Scottish Court of Session Decisions

EXTRA DIVISION, INNER HOUSE, COURT OF SESSION

[2015] CSIH 75

A523/12

 

Lady Paton

Lady Smith

Lord Drummond Young

OPINION OF THE COURT

delivered by LADY PATON

in the cause

 

THERESE MARGARET MCAULEY or CHALMERS

Pursuer and reclaimer;

against

CHRIS JOHN WILLIAMS CHALMERS

Defender and respondent:

Pursuer and reclaimer:  Tariq;  Harper MacLeod LLP

Defender and respondent:  Logan;  TC Young

27 October 2015

A forged signature
[1]        In this reclaiming motion, the pursuer and reclaimer challenges the Lord Ordinary’s refusal to grant decree of reduction of a forged disposition.  The references below are to paragraphs of the Lord Ordinary’s opinion dated 7 November 2014.

[2]        In the course of divorce proceedings which began on 24 February 2012 (paragraph 26), the pursuer’s lawyer Miss Jones carried out a search of the Land Register (paragraphs 19, 28).  She discovered that the pursuer’s husband, Paul Chalmers, had purchased a flat at 38 Hotspur Street, Glasgow in 1998 (paragraphs 12, 19, 28).  He had taken the title in the pursuer’s name, without her knowledge or consent, by a disposition signed by the seller John Alston McKelvey and dated 26 October 1998 (paragraphs 12, 13).  In 2006, by a disposition dated 16 March 2006, the property was further disponed “for love, favour and affection” to the Chalmers’ son Chris, the defender in this action (paragraphs 1, 2).  As part of the transaction, the defender had signed Stamp Duty Land Tax forms relating to the property.  The defender had also permitted Mr Chalmers (or Mr Chalmers trading as Rentier Properties, a property business) to continue receiving the rental income from the flat after the title had been transferred into the defender’s name (paragraphs 9, 35-37, 80, 84).

[3]        The pursuer had been unaware of these events until they were drawn to her attention by Miss Jones during the divorce proceedings (paragraphs 28-30, 44).  As the pursuer averred in condescendence 3 of her divorce pleadings, she considered that she was having difficulty obtaining information from Mr Chalmers, particularly in relation to his capital and income.  Mr Chalmers, who was working in Dubai, denied that there was any such difficulty.

[4]        When the title deeds for Hotspur Street were examined, it was found that the pursuer’s signature had been forged on the 2006 disposition (paragraphs 1, 7, 11, 28, 43), and that Paul Chalmers had acted as the witness to the signature.  The pursuer added some averments about her discovery of Hotspur Street in her divorce pleadings as follows:

“COND. 3 … The pursuer has discovered that a property at 38 Hotspur Street was formerly registered in her sole name.  In or about 2006 the defender made arrangements for that property to be transferred to the sole name of the parties’ son Christopher Chalmers.  The pursuer has no knowledge of signing a disposition to that effect.  She does not know who may have signed such a document on her behalf.  Title to said property was registered in the name of Christopher Chalmers in early 2008.”

 

Those averments were contained in the closed record date‑stamped 8 November 2012 in the divorce proceedings (appendix document 4).  Thus clear notice was given to Mr Chalmers by 8 November 2012 that the pursuer had discovered that Hotspur Street had been put in her name, yet had subsequently been transferred to her son the defender without her knowledge or signature.  The pursuer’s averments are referred to and summarised by the Lord Ordinary in paragraph 49 of his opinion. 

[5]        The pursuer’s husband Mr Chalmers did not respond to these averments with any information, explanation, or disclosure.

