Latest civil cases, on diligence on the dependence; prorogation agreements; pleadings; witnesses; appeals and other topics

Sheriff Lindsay Foulis examines issues including diligence on the dependence, agreements to prorogate and witness lists.

Since the last article in May Hand v North of Scotland Water Authority has been reported at 2002 SLT 798, McCann v McGurran at 2002 SLT 592, McGuire v Kidston at 2002 SLT (Sh Ct) 66, Bank of Scotland v Mitchell at 2002 SLT (Sh Ct) 55, Reddington v Riach’s Executor 2002 SLT 537, Cameron v Cameron at 2002 SCLR 313, Ali v Ali at 2002 SCLR 264, V P Packaging Ltd v The ADF Partnership at 2002 SCLR 393, and Pagan v Miller Group Ltd at 2002 SCLR 386.

Diligence on the dependence

In an application for a warrant to inhibit on the dependence at the instance of The Advocate General in an action for unpaid taxes against Maureen Taylor Lord McEwan on 25th June 2002 whilst refusing the application for a warrant in hoc statu reported the matter to the Inner House for consideration. Lord McEwan decided on this course as a result of considering the implications of the Karl Construction ruling on judicial, court, and administrative time. This is a case of watch this space. It is also perhaps worth noting that Lord McEwan felt that the Karl Construction tests were not satisfied albeit that the Defender had been sued before by the Revenue and there was some concern of assets being moved to third parties. Further by statute the Pursuers were deemed to have a prima facie case. It is also indicative of the state of uncertainty in this area of civil practice at the moment to make reference to a decision of Lord McCluskey dated 14th March 2002 in Prime Connexions Training Ltd v Brown. This related to a motion to recall an arrestment laid on the dependence and in reaching his decision Lord McCluskey made no reference to Karl Construction nor to the European Convention of Human Rights. His Lordship simply referred to the test of whether the arrestment was nimious or oppressive. The significance of this is that it appears Karl Construction did not even appear to form any part of the submissions before his Lordship despite the fact that this decision was issued some time after Lord Drummond Young issued his decision in Karl Construction. It can hardly be said that Karl Construction was overlooked – Lord Drummond Young’s decision would appear to have been the ‘talk of the steamy’! Again whilst Lord Drummond Young expressly limited his decision in Karl Construction to inhibition the implications to arrestment on the dependence could not have been overlooked. Against this background it was argued in opposition to a motion to recall an arrestment on the dependence before me recently that the law relating to arrestments on the dependence was unaffected by Karl Construction. Indeed the Sheriff Court could do nothing other than apply the pre Karl Construction principles to motions for recall of arrestments as these were authoritative having been determined by the Inner House and accordingly binding on the Sheriff Court. Whilst this argument has its attractions it does ignore the fact that the Sheriff Court is a ‘public authority’ in terms of section 6(3) of the Human Rights Act 1998 and accordingly in light of the terms of section 6(1) of that Act the Court must not act in a way incompatible with the Convention. It is hoped all will become clear once the Inner house has considered the matter. In the meantime in Barry D Trentham Ltd v Lawfield Investments Ltd 2002 GWD 15-482 a motion for recall of an inhibition on the dependence was refused. The arguments in favour of the recall were that the Defenders had sufficient funds to meet any liability and the continued inhibition prevented the Defenders from disposing of heritage which was central to their business. Lord Drummond Young refused the motion. In looking at a Defender’s ability to satisfy any liability resulting from an action regard had to be had to the situation at the conclusion of the action as well as the position when the motion was enrolled. The information in the balance sheet did not remove the risk of insolvency – a great deal depended on the success of one development and there was not a great surplus of assets over liabilities. There had already been an offer made to settle and the Defenders appeared to be liable for substantial sums. Caution or the lifting of the inhibition could remove the argument concerning the inhibition preventing the Defenders from continuing in their business.

