Scottish Court of Session Decisions

You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Green v. SIAC Assecurazioni SpA [2006] ScotCS CSOH_162 (12 October 2006)
URL: http://www.bailii.org/scot/cases/ScotCS/2006/CSOH_162.html
Cite as: [2006] CSOH 162, [2006] ScotCS CSOH_162

[New search] [Help]

OUTER HOUSE, COURT OF SESSION

[2006] CSOH 162

OPINION OF LORD KINCLAVEN

in the cause

JOHN GREEN

Pursuer;

against

SIAC ASSECURAZIONI SpA

and Others

Defenders:

________________

Pursuer: Scott QC and O'Rourke, Advocate; Russell Jones & Walker, Solicitors

First Defenders: Davidson QC and MacColl, Advocate; HBJ Gateley Wareing LLP

12 October 2006

Introduction

[1] This is an Ordinary Action in which the pursuer seeks payment of a principal sum of £511,000.

[2 ] The pursuer, John Green, avers inter alia that he is the owner/operator of the seining and trawling vessel the "Karizma", that the vessel was insured with the first-defenders against loss or damage, and that on 30 September 1997 the vessel sank off the coast of Norway. The total sum insured is averred to have been £511,000 which is the sum sued for.

[3 ] The pursuer makes averments in support of liability on the part of each of the three defenders.

[4 ] The first defenders are described as SIAC Assecurazioni SpA domiciled in Italy ("SIAC").

[5 ] The second-named defenders are Tower Risk Management Limited, London ("Tower").

[6 ] The third-named defenders are Merrion Reinsurance Company Limited, Dublin ("Merrion").

[7 ] The second and third defenders have not entered the process.

[8 ] The case came before me for debate on the Procedure Roll on the first, second and seventh pleas-in-law for the first-named defenders.

[9 ] Mr Scott QC and Mr O'Rourke, Advocate, appeared for the pursuer. Mr Davidson QC (as he then was) and Mr MacColl appeared for the first-named defenders. There was no appearance for the other defenders.

[10 ] The first defenders argued that, for various reasons summarised in the Note of Argument as adjusted (No 21 of Process), the pursuer's averments were irrelevant and that the action against them should be dismissed.

[11 ] In outline the first defenders argued:-

(1) that the pursuer's averments were irrelevant in relation to whether the first defenders had authorised the contract founded upon;

(2) that the pursuer's averment were irrelevant in relation to assignation;

(3) that the pursuer's averments of quantum were irrelevant; and

(4) that the form of conclusion was inappropriate.

[12 ] In response, counsel for the pursuer argued that the pursuer's averments and conclusion were sufficient and that there should be a proof before answer.

[13 ] In the whole circumstances, and for the reasons outlined below, I am satisfied that the first two arguments for the first-defenders are well founded, namely, in relation to (1) authority and (2) assignation.

[14 ] In my opinion, the pursuer's averments in relation to those matters are irrelevant. They fall short of what is required to state a relevant case against the first defenders and, in any event, they do not give fair notice to the first defenders of the case which they require to meet.

[15 ] On the present pleadings, in my view, the pursuer's case must necessarily fail.

[16 ] Accordingly, I shall sustain the second plea-in-law for the first defenders and dismiss the action so far as directed against the first-named defenders.

[17 ] I should add that I was not persuaded that the first defenders arguments in relation to (3) quantum and (4) the form conclusion were well founded but that does not alter my conclusion.

[18 ] My reasons are as follows.

The Pleadings

[19 ] The pleadings are contained in the Closed Record No.19 of Process.

[20 ] It may be helpful to highlight those passages which were referred to by counsel most often during the course of the debate.

[21 ] The first conclusion of the summons is:-

"For payment to the pursuer by the defenders jointly and severally and severally of the sum of FIVE HUNDRED AND ELEVEN THOUSAND POUNDS (£511,000) STERLING, with interest thereon at the rate of Eight per cent a year from the date of citation to follow hereon until payment."

[22 ] The second conclusion is for the expenses of the action.

[23 ] In Article I of Condescendence the pursuer avers details of the parties and jurisdiction. The First Defenders are referred to as "SIAC". The Second Defenders are referred to as "Tower" and the third defenders are referred to as "Merrion". It is averred (on page 5) inter alia that: "The pursuer effected a contract of insurance with the first defenders." It is also averred that: "In the present action the pursuer seeks indemnification under that policy."

[24 ] The first defenders aver in Answer 2 that their name, spelt correctly, is "S.I.A.C Assicurazioni S.p.A."

[25 ] The pursuer's averments in Article II of Condescendence (page 7 et seq) were quoted on several occasions during the debate and are best set out in full as follows:-

"COND II.1 The pursuer is the owner/operator of the seining and trawling vessel the "Karizma". The vessel was insured with the first defenders against loss or damage under a policy of insurance. The period of said insurance was from 27^thFebruary, 1997 to 26^thFebruary, 1998. The total sum insured as at September was £511,000. A copy of the cover note is produced, the terms of which are held to be incorporated herein brevitatis causa. (Production number 6/1) In particular said cover note was issued by Commercial General & Marine Limited, of Belasis Business Centre, Billingham, TS23 4EA on 2^ndJune, 1997. Said cover note recorded the insurance of the said vessel for the said period. The first defenders were disclosed as the Underwriters and had an address in the United Kingdom "Per Tower Risk Management, London". The pursuer believes and avers that the said Commercial General & Marine Limited were reputable brokers authorised by the first defenders to issue cover notes for marine and other classes of insurance on behalf of the first defenders as Underwriters. Further the pursuer believes and avers that the said Tower Risk Management Limited were authorised Agents of the first defenders who operated through the address of the said Tower Risk Management in the United Kingdom. Following intimation of a claim arising out of the loss of the said vessel, Tower Risk Management Ltd. wrote on behalf of the first defenders in which they accepted that the said vessel was insured under the said contract of insurance. A copy of their letter dated 15^thMay, 1998 is produced and referred to for its terms and here adopted brevitatis causa. Quoad ultra the first defenders' averments in answer are denied insofar as not coinciding herewith. It is explained and averred that Commercial General & Marine Limited (hereinafter "the said brokers") were reputable brokers who had prior experience of placing insurance through Tower Risk Management Limited (hereinafter referred to as "Tower") as authorised agents for The Merrion Group of Insurance Companies. The parent company is Merrion Reinsurance Company Ltd. having its Principal Office at Europa House, Harcourt Street, Dublin (hereinafter referred to as "Merrion"). On 16^thSeptember, 1997 Merrion wrote to the said brokers enclosing their latest brochure. Said brochure disclosed that the Merrion Group consisted of a number of companies including Tower which were said to have offices in inter alia Milan, and the first defenders which were said to be an Italian licensed insurance company. A copy of the said letter and the brochure referred to are produced and referred to for their terms. (Productions number 6/3 and 6/4) Said brochure further stated in respect of the first defenders "SIAC will be redeveloped in association with Tower Risk Management (Tower) to write niche products in Italy and the European Union". Merrion held themselves out as providing inter alia marine insurance through their subsidiaries including the first defenders. The said brochure further disclosed that Tower were registered in UK with a registered office at Ocean House, 24-25 Great Tower Street, London. Said brochure contained a separate sheet dated 4^thSeptember, 1997 from Tower detailing their Marine operations within the Merrion Group which includes the first defenders. Mr Ian T. R. Craigie was therein named as Tower's Marine specialist. From at least 1996 the said Craigie on behalf of Tower and other companies within the Merrion Group including the first defenders accepted business from the said brokers. On 11^thFebruary, 1997 the said Craigie wrote on behalf of Merrion to the Directors of the said brokers, Graham Gordon and Angus Galbraith setting out that inter alia the first defenders were authorised to write insurance business inter alia including "marine hull". The letter further held out that Tower were authorised as Merrion's underwriting agency to bind the first defenders on any class of business they were allowed to write in Italy. A copy of said letter is produced and referred to for its terms which are held as adopted and repeated herein brevitatis causa. (Production number 6/7) The said brokers received a further undated communication by fax from Merrion confirming amalgamation with an American Insurer Real America Corporation Inc. and referred to an agreement whereby their subsidiary Tower were authorised to write direct business for and on behalf of the first defenders. Following upon the loss of the vessel on 30^thSeptember, 1997 in circumstances hereinafter condescended upon the first defenders wrote to the Department of Trade and Industry on 23^rdOctober, 1997 purporting to deny knowledge of marine cover issued in their name.

