Scottish Court of Session Decisions

[1] The Petitioner is a second hand car dealer. He lives at 17 Main Street, Methven, Perthshire, an address which lies within the local authority area of the Respondents. The Respondents are the statutory successors of Perth and Kinross District Council ("the District Council"), within whose local authority area Methven was also located. In exercise of their powers under the Civic Government (Scotland) Act 1982 ("the 1982 Act"), the District Council introduced a scheme for the licensing of second-hand dealers under section 24 of that Act. That scheme came into effect on 1 February 1986. It has subsequently been amended.

[2] The Petitioner applied to the District Council for and was granted a second-hand dealer's licence during 1987. During 1990 that licence was renewed by the District Council, for the three year period to 31 July 1993. In anticipation of the expiry of his licence on 31 July 1993, the Petitioner sought its further renewal. At a meeting of the District Council's General Purposes (Licensing) Sub-Committee, held on 18 February 1994, the Petitioner's application for renewal of his licence was refused. The Petitioner requested written reasons for that decision. These were provided by the District Council, in a letter dated 10 March 1994. Subsequently, by Summary Application made in terms of the 1982 Act, the Petitioner appealed to the Sheriff at Perth against the refusal to renew his licence. Provisions permitting such an appeal are to be found in paragraph 18 of Schedule 1 to the 1982 Act. The Petitioner's appeal was successful, to the extent that the Sheriff pronounced an Interlocutor, dated 13 February 1995, remitting the application back to the District Council, to enable it reconsider the application de novo. The District Council, however, appealed to the Court of Session, against the Sheriff's Interlocutor of 13 February 1995. On 6 December 1995, the Court of Session sustained the District Council's appeal, recalled the Sheriff's Interlocutor and restored the determination of the District Council's General Purposes (Licensing) Sub-Committee. In accordance with the provisions of paragraphs 8(6)(c) and 18 of Schedule 1 to the 1982 Act, the Petitioner's licence had continued to have effect between 31 July 1993 and 6 December 1995, pending the outcome of the appeal proceedings. The Petitioner has not held a second-hand dealer's licence since 6 December 1995.

[3] The present Petition was lodged on 4 May 2000. In the Petition, the Petitioner seeks a number of remedies. He seeks declarator that the decision of 18 February 1994, to refuse his application for the renewal of his licence, was ultra vires of the District Council and was taken without legal warrant. He seeks declarator that he is entitled to compensation for loss, injury and damage suffered by him, as a result of the ultra vires and illegal decision of 18 February 1994. He seeks reduction of the decision of 18 February 1994 and such further orders (including an order for expenses) as to the Court seems just and reasonable.

[4] Before turning to the issues upon which I heard submissions at the First Hearing, it is appropriate to say something further about the averments in the Petition. The decision of 18 February 1994 is challenged on a number of grounds. These include an argument that the provisions of the 1982 Act were not complied with, when the scheme for licensing second-hand dealers was introduced and subsequently amended by the District Council. It is also argued that the General Purposes (Licensing) Sub-Committee of the District Council had not been given the necessary delegated powers to vary the scheme or to attach conditions to any licences issued in terms of section 24 of the 1982 Act. It is argued that any actings and decisions of the District Council (and of its General Purposes (Licensing) Sub-Committee), purporting to administer the scheme, and in particular the decision of 18 February 1994 to refuse the Petitioner's application for renewal of his licence, were ultra vires of the District Council. Separately, it is also argued that the District Council's decision to refuse to renew the licence, on account of the Petitioner's failure to comply with one of a number of ultra vires conditions, attached to the Petitioner's licence, was illegal and without legal warrant.

