The PI Court makes its mark

In this article I refer to a number of decisions from the All Scotland PI Court. Where these decisions also feature in Kate Donnachie’s article at Journal, April 2018, 44, I have tried to highlight observations which may be of wider application. I hope I have not repeated what is said in that article, to which I refer readers.

Appeals

The Inner House decision in Anderson v Imrie [2018] CSIH 14 (15 March 2018) is a useful examination of the approach taken by an appellate court. The decision is something of a rarity these days as each judge delivered a significant opinion. Lord Brodie observed that when an appeal court was asked to review how the law should be applied to the primary facts found, there was greater scope for the appellate court to interfere as opposed to where primary facts were challenged. In the former case, whilst giving weight to the decision at first instance, the appellate court should not shrink from evaluating the facts.

Lord Drummond Young identified four categories of decision which can come before an appeal court, from the determination of primary facts through to pure questions of law. When it came to the proper inference to be drawn from proved facts, the appellate court was in as good a position as the first instance judge; similarly as to the application of legal principles to facts. The appellate court could thus give practical effect to legal principles and lay down the extent of their operation. The makeup of the appellate court enabled different perspectives to be brought to the case. The structure of the Court of Session rendered this approach appropriate. The test to be applied was whether the decision of the first instance court was correct on the merits as a matter of substance. Respect required to be given particularly to the determination of primary facts and inferences therefrom. Less caution was required over the application of law to these facts. However, it was equally the duty of the first instance judge to provide reasons in a manner which could be properly understood.

Lord Malcolm observed that the significance of the advantages of the judge at first instance varied from case to case. There was a wide spectrum between the examples of pure fact and pure law, and classification was difficult. He suggested the core question for the appeal court was when regard was had to the particular issue in the appeal, how important were the advantages enjoyed by the first instance judge. Even with mixed questions of fact and law, these advantages justified considerable deference to the decision reached. If a judge avoided error, applied the correct legal principles and came to a decision open to them, it could not be said to be wrong. When matters of law became more significant, the greater the scope for the appellate court to apply its own judgment. The trial judge was exposed to the entire case and had the benefit of deeper insight. An appellate court should not generally overturn a decision reached on an assessment of the evidence unless there was a clear error.

Judgments – what to expect

In SSE Generation Ltd v Hochtief Solutions AG [2018] CSIH 26 (10 April 2018) Lord President Carloway observed that in letting parties know the reasons for a decision, a judgment normally required to set out the facts established and the supporting evidence. The legal issues were to be identified, and the manner in which they had been resolved set out in a concise understandable manner. It should be delivered in a reasonable time having regard to the nature of the case. The more parties assisted in narrowing the issues, the less complex the task undertaken by the judge. In considering statements admitted in terms of s 2 of the Civil Evidence (Scotland) Act 1988, it was for the judge to assess the weight to be given in the circumstances.

Locus delicti

In Docherty v Secretary of State for Business, Innovation and Skills [2018] CSOH 25 (21 March 2018) Lord Tyre determined that the claim was not governed by the Rome II Regulation (864/2007) because the negligent exposure to asbestos giving rise to the damage occurred before the regulation came into force. At common law, the ascertainment of the locus delicti required three elements, a negligent act, a cause of injury, and resultant material damage. The last was crucial in identifying the locus delicti.

Certificates of citation

Sheriff McGowan observed in Devine v Laurie [2016] SC EDIN 83 (10 October 2016) that the certificate of citation required to be in process as it was relevant for a number of reasons such as the calculation of interest and questions of expenses.

Caution for expenses

Caution, and the procedure surrounding applications, were considered by the Second Division in Centenary 6 Ltd v Caven [2018] CSIH 27 (10 April 2018). The Lord Justice Clerk determined that neither an after-the-event policy nor a deed of indemnity satisfied the requirement in the circumstances. For the purposes of s 726(2) of the Companies Act 1985 caution was required, albeit the provision of some other security could be a factor in determining whether a company was unable to pay the opponent’s expenses, and in any event was a factor mitigating the extent of caution to be found. It could also justify a subsequent application to modify or recall the order for caution, or excuse the litigant from the full consequences of failing to find caution as ordered, albeit that should not circumvent the original order. Other factors such as the relative strength of the party’s position or the conduct of the litigation could be considered. It was for the party benefiting from the order to bring any failure to the court’s attention.

Lord Glennie, who dissented, considered that it was open to a party to accept a form of security which strictly speaking was not a bond of caution. There was no reason in principle why an after-the-event policy could not amount to a satisfactory alternative. Caution was intended to protect a party, not stifle litigation. Delay in provision did not justify the punishment of a party, and a court should be slow to bring an action to an end on that basis. He further doubted that s 726(2) restricted the manner in which security could be found to caution alone.

