Scottish Court of Session Decisions

Pursuer: Campbell QC; Thorntons Law

Defender: Barne; Balfour and Manson LLP

13 March 2014

Introduction

[1] This is an action for damages by a widow against the former executors of her deceased husband's estate as a consequence of the defenders' alleged failures in connection with the administration of the estate. The action is related to a number of actions which have been raised in the Court of Session since the death of a farmer, James Clark. The action came before me for debate at a procedure roll which commenced on 27 September 2013 and concluded on 16 October 2013. The defenders seek absolvitor or dismissal of the action while the pursuer seeks a proof before answer on the present pleadings.

[2] The deceased resided in Fife and was formerly married to Mrs Joan Pentland-Clark. That marriage came to an end by divorce in 1977 and their financial arrangements upon divorce were regulated by a Minute of Agreement dated 7 October 1977 ("the Minute of Agreement"). This agreement made provision inter alia for payment of an allowance to Mrs Pentland-Clark until her remarriage or death. The deceased subsequently married the pursuer in 1982. The deceased executed a will on 20 November 1985 and registered in the Books of Council and Session on 12 December 1985 ("the Will"). In that Will the deceased bequeathed his whole estate equally amongst his widow and his three surviving children. The Will appointed the pursuer and Mr John Simpson Wilson as the deceased's executors. Mr Clark died on 5 December 1985. The first defender was assumed as an additional executor conform to a Deed of Assumption dated 13 December 1985. The pursuer resigned as executrix on 25 August 1986 and her resignation was acknowledged on 2 September 1986. Mr John Wilson died on 27 May 1991 and the second defender was assumed as an executor by Deed of Assumption dated 13 June and 21 June 1991. Messrs J & G Wilson, solicitors, Kinross, acted for the executors of the deceased until 1 July 1991 when Messrs Pagan Osborne, solicitors, Cupar, commenced acting for them. The present defenders were removed from office as executors by interlocutor of the Court of Session on 23 March 1999.

[3] After Mr Clark's death, a number of disputes arose amongst the pursuer, the beneficiaries and the defenders as then executors of the deceased's estate. Several actions were raised by the children of the deceased against the present pursuer and the executors between 1986 and 1997. In order to attempt to resolve these disputes, a mediation took place in or around October 1997 and settlement was achieved. As part of that agreement the pursuer was to pay the sum of £145,000 to the deceased's children. In addition the sum of £100,000 representing the value of partnership assets belonging to the pursuer was to be paid to her from the estate. Although not invited to the mediation process parties appear to agree in the pleadings that without the influence of Mrs Pentland-Clark on them her children would not have agreed to the settlement terms ultimately agreed at the mediation. Parties to the mediation undertook to make no claim "against the executors or their advisers, past or present, in respect of any act or omissions to date, or arising out of the implementation thereof".

[4] After the mediation was concluded, agreement reached and payments made, the executors had a number of issues outstanding, one being the amount due to Mrs Pentland-Clark as a principal creditor and a second being the liability on the estate as a consequence of the deceased's interest in Lloyds. This resulted in the executors requiring to petition the Court of Session for directions. The estate was identified as being insolvent. Mrs Pentland-Clark petitioned the court for sequestration of the estate and the appointment of a judicial factor. This led to the appointment of Mr John Hamilton Macfie as judicial factor. Mr Macfie presented an interim report to the court on 11 October 2000 and in November 2000 he was appointed permanent judicial factor. Said report is lodged as a production no 6/3 of Process and is referred to and incorporated into the pursuer's pleadings. Mr Macfie died on 18 July 2006 and despite the fact that she was already pursuing a personal action against the executors, Mrs Pentland-Clark was appointed judicial factor.

[5] The history of litigations arising out of this executry is complicated and convoluted. The disputes identified by Mr Macfie are fully detailed in his report dated 11 October 2000. It seems to me from that report that all of the actions identified there were actions by the children of the deceased and not by Mrs Pentland-Clark. Despite this the pursuer at article V of condescendence includes them in the list of actions which have occasioned her legal expense and the implication appears to be that she is entitled to claim those expenses because of the failure to wind up the estate properly. I am not clear whether and if so, to what extent expenses relating to actions by the children are included in the pursuer's present claim. In article VII of condescendence the pursuer states that "between October 1997 (the date of the Mediation) and the date hereof, the pursuer has incurred legal expenses ....totalling £433,006 in defending legal proceedings commenced against her by Mrs Pentland-Clark and the children." As I understood the summary of the factual background, the report of Mr Macfie and the submissions from parties, the actions involving the deceased's children as pursuers pre-dated the mediation. I note also in article VI of condescendence at page 22 of the Record the pursuer complains that had Mrs Pentland-Clark "been included" in the mediation process "and had she been paid that which was due to her, she could not have raised actions involving the pursuer for the next following two decades or more, apoealling(sic) at each stage when she lost, and thereby causing the pursuer to sustain the loss which she has." This would again imply that the pursuer is seeking expenses for actions raised more than 20 years prior to the raising of the action in 2011, namely from 1991.

[6] Mrs Pentland-Clark raised a personal action against the pursuer and the executors in April 2004. That action was dismissed by Lady Clark in September 2006. Mrs Pentland-Clark reclaimed and in June 2009 the reclaiming motion was refused.

[7] In December 2003 Mr Macfie raised an action in his capacity as judicial factor against the present executors claiming that the executors had made certain payments disabling the estate from meeting its obligations to Mrs Pentland-Clark. The action was sisted and the judicial factor intimated in or about March 2004 that the action was not to be insisted upon. My understanding was that this was to do with a lack of funding. Mrs Pentland-Clark took over the action at some point after she became judicial factor in July 2007. She expanded that action. The action was eventually dismissed against the pursuer by Lord McEwan in August 2011. Mrs Pentland-Clark reclaimed unsuccessfully in March 2012. She subsequently sought leave to appeal to the Supreme Court but that was refused in or about July 2012.

[8] The present action was signeted on 11 October 2011 and served on 14 October 2011. The defenders are sued in their capacity as executors of Mr Clark's estate.