[5] Turning to the question of damages, as already indicated, the Petition seeks a declarator that the Petitioner is entitled to compensation for loss, injury and damage suffered by him as a result of the decision of 18 February 1994. It should be noted, however, that the Petition does not seek an award of damages of a specific sum. Article 7 of the Petition is in the following terms:-

[6] The Petitioner's second plea in law states:-

[7] On 21 February 1997, the Petitioner was convicted after summary trial at Perth Sheriff Court of a contravention of section 7(1) of the 1982 Act. That conviction was based on findings-in-fact that the Petitioner had between 24 April 1996 and 22 May 1996, at premises at Main Street, Methven, carried on business as a dealer in second-hand motor vehicles, without holding a second-hand dealer's licence, as required by section 24 of the 1982 Act. The Petitioner subsequently appealed against that conviction, by way of Stated Case. During his trial, and in the appeal he marked, the Petitioner raised the issue of whether the District Council had in force, during April and May 1996, a valid scheme for the licensing of second-hand car dealers under the 1982 Act. The Petitioner did so as one line of his defence to the charge he faced. That line of defence was to the effect that he was not required to have a licence, because neither the District Council nor the Respondents had ever brought into force a valid scheme for the licensing of second-hand car dealers.

[8] Although that Stated Case was signed by the Sheriff as long ago as 28 August 1997, the appeal against the Petitioner's conviction has not yet been dealt with by the High Court of Justiciary. The appeal has called before the High Court on a number of times, but on each occasion the appeal has been adjourned. It is clear from the terms of the Stated Case that if the appeal proceeds to a full hearing, the Petitioner will seek to challenge the validity of the scheme for issuing licences to second-hand dealers operated initially by the District Council and now by the Respondents. It is likely that the Petitioner will seek to do so along similar lines to those he adopts in the present Petition.

[9] When the Petition came before me for a First Hearing, counsel for the Respondents indicated that there were two preliminary issues he wished to argue, before the merits of the Petition were addressed. Those issues related to the first and second pleas-in-law for the Respondents. The first plea-in-law is a general plea to the competency of the Petition and the second a general plea to the relevancy of the Petition. Counsel for the Petitioner was content that the two issues identified by the Respondents should be addressed and resolved as preliminary issues. It should be noted that the Respondents did not seek to argue at this stage of the proceedings, their seventh plea-in-law to the effect that the Petition is barred by mora, taciturnity and acquiescence. Likewise I did not hear any detailed submissions about the provisions of the 1982 Act or on the issue as to whether the District Council's scheme for the licensing of second-hand dealers was competently made and amended.

[10] It is convenient to deal first with the parties' submissions, as they related to the Repondents' second plea-in-law. These submissions were confined to the manner in which the Petition deals with the question of the claimed entitlement to compensation. Counsel for the Respondents criticised the Petitioner's averments relating to damages as being irrelevant and lacking in specification. He did so for a number of reasons. In the first place he argued that it was inappropriate to allow the question of damages to be dealt with in the context of the Judicial Review proceedings, which had been raised. He submitted that the appropriate way to proceed was by a separate action for damages. He suggested that in Judicial Review proceedings the Court was invited to exercise an extraordinary jurisdiction. He submitted that jurisdiction should only be exercised, when no other remedy was available. That was not the position in the present dispute between the parties, where a separate action for damages could have been raised. Counsel for the Petitioner did not go so far as to suggest that claiming damages in judicial review proceedings is incompetent. He acknowledged that the Rules of Court permit damages to be claimed and awarded in such proceedings. That follows from the broad terms in which Rule of Court 58.4 is drafted. Counsel for the Respondents contended, however, that it was not competent to deal with the matter of compensation, in the manner chosen by the Petitioner, which inevitably involves a two-stage process. He argued that the factual and legal issues involved in determining whether the Petitioner was entitled to any award of damages against the Repondents were complex. He submitted that as at least some of those issues had not been focused in the Petitioner's pleadings, it was not appropriate for the question of damages to be considered in the context of the present petition. In support of that particular contention I was referred to the views of Lord Johnston in Shetland Line (1984) Ltd v Secretary of State for Scotland 1996 SLT 653 at 658 H-K. Counsel for the Respondents also founded strongly on the fact that if the declarator sought was to be granted, further proceedings would be necessary to quantify the damages payable. In these circumstances, he argued that a separate action should be raised now, if the Petitioner was intent upon seeking to recover damages.

