Practice inside out

Latest civil cases, including defective service; duties to the court; lost productions; removings; amendment of a party; tenders; family actions; expenses

The Journal, March 2007, page 38

Defective service

In Greenwoods Ltd v ANS Homes Ltd [2007] CSOH 13; 2007 SLT 149 Lord Brodie granted relief when service of a Court of Session summons by process servers in England had not been witnessed. An authorised person had been used to serve the writ using methods normally sufficient in that jurisdiction. The defenders had become aware of the claim made against them albeit service was defective.

Observations on practice

In Hutton v Jack 2007 GWD 2-26, Sheriff Principal Lockhart observed that to raise an ordinary action for a sum just over the summary cause limit when the great proportion of the claim was in respect of solatium was imprudent. Far better to raise the action as a summary cause and thus substantially reduce expenses. Also in this case the defender, who represented himself at the appeal, stated that he had been insured and had advised his solicitors of this. Notwithstanding this information, the solicitors did not advise the defender to report the matter to his insurers. These are two matters which perhaps newly qualified members of the profession should bear in mind.

Of greater importance are observations made by the Inner House in Fernandez v Fernandez [2007] CSIH 6. The defender appealed against the granting of decree by default. The circumstances that supported the granting of decree were set out in the November 2006 article, which featured the decision from Lord Macphail. What is of significance in the Inner House decision are the apparent steps taken by the defender’s legal advisers effectively to engineer a situation in which the court at first instance would be forced to grant the defender’s motion. Against a background of senior counsel’s advice that a motion to discharge by the defender would be refused, a scheme was devised whereby the defender’s then agents would withdraw, and after the court was advised, the pursuer would require to intimate to the defender. New agents would then be instructed by the defender and as they would require the papers from the previous agents the proof would require to be discharged. The defender was advised of this scheme and the new agents were apparently put on notice of what was intended. It is unsurprising that this scheme was described by the Inner House as discreditable and a warning was issued that any agent inclined to adopt such a measure risked condemnation. The court further noted that the new agents involved at first instance also withdrew but then acted in the appeal.

The judiciary do not sit in ivory towers. They are aware of the commercial pressures on agents. However, agents have a primary duty to the court as officers of the court, and in apparently engaging in such schemes agents are putting the interests of a client ahead of that primary duty. Apart from anything else, that has implications for any agent’s standing before a court, with a good reputation being potentially lost. Once lost, it may be impossible to recover. Is it worth it?

Recovery of documentary evidence

In Strain v Premier Custodial Group Ltd [2007] CSOH 28; 2007 GWD 6-82 Lord Brailsford ruled that precognitions taken by the Crown in the course of a prosecution could not be recovered, in accordance with longstanding practice and to protect the integrity of criminal prosecutions.

Lost productions

In Peacock Group plc v Railston Ltd [2007] CSOH 26; 2007 GWD 6-69 Lord Drummond Young dismissed an action when the pursuers lost productions they had lodged but then borrowed from process. The productions were crucial to the cause of the action. The productions had been inspected by experts instructed by two of the parties but not by an expert for the remaining party. This party was the one who would potentially carry the can, the defenders blaming them on an esto basis. Lord Drummond Young refused to allow secondary evidence as to the condition of the productions as they were fundamental to the litigation and the pursuers had been responsible for their loss. It would be unfair to require the party who was ultimately being blamed to rely on the defenders’ expert. There had been no delay by that party in instructing an expert. They faced insurmountable prejudice. Dismissal was the appropriate decision in circumstances in which it could not be said that the pursuers had no possible case.

Jurisdiction for removings

In Beriston v Dumbarton Motor Boat and Sailing Club [2006] CSOH 190; 2007 GWD 4-51, Temporary Judge C J MacAulay determined that an action of removing accompanied by a conclusion for reduction required to be raised in the Court of Session. If declarator was sought as a preliminary to a claim for removing, the Court of Session and sheriff court had concurrent jurisdiction. If the action was purely for removing, the action should be raised in the sheriff court. An accompanying conclusion for interdict to reinforce the order for removing did not alter this position.

Amendment of a party

The decision of Lord Wheatley in Link Housing Association Ltd v PBL Construction Ltd (May 2006 article) has been appealed to the Inner House, which overturned Lord Wheatley’s decision ([2007] CSIH 4). At first instance the name of one defender, Link Housing Association Ltd, was deleted by amendment and Link Group Ltd substituted. Their Lordships reviewed various authorities and observed that generally the substitution of the correct defender for the wrong defender, the curing of radical incompetence, or the changing of the basis of an action would not be allowed after a time limit had expired. A similar principle applied if an additional or substituted pursuer was the aim of the amendment. The issue before the Inner House was whether the amendment constituted a correction in the designation of an existing party or the substitution of a new party. In this instance, from an examination of the background, the true defenders were indeed Link Group Ltd and not Link Housing Association Ltd, which was a quite separate corporate body. Accordingly, the proposed amendment sought to substitute the correct defender for an erroneous one outwith a time limit. The fact that one of the defenders had not appealed the decision at first instance did not preclude the Inner House from allowing the appeal in this case.

In relation to other submissions made, Lord President Hamilton observed that unless it was apparent from a pursuer’s averments that an obligation had prescribed, it was incumbent upon the party contending prescription to make the necessary averments. His Lordship further observed that delay in itself does not bar amendment: there requires to be accompanying prejudice or other material disadvantage. I would suspect that this can normally be found. The significance of this decision is clearly that if an action is raised close to the expiry of a time limit, care will require to be taken in the selection of the defenders. I may be wrong but I suspect there has been a slight relaxation on this point, with reliance being placed on the wide power of amendment available. The power is wide but it clearly has limits.

