EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
Lord Sutherland Lord Cameron of Lochbroom Lord Nimmo Smith |
0/161/6/1996
OPINION OF THE COURT
delivered by LORD CAMERON OF LOCHBROOM
in
RECLAIMING MOTION
in the cause
DRAMGATE LIMITED Pursuers and Respondents;
against
TYNE DOCK ENGINEERING LIMITED and OTHERS Defenders and Reclaimers:
_______ |
Act: Currie, Q.C.; Maclay Murray & Spens (Pursuers)
Alt: Wylie, Q.C., E. Robertson; Dundas & Wilson, C.S. (2nd and 3rd Party)
1 October 1999
This appeal is at the instance of the second third party and reclaimers in an action in which the pursuers and respondents ("Dramgate") claim damages arising from the arrestment and detention of a vessel, the MV British Viking, belonging to them.
The circumstances giving rise to the action are not in dispute between the reclaimers and the respondents. On 5 June 1996 the present defenders ("Tyne"), who did not appear at the appeal, sought warrant from the Sheriff at Aberdeen to cite Dramgate as defenders to an action for payment of two sums amounting to £186,342.75. These sums were said to be due to Tyne for ship repair work which had been carried out by them on two vessels belonging to Dramgate, payment for which together with additional charges remained outstanding. The initial writ presented to the Sheriff contained craves seeking decree for payment of those sums together with interest and expenses. It further craved the Court to grant warrant for letters of arrestment jurisdictionem fundandae causa authorising arrestment of all 64 shares of the vessel MV British Viking situated within the jurisdiction of the Court and in addition on the dependence of the action to grant warrant to arrest that vessel to remain under sure fence and arrestment "at the pursuers' instance until the defenders find sufficient caution acted with the books of Court that they will be made furthcoming to the pursuers as accords of law". The initial writ contained averments that Dramgate were a company having a place of business in England, that they were not resident in Scotland and were not otherwise subject to the jurisdiction of the Scottish Courts. The initial writ further included, as the provisions of Rule 3.4 of the Ordinary Cause Rules 1993 required where an application for warrant for arrestment to found jurisdiction was to be made, averments to the effect that the vessel was then docked in Aberdeen within the jurisdiction of the Court and that accordingly the Court had jurisdiction.
The initial writ also contained an averment that the Court had jurisdiction in the action by virtue of section 45(1)(e) of the Administration of Justice Act 1956. It is common ground between parties to the present action however that the basis upon which the initial writ was presented, namely payment of sums due in respect of ship repair work, does not give rise to jurisdiction in terms of that section. It is also common ground that such an action was governed by the terms of section 6 (c) of the Sheriff Courts (Scotland) Act 1907. This provides that "Any action competent in the sheriff court may be brought within the jurisdiction of the sheriff -...(c) Where the defender is a person not otherwise subject to the jurisdiction of the courts of Scotland, and a ship or vessel of which he is owner or part owner...(has) been arrested within the jurisdiction".
On presentation of the initial writ the Sheriff at Aberdeen granted warrant to cite Dramgate as defenders and also granted warrant to arrest on the dependence, including warrant to dismantle maritime subjects. There was a manuscript addition to this warrant which added the words "and finds jurisdiction on the arrestment". Nothing in the submissions presented at the appeal turned on the meaning of this phrase. It appeared that for the purpose of the appeal the parties accepted that the sheriff was to be taken as having granted warrant to arrest to found jurisdiction.
Following grant of the warrant to arrest on the dependence, the second third party acting as the solicitors for Tyne instructed a firm of sheriff officers, who are called in the present action as the first third party, to execute the warrant and to arrest the MV British Viking. On 5 June 1996 the warrant to arrest on the dependence of the action was executed by the first third party. The execution of the warrant set out that the sheriff officer acted by virtue of a warrant of the Sheriff dated 5 June 1996 "on an Initial Writ containing Warrant to Arrest on the Dependence including Warrant to dismantle maritime subjects, raised at the instance of" the present defenders against the present pursuer. It then declared that "in Her Majesty's Name and Authority and in Name and Authority of the said Sheriff" he had "lawfully" fenced and arrested the vessel. In terms of Rule 3.5 of the Ordinary Cause Rules 1993 the production of an initial writ with warrant to cite which includes a warrant to arrest on the dependence constitutes sufficient warrant to arrest on the dependence "if it is otherwise competent to do so".
