EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
Lord Eassie Lord Mackay of Drumadoon Lord Penrose	[20062007] CSIH NUMBER 6 A331/04   OPINION OF THE COURT   delivered by LORD PENROSE   in   RECLAIMING MOTION   in the cause   ADUKE AYINKE FERNANDEZ Pursuer and Respondent;   against   CHIEF OLADEINDE FERNANDEZ Defender and Reclaimer:   _______

 

 

Act: Currie, Q.C., Scott; Turcan Connell

Alt: Cullen Q.C., MacColl; Tods Murray

 

18 January 2007

 

[ [1] The pursuer and respondent raised the present action by summons signeted on 10 May 2004. The conclusions of the summons are for declarator that an agreement entered into between the parties on 21 and 22 August 2003 remains legally binding and enforceable and for payment of a sum calculated to be due to the pursuer and respondent in terms of the agreement. The defender and reclaimer, whose principal residence is in France, defends the action on a number of bases. The most significant of the grounds for resisting the conclusions of the summons are that the respondent has been guilty of anticipatory breach of the agreement so as to repudiate it, and, alternatively, that the reclaimer has rescinded the agreement in light of material breach by the respondent.

[ [2] The record was closed on 25 August 2004. Proof before answer was allowed, of consent, and it was estimated by parties that a diet of four days would be required for evidence and submissions. Following certain further procedure the case called for proof before the Lord Ordinary on 18 October 2005 and continued on 19, 20 and 21 October. At the outset of the proof diet, an issue arose whether the reclaimer's evidence should be taken on commission in Paris, on the grounds that ill health had prevented him from travelling to Scotland for the proof. An interlocutor allowing the reclaimer's evidence to be taken on commission by the Lord Ordinary was pronounced. Over the four days of proof, the respondent's evidence was led in full and the first witness to be called for the reclaimer was examined. At that stage the proof was adjourned.

[ [3] On 25 January 2006, having put the case out by order, the Lord Ordinary appointed the continued proof to be heard on 15 August 2006 and the ensuing three days. At this stage, Mowat Hall and Dick were instructed as the reclaimer's Scottish solicitors. Subsequently, Tods Murray were instructed to act for the reclaimer. On the reclaimer's instructions Tods Murray sought discharge of the diet of the continued proof. On 11 August 2006 the Lord Ordinary refused to discharge that diet. He also granted the unopposed motion amending the sum concluded for in the second conclusion by increasing it from £720,000 to £1,200,000. The case called for further proof on 15 August. The reclaimer was not present. Counsel appeared to intimate that the reclaimer's current solicitors, Tods Murray, had withdrawn from acting, and sought leave to withdraw. He tendered a letter dated 15 August 2006, which Tods Murray had written to the Deputy Principal Clerk of Session. In that letter Tods Murray set out certain reasons for their inability to represent the reclaimer properly at the continued proof. Counsel was given leave to withdraw, with the result that the reclaimer was neither present nor represented at the hearing that followed before the Lord Ordinary.

[ [4] The respondent moved for decree on the ground of the reclaimer's default. After hearing counsel for the respondent, the Lord Ordinary granted decree by default against the reclaimer in terms of the declaratory conclusion of the summons and decree for payment of the amended sum sought, together with awards of interest and expenses. The present reclaiming motion is against the Lord Ordinary's interlocutor of 15 August 2006.

The grounds of appeal lodged allege that in a variety of respects the Lord Ordinary erred in the exercise of his discretion in granting decree by default.

[ [5] The Lord Ordinary, in his Opinion dated 18 August 2006, has set out the procedural history of the action, including, in some detail, the circumstances on which he had relied on 11 August 2006 in refusing to discharge the diet of continued proof. The Lord Ordinary's interlocutor of 11 August 2006 has not been reclaimed and is not subject to review. But those circumstances have some bearing on the disposal of the reclaiming motion.