Case management

Simply as an example of steps which may be ordered to assist the court, and indeed the parties, reference is made to Ecclesiastical Insurance Office plc v Whitehouse-Grant-Christ [2018] CSIH 19 (23 March 2018). The Inner House ordered that the party with legal representation at first instance should prepare updated court documents, albeit the obligation might not strictly fall on that party.

Party litigants

In the application of AW for permission to appeal [2018] CSIH 25 (7 March 2018) the Inner House made observations concerning party litigants. A party had sought permission to appeal from the Sheriff Appeal Court following his appeal being refused as a result of his failing to comply with the court’s rules. He had appealed the decision to grant an adoption order in respect of his child. Before the Inner House, the appellant contended that the requirements of these rules were onerous for a lay person and lacked flexibility to take account of lack of familiarity with their provisions.

The court adopted the Supreme Court’s guidance in Barton v Wright Hassall LLP [2018] 1 WLR 1119, where it recognised that while some persons might have no choice but to represent themselves, and allowances might require to be made in case management matters and the conduct of hearings, a lower standard of compliance with rules or court orders would be uncommon. Rules did not distinguish the represented from the unrepresented party; non-representation did not justify non-compliance. Unless rules or court orders were particularly inaccessible or obscure, all litigants were expected to familiarise themselves with what was expected.

Mora, taciturnity and acquiescence

In Khan v Saddique [2018] CSOH 41 (13 April 2018), Lady Carmichael reiterated the requirements of the plea, namely delay (a question of circumstances), taciturnity (a failure to speak out in asserting a right or claim), and acquiescence (inferred objectively from both the delay and taciturnity). Prejudice to, or reliance by, the person whose actions were challenged was not necessary, but might be useful in inferring acquiescence. 

Recovery of documents

In Docherty v Babcock International [2017] SC EDIN 33 (25 May 2017) Sheriff McGowan observed that in framing specifications of documents, calls should be made with specific reference to the issues of fact on which the documents would have a bearing, and be intelligible and precise.

Summary decree

Lord Clark observed in Caley Oils Ltd (in administration) v Wood [2018] CSOH 42 (20 April 2018) that applications for summary decree could be entertained if the court could be satisfied that the defence was irrelevant without the need for prolonged debate. The court could look beyond the pleadings without trespassing on the role of the proof judge; summary decree could be granted if there was no issue that could properly be resolved only at proof and it was clear there was no defence in whole or part.

The existence of a disputed issue of fact does not preclude the grant. So observed Sheriff Mackie in AB v CD [2017] SC EDIN 74 (2 November 2017). Such motions can be made too early, but should not be left too late such as within weeks of a proof: McKenna v Chapman [2018] SC EDIN 9 (8 January 2018).

Actions of reduction

Lord Tyre in Stewart v UK Acorn Finance Ltd [2018] CSOH 31 (4 April 2018) confirmed that the test to reduce a decree in foro was a high one; the grant of decree was a question of judicial discretion with each case turning on its circumstances. The remedy was only applied exceptionally, when reduction was necessary to achieve substantial justice. The existence of or failure to use an alternative remedy was not an absolute bar. An action for reduction was not a rerun of the original action, nor an opportunity to present arguments not made, or rejected, in the original action. Focus was required on the circumstances pertaining when the original decree was granted. Lord Tyre also observed that evidence relating to a pattern of behaviour on the part of the defenders was not restricted to criminal behaviour.

Sanction for the dishonest

In Grubb v Finlay [2018] CSIH 29 (13 April 2018) Lord President Carloway observed that the court had an inherent power to dismiss an action summarily in certain limited circumstances. Whether a fair trial remained possible was a factor of considerable weight. The power should only be exercised as a last resort, particularly where the basis for the motion was not subject to averment or plea in law. It also required particular care where the court or parties had determined the matter was to be resolved by proof or proof had commenced.

Expenses

In Martin v Southern Rock Insurance Co Ltd [2018] SC EDIN 10; 2018 SLT (Sh Ct) 65 Sheriff McFadyen determined that in a defended simple procedure action in which the issue was simply quantum and was resolved by negotiation, the cap for expenses as set out in the Sheriff Court Simple Procedure (Limits on Award of Expenses) Order 2016 was exclusive of VAT and outlays such as the dues of warrant and, presumably when incurred, sheriff officers’ fees in serving the claim form. It should be noted that although procedurally the action fell within the definition of an action in which a defence had been stated but not proceeded with, the basis for settlement had been such that the sheriff considered it too late to found a claim for expenses on that basis. Accordingly the issue was limited to interpretation of the 2016 Order.

Sheriff McFadyen, who was referred to two competing decisions from summary sheriffs on the issue, considered the terms of s 81 of the Courts Reform (Scotland) Act 2014, which enabled ministers to prescribe categories of cases in which no expenses were awarded and in which expenses would not exceed a prescribed figure.

