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Cite as: [2004] ScotCS 163

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Thomson v. Newey & Eyre Ltd [2004] ScotCS 163 (02 July 2004)

OUTER HOUSE, COURT OF SESSION

A5244/01

OPINION OF T. G. COUTTS, Q.C.

(Sitting as a Temporary Judge)

in the cause

JAMES THOMSON

Pursuer;

against

NEWEY & EYRE LIMITED &c

Defenders:

________________

Pursuer: Davis, Drummond Miller:

Defenders: Weir, Brechin Tindal Oatts;

First Third Party: Marney, Maclay Murray & Spens;

Second Third Party: Shepherd & Wedderburn.

2 July 2004

[1] The extensive pleadings in this action disclose an application for damages for breach of contract. These damages are averred to include economic loss caused by the defenders having improperly obtained a decree at Hamilton Sheriff Court sequestrating the pursuer on 29 January 1997. The pursuer also makes a claim for damages for personal injuries caused by stress as a result of the effects of the sequestration. He claims to suffer anxiety and depression. The defenders involved a third party who in turn brought in a second third party. This action was not signetted until 13 November 2001. The debate did not concern the second third party.

Factual Background
[2] The pursuer who had traded either in his own name or as Pringle & Thompson, was sued in England for a debt Decree passed for payment of £1,933.25 together with £142.50 costs. In September 1996 the defenders petitioned in the Sheriff Court at Hamilton for the pursuer's sequestration. Warrant to cite was granted and a hearing fixed. The pursuer received service of the proceedings . He contacted the defenders. He tendered part payment. On the pleadings it is a matter of agreement between the parties that the defenders were to have ceased the sequestration proceedings in Hamilton Sheriff Court but that they failed to have the sequestration proceedings dismissed. The defenders explain that they had instructed the first third party to have the proceedings dismissed but that the first third party had failed to do so. The pursuer said that he was unaware until 1 October 1997 that an interim trustee had been appointed as a result of the granting of the defenders' petition on 29 January 1997. The pursuer contacted solicitors, Messrs Quinn Martin and Langan on or about 6 October 1997. Notwithstanding that, a permanent trustee was appointed on 18 December 1997. Ultimately the sequestration was recalled on 9 March 1999by the Lord Ordinary on a petition.

[3] The first third party paid the expenses of the pursuer in the petition for recall and also the expenses of the interim and permanent trustees. It would accordingly appear to be difficult for the first third party to maintain that they were not liable for any damages resulting from the sequestration and that they would be bound to indemnify the defenders subject to all factual matters being established.

[4] The pursuer asserting that the failure to raise an action for damages prior to the expiry of the triennium was not his fault narrates as follows:

"The pursuer contacted Messrs Quinn Martin & Langan on or about 6 October 1997. He applied for, but was refused, Legal Aid to petition for recall of the sequestration. Following the agreement of the first third party to meet the pursuer's reasonable costs in recalling the sequestration, advice of Counsel was sought in relation to whether to proceed by way of Petition for recall of sequestration or an action of reduction of the sequestration. It was decided to proceed with a Petition for recall. Confirmation was sought from the first third party that they would meet the costs of the pursuer's Permanent Trustee, and that the pursuer's debts were paid in full. The petition for recall was presented on or about 11 February 1999. It was not practical for the pursuer to raise an action of damages against the defenders until after the recall of the sequestration in March 1999. He would have lacked title to sue in respect of some or all heads of damage. He would have had difficulties obtaining funding. In any event, the pursuer was advised by his then solicitors, Messrs Quinn Martin & Langan that he should wait until after the sequestration was recalled and until after the third party had paid the expenses of the recall as agreed. The pursuer was not advised by Messrs Quinn Martin & Langan that there was a three-year limit to bringing a claim for damages for personal injury. Following recall of the sequestration the pursuer was not able to fund a claim for damages through his own resources. In or about April 1998 the pursuer had approached Quantum Claims Compensation Specialists Limited ("Quantum Claims"). At that time Quantum Claims took the view that there was insufficient information for them to agree to take on the claim. Following recalls of sequestration Quantum Claims sought to recover the pursuer's file from Messrs Quinn Martin & Langan. On 19 April 1999 the pursuer signed a mandate addressed to Messrs Quinn Martin & Langan in favour of Quantum Claims. The mandate was sent to Messrs Quinn Martin & Langan by letter dated 22 April 1999. Despite repeated reminders Messrs Quinn Martin & Langan refused to release their papers to Quantum Claims until after their fees and those of their Edinburgh Agents, Messrs Brodies, had been paid in respect of the petition for recall, notwithstanding that there was an agreement that the third party was to pay the fees. By letter dated 26 January 2000 and received by the pursuer on 1 February Messrs Quinn Martin & Langan advised the pursuer that the fees of the Edinburgh agents had been settled by the third party and that they would prefer Quantum Claims to attend at their offices to read and copy the file. The pursuer passed the letter to Quantum Claims immediately. On or about 5 September 2000 Quantum Claims referred the cause to Messrs Drummond Miller for further advice in relation to whether proceedings should be raised. The pursuer was advised at that time that the personal injury part of his claim was subject to section 17 and, that the triennium expired in January 2000 so that it was not necessary to raise proceedings immediately. At that time any personal injury element of the claim was not thought to be substantial. No medical report had been obtained at that time. Agents further took the view that further investigations were required to establish whether or not the pursuer had a satiable claim. Following further investigations and advice from Counsel, on or about 8 October 2001 Quantum Claims authorised the raising of proceedings. This action was signetted on or about 13 November 2001."