[11] Counsel for the Respondents attacked, on a variety of further grounds, the relevancy of the averments as to Petitioner's claimed entitlement to compensation. It was pointed out that the averments in Article 7 of the Petition describe the legal basis for the entitlement to damages in only the most general of terms. It was argued that as the District Council's actings, insofar as they bore upon the Petitioner, were all taken in the course of the Council's discharge of their statutory duties under 1982 Act, damages would only be recoverable if the Petitioner could establish that there had been malice or want of probable cause, when the Council set up the licensing scheme or when it dealt with the Petitioner's application for the renewal of his licence. No averments of malice or want of probable cause were to be found in the present pleadings. This was not a case in which a public body had acted without any statutory authority and had thereby exceeded its statutory authority. Many of these submissions as to relevancy were supported by further reference to the Opinion of Lord Johnston in Shetland Line (1984) Ltd at page 657 D-I and to the cases therein cited, in particular Bourgoin SA v Ministry of Agriculture, Fisheries and Food [1986] QB 716.

[12] The averments relating to damages were also attacked on the ground there are no averments as to when the losses arose. It was contended that such averments were essential, in view of the Petitioner's stated position in the pleadings that he had continued to trade after 6 December 1995, the date when the District Council's decision of 18 February 1994 took practical effect.

[13] Turning to issues of specification, it was contended that the Petitioner's averments lacked necessary detail about the nature of and financial standing of the Pursuer's business, how the valuation of the business at £500,000 was derived, when patrimonial loss had been suffered, the date and nature of the medical conditions, about which the Petitioner complains, and the date and nature of the medical treatment he has received.

[14] Counsel for the Respondents dealt briefly with a number of authorities referred to in the Petitioner's pleadings. He correctly described Smith & Co v Taylor (1882) 10R 291 as a case concerned with wrongful use of diligence. He contended that as such it is of no assistance in the present proceedings. He submitted that in Hughes v Town Council of Edinburgh and Others (1905) 13 SLT 672 there was an argument available to the pursuer that prima facie the two individual defenders, who were local authority officials, had clearly acted outwith their powers. He suggested that no such argument was available to the Petitioner in the present case. Counsel for the Respondents sought to distinguish Bell v McLennan 1992 SC 41 on the basis that part of the loss, which the pursuer had sought to recover in Bell, was clearly referable to the retention of goods by the Procurator Fiscal, for a period of weeks after the expiry of his statutory authority for retaining goods from their lawful owner. It was submitted that as with Hughes, there could be no doubt that in Bell, the public official involved, namely the Procurator Fiscal at Kilmarnock, had acted without statutory authority. Reference was also made to Robertson v Keith 1936 SC 29 and in particular to a passage in the Opinion of Lord Justice Clerk Aitchison at page 47, to which I will return in due course.

[15] Counsel for the Petitioner's response to these submissions was in short form. He stressed that damages can be awarded in Judicial Review proceedings. He also stressed that all that was being sought in the Judicial Review proceedings, as currently drafted, was a declarator that the Petitioner was entitled to compensation. Counsel envisaged at least two methods by which the quantum of damages could subsequently be assessed, were such a declarator to be granted. One would involve the Petitioner being ordered to produce in the present proceedings a detailed list of losses. He suggested that such a list could be considered at a Second Hearing. Another alternative would be the raising of a Sheriff Court action, founding on the existence of the declarator and limited to the assessment of compensation. Counsel's position was that the present petition was primarily directed to the vires of the actings of the District Council and its General Purposes (Licensing) Sub-Committee. The issue of damages, whilst of importance to the Petitioner, was almost incidental at this stage. He submitted that it would have been spurious for the Petitioner to have gone into the detail of the claimed losses at this stage, when only declarator is being sought.

[16] Counsel for the Petitioner responded to the criticisms as to a lack of averments of malice or want of probable cause, by referring to page 676 (2) of the Opinion of Lord Johnston in Hughes v Town Council of Edinburgh, page 41 of the Opinion of Lord Normand in Robertson v Keith and pages 46-47 of the Opinion of the Court delivered by Lord McCluskey in Bell v McLennan. He submitted that these authorities support the basic principle that underpins the case for a declarator of entitlement to compensation, namely that where a public official acts illegally, any damage he causes gives rise to a claim for damages.