[6]        A divorce minute of agreement was then signed by the pursuer and her husband.  In that minute, dated 12 November 2012, the partnership between the pursuer and her husband (Rentier Properties) was dissolved.  Mr Chalmers was to continue running the business (paragraph 3).  In paragraph 52 of the Lord Ordinary’s opinion, it is noted that the minute –

“… provided for [the pursuer’s] resignation from the partnership and an election for the continuation of the partnership business.  Save as otherwise provided for, [the pursuer’s] rights and interests in the partnership assets, capital accounts, and partnership income were transferred to Paul Chalmers.  Both parties renounced any right they may have against each other …”

 

[7]        A few days after the signing of the minute of agreement, the pursuer raised the present action of reduction and interdict against her son, the defender, who was employed as a property manager at D J Alexander (paragraph 9 of the Lord Ordinary’s opinion).  In that action she narrated the ongoing divorce action between herself and her husband Paul Chalmers;  the discovery of Hotspur Street and such facts as she had been able to ascertain in relation to the title;  the fact that she and her son were “estranged”;  and her concern that her son might sell or otherwise alienate Hotspur Street before matters were resolved.

[8]        On 22 November 2012, Lord Jones granted interim interdict against the defender or anyone on his behalf from selling or otherwise alienating 38 Hotspur Street.

[9]        In his defences to the present action of reduction and interdict, the defender averred that he believed that his father Paul Chalmers had purchased the subjects.  His father’s reason for putting the title in the pursuer’s name was not known.  His parents had operated a property partnership called Rentier Properties.  That partnership held some properties in joint names, some in Paul Chalmers’ name, and Hotspur Street in the pursuer’s name.  All of those properties were held in trust for the partnership.  The minute of agreement dated 12 November 2012 had settled all issues relative to their divorce.  The pursuer ought to have been aware that she had never been the owner of Hotspur Street but had held it in trust for the partnership.  She had renounced any claim that she had as a partner or former partner by the minute of agreement and accordingly had no right to a remedy of reduction.  In Answer 7 of the present action of reduction, the defender further averred:

“… the minute of agreement was signed on 12 November 2012.  The present proceedings were raised and served upon the defender within days of that agreement being signed.  Had Paul Chalmers been aware that the pursuer was seeking to recover the subjects and thereby an additional £130,000 or thereby of additional matrimonial property he would not have signed it.  The pursuer gained an advantage thereby.  In the event that reduction were granted and she was not obliged to account to Paul Chalmers for his interests in what would have been matrimonial property as well as his interests as the continuing principal of Rentier Properties she would have gained an unfair share of matrimonial property and have failed to give a true account as a former partner of said firm.  In the said circumstances even if she is not the signatory of the disposition of the subjects (which is not known and not admitted) decree should be refused.”

 

[10]      Decree of divorce, giving effect to the minute of agreement dated 12 November 2012, was pronounced in February 2013 (paragraph 2 of the Lord Ordinary’s opinion).

[11]      In mid‑2014, a proof before answer in present action of reduction took place before Lord Boyd of Duncansby.  Some two months prior to the proof diet, the defender moved into Hotspur Street and began living there as his home (paragraph 9 of the Lord Ordinary’s opinion).

[12]      In his opinion dated 7 November 2014, the Lord Ordinary acknowledged that there was a basis for reducing the disposition, namely the forged signature.  He rejected the defender’s contention that Hotspur Street had been owned by his parents’ partnership Rentier Properties and that the pursuer’s title had been in her capacity as partner.  He accepted certain other submissions made on behalf of the defender (all as set out in his opinion) and refused to grant a decree of reduction and interdict.  By interlocutor dated 7 November 2014, the Lord Ordinary dismissed the action, sustaining the defender’s second plea-in-law, which was in the following terms:

“2.       In any event the pursuer having entered the minute of agreement with Paul Chalmers, she is personally barred from pursuing this action, and it should be dismissed.”

 

Further, by interlocutor dated 5 December 2014, the Lord Ordinary awarded expenses in favour of the defender.

