Undefended claims: the limits of intervention
Latest civil cases, including simple procedure; skilled witnesses; contempt; legal aid; pleadings; jurisdiction; diligence; reponing; default; foreign law; tenders; sanction and other expenses; appeal
The decision of the Sheriff Appeal Court in Cabot Financial UK Ltd v McGregor  SAC (Civ) 12 (16 May 2018) is the first substantive decision from this court on simple procedure. The court consisted of the President and Vice President of the court, sitting with one other sheriff principal. Accordingly, its decision gives an authoritative guide as to the operation of this new procedure.
The three appeals arose from decisions by sheriffs dismissing undefended actions for payment of outstanding debts. The sheriffs had made “unless orders” in terms of rule 8.4 seeking copies of the original agreement between the lender and the respondents, the assignations of the debt and proof of intimation, and in one case the default notice and copy intimation of same. These orders were not complied with.
The first issue was what matters could the court investigate pars judicis. These related to issues of jurisdiction, and competence as to the form of proceedings and remedy sought. Prescription was also a matter a court was entitled to consider.
Questions of relevancy and specification did not normally fall within the court’s inherent jurisdiction. These principles also applied in actions under simple procedure. In undefended actions a motion for decree in absence would be refused in very limited circumstances. In disputed claims the court had an active role in controlling how a case progressed, by identification of the issues and assisting in resolution if possible, and had wide powers to achieve this.
The principles behind simple procedure were to encourage prompt and proportionate use of time, expense and resources to achieve a just resolution of claims. Rules had been formulated very differently, with unrepresented parties in mind to assist their participation. The sheriff had a responsibility to ensure that these litigants were not unfairly disadvantaged.
The sheriff’s duty was to come to a just resolution of the claim. The interventionist approach in disputed claims was not extended to undefended claims. “Unless orders” were intended for use in disputed claims, as were the sheriff’s powers in terms of rule 1.8. Further, article 6 of ECHR did not require a court to investigate potential defences in undefended actions under simple procedure. Again, if parties either admitted a claim or did not defend it, there was no requirement to ensure a lay person was not unfairly disadvantaged. Such responsibilities applied to disputed claims.
There was also an indication that if a sheriff clerk registered a claim under simple procedure, having been satisfied that rule 3.9 was complied with, it was not thereafter for the court to query issues relating to specification and relevance. In undefended actions, to seek such issues to be further addressed ran contrary to the principle that such claims were resolved quickly and economically.
It should be observed, however, in a possible explanation for the first instance decisions, that it would not be the first time that an application for a decision was sought and an examination of the summons provided a strong indication that the claim had prescribed. Agents, of course, should not be instituting proceedings in such circumstances. In considering the observations from the Appeal Court and the references to the principles in rule 1.2, it might be observed that agents appearing in simple procedure actions should be briefed as to their client’s position regarding a negotiated resolution.
In Webster v MacLeod  SAC (Civ) 16 (31 May 2018) the Sheriff Appeal Court considered the issue of certification as a skilled person. The decision as to certification was one of judgment. An appeal against such a decision could only be pursued if there was an obvious miscarriage of justice or involved a question of principle.
The court had to be satisfied that the person concerned was skilled and it was reasonable for them to be employed. They could be employed at any time including before the institution of proceedings. They did not require to be a witness. The person seeking certification required to provide the court with adequate material to enable the court to be satisfied as to qualifications and reasonableness. Reasonableness was to be determined objectively and was assessed at the time of instruction, giving consideration to the state of affairs at that stage. It involved proportionality between the decision to employ the person at that time and the matters in issue or likely to be in issue.
Family action contempt
In TJ v SB  SAC (Civ) 15 (30 May 2018), the Sheriff Appeal Court observed that punishment in respect of contempt in civil actions arising out of a failure to comply with court orders was primarily aimed at achieving compliance with such an order. Whilst disobeying an order for contact could not be purged in respect of past defiance of the order, to defer to enable the contemnor to allow future contact in terms of the order was aimed at coercing future compliance. This could mitigate any penalty for past non-compliance. It could enable the contemnor to reflect on past behaviour and the court’s power to punish. The court had a duty to uphold its own orders. If there was no change in attitude on the part of the contemnor, the court should proceed to consideration of penalty without delay.
In Glasgow City Council v Scottish Legal Aid Board  CSIH 37 (23 May 2018) the Lord President, delivering the opinion of the court, observed that the legal aid legislation allowed a party to a litigation or proposed litigation to make representation detailing obvious flaws in the application. This, however, did not require the applicant to present the full merits of his/her case.
