Scottish Court of Session Decisions

Tayside Health Board v. Barrie [2003] ScotCS 3 (10 January 2003)

OUTER HOUSE, COURT OF SESSION
A1495/01	OPINION OF LORD ABERNETHY in the cause TAYSIDE HEALTH BOARD Pursuers; against LESLEY BARRIE Defender:   ________________

 

 

Pursuers: Murphy Q.C., Joughin; R F Macdonald

Defender: O'Brien Q.C., Stirling; Mackay Simon, W.S.

10 January 2003

1. In this action of repetition for unjust enrichment the pursuers aver that in April 1993 the defender was offered, and accepted, the post of Board General Manager with the pursuers. It is then averred:

"The said offer provided inter alia that the appointment was subject to (a) applicable terms and conditions approved by the Secretary of State for Board General Managers in the Scottish Health Service, (b) terms and conditions applying to the post of General Manager, Tayside Health Board which the Secretary of State has approved through determination order or other means and (c) terms and conditions determined by the Board and applied to the post. It further provided that the remuneration offered was subject to variations from time to time in accordance with Directions given by the Secretary of State, including that relating to the operation of scheme for performance-related pay for General Managers. Statutory powers were conferred on the Secretary of State for Scotland to make directions as to the remuneration of staff in the National Health Service. Such Directions were issued to Health Boards by Management Executive Letter ("MELs"). Compliance with such Directions were (sic) mandatory. At all material times, the defender's entitlement as regards remuneration was governed by MELs issued by the Secretary of State."

The defender continued to be the pursuers' General Manager until late 1997. In about August 1997 the pursuers were made aware by their external auditors that there was reason to believe that in a number of respects the pursuers had not adhered to General and Senior Managers Pay (Remuneration and Conditions of Service) Directions contained in various MELs and statutory provisions. There was concern that this had resulted in overpayments to certain of their employees. On advice from the Scottish Office the pursuers' Chairman established an Inquiry to investigate. The Inquiry Team reported in about February 1998. They found that between 1995 and 1997 various overpayments had been made to a number of the pursuers' employees, including the defender.

2. There follow more specific averments to the following effect:

(1) The pursuers' Head of Personnel instructed the Payroll Department to make payments to some senior managers, including the defender, in lieu of consolidated Performance Related Pay for April and May 1996. There was no provision for this in the relevant MEL - MEL (1993) 114. The pursuers had no power to make such payments and the defender and the other senior managers were not entitled to them. The defender was aware that she had thus received a benefit to which she was not entitled. The overpayment was £251 in April 1996 and £252 in May, making a total of £503. The payments were made subject to superannuation and so occasioned an overpayment in that regard.

(2) In June 1995 MEL (1993) 114, Table B, Note 4, which provided for the manner in which performance increases were to be consolidated with basic salary when the increase took the salary above 95% of the maximum of the range, was misinterpreted by Senior Officers of the pursuers, including the defender, despite guidance from the Management Executive as to its proper interpretation. As a result the defender received an overpayment of £634.

(3) On 29 May 1996 the pursuers' Remuneration Committee purported to introduce local pay ranges for Senior Managers including the defender. As at that date, as the defender was or ought to have been aware, pay ranges for Senior Managers were set out in MEL (1995) 15, which did not permit such local pay ranges. The effect of introducing local pay ranges was that the defender was overpaid £7,481.

(4) Salaries of Senior Managers, including the defender, were increased by a 3% payment at the end of March 1996 backdated to 1 September 1995. This was in breach of the Direction given in MEL (1995) 15. The payment was consolidated into superannuable pay and so incorrect superannuation payments were also made. In this way the defender received an overpayment of £2,416.

(5) In 1995 and 1997 groups of the pursuers' staff, including the defender, were paid in lieu of annual leave which had not been taken. It was, however, not within the power either of the Remuneration Committee or the pursuers' Officers to make payments in lieu of annual leave other than in accordance with General Whitley Council Regulations in force at the time. In 1997 the defender received a payment in lieu of annual leave in breach of these Regulations of £5,085. The defender was well aware that this was in breach of the Regulations.

