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Cite as: 2005 SCLR 1, [2004] ScotCS 63

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Fraser v. Professinal Golders Association [2004] ScotCS 63 (12 March 2004)

OUTER HOUSE, COURT OF SESSION

OPINION OF LORD PHILIP

in the cause

COLIN FRASER, A.P.

Pursuer;

against

THE PROFESSIONAL GOLFERS' ASSOCIATION LIMITED

Defenders

________________

Pursuer: Sandison; Morton Fraser

Defenders: Anderson, Q.C., Brechin Tindall Oatts

12 March 2004

[1] In this action the pursuer, a former trainee professional golfer, seeks damages against the defenders, The Professional Golfers' Association Limited ("the PGA"), for breach of contract, or alternatively, on the ground of their fault and negligence, in relation to the conduct of an examination which he required to pass in order to become eligible for election to membership of the PGA. The case came before me on the procedure roll when the defenders argued for the dismissal of the action on the basis of the irrelevancy and lack of specification of the pursuer's pleadings.

[2] The PGA is a company limited by guarantee which regulates professional golf in the United Kingdom and Ireland. In that capacity, they set conditions under which golfers may participate in professional golf tournaments and be employed as golf professionals. They also oversee the training and examination of golfers who wish to become members of the Association. According to the pursuer it is not practically possible for a United Kingdom national to enjoy a career as a professional golfer without being a member of the PGA, since the majority of golf clubs in the United Kingdom are accredited to the PGA and so are only permitted to employ PGA members as professionals.

[3] The pursuer registered with the PGA as a Registered Trainee and in so doing became bound by the terms of the PGA Constitution and Regulations. Part 5 of the Constitution and Regulations contains provisions relating to the registration of potential members. The following Regulations of Part 5 are relevant to this case:-

"1.1 Anyone who intends to become a member of the Association ... must: ...........

1.1.2 have spent a period of not less than 6 months as a PGA Probationer as referred to in paragraph 3.1. below;

1.1.3 have complied with all the conditions relating to Probation as referred to in paragraph 3 below;

1.1.4 complete a PGA Contract of Employment for Registered Trainees;"

"1.3 A Registered Trainee must serve not less than three years in Registration during which he must complete all the required study work and all courses of training and qualify at the PGA Training School before being eligible for election to membership."

"1.5 A Registered Trainee can remain in Registration for a maximum of four years. Any Registered Trainee who fails to become eligible for final examination at the PGA Training School before the period of four years has expired will be removed from Registration and shall not be allowed to re-register at any time in the future unless otherwise decided by the Executive Committee."

"7.1 All matters of Training shall be the responsibility of the Executive Committee which shall review training methods from time to time and prepare for circulation to Members and Registered Trainees any instructional information they consider necessary.

7.2 The basis for training shall be the PGA Training Manual."

"7.4 A Registered Trainee shall be required to attend a First year residential training course and a Second year residential training course ... Failure to attend an appropriate course may result in the Registered Trainee's registration being cancelled;

7.5 A Registered Trainee shall also be required to complete a Log Book and submit the same for marking at regular intervals throughout the Registration period."

"9.1 In order to become eligible for election to membership of the Association, a Registered Trainee must pass all elements of a final examination at the PGA Training Centre."

"9.4 A Registered Trainee must pass all elements of the PGA final examination in order to become eligible for election to membership."

[4] The pursuer attended all training courses and satisfactorily completed all study and training assignments required of him in terms of the Constitution and Regulations and became eligible to sit the PGA final examination. As part of that examination, he was required to sit an examination on the repair of golf clubs. He failed that part of the examination on two occasions and re-sat it for the third and final time on 29 November 1995. At that diet of examination, as required by the defenders, he supplied the clubs on which he was to carry out repairs or alterations. He supplied a ladies no.2 wood and was requested by the examiner Brian Barton and the observer Keith Holland, to add four swing weights to that club. In order to do this, it was necessary to remove the sole plate from the head of the club, to drill a cavity or cavities in the head of the club and to pour into the cavities molten lead to the desired weight before replacing the sole plate. It was also necessary to drill an additional hole, known as a key, within the cavity to prevent the solidified lead from falling out.

[5] The pursuer avers that when he removed the sole plate, he saw that there was an existing empty cavity in the head of the club which had been made during a previous alteration. He selected a 3/8 inch diameter drill and made a fresh cavity in the club head to a depth of 3/8 inch. He then used a smaller drill to drill small holes off the cavity in order to provide a key. Thereafter, he poured molten lead into the cavity. When the lead had solidified he weighed the club and found that the required weight had not been reached. He then repeated the process by drilling a further small cavity and produced the correct weight. He then replaced the sole plate.