COND. II.2. In early 1997 Angus Galbraith and Graham Gordon, the two Directors of CGM, attended a meeting with Darren Louis Thomas. During that meeting Darren Louis Thomas produced an agreement between Tower and SIAC written in Italian. Darren Thomas showed them this document and informed them that the agreement conferred authority on Tower to act as underwriters on SIAC's behalf in the United Kingdom.

COND. 11.3. In 1996 SIAC was authorised to underwrite insurance in Italy. On 30^thDecember, 1996 SIAC concluded an Administrative Agreement ("the Agreement") with Merrion Underwriting Agencies ("MUA"). A copy of the Agreement and a certified translation thereof are produced and referred to for their terms, which are held as incorporated herein brevitatis causa. (Productions number 7/2 and 7/3) The Agreement was signed on behalf of MUA by Francois Verkaeren and on behalf of SIAC by Maria Louisa Sarti-Seregni ("Mrs Sarti-Seregni"). At all material time from about December 1996 until the end of 1998 Sarti-Seregni was Chairman of the Board of Directors and President of SIAC, as well as owner of 50% of SIAC's issued share capital. In terms of the Agreement MUA was authorized to take on all manner of insurance on behalf of SIAC which SIAC was authorized to trade in subject to the written authority of SIAC. The Agreement was assignable by MUA. In about April 1997 the Agreement was assigned by MUA to Tower. Tower thereafter acted as SIAC's underwriting agent in the United Kingdom. A full outline of the business to be written was provided to SIAC at the outset of the Agreement. The bordereaux of business written was provided at intervals. By the beginning of August 1997 SIAC was aware that marine policies such as the pursuer's were being issued in its name in the United Kingdom and Ireland. At a meeting of the Board of SIAC on 12^thDecember, 1997 Mrs Sarti-Seregni stated that Merrion had failed to remit 10 thousand million lire of premium income due in terms of the Agreement. Esto Merrion and Tower did not have authority to issue insurance in the name of SIAC (which is denied) SIAC knew or ought to have known that said policies were being issued in the name of SIAC fraudulently, that said policies would be relied on by the policyholders and that the policyholders were likely to suffer loss unless warned of the fraud. The pursuer relied on his policy.

COND. II..4. SIAC's underwriting of insurance policies issued in the United Kingdom and Ireland was being conducted without the clearance of the 'Istituto per la Vigilanza Sulle Assicurazioni Private ("IsVAP"), being the Italian domestic insurance market regulator. On 19^thAugust, 1997 IsVAP wrote to SIAC. IsVAP had received a request for clarification from the Irish Insurance Regulatory Authority in relation to insurance policies issued in the Republic of Ireland and underwritten by SIAC. IsVAP had received a copy of a cover note from the Irish Insurance Regulatory Authority which stated "Underwritten: 100% SIAC Assicurazioni SpA Milano per Tower Risk Management, London." On 20^th August, 1997 Mrs Sarti-Seregni wrote to Darren Thomas of Merrion at the registered office of Tower in London seeking clarification as to whether or not insurance policies which bore to be underwritten by SIAC had been issued in the Republic of Ireland. On 22^ndAugust, 1997 Darren Thomas of Merrion replied to Mrs Sarti-Seregni stating inter alia "you will no doubt be aware of our previous correspondence on this matter." Believed and averred that prior to August 1997 there was correspondence between SIAC, Tower and/or Merrion in terms of which it was understood that Tower had SIAC's authority to issue in the United Kingdom policies of marine insurance underwritten by SIAC."

[26 ] I was also referred to certain passages in Answer 2 for the first defenders including:-

· At page 22 C-D:

"Upon receipt of the letter from Merrion of 22^ndAugust, 1997 SIAC responded by fax letter dated 26^th August, 1997 (a copy of which is produced and referred to for its terms, which are held as incorporated herein brevitatis causa); SIAC stated that they were not aware of the "previous correspondence" referred to by Merrion, and requested Merrion to declare that they had not authorised anyone to issue contracts of insurance on their behalf."

· At page 24 D-E:

"Further explained and averred that on 5^thDecember, 1996 SIAC's Board of Directors ("Consiglio di Amministrazione") provisionally appointed Francois Verkaeren a member of the Board." and

· At page 25 C-E:

"The pursuer is called upon to lodge in Process (i) a copy of the purported "agreement between Tower and SIAC written in Italian", (ii) copies of the correspondence between Tower and SIAC prior to August 1997 in terms of which SIAC purportedly authorised Tower to issue policies on their behalf in the United Kingdom, and (iii) the outline of business provided by SIAC at the outset of their Agreement with MUA; his failure to do so will be founded upon. The pursuer is called upon to specify on Record (i) the manner in which MUA purportedly assigned the Agreement to Tower, and (ii) whether, when and how the purported assignation was intimated to SIAC."

[27 ] In Article III of Condescendence (on page 26) the pursuer avers inter alia:

"Esto the pursuer's said policy was issued without the authority of the first defenders, which is denied, it was issued as a result of the fraudulent representation of Tower. ..."

[28 ] In Answer 3 (on page 27) the first defenders aver inter alia:

"Admitted that, on the hypothesis upon which the pursuer's averments proceed, the pursuer's policy was issued fraudulently. ..."

[29 ] In Article IV of Condescendence (on page 27) the pursuer avers inter alia:

"Further and in any event esto the first defenders did not authorise the issuing of said insurance on their behalf as underwriters the said Merrion Reinsurance Company Limited (hereinafter referred to as "Merrion") fraudulently held out that the first defenders along with Tower were subsidiaries of the said Merrion and that the said Tower were brokers authorised by them to effect insurance cover on their behalf and on behalf of their subsidiaries including the first defenders. ..."