3. The total overpayment to the defender therefore amounted to £16,119 gross. Included in this sum was an overpayment of employee's superannuation contributions of £333 and an overpayment of taxation at 40% of £6,314. A statement showing how these overpayments had been calculated both gross and net by year relating to the defender for the years April 1995 to March 1996, April 1996 to March 1997 and April 1997 (Appendix A), a statement showing the overpayments by head both gross and net (Appendix B) and a statement of the overpayments by head analysed into superannuable and non-superannuable elements (Appendix C) were incorporated into the pursuers' pleadings brevitatis causa.
4. £16,119 is the sum first concluded for by the pursuers. They say in their pleadings that in the event of the defender repaying that gross sum to them, the pursuers would then provide a signed statement of the amount repaid which would allow the defender to reclaim the tax and superannuation paid direct from the Inland Revenue and National Health Service Superannuation Scheme respectively. Alternatively, the pursuers could recover the sums paid in respect of tax and superannuation direct from the respective authorities were the defender to pay them the net figure of £9,472 and provide them with a signed mandate authorising them to recover the sums paid in respect of tax and superannuation. £9,472 is the sum alternatively concluded for by the pursuers in the second conclusion of the summons.
5. The pursuers aver that these overpayments made to the defender were not due. They were paid by the pursuers in the erroneous belief that it was within the pursuers' power to make them and that the payments did not contravene any remuneration arrangements established under Directions issued by the Secretary of State. It is averred that the defender was or ought to have been aware of which MELs were applicable to Senior Managers' pay from time to time. She knew or ought to have known that the decisions made by the Remuneration Committee in relation to Senior Managers' pay had been made in error and that the Remuneration Committee had not applied the relevant MELs correctly. In these circumstances, it being reasonable and equitable for them to do so, the pursuers seek repetition of one or other of the sums alternatively concluded for.
6. The case is therefore one of unjust enrichment on the basis of the condictio indebiti. In response to these averments by the pursuers the defender tabled a number of preliminary pleas: pleas-in-law 1, 5 and 6. Plea-in-law 1 is a general plea to relevancy and lack of specification, which seeks dismissal of the action. Plea-in-law 5 seeks absolvitor on the basis that if these payments were made by the pursuers in error, they were made as a result of errors in law and accepted by the defender in good faith and therefore the pursuers are not entitled to recover the sums in terms of Scottish Hospital Memorandum No. 27/1967. Her averments in answer incorporated this document brevitatis causa, which it is said applied to her position as averred by the pursuers. Part of the document is quoted verbatim. These averments by the defender are met with a simple denial by the pursuers. Plea-in-law 6 is a plea that certain averments should not be remitted to probation.
7. The matter came before me on Procedure Roll. For the sake of completion I should record that the defender has a counterclaim against the pursuers but her counsel informed me that that could be ignored for present purposes. Counsel's primary position was that decree of absolvitor should be pronounced as sought in plea-in-law 5. As an alternative, the action should be dismissed as sought in plea-in-law 1.
8. Two notes of argument had been lodged on behalf of the defender but the second one had superseded the first. In support of her primary position, junior counsel referred me first to paragraph 4 of the second note of argument. That paragraph says this:

"4. The pursuers seek repayment of money paid during the course of a contract of employment. Memorandum 27/1967 set out some of the conditions applicable to that contract, in particular:

(a) It prohibits the recovery of sums paid in error of law.

(b) It further provides that a refusal to repay should be accepted unless there is a strong presumption of a lack of good faith. The pursuers have no averments relating to lack of good faith.

(c) It indicates that where the period of overpayment has continued for more than 12 months, the invitation to repay should be limited to the amount overpaid in the last 12 months of the period. The pursuers seek recovery of sums paid in the period April 1995 to October 1997 ([page] 34C [of the Closed Record]).

(d) It provides that where there has been collective overpayment, repayment would not be expected until all concerned had agreed to it, or there were good grounds for pressing for recovery from everyone. At [page] 39C/D [of the Closed Record] the pursuers have been called upon to aver the other persons involved in the collective overpayments, but they have failed to do so.