[9] The pursuer, in her pleadings, complains inter alia that the former wife of the deceased, Mrs Pentland-Clark, was not invited to participate in the mediation process. As a result of this, it is averred, the pursuer required to defend a number of court actions at the instance of Mrs Pentland-Clark and the deceased's children occasioning considerable expense. The pursuer also avers that had the defenders wound up the estate properly and had they settled the debt due to Mrs Pentland-Clark, Mrs Pentland-Clark would have been unable to raise any legal actions against her. The present action seeks repayment of losses suffered by the pursuer as a result of defending these actions.

[10] The pursuer also seeks repayment of said sum of £145,000. She avers in article VII of condescendence the following:

"at the mediation the pursuer has agreed to compromise the alleged claims against her by the children in the sum of £145,000, ....for the payment of which sum from her own resources she has secured no benefit or advantage nor any respite from litigation. As a result of the failure of the defenders to wind up the estate of the deceased the payment of the £145,000 has been made in vain and has failed to achieve its intended purpose."

Submissions by the defenders

[11] The primary position for the defenders was to seek absolvitor on the ground that the action had prescribed. A number of matters raised under this head of argument, particularly in relation to relevancy of the pleadings, inevitably overlapped other issues raised under the separate heads and all as helpfully summarised in the defenders' note of arguments. I shall deal with those other heads of argument in due course.

[12] The present defenders were removed as executors by interlocutor dated 23 March 1999 accordingly any action against them for alleged failings during their period of administration had prescribed. (Sections 6 and 11 and schedule 1 of the Prescription and Limitation (Scotland) Act 1973.) It was submitted by reference to the case of Pelagic Freezing Ltd v Lovie Construction Ltd [2010] CSOH 145 that the issue of prescription having been raised, it was for the pursuers to make relevant averments which, if proved, showed that the action had not prescribed. The pursuer accepted this proposition as a correct statement of the law. Similarly the pursuer conceded the submission that prescription commenced running when there existed a concurrence of iniuria and damnum (Dunlop v McGowan 1980 SC (HL) 73). The main dispute was the date when that concurrence took place.

[13] Mr Barne for the defenders summarised some of the very lengthy factual background to this case including some of the previous multiple litigations raised in connection with this executry. Much of the history has been previously rehearsed in those actions. I have summarised only the facts relevant to issues I have to decide. Mr Barne made reference to the report by Mr Macfie and to the series of litigations as detailed therein. He commented that "Everyone was suing everyone else including the executors suing solicitors who previously acted." Not all of the actions against the pursuer had failed however, highlighting the action of reduction by the children of the deceased against the pursuer as an individual and the executors which was successful on the ground inter alia that the pursuer was auctor in rem suam (reported in 1989 SLT 665.) Mediation brought these series of actions to an end and Mr Macfie's report states that, as part of the mediation agreement, "It was acknowledged that no claim will be made by the beneficiaries or any of them against the executors or their advisers, past or present, in respect of any act or omissions to date, or arising out of the implementation thereof". (The pursuer took no issue that that represented what the agreement contained although the interpretation is disputed.) That clause, Mr Barne submitted, effectively closed the door on the pursuer raising further litigation arising from that mediation.

[14] Mr Barne submitted that the concurrence of damnum and iniuria in the present case occurred at a point some many years ago and certainly in excess of five years prior to the raising of the present action. In relation to iniuria he referred to the dates on which the present defenders became executors. They were however both removed by interlocutor of 23 March 1999. Esto the defenders owed the particular duties now averred by the pursuer and esto they breached those duties, iniuria could not post-date 23 March 1999. From that date they did not hold the capacity of executor. That date, beyond which iniuria could not occur, was not disputed by the pursuer.

[15] In relation to damnum or the pursuer's claim for loss, Mr Barne referred me to article VII of condescendence:

"As the estate became insolvent and was unable to meet the claim by Mrs Pentland--Clark, she commenced a series of extravagant damages claims in a number of actions against the defenders and the pursuer seeking damages, payment of the arrears and debt allegedly owed to her, and a range of other remedies such as declarator, count reckoning and payment and reduction. These actions are detailed herein. The pursuer reasonably required to defend each of these actions in order to reasonably protect her legitimate interests. To have omitted to do so would have exposed her to the peril of decree in absence or by default, and would have subjected her to unmerited diligence or enforcement actions. Between October 1997 (the date of the Mediation process) and the date hereof, the pursuer has incurred legal expenses to her solicitors and counsel totalling £433,006 in defending the legal proceedings commenced against her by Mrs Pentland-Clark and the children. A statement and breakdown of fees paid will be produced. If the defenders, when acting as the executors of the deceased's estate, had fulfilled the duties which were incumbent upon them they would have provided for the debt owed to Mrs Pentland--Clark. By their omissions, as aforesaid, and failure to do so the Executors failed to deliver the purpose of the Mediation, which was the resolution of disputes among the beneficiaries so that the Estate could be wound up and the executry concluded. In any event, at the Mediation, the pursuer has agreed to compromise the alleged claims against her by the children in the sum of £145,000, as condescended on, for the payment of which sum from her own resources she has secured no benefit or advantage, nor any respite from litigation."

Those averments set out basis of the claim by the pursuer. In counsel's submission, esto there was any failure of duty on the part of the executors, the loss started to occur as at the date of mediation namely October 1997. As I understood this part of the argument that was because the object of the mediation had been frustrated by the executors' failures and the pursuer had made the payment of £145,000 accordingly her loss in relation to that sum must have been incurred as at the date of mediation. Even if that were not the case Mr Barne identified a debate in the personal action by Mrs Pentland-Clark, which took place in June 2006 and at that stage, at the very least, the pursuer was incurring legal fees to defend that action. The prescriptive period began to run therefore at October 1997 and at the very latest June 2006. The present action was not signeted until October 2011, more than five years after the dates identified.