 

The Lord Ordinary’s opinion
[13]      The Lord Ordinary noted the defender’s submissions in paragraphs 65 to 68 of his opinion.  Read short, counsel for the defender submitted first, that Hotspur Street belonged to the partnership Rentier Properties.  The pursuer’s only interest in the property was therefore as a partner in the firm.  However the pursuer had renounced any interest in the firm in the minute of agreement.  Secondly, the court should not exercise its discretion by granting reduction of the title.  The pursuer had made an informed decision when she signed the minute of agreement, knowing what she did about Hotspur Street (as reflected in her averments in the divorce action, set out in paragraph [4] above).  Having signed that minute of agreement, she was personally barred from seeking reduction.  In signing the minute of agreement she had not only renounced her claim against the assets of Rentier Properties, but she also sought to gain an unfair advantage by reaching a settlement and then by taking steps to recover an asset which she and her lawyer accepted would otherwise have been part of the matrimonial property and dealt with in the settlement.  When the court was asked to exercise its discretion, each case turned on its own circumstances.  The defender had obtained Hotspur Street in good faith and had spent money on it.  He now lived in Hotspur Street as his home.  He would lose the property if decree of reduction were granted.

[14]      In a later section headed “Decision and reasons” (paragraphs 85 to 93) the Lord Ordinary noted:

“[85]    I have found as a fact that 38 Hotspur Street did not form part of the Rentier Property portfolio. It follows that Mrs Chalmers could not have held it in trust for the firm.  Accordingly I will repel the defender’s first plea in law.

[86]      I now turn to the defender’s alternative submission.  I am prepared to accept that as a general proposition the decision on whether or not to grant a decree of reduction is a matter of discretion and will depend on the facts in each case.  That does not mean however that the decision is one at large and wholly dependent on what might be seen as the equities in the case. In William Dodd v Southern Pacific Personal Loans and others the pursuer condoned the forgery and was shown to have benefitted from the proceeds.  Mr Tariq submitted that if I refused to grant reduction the court would in effect be endorsing a fraud.  Although he did not cite the case some support for that approach comes in the speech of Lord Hatherley in Lockyer v Ferryman (1877) 4R (HL) 32 at 39 where he said, ‘It is well established…. that nothing can protect the perpetration of a fraud.’

 

[87]      However I am not persuaded that the matter is quite as simple.  If it were the case that, with the pursuer’s knowledge and agreement, 38 Hotspur Street had been purchased and the title put in the pursuer’s name either to be held in trust for the firm or in her own right and, subsequently, her signature had been forged on the disposition in favour of her son then it is difficult to conceive of a defence to an action of reduction.

 

[88]      That of course is not what happened.  The pursuer did not know of the acquisition of the property.  She did not know that it had been put in her name.  She accepted it was not intended as a gift to her.  Putting to one side her interest in matrimonial property she had no interest in the property before her signature was forged and the disposition granted in favour of the defender.  The fraud that was perpetrated here was a wider one than simply the forging of a signature.  The pursuer was used by Paul Chalmers as a means of concealing his interest in the property.

 

[89]      The closest analogy that I can think of is of someone fraudulently using someone else’s bank account to conceal money transfers.  If money was transferred into the account without the account holder knowing about it and was then transferred out again by that person forging the account holder’s signature the account holder would not ordinarily be entitled to the monies that had been in his account at the instance of the fraudster.

 

[90]      If decree of reduction were to be granted then the pursuer would not be restored to the position she was in before her signature was forged.  Since then she and her husband have divorced.  Reduction of the disposition would restore the pursuer’s real right in the property.  However had she had the real right at the time of the divorce it would have formed part of the matrimonial property and fall to have been dealt with at that time.  Both the pursuer and her solicitor, Ms Jones, accepted that is what would have occurred.  There was however a deliberate decision by the pursuer, advised by Ms Jones, to delay raising this action until after the divorce.  I am satisfied that the reason for doing this was so that the pursuer could gain an advantage over her husband and not have to put 38 Hotspur Street into the pot of matrimonial property.

 

[91]      When the pursuer signed the minute of agreement she was aware of the position with regard to Hotspur Street and the action that was open to her.  She decided however in the face of such knowledge to sign the minute of agreement and in so doing settle the division of matrimonial property between her and her husband.