On 7 June 1996 the second third party instructed the first third party to effect a further arrestment in relation to the vessel. The execution of the warrant referred to the warrant granted by the Sheriff on 5 June 1996 on the initial writ. It also set out that having been lawfully fenced and arrested, amongst other things the vessel "shall be made furthcoming to" Tyne "jurisdictione fundandae cause(sic), as accords of law, conform to said Initial Writ and Warrant".
On 11 June 1996 the Sheriff at Aberdeen, on the motion of Dramgate as defenders, recalled the arrestments and allowed the vessel to sail. An appeal by Tyne to the Sheriff Principal against the recall of the arrestments was refused.
In this action Dramgate aver that the arrestment effected on the dependence of the action on 5 June 1996 was fundamentally null and void in that it did not bear to arrest the MV British Viking ad fundandam jurisdictionem. It is said that there were no other grounds upon which the Sheriff could competently accept jurisdiction over Dramgate as defenders to the action in relation to the subject matter of the initial writ. Accordingly the vessel was unlawfully detained in Aberdeen harbour. It is further said that but for the inept, irregular and unwarranted arrestment of the vessel on the dependence of the action when there was no jurisdiction in the Court to warrant or warrant in the defenders to cause to be executed any such arrestment, the vessel would not on 7 June have been lying in Aberdeen harbour to be arrested.
In reply the second third party admit that the arrestments were recalled and that an appeal to the Sheriff Principal against the recall was refused. However they assert that the arrestments were executed regularly in accordance with the Warrant granted by the Sheriff on 5 June 1996.
After the procedure roll debate before the Lord Ordinary at which he heard submissions for each of the defenders, the first and the second third parties, the Lord Ordinary in terms of his interlocutor dated 28 September 1998 repelled the plea to relevancy and lack of specification stated by each of Tyne and the first third party. In addition, he repelled the third plea-in-law for Tyne to the effect that the arrestment on the dependence of the action executed on 5 June 1996 not being a wrongful arrestment, the defenders should not be assoilzied. Neither Tyne nor the first third party appeared at the appeal to make submissions in relation to the Lord Ordinary's determination. The Lord Ordinary also repelled the second third party's plea to relevancy and lack of specification and a plea in terms similar to the third plea-in-law for Tyne. Before this court the submissions of the second third party were directed to the decision of the Lord Ordinary so far as it repelled their plea to relevancy and lack of specification seeking dismissal of the action.
Before considering the submissions made to this court, it is convenient to note that counsel for the second third party did not take issue with that part of the opinion of the Lord Ordinary in which he noted that the purported arrestment executed on 7 June 1996 was ineffective in that it came too late to confer jurisdiction on the sheriff. No criticism was directed to the passage in his opinion in which the Lord Ordinary stated that the schedule of 5 June did not bear to arrest to found jurisdiction against Dramgate, that an arrestment on the dependence did not have that effect incidentally (Sutherlands of Peterhead (Road Hauliers) Limited v. Allard Hewson & Company Limited 1972 SLT (Notes) 83) and that accordingly at no time on 5 June 1996 did the sheriff have jurisdiction to entertain the action against Dramgate.
