Scottish Court of Session Decisions

Brown & Critchley, Limited, colour, paint, and varnish manufacturers, Lenzie, and having their registered office at 104 West George street, Glasgow, coniplainers, presented a note of suspension in the Bill Chamber against the Decorative Art Journals Company, Limited, 9 Albert Square, Manchester, respondents, in which they prayed the Court to suspend a decree against them obtained by the respondents in the Sheriff Court of Lanarkshire at Glasgow on 23rd September 1921, and a charge thereon.

From the averments of the parties it appeared that the registered office of the complainers, who were a private company incorporated under the Companies Acts 1908–1917, was in the sheriffdom of Lanarkshire, while their place of business at Lenzie was in the sheriffdom of Dumbarton. The respondents, who were advertisers in Manchester, brought an action against the complainers in the Sheriff Court of Lanarkshire at Glasgow. In the writ the complainers were designed as colour, paint, and varnish merchants, Lenzie, near Glasgow, and service was made upon them at their premises in Lenzie and not at their registered office in Glasgow. When the writ was served the respondents did not know that the complainers' registered office was in Glasgow. The complainers made no appearance in the action and on 23rd September 1921 the respondents obtained decree in absence for £44, 4s. with interest from 10th September 1921 and £5, 3s. 8d. expenses. The respondents then extracted the decree and charged upon it, the decree and charge designing the complainers as they were designed in the writ. The charge was served at the business premises in Lenzie by a sheriff officer who believed at the time that the premises were in Lanarkshire. When the days of the charge had expired without payment the respondents presented a petition to the Court of Session to have the complainers' company wound up and a liquidator appointed. The complainers, who had in fact received both the service copy of the writ and of the charge but had taken no steps to challenge them, then brought the note of suspension.

They pleaded—“1. Said pretended charge having proceeded upon a pretended decree in a process in which there was no jurisdiction against the complainers, the complainers

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are entitled to have the same suspended. 2. The said pretended decree and pretended charge being in the circumstances incompetent, irregular, and illegal, decree should be pronounced in terms of the note, with expenses to the complainers.”

The respondents pleaded, inter alia—“1. The note as laid is incompetent and should accordingly be dismissed. 2. The complainers' averments being irrelevant and insufficient to support the prayer of the note, the note should be dismissed. 3. The said decree having been pronounced by a Court of competent jurisdiction, and the charge following thereon having been validly executed, the note should be refused.”

On 30th November 1921 the Lord Ordinary ( Ashmore) refused the note.

Opinion.—In this action the complainers, a limited company having their registered office in Glasgow, ask for the suspension of a decree for £44, 4s. of principal obtained against them at the instance of the respondents, and of the relative charge for payment following on the decree.

The complainers' case, stated generally, is that the decree and the charge were and are irregular and illegal. The particular grounds on which suspension is sought are these—( a) That the decree was incompetently obtained in the Sheriff Court of the county of Lanark at Glasgow in an action in which that Court had no jurisdiction in respect that in order to constitute the jurisdiction the complainers ought to have been cited at their registered office in Glasgow, whereas in point of fact they were cited at their branch business premises at Lenzie in the county of Dumbarton; and ( b) that the charge following on the decree was in like manner incompetently served, not at complainers' registered office but at their said premises at Lenzie.

Counsel for the complainers argued that the citation of the complainers and the service of the charge were disconform to the following statutory provisions, viz.—(1) The provisions of section 6 ( b) of the Sheriff Courts (Scotland) Act 1907, which confers jurisdiction on the Sheriff Court in an action against a defender who carries on business and has a place of business within the jurisdiction, provided he is cited ‘either personally or at said place of business,’ and (2) the provisions of section 116 of the Companies (Consolidation) Act 1908 as to the service of documents on a limited company to the effect that a document ‘may’ be served on a company by leaving it or sending it by post to the registered office of the company.

The respondents in their answers state that the boundary line between the counties of Lanark and Dumbarton where it passes through Lenzie is obscure, and they do not admit that in point of fact the complainers' premises at Lenzie are within the county of Dumbarton. Further, they aver that the complainers duly received both the citation and the charge and took no steps to challenge the validity of either; and they maintain in law that the present suspension is incompetent and that the complainers' averments are irrelevant.