The parties being bound by their contractual agreement, the pursuers are prohibited from relying on the law of unjust enrichment (Dollar Land (Cumbernauld) Ltd v CIN Properties Ltd 1996 S.C. 331, 1998 SC (HL) 90)."

9. Counsel submitted that the defender was entitled to decree of absolvitor on the ground that where the terms of the parties' contract provided that there should be no recovery in the circumstances averred by the pursuers, as they did here, the remedy of unjust enrichment was not open to them. In support of that proposition reference was made to Gloag & Henderson's Introduction to the Law of Scotland, 11^th Edition, paras. 28.01, 28.02 and 28.03 and the case of Dollar Land (Cumbernauld) Ltd v CIN Properties Ltd. The principle enunciated in that case had also been applied in Compagnie Commerciale Andre v Artibell Shipping 2001 SC 653.
10. In this case the payments made to the defender for which repetition is sought were, according to the pursuers' averments, made under errors of law rather than errors of fact. That distinction would not in general prohibit repetition under the condictio indebiti (Morgan Guaranty Trust Co. of New York v Lothian Regional Council 1995 SC 151) but here it did by reason of the parties' contract. The particular part of that contract which was relevant in this context was the Scottish Hospital Memorandum No. 27/1967. The terms of that Memorandum had been incorporated into the pleadings and the relevant parts of it were summarised in para. 4 of the defender's second note of argument quoted above. Para. 11 of the Memorandum provides that if there has been overpayment to an employee such as the defender due to a mistake of law, recovery of the overpayment should not be attempted. Moreover, para. 8 provides that if, following upon an invitation to repay the sum overpaid, the employee refuses, the refusal should be accepted unless there is a strong presumption of lack of good faith. Here there were no averments by the pursuers which could overcome this provision. If bad faith, or lack of good faith, is to be relied on, there ought to be specific averments of the facts and circumstances indicating bad faith or lack of good faith. There were no such averments here. There were averments that the defender knew or ought to have known that at least some of the payments were overpayments but that was not sufficient to overcome the presumption that she was acting in good faith, particularly when the defender had put her good faith in issue, as she had done in Answer 8. Furthermore, the pursuers seek recovery of sums paid to the defender in the period between April 1995 and October 1997. Para. 8 provides that where the overpayment has continued for more than twelve months, the invitation to repay should be limited to the amount overpaid in the last twelve months of the period. Para. 15 provides that where a number of people have collectively been overpaid as a consequence of the same mistake, repayment would not be expected until either all concerned had agreed to it or it was agreed that there were good grounds for pressing for recovery from everybody. The pursuers had averred that others of their employees had also been overpaid but there was no specification of who these others were despite the defender's call for such specification. (These last were the averments referred to in plea-in-law 6, and also in para. 5 of the defender's second note of argument.) For all these reasons junior counsel for the defender submitted that the defender's plea-in-law 5 should be sustained and decree of absolvitor granted.
11. Counsel then made submissions in support of the defender's plea-in-law 1. This seeks dismissal of the action but counsel's first submission, which is foreshadowed in para. 1 of the defender's second note of argument, was restricted to seeking dismissal only in respect of the first conclusion of the summons, which seeks repetition not just of the sums averred to have been paid in error by the pursuers to the defender herself but also the sums paid by the pursuers in respect of income tax and superannuation on the defender's behalf. Counsel relied on the case of Bell v Thomson (1867) 6 M. 64 and, in particular, the passage at page 67 where Lord Justice Clerk Patton stated that the condictio indebiti in Scots law "holds good only to the amount of the benefit actually received by the party against whom it is maintained". The last paragraph of Lord Benholme's Opinion at page 70 was to the same effect. In this case, counsel submitted, the payments in respect of income tax and superannuation were not made to the defender. In that situation the pursuers could not seek repetition of them from the defender.
