Civil court: Spotlight on the Sheriff Appeal Court

I thought it would be interesting to concentrate principally in this article on recent judgments from the Sheriff Appeal Court – and there are many. The cases I have selected are quite varied and some deal with areas of substantive law as well as fundamental issues of procedure and practice.

The SAC has been sitting now for seven years. Over its first five years there were on average about 280 appeals per year, but in the year to December 2021 (the first Covid year) there were only 132 cases. I suspect that the numbers have increased to former levels now, but unfortunately there is no public information about this, nor about the types of cases and the basis of appeals, so it is not possible to analyse its current workload in any meaningful way. It certainly seems to be serving the purpose for which it was introduced, if these decisions are anything to go by.

Prescription and res judicata

In Beattie v Gloverall plc [2022] SAC (Civ) 33, a commercial agent sought compensation for damage suffered as a result of the termination of his agency. For reasons I do not fully understand, he raised multiple sheriff court actions. An action in Jedburgh was dismissed on a plea of no jurisdiction on 8 January 2020. He then raised an action in Kilmarnock on 15 January which was ultimately settled by tender and acceptance. On the same day he raised an action in Ayr which was ultimately remitted to Kilmarnock under OCR, rule 26.1(3) on the basis that Ayr had no jurisdiction.

By the time the case was transferred to Kilmarnock the quinquennium had expired.

At first instance, the sheriff took the view that the action was not time barred and that it was not subject to res judicata. The SAC held that in terms of rule 26.1(7), a “transferred cause shall proceed in all respects as if it had been originally brought in the court to which it is transferred”, and accordingly the claim had not prescribed. However, relying heavily on Smith v Sabre Insurance Co 2013 SC 569, it held that the claim was res judicata and the previous action in Kilmarnock had resolved the issue between the parties.

When application “made”

Section 28(2) of the Family Law (Scotland) Act 2006 provides that any application for a capital sum made by a cohabitee must be made not later than one year after the parties’ separation. In Knight v Henderson [2023] SAC (Civ) 2, the question was whether such an application should be treated as having been made on the date when the initial writ containing such a crave was lodged for warranting or when it was served on the defender. The sheriff held that it was the former and the application was accordingly timeous. The SAC disagreed: “in respect of actions initiated by summons or initial writ, there is no conjoining of the parties… until the defender has been cited by service”. That is the date on which the application should be treated as having been made. Interestingly, the SAC sanctioned the employment of senior counsel for this appeal.

Notes of appeal

In Anderson’s Trustee v Anderson [2023] SAC (Civ) 3, Sheriff Principal Turnbull, as procedural appeal sheriff, had to consider arguments from the respondents under rule 6.9 of the Sheriff Appeal Court Rules 2021, directed to the terms of the note of appeal lodged. Rule 6.2(2) provides that the note of appeal in form 6.2 should, amongst other things, “state the grounds of appeal in brief specific numbered paragraphs setting out concisely the grounds on which it is proposed that the appeal should be allowed”.

On the basis of the written submissions advanced by both parties, the sheriff principal decided that (1) the detailed criticism of the precise terms of the note of appeal did not raise a question of competency; (2) the appellant’s attempt to open up prior interlocutors to the one against which appeal had been taken, was not permitted: this would only be allowed if it was required “for the purpose of doing justice between the parties in respect of the decision which has been appealed”; and (3) each statement in a note of appeal does not need to narrate an error of law.

Right of rejection

In King v Black Horse Ltd [2023] SAC (Civ) 4, the pursuer and appellant was the hirer of a Jaguar under an HP agreement. He alleged that the car was defective. He purported to reject the car but continued to use it, and continued to make payments under the agreement, tax it, insure it, and drive it. The pursuer claimed that he was entitled to rescind the contract, but the sheriff granted the defenders’ motion for summary decree and dismissed the action. The SAC refused the pursuer’s appeal, and the judgment contains a handy summary of the law on contract and rejection. The post-rejection use of the car was sufficient alone to enable the SAC to decide against the pursuer. There is a hint in the judgment that the pleadings may have had some part to play in the outcome. The court refers to the appellant’s failure to lodge an intelligible record, but the judgment does not elaborate on this.