Counsel for the respondents in support of these pleas of incompetency and irrelevancy founded on the following statutory provisions, viz.—( a) The provisions of section 5 (5) of the Sheriff Courts Act of 1907 conferring jurisdiction on the Sheriff as regards suspensions of charges under decrees of the Court when the debt, exclusive of interest and expenses, does not exceed £50; ( b) the mandatory provisions of section 7 of the same” Act to the effect that all causes not exceeding £50 in value, exclusive of interest and expenses, ‘shall’ be brought and followed forth in the Sheriff Court only, and ‘shall not be subject to review by the Court of Session’; and ( c) the provisions of Rule 123 of the First Schedule to the same Act to the effect that where a charge has been given on a decree granted by the Sheriff for payment of any sum of money not exceeding £50, exclusive of interest and expenses, the person so charged ‘may’ apply in the Sheriff Court of his domicile for suspension on caution of the charge.

The following cases were cited by the complainers’ counsel in support of his argument:—(As to the necessity for citation at the place of business within the Sheriffdom)— M'Bey v. Knight, 1879, 7 R. 255, and Corporation of Glasgow v. Johnston, 1915 S.C. 555 (opinion of Lord Mackenzie at p. 565, to the effect that “the antecedent to valid citation is that the Court has jurisdiction to issue the summons”). (As to the necessity in virtue of section 116 of the Companies Consolidation Act 1908 for service at the registered office of the company)— Wood v. Anderston Foundry, 1887, 36 W.R. 918, and Pearks, Gunston, & Tee, Limited v. Richardson, [1902] 1 KB 91. (As to the competency of suspending in the Court of Session when the proceedings in the Sheriff Court are fundamentally null)— Manson v. Smith, 1871, 9 Macph. 492; O'Malley v. Strathern, 1920 S.C. (J.C.) 74.

The following cases were cited by the respondents' counsel:—(As to the incompetency of suspension in this Court)— Bryson v. Belhaven Engineering and Motors, Limited, 1908, 15 S.L.T. 1043 (a decision in the Bill Chamber by Lord Guthrie), and Dickson & Walker v. John Mitchell & Company, 1910 S.C. 139. (As to the complainers being personally barred from objecting to irregularities of citation and service)— Fraser v. Reid, 1826, 4 S. 773.

I have come to the conclusion that the suspension is incompetent.

I base my opinion to that effect mainly on the following considerations:—(1) I think that section 7 of the Sheriff Courts Act 1907 expressly confers on the Sheriff Court a private jurisdiction in such an action as this in which the value of the cause is under £50, and excludes review by the Court of Session of the Sheriff Court decree complained of. (2) I think that Rule 123 of the First Schedule to the Act of 1907, to the effect that a suspension of a charge under a Sheriff Court decree for less than £50 ‘may’ be brought in the Sheriff Court of the domicile of the person charged although in itself prima facie merely permissive,

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must be read along with the mandatory provisions of section 7 of the Act for the purpose of determining the present question of jurisdiction, and that so read the jurisdiction of the Sheriff Court as regards the subject-matter of this case is really exclusive. The contrary view for which the complainers' counsel contended would mean that in suspensions of charges in Sheriff Court decrees for less than £50 there is concurrent or cumulative jurisdiction in the Sheriff Court and the Court of Session. I do not think that such a construction of the combined statutory provisions is well founded—contrast Ersk. Inst., i, 2, 10, with i, 3, 20. (3) In my opinion the present case is not governed by the authority of any of the numerous and varied cases in which a court of superior jurisdiction, apart from any express power of review, or even in spite of an express exclusion of review, has intervened in special circumstances to give a remedy against the decision or the procedure of a court of inferior jurisdiction, as, for example, when the inferior court has acted without jurisdiction, or when the proceedings complained of have been otherwise fundamentally irregular or null.

It is not practicable to state affirmatively the conditions under which a jurisdiction of the kind referred to, extraordinary and exceptional in its nature, can or will be exercised, for the cases which have been decided, while illustrating the application of the general principle in the particular circumstances of each case, do not afford any absolute definition of the scope of the general principle.

I think, however, that the following proposition—negative in its character and limited in its application—is consistent with all the decisions and is well founded in principle, viz., that the intervention of the Court of superior jurisdiction in cases of the kind referred to will not be held to be justified when a statutory remedy appropriate in the circumstances of the particular case is available in the inferior court and has not been exhausted.

“For the various reasons which I have given I shall refuse the note of suspension as incompetent.”