[5] Several issues require to be resolved by way of proof before answer in relation to the pursuer's claim for economic loss. Furthermore, the defenders aver that such was the state of his finances that on the balance of probability he would have been sequestrated in any event.

Matters Raised at Procedure Roll
[6] The defenders first contended that the entire action should not be allowed to proceed in that it includes "claim for damages on personal injury" which is struck at by section 17 of the Prescription and Limitation (Scotland) Act 1973 as Amended. The action could not proceed unless it could be saved by section 19A of that Act.

[7] At the conclusion of the debate it appeared to the court that counsel for the pursuer and for the defenders were at one in submitting that if the personal injuries claim was not saved by section 19A then the averments of personal injury should be excluded and the economic loss claim should proceed by way of proof before answer. This was the solution adopted by Lord Cullen in Fleming v Strathclyde Regional Council, 1991 SLT 161.

[8] There was also an argument between the first third party and the defenders on a matter of specification to which I shall return.

Pursuer's argument for the exercise of discretion under section 19A
[9] Parties were at one in recognising on the authorities that the court has an unfettered discertion under section 19A. Several cases were cited as illustrations of the exercise of that discretion but it was recognised that each case must depend upon its own particular circumstances and the sole question is whether, weighing the position of all parties, it is just and equitable to allow an action to proceed despite its being time-barred.

[10] In this connection the court was reminded of the binding cases of Donald v Rutherford 1984 SLT 70, Forsyth v A S Stoddart & Co. Ltd. 1985 SLT 51, and Anderson v Glasgow District Council 1987 SLT 279. Further by way of illustration, reference was made to Morrice v Martin Retail Group, 2003 SCLR 289, Cowan v Toffolo Jackson & Co Ltd. 1998 SLT 1000, McCabe v McLellan 1994 SLT 87, Clark v McLean 1994 SLT 410, Drinnan v C. W. Ingram & Son 1968 SLT 205, Carnegie v The Lord Advocate 2001 SC 802, Stephen v North of Scotland Water Authority 1999 SLT 342 and to a recent decision of Lady Smith Julia Hill v McAlpine, 13 May 2004.

[11] The pursuer's contention in the special circumstances of this case as set out in his pleadings were, first, that the delay was not the pursuer's personal fault. Second, that while he may have a claim against his solicitors regarding their conduct, his remedy is not entirely clear and would be expensive and difficult. Third, that the pursuer would be significantly prejudiced if forced to proceed by way of two actions instead of one. Fourth, that the defenders would not be materially prejudiced if the Court were to allow the action to proceed. Fifth, some of the pursuer's difficulties were the defenders' or their agent's responsibility and sixth, the whole claim derives from one litigation which went wrong.

