Scottish Court of Session Decisions

In our view, the appropriate place to start in considering these competing arguments is with Maclaren's Court of Session Practice and the authorities cited there. Maclaren treats res judicata as a peremptory defence and says (at 396)

The authorities cited in regard to the proposition that a decree of dismissal will not found the plea are Barclay v. Barclay (1842) 5 D. 394 and Gillespie v. Russell, Duke of Sutherland v. Reed, Menzies v. Menzies, Wallace v. Braid and Cunningham v. Skinner.

Barclay v. Barclay was a case in which there were competing applications for service as heir to an estate and one of the applications was dismissed when the party indicated that he did not intend to proceed with it. It was held that the dismissal was not res judicata but the case is of no particular assistance for the present purpose. The headnote to the decision in Gillespie v. Russell in the House of Lords reads:

The first action was an action in which the pursuer, with the concurrence of her husband, alleged that she had been induced by fraudulent misrepresentation to let a coalfield of much greater value than she had supposed and she sought to have the lease set aside. The Lord Ordinary pronounced an interlocutor finding that the pursuers had not averred facts relevant and sufficient to support the conclusions and assoilzied the defenders. The Inner House varied the interlocutor by substituting the words "assoilzied the defenders from the action as laid". In the second action the pursuer made new and more detailed allegations in regard to the same alleged fraud. The Lord Chancellor, at 761, expressed the view that the second action contained apt averments and allegations disclosing facts which, if true, proved that the defenders, inter alia, resorted to fraud. He then said:

Lord Brougham expressed the view that even without the addition by the Inner House of the words "as laid" the previous decision would only have been an absolvitor from the action as laid and added that he agreed that the object of the court in adding those words was to make it clear that the pursuers still had the power of bringing a fresh action. Lord Cranworth expressed some doubt about that conclusion but Lord Chelmsford said at 764:

It is, in our view, clear that the primary question in that case was as to the effect of the interlocutors in the previous action and that what the House of Lords held was that, notwithstanding the use of the word "assoilzie", the interlocutor in the previous action should be treated as an interlocutor dismissing the action as irrelevant. In order to reach that conclusion, their Lordships had to consider what had been decided in the previous action but they did so, in our view, to discover what the effect of the previous interlocutor was intended to be, not, as Sir Crispin suggested, in order to apply the usual tests, as set out in the Clippens Oil Co. case and other authorities, for the application of the plea of res judicata. In our view, however, the judgments do go a little further and suggest, if they do not positively affirm, that where a second action is brought following a dismissal of a previous action the question for the court is whether the second action is "properly laid" and that if it is it will be allowed to proceed.

In Duke of Sutherland v. Reed, the pursuer raised an action in the Court of Session seeking declarator that certain crofters had no right or title to pasture cattle upon certain lands and also seeking interdict. The pursuer had previously presented a petition in the Sheriff Court seeking interdict. That petition was disposed of in a manner which the court in the later case described as remarkable. The sheriff heard some limited evidence on the question of possession of the land in question and then proceeded, as the Lord President observed at 257, to make a finding in fact on a matter on which he had not allowed any proof. Proceeding on that finding, the sheriff then held that the action before him was incompetent. When the subsequent case came to the Court of Session, a plea of res judicata was taken and on that plea the Lord President observed:

That passage formed the basis of the defenders' submission that any conflict in the authorities could be resolved on the basis that the plea of res judicata could be applied to a finding of irrelevancy or incompetency on the same basis as it could be applied to a decree of absolvitor, namely by considering whether the parties, the subject matter and the issue litigated and decided were the same. In our view, the proper reading of what the Lord President said in Duke of Sutherland v. Reed is the same as is implied by the House of Lords decision in Russell v. Gillespie, namely that if a subsequent action is raised after an initial action has been dismissed as incompetent or irrelevant, then the question is whether the new action is competent and relevant.