[6 ] It is perhaps inevitable that the views formed by the Lord Ordinary, in granting decree by default on the basis of the representations of one party only, should be open to attack as incomplete or inappropriate in certain respects. In paragraph [19] of his Opinion, for example, the Lord Ordinary comments on the lack of reasons for what he describes as delay between the close of the first diet of proof on 21 October 2005 and 25 January 2006, when the case called by order before him. In the same paragraph he exonerates the respondent from any responsibility for such delay. Those factors provided the basis for the first part of the reclaimer's second ground of appeal.

[ [7] This court was informed by senior counsel for the reclaimer, without demur from senior counsel for the respondent, that the period between 21 October 2005 and 25 January 2006 had been taken up in correspondence and discussions among the parties' solicitors and the Keeper, which was aimed at resolving conflicts of commitments among counsel for the parties and the Lord Ordinary. It is clear that, however reprehensible any delay in resolving those conflicts, it is not appropriate to attribute fault for that delay solely to the reclaimer. Further, in paragraph [29] of his Opinion, the Lord Ordinary was faced with a lack of information and explanations about material stages in the extrajudicial history of the litigation, about which this court now has relatively firm information. In these circumstances it is appropriate to set out the history of events as explained to this court.

[ [8] There was nothing particularly remarkable about the progress of the litigation up until January 2006. Following the adjournment of the proof on 18 October 2005, both parties approached the Keeper with information about counsel's forward commitments. The Keeper had information about the Lord Ordinary's diary. It proved impossible for parties to resolve conflicts. The Lord Ordinary caused the case to be put out by order to resolve the issue. At that stage the interlocutor of 18 October 2005, appointing the evidence of the reclaimer to be taken on commission in Paris on account of his ill-health, was still live. The personal presence of the reclaimer at the continued diet of proof was, accordingly, not of fundamental importance to the resolution of the administrative problems of fixing dates for that diet.

[ [9] In the course of the by order hearing on 25 January 2006 the Lord Ordinary made clear his willingness to sit during the summer recess to dispose of the proof. It appears that the Lord Ordinary was anxious to fix dates for the disposal of the case and that provided a clear focus for the discussion of the options open to the parties. In paragraph [7] of his Opinion the Lord Ordinary states:

"It became clear that the only dates in 2006 that would be suitable to counsel were 15, 16, 17 and 18 August 2006. In particular, the position of the defender's counsel was that these were the only dates on which the case could be heard in 2006."

He ordered that the proof proceed on those dates. Senior counsel for the reclaimer indicated in the course of his submissions that he understood that during the by order hearing there had been no reference to the availability of witnesses in relation to the selection of appropriate dates for the continued proof. He informed this court that the diet had been recorded as 'provisional' in a note by counsel dated 4 July 2006, which was contained in the files of the reclaimer's former solicitors, Mowat Hall Dick. It was also explained that throughout Mowat Hall Dick had received their instructions from Farr & Co, the reclaimer's London solicitors, although on occasion they had spoken directly with the reclaimer.

[ [10] On the information available to this court, including the terms of the interlocutor of 25 January 2006, there is no basis on which a view could be taken that the diet was provisional. That would have required the agreement of both parties and the Lord Ordinary. If it was indeed believed by Mowat Hall Dick to be a provisional diet, their failure to take any steps to enrol for discharge of the diet, in the light of the events that were to follow, is incomprehensible.

[ [11] Senior counsel for the respondent informed us that study of Mowat Hall Dick's files had disclosed that they had had a telephone conversation with the reclaimer on 25 January 2006, in the course of which he was made aware of the dates of the continued proof. Senior counsel for the respondent informed us that his instructing solicitors, Turcan Connell, had a file note relating to the hearing on 25 January 2006 which indicated that a conversation had taken place between Mowat Hall Dick and the reclaimer during an adjournment of the by order hearing. That was not confirmed by the senior counsel for the reclaimer. For that reason, the precise timing of the conversation between the reclaimer and Mowat Hall and Dick cannot be identified. However, it was clear from the narrative provided to this court, by the reclaimer's senior counsel, that the reclaimer knew during the course of 25 January 2006 that the dates selected for the continued diet were as recorded in the interlocutor of that date. It was still the intention that his evidence should be taken on commission, and the interlocutor of 25 January continued consideration of that matter to a date to be fixed.