Responses by defenders (adopted by first third party)
[12] The pursuer would not be devoid of all remedy if he were not allowed to proceed against the defenders in relation to his having allowed the time-bar to elapse. The pursuer has involved several solicitors but that was his own choice and should not count in his favour in relation to a 19A argument. The two claims, breach of contract and personal injury, are entirely different and the pursuer has shown no particular expedition in bring forward the personal injuries claim. The defenders would be put to considerable expense and inconvenience in investigating and dealing with a claim based on stress and depression after expiry of the time limit. In addition, further delay has occurred, even after the time when it was known that time-bar was a feature. The fact that this litigation will proceed on the economic loss claim against the defenders, in reality the third party, is neutral because the investigations for both claims would be different. Insofar as the defenders and the third parties are concerned there is a dispute, although not a major dispute, on the entitlement of the pursuer to economic loss. The claim for personal injury as a result of stress and the like is a different and separate issue about which the defenders and third party would have no personal knowledge or involvement.

Decision on time-bar
[13] It requires to be noted that this action, as between the pursuer and the defenders, is on its facts somewhat different from a standard reparation action. This is not a case in which a defender or employer may be responsible for physical injury resulting from an accident, the facts and consequences of which may be reasonably clear, as for example in the recent case of Hill v McAlpine. Consideration of a claim based on stress which, on the pursuer's own averments, prior to the expiry of the triennium, was not thought to be substantial, is rather different a claim for injuries following from, for example, a road traffic accident, which would to some extent be within the notice of the defenders and might well have been investigated. The pursuer himself did not obtain a medical report until January 2000 despite his having consulted with his GP in early 1998 with complaints of sleep difficulties and stress as a result of the sequestration.

[14] I am not persuaded that the circumstances as disclosed and the pursuer's argument thereon are such as to make it just and equitable that the personal injuries claim should proceed. The pursuer had ample time and advice available to him prior to the expiry of the triennium. There is no hint on averment that he ever involved the defenders in the allegations of stress. In relation to his being sequestrated he would have had title to sue for that part of his claim, even if any monetary benefit might have accrued to his trustee.

[15] However, the factor which finally tips the balance against the pursuer is the averments (52D) that it was not thought to be necessary to raise proceedings immediately although the triennium had expired. Such advice was given in September 2000 over a year before raising the action, and in the event an 18-month period was allowed to lapse after the expiry of the triennium and the raising of the action. In this case it is the pursuer, not the defenders, who would have a windfall benefit, if allowed to proceed with this action. The fact that he may have a claim for economic loss is in my opinion a neutral factor which in this case, gratuitously, would allow him to tack on a time-barred personal injuries claim. A situation could arise whereby the economic loss claim failed and as a result of having pursued a bad action, the pursuer would have been enabled to present an otherwise time-barred claim. If the matter is tested simply as to whether the personal injuries action could have been presented separately, I do not consider that the pursuer in such a case would succeed on a 19A invocation.

[16] I shall now accordingly allow the action to proceed against the defenders under deletion of all averments relating to personal injuries in Condescendence Four from 40D "The pursuer suffered stress" to 41B "General Practitioner" and by repelling the pursuer's fourth plea-in-law.

First third parties' contentions on the specification of the defenders' averments
[17] The only argument put before the court from the first third party's note of arguments was the first, a specification point. The complaint is that on the defenders' averments, express instructions were critical in that there was a change of instructions to the third party to enforce judgement and to proceed to sequestration. There was no specification of to whom the instructions to withdraw the proceedings were given, in what manner they were communicated, by whom they were given nor the precise content of those instructions.

[18] That position was described by defenders' counsel as hollow. The defenders had given clear notice of the facts to be advanced and the third party had paid the expenses occasioned by their failure to withdraw the sequestration. There is an averment that the third party on 19 June 1998 wrote to the pursuer's solicitor confirming that but despite that, the third parties do not on the face of the pleading admit that the expenses were paid. In addition, the first third party had involved a second third party, their local agents, and complainer about their conduct in the granting of the sequestration.

[19] The plain averment that instructions were given to the third party, coupled with the averred conduct of the third party after things went wrong, is, in my view, sufficient specification of what the defenders' case is and gives clear notice of it.

[20] I shall accordingly decline to sustain the pursuer's and first third party's argument, repel the pursuer's fourth plea-in-law, sustain the defenders' sixth and seventh pleas-in-law, sustain the third party's second plea-in-law and allow the whole remaining matters to proceed by way of proof before answer.