[30 ] In Article V of Condescendence (on page 29) the pursuer avers inter alia:

"Further and in any event esto the first defenders did not authorize the issuing of said insurance on their behalf as underwriters, which is denied, Merrion fraudulently held out that Tower were brokers authorized by them to effect insurance cover on their behalf. ..."

[31 ] In Article VI of Condescendence (on page 30) the pursuer averred inter alia:

"Separatim, esto the pursuer's policy was issued fraudulently and without authority by Tower and/or Merrion his loss was caused by the fault and negligence of SIAC. ..."

[32 ] In Article VII of Condescendence (on page 32) the pursuer avers inter alia:

"The said Return by Merrion lists as Directors of Tower inter alios Darren Louis Thomas and Francis Verkaeren. On 19^th July, 2001 the said Thomas was charged along with Leslie Gerald Hursey and David Graham Da Costa with conspiring with the said Verkaeren to defraud by inter alia (1) falsely representing that Tower were authorised Agents of the first defenders, (2) falsely representing that the documents issued purportedly in the name of and with the authority of the first defenders evidenced good and valid policies of insurance and (3) falsely representing that the first defenders were authorised to underwrite insurance in England and Wales. The said Hursey, Thomas and Da Costa are due to stand Trial on inter alia said charges in January 2003."

[33 ] In Article VIII of Condescendence (on page 33) the pursuer avers inter alia:

"On 30^thSeptember, 1997, the vessel sank off the coast of Norway. Prior to sinking, the vessel had been taking in water for a number of hours. Water had been entering via the fish hold. Subsequent investigations revealed that the probable cause of the water intake was the starboard whalepump overboard discharge non-return valve having seized in the open position. With reference to the first defenders' averments in answer it is explained and averred that the vessel sank in the early hours of 30^thSeptember, 1997 at position 60°16' North and 3°27' East off the coast of Norway near Bergen where it was being towed. A Report on the sinking was prepared by McCombie Marine Services. The Report concluded that the most likely cause of the sinking was that water had entered through the non-return valve on the overboard discharge of the whalepump line."

[34 ] In Article IX of Condescendence (on page 34) the pursuer avers inter alia:

"In terms of the said policy the first defenders are liable to pay to the pursuer the value of the said vessel at the time of its sinking. The said value was £430,000. In terms of the said policy the first defenders are liable to pay to the pursuer the value of nautical equipment destroyed and nets, gear and catch lost as a result of the sinking. The value of said losses is £81,000. With reference to the first defenders' averments in answer, it is explained and averred that a Report and Valuation of the said vessel was prepared by Pirie & Smith Limited, Consultant Marine Engineers. Said Report followed upon an inspection of the vessel on or about 21^stFebruary, 1997 and is dated 5^thMarch, 1997. The Report was forwarded to the said brokers by fax dated 17^thMarch, 1997. The said brokers forwarded the Report to Tower on 17^thMarch, 1997 and was acknowledged by Tower on 7^thApril, 1997. The cover note issued by the brokers dated 2^ndJune, 1997 confirms that the said Report dated 5^thMarch, 1997 has been seen and approved by the first defenders."

[35 ] In Answer 9 (on page 35)the first defenders aver inter alia:

"Separatim, the pursuer is called upon to specify the equipment, nets, gear and catch to which he attributes a value of £81,000."

[36 ] In Article X of Condescendence (on page 35-36)the pursuer avers:

"Separatim as a result of the said fraudulent representation by the said Tower (hereinafter the "second defenders") the pursuer has sustained loss. As a result of said fraud the pursuer has lost insurance cover indemnifying for the loss of said vessel. The amount of said loss is the sum sued for."

[37 ] In Article XI of Condescendence (on page 36) the pursuer avers:

"Separatim as a result of the fraudulent representations of the said Merrion (hereinafter referred to as the "third defenders") the pursuer has sustained loss. He relied upon the cover note issued in name of the first defenders. As a result of the said frauds he has been unable to recover the value of the lost vessel. The amount of said loss is the sum sued for."

[38 ] In Article XII of Condescendence (on page 36) the pursuer avers:

"The first defenders have failed or refused to admit liability. The present action is necessary in order to recover the money due."

[39 ] The Pleas-in-law for the Pursuer (on page 36-37)include the following:

"2. The first defenders having insured the pursuer's vessel and the vessel having been destroyed by one of the risks covered by the policy, the first defenders are liable to the pursuer for the sum insured and decree should be granted therefor as concluded for.

3. Alternatively, and in any event, the pursuer having sustained loss as a result of the fraudulent misrepresentations of the second defenders, decree should be pronounced as concluded for.

4. Alternatively, and in any event, the pursuer having sustained loss as a result of the fraudulent actings of the third defenders, decree should be pronounced as concluded for.

5. Separatim the pursuer having suffered loss, injury and damage as a result of the fault and negligence of SIAC is entitled to reparation from them therefor.

6. The sum sued for being reasonable reparation, decree therefor should be pronounced as concluded for."

[40 ] The Pleas-in-law for the First Defenders (on page 38) include the following:

"1. Ab ante the Court having no jurisdiction, the action should be dismissed.

2. The pursuer's averments being irrelevant et separatim lacking in specification, the action should be dismissed. ...

7. The pursuer's case in delict being barred by the operation of prescription, the averments thereanent should not be admitted to probation."

Preliminary Matters

[41 ] At the outset of the debate, Mr Scott QC for the Pursuer indicated that he wished to comment upon and to amend the pursuer's pleading as follows.

· Firstly Mr Scott sought leave to insert at page 9E of the Record (after "terms") the words "which are held as adopted and repeated herein brevitatis causa." There was no opposition to that motion which was granted. For ease of reference, I have included that amendment in the pleadings above (in bold).

· Secondly, having considered the matter, Mr Scott intimated that the pursuer no longer sought to advance any argument in support of his delictual case and that therefore the pursuer's fifth plea-in-law (at page 37C-D of the Record) was to be repelled of consent. That motion was also granted. As noted above, that fifth plea in law was to the effect that pursuer had suffered as a result of fault and negligence on the part of the SIAC.

· Thirdly, Mr Scott sought leave to delete the plea-in-law which appears as pursuer's seventh plea-in-law (at page 37 D-E). It was included at that location in error when the Record was prepared. It should properly have appeared as a plea-in-law for the defenders rather than the pursuer. That plea was to the effect that the pursuer's case in delict was time barred. As the pursuer was no longer insisting in his delictual case that plea was no longer a live issue.

[42 ] Mr Davidson QC, for the First named defenders responded to those developments and indicated that the removal of the pursuer's delictual case was intimated after 10.00 on the morning of the first day of the debate. A substantial part of the first defenders Note of Argument related to criticisms of the pursuer's delictual case. Mr Davidson suggested that the late departure of the pursuer's fifth plea-in-law will have an important effect on expenses. The debate had been set down for three days.

Productions

[43 ] I should also record that various productions were referred to in some detail by counsel during the debate without objection from either party.

[44 ] For ease of reference, the main features of those productions were as follows.