[ [12] The list of witnesses lodged for the reclaimer discloses the identities of three witnesses resident in France, additional to the reclaimer, who were later thought to be material and essential witnesses. This court was informed that of these one was regarded as being of particular importance, Maître Gregoire Rincourt of Paris. He was one of the reclaimer's legal advisers. Mowat Hall Dick singled him out for particular attention. On 26 January 2006 they wrote to Maître Rincourt informing him that due to the difficulties that had been encountered the court had offered to sit during the vacation, to accommodate parties. They intimated the dates fixed for the continued proof and asked Maître Rincourt to inform them of any difficulties. They stated that any alternative dates would be in July or August. They asked the witness that if he anticipated difficulties he should supply them with detailed information about his availability. As previously indicated, counsel for the reclaimer informed this court that, as he understood the position, there had been no discussion during the by order hearing on 25 January, about the availability of witnesses for the continued diet. He suggested that was consistent with the terms of the letter to Maître Rincourt dated 26 January 2006.

[ [13] On 30 January 2006, Maître Rincourt intimated that he would prefer a diet in July, because he wished to go to Russia with his children in August. On 1 March Mowat Hall Dick sent another fax to Maître Rincourt, with reminders of the previous correspondence, asking for precise details of his availability. On 7 March Maître Rincourt responded that August began on 1 August and that his holiday ended on 1 September. As explained by senior counsel for the reclaimer, it appeared that Mowat Hall Dick had now become concerned about the availability of Maître Rincourt. They consulted counsel. There were consultations in March and April. Advice was sought whether steps should be taken to try to have the continued diet of proof discharged, or alternatively whether Maître Rincourt's evidence should be taken on commission in Paris.

[ [14] On 6 June, Mowat Hall and Dick held a further consultation with senior counsel. The issue discussed was the availability of the French witnesses. Senior counsel advised that it would be necessary to lead the evidence of Maître Rincourt and of two further witnesses, Monsieur Pascault and Monsieur Audan, both of Paris, at the continued proof. Senior counsel advised Mowat Hall Dick that the reclaimer should be made aware of her advice. Senior counsel for the reclaimer informed us stated that this was the first indication on Mowat Hall and Dick's files that Pascault and Audan would be required, but might not be available on the dates of the continued proof. There was nothing on the files of Mowat Hall Dick to show that either had been approached prior to that time and, informed that they had been identified as essential witnesses and advised of the dates of the continued proof.

[ [15] As at the beginning of June 2006, the reclaimer's instructions to Mowat Hall Dick were that they should take steps to discharge the continued diet of proof fixed for August 2006. He told them then that all of the French professional witnesses would take their holidays in August and that none of them would be available at that time.

[ [16] Mowat Hall Dick had further discussions with senior counsel. She advised that any attempt to discharge the continued diet would fail. She advised that it would be preferable to commence the continued diet with the reclaimer's evidence, and then seek a further adjournment of the proof, on the basis that the other French witnesses were not available. She advised that the reclaimer should be pressed to say that he would come to Edinburgh and give evidence.

[ [17] We were informed by senior counsel for the reclaimer that the reclaimer was not impressed by the advice he had received from his previous senior counsel. He repeated that he wished a motion to be enrolled for the discharge of the diet of continued proof. It is of some importance to pause and consider the implications of the information given by senior counsel respecting these further instructions. They indicate that the reclaimer was well able to consider the quality of the advice he was receiving and to give instructions in the light of it. His actions were those of a knowledgeable litigator.

[18 ] The reclaimer then proceeded to erect a further obstacle to the continued proof. He indicated that he also would be unavailable to give evidence, because he would be travelling in Africa during August. In answer to questions he was asked, senior counsel for the reclaimer could not provide any information about the purpose of the travel, when it was arranged, nor whether there was an explanation why those travel plans were subsequently abandoned, as they clearly were, as is evidenced by the fact that, according to the information provided to this court, the reclaimer was in Paris at all material times during August.