[16] The prescriptive period, counsel submitted, starts to run at the moment loss has occurred even if the amount of that loss cannot be quantified. All that was needed to trigger the concurrence was the existence of a loss. An obligation to make reparation was a single and indivisible obligation and could not be "sliced" into different parts thus creating different prescriptive periods. I was referred to passages in Dunlop v McGowan at pages 79 and 81 within the Opinions of Lords Russell and Keith. I was also referred to the case of Aitchison v Glasgow City Council 2010 SC 29 paragraph 32:-

"It is accepted on all hands that as regards a claim for damages in respect of personal injuries, as of any other claim for damages, only one action can be pursued to decree. Thus, if an individual having sustained injuries through the fault of another sues the wrongdoer to decree (or settles with him), the obligation to make reparation is superseded (and extinguished) by the decree or the settlement agreement. He cannot sue a second or further time for damages in respect of injuries which subsequently emerge caused by the same wrong, even if he neither knew nor had the means of knowing at the time of his original claim of the likely or even possible emergence of these later injuries. That rule, which is a rule of practice, may seem in some circumstances harsh; but it is firmly established in our law (Stevenson v Pontifex and Wood, per Lord President Inglis at page 129 and per Lord Adam at page 130). The observation by Lord Keith in Dunlop v McGowans at page 81 that 'only one action may be prosecuted for enforcing [the obligation]', while made in the context of a different class of obligation and when considering the application of prescription rather than limitation of action, is equally applicable to actions in respect of personal injuries."

Lord Russell in Dunlop also states:

"I do not find in the Act any justification for this distinction between 'pecuniary loss' and 'potential loss'. All is a question of quantification of the harm done by the breach of duty".

[17] The fact that the pursuer suggests she cannot quantify her total loss until July 2012 is irrelevant as the loss has already been occasioned, namely October 1997 when the mediation took place or at the very latest in June 2006 when the first legal debate took place.

[18] Mr Barne addressed me on the specific provisions contained in the Prescription and Limitation (Scotland) Act 1973. He referred me to sections 6 and 11 and schedule 1 of the Act. The relevant provisions are as follows; section 6(1):

"If, after the appropriate date, an obligation to which this section applies has subsisted for a continuous period of five years-

(a) without any relevant claim having been made in relation to the obligation,

and

(b) without the subsistence of the obligation having been relevantly acknowledged, then as from the expiration of that period the obligation shall be extinguished:

Provided that in its application to an obligation under a bill of exchange or a promissory note this subsection shall have effect as if paragraph (b) thereof were omitted.

(2) Schedule 1 to this Act shall have effect for defining the obligations to which this section applies.

(3) In subsection (1) above the reference to the appropriate date, in relation to an obligation of any kind specified in Schedule 2 to this Act is a reference to the date specified in that Schedule in relation to obligations of that kind, and in relation to an obligation of any other kind is a reference to the date when the obligation became enforceable."

Section 11:

"(1) Subject to subsections (2) and (3) below; any obligation (whether arising from any enactment, or from any rule of law or from, or by reason of any breach of, a contract or promise) to make reparation for loss, injury or damage caused by an act, neglect or default shall be regarded for the purposes of section 6 of this Act as having become enforceable on the date when the loss, injury or damage occurred." and

(3) In relation to a case where on the date referred to in subsection (1) above (or, as the case may be, that subsection as modified by subsection (2) above) the creditor was not aware, and could not with reasonable diligence have been aware, that loss, injury or damage caused as aforesaid had occurred, the said subsection (1) shall have effect as if for the reference therein to that date there were substituted a reference to the date when the creditor first became, or could with reasonable diligence have become, so aware."

With reference to section 11(1) Mr Barne submitted that the date when the action became enforceable was the date when the loss began to occur. In his submission the pleadings were entirely unclear as to whether the pursuer was relying on subsection 3 of section 11. Standing her third plea in law to the effect that there was no cause of action until July 2012, it could not be the case that she was relying on section 11(3). However in article VIII of condescendence the pursuer states that, "She was not aware of the extent of the loss that had been sustained and that it had been caused by an act, neglect, or default of the executors until July 2012". The necessary implication of not knowing the extent of loss was that the pursuer knew previously that there was some loss. In any event there were no averments to show how the pursuer was unaware until July 2012 of the neglect of the defenders. The pursuer had been a defender in the personal action by Mrs Pentland-Clark prior to 2006. She would have been aware of the judicial factor's report of October 2000 wherein criticisms were made of the executors. She would have been aware of the alleged maladministration of the estate by the time it was declared insolvent. The sum of £145,000 was paid before that. There were no appropriate pleadings to engage section 11(3) nor was there any appropriate plea in law.

[19] Mr Barne turned to his second head of argument regarding the duties of executors. He submitted that an executor's title is a factorial one acting eadem persona cum defuncto. The liability of an executor is representative and limited and he is protected by the inventory of the estate on which he is confirmed. I was referred to section 2 of the Confirmation of Executors (Scotland) Act 1823 which states:

"Caution shall not be required to be found by

(a) an executor nominate; or

(b) an intestate's spouse who shall be executor dative and has right by virtue of sections 8 and 9(2) of the Succession (Scotland) Act 1964 to the whole estate.

In all other cases the court granting confirmation shall fix the amount of the sum for which caution shall be found by the person or persons to whom confirmation shall be granted, not exceeding the amount confirmed."

Mr Barne submitted that this supported his submission to the effect that executors are liable only to the extent of the estate confirmed. I was referred also to Currie on Confirmation 9^th Edition paragraph 1 - 13:

"Although originally a benefit, the office of executor is now an administrative appointment: an executor is simply an administrator of the estate, for all interested in the succession, but not for creditors."

and thereafter to paragraph 1 - 21. No basis for any personal liability had been made out on the present pleadings. Mr Barne also referred me to the opinion of Lord Carloway in the case of Pentland-Clark as Judicial Factor v Maclehose & others [2012] CSIH 29 at paragraph 41:

"The duty of an executor is one of factory. He requires to ingather the deceased's estate, to pay the debts due to by the deceased and thereafter to distribute the ingathered estate to the beneficiaries in accordance with the wishes of the deceased as disclosed by any will. He represents the deceased; that is to say in questions with third parties, he is the same person as the deceased (eadem persona cum defuncto). The title which he holds is subject to all pleas which could have been taken against the deceased (see generally Wilson and Duncan: Trusts, Trustees and Executors 2^nd Edition paras 31-09 to 31-11; 34-1 to 34-07). It is these straightforward and well known principles that provide the answer to the issues raised by the pursuer."