[45 ] Production 6/1

Production number 6/1 bears to be the copy cover note (referred to at page 7B of the Record). It is headed "Commercial General & Marine Limited". It is dated 2^ndJune 1997. It bears to be a "Cover Note" and states "In accordance with your instructions, we as Marine Consultants, have effected insurance as recorded below". The assured in Mr John Green as Owner/Operator. The vessel name is "Karizma" with value stated to be "GB£511,000". The "Period" is "12 months with effect from 27^thFebruary 1997". The "Interest" is stated to be "Hull & Machinery, Electronics and Nets & Gear". The note also states (on page 2): "Underwritten: 100% SIAC Assecurazioni S.p.A, Milano per Tower Risk Management, London". It bears to be signed "For and on behalf of Commercial General & Marine Limited".

[46 ] Productions 6/3 and 6/4

Productions number 6/3 and 6/4 bear to be the copy letter dated 16^thSeptember 1997 and the brochure (referred to at page 8 D-E).

[47 ] The letter (6/3) is headed "Merrion Reinsurance Company Ltd", at an address in Dublin. It is addressed to "Graham Gordon, Commercial General & Marine Ltd" at an address in Cleveland, UK. It reads "Please find attached the latest brochure of THE MERRION GROUP for your information."

[48 ] The Brochure (6/4) bears to relate to "The Merrion Group". I was referred to various parts of the brochure including those parts which suggested that "The Merrion Group" primarily consisted of:-

· RealAmerica Co (described as the parent Company),

· Merrion Reinsurance Company Ltd (described as an Irish based Reinsurance Company),

· Tower Risk Management Ltd (described as an Irish based financial services Company with branches in Athens and Milan),

· Quest Financial Management SA (described as a Belgian based financial consultant),

· SIAC Assicurazioni S.p.A. (described as an Italian licensed Insurance Company),

· SIS Compagnia Di Assicurzioni S.p.A. (described as an Italian licensed Insurance company), and

· Tower Risk Management Ltd (described as a British based research & development office).

[49 ] Production 6/7

Production number 6/7 bears to be the copy letter dated 11^thFebruary 1997 (referred to at page 9 D-E). The letter is dated 11^thFebruary 1997 and is headed "Merrion Reinsurance Company Ltd". It bears to be from "Ian T. R. Craigie, Marine Underwriter" and is addressed to "Graham Gordon & Angus Galbraith, Commercial General & Marine".

[50 ] On page 1, the letter (6/7) states inter alia:-

"Gentlemen,

Further to our recent discussion on SIAC, we would CONFIDENTIALLY advise the following information which, as of a commercially sensitive nature, we would ask you to treat as such:

SIAC Assicurazioni S.p.A. ... (designed and described)

Authorised to write business as follows: ...

EEC Class Agreement Date Agreement Reference

06 Marine Hull 26.11.84 15850 ..."

[51 ] On page 2, the letter (6/7) states inter alia:-

"Our underwriting director, Francois Verkaeren, recently advised us all that Merrion's underwriting agency, Tower Risk Management Limited, is now able to bind SIAC as direct carrier on any class of business they're allowed to write in Italy. That business is protected by Merrion under a Q/S and X/L system and we in turn have our own retrocessional protections. To write business in the EC, SIAC needed to ask permission of the IVAP in Rome who have one month to accept or refuse (after that month the request is deemed approved). Francois is in Milan, with SIAC, tomorrow and will obtain the necessary confirmation that the letter has been sent as we asked.

We trust this commercially confidential information meets with your requirements and would reiterate that out relationship with out Italian friends should be treated respectfully."

[52 ] Productions 7/2 and 7/3

Productions 7/2 and 7/3 bear to be the copy Agreement and the translation (referred to at page 10E - 11A).

[53 ] The copy Agreement (7/2) is in Italian.

[54 ] The translation (7/3) bears to be of an "Administrative Agreement" which includes the following passages, which were referred to by counsel, namely:-

"This agreement was concluded on the 30/12/1996 between:

MERRION UNDERWRITING AGENCIES

hereafter referred to as the Agent

And SIAC Assicurazioni S.p.A.

hereafter referred to as the Company

· ARTICLE 1

The Company hereby authorises the Agent to operate on its behalf and to procure, take on and manage all manner of insurance that the Company is authorised to trade in but only once the Agent has obtained the appropriate written consent from the Company. ...

· ARTICLE 2 - PERIOD OF VALIDITY

This on-going agreement comes into force on 30/12/1996. It will last for at least a year and is renewable on the anniversary of the aforementioned date as per the following criteria. ...

Please note however, that the Company's total gross premium receipts must exceed 10,000,000,000 Italian lira during the first 12-month period prior to the date when the agreement comes up for renewal. ...

· ARTICLE 3 - LIMITS OF AGENT AUTHORITY

The Agent shall conduct and manage the insurance business referred to in this agreement in accordance with the terms and conditions outlined herein. Within the limits of the terms and conditions specified below the Agent shall enjoy full authority and rights without any limitation whatsoever: ...

(f) To authorise the Agent or any other duly appointed Agent employee or Agent associate to sign, either individually or jointly on behalf of the Company any documents that are related to the business referred to in this agreement. Please note however that from the Company's perspective the Agent shall at all times remain the sole party that is deemed to be liable with respect to this agreement. ...

· ARTICLE 11 -JURISDICTION

This agreement will be valid world-wide with the exception of the United States of America.

The Company hereby accepts that the Agent shall be the sole arbiter in matters relating to the categorisation of the limits of jurisdiction for any given contract. The Agent shall also determine the scope of this agreement as well as the type of insurance and reinsurance. ...

· ARTICLE 13 - NATURE OF THE AGREEMENT ...

2) It is agreed that the Agent is entitled to assign his rights to any third party on the understanding that the third party shall be legally bound to the Company and shall act in accordance and compliance with the Agent's responsibilities. ..."

[55 ] For ease of reference, I have included the relevant production numbers in the pleadings above (in bold).

[56 ] Against the background of the pleadings and the productions which were referred to during the debate, I now turn to the submissions of counsel.

The Submissions for the First Defenders

[57 ] Mr MacColl, Junior Counsel for the first defenders, developed the arguments for the first defenders along the set out in their Note of Argument as adjusted (No 21 of Process).

[58 ] His motion was to sustain the first defenders' second plea-in-law and to dismiss the action.

[59 ] The first defenders' arguments depended primarily on criticism of the pursuer's pleadings (which I have outlined above).

[60 ] There was no dispute as to the test of relevance which was outlined by the pursuer (see below).

[61 ] Mr MacColl referred me to McBryde, "Contract", 2^nd Edition (pages 295- 299 and 336-337) for the basic proposition (at paragraph 12-100) that "Intimation of an assignation must be made to the debtor to perfect the assignee's rights."

[62 ] He also provided me with references to Carter v McIntosh (1862) 24 D 925 and The Royal Bank of Scotland plc v Holmes 1999 SLT 563 but did not expand upon them.