12. Counsel then made a number of submissions, mostly of lack of specification, which she said should result in dismissal of the whole action. These reflected what is said in paras. 2 and 3 of the defender's second note of argument. The first submission, which arose out of the point made in the previous submission, was that there was no breakdown in the pursuers' averments of the amounts paid by the pursuers in respect of income tax and superannuation. There was therefore no notice of what the defender herself was said to have been paid. In this connection the pursuers' averments in Condescendence 8 referred to and incorporated brevitatis causa Appendices A, B and C, mentioned earlier. These Appendices, however, were lacking in specification and contradictory. What the pursuers ought to have averred was (1) what the defender's entitlement was, (2) what she herself received, with relevant dates and (3) what the difference is. Otherwise the defender had no fair notice of the extent to which it is said that she had been enriched. The pursuers, however, had not made any averments on (1) and (2). There was a call in Answer 8 directed to this point but the pursuers had not responded. Furthermore, there was a contradiction between Appendix B and Condescendence 3. In the latter it is averred that there was an overpayment to the defender of £634. No reference is made there to income tax or superannuation. In Appendix B, however, figures are given for both these items, reducing the net overpayment figure to £358.
13. Counsel then sought to make a number of submissions which would have necessitated me looking at two MELs, MEL (1996) 65 and MEL (1997) 75, which were not incorporated into the pleadings. At that stage, however, on the motion of both parties I allowed the pleadings to be amended to cure the defect and both MELs were lodged as productions. Turning to MEL (1997) 75, counsel submitted that it appeared from Appendix A that the alleged overpayment to the defender has been calculated by reference to MEL (1997) 75. That MEL, however, which was dated 10 November 1997, post-dated the defender's retirement on 31 October 1997. It could not therefore be applied to her. Counsel then pointed out that in para. 1 of Schedule 1 to Annex A of the MEL it is stated that the new ranges of pay provided in that MEL shall not apply "to any extent to which a detriment might be sustained by such an employee by such application". In the circumstances here application of the MEL would be to the detriment of the defender. It was therefore not applicable. Having made that submission, however, counsel immediately accepted that it was a matter for proof and dismissal on this ground would not be appropriate at this stage. Still on MEL (1995) 97, counsel then pointed out that, if it was applicable, it was retrospective but only to 1 September 1996. The pursuers' Appendix A, however, went back to April 1995. For the period prior to 1 September 1996, therefore, the figures were wrong and would have to be re-calculated. In any event, the figures in Appendix A could not be reconciled with the figures in Schedule 2 to Annex A of MEL (1997) 95. It was therefore not clear whether the figures in Appendix A had in fact been calculated by reference to that MEL. For all these reasons counsel submitted that the action should be dismissed.
14. In reply counsel for the pursuers submitted that none of the defender's pleas-in-law should be sustained and a proof before answer should be allowed of the parties' whole pleadings. Dealing with the first submission made on behalf of the defender, counsel accepted the authority of the Dollar Land case but submitted that it did not apply in the circumstances of this case. The terms of the parties' contract were as set out in Condescendence 2. There was no reference there to Scottish Hospital Memorandum No. 27/1967. It had been introduced into the pleadings by the defender in Answer 9 but it was to be noted that, contrary to what is said in para. 4 of the defender's second note of argument, it was not averred by the defender to be a part of that contract. Indeed, it was referred to there as a document for the pursuer's guidance. So neither party averred that it was a part of the party's contract, and it was not. It was an administrative memorandum from government to Health Boards setting out certain administrative procedures that should be followed. It was therefore a memorandum from central government to a statutory body in a public law context, quite different, for example, from MEL (1997) 75 which was specifically aimed at certain employees and their contracts of employment and containing a Direction in relation to their contracts of employment. Accordingly, it had no effect on any private law contract and did not exclude the pursuers' common law remedies in relation to the defender's contract of employment. If that had been its intention, one would have expected it to have been clearly spelt out in the document, which it was not. Even if the Memorandum was part of the parties' contract, its terms were not apt to exclude the condictio indebiti as a remedy open to the pursuers. Counsel accepted that, if the terms of the Memorandum were not adhered to, that might sound in equity for the defender (the onus for which would be on the defender: see Morgan Guaranty Trust Co. of New York v Lothian Regional Council 1995 SC 151) but that was an issue to be judged under reference to all the facts and circumstances after proof.