 

[92]      The defender on the other hand is not blameless.  I have found that he colluded with his father at least in so far as the payment of rental income after 2006.  On the other hand I am not satisfied that he participated in any fraud on his mother.  I am satisfied that there was an intention on the part of Paul Chalmers that the property should ultimately go to his son, Chris.  The defender is now in occupation of the property and it is his home.

 

[93]      In all the circumstances, particularly having regard to the fact that it was never intended that the pursuer should have any beneficial interest in the property, that she delayed raising this action beyond the signing of the minute of agreement and that the defender did not participate in any fraud on the pursuer I have decided that I should sustain the defender’s second plea in law and refuse to grant decree of reduction. I shall repel the defender’s third and fourth pleas in law and repel the pursuer’s pleas in law.  I shall reserve the question of expenses.”

 

[15]      The pursuer reclaimed.

 

Submissions for the pursuer and reclaimer
[16]      The granter’s signature in the 2006 disposition had been forged.  Accordingly the 2006 disposition was void, a nullity (Lockyer v Ferryman (1877) 4 R (HL) 32, at page 39).  The court had no discretion whether or not to grant reduction, but must do so unless exceptional circumstances were made out, namely that the pursuer had adopted or authorised the forged signature (cf Muir’s Exrs v Craig’s Trs 1913 SC 349;  Dodd v Southern Pacific Loans [2006] CSOH 93).  No such exceptional circumstances had been proved.  Accordingly the forger – thought to be Paul Chalmers – had to bear the consequences of his own actions.

[17]      Esto there was any question of the court’s discretion, the Lord Ordinary had erred in its exercise.  He had taken irrelevant considerations into account.  He had left relevant considerations out of account.  He had decided in favour of an applicant who did not have clean hands (the defender).  Counsel referred to factual details, taken from the court’s opinion and reflected in the discussion section below (paragraphs [23] to [33] below).  Counsel also referred to Clydesdale Bank v Paul (1877) 4 R 626, at page 628;  Universal Import Export GmbH v Bank of Scotland 1995 SC 73, at page 80C;  McLeod v Cedar Holdings Ltd 1989 SLT 620 at pages 623L to 624B;  Royal Bank of Scotland plc v Highland Financial Partners LP [2013] EWCA Civ 328, paragraph 159.

[18]      In the result, it was submitted that the Lord Ordinary had erred in law (paragraph [16] above).  Esto the Lord Ordinary was entitled to exercise his discretion, he had erred in so doing (paragraph [17] above).  The interlocutors of 7 November and 5 December 2014 should be recalled, and decree of reduction pronounced.

 

Submissions for the defender and respondent
[19]      The Lord Ordinary was correct to find that exceptional circumstances existed, justifying refusal of a decree of reduction.  The court had to weigh up all the facts.   Factors affecting the court’s willingness to grant a decree of reduction included the conduct of a party, in particular the pursuer’s conduct in signing the divorce minute of agreement in full knowledge of Hotspur Street and the fact that it was not included in the matrimonial property;  also the pursuer’s decision to proceed to finalise the divorce with Hotspur Street unaccounted for (cf Lockyer v Ferryman (1877) 4 R (HL) 32;  Dodd v Southern Pacific Loans, [2006] CSOH 93).  A further relevant factor was the inconvenience which a decree of reduction might cause, such as removing ownership of the flat from an innocent party who was using it as his home (cf Grahame v Magistrates of Kirkcaldy (1882) 9 R (HL) 91;  Universal Import Export GmbH v Bank of Scotland, 1995 SC 73 at page 80C-E).  Each case had to be decided on its particular facts (Robertson’s Exr v Robertson, 1995 SC 23 pages 29H to 30D). 