I was referred to Trusts, Trustees and Executors by Wilson and Duncan 2^nd Edition, paragraph 31-11; and to the Stair Encyclopaedia, volume 24 paragraph 169. An executor owes a duty to account. Where a beneficiary claims that he has failed to realise an asset of the deceased's estate the beneficiary's usual remedy is to raise an action against him calling on him to realise and account for the asset. An executor does not, however, owe general duties of care to the beneficiaries although he may in certain circumstances be liable for losses to the estate.

[20] The basis of the claim is set out in article VI of condescendence. That is in the following terms:

"The loss and damage sustained by the pursuer has been caused by the defenders' fault and negligence when acting in the course of their duties as executors of the deceased. It was their duty, having accepted the office of executor on the estate of the deceased, to exercise the degree of care and skill to be expected of reasonably competent executors taking all circumstances into account, not merely their factorial duties. They knew of the litigious propensities of Mrs Pentland-Clark. They knew (because they had so arranged matters) that she had been excluded from the Mediation process, and that it was in arrears at the date of the Mediation Agreement. It was their duty to ingather the estate of the deceased. It was their duty to have regard to the stated interests of those making any claim upon the estate; to assess and validate such claims; to achieve compromise and finality where appropriate, according to sound professional judgment, and to evaluate and to make payments according to their value from the assets of the estate, so as to bring the executry to a close. It was their duty to settle all of the debts of the deceased's estate in full, or in any event pari passu if there were insufficient assets to do settle in full. It was their duty to distribute any surplus assets in full or in any event pari passu among the beneficiaries in accordance with the terms of the Will. It was their duty as executors not to make such payments or to exact from the executry estate under their charge legal fees and any other charges which actually or potentially rendered the deceased's estate insolvent, before satisfying or in any event compromising the debts due. They knew or ought to have known (because they alone had full knowledge of the estate's state of affairs) that having taken a charge for legal and other expenses after paying the pursuer but before paying Mrs Pentland-Clark that there were insufficient remaining assets to settle the arrears of alimentary debt owed to Mrs Pentland-Clark. They knew or ought to have known that non-payment of the debt due to her would be likely, in all the circumstances, to provoke litigation or in any event to provoke a challenge to the defender's conduct of the executry. They knew or ought to have known that Mrs Pentland-Clark would be likely to try to involve the pursuer in her litigation or challenge, as indeed occurred. No executor of ordinary skill and competence exercising reasonable care would have made payments or taken legal or other charges which rendered the deceased's estate insolvent, whilst there were insufficient funds remaining to settle the arrears of alimentary debt owed to Mrs Pentland-Clark. No executor exercising ordinary skill, care and competence would have ignored the likelihood of a challenge being brought by Mrs Pentland-Clark to the overall conduct of the executry, and in particular the defender's failure to pay her , or even to offer to pay her. As a consequence of the defenders' several failures in duty, the pursuer has suffered loss as a result of the actions and omissions of the defenders in failing to make payment to Mrs Pentland-Clark. Her response, in engaging in serial litigation for many years in a determined but ultimately unsuccessful attempt to involve the pursuer in her claims, was entirely predictable and reasonably foreseeable given her entitlement to be paid; her known persistent and litigious character; her unforgiving nature; her sense of proprietorship over the affairs of the executry and her children, and, despite her divorce from the deceased, her deliberate exclusion by the defenders from the Mediation process. Had she been included, and had she been paid that which was due to her, she could not have raised actions involving the pursuer for the next following two decades or more, appealing at each stage when she lost, and thereby causing the pursuer to sustain the loss which she has. In the duties incumbent on them as executors the defenders failed, and by their failures, so caused the pursuer to suffer loss and damage. But for their failures in duty, the pursuer would not have suffered the loss and damage hereinafter condescended upon."

The defenders submit that the pursuer's claim in the present case does not relate to any loss caused to the estate nor does the pursuer claim that she has failed to receive what she ought to have received. The losses have not been incurred in her capacity as beneficiary under the deceased's Will but have been incurred by her in her capacity as defender in proceedings brought by Mrs Pentland-Clark. The defenders submit that although they may have been under certain duties in relation to the administration of the deceased's estate they did not owe any general duty of care to the pursuer. The duty of care averred is a duty owed to the creditor, not to the pursuer. A number of other criticisms were raised in connection with the specific duties which it was alleged the defender should have and in relation to the foreseeability of Mrs Pentland-Clark's legal actions.

[21] Esto the defenders owed some duty of care to the pursuer, the losses claimed by the pursuer did not fall within the scope of the liabilities that the parties would have reasonably considered the defenders had assumed as executors. Reference was made to the case of South Australia Asset Management Corporation v York Montague Ltd 1997 AC 191 and in particular to the opinion of Lord Hoffman at page 211 et seq:

"A duty of care such as the valuer owes does not however exist in the abstract. A plaintiff who sues for breach of a duty imposed by the law (whether in contract or tort or under statute) must do more than prove that the defendant has failed to comply. He must show that the duty was owed to him and that it was a duty in respect of the kind of loss which he has suffered. Both of these requirements are illustrated by Caparo Industries Plc v Dickman [1990] 2 AC 605. The auditor's failure to use reasonable care in auditing the company's statutory accounts was a breach of their duty of care. But they were not liable to an outside take-over bidder because the duty was not owed to him. Nor were they liable to shareholders who had bought more shares in reliance on the accounts because, although they were owed a duty of care, it was in their capacity as members of the company and not in the capacity (which they shared with everyone else) of potential buyers of its shares. Accordingly the duty which they were owed was not in respect of loss which they might suffer by buying its shares. As Lord Bridge of Harwich said, at page 627:

'It is never sufficient to ask simply whether A owes B a duty of care. It is always necessary to determine the scope of the duty by reference to the kind of damage from which A must take care to save B harmless.'