15. Dealing with the point made in the first paragraph of the defender's second note of argument, which was based on Bell v Thomson, counsel submitted that this proceeded on a misunderstanding of the requirements for an action based on the condictio indebiti. The basic requirement was to show that the defender had been enriched by a benefit transferred in error by the pursuer. This did not mean, however, that the defender had to be holding, say, money in his hand, as it were. It might be an intangible benefit. The income tax and superannuation payments which the pursuers made were all employees' contributions which were made on behalf of and in the name of the defender. The fact that the pursuers paid them direct to the relevant authorities was just the mechanism of payment. The defender was lucratus in two ways. First, her liability to income tax in respect of the payments in question had been discharged. Secondly, her pension had been augmented. In any event, the case of Bell v Thomson was easily distinguished on its facts from this case.
16. Turning to the submissions based on paras. 2 and 3 of the defender's second note of argument, counsel submitted that taking the averments together with Appendices A, B and C, which were incorporated into the pleadings, fair notice had been given. Appendix A showed how the overpayments had been calculated both gross and net in each of the three financial years in question and these figures had then been carried forward to Appendix B where they were broken down into separate heads, which payments were superannuable, which were not and what deductions had been made in respect of income tax and superannuation, resulting in the net sums of alleged overpayment, which is the sum second concluded for. Appendix C made the same calculations but without showing the deductions, thereby showing how the sum first concluded for was calculated.
17. Insofar as giving notice of the dates when the alleged overpayments were actually made was concerned, counsel submitted that it was sufficient to specify in which financial year they fell. The pursuers had done that but if more was required, then the averments in Condescendence 3 of the Closed Record specify the particular months in which the alleged overpayments were made. These payments tied up with the figure for Pay in Lieu of Consolidated PRP in Appendix B. The alleged overpayment in Condescendence 4 is averred to relate to the financial year 1996/97 only. It was part of the defender's annual emolument for that year and tied up with the figure for PRP Consolidated over 95 in Appendix B. The dates of the alleged overpayment in Condescendence 5, which tied up with the Salary Range figures in Appendix B, are sufficiently specified in the averments in that Condescendence. They refer to ongoing payments in two financial years, which would be carried into the salary slips for those years. Similarly the dates of the alleged overpayment in Condescendence 6, which tied up with the figures for 3% increase on 100% of Salary in Appendix B are sufficiently specified in that Condescendence. And in Condescendence 7, where the alleged overpayment in lieu of annual leave is averred, this was a lump sum payment which is averred to have been made in 1997 and would be easily identifiable as such in the defender's salary slips. In these circumstances the defender had been given adequate notice of the alleged overpayments.
18. Counsel then turned to the various points made in relation to MEL (1997) 75. That MEL did post-date the defender's retirement by ten days but it was not a unilateral variation of the defender's contract of employment. On the contrary, the contract was subject to applicable MELs and therefore was subject to this MEL which applied to the defender's period of employment even though it was issued after she had retired. In fact it was giving her an annual increase in salary, backdated. The matter should be tested by whether the defender could have sued for that increase, which counsel submitted she plainly could have done. The question whether MEL (1997) 75 was applicable by reason that the recalculation of the defender's salary it provided for was to the detriment of the defender was now accepted to be a matter for proof. With regard to payments made before 1 September 1996 a confusion had arisen. Those payments had been attributed to MEL (1997) 75 because that MEL had, in para. 1.9, replaced the previous MEL, MEL (1996) 65, and was the only one extant.
19. Finally, counsel dealt briefly with the point made in para. 5 of the defender's second note of argument. He pointed out that this was predicated on the Memorandum No. 27/1967 being part of the defender's contract of employment. In any event, however, sufficient specification had been given of alleged overpayments made to other members of the pursuers' employees. If the defender wished more, she could lodge a specification and seek commission and diligence.
