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Cite as: [2002] ScotCS 294

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Keith v. Chalmers & Ors [2002] ScotCS 294 (11 November 2002)

OUTER HOUSE, COURT OF SESSION

CA149/00

OPINION OF LORD MACFADYEN

in the cause

MURRAY KEITH

Pursuer;

against

DAVIDSON CHALMERS and OTHERS

Defenders:

________________

Pursuer: Sandison; Boyds

Defenders: Williamson, Q.C., Solicitor Advocate; Brodies, W.S.

11 November 2002

In this action of damages for professional negligence I granted decree of absolvitor on 11 September 2002. My reasons for doing so are set out in my Opinion of the same date. In short, I held (i) that the defenders were negligent in failing to advise the pursuer on 22 August 1997 that his then proposed course of action would place him in breach of fiduciary duties which he owed to Argyll Property Asset Managers Ltd ("Argyll"), although not negligent in failing to tender such advice at any earlier date; but (ii) that the pursuer did not suffer any loss as a result of that negligence.

The pursuer has reclaimed against my interlocutor of 11 September 2002. In that interlocutor I reserved the question of the expenses of the action. Both parties subsequently enrolled motions for expenses. Such motions may be brought before the Lord Ordinary whose interlocutor has been reclaimed provided they are enrolled within fourteen days of the date of enrolment of the reclaiming motion (Rule of Court 38.3 (2A)). In the event, the pursuer's motion was not timeously enrolled, but it was a matter of agreement between the parties that I should, in terms of Rule 2.1, relieve the pursuer of the consequences of that failure to comply with Rule 38.3 (2A), because a timeously enrolled motion to the same effect had been dropped as a result of a misunderstanding. I accordingly granted such relief and entertained both parties' motions.

Mr Sandison for the pursuer submitted that, notwithstanding the fact that defenders had been assoilzied, the pursuer should be awarded the expenses of process, or should at least not be found liable to the defenders in such expenses. He pointed out that the defenders had denied that they were guilty of professional negligence. They had not been successful in maintaining that position. The pursuer had failed because it had been held that the defenders' negligence, committed when it was held to have been committed, had not resulted in any loss suffered by the pursuer. Mr Sandison submitted that, had the defenders conceded that they had been guilty of professional negligence in their failure to advise the pursuer in August 1997 about his fiduciary duties to Argyll, much of the proof would have been avoided, and the question of causation on which the pursuer ultimately failed could have been resolved at debate.

Mr Sandison made a further point by reference to a submission which he had advanced at the proof. He had then submitted that, since the pursuer's case was based on contract, he was entitled, on proof of breach of contract, to nominal damages without proof of specific loss. He pointed out that in my opinion I did not expressly deal with that submission. Had that submission been upheld, the pursuer would have been entitled to be treated as having succeeded, and would therefore have been entitled to the expenses of process.

Mr Williamson for the defenders submitted that the normal rule - that expenses should follow success - should be applied in the disposal of the motions for expenses. The pursuer's case had been that he had suffered loss of £107,000 as a result of breach of contract on the part of the defenders. The pursuer's pleadings were inspecific as to when the negligence was said to have taken place. As the case developed at proof, the primary contention had been that the negligence occurred before August 1997. In that respect the pursuer had failed. Negligence had only been established as at August 1997. The pursuer had failed to establish that he had suffered any loss as a result of that negligence. Applying the principle that expenses follow success, therefore, the pursuer's motion should be refused and the defenders' motion granted.

I do not consider that I can base my decision on expenses on Mr Sandison's second argument. I have confirmed that it is correct that he did submit at the hearing on evidence that, if the pursuer succeeded in establishing breach of contract, he was entitled to nominal damages without proof of specific loss. The point is recorded in my notes in a single sentence. So far as I recall, it was not elaborated upon. Be that as it may, it is correct that I did not expressly deal with that submission in my Opinion. Whether that amounted to an error on my part or not, as to which I express no opinion, it is not in my view open to me to revisit that matter now, after a reclaiming motion has been granted. I therefore take the view that, whatever the merits of any criticism that I failed to deal with an aspect of the pursuer's submissions may be, I must dispose of the question of expenses on the view which I took of the merits of the case in my Opinion of 11 September.

The question therefore comes to be whether the fact that the pursuer succeeded in establishing that the defenders committed a breach of contract in failing to advise the pursuer about his fiduciary duties in August 1997 renders it appropriate that the pursuer should be awarded the expenses of process, or at least not found liable to the defenders in such expenses. In my view, this is not a case of divided success, in which it is appropriate to take account of the fact that different parties succeeded in separable issues in the case. As Mr Williamson pointed out, Mr Sandison's submission depended on retrospective analysis of what the case had been about. In fact the case on both sides evolved in the course of the proof, and it is to a substantial degree speculative to attempt to say how the case would have proceeded if, before the proof, the defenders had admitted that they were negligent in August 1997 while maintaining their denial of negligence at any earlier stage. In my view it is appropriate to apply in this case the ordinary rule that expenses should follow success. Leaving aside the question of nominal damages, it is not success for a pursuer in an action of damages to establish that the defender was negligent but fail to prove that any loss resulted. I therefore find the pursuer liable to the defenders in the expenses of the action.

Mr Williamson moved in addition for the expenses of the hearing of the motions for expenses. That was not opposed, and was therefore granted.