That then brings us to the case of Menzies v. Menzies. The action arose from the pursuer's attempts to reduce an agreement which he had made with his father in relation to entailed estates at a time when his father was the heir in possession and the pursuer was the next heir. In the first action, reported at (1890) 17R 881, the pursuer averred that the consideration which he had received for consenting to the agreement was grossly inadequate, and that it was the duty of a person who was acting as his father's agent, and who knew that the pursuer had no independent advice and was relying upon him, to have disclosed certain facts which, if the pursuer had known them, would have led him not to enter into the agreement. The pursuer therefore averred that he was induced to enter into the agreement by misrepresentation and improper concealment and under essential error induced thereby. That action was dismissed as irrelevant. In the second action, the pursuer averred fraudulent misrepresentation and the case went to proof. The Lord Ordinary found that the pursuer was induced to enter into the agreement by representations in regard to a material matter of fact made to him by the father's agent and that those representations, although not made fraudulently or with intent to deceive the pursuer, were not consistent with fact. On that basis, the Lord Ordinary reduced the agreement. The defenders reclaimed and the Second Division recalled the Lord Ordinary's interlocutor and assoilzied the defenders. The report in the House of Lords records, at 110:

The pursuer appealed to the House of Lords and on appeal the defenders abandoned the plea of res judicata. It was in that context that Lord Watson is reported as saying:

The context of that remark is, in our view very important. As the report shows, the very point on which the Second Division had held that the plea of res judicata could be maintained was that a decision to dismiss an action as irrelevant could be founded on as res judicata in a subsequent action in which the averments or the facts found were the same as the averments in the action which had been dismissed. That seems to us to be precisely the position which the defenders are adopting in the present case and it is precisely the position which Lord Watson was at pains to negative.

Cunningham v. Skinner was a case in which a person who had raised an action of damages for slander became bankrupt and was ordered to find caution but failed to do so, following which the action was dismissed. Some time later, another action was raised by the same pursuer against the same defenders on almost the same grounds. The defenders pled res judicata but the plea was rejected by a majority of the Second Division. The reason given by the Lord Justice Clerk, at 1128, was as follows:

Lord Traynor concurred but Lord Young dissented on the ground that a mistake had been made in granting dismissal rather than absolvitor in the first action and that the court was entitled to look at the ground of the judgment and why it was pronounced in order to decide whether the first action formed a bar to a subsequent action.

It is, in our view, clear that these authorities provide strong support for the proposition found in Maclaren and that they are not subject to being read in the qualified way which was proposed in the argument on behalf of the defenders. Maclaren's proposition is also very clearly supported by a dictum of Lord Deas in Stewart v. Greenock Harbour Trustees (1868) 6 M. 954 at 958, cited by Lord Shaw in Glasgow & South Western Railway v. Boyd & Forrest Ltd. (referred to below) The decision in Wallace v. Braid and the later decisions in Dundee General Hospitals v. Bell's Trustees and Paterson v. Paterson in our view support the same conclusion but it is not necessary to examine them in detail. It is, however, perhaps worth mentioning more particularly Govan Old Victualling Society v. Wagstaff, which also supports the rule, because that was a case in which Lord President Dunedin gave the only judgment, in which the other members of the court concurred. The precise circumstances of the case are not important. What is important is that, at 718, the Lord President said:

That observation is significant because the only real and substantial support for the defenders' argument in this case comes from Johnston v. Standard Property Investment Company Limited, in which case also Lord President Dunedin gave the only judgment. The case arose out of conveyancing transactions of some complexity involving the granting of deeds about which the Lord President spoke very critically. The essence of the transactions, as we understand them, was that a bondholder in possession of certain property sold it in lots and sought to create real burdens and rights of relief in regard to payment of feu duty. Eventually, an action for payment of a share of feu duty was raised against Johnston. With regard to that action the Lord President said, at 25:

Later on, after further transactions had taken place, two further actions were raised both dealing with aspects of the same transaction. In one of them, which was an action in the Court of Session, the court held that the bondholder was not in any way capable of interfering with the allocation of feu duty or creating any relevant real burden and in that action decree of absolvitor was granted. The other action was an action in the Sheriff Court which was appealed to the Court of Session and was before the court at the same time as the Court of Session action. In that action, the same point as had been considered in the action before Lord Dundas was raised and with regard to it the Lord President said:

Before making any comment on that decision, it is perhaps desirable to refer to what was said by Lord Shaw in Glasgow and South Western Railway Company v. Boyd & Forrest. Briefly, the circumstances of that case were that a firm of contractors had raised an action in which they claimed various sums but in which the defenders were assoilzied. Subsequently, the contractors sought to invoke an arbitration clause in the contract and the plea of res judicata was taken. The substantial question before the court was whether the questions litigated and decided in the action were the same as the questions arising in the arbitration. The decision was that they were and that the plea of res judicata was well-founded. The bulk of the speech of Lord Shaw was concerned with the question of what is meant by the expression media concludendi. Lord Shaw came to the conclusion that what was concerned in the action was, as the Lord Ordinary had said, that the summons concluded for payment of all sums alleged to be due in respect of work executed and that was what had been litigated and decided. He continued by saying that the appellants had obtained their definite, final and complete answer to that question by the decree of absolvitor which had been pronounced and he continued:

These authorities do, of course, support the defenders' position to some extent. It is, however, not easy to see precisely what Lord Shaw had in mind in the sentence in which he suggested that there could be a good plea of res judicata in the case of a fresh action containing a mere repetition of averments previously dismissed, particularly having regard to his approval of the dictum of Lord Deas to the effect that dismissal leaves it open to a party to bring a fresh action. The defenders' suggestion, essentially, was that in a case in which the whole issue was one of law or one which could be determined upon averments without the need for proof, then that issue constituted "the merits" of the action and a decision upon it, even if expressed as a dismissal, could be regarded as res judicata. That, however, is certainly not consistent with the dictum of Lord Deas and that dictum, is, in our view, in accordance with the tract of authority which we have discussed earlier in this opinion. Lord Shaw's expression of opinion does not appear to have been regarded in any of the later decisions or textbooks as qualifying the rule which, as we have seen, was expressed by Maclaren and followed by the other textbook writers.

The decision in Johnston supra, however, is plainly one in which the court treated a prior dismissal as being, in the circumstances, res judicata. All that can be said, really, is that that decision is entirely isolated: that it proceeded, so far as the judgment shows, without any detailed consideration of the law relating to the plea of res judicata and without any reference, explicitly at least, to authority: and that there is no attempt to explain how the decision could be fitted in with the rule indicated by cases such as Menzies v. Menzies. It is, also, perhaps significant that the case does not seem to have been founded upon in subsequent authorities or regarded as justifying a qualification to the rule expressed in textbooks. The decision must be regarded with respect but, in the absence of some explanation of how it was reached, as against the other authorities to which we have referred, it does not seem to us to justify a modification of the rule which in our view has been clearly understood and accepted for over a century at least. If the decision had proceeded upon reasoning or reference to authority, we could of course not have decided to ignore it without referring the question to a larger court. In the somewhat unusual circumstances in which this issue arises, however, we have reached the conclusion that it is not necessary for us to do so. In our view, the rule which the authorities overall clearly establish is the rule briefly and clearly expressed by Lord Deas, namely that the difference between dismissal and absolvitor is that dismissal leaves it open to bring a fresh action while absolvitor does not.

It is, of course, true as the defenders submitted, that there may be cases in which a decision reached after a debate is in reality a decision on the whole substantial subject matter of the case and that it may be thought inconsistent with the principle which lies behind the plea of res judicata that a party who has lost an action on such a basis should be free to raise repeated actions in the future. As to that, however, it can be said that in at least the majority of cases it should be possible for a defender who wishes to protect his position by obtaining a decree of absolvitor to do so, if necessary, by allowing the action to go to proof or by making appropriate admissions or renouncing probation. There may, of course, be cases in which an action can be disposed of on a point of law and investigation into complex facts may thereby be avoided. Even in such a case, however, the rules of court permit an action to be tried in stages (see R.C. 36.1) and, particularly in a commercial cause, it should be possible to structure the procedure so as to achieve an appropriate result. If it is not possible, that seems to us to be a matter which might be better addressed by considering whether further rules of court are necessary rather than by blurring the distinction which the authorities establish between dismissal and absolvitor and so creating uncertainty as to the effect of a decision. The opportunity which our procedure affords of taking a plea to the relevancy enables a defender to have an action against him dismissed without the necessity of going to proof but it is not unreasonable that when advantage is taken of that opportunity, the decision should be subject to the possibility of a further action being raised.

In all the circumstances, therefore, we are of opinion that the Lord Ordinary should have refused the plea of res judicata on the ground that the dismissal of the previous action could not be res judicata for the purposes of the present action. In these circumstances, it is not necessary for us to examine in detail the arguments which were addressed for and against the Lord Ordinary's decision on the question whether, assuming that a decree of dismissal could provide the basis for a plea of res judicata, the present action was not one in which that plea was available to the defenders. In brief the Lord Ordinary held that the pursuers' averments in relation to the assignation in their favour represented a relevant and substantial difference between this action and the former action, with the result that the plea could not be relied on by the defenders. In our view the Lord Ordinary reached the correct conclusion on that point, for the reasons which he gives.

The effect of our decision, therefore, is that the reclaiming motion falls to be refused.