The submissions for the second third party began with the assertions that the Sheriff had granted a warrant which was an ex facie valid warrant for arrestment on the dependence of the action and that the warrant to arrest on the dependence of the action had been executed in due form. It was said that the Lord Ordinary had failed to keep in mind the distinction between an arrestment to found jurisdiction and an arrestment on the dependence. That distinction had been explained by Lord Kilbrandon in his speech in Alexander Ward & Company Ltd. v. Samyang Navigation Company 1975 SC (HL) 25 at p.54. The purpose of the latter was to freeze the subject arrested in the hands of the common debtor or in the case of a ship to prevent her movement, in order to provide the pursuer with security for payment by the defender of such sum as he shall be found to owe. On the other hand arrestment jurisdictionis fundandae causa did not attach the property arrested. It merely attested to the fact that the ship was at the time within the jurisdiction and that notice had been given that it was the intention of the person using the diligence to raise an action founding on the jurisdiction which resulted from the property being within the country, as was stated by Lord M'Laren in Craig v. Brunsgaard, Kjosterud & Company (1896) 23 R 500. It was accepted that where there had been a wrongful use of diligence for which an action of damages lay, an action could be directed against the creditor. But a litigant in appealing to the court of his country for redress was only using a remedy to which he was absolutely entitled and to make him liable in damages it must be averred and proved that he acted maliciously and without probable cause. Reference was made to Graham Stewart on Diligence pp. 762-3 and North v. Stewart 17 R (HL) 60. The circumstances averred by the pursuers fell into that category of case in which the defenders as pursuers in the initial writ were using a legal right or remedy to which they were absolutely entitled and which they could use without applying to the court for a special warrant. This applied to arrestments of all kinds in which it might be said that the creditor merely utitur suo iure. In that event the pursuers were not liable for executing the diligence unless either (1) there was an inherent vice in the form or regularity of the writ itself, or in the manner in which it was used, and none such was averred or (2) it be averred and proved that they obtained the diligence and put it in force maliciously and without probable cause (Bell's Principles para. 553: Brodie v. Young 13 D 737: Henning v. Hewetson 14 D 487). No such averments were made by the pursuers. The fact that an arrestment bearing to be executed solely on the dependence could not be held to be an arrestment to found jurisdiction, did not invalidate that arrestment. It was a form of diligence which in the ordinary case of an action with a pecuniary crave did not require averments justifying the arrestment (Macphail on Sheriff Court Practice para. 11.11) It therefore did not fall within the second kind of diligence referred to in Bell's Principles para. 553 in which a precise statement was required in order to induce the court to grant the requisite authority. Because the warrant was not then obtained purely as a matter of course, the applicant was answerable for the correctness of his statements. He became liable in damages if it was simply proved that his application was wrongful or illegal (Kennedy v. Police Commissioners of Fort William 5 R 302: J.B. Smith & Company v. Taylor 10 R 291). But there could be no action of damages for merely raising or insisting in an action at law (Wolthekker v. The Northern Agricultural Company (1862) 1 M 211). It w
For the respondents counsel invited the court to adopt the reasoning of the Lord Ordinary and to adhere to his interlocutor. The cases cited for the second third party demonstrated the ambit of the general principles which were to be applied. It was accepted that a party was not legally liable for having recourse to diligence in the ordinary course if his action failed at the end of the day. On the other hand the cases identified and exemplified a broad range of situations in which arrestment on the dependence or equivalent diligences were actionable. It was therefore wrong to suggest that the third category to which Lord President Normand had referred in Grant was an aberration and not well founded in law. Looking to the circumstances of this case it was clear that the initial writ recognised that as a prerequisite it was necessary to arrest the vessel to found jurisdiction for the right of Tyne to take action on their claim for payment to come into being. It was a matter of concession before the Lord Ordinary by the defenders and the third parties that the reference in the initial writ to section 45 of the Administration of Justice Act 1956 was inapposite. When the warrant to arrest on the dependence was executed, Tyne had not taken the necessary steps to arrest to found jurisdiction. Tyne's failure to do so rendered execution of the warrant radically incompetent. Arrestment to found jurisdiction was an essential ingredient of Tyne's right to raise an action. The circumstances differed from those in cases such as Wolthekker, Brodie v. Young and Wilson v. Mackie. It was not failure of the ground of action itself. Rather it was that an essential prerequisite of the right to take action had been omitted by Tyne. In Wolthekker the defenders raised an action against the owner and master of a vessel. With a view to this action, they arrested the vessel jurisdictionis fundandae causa and afterwards, on the dependence of the action, they arrested the vessel and caused her to be dismantled of her rudder. It was in those circumstances that the Lord Justice Clerk referred to the settled rule that a litigant using any legal right or remedy to which he was absolutely entitled and which he required to apply for no special warrant to enable him to use, could never be made liable for the consequences of its use unless he was shewn to have resorted to it maliciously and without probable cause. The question with which the court was concerned was whether it could be said that arrestment of a vessel on the dependence of an action differed in some sort from any other arrestment on the dependence and could be said to be the equivalent to an interdict against the sailing of the vessel and thus analogous to wrongous interdict in which it was unnecessary to aver malice and want of probable cause. The court held that it did not and that the settled rule applied. But in Wilson v. Mackie the court was careful to distinguish between the case where the claim in the action on which the arrestments proceeded was unfounded and the case where the arrestments were used without any warrant at all. In both cases it could be said that the arrestment had been used wrongously but in the former case only was it necessary to aver malice and want of probable case in any action for wrongous use of arrestment. Kennedy v. Police Commissioners for Fort William was a clear case where the necessary prerequisite for the action taken by the police commissioners, namely a statutory power to issue an order prohibiting Kennedy from carrying on certain building operations, was lacking and the police commissioners acted in excess of their statutory powers. Interim interdict was obtained on averment that Kennedy had contravened the order. It was held that an interdict was not granted as matter of ordinary right. Rather it was only granted on cause shown as an extraordinary r
"But in the former case it is otherwise; though even if there is some flaw in the steps of process, and if in spite of it diligence is persisted in, it may amount to a wrongous use of it, and give rise to an action of damages. But the unsuccessful use of diligence in the ordinary course of process is not necessarily a wrong on which damages will follow."