[63] Mr MacColl submitted that, in overview, the factual background was essentially as follows. The pursuer was the owner of a fishing vessel which sank on 30 September 1997. The pursuer seeks payment from the first defenders under a purported contract of insurance for the vessel. In response, the first defenders maintain that they have not entered into any contract of insurance with the pursuer and, further, that any contract of insurance purportedly issued in their name was issued fraudulently by unauthorised third parties for whom the first defenders bear no responsibility. In light of this defence, the pursuer made (but now no longer insists upon) a delictual case against the first defenders, asserting that the first defenders should have known about the fraud and taken steps to warn him about it.

[64 ] In essence, the pursuer's present claim is a contractual case against the first defenders (SIAC) for payment under a purported contract of insurance. In Article II.1 of Condescendence, the pursuer avers that this contract was entered into by Commercial General & Marine Limited, acting as insurance brokers for the pursuer, and the second defenders (Tower Risk Management Limited) acting as agent for the first defenders. In Article II.3 of Condescendence, the pursuer avers that, in purporting to enter into the contract of assurance on behalf of the first defenders, the second defenders were acting under and in terms of an Administration Agreement ("the Agreement") dated 30 December 1996 between the first defenders and an entity known as Merrion Underwriting Agencies ("MUA"), under which MUA was permitted to take on contracts of insurance on behalf of the first defenders. The second defenders were entitled to act under the Agreement as, it is asserted, MUA had assigned its interest in the Agreement to the second defenders.

[65 ] In general terms, the arguments advanced by the first defenders fell under four main headings, namely:-

(1) authority (from the first defenders) - or rather the lack of it;

(2) assignation - or the lack of it;

(3) quantum; and

(4) the form of the first conclusion of the summons.

[66 ] I would comment on each of those arguments as follows.

Argument 1 for the First Defenders: regarding lack of authority

[67 ] The first main argument for the first-name defenders was to the effect that the pursuer's averments are irrelevant in relation to the question of whether SIAC had given any authority, and in particular written authority, in relation to the contract founded upon.

[68 ] The first defenders argue that, against the factual background outlined above, the pursuer's case in contract is predicated upon his proving that the second defenders, in purporting to conclude the contract of insurance, acted under and in terms of the Agreement. The pursuer avers that the Agreement permitted MUA (and, following the assignation, the second defenders) "to take on all manner of insurance on behalf of SIAC which SIAC was authorised to trade in subject to the written authority of SIAC" (at page 11 B-C of the Record). The pursuer, however, does not aver that the first defenders had given any such written authority in relation to the contract now founded upon. Accordingly, the pursuer's claim in contract is irrelevant and falls to be dismissed.

Argument 2 for the First Defenders: irrelevant averments anent assignation?

[69 ] The second main argument for the first-name defenders was to the effect that, in any event, the pursuer's averments anent assignation are so lacking in specification as to be irrelevant.

[70 ] In particular, the first defenders argue that the pursuer, in founding upon the purported actions of the second defenders under the Agreement, requires to show that there was an effective assignation by MUA in favour of the second defenders. At page 11 C of the Record, the pursuer makes the averment (a "bald" averment so say the first defenders) that: "In about April 1997 the Agreement was assigned by MUA to Tower." Despite a call upon him to do so, the pursuer does not aver the manner in which this purported assignation was carried out. The pursuer's averments anent the assignation are, therefore, so lacking in specification as to be irrelevant and should not be admitted to probation.

[71 ] Moreover, and again despite a call upon him to do so, the pursuer makes no averment that the purported assignation between MUA and the second defenders was intimated to the first defenders. On the basis that the pursuer does not offer to prove that there was any intimation to the first defenders, it was submitted by the first defenders that that the pursuer is not now entitled to rely upon the purported assignation.

[72 ] The pursuer's averments on authority and assignation were, it was submitted, irrelevant and accordingly the case should be dismissed.

Argument 3 for the First Defenders: irrelevant averments on quantum

[73 ] The first defenders also challenge the relevancy of the pursuer's averments of quantum in Article IX of condescendence (on page 34).

[74 ] In particular, the first defenders point out that the pursuer seeks payment of the sum of £511,000. This sum is made up of (1) £430,000, which is said to be the value of the lost vessel, and (2) £81,000, which is said to be the value of "nautical equipment destroyed and nets, gear and catch lost". It was submitted by the first defenders that the pursuer's averments in relation to the second head of claim are so lacking in specification as to be irrelevant. No specification is given of the nature or amount of the nautical equipment, nets, gear and catch in relation to which this claim is made; nor does the pursuer offer any apportionment of the sum claimed between these various losses. In these circumstances, it is submitted that the first defender does not have fair notice of the nature of this part of the claim, and, therefore, it should not be admitted to probation.

Argument 4 for the First Defenders: The form of the first conclusion of the summons

[75 ] The first defenders also advanced a fourth argument during the course of the debate which was directed towards the form of the first conclusion of the summons (on page 4).

[76 ] This argument was to the effect that the joint and several decree sought was inappropriate standing the nature of the cases against the other two defenders.

[77 ] The case against the first defenders was based on contract unlike the cases against the other two defenders. If the pursuer's case against the first defenders is well founded then liability has nothing to do with the second and third defenders. Yet the first conclusion seeks decree against all three defenders.

[78 ] That, argued, the first defenders made the form of conclusion inappropriate. It also indicated a degree of confusion on the part of the pursuer.

Supplementary matters

[79 ] The first defenders also raised in their Note of Argument what they described as "supplementary matters".

[80 ] In particular, as well as their preliminary plea to the relevancy and specification of the pursuer's averments, the first defenders have tabled pleas-in-law challenging the jurisdiction of the court in relation to the present case (plea-in-law 1) and maintaining that the pursuer's delictual case is barred by the operation of prescription (plea-in-law 7).

[81 ] It was accepted by the first defenders that, in contrast to the matters discussed above, their first plea-in-law cannot be determined without the hearing of evidence.

[82 ] The first defenders wished it to be noted, however, that they reserved their right to insist upon this plea if this becomes necessary after the procedure roll debate.

[83 ] In light of the pursuer's departure from his delictual case, the seventh plea-in-law for the first defenders is no longer a live issue.

[84 ] I now turn to the submissions from Junior Counsel on behalf of the pursuer.

The Submissions for the Pursuer

[85 ] Mr O'Rourke, on behalf of the pursuer, invited me to allow a proof before answer and to repel the first defender's second plea-in-law.

[86 ] He developed the pursuer's arguments under reference to the pleadings and productions which I have already outlined above in some detail.

[87 ] Mr O'Rourke indicated inter alia that in light of the brochure (Production 6/4) and the fax (Production 6/7), the pursuer's brokers were confident that there was an agreement with SIAC and that Tower had authority to act.

[88 ] Mr O'Rourke very fairly indicated that the pursuer does not know what the document was that is referred to in Article II.2. The pursuer has not seen it.

[89 ] There are, according to the pursuer, no documents that definitely show a relationship between Tower and SIAC.

[90 ] There were however, suggested Mr O'Rourke, three "possibilities" as follows:-

· Firstly, there was the possibility that there was an assignation as averred in Article II.3 at page 11B-C;

· Secondly, it might be that there was a separate agreement as averred in Article II.2 at page 10 C-D; and

· Thirdly, there was nevertheless an agreement, albeit not in writing, with reference to the communication of 11 February 1997 (Production 6/7).