[17] In my opinion, the averments in the Petition, which relate to the declarator of an entitlement to compensation, are irrelevant and lacking in specification. It is correct, as counsel for the Petitioner stressed, that it is competent to seek damages in a Petition for Judicial Review. Recourse to the provisions of Rule of Court 58(4), however, makes it clear that an order relating to damages can only be made in such form as could be sought in an action or petition. No authority was cited to me to support the proposition that in an action (or, for that matter, in any other form of petition proceedings) in the Court of Session, it would be competent for the person raising the proceedings to limit the order he seeks from the Court to a declarator of entitlement to damages, which might involve leaving questions of causation, remoteness of damages and quantification to be resolved in subsequent and possibly completely separate proceedings. Nor is it obvious how such proceedings for declarator alone would fit with the law of prescription and limitation of actions or with the principle that damages, which arise from one and the same cause of action, should all be assessed and recovered in one action. Depending upon the grounds of liability founded upon, such a two-stage process might also make it difficult to address and rule upon the existence and scope of duties of care.

[18] In Article 7 of the petition the Petitioner avers that he has suffered a variety of different heads of loss. He claims that his business, valued at £500,000, has been destroyed, that he has been subjected to criminal prosecution and conviction and that his health has been adversely affected, requiring him to undergo treatment for nerves and depression. No further specification of the losses allegedly suffered is given. Clearly, as a matter of relevancy, the Petitioner would not be entitled to a proof on such averments of loss, without further specification being added to the pleadings. But is goes further than that. Issues clearly arise as to whether the various heads of loss, claimed by the Petitioner, were caused by the unlawful actings of the District Council and, if so, whether any or all of those heads of loss are too remote as to sound in damages. Standing the terms in which the declarator of an entitlement to compensation is framed, those issues would in all probability require to be resolved, before the Court could decide whether to grant the declarator sought by the Petitioner. The terms of the declarator sought refer to an entitlement to compensation for the loss injury and damage suffered by the Petitioner as a result of the District Council's ultra vires and illegal decision. In my opinion, no ruling as to the existence or otherwise of such an entitlement to compensation could be made without evidence and submissions as to matters not currently focused in the pleadings. The problems created by the current terms of the Petitioner's pleadings may go further than questions of relevancy. Indeed they may go further than concern about a "procedural shambles", to borrow Lord Johnston's colourful phrase in Shetland Line(UK) Limited. On the basis of evidence and submissions tied to the Petitioner's present averments, it would arguably be impossible for the Court to reach a just view as to whether declarator should be granted. Were the Court to do so, it would be unclear what losses the Declarator covered and what issues of causation and remoteness of damage remained to be solved.

[19] In reaching these views, I have deliberately refrained from expressing any view as to whether in a separate action for damages, the Petitioner would require to aver and prove malice on the part of the District Council or want of probable cause for the District Council's actings. I have done so, because it is unnecessary for my decision on this aspect of the case and because I did not receive full submissions, from either party, on the complex legal issues involved in that question. At this stage, all I would record is that the Petitioner founds on the passage at page 47 of the Opinion of Lord Justice Clerk Aitchison in Robertson v Keith, where he summarises the law relating the grounds upon which civil liability for the actings of a public official may be established. Whether that should occur in the present case is a question upon which I express no opinion.

[20] In these circumstances, I accept the Respondents' submissions as to the lack of relevancy and lack of specification of the Petitioner's averments relating to the declarator of an entitlement to compensation and as to damages. I do not agree, however, with the Respondents' counsel that the lack of relevancy of those averments inevitably leads to the dismissal of the Petition. The averments relating to an entitlement to compensation and damages are not an essential part of the Judicial Review proceedings, in the sense that the other remedies sought can be considered, without any recourse to the issue of whether the Petitioner is entitled to compensation from the Respondents. Accordingly, I sustain the Respondents' second plea in law to the extent of excluding from further consideration in these proceedings the claim for a declarator of an entitlement, on the part of the Petitioner, to compensation for loss, injury and damage.