But in the present case there had been no flaw in a step of process. Arrestment to found jurisdiction was not a step of process. In the absence of an arrestment to found jurisdiction the sheriff court had no jurisdiction to entertain the claim in the initial writ. It followed that a prequisite for the warrant to arrest on the dependence was lacking and accordingly there had been wrongous use of the diligence. There had been no legal warrant for use of the arrestment of the vessel on the dependence of the action. It was a groundless arrestment. It was only where such an arrestment had been legally and regularly executed that it was necessary to aver malice and want of probable cause. Reference was made to passages from Bell's Principles and Graham Stewart on Diligence cited by the Lord President in Azcarate v. Iturrizaga at p. 579. In Grant v. Magistrates of Airdrie it was held that where a summary warrant enabling a rate collector to recover arrears of assessment was defective in that it was directed against the wrong person, it was not one to which the defenders had an absolute right to obtain but was only obtainable and had only been obtained periculo petentis upon the ex parte certificate of the collector. However in dealing with a diligence which was an unquestionable right to which a party was absolutely entitled, the Lord President had identified a number of grounds upon which the party using the diligence would be liable in damages at common law for injury done apart from establishing proof of malice and want of reasonable cause. He had distinguished between the case where the party using the diligence had acted without legal warrant or there had been irregularity in execution and the case where although formally regular, the execution was wholly unjustifiable, instancing a case where the sum due had been paid before execution. In this latter case the court would look behind the execution to determine whether or not there was ground for it. The court had done so in a number of the cases cited, including Wilson v. Mackie, Kennedy and Grant. The use of the word "unjustifiable" in relation to such cases was to be found in the passages in Graham Stewart on Diligence at pages 767 and 769. In these passages the author pointed out that wrongful use of a charge, being the first step of diligence, arose where a charge was given under circumstances which rendered its use unjustifiable. Thus where a debtor had been charged when he ought not to have been, i.e. when the charge was unjustifiable, then though the procedure was formally regular, the diligence used was really without a warrant.
In our opinion, the Lord Ordinary reached a sound conclusion in the matter. It is not in dispute that when the warrant for arrestment on the dependence was executed on 5 June 1996, it was inept and of no effect in that no arrestment to found jurisdiction had taken place. Indeed standing the decisions of the Sheriff and the Sheriff Principal in relation to recall of the arrestments it could not have been regarded otherwise. We interpose at this stage to note that if a legal wrong was then committed, it is no answer to aver that subsequently in the same proceedings the proper procedure was adopted. In Azcarate v. Iturrizaga it is the case that the second arrestment was laid in a subsequent action. But reference was made in the opinion of Lord President Normand at p.580 to the second Carlsberg case (5R(HL)215). In this latter case it was decided that where a first arrestment on the dependence had been cut down as a wrongful use of diligence, a subsequent arrestment on the dependence in the same action could not be allowed to be effective, because, if it were, the arresters would be given the advantage of their own legal wrong. Accordingly contrary to the submissions for the reclaimers, that case is directly in point for the present case. The failure to execute an arrestment to found jurisdiction means that the court has no jurisdiction to entertain the action and its place cannot be taken by an arrestment bearing solely to be executed on the dependence (Sutherlands of Peterhead (Road Hauliers) Ltd v. Allard Hewson & Co.). An arrestment to found jurisdiction confers jurisdiction upon the court as the statutory provision in the Sheriff Courts (Scotland) Act 1907 makes clear. In his speech in Alexander Ward & Co. Ltd. v. Samyang Navigation Co. at p. 55 Lord Kilbrandon was concerned with the question whether the warrant to arrest to found jurisdiction with the procedure which followed on it, made up something separate from the action whose purpose they were to serve, so that, being spent, they could not be ratified. He agreed with the judges of the Second Division that this was not the proper conclusion to be drawn. He said this:
"The fact that there is no nexus, the nexus having had but an ephemeral or
rather momentary existence while the warrant was in the course of execution, does not mean that the juridical effect of the arrestment is likewise momentary and ephemeral."
