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Bumper crop

18 May 09

Latest civil cases, including jurisdiction; recovery of documents; diligence; expenses (and caution); res judicata; remit to ordinary cause

by Lindsay Foulis

Jurisdiction

In Williamson v Williamson, Kirkcaldy Sheriff Court, 6 March 2009, Sheriff McCulloch was moved to determine that there was no jurisdiction for a divorce action. Looking at the authorities, Sheriff McCulloch held that domicile of origin could only be displaced by a domicile of choice if a party decided to make their home in a new country. Habitual residence was the place where the person had established on a fixed basis their permanent or habitual centre of interests. Unlike habitual residence, it was possible to reside in more than one country.

In Oceanfix International Ltd v AGIP Kazakhstan North Caspian Operating Co NV, Aberdeen Sheriff Court, 3 April 2009, Sheriff Tierney was moved to hold that although Aberdeen Sheriff Court had jurisdiction, a court in Kazakhstan was the convenient forum. Sheriff Tierney would have acceded to that motion, but decided that once a court in the UK is properly seized of jurisdiction over a national of a member state in terms of article 5 of Council Regulation (EC) 44/2001, the court could not thereafter decline jurisdiction.

Recovery of documents

In Bridgefoot Building Contracts Ltd v Michie, Dundee Sheriff Court, 9 April 2009 the defenders argued on appeal that an application in terms of s 1(1) of the Administration of Justice (Scotland) Act 1972 for the inspection, preservation, etc of documents should not have been granted. One argument presented was that the order was incompetent. In terms of rule 3.1.2 of the Act of Sederunt (Summary Applications and Appeals etc Rules) 1999 an application in terms of s 1(1) was made by summary application and required to aver the facts which gave rise to the belief that the items sought would no longer exist if the order was not granted. Sheriff Principal Dunlop had little difficulty in deciding that that rule was limited to applying to the “dawn raid” type orders sought in terms of that legislation.

Parties’ representatives

In the petition by Secretary of State for Business Enterprise and Regulatory Reform [2009] CSOH 50 (27 March 2009), Lord Hodge determined that the respondent company’s director could not represent the concern. There was no issue regarding acquiescence, as there was no power to give the director the right to represent his company. There was further no breach of article 6. There were advantages in limited liability status; the inability for a director to represent his company in court was simply a disadvantage.

Diligence on the dependence

In McCormack v Hamilton Academical Football Club Ltd [2009] CSIH 16; 2009 GWD 10-158, the pursuer obtained an arrestment on the dependence in respect of his claim for damages following his summary dismissal as the defenders’ manager. The Lord Ordinary recalled the arrestment but the Inner House allowed the pursuer’s appeal against the recall. The defenders were undoubtedly absolutely insolvent and thus there had to be a risk that the satisfaction of any ultimate decree might be prejudiced. In considering whether there was the possibility of prejudice, consideration was not simply limited to the present position but account could be taken of the likely position when decree was obtained. The defenders’ future financial position was dependent on the goodwill of creditors. It was reasonable that an arrestment remain in place.

Caution for expenses

In Gaelic Seafoods (Ireland) Ltd v Ewos Ltd [2009] CSOH 29; 26 February 2009, on a motion for caution for expenses at common law, Lord Drummond Young considered it particularly important that the pursuers were a limited company which could technically deal with its affairs in such a way that its creditors were left with little or nothing, where they were admittedly insolvent. The pursuers were in liquidation. Thus unless the liquidator sisted himself to the action, in view of the pursuers’ insolvency, caution should be ordered unless there were strong factors pointing to a contrary conclusion. The relevancy of the parties’ respective pleadings could be such a factor, but the fact that the defenders had a substantial business, the closeness in relationship between the parties, and the fact that the defenders had been able to carry out investigations in a claim against them elsewhere, were not such factors. Likewise the fact that a substantial sum was claimed was not relevant.

Lord Drummond Young also rejected the argument that the existence of a funding agreement and legal expenses insurance was ground for not ordering caution. On perusal of the agreement, there were doubts as to whether it gave cover. He also rejected an argument for the defenders that as the pursuers were a company incorporated in a country within the EU, the common law test for caution should be the same as the Companies Act, s 726, otherwise there was discrimination against UK corporations. A state could discriminate against its own nationals if it chose to. However, the tests which applied to s 726 applications were very similar to those applied in applications for caution.

Interim interdict

In South East Traders Ltd v Robertson, Airdrie Sheriff Court, 4 March 2009, the issue was whether leave to appeal was required. Interim interdict had been granted ex parte and continued to enable the defender to be represented. At the full hearing the order previously granted was continued. A subsequent motion for recall on the basis of a change of circumstances was unsuccessful. Sheriff Principal Lockhart held that appeal of this decision without leave was incompetent: while, following the decision of Sheriff Principal Nicholson in ASA International Ltd v Nelson 1999 SLT (Sh Ct) 44, the second hearing constituted a hearing at which full submissions were made in respect of the grant or refusal of the interim order and no leave was required at that stage, the further hearing did not result in a “grant or refusal” of interdict and leave to appeal was required.

In Mulhern v Scottish Police Services Authority [2009] CSIH 18; 2009 GWD 11-167 it was confirmed that an interim interdict which is recalled remains in force if the recall of the order is the subject of appeal.