The basis of the action could not be challenged to the same extent as in the actual litigation. Further, intimation of grounds of refusal of legal aid only required to be expressed in broad terms. No detailed specification of the reasons or examination of the merits was required.
In a postscript to his decision in Wilson v Agco Finance  SC EDIN 24 (3 April 2018), Sheriff McGowan made observations in relation to the written pleadings in that action, which could easily apply to a significant number of actions in the sheriff court. He referred to the section in Macphail on written pleadings and observed that lengthy articles of condescendence and answers did not conform to proper practice. Long, confused and discursive narratives did not fulfil the function of enabling parties and the court to ascertain with precision the matters at issue and those agreed. An article of condescendence should not exceed 10 to 12 lines when first drafted. It would be expanded by the adjustment process. The shorter the articles, the easier it was to comprehend the issues.
Sheriff McGowan made further observations in Aldabe v Advocate General for Scotland  SC EDIN 30 (23 May 2018). Articles of condescendence should not include case law and other legal sources, which led to inability to summarise the factual and legal basis of a party’s case, rendered the opponent’s task in answering averments difficult and time consuming and made it difficult for a court to understand and evaluate a party’s case. The claim had to set out the remedy sought, the factual basis on which it proceeded and the legal proposition linking that with the remedy. Fair notice required to be given of sufficient details of the alleged facts on which the claim was based.
This plea was also taken up by Lord Brodie in the opinion of the court in Richards v Pharmacia Ltd  CSIH 31 (24 April 2018). In this instance the complaint was the pleading of evidence and not fact. In considering the issue of specification, what was required clearly depended on circumstances and the party to whom the pleadings were addressed. What that party was already aware of and might be taken readily to understand was a consideration. His Lordship also observed that the action proceeding to proof did not discount the opportunity for active case management.
BN Rendering Ltd v Everwarm Ltd  CSOH 45 (27 April 2018) concerned a contract with a standard clause that any contract governed by those terms should be governed by the laws of England and parties submitted to the exclusive jurisdiction of the English courts. The defenders took a plea of no jurisdiction. The contract related to works in Kirkcaldy. Lord Bannatyne determined that it was unnecessary for the contract to be signed by both parties to signify real consent to the clause waiving the normal rules regarding jurisdiction. The determining matter was whether there was express reference in the contract to the terms and conditions; this was answered by having regard to the nature and extent of the reference.
Diligence on the dependence
In AA v Secretary of State for Business, Energy and Industrial Strategy  CSOH 54 (1 June 2018) Lord Tyre, after considering authority, determined that it was competent to raise an action in the Court of Session for the sole purpose of obtaining diligence pending the outcome of foreign proceedings, that such an action would not be dismissed on grounds of lis alibi pendens and it was of no consequence that the Scottish courts had no jurisdiction to decide the merits. An action could also be raised both in that court and the sheriff court to enable protective diligence to be taken in respect of employment tribunal proceedings.
Actions against dissolved firms
In Khosrowpour v Taylor  CSOH 64 (15 June 2018) Lord Doherty reiterated the principle that in a contractual action against a dissolved partnership, all relevant partners required to be called as defenders unless it was averred that it was not possible to convene a partner.
Sheriff Braid in the All Scotland PI Court, in Broadley v UK Insurance  SC EDIN 34 (6 June 2018) refused a reponing note against a decree in absence granted in a personal injuries action. He referred to the decision of Sheriff Principal Stephen in EUI v Bialas-Krug  SC EDIN 38, where she observed that the court had to consider all the factors and in particular whether there was a statable defence and the explanation for the late appearance. Sheriff Braid noted that decree was not granted for a wildly excessive sum. There was a statable defence on both liability and quantum; but the defenders had no adequate system to deal with court proceedings served on them in Scotland, and there were clearly administrative failures. Weighed against that, the pursuer was entitled to a determination within a reasonable time and to grant the note would inevitably result in delay. Once actions were raised they should proceed speedily and efficiently; this required insurers to have a proper system in place for dealing with actions raised. To allow a reponing note in such circumstances might well encourage a sense of complacency on the part of defenders.
Default: sanction of dismissal
In Shanley v Clydesdale Bank plc  CSIH 32 (27 April 2018) a party litigant appealed the dismissal of his action. Raised in 2014, in 2016 it had been transferred, of consent, to the commercial roll. Numerous contentious hearings took place. Proof before answer was allowed, and various interlocutors were pronounced aimed at effective case management. At that stage the pursuer was represented. He and his solicitors failed to comply with various orders. An order for interim payment of expenses was made. Despite allowances being made and warnings issued that failure to comply risked dismissal, matters had not been addressed.