But that case does not support the suggestion that failure to execute that warrant has no juridical effect in relation to the warrant to arrest on the dependence of the action. Indeed for an arrestment on the dependence of the action to have effect, the property must at the time of the arrestment be property in the hands of an arrestee who is subject to the jurisdiction of the court (Graham Stewart on Diligence p.37: Macphail on Sheriff Court Practice para. 11.12). Section 6(c) of the 1907 Act provides that where the defender is a person not otherwise subject to the jurisdiction of the courts of Scotland, as was the case with Dramgate, an action may be brought within the jurisdiction of the sheriff but only if the ship or vessel of which he is owner has been arrested within the jurisdiction. That is to say, the arrestee can not be made subject to the jurisdiction of the sheriff court unless and until the warrant for arrestment to found jurisdiction has been executed. Indeed in terms of the sheriff court rules specific averment requires to be made in the initial writ to enable such warrant to be applied for. Moreover Rule 3.5 provides that the warrant to arrest on the dependence is only warranted in circumstances where it is "otherwise competent to do so". Accordingly for the arrestment on the dependence to be effective as an arrestment in security, the owner of the vessel must have been made subject to the jurisdiction of the sheriff court at the time of the execution of the warrant for arrestment by means of an execution of the warrant to found jurisdiction and not simply by virtue of an application for and grant of warrant to found jurisdiction, as appeared to be contended for on behalf of the reclaimers.
Against that background we turn to consider the question of whether in the present case a legal wrong was committed when Tyne executed the warrant to arrest on the dependence of the action on 5 June 1996 through the agency of the third parties, and if so whether it is necessary for Dramgate to aver that execution of the warrant was not only wrongful but that the diligence was put into force maliciously and without reasonable cause.
We find it unnecessary to review the authorities cited to us in detail since they bear out the general principle as stated in Bell's Principles para. 553.4 as follows:
"The use of diligence (as arrestment, etc., in security) is always periculo petentis: and where injury arises, will entitle to reparation, if nimious or groundless. 'This distinction is to be observed:
(a) a person using any legal right or remedy to which he is absolutely
entitled, and which he can use without applying to a Court for a special warrant, is not liable in damages for doing so; unless either
(1) there be an inherent vice in the form or regularity of the writ
itself, or in the manner in which it is used; or
(2) it be averred and proved that he obtained his diligence or put it
in force maliciously and without probable cause.
This applies to arrestments of all kinds, poindings and inhibitions, in which it may be said that the creditor merely utitur jure suo. But in the case of warrants to apprehend as in meditatione fugae,...petitions for cessio bonorum,...applications for interdict...the warrant or order of Court is not obtained purely as a matter of course, but upon a precise statement, often ex parte in order to induce the Court to grant the requisite authority. In such cases the applicant is answerable for the correctness of his statements, and is liable in damages if it be simply proved that his application was wrongful or illegal. There can be no action for damages for merely raising or insisting in an action at law,".
Again we have in mind that in Graham Stewart on Diligence p.767 the author says this in relation to actions of damages:
" Where the charge is irregularly or unwarrantably executed, an averment of 'wrongfully' is sufficient.
What is 'wrongful' use. - The irregularities which are considered 'wrongful' may be dealt with under the following heads -
(1) Where the warrant is irregular,
(2) Where there is irregularity in the
service of the charge, and
(3) Where a charge is given under circumstances which render its use
unjustifiable."