[20]      In the present case, the pursuer had no beneficial interest in the property (paragraphs [7] and [88] of the Lord Ordinary’s opinion).  She had not paid for the property.  She had not been aware that she owned the property, until she no longer owned it.  She accepted that the property was not intended as a gift.  She was currently no better or worse off than before.  Also the property had not been included in the divorce proceedings and therefore had not been properly dealt with as matrimonial property.  As the Lord Ordinary concluded in paragraph [90], the pursuer had delayed raising any action in relation to the property so that she “could gain an advantage over her husband and not have to put 38 Hotspur Street into the pot of matrimonial property”.  The Lord Ordinary had been entitled to make the analysis he had.

[21]      In relation to the submission concerning “clean hands”, the Lord Ordinary had not said that the defender was lying.  The Lord Ordinary was entitled “to see if the misconduct of the [defender was] sufficient to warrant a refusal of the relief sought” (Royal Bank of Scotland plc v Highland Financial Partners LP [2013] EWCA Civ 328 paragraph 159).  The Lord Ordinary was entitled (a) to discriminate between concealment of rental income from the property and concealment of ownership of the property;  and (b) to conclude that he was not satisfied that the mere signing of the Stamp Duty Land Tax forms meant that the defender had “some involvement” in the fraud.

[22]      Ultimately the Lord Ordinary had considered and weighed up all the relevant factors and concluded that the pursuer had taken a particular course of action in order to achieve a windfall.  Accordingly the Lord Ordinary decided, as he was entitled to, that in this particular case, in the exercise of the court’s equitable discretion, decree of reduction should not be granted.  The reclaiming motion should be refused.

 

Discussion
[23]      In our opinion, a forged disposition is a nullity.  It is wholly void, not merely voidable (Gordon, Scottish Land Law (3^rd ed), paragraph 12-41;  Walker, Civil Remedies, page 151;  Walker, The Law of Contracts (3^rd ed), paragraph 15.3;  Lockyer v Ferryman (1877) 4 R (HL) 32 at page 39;  Stair Encyclopaedia Vol II Fraud (Professor JM Thomson) paragraph 758).  Only in exceptional circumstances may a forged disposition have any effect, the exceptional circumstances being where the person whose signature has been forged expressly or impliedly authorises or adopts the forged signature as his or her own (Muir’s Exrs v Craig’s Trs, 1913 SC 349, pages 354-355;  Mackenzie v British Linen Company (1881) 8R (HL) 8;  Dodd v Southern Pacific Loans Limited [2006] CSOH 93;  Gloag, Contract (2^nd ed) page 546;  Rankine, Personal Bar, page 209).  Furthermore, we consider that the system of Scottish land registration could be subverted if it were possible to forge a signature on a disposition which was duly registered, and then put forward equitable circumstances supporting a contention that the forged disposition should not be reduced, with the ultimate result (in the context of land tenure) depending upon the discretion of the court.

[24]      In the present case, there is no evidence that the pursuer expressly or impliedly authorised or adopted as her own the forged signature on the 2006 disposition.  We therefore agree with counsel for the pursuer that the Lord Ordinary erred in law by adopting the approach of an exercise of discretion.  The deed is null and of no effect, and the pursuer is entitled to decree of reduction.

[25]      Lest we are wrong, we give our views on the assumption that the court had a discretion to decide whether or not to reduce the deed. 

[26]      At the outset, we accept that a discretionary decision should not be lightly interfered with.  In Britton v Central Regional Council 1986 SLT 207 it was held that:

“… this appellate court may not interfere with the decision of the Lord Ordinary  unless it is satisfied either that he exercised his discretion upon a wrong principle or that, his decision being so plainly wrong, he must have exercised his discretion wrongly.”

 

In Thomson v Glasgow Corporation 1962 SC (HL) 36, Lord Reid said at page 66:

“…this House would not overrule the discretion of a lower court merely because we might think that we would have exercised it differently … We might do so if some irrelevant factor had been taken into account, or some important relevant factor left out of account, or if the decision was unreasonable, and we would no doubt do so if the decision could be said to be unjudicial.”

 

[27]      In the present case, there are three factors which were taken into account by the Lord Ordinary which we consider were inaccurate and therefore irrelevant.