The complainers reclaimed, and argued—The Sheriff Court action and the charge had not been served upon the complainers at a place of business within the sheriffdom. Such service was a necessary element in founding jurisdiction in the case of a company. The decree had therefore been pronounced by a Court which had no jurisdiction over the complainers and was null and void—Sheriff Courts (Scotland) Act 1907 (7 Edw. VII, cap. 51), secs. 5 (5) and 6 ( b), and First Schedule, Rules 11 and 13; Corporation of Glasgow v. Johnston, 1915 S.C. 555, 52 S.L.R. 434; Balfour's Practicks, p. 408; Manson v. Smith, 1871, 9 Macph. 492, 8 S.L.R. 346; Aitcheson v. M'Donald, 1911 S.C. 174, 48 S.L.R. 185. The Sheriff Courts (Scotland) Act 1907 provided a complete code on the question of jurisdiction, and the fact that the registered office of the complainers was within the sheriffdom could not affect the matter— M'Bey v. Knight, 1879, 7 R. 255, 17 S.L.R. 130. Further, as a registered company the complainers should have been cited at the registered office, and the omission of the respondents so to cite them created a fundamental nullity—Companies (Consolidation) Act 1908 (8 Edw. VII, cap. 69), secs. 62 (1) and 116; Companies Act 1862 (25 and 26 Vict. cap. 89), sec. 62; Buckley on the Companies Acts (9th ed.), p. 268; Maclaren's Court of Session Practice, p. 339; Gore—Brown's Handbook on Joint Stock Companies, p. 16; Wood v. Anderston Foundry Company, 1888, 36 W.R. 918; Pearks, Gunston, & Tee, Limited v. Richardson, [1902] 1 KB 91; Watkins v. Scottish Imperial Insurance Company, Limited, 1889, 23 QBD 285; National Gas Engine Company, Limited v. Estate Engineering Company, Limited, (1913) 2 I.R. 474. If the decree and charge were fundamentally null they could be suspended in the Court of Session irrespective of the value of the cause— Christie Bros. v. Remington Typewriting Company, 1912, 1 S.L.T. 123. In an analogous case under section 75 of the Summary Jurisdiction Act 1908 this principle had been approved— O'Malley v. Strathern, 1920 S.C. (J.) 75, per Lord Justice-General at p. 79, 57 S.L.R. 640. But here the value of the cause was more than £50. Besides the sum in the decree, the importance of the case to the complainers arising from all the circumstances, including the attack on their credit and the petition for winding-up, was to be considered in estimating the value— Dickson & Walker v. John Mitchell & Company, 1910 S.C. 139, per Lord President at p. 145, 47 S.L.R. 110; Henry v. Morrison, 1881, 8 R. 692, 18 S.L.R. 438; Thomson v. Barclay, 1883, 10 R. 694, 20 S.L.R. 440.

Argued for the respondents—There was no nullity here either in respect of want of jurisdiction or defective citation. The complainers' registered office in Glasgow was their place of business and domicile, and subjected them to the jurisdiction of the Sheriff of Lanarkshire irrespective of the place of citation—Companies (Consolidation) Act 1908, sec. 62; Duncan and Dykes, Civil Jurisdiction, pp. 33 and 34; Lindley on Company Law, vol. i, p. 54; Laidlaw v. Provident Plate Glass Insurance Company, Limited, 1890, 17 R. 544, 27 S.L.R. 354. The citation might be irregular but it was not null. If the complainers had appeared, the defect would have been remedied—Sheriff Courts (Scotland) Act 1907, First Schedule, Rule 13. But section 116 of the Companies (Consolidation) Act 1908 was not imperative, and service at a place other than a registered office was good at common law. Rule 10 of the First Schedule provides for service on all kinds of persons outwith the jurisdiction. The only cases in which, under the Sheriff Courts (Scotland) Act 1907, the citation might cause a nullity were those relating to the performance of a contract or the commission of a delict in the jurisdiction. In those cases citation in the sheriffdom was necessary to create jurisdiction—section 6 ( f) and ( i). It was admitted that the complainers had received both the citation and the charge. Their

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contention therefore, if it were sound, was merely technical, and they were in a very unfavourable position for insisting on it. But if the citation was merely irregular, the suspension was incompetent in respect that the value of the cause did not exceed £50—Sheriff Courts (Scotland) Act 1907, section 5 (5) and 7, and First Schedule, Rules 123 to 125; Dickson & Walker v. Mitchell & Company, sup. cit.; Bryson v. The Belhaven Engineering and Motors, Limited, 1908, 15 S.L.T. 1043. The value of the cause was the amount due under the decree by payment of which the complainers could at any moment have stopped further proceedings. Further, the decree had not been implemented, and the remedy of reponing was still open to the complainers—Sheriff Courts (Scotland) Act 1907, First Schedule, Rules 27 and 33. Counsel also referred to the Sheriff Courts (Scotland) Act 1838 (1 and 2 Vict. cap. 119), section 34, and the Citation (Scotland) Act 1882 (45 and 46 Vict. cap. 77), section 3.

At advising—