or burdens affecting them and of the expenses attending this sale and (2) for a debate on the defenders pleas to the competency and relevancy of the pursuers case in respect of craves 5 and 6 of the amended record
2. The relevant background to the Minute is that at the options hearing of 4th October 2005 the pursuer's first crave, namely the crave for decree of divorce, and her fourth crave, being the crave for sale of the property, were allowed to proceed as undefended with proof by way of affidavit evidence. A diet of proof in respect of the pursuer's second and third craves was fixed for 24th January 2006. On 13th October 2005 that diet of proof was discharged on the defender's motion. In due course the pursuer lodged affidavits and documentation in proof of crave 4 and on 21st November 2005 decree was granted in terms of that crave for the sale of the property and equal division of the proceeds under deduction of any debts or burdens affecting the property and the expenses of the sale.
3. The decree following upon the order was extracted on 16th December. On the 10th March 2006 the defender lodged a Minute for recall of the interlocutor of 4th October, being the interlocutor allowing proof of crave 4 by affidavit evidence. By that time the proof had taken place and an order for the sale granted. The averments in the Minute state that the defender sought recall of the order for sale in order that the true issues and controversy between the parties can be determined. The debate before me proceeded on the basis that it was the order for sale which the defender sought to have recalled, being the interlocutor of 21st November 2005, not the interlocutor allowing proof in respect of crave 4 by affidavit evidence. The defender further avers in the Minute that the Pursuer had resigned from the partnership with effect from 31st October 2005, that the farm was partnership property and should be dealt with in terms of the partnership agreement, and that the decree should be recalled so that the true issues between the parties, namely the division of partnership property could be determined. Answers were lodged, the defender's position being (a) the decree having been extracted recall was incompetent, (b) the defender was personally barred from seeking a recall and (c) that no cause was shown for the recall.
4. Mr Mullen, the solicitor for the defender, explained that the defender had worked the farm for many years and continued to work it. He explained that the pursuer and the defender were partners in the farm and that the partnership assets, including the farm, on cessation of the business fell to be determined in accordance with the partnership agreement. There was a difficulty in doing this as the pursuer had an interlocutor ordering the sale of the property. Title to the property was held by the parties in their capacity as partners and as trustees for the partnership, not as individuals. The value of the individual assets was brought out in the partnership accounts and would in due course become part of the matrimonial assets. At the time when the motion to have the property sold and the proceeds distributed was made the defender had thought that a sale of the property was inevitable, and accordingly he had not contested the pursuer's motion. He was now of the view that he perhaps could afford to acquire the pursuer's interest in the farm business and continue to work it. He wanted the whole situation to be revisited.
5. Mr Mullen explained that the defender's change in position had come about once a further valuation of the property had been received after the continued options hearing at which the crave was allowed to proceed as undefended. Section 14(4) provided that an incidental order, such as had been granted here, may be recalled by a subsequent order on cause shown. The cause shown in this case was the new valuation bringing about the defender's change of mind as to his ability to acquire the farm. He submitted that to recall the decree would not prejudice the pursuer as at the end of the day the matrimonial property will require to be fairly divided.
6. Mr Mullen submitted that the motion to recall the order should be granted because the order itself was incompetent in that it sought to order the sale of property that was owned by a third party, namely the partnership. The parties did not own the farm as individuals, but rather in their capacity as partners of and trustees for the firm. Partners held property in trust first of all for the creditors of the firm. He referred to Miller on Partnership, chapter 9 page 390, where the author referred to Professor Bell's Commentaries II page 501 to the effect that the pro indiviso right in the partnership property which is vested in the partners is so vested in the first place for the benefit of the creditors of the firm, and only thereafter for the partners themselves. He submitted that this made it clear that the property was owned by a third party, namely the partnership, that other persons had an interest, namely the creditors of the partnership, and that the court could not therefore make an order simply ordering the sale of what was effectively someone else's property. He submitted that at the end of the day what needed to be taken into account as matrimonial property were the parties' respective interests in the partnership, which interests fell to be determined, after the rights of creditors, in accordance with the partnership agreement. It was not competent for the court to order the sale of a third party's property. To the extent that this involved the review of another sheriff's interlocutor he indicated firstly that the application was being made under the Act which authorised the recall of an interlocutor, and secondly he submitted that it was always open to the court to take account of fundamental incompetencies - referring to the case of Hay v Hay 2000 SLT (ShCt) 95 where Sheriff Miller held that although it was incompetent for a court to alter the interlocutor of another sheriff, the court was not prevented from considering questions of competency presented on a legal basis not raised or argued previously. In this case the important issue was that the court could consider questions of competency not raised earlier. Robertson v Robertson 2003 SLT 208 made it clear that it was incompetent to seek under section 14(2)(h) to vary the terms of a partnership agreement between spouses which related to a farm business as such an agreement was not one to which the section applied. The partnership agreement provided how the partnership assets were to be dealt with on dissolution. The order which the pursuer had obtained effectively sought to vary that, and that was incompetent. I should therefore take notice of the incompetency and recall the order leaving the farm and the other assets to be dealt with under the partnership agreement.
7. Miss Ennis, counsel for the pursuer, opposed the minute of recall. She agreed with the procedural history of the case and explained that there had been no opposition to the pursuer's motion for an interim order in terms of crave 4, that no appeal had been lodged, that evidence had been produced to the sheriff dealing with the motion for decree in terms of the crave and that the decree which the sheriff had granted had been extracted on 16th December 2005. The pursuer had been proceeding on the basis that the parties were agreed that the property should be sold.
8. The pursuer opposed the Minute on four grounds, namely:- (1) it was incompetent; (2) the defender was personally barred from seeking the recall (3) he had not shown cause; and (4) as a matter of discretion, the order should not be recalled.
9. So far as the attack on competency was concerned she submitted that there was a significant difference between the nature and effect of an interlocutor on the one hand and an extract decree on the other. What the defender was seeking to do was to bring an extract decree under review. Section 14(4) of the 1985 Act should be interpreted in accordance with the normal rules...
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