[91 ] Mr O'Rourke accepted that an assignation does require intimation or the equivalent of intimation.

[92 ] Mr O'Rourke indicated that the pursuer simply does not know if written consent was, or was not sent, from SAIC to Merrion or to anyone else.

[93 ] The pursuer did not know if the document referred to in Article II.2 (at page 10 C-D) was the MUA Agreement referred to in Article II.3 (at pages 10 and 11).

[94 ] It was submitted, however, that even if the pursuer failed to prove the averments at page 10 C-D and the averments at page 11 B-C, there is nevertheless a course of acting which is capable of supporting the conclusion that there was a relationship of agent and principal between Tower and SAIC.

[95 ] Mr O'Rourke submitted that the averments in support of that conclusion were to be found at page 11 C-E of the Record. They start with the words "Tower thereafter acted as SIAC's underwriting agent in the United Kingdom. ..." and they end with the words "... failed to remit 10 thousand million lire of premium income due on terms of the Agreement."

[96 ] Those averments were, it was submitted, the equivalent of intimation.

[97 ] It was submitted that the pursuer is not obliged to look behind the internal structures or arrangements of a company or group of companies.

[98 ] In relation to the test of relevance, Mr O'Rourke referred me to the well known cases of Jamieson v Jamieson 1952 S.C. (H.L.) 44 and in particular Lord Normand at pages 49-50 and Miller v The South of Scotland Electricity Board 1958 (S.C.) (H.L.) 20 at 21 and in particular Lord Denning at page 36.

[99 ] In Jamieson Lord Norman stated (at page 50) inter alia:

"The test of relevance is the same for all actions; ... The true proposition is that action will not be dismissed as irrelevant unless it must necessarily fail even if all the pursuer's averments are proved. The onus is on the defender who moves to have the action dismissed, and there is no onus on the pursuer to show that if he proves his averments he is bound to succeed."

[100 ] In Miller, Lord Denning stated (at page 36) inter alia:

"The defenders ... have objected to the action on the ground that the pursuer's averments are irrelevant and insufficient in law to support the conclusion of the summons. The only question on such a plea is whether taking the pursuer's averments pro veritate, they disclose a case relevant in law so as to entitle him to have them remitted for proof."

[101 ] Mr O'Rourke also referred me to The Royal British Bank v Turquand (1856) 6 E. & B. 327 (pages 886-888).

[102 ] In Turquand's case the plaintiff declared against the defendants, a joint stock Company, on a bond, signed by two directors, under the seal of the Company whereby the Company acknowledged themselves to be bound to the plaintiff in £2,000. It was averred that there had been no resolution authorising the making of the bond and that it was given without the authority of the shareholders. The Court of Exchequer Chamber held that the plaintiff was entitled to judgement, the obligee having, on the facts alleged, a right to presume that there had been a resolution at a general meeting, authorising the borrowing the money on bond.

[103 ] In particular Jervis C.J. in Turquand's case (at page 888) stated inter alia:

"We may now take for granted that the dealings with these companies are not like dealings with other partnerships, and that the parties dealing with them are bound to read the statute and the deed of settlement. But they are not bound to do more. And the party here, on reading the deed of settlement, would find, not a prohibition from borrowing, but a permission to do so on certain conditions. Finding that the authority might be made complete by a resolution, he would have a right to infer the fact of a resolution authorizing that which on the face of the document appeared to be legitimately done."

[104 ] In relation to assignation and intimation, Mr O'Rourke referred me to Erskine, "An Institute of the Law of Scotland" Book III, titleV, 5 at pages 822-823, and Gloag and Henderson, "The Law of Scotland", 11^th Edition, pages 564-565,

[105 ] Erskine stated in relation to "What is held equivalent to intimation" (at page 822) inter alia:

"Payment of interest made by the debtor to the assignee is equivalent to intimation; for the assignee, by his receiving interest, is truly in the actual possession of the debt in virtue of his conveyance; and all rights not feudal may be completed by the acquirer's entering into the natural possession. ... If possession by an assignee completes his right, it follows that assignation of a lease, or of the rents of an estate, is perfected without the necessity of intimation, as soon as possession is attained by the assignee".

[106 ] The learned authors of Gloag and Henderson state (in paragraph 38.06 under the heading "Equivalents of Intimation") that:

"The assignee's possession of the right by entering into enjoyment of the rents or interest is also equal to an intimation, for it imports not only notice to, but actual compliance by, the debtor."

[107 ] In relation to quantum Mr O'Rourke submitted that "catch" is part of "gear". The definition of "gear" in the Oxford English Dictionary was sufficiently broad, argued Mr O'Rourke to include (at least in some parts of the world) "possessions in general".

[108 ] In relation to the form of conclusion, Mr O'Rourke referred me to:- Maxwell, "The Practice of the Court of Session" at pages 171-172; Lord Macfadyen, "Court of Session Practice" at D [12]; and The Rules of Court, Rule 13.2(2) and Form 13.2(2) in the Parliament House Book at pages C 674-677. The matters mentioned there are not disputed.

[109 ] Maxwell states (at page 172) that:

"Alterative conclusions are competent and sometimes necessary; and a pursuer may have alternative conclusions which are irreconcilable".

[110 ] Lord Macfadyen states (at page D/6) that:

"The pursuer states his demands in the form of conclusions, for example, for payment, for declarator, for reduction, and so on. Rule 13.2(2) provides that conclusions shall be stated in accordance with the appropriate style, if any, in Form 13.2-B. Form 13.2-B gives 24 examples of what it calls the 'principal forms of conclusion'."

[111 ] Form (1) of the forms of conclusion in the Rules of Court relates to "Action for payment" and the stated wording is:

"For payment to the pursuer by the defender [jointly and severally, or severally, or otherwise as may be appropriate] of the sum of (amount in words and figures) with interest at the rate of ... per cent a year from (date) until payment".

[112 ] The pursuer's conclusion was in appropriate terms, said Mr O'Rourke.

[113 ] In the whole circumstances, it was submitted by Mr O'Rourke that there was sufficient for a proof before answer.

Senior Counsel's Submission for the first defenders

[114 ] Mr Davidson QC (as he then was), for the first defenders adopted the submissions made by Mr MacColl.

[115 ] In opposing the pursuer's motion, Mr Davidson's submissions might be summarised as follows.

[116 ] At the outset, Mr Davidson indicated that the criticism in relation to the form of conclusion may not result in dismissal but it did demonstrate confusion in the pursuer's position.

[117 ] Mr O'Rourke for the pursuer points to three "possibilities" but that is simply not good enough to meet the test or relevancy.

[118 ] In any event, said Mr Davidson, those three possibilities are not in any way disclosed by averment.

[119 ] Mr Davidson also went through the documents referred to by the pursuer to highlight what they contained and what they did not contain.

[120 ] I have outlined the documents above.

[121 ] Production 6/7, the letter dated 11 February 1997, is from Merrion Reinsurance Company Ltd to Commercial General & Marine.

[122 ] Production 6/1, the cover note dated 2 June 1997, is issued by Commercial General & Marine Limited.