[19 ] Still concentrating on the events of early June, Maître Rincourt again informed Mowat Hall Dick that he was completely unavailable in August. He explained that it was a period of judicial holidays when all litigation activities in France ceased.

[20 ] As June drew to a close, discussions continued in Scotland between Mowat Hall Dick and senior counsel. Senior counsel felt strongly that a motion to discharge the continued diet of proof was not appropriate and that the reclaimer should be pressed to say that he would give evidence at the continued proof diet.

[21 ] Accordingly by the end of June or early in July, as explained by counsel for the reclaimer, the position was that the reclaimer had instructed a motion be put before the court seeking that the continued proof diet should be discharged, but that counsel had advised that a motion to that effect would not succeed and was not appropriate.

[22 ] At the same time, around the end of June or early in July, further discussions took place between Mowat Hall Dick and Farr & Co. This court was informed that Mowat Hall and Dick's files indicate that these discussions continued until about 7 or 10 July. During those discussions it was proposed (a) that Mowat Hall Dick would withdraw from acting for the reclaimer, or have their instructions withdrawn, (b) that intimation of their ceasing to act for the reclaimer would then be given to the court, (c) that the respondent would require to go through the procedures laid down in Rule of Court 30.2 for intimation upon the reclaimer, under certification of her intention to bring the issue before the court, failing his appointment of new solicitors, (d) that then, and only then, would Tods Murray be instructed in place of Mowat Hall and Dick and (e) that Tods Murray would not immediately be provided with the case papers. It was proposed that all this would be done in accordance with a timetable that had been devised, taking account of the terms of the Rules of Court, to place the court in a position in which discharge of the continued diet of proof would be rendered inevitable. During those discussions, Mowat Hall Dick advised Farr & Co that if they withdrew from acting the reclaimer would have twenty-one days within which to procure the transfer of papers to Tods Murray. In fact, the period provided in the Rules of Court is fourteen days. This court was informed that Mowat Hall Dick had been confident that the diet would be discharged and that they so advised Farr & Co. Whilst those discussions were taking place, Tods Murray were put on notice by Farr & Co that it was intended to instruct them in due course to act for the reclaimer in the litigation. The reclaimer was also informed of the advice tendered by Mowat Hall Dick.

[23 ] Over the same period of time, Mowat Hall Dick and the reclaimer's then senior counsel was were involved in giving advice to the reclaimer for the purposes of an action in dependence before the Tribunal de Grande Instance de Paris. On 29 June 2006, and for the purposes of those French proceedings, senior counsel executed a lengthy affidavit dealing with the parties' litigation in Scotland. This court was informed that Mowat Hall Dick's files also contained a lengthy note prepared by counsel and dated 4 July 2006. In these circumstances, despite the reclaimer's claimed dissatisfaction with the advice he was receiving from his Scottish advisers, discussions aimed at replacing Mowat Hall Dick as the reclaimer's solicitors in the present action continued alongside work being carried out by those former Scottish advisers, in relation to another litigation in which the reclaimer was involved.

[24 ] On 13 July 2006, a solicitor with Mowat Hall Dick wrote to the Deputy Principal Clerk of Session as follows:

"We write to advise that we are no longer instructed in respect of this matter. I would appreciate it is if the process could be marked that we have withdrawn from acting."

On 14 July 2006 the respondent brought the matter to the attention of the Lord Ordinary. The Lord Ordinary ordered the reclaimer to intimate within seven days of his receiving intimation of the terms of the interlocutor of that date whether or not he insisted in his defences, under certification that failure to do so might result in the court granting such order as was thought fit. The timetable anticipated by Mowat Hall and Dick had been accelerated by the Lord Ordinary, as it was competent for him to do.

