AA v. BB

Factual and Procedural Background

The Plaintiff seeks a decree of divorce on the grounds of irretrievable breakdown of the marriage. The Defendant requests, inter alia, an order for the transfer of the Plaintiff's entire interest in two heritable properties known as CC and DD, and the transfer of the Plaintiff's entire interest in a business known as "EE," including related assets and entitlements. Failing these transfers, the Defendant seeks a monetary payment of £2,000,000.

The Defendant also seeks interim interdicts to prevent the Plaintiff from disposing of the specified properties and business assets outside the ordinary course of trade, pursuant to section 18 of the Family Law (Scotland) Act 1985.

The action was served on the Defendant, who lodged a notice of intention to defend. The case was sisted pending financial negotiations, then re-enrolled for further procedure. Amendments to pleadings were allowed, but the Sheriff refused interim interdict and other requested orders.

The Defendant appealed the refusal of interim interdict.

Legal Issues Presented

1. Whether the Defendant demonstrated a prima facie case sufficient to justify the granting of an interim interdict preventing the Plaintiff from disposing of matrimonial assets.
2. Whether the Sheriff erred in law in applying the test for interim interdict as articulated in Burn Murdoch.

Arguments of the Parties

Defendant's Arguments

• The Sheriff failed to appreciate the nature of the case regarding the existence of a prima facie case.
• The Sheriff erred in law concerning the test for granting interim interdict, specifically referencing the Burn Murdoch standard.
• During the appeal hearing, the Defendant submitted evidence including a bank confirmation of a loan facility up to £3 million to fund the transfer of properties and business assets.

Plaintiff's Arguments

• The Defendant's pleadings lacked sufficient specification to establish special circumstances justifying transfer of matrimonial assets to the Defendant.
• The Defendant failed to demonstrate how the transfer of properties would be funded, raising concerns about the practicality of the Defendant's proposals.
• The Plaintiff argued that without clear verification of funding, an interim interdict would unjustly freeze her ability to manage her assets.
• Following the submission of further evidence during appeal, the Plaintiff accepted that a prima facie case had been demonstrated.

Table of Precedents Cited

Court's Reasoning and Analysis

The Sheriff Principal reviewed the initial refusal of interim interdict by the Sheriff, who found the Defendant's pleadings insufficiently detailed to establish special circumstances justifying transfer of matrimonial assets. The Sheriff noted the Defendant's claim was largely unsupported by specification, and that granting interdict would unjustly restrict the Plaintiff's ability to manage her property.

On appeal, the Defendant produced additional evidence, including a bank confirmation of available loan funding to support the proposed transfers. This evidence addressed previous concerns about the Defendant's ability to fund the transfers and thus established a prima facie case.

The court emphasized that a prima facie case requires a good arguable case supported by clear evidence and proposals. With the new evidence, the balance of convenience favored granting an interim interdict to maintain the status quo pending proof, preventing potential dissipation of assets.

The court also noted issues relating to accounting for sales in the ordinary course of trade, emphasizing that strict accounting must be maintained and that failure to do so could lead to further legal action by the Plaintiff.

Ultimately, the court found that the Defendant had demonstrated a prima facie case on appeal, reversing the earlier refusal and granting the interim interdict accordingly.

Holding and Implications

The Sheriff Principal allowed the appeal, recalling the earlier interlocutor only insofar as it refused the interim interdict. The court granted an interim interdict preventing the Plaintiff from selling, transferring, or otherwise disposing of the specified properties and business assets (except in the ordinary course of trade) pending further proceedings.

The Defendant was found liable for the expenses of the appeal, with costs to be accounted and taxed accordingly. The appeal was certified as suitable for the employment of counsel.

The decision directly affects the parties by maintaining the status quo of the matrimonial assets during litigation but does not establish new precedent beyond the application of existing legal principles.