[21] Under reference to the Respondents' first plea in law, Counsel for the Respondents argued that as the legal issues raised in the Petition, as to the vires of the District Counsel's licensing scheme, were identical to those that had been raised in the criminal appeal proceedings, the present Judicial Review proceedings were not competent. As a subsidiary argument, he also contended that if it was competent to raise the issue of the vires of the District Council's actings, in Judicial Review proceedings, the Court should nevertheless, as an exercise of its discretion, decline to deal with that issue in the present case, out of respect for the High Court of Justiciary. Counsel described this subsidiary argument as akin to an argument of forum non conveniens.

[22] Counsel for the Respondents founded on the fact that in the criminal appeal, the alleged lack of vires for the District Council's actings had been raised. Cases such as Dilietio v Ealing London Borough Council [1998] 2 All E R 886 and Boddington v British Transport Police [1999] 2 AC 143 illustrated how a person charged with a criminal offence could raise, as part of his defence to criminal proceedings, the legal validity of a bye-law or admininistrative action. That had been done by the Petitioner in the criminal proceedings taken against him. No objection had been taken by the Crown to the vires issue being raised, initially before the Sheriff and now before the High Court of Justiciary. It was also stressed that the only new issue raised in the Judicial Review proceedings, compared to what was raised in the criminal appeal, was the matter of damages, which were irrelevant.

[23] As I have indicated Counsel's initial argument in support of the Respondents' first plea-in-law was that as the vires issue had been raised in the criminal proceedings, it could not as a matter of competency be raised in judicial review proceedings. In my view that argument is ill-founded. I do not consider that the argument finds any support in the authorities which counsel for the Repondents placed before me, namely Morton v Gardner (1871) 9 M. 548, Cordiner, Petitioner 1973 J.C. 16 and Clyde and Edwards on Judicial Review at para. 8.43. Neither the civil nor the criminal courts have an exclusive jurisdiction to construe the provisions of the 1982 Act. It is quite possible to envisage the same question of law, as to the construction or application of the provisions of the 1982 Act, arising in both civil and criminal proceedings. Were that to happen, it would be necessary for the question of law to be resolved in each set of proceedings. In my opinion, that could occur without the criminal court interfering with the jurisdiction of the civil court or vice versa. As Lord Justice General Emslie made clear in Cordiner, at page 18, the High Court of Justiciary and the Court of Session have different functions and their jurisdictions are independent and in no sense concurrent. As far as the reference to the passage in Clyde and Edwards is concerned, whilst it would be incompetent, as the learned authors suggest, for the civil courts to entertain proceedings for a declarator that a criminal wrong has been committed, that is not what is sought by the Petitioner in the present case, whether directly or indirectly. In any event, any decision by a Lord Ordinary (or by the Inner House) in the present case would not be binding on either the Crown or the High Court of Justiciary. For these reasons, I reject that Respondents' argument that the Judicial Review proceedings are incompetent.

[24] As far as the subsidiary argument is concerned, I also reject it. In the first place, the Respondents' first plea-in-law is a plea to the competency of the proceedings. In such circumstances, I do not see how any question can arise as to the Court of Session having a discretion in relation to this aspect of the case. In the event that it did, I am quite satisfied that such discretion would fall to be exercised in favour of the Petitioner. The Stated Case remains undetermined. There can be no guarantee that it will ever be determined by the High Court. The Petitioner could abandon the appeal. The Crown could concede that the conviction should be quashed. Even if a full hearing of the Stated Case takes place, there is no way of knowing when that will be. It is even possible that at such a hearing, the appeal could be decided on questions of law other than those raised in the present Petition. When regard is had to all those factors, it is clear that, if the Court has a discretion as to whether to allow the Petition to proceed, that discretion should be exercised in favour of the Petitioner. I accordingly repel the first plea-in-law for the Respondents.

[25] Having regard to the views I have reached on the submissions I heard at the First Hearing, the Petition will be put out "By Order", to deal with the question of expenses and for a discussion as to further procedure.