Res judicata

In Primary Health Care Centres (Broadford) Ltd v Ravangrave [2009] CSOH 46 (26 March 2009), Lord Hodge considered the extent of the plea. It required there to be a prior determination by a court of competent jurisdiction, the decree to be pronounced without fraud or collusion, the subject matter of the actions to be the same, the media concludendi to be the same, and the parties to be the same or representative of the parties in the earlier action. In relation to the last condition, it was of no consequence that an additional party was a defender in the second action. The media concludendi directed the later court’s attention to what had been litigated and what was decided in the earlier action. A plea of res judicata was not the mirror image of a pursuer’s plea of competent but omitted. A subsequent action which apparently is res judicata can however be pursued if the pursuer can set out a different factual basis for the same claim and can show that he could not reasonably have been aware of the facts when the first action was conducted.

Proof or preliminary proof?

In G v Glasgow City Council [2009] CSOH 34 (5 March 2009), Lord Malcolm allowed an inquiry into the issues regarding time bar. An issue arose as to whether it should be a preliminary proof or a proof before answer. In allowing the latter, the factors taken into account were that the averments relevant to time bar were also relevant to issues of quantum. Further, the defences seemed to suggest that the pursuer was simply being put to the proof by the defenders. There were no apparent benefits in limiting aproof. In addition, the pursuer had already given evidence in a criminal trial. There was no apparent benefit in requiring her to give evidence on a further two occasions on the same matter.

Remit to the ordinary cause

In Hamilton v The Royal Bank of Scotland plc 2009 GWD 9-144 the issue was whether a small claim should be remitted to the ordinary roll. Sheriff Pender was persuaded that a remit was appropriate. In a small claim there was no provision for written pleadings and a debate on legal issues was not envisaged. Any evidence was noted only by the presiding sheriff. The legal difficulties inherent in the present action, the complexity of the facts and the length of proof justified the additional expense. The matter was further of great importance to the defenders and of great public interest. A remit was merited. It was difficult to determine what delay if any would be caused by the subsequent procedure if the remit was granted, in light of the facility to debate issues.

Whilst still on small claims, an interesting observation was made obiter by Sheriff Principal Young in Mono Seal Plus Ltd v Young, Tain Sheriff Court, 23 February 2009. The pursuer sued for a principal sum together with a further sum claimed under the late payment legislation for interest. The sheriff principal observed that the principal sum itself was below the summary cause limit. It only exceeded this limit when the specific sum constituting late interest was added. In terms of the Small Claims Order, the ceiling of £3,000 was exclusive of interest. Thus it was arguable that the additional claim for late payment interest did not result in the action being no longer competent as a small claim.

Awards for children

In S v Argyll & Clyde Acute Hospitals NHS Trust [2009] CSOH 43 (20 March 2009), Lord Brodie considered that an application to the court in terms of s 13 of the Children (Scotland) Act 1995 was likely only to be appropriate before the sums in damages were paid by the defenders and not thereafter.

Expenses

In Emerson v The Edrington Group Ltd [2009] CSOH 40 (19 March 2009), Lord Matthews was moved to restrict expenses when the sum awarded was significantly within the summary cause limit. The case had settled without evidence. Lord Matthews had difficulty in assessing the likely value of the claim on full liability but it did seem that it would have exceeded £5,000. A compromise figure was ultimately accepted. The initial report on which the pursuer founded seemed to support the higher valuation. A subsequent report which resulted in this view being modified was only received after the action was raised. Lord Matthews was not persuaded in the circumstances to modify the expenses, although the action could have been raised under post-2002 summary cause rules.

Witnesses

In Ross v PGS Production AS [2009] CSOH 45 (25 March 2009), Lord Malcolm refused to certify two witnesses as skilled witnesses. They appeared to have carried out investigations to ascertain whether the pursuer had a claim. Such a person was not an expert whose function it was to give advice to the court, but rather a consultant for the party instructing. They were further giving opinions on factual matters. The exact function an expert witness is fulfilling, I suspect, is often overlooked.

Sequestration

In the petition of John Ross [2009] CSOH 33 (10 March 2009), the petitioner sought recall of sequestration. It was accepted that a charge had been served and expired without payment. The fact that in terms of the document of debt a certificate was required to confirm the indebtedness did not invalidate the constitution of absolute insolvency. Temporary Judge Morag Wise decided further that the fact that the petition was continued for a number of occasions for settlement, did not preclude the court from awarding sequestration when the petitioner was not present at the relevant calling of the petition. This did not breach his right to a fair hearing. There had never been any suggestion that the petitioner was seeking to lodge a defence to the petition for sequestration.

Adults with incapacity

In the minute for Carol Cooper, Stonehaven Sheriff Court, 23 April 2009, Sheriff Principal Young considered that a solicitor’s Master Policy cover and the existence of the Guarantee Fund did not result necessarily in there being no requirement for caution if a solicitor was appointed guardian to an adult. There might however be circumstances when the cost of providing such caution was excessive when regard was had to the risk and the value of the estate.

The usual caveat applies.

Update

Since the last article Sovereign Dimensional Survey Ltd v Cooper (March article) has been reported at 2009 SLT 327, Royal Insurance (UK) Ltd v Amec Construction (Scotland) Ltd (January 2008) at 2009 SCLR 111, and Black v Black (January 2009) at 2009 SCLR 131.
 

 

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