[123 ] Production 6/4, the brochure, is equally consummate as a tool of fraud by others.

[124 ] In all those documents there is nothing from SAIC or generated by SAIC.

[125 ] The pursuer has attempted on several occasions to recover documents under specification but there are none.

[126 ] The pursuer's case is predicated on agreement with SAIC but his averments are irrelevant.

[127 ] In relation to the first possibility mentioned by Mr O'Rourke (the Agreement referred to in the averments at page 11B-C) it was clear from the pursuer's own averment that authorisation was "subject to the written authority of SAIC".

[128 ] Production 7/3 (quoted above) provides in Article I inter alia "but only once the Agent has obtained the appropriate written consent from the Company".

[129 ] Critically, the pursuer has no averment of written consent.

[130 ] Indeed Mr O'Rourke accepted that the pursuer did not know if written consent was ever given.

[131 ] The Agreement referred to at 11 B-C is simply not effective for the pursuer's purpose.

[132 ] That, submitted Mr Davidson, is the end of the pursuer's case as pled.

[133 ] In any event, as a secondary argument, there is no averment of an effective assignation.

[134 ] The averments at page 11 B-E do not support the pursuer's suggestion that there has been the equivalent of intimation.

[135 ] Merrion is not Tower and there are insufficient averments relating to SAIC.

[136 ] In relation the second possibility referred to by Mr O'Rourke (the averments in Article II.2 at page 10 C-D) Mr Davidson submitted that the pursuer's arguments were speculative.

[137 ] With refreshing frankness, Mr O'Rourke had indicated that the pursuer did not know if this was the MUA Agreement or some other agreement.

[138 ] The averments at page 10 C-D relate to what Mr Thomas was saying and doing. The do not say what the factual position actually was.

[139 ] Mr Thomas (of Merrion) is also referred to by the pursuer in Article VII of Condescendence (at page 32) where the pursuer makes averments about a charge of conspiracy to defraud.

[140 ] In the circumstances, submitted Mr Davidson, the so-called second possibility takes the pursuer nowhere.

[141 ] In relation to the third possibility, the argument as presented by Mr O'Rourke was to the effect that the pursuer's pleading were somehow broad enough to cover an allegation that there was an unwritten agreement between Tower and SAIC.

[142 ] That argument was difficult to advance standing the pursuer's averments about written agreement and written consent and assignation.

[143 ] Mr O'Rourke's argument involved the terms of the letter of 11 February 1997 (Production 6/7).

[144 ] Production 6/7 is from Merrion Reinsurance Company Ltd (not from SAIC).

[145 ] It does not say that representations were made on behalf of SAIC. It refers to Mr Verkaeren as "our underwriting director".

[146 ] Mr Verkaeren is also mentioned by the pursuer (on page 32) in his averments about the charge of conspiracy to defraud.

[147 ] Mr Davidson also pointed out that there is a reference to "in Italy" (on page 2 of 6/7) and suggested that was in effect a territorial limitation.

[148 ] However, the reference to Italy is somewhat ambiguous and it may be going too far too fast to draw any adverse territorial conclusion at least at this stage.

[149 ] The fact remains, said Mr Davidson, that there is no SAIC generated document.

[150 ] The brochure (6/4) does not come from SAIC. It was provided by letter dated 16 September 1997 (6/3) from Merrion. That was after the date of the cover note (6/1) which is dated 2 June 1997.

[151 ] The averments at page 11 C-E are not sufficient to remedy the deficiencies in the pursuer's case.

[152 ] In any event it was not clear which actings on the part of SAIC the pursuer was seeking to found upon. The first defenders were entitled to fair notice.

[153 ] The pursuer's third possibility, it was submitted, does not get off the ground.

[154 ] Each of the three "possibilities" referred to by Mr O'Rourke was irrelevant.

[155 ] The first defenders criticisms of the pursuer's averment of quantum were well founded but related essentially to matters of specification.

[156 ] Finally, Mr Davidson renewed the motion to dismiss the action.

Senior Counsel's submissions for the pursuer

[157 ] In the fourth speech, Mr Scott QC, for the pursuer, reminded me of the test of relevance which had been outlined by Mr O'Rourke. I will apply that test.

[158 ] Mr Scott also asked me not to draw any adverse inference form the fact that the second and third named defenders had not entered the process. I will comply with that request.

[159 ] In relation to the first two arguments (authority and assignation) Mr Scott's submissions on those substantive points can be summarised as follows.

[160 ] The pursuer's case against SAIC has not been periled only on the Agreement forming Number 7/3 of process.

[161 ] In any event, the pursuer does not have to prove that it was assigned.

[162 ] Nor does the pursuer have to establish that SAIC gave written consent.

[163 ] The date of the cover note is not the punctum temporis.

[164 ] The pursuer's central averments, said Mr Scott, are in Article II.1 and in particular at pages 7A to 8B. Those are the averments (set out above) from the beginning of Article II.1 down to the word "Quoad ultra ...".

[165 ] At the end of the day it will be for the pursuer to satisfy the court that those averments are well founded.

[166 ] The pursuer avers a number of facts and circumstances which, it was submitted, taken together support the pursuer's contractual claim.

[167 ] It would be premature to dismiss the case. It cannot be said at this stage that the inference of authority could not ultimately be drawn. It would be incorrect to atomise the averments and dispose of them one by one.

[168 ] For example, Mr Scott said, he would accept that the averment in Article II.3 (at page 11E) about Mrs Sarti-Seregni would not on its own found an inference of authority but Mr Scott would not accept that that averment, taken together with other averments, did not point towards authority.

[169 ] The first defenders' approach was the equivalent of picking out the individual pieces from a jigsaw and saying that those individual pieces do not reveal the picture. That was the wrong approach.

[170 ] The factual circumstances which reveal the whole picture, submitted Mr Scott, were to be found within the whole terms of the pursuer's pleadings and the documents incorporated within those pleadings.

[171 ] Mr Scott's then went through the Record identifying various passages and factual circumstances which he submitted were significant. For ease of reference, I have included them in the extracts from the pleadings which I have set out in detail above. The averment can be found in Articles 11.1, II.2, II.3 and II.4 at pages 7A to 13B.

[172 ] The letter dated 11 February 1997 (Production number 6/7) was also significant submitted Mr Scott. I have included the terms founded upon by Mr Scott in the extracts quoted above.

[173 ] Mr Verkaeren wore a number of difference hats and he was a director of SAIC at that time.

[174 ] In relation to the meeting (referred to at page 10 C-D of the Record) it was not clear if the document referred to there was the same as the Administrative Agreement but the evidence of what was said and done by Mr Thomas was still relevant.

[175 ] The Administrative Agreement (7/3) was in very wide terms. Mr Scott accepted that it was subject to a condition about the class of business but he suggested that that was a requirement which SAIC could waive or ignore if it thought fit. Mr Scott suggested it could not be used as a shield if SAIC had been permitting business to be written in their name by Tower. Holding out would elide matters.

[176 ] In the result, suggested Mr Scott, the pursuer would be entitled to prove a case based on ostensible authority even on the present pleadings which contained averments suggestive of actual authority.