[28]      First, in paragraph [88] of his opinion, the Lord Ordinary characterises the pursuer as having had “no interest in the property before her signature was forged and the disposition granted in favour of the defender”.  We cannot agree.  The pursuer was the named disponee in a valid disposition of 38 Hotspur Street, with a genuine signature by the then granter, John Alston McKelvey, all recorded in the Land Register in 2008.  She therefore had a real right in the property which could not, in law, be taken away from her without her knowledge, consent, and signature.  It is in our view irrelevant that she did not know about the title, or that she had not contributed any funds towards the purchase, or that she had never lived in the property.  A valid disposition duly recorded in the Land Register cannot properly, in our view, be dismissed as “no interest in the property”.

[29]      Secondly, in paragraph [56], the Lord Ordinary stated that:

“… there was a deliberate decision [by the pursuer and her lawyer] not to commence [the reduction] proceedings until after the divorce had been finalised.”

 

In paragraph [90] of his opinion, the Lord Ordinary confirmed that:

“… There was however a deliberate decision by the pursuer advised by [her lawyer] to delay raising this action until after the divorce …”

 

However, we note from the Lord Ordinary’s opinion that the pursuer raised the present action of reduction and interdict in mid-November 2012, while the divorce action was still proceeding (see paragraph [7] above).  In particular, averments relating to Hotspur Street were introduced by the pursuer into the divorce action:  those averments appeared in the closed record date-stamped 8 November 2012 (see paragraph [4] above).  The action of reduction and interdict was raised a few days after the signing of the minute of agreement dated 12 November 2012.  Interim interdict against the defender from selling or alienating Hotspur Street was granted on 22 November 2012 (see paragraph [8] above).  Decree of divorce was not granted until February 2013 (see paragraph [10] above).  Thus on the basis of the Lord Ordinary’s own findings‑in‑fact, we are unable to agree that the reduction proceedings were delayed until after the divorce had been finalised. 

[30]      A third factor taken into account by the Lord Ordinary was the purpose said to have underlain the pursuer’s actions, namely “so that the pursuer could gain an advantage over her husband and not have to put 38 Hotspur Street into the pot of matrimonial property” (paragraph 90 of the opinion).  The implication is of an ambush of Mr Chalmers following upon decree of divorce, after he had, in the minute of agreement, agreed the settlement of her claim for financial provision on divorce, yet Hotspur Street had not been taken into account.  In our view, the third factor becomes questionable when it is borne in mind that the pursuer, having been kept in ignorance about Hotspur Street by her husband but having been told about it by her lawyer, openly brought the question of Hotspur Street to the attention of Mr Chalmers (and the court) three months before the divorce was finalised.  It seems to us that the pursuer was taking such steps as she could to highlight and ventilate the question of Hotspur Street, rather than keeping quiet about it in the divorce action.  The person who was being unforthcoming about Hotspur Street was, in our view, Mr Chalmers.  It seems to us that the pursuer, having received no information, explanation, or averments about Hotspur Street, went on to conclude her divorce as best she could on the material available.  If Mr Chalmers considered that the minute of agreement was not fair or reasonable, he could have sought to have it set aside or varied (Family Law (Scotland) Act 1985 section 16(1)(b)) (but did not).

[31]      Against that background, we are of the opinion that the Lord Ordinary took three irrelevant factors into account;  that the exercise of his discretion was substantially affected thereby;  and that this is a case where we would, had the issue arisen, have interfered with the exercise of the Lord Ordinary’s discretion.  The matter would then have been at large for this court, and the circumstances surrounding the forged signature in the 2006 disposition would require to have been reconsidered.