Jurisdiction – agreements to prorogate

In McGowan v Summit at Lloyds the Inner House delivered their opinion on 12th June 2002. The opinion was delivered by Lord Reed. The subject matter of the appeal from the Sheriff Principal of North Strathclyde was whether the following clause: ‘This Document shall be governed by the Laws of England whose Courts shall have jurisdiction in any dispute hereunder’ had the effect of giving the English Courts exclusive jurisdiction. The first question to be addressed by the Inner House was whether the Sheriff Court had concurrent jurisdiction with the English Courts by dint of Schedule 4 of the Civil Jurisdiction and Judgments Act 1982, section 2, article 5(1) – the place of performance of an obligation under a contract or whether the English Courts had exclusive jurisdiction by virtue of the terms of Schedule 4 section 6, article 17 of that statute – prorogation of jurisdiction. In reviewing a number of Sheriff Court decisions, the Inner House decided that article 17 should not be interpreted as requiring the Scottish Courts to accept jurisdiction when a contractual provision conferred exclusive jurisdiction on the English Courts. Accordingly, whether jurisdiction was exclusive or non exclusive depended upon the law governing the contract rather than the statute. It was a question of interpretation. In interpreting such clauses, their Lordships decided that it was not a principle of interpreting jurisdictional clauses in agreements that a clause could only confer exclusive jurisdiction on a Court outside Scotland if it did so expressly. Interpretation was a matter of giving the words used their natural meaning in the light of the circumstances surrounding the making of the agreement. The agreement had to be read as a whole – provision for service of proceedings only within one jurisdiction, the fact that the jurisdictional clause has been specifically agreed, the fact that the clause can be invoked by either party may point to exclusive jurisdiction being intended. On the other hand, the fact that a clause contained in a printed form issued by one party with the obligation falling upon the party to whom the form is issued, and that the clause has commercial or legal significance even if only construed as declaratory might tend to point to non exclusive jurisdiction being intended. Their Lordships decided in the circumstances that there was concurrent jurisdiction. Their Lordships further reiterated certain observations previously made as to the citation of authorities. These were that when a decision had been reported in Session Cases it should be cited from that source. Likewise in the case of an English decision, if published by the Incorporated Council of Law Reporting for England and Wales, it should be cited from that source.

Written pleadings – take care with the standard phrases

In Simpson v Transocean Offshore (UK) Ltd 2002 SCLR 233 the Defenders suffered as a result of using the usually innocuous phrase ‘the Defenders fulfiled all duties incumbent upon him’ in response to averments that the Defenders were in breach of certain statutory regulations. Sheriff Principal Young decided that as the regulations only applied if the Defenders were the owners of the installation, these averments amounted to an admission that the regulations were applicable to them.  

Witness Lists

In the Countess of Lindsay v Fife Scottish Omnibuses Ltd 2002 GWD 19-633 an issue arose as to whether the evidence of an expert witness for the Defenders should be heard. The expert was the substitute expert witness for another who had been on the Defenders list. However, the substance of the evidence of the witness had not been intimated. The evidence was not allowed to be led. Lord Macfadyen indicated that if the only failure had been to fail to intimate the identity of the witness then the evidence would have been heard.

Too many defenders, too many remedies
Reference is simply made to Brodie v Secretary of State for Soctland 2001 GWD 20- 698, an action in which the Pursuers sought reduction of a trust disposition and settlement and differing amounts of damages against different Defenders. Lady Smith indicated that the combination of a number of remedies against different Defenders rendered the action incompetent following Western Bank Liquidators v Douglas 1860 22D 447.

Appeals against decrees of default
In Kerr & Co v McAloon 2002 SCLR 374 is an example of the sort of arguments which might be usefully employed if you are consulted to conduct such an appeal. The nature of the defence and the circumstances surrounding the failure to appear at the peremptory diet won the day for the Appellant in that decision.

Evidence of loss
As something of an aside in Dowling & Rutter v Abacus Frozen Foods Ltd 2002 SLT 491 the Defenders endeavoured to prove the loss they were counter claiming for by means of a spread sheet. Lord Johnston indicated that this was not sufficient evidence as the basic figures forming the basis of the document should at very least have been available.

Leave to appeal – the consequences of forgetting
In MacDonald v MacDonald 2002 GWD 22-721 the Sheriff set aside a minute of agreement following a preliminary proof. An appeal was taken to the Sheriff Principal but no application for leave to appeal was made to the Sheriff at first instance. Before Sheriff Principal Dunlop, the appellant sought the matter be remitted to the Sheriff to consider a motion for leave late. Sheriff Principal Dunlop held that the appeal was incompetent. The lodging of the Note of Appeal removed the process from the court of first instance and accordingly it was no longer open to the appellant to make application to the Sheriff for leave. Neither the common law nor statute gave the Sheriff Principal the right to remit the matter. Sheriff Principal Dunlop observed that it might be possible to use the terms of section 29 of the Sheriff Courts (Scotland) Act 1907 to ultimately bring the interlocutor pronounced by the Sheriff under review.

Family actions
In Thomson v Thomson 2002 GWD 20-640 an ex-wife sought to vary an interdict granted on divorce by the addition of a power of arrest as provided for with the passing of the Protection from Abuse (Scotland) Act 2001. She made the application by way of Minute. Sheriff Principal Nicholson decided that such an application was competent but indicated that the appropriate way to proceed was by the enrolment of a motion as was envisaged in rule 41.2(1) of the Ordinary Cause Rules.

The decision of Sheriff Cusine in Masson v Masson 2002 SCLR 382 is simply an example of a party’s conduct adversely affecting a motion for modification in terms of section 18 of the Legal Aid (Scotland) Act 1986.

As usual the foregoing is accompanied by the usual caveat.

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