[6] He avers that the operation of increasing the swing weight of a wooden club was dealt with in the PGA Training Manual which was issued to him. The Manual did not however address the procedure to be used when the club was found on opening to have a pre-existing empty cavity, which limited the scope for the positioning of further cavities. Nor did the manual provide for any particular standard by which the proper execution of these procedures was to be judged. The pursuer avers that he had accordingly not been trained by the defenders in the procedure to be adopted in the circumstances with which he was confronted.

[7] The examiner and observer failed the pursuer in the club repair examination, awarding him a grade D, the grade awarded to candidates who failed to attain the standard required in the practical aspect of the club repair examination. The final examination report made three criticisms of the pursuer's performance. They were (a) that he had used the wrong drill size, (b) that he had let the lead go hard while pouring, and (c) that he had drilled a further cavity to add more weight rather than drilling out his first cavity and re-filling it. The pursuer avers that none of these criticisms were justified by the provisions of the Training Manual or by reference to the standards of a competent and professional golf repairer. Any fair reasonable or competent examiner or observer would have awarded him a pass in the examination. Had he been required to add weight to a club which did not have a pre-existing empty cavity with limited scope for the positioning of further drilling, he would have passed the examination. Had he passed the club repair examination, he would have passed the entire examination.

[8] The first arm of the pursuer's case is that it was an implied term of the contract between him and the PGA that they would, in conducting the club repair examination, assess his performance fairly and reasonably and by application of the standards of a careful and competent professional golf club repairer. Further, he avers, it was an implied term of the contract that the defenders would not, in conducting the examination, require him to carry out a repair in circumstances not dealt with in the PGA Training Manual and with which he had not been trained to deal. These terms were required to give such efficacy to the contract between the parties as they must have intended it to have and were required to complete the agreement and enable it to work. Both parties must have intended such terms to form part of the contract. The defenders breached these implied terms. Had they not breached them, the pursuer would have been awarded a pass in the examination and would have been elected to membership of the PGA.

[9] The pursuer's alternative case is based on the negligence of the defenders. He avers that they had a duty to him to take reasonable care (a) to assess his performance fairly and reasonably and by applying the standards of a careful and competent professional golf club repairer, and (b), separately, not to require him to carry out a repair in circumstances not dealt with in the Training Manual and with which he had not been trained to deal. Had the defenders not failed in each of these duties, he would have passed the examination and been elected to membership of the PGA. The loss which he sets out was a reasonably foreseeable result of the breaches of duty and his non-election as a member.

[10] The pursuer then makes averments of loss. He begins by setting out details of his successful amateur career, and goes onto aver that had he been a member of the PGA, he would have earned money by teaching golf and playing for prizes in professional tournaments. He had secured a post as a golf tutor with Auchterlonies of St. Andrews, and his annual income from that source would have been at least £30,000 per annum over a career of at least 20 years. He would also have competed in PGA tournaments and would be likely to have won substantial prize money over the same period. Because he was not a member of the PGA, he had no practical opportunity to pursue a career as a professional golfer in the United Kingdom. Instead he has had to travel to Florida to work there from time to time as a golf tutor earning around $300 a week.

[11] Mr Anderson, Q.C. for the defenders, in moving for the dismissal of the action, began by arguing that the Constitution and Regulations did not constitute a bilateral contract between the parties. He did however accept that certain limited rights might arise as a result of membership of the PGA, to which the pursuer was entitled as a Registered Trainee. His principal point was that the pursuer's averments relating to the implication of contractual terms were irrelevant. The pursuer had failed to aver why the terms for which he contended were necessary to make the agreement work. It could not be suggested that both parties would automatically agree that a term should be implied to the effect that the examination should not involve the repair of a club with a pre-existing cavity. The marking of the examination involved an exercise of discretion by the examiners. The Court should not interfere with the exercise of such a discretion, except in cases of excess or abuse of power. There was no averment of excess or abuse of power, nor of procedural irregularity, malice or dishonesty. The pursuer had failed to aver the way in which the examination had been conducted unfairly and unreasonably. He was simply saying that he did not agree with the result of the examination.

[12] The negligence case, which did not add anything to the case based on breach of contract, was, he argued, also irrelevant. The duties of care relied on could not arise independently of the contract. If there was no case on contract, there could not be a relevant independent case based on negligence. The pursuer could not have rights in delict which were greater than or equal to his contractual rights. There was no corresponding civil wrong recognised by the law. There was no foundation in law for the duties of care upon which he relied.