[25 ] The respondent's solicitors attempted to intimate the interlocutor of 14 July 2006 at the reclaimer's two known addresses in Paris and at his address in Brussels. They also attempted to have it served personally on the reclaimer by huissiers. The court was told that Farr & Co, who were clearly aware of the procedure under Rule of Court 30.2, which those acting for the respondent would require to undertake, contacted the reclaimer in Paris on 19 or 20 July 2006 to ascertain whether he had received intimation of any court order. He told them he had received nothing. Initially the respondent's solicitors, Turcan Connell, had difficulty in instructing huissiers. However, on 2 August 2006 huissiers attended at the reclaimer's residence and tendered the notice. It was refused. The huissiers then left the appropriate form at the post office in Verberie. It is understood that the reclaimer arranged for it to be uplifted from there.

[26 ] On 2 August 2006, Turcan Connell intimated to the reclaimer's solicitors in Paris and New York that it was intended to enrol for decree in this action. On 4 August 2006, Tods Murray were instructed to act for the reclaimer. On 7 August they intimated their appointment to the Deputy Principal Clerk of Session. Tods Murray informed Turcan Connell of their involvement only after receiving formal instructions. The reclaimer's motion for discharge of the continued proof was enrolled on 8 August and heard on 11 August 2006, when it was refused.

[27 ] Counsel's instructions for the hearing on 11 August 2006 were limited to his placing before the court the factors set out in the Lord Ordinary's opinion at paragraphs 12 and 13. It is now clear that those instructions were not only limited in extent, but they were materially inaccurate in some respects. The statements that the reclaimer had not delayed, and had not received intimation of the interlocutor of 14 July 2006, were inaccurate. The statement that counsel did not know why the reclaimer had not instructed Tods Murray earlier was no doubt accurate as a reflection of counsel's instructions. But it was not a position that the reclaimer was entitled to have counsel adopt, because the reclaimer knew precisely why the timetable had been adopted. Similarly the statement that Tods Murray had been unable to recover the case papers was no doubt accurate as a reflection of counsel's instructions, but withholding those papers was clearly part of the scheme that was being deliberately carried into effect. Senior counsel for the reclaimer could not explain to this court how his predecessor came to be instructed in the terms he was for the hearing of 11 August 2006.

[28 ] It is quite clear from documents before this court and the submissions of senior counsel for the reclaimer that the course of action pursued from the end of June or early July 2006 had these features:

·        In the knowledge that a discharge of the continued diet of proof was unlikely to be achieved by a motion enrolled around the end of June or the beginning of July, the reclaimer and at least some of his legal advisers set about implementing a scheme to force the hand of the court and to achieve the discharge that the reclaimer wished.

·        Central to the scheme was that Mowat Hall Dick should resign the existing agency, or that the reclaimer should withdraw their instructions, but should do so at a late stage relative to the continued diet.

·        Mowat Hall Dick would then intimate to the court that they no longer acted for the reclaimer, with the result that the respondent would require to invoke the procedure set out in Rule of Court 30.2.

·        After a delay within the ambit of the terms of Rule of Court 30.2, Tods Murray would be instructed and would intimate that they had been so instructed.

·        At that stage Tods Murray would not have been provided with the case papers by Mowat Hall Dick, who could assert a lien for unpaid fees.

·        Once they had been instructed, Tods Murray would instruct counsel to seek the discharge of the continued diet of proof, relying on their late instructions and the lack of case papers to claim prejudice to the reclaimer if the continued proof were to proceed on the dates fixed.

·        When that discharge was sought, counsel would be instructed to restrict what was said to the court about the transfer of agency to a limited amount of information.

[29 ] In the event, the Lord Ordinary refused the motion without the information now available. It is inconceivable that he would have reached a different conclusion if he had been aware of the circumstances as now set out.

[30 ] On 15 August 2006 Tods Murray wrote to the Deputy Principal Clerk of Session in the terms set out in paragraph [24] of the Lord Ordinary's opinion, intimating that they had withdrawn from acting for the reclaimer. The representations in that letter were criticised by counsel for the respondent as incomplete and lacking in candour. Whatever view one might form on those submissions, if it were necessary to do so, it is sufficient for present purposes to say that the letter of 15 August 2006 appears to have been the last throw of the dice in an increasingly desperate attempt to achieve the discharge sought by the reclaimer. It is to be noted that Tods Murray act for the reclaimer in this reclaiming motion.