Lord Malcolm, delivering the opinion of the Inner House, observed that the orders had been made to promote the efficient conduct of the proof. Compliance was not essential for a fair trial of the disputed issues. Failure to fulfil responsibilities to the court and a client on the part of a solicitor had to be distinguished from wilful non-observance by a party. Dismissal was appropriate in instances of flagrant breach of court orders or procedural rules. A court had to bear in mind that its duty was to adjudicate on issues properly before it which could be resolved justly and fairly between the parties.
Proof of foreign law
A number of issues arose in Lord Bannatyne’s decision in Ted Jacob Engineering Group v Morrison  CSOH 51 (22 May 2018). He determined that to be entitled to give evidence regarding foreign law, a witness must claim to have some expertise in the law in question. The question was, did the witness have the relevant knowledge and experience? In addition, in construing a contract governed by foreign law, the expert’s function was to give evidence as to the rules and principles regarding construction of contracts as a matter of foreign law. The court thereafter applied these rules and principles to the disputed term. It was not for the expert to determine its construction. Further objection was taken to lines in cross-examination on the basis that no fair notice of such matters had been given. Lord Bannatyne determined that that was an issue of fair notice, which was founded on whether prejudice was caused. In this instance the expert was well able to answer the questions put without the need for further research.
In Halligan v Sutherland’s Fruit & Veg  SC EDIN 25 (13 April 2018), in considering whether he could remedy the erroneous pronouncing of an interlocutor, Sheriff McGowan first observed what procedure should have been followed in circumstances in which a Williamson tender had been lodged on behalf of the second defenders, offering to share liability equally. When this was accepted by the first defenders no further motion should then have been required as the litigation had not settled. Subsequently settlement was achieved with the pursuers. At that stage the issue of expenses quoad the defenders should have been argued.
Unfortunately a motion was lodged to accept the second defenders’ tender. This was opposed and a hearing was assigned. In the interim, settlement having been achieved, a joint minute was executed and an unopposed motion granted for decree in terms thereof. The second defenders then sought expenses against the first defenders and the issue was whether the interlocutor disposing of the action could be circumvented in some way. Sheriff McGowan considered that there was no clerical or incidental error. The former covered an error in copying or writing; the latter an error in expression or inadvertent failure to record part of a decision. Nor had there been de recenti consent of the parties. The interlocutor had to stand.
Sanction for counsel
Robertson v Esure Insurance  SC EDIN 26 (26 April 2018) is another decision on this point, this time from Sheriff McGowan. Whilst the consequences of an adverse finding against a party regarding his/her credibility and reliability might be a factor justifying certification for the employment of counsel, much depended on the circumstances. However, it did not appear to be suggested that the pursuer was dishonest. The fact that the pursuer’s agents elected to act for him and for a credit hire company in respect of recovery of charges, was a conflict external to the proceedings.
In Prospect Healthcare (Hairmyres) v Kier Build  CSIH 43 (19 June 2018) the First Division reiterated the general principle that where a pursuer is unsuccessful and incurs a resultant liability in expenses to the defender, that does not extend to liability for the expenses of any party convened by the defender against whom the pursuer has not directed a case. That principle might be modified in the event of the pursuer behaving unreasonably.
In PS v NS  SAC (Civ) 11 (20 April 2018) a divorce writ was served. The defender failed to lodge a notice of intention to defend timeously but intimated and lodged a motion for a notice to be received late. This was not opposed; however in the intervening period a motion for decree was granted by a sheriff oblivious of the defender’s motion. An appeal against the grant of decree of divorce was taken. On reviewing authorities and relevant ordinary cause rules past and present, Sheriff Holligan determined that the appropriate course was for the defender to proceed by OCR, rule 33.33A or s 110 of the Courts Reform (Scotland) Act 2014, not to appeal the decision of the sheriff. There was no error in that decision. The decision was one which the sheriff was entitled and indeed duty bound to make.
Lindsay Foulis, sheriff at Perth
Of the cases discussed in the last article (May 2018), Docherty v Secretary of State for Business, Innovation and Skills has since been reported at 2018 SLT 349, Ecclesiastical Insurance Office plc v Whitehouse-Grant-Christ at 2018 SLT 407, Centenary 6 Ltd v Craven at 2018 SLT 423, ECC v GD at 2018 SLT (Sh Ct) 160, Cullen v Scan Building Services Ltd at 2018 SLT (Sh Ct) 189, and X v Y at 2018 SLT (Sh Ct) 215.