[13] Moreover, argued counsel for the defenders, this was an action for damages for pure economic loss not accompanied by physical damage. The pursuer was suing for loss of expectation. There was no justification for the imposition of liability for any such loss on the defenders. The defenders had neither expressly nor impliedly assumed responsibility for such loss, nor was it just and reasonable that it should be imposed upon them by law. Reference was made to Marc Rich & Co v Bishop Rock Marine 1996 AC 211 and Caparo Industries Plc v Dickman 1990 2 AC 605.

[14] In moving that the case should be sent to proof or proof before answer, Mr Sandison for the pursuer submitted that the Constitution and Regulations had the effect of a contract between the parties, and provided a set of mutual rights and obligations amongst members of the PGA. The first implied term related to the manner in which the examination should be conducted. It was clear that the parties must have intended that the pursuer's performance should be assessed fairly and reasonably and by the application of the standards of a careful and competent professional golf club repairer. It could not be suggested that a trainee would subject himself to an examination in relation to which there was no constraint as to the standard by which his performance would be judged.

[15] The second implied term related to the content of the examination. It was accepted that the examiners had a discretion in assessing the pursuer's performance, and that the Court could not intervene simply because it disagreed with the examination result, but paragraph 7.2 of Part 5 of the Constitution and Regulations provided that the basis for training would be the PGA Training Manual. The only other factor which cast light on what the content of the examination should be was the material taught to the pursuer at the defenders' training course. The clear implication therefore was that the examination should be confined to the material set out in the Manual and taught in the training course. These two elements in effect constituted the syllabus for the examination. Neither of them covered work on clubs with pre-existing cavities.

[16] In relation to the negligence case, counsel accepted that a duty of care did not exist in the abstract. The test for the imposition of a duty of care ultimately resolved itself into a question whether, if the necessary proximity existed, it was fair just and reasonable for the duty to be imposed in the circumstances of the case. The pursuer had averred circumstances in the light of which the defenders must have been aware that if they did not exercise the duties of care averred, the pursuer would be deprived of the opportunity to enter the profession and to enjoy the financial advantages of it. While foreseeability of damage alone was not sufficient to impose a duty to prevent economic loss, the following factors rendered it appropriate for the duties of care to be imposed in this case. (i) There was no question of there being liability to an indeterminate class of persons. (ii) There was a close relationship between the parties in which the defenders were the dominant party. (iii) The relationship was one of trainer and trainee. (iv) There was a close link between the breach of duty and the loss claimed.

[17] I deal first with the pursuer's case based on contract. The relationship between the defenders and the pursuer in his capacity as a Registered Trainee was regulated by the Constitution and Regulations document. Accordingly, in relation to the topics covered by it, that document formed a contact between the parties. The first term which the pursuer argues is implied in the contract is that, in conducting the club repair examination, the defenders would assess his performance fairly and reasonably, and by the application of the standards of a careful and competent golf club repairer. In my opinion, that term is one which, in the context of this contract, every reasonable trainee would desire for his own protection, and to which no reasonable professional body would refuse to accede. (William Morton & Co v Muir Brothers & Co 1907 SC 1211). I therefore conclude that the first term is implied in the contract.

[18] The second implied term for which the pursuer argues is that the defenders would not require the pursuer to carry out a repair in circumstances not dealt with in the training manual, and with which he had not been trained to deal. For this (and any other) term to be implied, it must be necessary to make the contract work, or more particularly in this case, it must be necessary to make the sections of Part 5 of the document, which relate to Training and Examination, work.

[19] If the pursuer is right, it would mean that, before the contract could work, only specific repairs or alterations which had been the particular subject of instruction in the manual or in the training course could be set as tests in the examination. It would also mean that the answer to every examination question could be learned by rote by the trainee on the confident assumption that no other question could be asked. Accordingly for the training to be comprehensive, the manual and the training course would require to include specific instruction on every conceivable club repair problem which could every arise. There would be no room in the examination for the exercise of initiative, for the application of common sense or for the application of skills learned to problems which had not been met with before. I cannot accept that a professional body in the position of the PGA would have intended to approach the training of professional practitioners in a way that would limit their capabilities to problems with which they had been specifically confronted in training . On the contrary, I would expect them to be trained in a way which would enable them to apply their skills to novel and unexpected problems. I therefore consider that no professional body in the position of the PGA would accede to the pursuer's second implied term.

[20] I also reject the argument that the contract could not work without the second implied term. Counsel for the pursuer made no real attempt to explain why that should be so, and I can see no reason why the contract should not work perfectly well with the conduct of the examinations being left to the discretion of the defenders. There was no suggestion that the contract had not operated satisfactorily in other cases. In these circumstances, I find that the second term is not implied in the contract.