In the present case, there is no dispute that the duty was owed to the lenders. The real question in this case is the kind of loss in respect of which the duty was owed."

The defenders submitted that the essence of the pursuer's case is that the defenders were under a duty to take reasonable care to ensure that the pursuer would not be sued by Mrs Pentland-Clark in relation to meritless claims. It was submitted that there was no basis in fact or law to support the imposition of such a wide ranging duty of care on the defenders.

[22] Counsel for the defenders then addressed the issue of causation and foreseeability. Dismissal of the action was sought. There was no basis disclosed in the pleadings for the court to conclude as a matter of law that the losses occasioned to the pursuer were caused by any breach of duty by the defenders which was owed by them to the pursuer. The litigation pursued by Mrs Pentland-Clark was a novus actus interveniens. The pursuer avers that she would not have incurred substantial legal expenses nor would she have wasted the payment of £145,000 agreed as part of the mediation process had the defenders settled the debt owed to Mrs Pentland-Clark. However in her personal action, Mrs Pentland-Clark had been found by the Inner House to have no locus qua creditor to pursue the action she had brought. No breach of duty by the defenders conferred any locus on Mrs Pentland-Clark to initiate proceedings against the pursuer. In her action as judicial factor her status as creditor was not relevant. Further there was no causal connection between the duties relied upon by the pursuer and the cause of action brought by Mrs Pentland-Clark. In any event there were no proper averments to establish that the losses allegedly suffered by the pursuer were reasonably foreseeable. I was referred to Clerk & Lindsell on Torts, 12^th Edition 2-101 & 102; 2-174.

[23] Particular arguments were raised in relation to the mediation and the pursuer's claim that the sum of £145,000 should be re-paid to her. In respect of this chapter the defenders insisted on their second and fourth pleas in law or at the very least submitted that the pleadings in relation to the mediation ought not to be admitted to probation. The pursuer averred that the executors had failed to deliver the purpose of the mediation, which was the resolution of disputes among beneficiaries so that the estate could be wound up and the executry concluded. It was also averred that "the pursuer has accordingly needlessly expended £145,000 on faith of the mediation agreement" (article VIII of condescendence). Counsel submitted that there were no relevant pleadings to identify why the defenders should be liable in relation to the £145,000 paid by the pursuer as part of the mediated settlement. There was no suggestion that the defenders had warranted that the mediated settlement would achieve any particular end. In any event the mediation did achieve an end to the litigations then in existence. That was the purpose behind the mediation. Mr Barne submitted that the duties of care set out at pages 20-21 of the Record were wholly generalised and lacking in specification except possibly the averment "it was their duty as executors not to make such payments or to exact from the executry estate under their charge legal fees and other charges which actually or potentially rendered the deceased's estate insolvent, before satisfying or in any event compromising the debts due." However, standing the pleadings at page 8 and 9 of the Record, the pursuer avers that the legal fees charged to the estate postdated the date of the settlement agreement. There was no suggestion in the pleadings that the defenders had acted negligently in respect of the mediation or the parties involved in the mediation. The mediated settlement brought about a resolution of a wide range of issues arising between the parties to the mediation. It brought those ongoing litigations to an end. In addition there was no causal link between the breaches of duties relied upon, said to have occurred after the mediation, and the payment of the £145,000. In any event the pursuer had agreed as part of the mediated agreement that no claim would be made by the beneficiaries or any of them against the executors or their advisors past or present in respect of any acts or omissions to date or arising out of the implementation of the mediation agreement. Properly construed this discharge bars the pursuer from making a claim against the defenders in relation to the £145,000. In response to Mr Campbell's suggestion that an interpretation of that discharge was a matter that required evidence and proof, Mr Barne submitted that it was a matter of law and ought to be decided by the court without hearing evidence.

[24] A number of general points on relevancy were raised and inaccuracies in the pleadings identified. While some of these may be matters for proof there was lack of clarity in the pleadings on a number of issues and thus the defenders had insufficient notice of the case against them particularly in relation to quantum.

[25] One of the issues raised related to the pursuer's averment in article III of condescendence at page 9:

"Shortly thereafter, legal fees and other charges exceeding £300,000 in total value were then charged upon the remainder of the estate by the defenders. The amount of fees and other charges taken by the defenders was in an amount which rendered the estate insolvent without having first satisfied the apparently lawful claims of Mrs Pentland-Clark for alimentary payments then due to her."

The implication from those pleadings was that the defenders had, after the last mediation payment was made, simply charged in excess of £300,000 as legal fees thus making the estate insolvent. That was not the case. Reference was made to the judicial factor's report which had been incorporated into the pursuer's pleadings. At page 24 a summary of the account is provided dating between July 1991 and May 1999. An amount of £306,738.43 is provided as a sum of "legal expenses" for that whole period and not simply removed from the estate after the mediation as averred by the pursuer.

[26] Finally the defenders attacked the pleadings in relation to quantum. It was submitted that there was no specification as to how a total of £433,006 had been incurred in defending legal proceedings brought against the pursuer by Mrs Pentland-Clark. The only specific sum averred was £76,000, said to be the expenses awarded to the pursuer in the personal action by Mrs Pentland-Clark. There was no specification as to how the balance claimed was made up. Mr Barne pointed out that there had been additional proceedings involving judicial review by Mrs Pentland-Clark where she successfully challenged the taxation of expenses by the auditor in her personal action. She had claimed that the auditor was formerly a partner of Shepherd & Wedderburn. She was successful in that petition. The pursuer was not entitled in these circumstances to claim expenses in relation to an action where she had been unsuccessful. The pursuer had attempted to resist the judicial review. The pursuer and the defenders had also attempted to reclaim unsuccessfully the decision of Lady Wise in the action by Mrs Pentland-Clark as judicial factor. The defenders should not be liable for expenses where the pursuer had failed. The defenders were entitled to specification as to what expenses were being claimed. Similar arguments were also presented in relation to the amounts of interest being claimed and the lack of specification. In addition interest was being sought on sums prior to July 2012 despite the pursuer's position that the loss did not occur until July 2012. Finally the defenders challenged the right of the pursuer to claim payment of expenses when the pursuer had already been awarded expenses against Mrs Pentland-Clark. The pursuer had not attempted to enforce these awards. Esto the pursuer successfully obtained the awards now claimed in the present action, it would still be open to her to enforce those awards of expenses against Mrs Pentland-Clark particularly should she, namely Mrs Pentland-Clark, receive payment qua creditor out of the deceased's estate as a result of the ongoing litigation. It would be iniquitous to obtain a duplication of expenses.