When account was taken of para 2(1) of and regs 11 and 13 of sched 1 to the Act of Sederunt (Fees of Solicitors in the Sheriff Court) (Amendment and Further Provisions) 1993, VAT and outlays were recoverable.

Now that a sheriff has decided the matter, does a sheriff’s decision have greater persuasive force? There are occasions these days when the real reason for the litigation appears to be expenses, as in Tomczak v Reid [2017] SC EDIN 63 (19 September 2017). Sheriff McGowan reminded parties that expenses were a mere accident of the process, secondary to and arising from the action. Whether a particular outlay should be allowed or otherwise was a matter for the auditor.

Skilled witnesses

In Hunter v East Lothian Council [2018] SC EDIN 19 (23 January 2018) Sheriff McGowan observed that in determining whether a witness was skilled, their knowledge, experience, training or education at the time of instruction was considered. Whether the instruction of such a person was reasonable depended on circumstances at the time. The admissibility of their evidence was not determinative. In the context of the All Scotland PI Court, practitioners should note the observations at para 106 regarding estimates of the duration of hearings.

Sanction for counsel

In Cullen v Scan Building Services Ltd [2018] SC EDIN 15 (21 February 2018) Sheriff McGowan observed that when sanction is sought on the basis of complexity or difficulty there should be clarity as to the precise nature thereof: evidential, factual, legal? Once that is established, do the proceedings merit counsel and is it reasonable? In Burns v Hamilton & Forbes Ltd [2017] SC EDIN 72 (26 October 2017) Sheriff Braid observed that reasonableness in instructing counsel was an objective test viewed at the time the motion was considered. The test was not necessity. The nature and potential value of the claim could be considered, as could the fact that it was proceeding to proof. Prior Court of Session practice regarding employment of senior counsel was not relevant.

Interest on damages

I suspect the facts in Sheridan v News Group Newspapers Ltd are unlikely to be repeated. However, Lord Turnbull’s decision on interest and expenses [2018] CSOH 20; 2018 SLT 249 is worth mentioning to highlight the operation of judicial discretion in declining to award interest on damages in terms of ss 1 of the Interest on Damages (Scotland) Act 1958 and 1A of the Interest on Damages (Scotland) Act 1971.

Family actions case management

In X v Y [2018] SAC(Civ) 10 (20 February 2018) the sheriff had assigned an evidential child welfare hearing and sisted the proceedings quoad divorce. The Sheriff Appeal Court questioned whether it was competent to sist an action in part, without coming to a concluded view. However, it considered that a child welfare hearing at which evidence was led should only be employed in the most straightforward cases, perhaps limited to resolution of one clearly identifiable issue. Where the evidence relating to a number of matters was interlinked, adopting the necessary procedure to proof had clear benefits. An evidential child welfare hearing could raise procedural complexities.

A separate issue arose in relation to intimation of the form F9 to the parties’ children. The court took the view that that form was simply one way in which the views of children could be ascertained.

Permanence and adoption orders

An observation from ECC v GD [2018] SAC (Civ) 5 (8 March 2018) is to the effect that if a sheriff considers the “threshold test” is not met, the court should deal with other matters on which evidence has been led. This enables the appeal court, if it comes to a different decision, to proceed on the basis of the sheriff’s determination on such matters. So for example, if authority to adopt is sought, the sheriff should express an opinion on whether this would have been granted if the threshold test had been satisfied. Agents should simply remind the court of this in submission. In a moment of whimsy, I do wonder whether it was necessary to anonymise the petitioning local authority: any guess as to its identity?

Regarding case management in such actions, the use of affidavits to present evidence in chief was commended by the Sheriff Appeal Court in JA v AC [2018] SAC (Civ) 6 (9 March 2018), oral evidence being restricted to cross and re-examination.

Liquidations

The reporter’s role in considering liquidators’ remuneration was considered by Lord Bannatyne in Liquidator of Equal Exchange Trading Ltd [2018] CSOH 35 (11 April 2018). The remit was to audit the accounts to ensure the work claimed was carried out. However, the reporter also required to consider whether that work was reasonably undertaken. This included the level at which the work was undertaken. The reporter required to consider whether there were any concerns about the conduct of the winding up, including compliance issues regarding the liquidator’s duties, mala fides on the part of the liquidator, efficient progress of the liquidation, and whether the liquidator’s actions accorded with those of a reasonable insolvency practitioner.

Update

Since the last article, Russell v Russell (November 2017 article) has been reported at 2018 SLT 264, Perth & Kinross Council, Petrs (March) at 2018 SLT 275, and D v Victim Support Scotland (March) at 2018 SLT (Sh Ct) 91.