In the event that the warrant to found jurisdiction has not been executed when execution of the warrant for arrestment on the dependence of the action takes place, this is, in our opinion, equivalent no more and no less to the situation where a debtor has been charged when he ought not to have been (Graham Stewart on Diligence p.769). In that passage under the heading "Charge unjustifiable, though procedure formally regular", the principle is illustrated in two different ways by the author. He instances the case where the charge is unjustifiable, as when the debt was paid or discharged or tendered, and the case where the creditor has come under an obligation to abstain from diligence. As is apparent from the cases cited, that principle has been applied in a number of different circumstances where the warrant granted has been one for arrestment on the dependence of the action and thus one which would in the ordinary course be granted as of absolute right without obtaining a special warrant from the court. It is sufficient to refer only to the cases of Wilson v. Mackie and Smith v. Taylor. In doing so the court has gone behind the face of the execution of the diligence itself to determine whether or not there were circumstances which rendered its use unjustifiable. Counsel for the reclaimers did not suggest that the court was not entitled to do so in the present case. No case was cited in which a situation exactly in point on its facts was before the court. It is important also to have in mind that in cases such as Wolthekker v. Northern Agricultural Co. and Carlberg v. Borjesson, both of which involved arrestment of vessels, arrestment to found jurisdiction had been executed before arrestment on the dependence of the action. In our opinion, in the present case the principle alluded to in the passage from Graham Stewart quoted above can be invoked on the basis that Tyne were under an obligation to abstain from executing the warrant for arrestment on the dependence of the action until the warrant to found jurisdiction had been executed, not least because as the Sheriff Court rules make clear it was only warrantable if it was otherwise competent to do so. But Dramgate, as the proposed defenders in the action, were not subject to the court's jurisdiction at the point of execution of the warrant on the dependence. Thus it was not competent to arrest their property. In that event it can properly be said that either there was an inherent vice in the manner in which the warrant was used or that its execution was in the circumstances unjustifiable.
In his submissions counsel for Dramgate founded upon cases in which it would appear that the court was concerned with diligences where it could not be said that the creditor merely utitur jure suo, as for instance Kennedy v. Police Commissioners for Fort William and Grant v. Magistrates of Airdrie. Nevertheless the court in those cases went behind the face of the diligences in determining whether their use was wrongful, notwithstanding that such cases fell into the category of those diligences which are in the strict sense periculo petentis, the warrant or order of the court not being obtained purely as a matter of course. Such cases are useful in showing that the court is entitled and able to look behind the diligence and its execution to determine whether a legal wrong has been committed. In that category of case, the arrester is liable for the consequences if he has wrongfully used the arrestment on the warrant so obtained and it is never necessary to aver malice and want of probable cause. It was not however suggested by counsel for Dramgate that the Lord Ordinary erred in finding it unnecessary to consider submissions made to him that arrestment to found jurisdiction fell within that category, being the second class identified by Lord President Normand in the case of Grant, and on the effect of such a warrant when regularly executed. We recognise that in terms of the Sheriff Court rules specific averments are required to justify the application for warrant to found jurisdiction as a preliminary to the grant of the warrant for arrestment on the dependence of the action, all being part of one procedure (Alexander Ward & Co. Ltd. v. Samyang Navigation Co.). Accordingly it might be said that the right of Tyne to use arrestment in security of their claim was not in the same position as their right to take action therefor, since the latter right did not emerge unless and until arrestment to found jurisdiction had been executed. For it would only be then that Dramgate would become subject to the jurisdiction of the sheriff court. If the warrant was not executed, then there was no right to take action in the sheriff court, however well founded in fact Tyne's claim might otherwise be. Thus the warrant for arrestment in security was necessarily allied to the warrant to found jurisdiction and therefore the latter became a special warrant of a kind similar to warrant to arrest in meditatione fugae or was in the same position as an application for interdict. It could thus be said that the sheriff was being induced to grant the warrant in security on the basis that the warrant to found jurisdiction would have been executed before the diligence was used, that is to say, was induced to do so by reference to a state of fact that did not exist when the diligence came to be used. However in the absence of any argument specifically directed to this matter, it is unnecessary to reach any concluded view on the matter, because parties joined issue on the basis that this was a case in which it could be said that as creditor Tyne utitur jure suo in seeking warrant for arrestment on the dependence.