[31 ] In the event, as the Lord Ordinary notes in paragraph [29] of his opinion, having considered the matter, the Lord Ordinary decided not to order intimation again and proceeded to grant decree by default.

[32 ] The attempt deliberately to contrive a situation in which the court would be compelled to a course of action that would not, on advice, be achieved by motion made openly in ordinary form and supported honestly by relevant information, was discreditable. Any party inclined to adopt such measures should be aware of the risk of condemnation on discovery.

[33 ] The reclaimer was in wilful default by reason of his failure to be present or represented at the continued diet of proof on 15 August 2006. He was in Paris, demonstrating that the alleged commitment to travel in Africa had no binding effect. He was not ill at the material time. He could have attended court in Scotland. Whether the alternative strategy proposed by his former senior counsel would have had better prospects of success is immaterial: he might have persuaded the court by his own submissions even on 15 August 2006 that the diet should be discharged. But it is abundantly clear that he had no intention of appearing on that day. Indeed, we were informed that the reclaimer had received legal advice not to attend court in Scotland that day. Such deliberate obstruction of the conduct of civil litigation cannot be tolerated with equanimity.

[34 ] Counsel were agreed that the tests to be applied by the court in disposing of motions for decree by default are well established by Hislop v Flaherty 1933 SC 588 and McKelvie v Scottish Steel Scaffolding Co 1938 SC 278, and that the effect of those and other authorities is accurately set out in Macphail Sheriff Court Practice 2^nd edition page 443 paragraph 14.09. The guiding principle is that the court should seek to do justice between the parties in the circumstances of the case. But where there is a prima facie defence the interests of justice will, in the absence of exceptional circumstances, militate in favour of giving the defender an opportunity to vindicate his defence and accordingly against granting decree by default. The issue remains one of discretion in all the circumstances of the case, however, and there is no rule that a defender must be allowed the opportunity to vindicate a prima facie defence.

[35 ] For the respondent Senior Counsel argued that on a proper view of the agreement founded on and the averments of the reclaimer there could not be said to have been a prima facie defence to this action. However, this is a case in which, of consent of parties, proof before answer was allowed, and that proof was part-heard at the material time. In the light of parties' agreement that proof was required before the issues in the case could be resolved, it would not be appropriate for this court to proceed on the basis that there would not be a prima facie defence if the reclaimer were able to establish the factual position adopted in his pleadings. This case should therefore be approached on the basis that only exceptional circumstances would weigh heavily against the court's general reluctance to pronounce decree by default against a defender with a prima facie defence. Having regard to the materially different circumstances set out before this court, there is no need to discuss the Lord Ordinary's reasons for his decision.

[36 ] It was clearly intended that the reclaimer should give evidence. As at 25 January 2006 the expectation was that he would give evidence on commission at some date prior to the continued diet, if his state of health justified that course. No step was taken to arrange such a commission. In those circumstances the only opportunity to take his evidence would have been at the continued diet, or, if his health then prevented his attendance, on commission after that diet if the court had permitted such a course. Quite apart from the scheme to change agency, the reclaimer sought to disabled himself from attending the continued diet by making arrangements to travel in Africa. That plan was apparently abandoned, since he remained in Paris at the material time. But his inability to attend the diet was at one stage attributed to such travel plans.

[37 ] However, the conclusive factor against granting the reclaimer's motion is the nature of the scheme conceived and carried into effect to bring about a situation in which the court would feel compelled to grant the discharge that could not reasonably be expected to have been granted in the usual course. It must be hoped that the machinations of the reclaimer and his legal advisers in this case were indeed exceptional. It would be difficult to conceive of a more deliberate manipulation of the ordinary procedures of the court in support of a determined intention to default than has occurred in this case. In the whole circumstances, the reclaiming motion is refused.