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Interest that runs for years

21 January 19

Latest civil cases, including interest; pursuers' offers; community councils; calling; contempt of court; expenses; assessment of evidence; skilled witnesses, appeals; taxation; sequestration

by Lindsay Foulis

Interest on damages

In Sheridan v News Group Newspapers Ltd [2018] CSIH 76 (11 December 2018) the First Division allowed the pursuer’s appeal against the Lord Ordinary’s refusal to award any interest on the damages award made by the jury a considerable time before. The Lord President, reviewing authority, observed that as a general principle interest on an award was due when money had been wrongfully withheld and not paid on the day it was due. Damages were wrongfully withheld when they had been quantified and thereafter not paid. Payment of interest was a form of compensation for delay in payment. Entitlement to interest was not dependent on the conduct of parties during the litigation. Disapproval of a party’s conduct was the province of determining liability for and the level of expenses. There was no rule at common law that interest was not payable on damages until decree of the court of final appeal. Nor was interest dependent on the arguability of any grounds of appeal. There was always discretion to award interest from the date when the decision was reached at first instance. 

The Lord President also commented, on a motion to apply a rate of interest lower than the judicial rate as a consequence of the low rates in operation since 2008, that regard had be paid to the fact that the pursuer was a private individual. Such persons were unlikely to be wealthy and were thus more vulnerable to the rates applicable to mortgages and credit cards than commercial concerns. 

On a submission that the Lord Ordinary had reached a conclusion as a result of his own independent research, he commented that in an adversarial system the court was reliant on the parties’ representatives to refer the court to the relevant law and make submission thereon and on the opponent’s argument. The court was not directly involved in that process. It could, however, seek parties’ views on a matter which it had in mind. If after avizandum the court discovered a potentially relevant authority, it might seek further submission if fairness dictated such a course. However, superior courts could be expected to carry out independent research and deliver a decision without the cost and delay inherent in assigning further hearings.   

Pursuers’ offers

An interesting point arose for the Inner House in Anderson v Imrie [2018] CSIH 79 (18 December 2018), namely whether a pursuer’s offer could be employed after the court at first instance had determined matters on the merits and this final judgment was appealed. The relevant provisions of the Court of Session Rules are the same as those in chapter 27A of the Ordinary Cause Rules. Lord Malcolm, delivering the opinion, held that it was clear that pursuers’ offers were not available in respect of a challenge to a final decision from the court at first instance. They were not available in the appellate process. The purpose of such offers was to encourage early settlement. A pursuer’s offer was not the equivalent of a minute of tender.

Actions against community councils

In Kershaw v Connel Community Council [2018] CSOH 111 (5 December 2018) Lord Woolman, having considered the relevant provisions of the Local Government (Scotland) Act 1973, determined that community councils were not incorporated bodies. However, they had been created as distinct bodies with rights and duties to act in the public interest and could be sued in their own name.

Failure to have summons call

I don’t consider that an examination of the operation of s 19A of the Prescription and Limitation (Scotland) Act 1973 really falls within the ambit of these articles. Accordingly I don’t intend to cover Lord Doherty’s decision in A v Glasgow City Council [2018] CSOH 116 (9 November 2018) in detail. However, his Lordship did observe that whilst failure to have a summons call was a serious and culpable failure on the part of agents, it was a less flagrant failure than such as failing to serve the action within the triennium.

Contempt of court

In Panel on Takeovers & Mergers v King [2018] CSOH 105 (14 November 2018) Lady Wolffe determined, after reviewing authority, that there was no general requirement to obtain the concurrence of the Lord Advocate before instituting proceedings for contempt of court. Concurrence was only required when the alleged contempt constituted a breach of interdict. The latter was consistently distinguished from other forms of contempt, albeit breach of interdict was a species of contempt.

Expenses

In Zdrzalka v Sabre Insurance [2018] SC EDIN 57 (9 October 2018) Sheriff McGowan required to consider the operation of the Personal Injury Pre-Action CPAP in determining liability regarding expenses. He noted that all personal injury claims arising from accidents after 28 November 2016 which had a value of less than £25,000 required to be dealt with in terms of the protocol. Chapter 3A of the Ordinary Cause Rules made provision as to the powers available to the court if there was an issue concerning compliance with the protocol. However, the court still had wide discretion at common law. The purpose of the protocol was to have a pursuer refrain from litigation unless liability was not admitted or the admission was not to be treated as binding. Such a non-binding admission was not a breach of the protocol, but did not operate as an obstacle for proceedings. It was a factor in considering whether or not proceedings could be raised. 