Appealing refusal of recall of decree

Bell v Farmer [2023] SAC (Civ) 6 was decided by Sheriff Principal Anwar, who posed this question: “Is there a right of appeal against the refusal to grant an application for recall in simple procedure actions?” In a claim for damages by a householder against a tradesman, the defender/respondent failed to lodge a response to the claim form (apparently an oversight by his solicitor) and decree was granted. He applied for recall and, after a “fraught” hearing on the application, the summary sheriff refused to recall it. The same sheriff ruled that an appeal against that decision was incompetent. The respondent appealed, and, somewhat confusingly, became the appellant, with the claimant becoming the respondent.

The latter first argued that, on interpretation of the legislation, no right of appeal existed. After considering the statutes and their procedural context, the sheriff principal held that Parliament could not possibly have decided to exclude such a right. A decision to refuse an application to recall fell within the definition of a “final judgment in a simple procedure case” in terms of s 82(1) of the Courts Reform (Scotland) Act 2014. As for the refusal to allow an appeal to be made, she said that once an appeal has been lodged, the sheriff is functus and cannot “entertain questions about the competency of the appeal”, which is solely a matter for the appeal court.

Title to sue

In McGarrigle v UK Insurance [2023] SAC (Civ) 7 the pursuer made a claim for damages following a road accident. He was a self employed private hire driver, driving a leased vehicle. He was unable to lease a replacement vehicle and obtained one under a credit hire agreement for 81 days at about £100 per day. He sued for the credit hire charges. Dismissing the claim, the sheriff said he had no title to sue. The SAC overturned this decision.

It commented that “The sparseness of the appellant’s pleading has… obscured analysis of his claim.” I have observed elsewhere that while an overemphasis on the formality of pleadings can lead to injustice, a disregard for the basics of pleadings can have a similar effect. The obligation to plead a coherent and relevant case necessarily involves a proper consideration of the legal rights and obligations arising in a particular set of circumstances. This should be done at the outset before the pleadings are drafted, rather than during a debate when a discussion of the pleadings may expose inadequate preparation. While the SAC did not consider that the claim should be dismissed on the grounds of no title to sue, it emphasised that this was a distinct plea in law. It did not “endorse the present claim as relevant or fully specified”, and remitted to the sheriff to proceed as accords.

Summary application decision

In Miller v Miller [2023] SAC (Civ) 8 a summary application hearing concluded on 25 October 2021. On 21 July 2022 the sheriff assigned a hearing to issue an ex tempore judgment. The court made the point – as has been stated in a number of cases recently – that this was not an ex tempore judgment. Furthermore, s 50 of the Sheriff Courts (Scotland) Act 1907 provides inter alia that, where a hearing is necessary in a summary application, the sheriff “shall give judgment in writing”.

The SAC made it clear for future reference that “what a sheriff cannot do (in either an ordinary action or in a summary application) is reserve judgment and subsequently purport to pronounce an ex tempore judgment. Providing to parties on request a transcript of the ex tempore judgment (as happened in the present case) is not giving judgment in writing.

“...In our view, in a summary application, where evidence has been led, it is incumbent upon the sheriff to issue a written judgment incorporating findings in fact and law; and including the reasons for their decision on any questions of fact or law or of admissibility of evidence”.

Is simple procedure fair?

In Doran v SC Causewayside [2023] SAC (Civ) 10 the party appellant appealed to the SAC against what happened in his claim, the details of which are immaterial. He argued that the proceedings had not been conducted in a fair manner and in breach of the Simple Procedure Rules. Four specific grounds of appeal alleged bias on the part of the sheriff, an unfair request on the appellant to lodge documents in support of his claim, the use of unless orders, and unfair conduct of the evidential hearing, each one of which was dealt with succinctly by Sheriff Principal Ross, who considered that the sheriff did exactly what the rules required him to do. The sheriff was mindful that, although a party litigant may be assisted to understand proceedings in general, a court cannot assist a party to win his case (Barton v Wright Hassall [2018] UKSC 12): “The appellant demands too much of the sheriff, and too little of himself.”

Dissolution of partnerships

NHBC v Henderson [2023] SAC (Civ) 11 involved a complex dispute centred on partnership law in Scotland. The court set out in simple terms the legal effect of a subsequent dissolution of a partnership on the rights and obligations of those concerned in a contract to which the partnership was a party. I recommend copying paras 37 to 42 of the judgment, and the cases referred to there, for future reference.