[32]      Those circumstances include the following:

• The pursuer was unaware of, and was not a participant in, the forging of her signature on the disposition.She was assessed by the Lord Ordinary as being “truthful on the whole” (paragraph 8 of his opinion).
• By contrast, the Lord Ordinary considered that her husband Mr Chalmers was the likely forger (and therefore a wrongdoer, apparently involved in a crime – forgery – although it must be emphasised that the identity of the forger has never been conclusively proved in court).In the course of his evidence in the action of reduction, when asked whether he had forged his wife’s signature, Paul Chalmers replied “I cannot recollect”.That evidence was disbelieved by the Lord Ordinary (paragraph 11).In his opinion, the Lord Ordinary concluded:

  “[11]    … From my findings it appears that, at the very least, Paul Chalmers was engaged in tax avoidance by not declaring income from Hotspur Street.  He also appears not to have disclosed that income in the course of the divorce proceedings.  On the whole I did not find him a credible or reliable witness …

   

  [88]      ... The pursuer was used by Paul Chalmers as a means of concealing his interest in the property [viz Hotspur Street] …”

   

• As for the defender, the Lord Ordinary did not accept parts of his evidence.In particular, the defender was disbelieved when he claimed that the pursuer knew about Hotspur Street, and knew what was happening with Hotspur Street (paragraphs 24 to 27, and 38 to 40 of the opinion). The Lord Ordinary formed the view that:

  “[9] ... At times [the defender’s] evidence lacked candour, particularly when dealing with questions regarding the income from Hotspur Street during his ownership and before he commenced living there.

   

  [10] … a possible reason for some of [the defender’s] vague and evasive answers was a misguided attempt to protect his father from possible investigation by HMRC …

   

  [59] I am satisfied that [the defender] was not being truthful when he told the court that he did not know where rental income was being paid …

   

  [84] There is no doubt that [the defender] colluded in the rental income continuing to go to his father after he became the ostensible owner of the property.  I am satisfied that neither of them told the court the full truth about this matter …” 

   

  Thus the defender cannot in our view qualify as a third party acting in good faith having paid full consideration (Clydesdale Bank v Paul (1877) 4 R 626 at pages 628 to 629;  Universal Import Export GmbH v Bank of Scotland, 1995 SC 73 at page 80C).  Nor can he be seen as coming to the court with clean hands (Royal Bank of Scotland plc v Highland Financial Partners LP 2013 EWCA Civ 328 paragraph 159). 

• The pursuer was quite open about her discovery of Hotspur Street and the forged signature.She added relevant averments in her divorce action (see paragraph [4] above).Paul Chalmers was therefore alerted to the fact that the matter had been brought out into the open.He could have tackled the issue in the course of the divorce, thus avoiding any possibility of the divorce being finalised without Hotspur Street’s history and status being fully taken into account.He could have invited the court not to give effect to the minute of agreement in the circumstances outlined by the defender in paragraph [9] above, and if necessary to set aside or vary that minute.
• Even if any steps taken by the pursuer and her lawyer could be criticised, we consider that a detailed examination of all matters including the rents received by Mr Chalmers and the overall outcome of the divorce proceedings would be required in order to ascertain which party gained an advantage over the other as a result of Hotspur Street.
• The defender received as much of a windfall as any which the pursuer might have been perceived to have received. The defender did not have to pay a purchase price for Hotspur Street.In 2006 he was given the title of a property worth about £130,000 “for love, favour and affection”, the title being recorded in 2008. He was found to have colluded with his father over the rental income accruing after the title was transferred into his name.Whenever his evidence differed from the pursuer’s, the pursuer’s evidence was preferred.The defender did not move into Hotspur Street until about two months prior to the proof before answer in mid-2014.

[33]      Against that background, and bearing in mind that, as a general proposition, a forger must bear the consequences of his own actions (cf dicta in McLeod v Cedar Holdings Ltd 1989 SLT 620 at pages 623L to 624B), we consider that the proper exercise of the court’s discretion would result in the granting of decree of reduction.

 

Decision
[34]      For the reasons given above, we allow the reclaiming motion and recall the interlocutors of 7 November 2014 and 5 December 2014.  We grant decree of reduction, and continue the case to a by order hearing to be addressed on the questions of interdict and expenses.