[21] The question arises whether the pursuer can succeed in the breach of contract case if only the pursuer's first term is implied. If the second term is not implied, the pleadings lack any specification as to the way in which the defenders failed to assess the pursuer's performance fairly and reasonably or failed to apply the standards of a careful and competent professional golf club repairer. The averments relating to the alleged breach of the second term do not, in my view, provide the necessary specification. On the view I take, there was nothing in the contract to prevent the defenders from setting questions not specifically dealt with in the manual or in the training course. In that situation, I am unable to hold as a matter of relevancy that, by setting a problem not specifically covered in the manual or the training course, the defenders failed to assess the pursuer's performance fairly and reasonably or by application of the standards of a careful and competent repairer. I therefore conclude that the pursuer cannot succeed on the case based on breach of contract.

[22] I now turn to deal with the case based on negligence. The duties of care on which the pursuer bases his negligence case at pp.40-41 of the record mirror the wording of the terms which he contends are implied in the contract. Accordingly his alternative case is that, if those terms are not implied in the contract, the law nevertheless imposes on the defenders a duty to comply with them (or, more accurately, a duty to take reasonable care to comply with them). The case in negligence may be construed in this way - that the defenders are under a duty to take reasonable care not to cause the pursuer economic loss (a) by failing to assess his performance fairly and reasonably and by application of the standards of a competent professional golf club repairer; and (b) by requiring him in the examination to carry out a repair in circumstances not dealt with in the training manual and with which he had not been trained to deal.

[23] Mr Sandison conceded that in the light of developments in the law of negligence over the last 20 years, the forseeability of harm and "proximity", as determined by the nature of the relationship between the parties, were not sufficient to impose liability for economic loss caused by negligent acts. The Court had in addition to be satisfied that in all the circumstances it was fair, just and reasonable to impose the duty of care on which the pursuer relied. (See Caparo Industries Plc v Dickman and Marc Rich & Co v Bishop Brock Marine Co Ltd ).

[24] In considering the question as to whether that duty of care was indeed incumbent on the defenders I shall assume (without deciding) that the necessary "proximity" existed and that harm to the pursuer was a reasonably foreseeable consequence of the breach of duty averred. The question then is whether it is fair, just and reasonable to impose on the defenders the duty of care on which the pursuer relies. I have considered the factors on which the Mr Sandison relied in support of the imposition of the duty on the defenders but I have come to the view that they are outweighed by other considerations.

[25] The first point to be made is that the line of authority of which the two cases referred to form part clearly indicates that some limit requires to be imposed on the liability of a wrongdoer towards those who have suffered economic damage in consequence of his negligence. (See, for example, Lord Bridge of Harwich in Caparo at p.618H.) Secondly, the kind of loss which is likely to be claimed by a person who is prevented from entering a profession by failure to pass an examination will inevitably be speculative in nature. The possession of a particular qualification provides no guarantee of success in the relevant field. The progress of an individual's career depends at least as much on his personal qualities as on his possession of a qualification. There will therefore be great difficulty and uncertainty in the calculation of damages in such cases.

[26] Thirdly, the conduct of examinations involves the exercise of discretion on the part of the examining body. There no room for the Court to intervene simply because it disagrees with an examiner's marking of an examination. It may be able to do so where there has been excess or abuse of authority, procedural irregularity, malice or dishonesty, but systems of examinations would be undermined if results could be challenged and damages for loss of earnings claimed on the ground of alleged negligence on the part of examiners.

[27] Fourthly, the pursuer seeks to introduce what seems to me to be a novel category of negligence. The speeches of Lord Bridge of Harwich and Lord Roskill in Caparo indicate approval of a return to the traditional categorisation of distinct and recognisable situations as guides to the existence of the duties of care. Lord Bridge cites with approval the words of Brennan J in Sutherland Shire Council v Heyman (1985) 60 ALR 1, 43-44:

"It is preferable, in my view, that the law should develop novel categories of negligence incrementally and by analogy with established categories, rather than by a massive extension of a prima facie duty of care restrained only by indefinable 'considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed'".

No attempt was made on behalf of the pursuer to point to any established category of negligence which might include, or be extended to embrace, the duty of care that he sought to impose on the pursuer.

[28] Apart from these considerations, I find it impossible, having held that the second of the pursuer's implied terms is not one which the parties intended to incorporate into the contract, to hold that a virtually identical obligation was imposed on the defenders by operation of law. As I have already said, it is for the defenders to decide how they conduct examinations for entry into the profession which they regulate, and I can see no basis upon which the general law should intrude to tell them what questions or tests which they can or cannot set.

[29] For these reasons, I have come to the view that it would not be fair, just or reasonable to impose on the defenders the duty of care for which the pursuer contends. I accordingly find that the pursuer's case so far as it is based on negligence is irrelevant.

[30] I shall therefore sustain the first plea in law for the defenders and dismiss the action.