Submissions for pursuer

[27] Mr Campbell QC commenced his submissions by commenting that the present case was based on unusual facts and did not "fit the categories of negligence and duties of care" which normally appear in the court. He referred to part of the history of events which I have summarised above. He referred in particular to a "course of conduct carried out by Mrs Pentland-Clark and her children" extending over a period of 27 years and culminating in irrelevant claims against the pursuer and finally determined by the Inner House in the cases of Pentland-Clark v Wilson and others [2009] CSIH 48 and Pentland-Clark as Judicial Factor v Maclehose and others [2012] CSIH 29. Those cases also "gave a flavour of what had gone wrong". The main complaint of the pursuer was set out in article III of condescendence. There had been a number of disputes arising from the executry which led to expensive litigation all as listed in Mr Macfie's report. As a result the executors promoted a mediation in October 1997 which resolved the disputes. However a main creditor of the estate, Mrs Pentland-Clark, was not invited to participate in the mediation. In failing to invite her to the mediation the executors had failed in their duties as executors and were culpably negligent. While complaining that Mrs Pentland-Clark was not invited to the mediation I note that it is averred in article III of condescendence that:

"she exercised control over its outcome by assuming control and management over the consent of her children to the Mediation settlement which was eventually achieved, despite their being adult. Had she not exercised her consent, the mediation would not have produced an outcome."

Mr Campbell submitted that it was also the defenders' failure to settle Mrs Pentland-Clark's alimentary claims which gave her, for the first time, a locus to litigate. The defenders knew of the propensity of Mrs Pentland-Clark to manipulate her children. They also knew of her litigious nature. In response to a question from me, Mr Campbell acknowledged that Mrs Pentland-Clark had not previously litigated.

[28] In relation to the prescription plea Mr Campbell submitted there were two aspects of iniuria. The first being the failure to invite Mrs Pentland-Clark to the mediation process; the second being the failure to settle her alimentary claims. This was the basis of the pursuer's case. The pursuer also complained that the executors who had convened the mediation had "paid themselves legal fees of £300,000" thus rendering the estate insolvent while the "main creditor" remained unpaid. Turning to the issue of concurrence of damnum and iniuria it was submitted that concurrence could not take place until Mrs Pentland-Clark had exhausted all of her actions against the pursuer. Only then would she know what her losses truly were. That date occurred in July 2012 when her leave to appeal to the Supreme Court was refused. He referred me to sections 6 and 11 of the 1973 Act.

[29] Mr Campbell submitted that until July 2012 it was not possible for the pursuer to state what was the "finite amount expended" by her. While Mrs Pentland-Clark's personal action against her had concluded in June 2009 it was not possible for the pursuer to calculate her total loss until the action by Mrs Pentland-Clark as judicial factor had been finally disposed of. Damnum only occurs when the possibility of litigation by Mrs Pentland-Clark has been exhausted, namely July 2012. The pursuer was relying on section 11(3) of the 1973 Act. The basis upon which the pursuer relied on section 11(3) was not clear to me.

[30] I raised with Mr Campbell the date of the raising of the present action (October 2011). I questioned how, if Mr Campbell was correct, was it that the pursuer could raise the action before the date when she asserted that the concurrence of damnum and iniuria took place. I received no satisfactory answer other than to say the point had not been raised by the defenders. (In response later Mr Barne adopted this point in support of his prescription argument.) Mr Campbell submitted that there was no loss until the amount could be crystalised.

[31] In relation to the issue of the duty of care by executors, while accepting that executors' duties are normally factorial there was a specialty in this case that led to the issue of professional negligence being considered. The pursuer was offering to prove that in the particular circumstances of the present case standing the position of Mrs Pentland-Clark as set out in article III of condescendence to the effect that she was controlling her children in relation to the mediation, it was negligent of the executors not to invite Mrs Pentland-Clark to that mediation. Mr Campbell acknowledged that the executors "no doubt acted in good faith" but any settlement achieved required that Mrs Pentland-Clark be a party to that. There were two aspects of negligence averred as against the executors and the first was the failure to invite Mrs Pentland-Clark to the mediation and the second was that "the executors took steps to pay themselves a fee and to render the estate insolvent". He submitted that the £300,000 was a fee after the mediation. It was submitted that Mrs Pentland-Clark was of a litigious disposition and this was known to the defenders. The defenders therefore had a duty to take care that they did not leave her in a state of dissatisfaction. He referred to her behaving in an "extraordinarily litigious fashion" after the judicial factor's death which was in July 2006. He referred to the opinion of Lord Carloway in the case of Pentland-Clark as judicial factor v Maclehose and others [2012] CSIH 29. He also referred to the case of Pentland-Clark v Wilson and others [2009] CSIH 48. Taking these cases together with her failure to obtain leave from the Supreme Court and to the fact that she had now gone to the European Court of Human Rights demonstrated that it must have been within the executors' knowledge that she was of a litigious nature. It was submitted that had the executors paid Mrs Pentland-Clark what she was due she would have had no cause to raise any action. I was referred to no authority to support the proposition that the executors owed the duty of care to the pursuer in the circumstances as averred in the present case.