If such an admission was made and proceedings were raised without further negotiation or discussion, the court considered the parties’ conduct by reference to the aims of the protocol, which were to avoid proceedings or reduce their complexity/length and encourage prompt and fair settlement, early disclosure, and narrowing disputed issues. If the protocol no longer regulated the position between the parties it was of no continuing relevance. If no specific allegation of breach of the protocol was made, OCR 3A.3 was not engaged. If a pursuer had not breached the protocol by suing but there existed circumstances entitling a court to modify an award of expenses, the court considered all the relevant circumstances. 

Sheriff McGowan indicated that medical reports which were to be relied on should be disclosed. A policy not to do so until proceedings were instituted could not constrain a court’s discretion regarding expenses. Further, there should not be a duplication of steps taken to recover medical records.  

Assessment of evidence

Lord Bannatyne’s opinion in Agilisys Ltd v CGI IT UK Ltd [2018] CSOH 112 (4 December 2018) considers the use and value of contemporaneous documentation in relation to the assessment of evidence. He observed that the circumstances of the case rendered the documentation significant. Witnesses were being asked about events a year or two before and were speaking about a substantial range of issues. They understandably did not have a full and clear recollection of many matters. In the circumstances there was little chance of the documentation having been created for the benefit of posterity and thus it was the best evidence. Lord Bannatyne did not consider the various documents in isolation but endeavoured to identify a pattern forming. He further considered whether the documents formed part of ordinary contractual correspondence or were likely to have been written in circumstances in which more consideration would have been given to their content. He considered the various explanations as to the terms of the documents, why certain documents were missing and whether the lack of contemporaneous documentation on certain issues was significant.

Skilled witnesses

Whether it was appropriate to certify a person as a skilled witness was considered in Sheriff Braid’s decision in D v Victim Support Scotland [2018] SC EDIN 60 (26 October 2018). The sheriff had previously ruled that the evidence from a very experienced solicitor and First-tier Tribunal judge did not satisfy the Kennedy v Cordia test in the particular circumstances. Once the dispute had resolved extrajudicially he was moved, his earlier decision notwithstanding, to certify the solicitor as a skilled witness. 

Sheriff Braid refused the motion. There had to be some regard to context. A skilled witness was required to give either opinion evidence or relevant factual evidence which would assist the court. Such a person required at very least to be capable of giving competent evidence in the litigation. The decision required to be made according to the relevance of their qualifications and experience to the issues in the case. This required an evaluation by the judge. If the evidence which the witness could have provided would not have been admissible, it could not be said that it was reasonably required for the cause. To that end he differed from the view expressed by his colleague, Sheriff McGowan, in Hunter v East Lothian Council (see the May 2018 article).

Appeals

In Kennedy v Royal Bank of Scotland [2018] CSIH 70 (15 November 2018) Lord President Carloway commented on future procedure in the event of a decision on a crucial point by a court at first instance being overturned and the case remitted back to that court for further determination. In such circumstances it was inappropriate for the matter to be heard at proof by the same judge at first instance.

Taxation

Lord Doherty confirmed in Shanley v Stewart [2018] CSOH 101 (24 October 2018), on considering a note of objections to an auditor’s report, that it was not part of the auditor’s function to consider any allegation of misconduct on the part of an opponent or their advisers. Further, the role of the court was solely to deal with objections to specific items in the auditor’s report. 

Sequestration 

In Angus Council Petrs [2018] SC FOR 65 (25 October 2018) Sheriff Murray refused to grant warrant to cite in respect of petitions for sequestration which proceeded on the grant of summary warrants. The subsequent charges had been for sums less than £3,000. The petitioners maintained that they were qualified creditors as the respondents were due other debts. This argument did not find favour. The charges stated that “if you have total debts of £3,000 or more, you are also liable to be sequestrated”. The petitioners required to show that they were creditors in respect of relevant debts amounting to not less than £3,000. Aside from the summary warrants and the resultant charge, no evidence had been produced to indicate the existence of the other debts. 

Sheriff Murray also concluded that a creditor could not petition for sequestration when the charge was for a sum less than £3,000 even if at the date of presentation the debtor was due a sum of £3,000 or more. The purpose of the summary warrant was to recover unpaid council tax. The provisions of the Bankruptcy and Diligence (Scotland) Act 2007 were intended to promote settlement of debt and prevent further diligence. The petitions did not provide evidence on these matters. Indeed the terms of the charge gave the impression that the debt which was the subject of the charge being less than £3,000, sequestration could not follow.

Lindsay Foulis, sheriff at Perth

Update

Since the last article, Docherty’s Executors v Secretary of State for Business Innovation and Skills (November article) has been reported at 2018 SLT 1021, Carr v R H Independent Healthcare Ltd (September) at 2018 SLT 1050, Byres v Moore (September) at 2018 SLT (Sh Ct) 301, K v K (November) at 2018 SLT (Sh Ct) 418, Webster v MacLeod (July) at 2018 SLT (Sh Ct) 429, and Sheridan v News Group Newspapers Ltd (May) at 2018 SCLR 555 (since reversed as described above).

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