[177 ] SAIC could waive or ignore a requirement of written authority. It could be elided by holding out. The pursuer's averments at page 11 C-E were sufficient for a case based on holding out or ostensible authority said Mr Scott.

[179 ] The formality of intimation is irrelevant if SAIC was in fact aware that business was being written. Intimation is irrelevant if there is no competing right.

[180 ] It does not mean that an unintimated assignation is of no effect.

[181 ] Mr Scott referred me to Halliday on "Conveyancing" (at paragraph 8.15), McBryde on "Contract" (at paragraphs 12-102(e), 12-104 and 12-107) and Gloag on Contract (2^nd Edition) at page 416.

[182 ] In any event, all this would be superseded if SAIC knew that Tower were issuing policies on their behalf. They are barred from denying that that is so. The averments at page 11 C-E are habile to establish a case of holding out.

[183 ] In the whole circumstances, submitted Mr Scott, there should be a proof before answer on those substantive matters.

[184 ] In relation to the third argument (on quantum) Mr Scott submitted that the pursuer's averments were adequate. The pursuer had to prove a loss equal to or greater than the insured value. It was a question for proof. "Gear" can include moveable property.

[185 ] In relation to the fourth argument (the form of conclusion) Mr Scott submitted, in essence, that the form of conclusion used in this case would enable the court to pronounce an appropriate decree having regard to the facts found at the end of the case.

[186 ] In the result, Mr Scott, renewed the motion made by Mr O'Rourke to allow a proof before answer.

[187 ] He was, however, content to allow the first defender's second plea-in-law to remain standing.

Response

[188 ] As Mr Scott had raised some new issues in the fourth speech, Mr Davidson responded briefly.

[189 ] There was nothing averred about ostensible authority or personal bar.

[190 ] On a fair reading of the pursuer's pleadings the case which the first defender's required to meet on the present record was one of alleged actual authority, written consent and assignation.

[191 ] That was primarily the way in which the pursuer's case had been advanced by Mr O'Rourke.

[192 ] In any event, the arguments advances by Mr Scott depend on there being sufficient averments of things done or held out by SAIC.

[193 ] The present pleadings were not sufficient to support Mr Scott's arguments.

[194 ] There was still a missing link - averments linking liability to the first defenders.

[195 ] Even on Mr Scott's arguments, what was important was averment of ostensible authority given by SAIC - and not ostensible authority given by those charged with fraud.

[196 ] The pursuer's averments were irrelevant submitted Mr Davidson.

Discussion

[197 ] I have taken into account everything that has been said on behalf of the pursuer but, in my opinion for the reasons outlined below, the pursuer's averments against the first defenders are irrelevant.

[198 ] The test of irrelevancy is a high one for a defender to meet (Jamieson v Jamieson 1952 S.C (H.L.) 44 and Miller v The SSEB 1958 S.C. (H.L.) 20) but, in my view, that test has been met by the first defenders in this particular case.

[199 ] I am satisfied that, taking the pursuer's pleading pro veritate, this action must necessarily fail essentially for the reasons outlined by the first defenders.

[200 ] In particular, I agree with the submissions made by counsel for the first defenders in relation to their first argument (regarding authority) and, in any event, their second argument (regarding assignation).

[201 ] In my opinion, the pursuer has not made sufficient relevant averments of a factual nature such as would fix the first defenders with liability in this case.

[202 ] In the result, the pursuer's case against the first defenders falls to be dismissed.

[203 ] I reject the first defenders' third argument (relating to quantum) and their fourth argument (relating to the form of conclusion) but that does not alter my overall conclusion.

[204 ] The questions of authorisation and assignation are inter-related but it may be convenient to consider matters under the following general headings:

(1) authority,

(2) assignation,

(3) quantum, and

(4) the form of conclusion.

[205 ] I shall deal with each in turn.

(1) Authority

[206 ] In my view, on a fair reading of the Record, the pursuer's averments about authority (as set out in Article II.2 at page 10 C-D and Article II.3 at page 11 B-C) are central to the pursuer's case, as pled, and they are irrelevant for the reasons outlined by the first defenders.

[207 ] In Article II.2 at page 10 C-D, the pursuer makes averments about a meeting in early 1997 (at an unspecified location) between Darren Thomas (of Merrion) and Angus Galbraith and Graham Gordon (two directors of Commercial General & Marine Ltd). It is averred that:

"During that meetings Darren Louis Thomas produced an agreement between Tower and SIAC written in Italian. Darren Thomas showed them this document and informed them that the agreement conferred authority on Tower to act as underwriters on SIAC's behalf in the United Kingdom".

[208 ] Those averments relate simply to what was said and done rather than to the correctness of any underlying factual position. There is no averment that authority was in fact conferred on Tower. There is no averment that Mr Thomas was acting on behalf of the first defenders.

[209 ] The averments in Article II.3 (at page 11B-C) about written authority and assignation are also central to the pursuer's case against the first defenders.

[210 ] Those averments relate to what is described as the "Administrative Agreement" between Merrion Underwriting Agencies (MUA) and SIAC (number 7/2 of Process) and the translation thereof (numbers 7/3).

[211 ] At page 11B-C, the pursuer undertakes to prove the following, namely, that:

"In terms of the Agreement MUA was authorized to take on all manner of insurance on behalf of SIAC which SIAC was authorized to trade in subject to the written authority of SIAC. The Agreement was assignable by MUA. In or about April 1997 the Agreement was assigned by MUA to Tower."

[212 ] On the pursuer's own averment that authority was "subject to the written authority of SIAC".

[213 ] On a fair reading of the pleadings, the pursuer's case against the first defenders is one based on "written authority".

[214 ] There is, however, no averment that any written authority was obtained.

[215 ] That in my opinion is fatal to the pursuer's case.

[216 ] There is a crucial missing link in the pursuer's contractual case.

[217 ] The pursuer seeks to make a case based on written authority but he has not relevantly averred the essentials.

[218 ] Further, in my opinion, the pursuer has not relevantly averred any alternative or circumstantial case based on "a course of actings" (to use Mr O'Rourke's words). If there is any basis for such an allegation, it has not been expressed sufficiently clearly on Record such as to give fair notice to the first defenders of the case which they require to meet.

[219 ] It is not good enough to say that other people thought that SAIC had given authority. There must be some link to bind SIAC.

[220 ] In the result, on a fair reading, the pursuer has periled his case on averments of actual written authority and assignation and he has failed to aver those matters relevantly.

[221 ] The other averments referred to by counsel for the pursuer (at page 11 C-E of the Record and elsewhere) are not sufficient to remedy the deficiencies in the averments relating to authority and assignation.

[222 ] In my view, Turquand's case (Royal British Bank v Turquand (1856) 6 E. & B. 327) does not assist the pursuer in the circumstances of this particular case. The factual backgrounds to the two cases are different. In any event, I am not satisfied that the pursuer has any right to infer the fact of authority in the circumstances averred on Record - at least not such as would bind the first defenders.

[223 ] In a general sense it may well be open to a pursuer to make a case based on ostensible authority, waiver, personal bar, retrospective validation or other similar principle along the lines mentioned by Mr Scott.