Specification and fair notice

In Goldsmith & Co Estates v Scaliscro Estates [2023] SAC (Civ) 13 the pursuer raised a commercial action for payment of £90,000 for work done under a contract for provision of estate management services. After procedure intended to cure the inadequate specification of the claim, following debate the court refused to allow most of the heads of claim to go to probation. The SAC substantially agreed with the sheriff’s decision.

It said: “In any litigation, the pursuer requires to give sufficient notice of the essentials of its claim to allow the defender a fair opportunity to understand the claim, and to prepare any available defence. The degree of specification required will vary… Parties agreed that the test for specification was as set out in Macphail, Sheriff Court Practice (4th ed), at para 9.32…

“In a commercial action, fair notice may be based on a combination of relatively brief written pleadings together with productions such as affidavits, a Scott schedule, timesheets or other sources of evidence. That flexibility does not, however, relieve the pursuer from giving fair notice.

“…What is required will depend on the nature of the case but regard must also be had to whom the pleadings are primarily addressed: the other party, and what the other party may be taken readily to understand… An argument on specification is not an arid pleading exercise, because it foreshadows the practical preparations necessary for proof, and focuses the issues on which evidence will be led. A loosely-specified claim, or defence, can lead to an unduly lengthy, wasteful, poorly-focused proof, and may on occasion serve to obscure that the claim is not relevant, or capable of being proved.”

Dispute resolution: arbitration

Three cases from the Court of Session involving major contractual disputes highlight different ways in which parties have tried to resolve them without following traditional adversarial litigation to the bitter end. However, procedural issues associated with them did cause some problems.

In Briggs Marine Contractors v Bakkafrost Scotland [2023] CSOH 6 the parties had entered into a written salvage contract which included an arbitration clause providing that “any dispute arising out of or in connection with” the contract should be referred to arbitration. After work commenced, complications arose, and the parties continued their existing working relationship but on informal and different terms. The pursuers sought payment of the work that they had done under these new terms. The defenders took a preliminary plea that the courts had no jurisdiction because the parties were obliged to arbitrate.

A debate centred on the meaning of the phrase quoted above and it was interpreted broadly. The plea was sustained, the court following the reasoning that the parties “as rational business people must be taken to have intended that a dispute so closely connected to the [contract] as the present one – even if they could not have foreseen the precise nature of the dispute, or the circumstances in which any second agreement might be entered into – would be resolved by arbitration, in order that all disputes be dealt with under the ‘one-stop’ approach”.

Dispute resolution: adjudication

In Atalian Servest AMK v BW (Electrical Contractors) Ltd [2023] CSOH 14 a decision by an adjudicator in relation to claims under a construction contract was challenged on various grounds. As might be expected, the sums of money involved were substantial, the facts of the case complex, and the adjudicator’s general approach to his task was criticised in numerous ways. It is interesting to observe that the court was referred to no fewer than 30 cases on adjudications, all decided in the last 20 years. The Lord Ordinary upheld the adjudicator’s decision.

As I was completing this article, the decision of the Inner House refusing the appeal from the Lord Ordinary’s decision was published: [2023] CSIH 18. The Lord President reviewed earlier decisions in English and Scottish cases and highlighted certain basic features of adjudication that must be borne in mind: “‘The purpose of the scheme is to provide a speedy mechanism for settling disputes in construction contracts on a provisional basis and by requiring decisions by adjudicators to be enforced pending final determination of disputes by arbitration, litigation or agreement, whether these decisions are wrong in point of law or fact, if within the terms of reference.

It is a robust and summary procedure…’

“...Having cut to the chase, the adjudicator used a broad axe with a blunt edge to reach a robust and summary conclusion.”

Commercial action inspiration

Finally, in Hill v Apleona HSG [2023] CSOH 15, a commercial action, Lord Braid took the seemingly enlightened step of remitting certain aspects of a dispute about dilapidations to a reporter. He oversaw the preparation of a joint remit at a procedural hearing. From then on, however, things went off the commercial rails. In a masterpiece of understatement, he observed: “Unfortunately, the remit has not turned out to be the speedy panacea that the court had envisaged.”

There were delays in instructing the report, delays in providing information, and uncertainty about what the reporter’s task, authority and powers actually were. The reporter produced a draft report many months later (the delay was not his fault), but this, “rather than simplifying matters, has fanned the flames of the dispute”. I suppose this just goes to show that even in commercial actions, as someone once said, the best laid schemes “gang aft agley, and leave us nought but grief and pain, for promised joy”. Perhaps that could have been inserted into the interlocutor somewhere.