Scottish Court of Session Decisions

North Sea Equipment Rentals Inc v. Drilltech Services (North Sea) Ltd [2002] ScotCS 45 (15th February, 2002)

OUTER HOUSE, COURT OF SESSION
	OPINION OF LORD MacLEAN in the cause NORTH SEA EQUIPMENT RENTALS INC Pursuers; against DRILLTECH SERVICES (NORTH SEA) LIMITED Defenders:   ________________

 

 

Pursuers: A McKenzie, Paull & Williamsons

Defenders: R W J Anderson, Q.C., Ledingham Chalmers

15 February 2002

 

1. In May 1994 the pursuers raised an action against the defenders, the summons passing the signet on 26 May 1994. The first conclusion was in the following terms:

"For delivery by the defender to the pursuer's agents Tuboscope Vetco (UK) Limited, at Badentoy Park, Portlethen, Aberdeen the property specified in the schedule hereto within fourteen days or such other period as the Court shall appoint or, failing delivery, for payment by the defender to the pursuer of the sum of one million two hundred thousand pounds (£1,200,000) sterling with interest thereon at the rate of eight per centum per annum from 27 April 1994 until payment".

The schedule referred to is headed thus: "SCHEDULE OF ASSETS THE PROPERTY OF THE PURSUERS HELD BY THE DEFENDERS". It sets out the property in terms of quantity, description and serial numbers. On 3 June 1994 the defenders' solicitors accepted service of the summons and dispensed with the induciae. By 16 June 1994 the parties had entered into a Joint Minute agreeing certain matters in detail. Paragraph 4 of the Joint Minute provides:

"The defender shall arrange for the property identified in schedule 4 attached to said letter dated 2 June 1994 from Ledingham Chalmers to Paull & Williamsons to be returned from customers to the pursuer as soon as is reasonably practicable consistent with the terms of the contract with these customers. The defender confirms that to the best of his knowledge and belief that all the said property will be returned from customers to the pursuers within a reasonable period, being consistent with the terms of the contract with these customers".

2. On 16 June 1994 counsel representing the parties appeared before Lord Milligan. Of consent Lord Milligan granted the following order:

"Ad interim interdicts the defenders or anyone acting on their behalf from using, contracting in relation to, disposing of, or otherwise intromitting with the property specified in the schedule hereto except in accordance with the terms of any subsisting contracts entered into between Bon Accord Tool and Supply Company (North Sea) Limited and their customers, or by delivery of said property to the pursuers' agents Tuboscope Vetco UK Limited at Badentoy Park, Portlethen, Aberdeen; finds the defenders liable to the pursuers in the expenses of the action to date and remits the account thereof, when lodged, to the Auditor of Court for taxation, Sists the cause for implementation of the agreement between parties contained in the Joint Minute No.11 of process".

What is of relevance in the debate I heard is that the Court sisted the cause to enable the agreement between the parties to be implemented. The Joint Minute containing the agreement made no mention of what was to happen to the action but it is in my opinion to be inferred from the terms of the interlocutor that parties wished to keep the action in being. In short, the agreement in the Joint Minute was not in substitution for the action. Indeed, it is to be noted that the defenders were found liable to the pursuers in the expenses of the action "to date".

3. On 29 November 2000 the pursuers lodged a Minute of Amendment in the action. After sundry procedure the Court on 12 July 2001 allowed a further Minute of Amendment to be received and the summons to be amended in terms of the Minute. It had also appointed the defenders to lodge defences, if so advised, no defences having been lodged in the action before that. It appears that formally the sist was not at any time recalled. The Record eventually closed on 10 October 2001. In the first conclusion of the amended summons the pursuers seek delivery by the defenders to their agents at Portlethen, Aberdeen of certain items of their property. These items are all to be found in the schedule appended to the original summons. In Article 4 of the Condescendence it is averred:

"Shortly after the institution of the present proceedings an extra judicial agreement was reached. The terms of said agreement were incorporated in the Joint Minute, signed by the parties' respective counsel, which forms No.11 of process. Following said agreement certain items of equipment originally sought in the process were returned to the pursuers' agents. The items set out in the first conclusion hereof constitute the items originally sought but not yet returned".

I note that these averments are met with a blank denial in the defences. The pursuers' first plea is:

"The defender being unlawfully in possession of the pursuers' property, decree of delivery should be pronounced as concluded for".

The defender's first two pleas-in-law are in the following terms:

"(1) The conclusions of the summons having been exhausted by the Joint Minute for the parties executed in June 1994, the pursuers are barred from proceeding with the present action.

(2) The said Joint Minute executed in June 1994 representing the limit of the parties' contractual obligations and a period in excess of five years having elapsed since the execution of said contract, the present action is time barred".

I observe that there are no averments in support of the first plea-in-law for the defenders.

4. Mr Anderson, however, sought to argue his second plea-in-law. He submitted that in this action the pursuers were seeking to implement the Joint Minute and he maintained that that was clear from the averments in Article 4 of the Condescendence which I have set out above. That being so, since more than five years had elapsed since the date of the contract embodied in the Joint Minute without a relevant claim having been made and without the subsistence of the obligation having been relevantly acknowledged, the pursuers' rights to insist upon delivery and to demand count, reckoning and payment had accordingly prescribed in terms of section 6 of the Prescription and Limitation (Scotland) Act 1973 and Schedule 1, paragraph 1(g).
5. This submission, in my view, involves a complete misreading of the pursuers' averments on Record. The pursuers do not found on the agreement or contract contained in the Joint Minute. It is referred to but only in a historical sense. Although sisted, the action continued in being. The same claim - that is, for delivery of the pursuers' property by the defenders - is being made in the current action as was made in the original summons, the only difference between the two being in the number of items sought. In other words, the relevant claim in relation to these items was made in May 1994 and this claim is still being persisted in through the medium of the action in which the original claim was originally made. Indeed, I am surprised that this was not seen to be obvious. It may, or may not, have been fortuitous that the action continued in being - a windfall for the pursuers, as Mr McKenzie, the pursuers' counsel described it - but so be it.
6. Mr McKenzie asked me to repel the defenders' first two pleas. Strictly speaking, the pursuers should have tabled a plea to the relevancy in relation to the defenders' first plea, but Mr Anderson did not object to this, and, as I have already said there are no averments in support of it. It is, in any event, wrong in law. So I will repel both pleas. I was not asked to make any order with regard to further procedure in the cause. So I will put the case out By Order in order that parties can so advise the Court and no doubt deal with the expenses of the debate I have just heard.