20. Senior counsel for the defender adopted her junior's submissions. For her own part most of her submissions were directed at the point made in para. 4 of the defender's second note of argument. She accepted that the Memorandum No. 27/1967 was a document in the public domain and therefore of public law. But that was nothing to the point given the pursuers' averments in Condescendence 2 setting out the provisions of the defender's contract of employment. Those averments showed that the contract was affected by public documents. MELs were one example but the averments indicated that there were others and the Memorandum No. 27/1967 could have been one of them. It was not signed but it must have been approved by the Secretary of State and its terms were such that it could have been relied on by the pursuers as falling within the averments in Condescendence 2 as to what constituted the defender's contract of employment. In that situation it was not necessary for the defender to aver that it formed part of the contract, although in fact at the top of page 39 of the Closed Record the defender had averred that it applied to the defender's position. Since it fell within the pursuers' definition of the contract it was open to interpretation and, in the absence of any averments to the contrary, the only conclusion was that it applied to the circumstances of this case as averred by the defender. Counsel did not go so far as to say that the Memorandum excluded the remedy of unjust enrichment completely but it had the effect of excluding it in certain circumstances and these are the circumstances set out in the defender's pleadings. In that situation the defender was entitled to decree of absolvitor.
21. Counsel was critical of the absence of averments by the pursuers in relation to this Memorandum. She submitted that it amounted to a lack of candour. The defender's averments in relation to the Memorandum had been part of the pleadings for over two years, although they had been expanded in that time. In that time also the pursuers had amended their pleadings in relation to other matters but had made no averments in relation to the Memorandum. They even continued to deny its existence, even though it was in effect their document and senior counsel for the pursuers had accepted it was still in force. Counsel referred to the cases of Gray v Boyd 1996 S.L.T. 60 and Ellon Castle Estates Co. Ltd. v Macdonald 1975 S.L.T. (Notes) 66. She submitted that in the circumstances here the pursuers' denial of the document's existence could not be taken at face value, although she did not go so far as to say that it could be taken as an admission.
22. Counsel dealt briefly with the other points. She insisted that on the ratio of Bell v Thomson the defender was entitled to say that the pursuers' averments in relation to the income tax and superannuation paid by the pursuers were irrelevant. Counsel's researches had not revealed any case which negatived this.
23. With regard to the points made in relation to paras. 2 and 3 of the defender's second note of argument, counsel said that it was only when senior counsel for the pursuers had explained it in his submissions that she had understood Appendix A. It had been necessary to use MEL (1997) 75 for that purpose and while it was now a very technical point, that MEL had not been incorporated into the pursuers' pleadings but only the defender's. Counsel insisted, however, that MEL (1997) 75 was not part of the defender's contract, since it was not issued until after the defender had retired. The fact that it retrospectively increased the defender's salary was nothing to the point. Insofar as the pursuers' averments and calculations were based on that MEL, therefore, they were irrelevant.
24. In his reply senior counsel for the pursuers replied to the suggestion that the pursuers' pleadings lacked candour. He reiterated a point he had made in his first speech, namely, that in the context of an action based on the condictio indebiti the pursuers needed to do no more than to aver that the defender was lucratus, which they had done. If in relation to the equities of the situation the defender relied on Memorandum No. 27/1967, then the pursuers had to face up to that as best they could in any proof. Counsel accepted that the pursuers had not pled bad faith on the part of the defender. But bad faith was not the same as lack of good faith. The latter could, for example, be turning a blind eye, not asking questions when one should have done or deliberately ignoring the obvious. These were all factors to be taken into account when considering the equities of the situation in an action of this kind. The pursuers had pled that it was equitable in the circumstances that they should be granted decree in terms of one or other of the conclusions of the summons (page 37D of the Closed Record).
25. I shall deal with the points raised in the same order as I have narrated counsel's submissions. Having considered the averments in the pleadings and the terms of Scottish Hospital Memorandum No. 27/1967 I am not able to conclude at this stage that the Memorandum is among the documents to which, according to the pursuers' averments in Condescendence 2, the defenders' appointment as Board General Manager was subject. It seems to me that it would be necessary to know more about the status of that document and the manner in which it related to the parties before it could be affirmed to have been part of the defender's contract of employment. It would be an extreme step to grant decree of absolvitor at this stage on the basis that the Memorandum was part of the defender's contract of employment and I am not prepared to do that.