Nor in our opinion did the Lord Ordinary misunderstand what was said by Lord President Normand in the case of Grant. He appreciated that Tyne were entitled to apply in the initial writ for warrant to arrest on the dependence of the action. To that extent he accepted that warrant having been granted by the sheriff it could not be said that there was lack of legal warrant or on the face of the execution any irregularity in its execution. However he correctly pointed out that the true issue was whether the failure on 5 June 1996 to execute the arrestment to found jurisdiction affected the arrestment on the dependence which was then executed and which appeared to be unexceptional both in form and in regularity of execution. He correctly pointed out that in the absence of any averments of malice and want of probable cause, Dramgate could only rely on establishing that the execution of the warrant for arrestment on the dependence though formally regular, was wholly unjustifiable. We agree with counsel for the respondents that in using that phrase the Lord President was merely echoing what was said in the passage from Graham Stewart on Diligence at p. 769. The subsequent illustrative reference to the payment of the sum due by the debtor before execution of the warrant would appear to make this clear. In so far as it is appropriate to regard what the Lord President said as setting out "categories" of case, there is ample warrant in the passages cited above from Bell's Principles and Graham Stewart on Diligence for identifying three different sets of circumstances in which notwithstanding it might be said that the creditor merely utitur jure suo, nevertheless it was unnecessary to aver malice and want of probable cause in an action of damages for wrongful use of diligence. One of these sets of circumstances concerns the use of diligence formally regular where the use is unjustifiable. Accordingly there is no merit in the criticisms of counsel for the reclaimers in relation to the use of the phrase "wholly unjustifiable" in the passage from Lord President Normand's opinion in Grant cited by the Lord Ordinary, not least because that passage was clearly and specifically related to the first of the two kinds of case identified and distinguished in Bell's Principles. That this is so is made abundantly clear by the terms of the last sentence of the passage quoted by the Lord Ordinary. There Lord President Normand was plainly referring to the second kind of case so identified. Accordingly we do not find it necessary to consider whether there is any disparity between what was said by Lord President Normand in Azcarate v. Iturrizaga and in Grant, other than saying that any disparity is not immediately obvious.
In our opinion the Lord Ordinary was correct in holding that what he called the Lord President's third category could be constituted by averments identifying circumstances which demonstrated that the use of the diligence was wholly unjustifiable and that if that were so, averments of malice and lack of probable cause were not required. In holding that Dramgate's case was relevant, he pointed out that it is averred on behalf of Dramgate that what had been executed was an arrestment on the dependence and nothing else, that the sheriff court proceedings were competent if and only if the pursuers there obtained and executed warrant to arrest the ship to found jurisdiction and that they had singularly failed to do so. He correctly held, and it was not sought to suggest otherwise on the part of the reclaimers, that warrant to arrest on the dependence of the action did not authorise arrestment to found jurisdiction. In our opinion, in these circumstances he was entirely correct when, after noting that it was accepted for Tyne that there could be no competent proceedings unless warrant to found jurisdiction were at least attempted in terms of an appropriate warrant from the sheriff, he said that without that process execution of arrestment on the dependence was wholly unjustifiable though formally regular and that in the circumstances of the case it was wholly unjustifiable to execute a warrant to arrest on the dependence without taking any steps to arrest to found jurisdiction. We agree with the Lord Ordinary that the circumstances averred can be looked at in two different ways, either as the omission of an essential procedural stage entitling Tyne to use the warrant to arrest on the dependence, in which event it can be said there was a flaw in the steps of process entitling Tyne to use the diligence, or because there being no colourable basis for jurisdiction against Dramgate at the time of the arrestment, it was incompetent to arrest the vessel belonging to Dramgate on a warrant on the dependence of an action when as arrestee Dramgate had not then been made subject to the jurisdiction of the court which issued the warrant. In either event we agree with the Lord Ordinary that it was unnecessary for Dramgate to aver more than that the use of the diligence was wrongful and in particular that they did not require to aver malice and want of probable cause.
In the whole circumstances we shall refuse the reclaiming motion and remit back to the Lord Ordinary to proceed as accords.