31 July 2013
PRESS SUMMARY
McGraddie v McGraddie and another (Scotland)
[2013] UKSC 58
ON APPEAL FROM: The Court of Session (Inner House), [2012] CSIH 23
JUSTICES: Lord Neuberger (President), Lady Hale, Lord Wilson, Lord Reed, Lord Hughes
BACKGROUND TO THE APPEAL
This appeal concerns a particular application of settled principles which delineate the circumstances in which an appellate court may interfere with findings of fact made by a judge sitting at first instance.
The Appellant (“DM”) and first Respondent (“RM”) are father and son respectively. DM and his wife left Scotland many years ago to live in the United States. RM and his partner (“LG”), who is the second Respondent, live in Scotland with their son. The Appellant and his wife decided to return to Scotland in 2005 when the latter became terminally ill. DM asked RM, who is a property developer, to find a suitable property for him and his wife to live in upon their return. When RM did so, DM transferred the funds required to purchase that property (“the St Helens Gardens property”) to RM’s bank account. RM subsequently arranged the purchase. However, unknown to DM, he arranged for the title to the property to be taken in his own name. DM moved into the property with his wife on 1 January 2006, but she died six days later. In February 2007, DM gave RM a cheque in his favour for £285,000, the reason for which is subject to the dispute which gives rise to this appeal. RM and LG used £200,000 from that amount, together with £90,000 raised by way of a mortgage, to buy a newly built house in Stewarton (“the Lochrig Court property”), taking title in their own names. The remainder of the £285,000 was spent on cars, the repayment of debts, improvement of their existing home prior to sale and finishings for the Lochrig Court property.
DM raised the present proceedings later in 2007 seeking, among other remedies, the conveyance of the two properties to him. He maintained that, first, RM had acted without his authority in taking title to the St Helens Gardens property in his own name and, second, that RM and LG had acted without his authority in taking title to the Lochrig Court property in their names. In relation to the former, RM maintained that DM had instructed that title to the St Helen’s Gardens property was to be taken in his (RM’s) name. In relation to the latter, RM and LG maintained that the payment of £285,000 had been a gift. The case proceeded to proof before the Lord Ordinary, Lord Brodie, in the Outer House of the Court of Session, who found in favour of DM and ordered that the properties be transferred to him.
It was central to the Lord Ordinary’s decision that he preferred the evidence of DM over that of RM on the central issues of fact, finding that DM had not made substantial gifts to RM. RM and LG appealed to the Inner House of the Court of Session in relation to the Lochrig Court property only. Noting that the Lord Ordinary had stated that he did not find any of the other evidence materially to undermine DM’s account, the Inner House identified a number of aspects of the evidence which they asserted did exactly that. They therefore concluded that they were entitled to overturn the Lord Ordinary’s decision on the basis that he had gone “plainly wrong” and to substitute their own decision on the facts from the printed record of proceedings.
JUDGMENT
The Supreme Court unanimously allows DM’s appeal. Lord Reed gives the judgment of the court.
REASONS FOR THE JUDGMENT
The Inner House considered that eight separate aspects of the evidence had undermined DM’s evidence [24]. However, of these, only four were of substance [25-26], and each of those had been expressly taken into account by the Lord Ordinary in reaching his conclusion on DM’s credibility [27].
In a case such as the present one, in which the trial judge is faced with a stark choice between irreconcilable accounts, the credibility of the parties’ testimony is of primary importance. In that regard, the Lord Ordinary found that DM was a credible witness on the central issue of whether the payment of £285,000 was a gift, notwithstanding a number of aspects of the evidence which could be regarded as detracting from his credibility [28, 30]. The question whether DM’s evidence was to be regarded as credible and reliable, having regard to the other evidence in the case, was pre-eminently a matter for the Lord Ordinary [28].
Further, the Inner House did not consider the weight of the evidence adverse to DM’s credibility in the context of the evidence as a whole. They did not appear to have given any weight to the extent to which the Lord Ordinary’s conclusion was affected by the manner in which the witnesses gave evidence, which the Inner House could not have assessed for themselves from the printed record. They did not consider the Lord Ordinary’s assessment of the character of the witnesses or the unchallenged finding that RM had acted in breach of trust in relation to the St Helens Gardens property. They also did not scrutinise the evidence of RM or LG in the same way they did that of DM [29].
It was not correct for the Inner House to rely on the case of Hamilton v Allied Domecq plc [2007] UKHL 33, in which a critical finding of fact had been made which was unsupported by the evidence. That was not the position in the present case [31].
Finally, in relation to the issues raised on the appeal, the Lord Ordinary’s assessment that the evidence of the Respondents’ son added little or nothing on the basis that he largely recounted what he had been told by his parents, was borne out by the relevant passages of the evidence. The Lord Ordinary did not therefore err in failing to give greater weight to that evidence [32].
In the whole circumstances, therefore, the Inner House had no proper basis for concluding that the Lord Ordinary had gone plainly wrong, let alone that on a re-consideration of the whole evidence the opposite conclusion should be reached [33].
While the case concerned the application of long settled legal principles, the Court does not criticise the bringing of the appeal. The failure of an appellate court to apply those principles correctly may raise a point of law of general public importance [35].
References in square brackets are to paragraphs in the judgment
NOTE
This summary is provided to assist in understanding the Court’s decision. It does not form part of the reasons for the decision. The full judgment of the Court is the only authoritative document. Judgments are public documents and are available at:
https://www.supremecourt.uk/decided-cases/index.html