[32] In relation to the other matters raised by the defenders Mr Campbell referred me to the case of Jamieson v Jamieson 1952 SC(HL) 44 at page 49 where, it was submitted, Lord Normand set out the test for relevancy and dismissal. This was the only authority referred to me by the pursuer. He submitted that the case as pled was not such that merited dismissal and the pursuer was entitled to seek to take her case to proof.

[33] Mr Campbell admitted that his pleadings on quantum were "short on detail" but he submitted that the pleadings were sufficient to take to proof. It was submitted that it was due to the executors' omissions in failing to pay Mrs Pentland-Clark her alimentary dues and as a result of paying themselves "legal fees" which caused the estate to be insolvent. Had they not done so Mrs Pentland-Clark would have had no cause to raise an action. It was submitted that there was a direct causal connection. The pursuer required to defend these actions and was occasioned legal expenses. Her explanation for not seeking to enforce the decrees against Mrs Pentland-Clark was on advice that it was highly unlikely that she would succeed. In a general discussion with Mr Campbell about the expenses and the charge of interest I have to say that I was very unclear as to what was being sought and how that was being calculated, particularly in relation to the interest, however Mr Campbell sought to take the matter to proof. One particular area which increased the lack of clarity quoad quantum was revealed in a discussion in relation to the specific sum of £76,000 referred to at the end of article V of condescendence. The pleadings as framed would tend to suggest that this sum is part of the sum sued for by the pursuer while in the course of his submissions Mr Campbell suggested it was not included. I had noted that, although the pursuer now asserts she was unable to assess her loss until July 2012, the pleadings regarding this particular sum, namely £76,000, originally suggested that it was only "at that point in time", namely, March 2012 that "the pursuer was for the first time able to ascertain her net loss." In the course of further submissions Mr Campbell sought to delete the averments from "At this point in time" to the end of article V of condescendence. There was no opposition and I allowed that amendment.

[34] Mr Campbell concluded his submissions by turning to the mediation agreement. He submitted that the construction of the mediation agreement was a matter for proof. He submitted that there was no part of the agreement which regulated Mrs Pentland-Clark's claim and this was in essence the defenders' main failure. Parties had reached agreement on a range of matters which required implementation. As that range of matters did not include payment to Mrs Pentland-Clark that was a failure in the mediation. The failure to obtain her signature to the agreement led to the subsequent actions by Mrs Pentland-Clark and thus was the fault of the defenders. The interpretation of the clause wherein parties to the mediation had apparently acknowledged that no claims would be made arising out of the mediation or the implementation of it was a matter for proof.

Decision

[35] I shall commence by dealing with the defenders' first plea in law in which, as is now pled, absolvitor is sought. The history of events including relevant dates is as summarised above and was not in dispute. Both parties were agreed that the date of iniuria could not post-date the removal of the executors from office in March 1999. The issue was when the concurrence of damnum and iniuria occurred.

[36] There appear to me to be two separate heads of claim. The first relates to the re-payment of the £145,000 which the pursuer paid out as part of the mediation settlement. The second relates to the legal expenses occasioned to the pursuer as a result of defending court actions raised against her by Mrs Pentland-Clark. As I have referred to in my summary of the facts, it is not clear to me from the pleadings whether some of those legal expenses were occasioned by actions raised by the children, having regard to the manner in which the pleadings are framed. There is also very little specification as to how the sum sued for in respect of legal expenses is calculated. If the legal expenses claimed by the pursuer include any of the actions by the children, I am clear that the pursuer cannot, having regard to the basis of her claim, sue for any of those expenses occasioned. There is no case pled of failures by the executors in relation to the children.

[37] The basis of the claim against the executors is that they owed a duty of care to the pursuer, not in relation to her position as beneficiary to the estate, but in relation to her position as a victim of the alleged litigious pre-disposition of Mrs Pentland-Clark to sue those whom she perceives have wronged her as a result of the position into which the executors placed her while they were administering the estate. More particularly it related to their failures to invite Mrs Pentland-Clark to the mediation in October 1997 which led to an agreement in the same month. Secondly, it is averred, they charged "legal fees and other charges" in excess of £300,00 to the estate before settling Mrs Pentland-Clark's outstanding alimentary claims, resulting in the estate becoming insolvent. Those failures led directly to the subsequent litigation by Mrs Pentland-Clark. If that is correct then it appears to me that the first "wrong" or iniuria must have occurred at the time of the mediation and the second must have occurred, according to the pursuer's case, when the expenses were charged thus making the estate insolvent as a result of which Mrs Pentland-Clark did not receive what she was due, all of which pre-dated the removal of the executors from office. If I am wrong in identifying those particular dates it is agreed in any event that iniuria occurred, at the latest, on the date of the executors' removal.

[38] I now turn to the question as to when the loss occurred. As I have already identified the loss averred comes under two heads, the first being the £145,000 paid as part of the mediation settlement. The pursuer claims that this sum should be repaid to her because the mediation settlement did not achieve an end to litigation. The pursuer avers in article VII of condescendence the following:

"As a result of the failure of the defenders to wind up the estate of the deceased the payment of £145,000 has been made in vain and has failed to achieve its intended purpose."

Assuming this was a relevant head of claim for the purposes of considering the prescription plea it seems to me that the pursuer must have known that the payment had been "made in vain and had failed to achieve its intended purpose" as soon as any action was raised against her by Mrs Pentland-Clark. That being the case, the date of that loss would be at the point of the first action raised against the pursuer by Mrs Pentland-Clark. She must have realised by then that the payment "had been made in vain" because she was by then engaged in further litigation. The date which was provided to me for the raising of the first action, namely the personal action by Mrs Pentland-Clark, was in April 2004. In my view therefore it is clear that the attempt to seek repayment of the sum paid as part of the mediation settlement, if a relevant claim, has certainly prescribed, the relevant date being April 2004.

[39] The pursuer must also by that stage have known of the defenders' alleged failures because all of the information identified in the judicial factor's report and the awareness of the removal of executors due to the insolvency of the estate were factors which must have been known to her some years before.