Minutes of tender

In Morrison v BBC [2007] CSOH 6; 2007 GWD 6-77 a minute of tender was accepted. When decree was sought in terms of the minute of tender and acceptance, the defenders opposed the motion seeking the expenses of the action. The basis for opposition was that the action had been raised precipitately when the defenders were willing to resolve the claim. Lord Emslie observed that as the minute of tender offered a specific sum together with expenses, which when accepted constituted a contract, it was difficult to envisage a situation where expenses could be awarded against the party accepting the tender when there was no issue of delay. He did however restrict the expenses awarded in favour of the pursuer.

Costs in family actions

There are two issues which arise from the decision of Sheriff Principal Bowen in O’Neill v Gilhooley, Edinburgh Sheriff Court, 8 December 2006. One of these seems to me to be of particular significance to agents practising in the area of family law. In a family action for residence a report was called for and the pursuer was ordered to instruct the report and at first instance to meet the cost of the reporter. This cost ultimately was £4,659.70. Subsequently, the pursuer moved for the defender to be made liable for that cost. The defender had since been awarded legal aid. This motion was refused. The pursuer sought and was granted leave to appeal. I shall return to the sheriff principal’s observations on the matter of leave.

On the issue of liability for the reporter’s fees, Sheriff Principal Bowen refused the appeal. The authority for calling for a report came from s 11 of the Matrimonial Proceedings (Scotland) Act 1958. In terms of s 11(5), such expenses fall to be treated as expenses in the cause. Ultimate liability accordingly falls on the party ultimately made liable for the expenses of the cause. The inclusion of the words “in the first instance” in the interlocutor ordering the report was intended to secure prompt payment of the reporter’s fees. They were not included to give either party the right to vary this initial liability if circumstances changed, for instance as a result of a grant of legal aid. Further, as the reporter’s fees ultimately formed part of the expenses of the cause, if an order for payment of expenses was made against the legally aided party, that party had the right to modify his/her liability in terms of s 18(2) of the Legal Aid (Scotland) Act 1986.

I am quite sure that what was attempted in this case is by no means out of the ordinary. I cannot imagine that this decision will not come to the attention of the Scottish Legal Aid Board. It accordingly has clear implications for practitioners. The calling for a report in a family action is not uncommon. Sometimes they are useful. In other instances, it seems to me that a report will neither tell the court anything it cannot anticipate, nor will it achieve any immediate resolution of an issue. The financial criteria for eligibility for civil legal aid are not generous. As Sheriff Principal Bowen remarked, the pursuer’s means were modest. He does not appear to have been legally aided. The burden of meeting the costs of the report was clearly significant, but I suspect these costs were by no means out of the ordinary. Accordingly, I anticipate that agents may have to be more discerning in when to call for such reports if acting for a party who is likely to be ineligible for legal aid. Alternatively, they will require to try and ensure that liability does not initially rest with their client. Agents also have to be alive to the fact that if they move the court to call for a report as they feel it will be beneficial, and the court agrees, questions as to liability for the costs are of secondary importance to the court.

The second issue related to leave to appeal. Sheriff Principal Bowen indicated that whilst such a motion should be determined by the sheriff who pronounced the original interlocutor, if the motion was straightforward then there is no reason why any sheriff cannot deal with it. Such a situation is not restricted to one of practical impediment.

Tests relating to expenses

Simply as an observation as to when sanction for the employment of junior counsel will be granted, Sheriff Principal Young in Nelson v MacBeath, Wick Sheriff Court, 18 January 2007 indicated that in circumstances in which the professional reputation of a solicitor as an officer of court was called into question, it was appropriate first that the solicitor should be represented by another, and secondly that representation be by junior counsel. In Sweeney v Sweeney (No 3) [2007] CSIH 11 the Inner House emphasised that there was nothing unfair with a party put to expense in vindicating his/her right in a divorce action recovering expenses. “Expenses following success” did not however automatically apply in respect of claims for financial provision. Mere success did not normally justify an award of expenses. Full disclosure and cooperation in agreeing valuations, thus narrowing the issues, tended to result in no award of expenses being made. If issues were unsuccessfully taken to proof, resulting in a significantly larger award, awards in expenses were appropriate. The relationship between award and offers was of primary significance.

In Rennie v The Society of Vincent de Paul [2007] CSOH 40, Lady Smith considered a note of objections to an auditor’s report. In referring to what expenses were reasonable as judicial expenses, her Ladyship observed that the test of what was reasonable was an objective one. What would a reasonable solicitor do in conducting the litigation in a proper manner? There is accordingly a range of reasonable decisions as to whether a particular step is taken or outlay incurred. It was only if the work undertaken or outlay incurred was outwith that range that the entry in a judicial account should be taxed off. Whether the litigation could have been properly undertaken without that step being taken was not the test. Reasonableness was further determined at the time the decision was actually taken. No balancing exercise required to be undertaken as between the parties or the cost of the step undertaken and the likely amount of the overall judicial account. A court can only interfere with an auditor’s decision if relevant material has been ignored, irrelevant material taken into account, material is misunderstood, the auditor has misdirected himself on material before him or on the law, or he has reached a decision no reasonable auditor could have come to.

The usual caveat applies.