26. In these circumstances it is, I think, more appropriate if I do not say much more about the document and the submissions made about it. I think I should say this, however. I agree with senior counsel for the defender in her criticisms of the absence of the averments by the pursuers in relation to the Memorandum. I can understand that from the pursuers' point of view the Memorandum is not part of the defender's contract of employment and is not a bar to the pursuers raising the present action. But the purpose of pleadings in our procedure is that each party states their position with regard to the issues which have been raised with frankness and candour with a view to narrowing the issues between them and enabling all who read the pleadings, including, of course, the Court, to see what the issues are. Here the Memorandum was introduced into the pleadings by the defender and was plainly being relied upon by her in support of her plea-in-law 5 seeking absolvitor. The document was one within the pursuers' knowledge and was in effect their document. In that situation for them to deny its existence was in my view reprehensible. Their counsel in argument, although submitting that it did not form part of the defender's contract of employment, accepted that non-adherence to its terms could sound in the equitable considerations which would be necessary in any proof in the case. In these circumstances in my view the pursuers should have admitted the existence of the document and made their position in relation to it clear in their pleadings. I might also add that when the defender's second note of argument was lodged and it was seen that there was an issue as to the applicability of MEL (1997) 75 it would have been helpful and, I think, in the spirit of frank pleadings for the pursuers to have pointed out in their pleadings why that MEL was applicable even though it post-dated the defender's retirement and explained what was said to be the confusion relating to payments made prior to 1 September 1996. And, of course, both parties should have seen to it that that MEL was lodged as a production and incorporated into the pleadings before the debate took place. If these steps had been taken, it would have saved a considerable amount of time and trouble at the debate.
27. Turning now to the point based on the case of Bell v Thomson, it seems to me that the submissions on behalf of the pursuers on this were well-founded. Income tax and superannuation were payments made for and on behalf of the defender. The mechanics of payment were such that the pursuers made the actual payments to the relevant authorities but, as I have said, they were made for and on behalf of the defender, who would otherwise have had to make them herself. In that way, therefore, in my opinion she received the benefit of them and may therefore be liable in repetition of them on the basis of the condictio indebiti if the payments were made in error. It does not seem to me that this is contradicted by Lord Justice Clerk Patton's dictum in Bell v Thomson at page 67, which was relied on by counsel for the defender. I shall therefore not sustain the defender's first plea-in-law and grant decree of dismissal as requested by counsel for the defender on this ground.
28. With regard to the points made in support of para. 2 of the defender's second note of argument I am of the opinion that the pursuers have given fair notice of the sums allegedly overpaid to the defender and the dates when they were paid. Accordingly, I am satisfied that these averments should go to proof before answer.
29. So far as the points relating to the applicability of MEL (1997) 75 are concerned, that is, the points made in support of para. 3 of the defender's second note of argument, again I consider that they cannot be dealt with in the absence of proof. I accept that at first sight it does seem strange that a MEL coming into effect after the defender had retired from her employment could be said to affect the contract of employment. However, the provisions governing her contract, which are averred in Condescendence 2, are so complex that without further enquiry I do not think it is possible to conclude that the contract could not be affected by that MEL. For the same reasons it is not possible in my opinion to conclude that that MEL does not apply to payments made prior to 1 September 1996 without further enquiry. It was ultimately common ground that the question whether the application of that MEL would be to the defender's detriment was a matter for proof.
30. There remains only the point made in para. 5 of the defender's second note of argument. This point is, as senior counsel for the pursuers pointed out, predicated on whether Memorandum No. 27/1967 is part of the defender's contract of employment but the specification of the particular averments is a separate point. In my view, however, these averments give the defender fair notice of the pursuers' position. In that situation I am not prepared to sustain the defender's plea-in-law 6.
31. On the whole matter, therefore, I shall allow a proof before answer of all the parties' averments, leaving all pleas standing.