[40] In respect of the pursuer's claim for the legal expenses occasioned by the litigation by Mrs Pentland-Clark, again assuming that this head of claim is a relevant one, I am of the view that the appropriate date when the cause of action becomes enforceable is when she starts to suffer actual loss. That surely must be the point at which she has to fund her defence to the action raised by Mrs Pentland-Clark. At the point when Mrs Pentland-Clark raised the first action against her the pursuer must have known that the action was a pointless one. At the very latest she must have known that when Lady Clark dismissed the action against her in September 2006, which was more than 5 years prior to raising of the present action. She had by that time suffered losses from that court action. These losses were no doubt easily quantifiable and they are part of losses which she now seeks. The fact that she could not fully quantify all of her losses as a result of the continued litigations is in my view irrelevant. Looking at the terms of section 11 of the 1973 Act it is clear to me that the obligation to make reparation for the loss due to the neglect or default of the defenders became enforceable at the moment when the loss commenced occurring, (Dunlop v McGowans supra). It seems to me that the whole fallacy of the pursuer's argument is displayed in the fact that the action was raised in October 2011, some 9 months prior to the concurrence, as averred by the pursuer, of damnum and iniuria. In my view the pursuer ought to have raised the action when the action became enforceable or within 5 years of that date and if her total losses had not been quantifiable then her remedy would have been to sist the action. I am of the view in these circumstances that the action has prescribed and that decree in favour of the defenders ought to be awarded. I therefore propose to sustain the first plea in law for the defenders and repel pleas in law for the pursuer.

[41] Having come to this view I realise that it is unnecessary for me to deal with the other matters raised by the defenders however, in view of the detailed arguments presented, I ought to say something about them.

[42] Article VI of condescendence avers wide ranging duties on the part of the defenders as executors. In particular it is stated that "it was the duty, having accepted the office of executor on the estate of the deceased, to exercise the degree of care and skill to be expected of reasonably competent executors taking all circumstances into account, not merely their factorial duties". That was clearly the position of the pursuer's counsel in his submissions to me. No authority was provided which supported such a general proposition. As I have identified earlier the pursuer seeks damages against the executors not in relation to her position as a beneficiary to the estate. As is apparent from the actions which Mrs Pentland-Clark raised against the pursuer, those actions were raised on the basis of the pursuer being a former executor to this estate. Those actions were dismissed. I appreciate that the pursuer was not an executor at the point at which the executry was declared insolvent but she had received what she was due from the estate, as I understood the position, and she was part of the mediated settlement. I cannot see how the executors have a duty of care to ensure that a former executor not be sued by an aggrieved creditor. On a proper analysis of these pleadings it is clear to me, as submitted by Mr Barne, that the duty of care averred is one said to be owed to the creditor, namely Mrs Pentland-Clark, to ensure that she is paid what is due to her. As Lord Carloway emphasised in the case of Pentland-Clark as judicial factor v Maclehose in 2012 at paragraph 41 the executor's duties are factorial. An executor's position is now an administrative one (Currie on Confirmation) while a beneficiary may be able to raise an action calling on an executor to realise and account for an asset where the executor has failed to realise that asset, an executor does not owe general duties of care to beneficiaries. While the pursuer was a beneficiary to the estate she is not suing in that capacity. It seems to me that this action is framed as if it were an action of professional negligence, particularly having regard to the terminology used in the pleadings such as, "exercised the degree of care and skill to be expected of reasonably competent executors". I am unaware of executors being in a category of "professionals". As is clear from the authorities to which I was referred executors are simply administrators of the estate. There is in my view no duty of care owed by the defenders as averred in the present case.

[43] In addition I cannot see how it could have been within the contemplation of the executors that Mrs Pentland-Clark would have engaged in such a range of court actions against "all and sundry" using what was described as a "scattergun approach". It is averred that the executors ought to have known of Mrs Pentland-Clark's litigious nature, however until the series of actions now complained about, Mrs Pentland-Clark had not previously raised any court actions. I cannot see how in these circumstances the executors could possibly have foreseen what occurred in relation to Mrs Pentland-Clark. There are no factual averments supporting the assertion that the actions of Mrs Pentland-Clark were foreseeable. There is in addition in the pleadings no causal connection between the duties relied upon by the pursuer and the cause of action brought by Mrs Pentland-Clark.

[44] In relation to the £145,000 paid as part of the mediation settlement, and putting aside the issue of prescription, this claim for repayment is in my view totally misconceived. The pursuer seeks in essence repayment of a sum of money which she agreed to pay over as part of a mediated settlement. No effort has been made to reduce this minute of agreement. Accordingly the minute of agreement still stands. The pursuer herself as part of that mediation agreement agreed that "no claim will be made by the beneficiaries or any of them against the executor or their advisors, past or present, in respect of any acts or omissions to date, or arising out of the implementation thereof." I cannot agree with Mr Campbell that the interpretation of this phrase requires evidence at proof. The meaning is quite clear in my view. In seeking repayment of this sum a beneficiary, as the pursuer was, is seeking to raise an action against the executors in respect of alleged omissions by the executors. Having reached that agreement with the parties to the mediation and having given that undertaking the pursuer is in my view personally barred from seeking repayment of this sum while the minute of agreement still stands.

[45] While I do not need to deal with this aspect of the case it seems to me that the specification of the legal expenses being sought is wholly inadequate in this case. As I have identified in the course of this opinion I am not clear what expenses the pursuer is seeking and in relation to which actions, as the case is presently pled. I have already indicated that if she is claiming any expenses in relation to the actions by the children then she is not entitled to do so by virtue of the way that the case is pled however the implication from some of the phraseology within the pleadings is that a claim in respect of some of those actions is being made. It is also unclear what interest is being sought and on what basis and in respect of which sums the interest is being claimed.

[46] Had I not upheld the plea of prescription I would have upheld the defenders plea in relation to payment of £145,000 made in terms of the mediation agreement on the ground of personal bar. I would otherwise have dismissed this action on grounds of relevancy and lack of specification.