OUTER HOUSE, COURT OF SESSION [2007] CSOH 122 |
|
A416/04 |
OPINION OF LORD GLENNIE in the cause PS INDEPENDENT TRUSTEES LIMITED and OTHERS Pursuers; against DAVID KERSHAW and OTHERS Defenders ________________ |
Pursuers:
Clark; Biggart Baillie,
First & Second Defenders:
Cunningham; CMS Cameron McKenna
Third Defenders: Munro; Morton Fraser
Fourth Defender: John MacLennan, Party
10 July 2007
[1] This action came before me on the Procedure Roll, as a result of which I issued an Opinion ([2007] CSOH 50) in March of this year. The details of the action are set out in that Opinion. In short, the pursuers, as current trustees of the Blyth & Blyth Pension Scheme ("the Scheme"), sue to recover losses to the Scheme caused, so they contend, by certain acts and omissions of the defenders. The first defender was the Scheme Actuary. He was employed by the second defenders. The first and second defenders are referred to as "the actuaries". The third, fourth and fifth defenders (the "trustees") were, at the times set out in para.[3] of my earlier Opinion, trustees of the Scheme; and they were also directors of the Company, though they are not sued in that capacity. The trustees are each sued for breach of trust on the basis of gross negligence, which the pursuers characterise as a reckless disregard by them of the consequences of their acts or omissions.
[3] At the By Order hearing the pursuers stated that they did not intend to reclaim. However, they sought an opportunity to amend, in particular to deal with the criticisms levelled at the investments claim. I gave them that opportunity. In the event, the amendments proposed by the pursuers were limited, in substance, to the investments claim, though there were a number of alterations elsewhere to take account of certain claims having fallen away. When the case called before me on the pursuers' motion for the Minute of Amendment to be received, Mr Clark, for the pursuers, made it clear that the contributions claim and the early retirements claim were no longer pressed against any of the trustees. Nor did he seek to press the investments claim against the third defender. In those circumstances, all claims against the third defender fell away; and it was agreed that a joint minute would be forthcoming dealing with this. Discussion then focused on the pursuers' proposed amendments to the investments claim as against the remaining trustees.
[4] In
the version of the summons as it stood at the time of the Procedure Roll
discussion, the pursuers had made averments about a number of occasions on
which the trustees were given advice which, it was alleged, they ought to have
followed. Those averments included but
were not limited to a reference to a Supplementary Investment Report by Buck
Investments Consultants Limited dated
[5] The remaining defenders all opposed receipt of the Minute of Amendment of the ground that it was very late and that the pursuers had already had ample opportunity to plead a relevant case.
[6] In
addition, Mr MacKenzie, for the fifth defender, argued that the pursuers had
still not grappled with the "temporal" question. The fifth defender had become a trustee with
effect only from
[7] Amendments should generally be allowed, however late, if they help to focus the real issues between the parties unless they give rise to prejudice which cannot be alleviated by an award of expenses. I do not consider that the delay in this case is so great that I should adopt a different approach. A case such as this will inevitably hang heavily over individual defenders, but that is not a reason for depriving the pursuers of the opportunity of putting forward a relevant case. If the amendments focus the issues, that is to the advantage of both parties. It was not suggested that there was any other prejudice such as, for example, a difficulty in dealing with the new issues raised because relevant evidence had been lost. In any case, I am presently being asked to allow the Minute of Amendment to be received. If during the process of answering the Minute, and making any adjustments thereafter, the defenders find that they have been put in genuine difficulty by the lateness of the amendment, that is something which can be raised in the future in opposition to the pursuers' motion to have the Record amended in terms of the Minute of Amendment and Answers.
[8] It was agreed that in considering whether to grant the pursuers' motion for the Minute of Amendment to be received I was entitled to form a view as to the relevancy of the proposed amended claim. There will be little point in putting parties to the time and expense involved in the amendment procedure if the Minute of Amendment does not address valid criticisms in such a way as to suggest that a relevant case will emerge from the amendment process. However, receipt of a Minute of Amendment should only be refused if it is clear at that stage that it will not cure the defect. Once the Minute of Amendment is received and answered, there will be a period of adjustment in the course of which the pursuers will have the opportunity of adjusting the Minute. Only when the amendment is moved in its final form will it be possible to see whether points of relevancy or specification can properly be taken, either in opposition to the amendment being allowed or, subsequently, at a continued or further Procedure Roll discussion on the Amended Record. Before that stage is reached, so it seems to me, the court ought not to shut the pursuers out from attempting to improve an otherwise irrelevant case unless the proposed amendments fall far short of what would be required to make it relevant or do not even address the identified deficiencies.
[9] After the hearing I invited parties, if they so desired, to put in written notes dealing with a point of law that arose towards the end of the day. The notes went rather beyond what I had intended; and threw up problems which had not, I think, been canvassed during the hearing. The pursuers drew my attention to the minutes of a meeting which were not incorporated into the pleadings but obviously could be incorporated during the adjustment process. They said that those minutes assisted their case on the temporal issue as against the fifth defender. The fifth defender responded by referring to the advice received from Buck Investments Consultants Limited in their Supplementary Investment Report. He argued that the advice, which the pursuers aver was accepted by the trustees, did not support the pursuers' new case. Again, this advice is not specifically incorporated into the pleadings. It is difficult at this stage to see how the averments will settle down after completion of the adjustment period.
[10] In addition, it was pointed out by the fourth defender, in a note submitted by him after the hearing, that the proposed amendment significantly altered the case against him. If the pursuers' case were amended in the manner proposed, he would wish to argue that the investments claim as against him was irrelevant, essentially for the reason put forward by the fifth defender under reference to the Buck Investments Report. As against the fourth defender, this is not simply a question of whether the pursuers have, by their proposed amendment, taken steps to cure a previously identified irrelevancy in their case. For him, this would be his first opportunity to challenge the relevancy of the pursuers' case on these grounds. Such a challenge can only sensibly take place once the new case is pled in its final form.
[11] It seemed to me that these new arguments all raised matters which could not properly be dealt with at this stage. The defenders raise issues which can only be dealt with once the pleadings are finalised. Accordingly I shall allow the Minute of Amendment to be received. The pursuers and other parties should plead out their cases, incorporating such documents as they wished to rely on. The defenders will need, as part of this process, to answer certain substantial amendments already made by the pursuers before the Procedure Roll hearing, in so far as those amendments have not been superseded by the latest Minute of Amendment. Any remaining issues as to relevancy or otherwise should be argued later, either at the stage of the pursuers moving for the Record to be amended or at a further or continued Procedure Roll hearing thereafter. I shall continue to reserve all questions of expenses not already dealt with.
[12] I should note, for the record, that counsel for the actuaries indicated that, in light of my earlier Opinion, his clients would wish to debate the relevancy of certain parts of the pursuers' case against them. Mr Clark accepted that they could do this notwithstanding that they had decided to take no part in the earlier Procedure Roll hearing.